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Commons Chamber

Volume 454: debated on Thursday 7 December 2006

House of Commons

Thursday 7 December 2006

The House met at half-past Ten o’clock


[Mr. Speaker in the Chair]

Oral Answers to Questions


The Chancellor of the Exchequer was asked—

Money Laundering

1. What estimate he has made of the total amount of money laundered through British businesses and by individuals in each year since 1997-98; and if he will make a statement. (104881)

It is estimated that the total quantified organised crime market in the UK is worth about £15 billion a year. As a result of actions taken to counter money laundering, we have seized more than £230 million of assets from criminals over the past three years. Last year we recovered a record £97 million.

The Minister will be aware that when the Permanent Secretary to the Treasury was giving evidence to the Treasury Committee he confirmed that only £500,000 of suspect terrorist funding had been frozen, but the United States has interdicted 400 times that amount. Why has the Treasury’s performance been so poor in that vital regard?

I am aware of the hon. Gentleman’s interest in those matters and I read his very interesting speech in the debate on the Queen’s Speech a few weeks ago. It is true that we have frozen 192 accounts with some £500,000 of suspected terrorist funds since 2001. That is less than the US, but more than other G7 members, including Canada, France, Germany and Japan. In addition to that £500,000, a further £460,000 cash has been seized under the Terrorism Act 2000, a further £126,000 of assets has been forfeited by those suspected of being involved in terrorism, and the latest figures show that £1.385 million—which is solely terrorist-related money—has been seized under the Proceeds of Crime Act 2002. Across the piece we have been freezing and seizing assets. We have also been acting to ensure that we crack down on terrorist networks. I know that the hon. Gentleman has a great interest in those matters and I believe, as he does, that we should try to achieve a consensus across both sides of the House on the many actions that we are taking to deal with that important issue.

Are there not matters that are not only abused by terrorists but by others, which lead to considerable tax losses? Those matters include the abuse of remittances; the abuse of taxed resident status; the shunting of private equity capital between tax jurisdictions; the abuse of trust services; and the failure to register trust service providers. Those issues have been on the agenda for some time and more tightening up is required.

My hon. Friend is right to say that we need to tighten up even further and we are doing so. We have just completed a consultation into how we may strengthen the regulation of bureaux de change and the money services businesses so that we can deal with precisely the issues that he raises. In the past three years there has been a 46 per cent. rise in prosecutions for money laundering through those money services businesses and he is right to say that we need to act. We need to strengthen regulation and, following our consultation, we will have a consensus with the industry on tougher action to deal with those issues.

Will the Treasury bear in mind the fact that, without expert supervision at all times, casinos can be used by criminals to launder money. Criminals are believed to do so in many parts of the world, so why are we bringing super-casinos to Britain?

The hon. Gentleman is quite right: we need to ensure that we get the regulation of that area right, as in all other areas. We have been consulting on how to implement the third money laundering directive to provide a better and more risk-based approach to the regulation of the casino industry. It is an important industry that creates jobs, but we must ensure that it is properly regulated and that is what we will do.

The UK joint money laundering steering group’s guidance notes acknowledge that misuse of corporate entities is the most likely vehicle for money laundering. When in July the Treasury published its consultation paper on the measures that are necessary to comply with the EU’s third money laundering directive, the proposals were seriously criticised by non-governmental organisations such as Transparency International because they would not monitor trust and company service providers tightly enough to avoid such misuse. Can my hon. Friend reassure the House that he will introduce proposals for legislation shortly that will include tough monitoring of company service providers?

I can assure my hon. Friend that we have indeed been toughening up the guidance. We have also been consulting on how we implement the directive. I believe that we will have a consensus on the way forward on money laundering and I will take seriously the points that he makes. We have not only strengthened our rules and regulations on the important issue of money laundering over the past year, but have taken action that has involved 13,000 different financial investigations by the police in the past two years alone. We are acting and ensuring that we have the best approach to regulation of that area, and I take seriously the points that my hon. Friend makes.

In last year’s pre-Budget report, the Chancellor promised a comprehensive progress report on countering money laundering and terrorist finance in the spring. It is now winter: where is the report, and why is it more than six months late?

As the hon. Gentleman knows, we have produced report after report on these matters all year. We produced new guidance on countering money laundering in February, and will produce Sir Stephen Lander’s Serious Organised Crime Agency report in the spring. In addition, we produced a consultation document on money laundering in July, and we made an economic statement to the House in October in which we outlined all the measures that we are taking. Those measures include two new orders and new powers to deal with benefits paid to the households involved. We have taken action month by month, and we are working very closely with the security services and the police to make sure that we have the best regime. As I said a month ago, we will produce a report around the end of the year that will bring together everything that we are doing.

I advise the hon. Member for Tatton (Mr. Osborne) and his colleagues that they would do much better if they took this matter seriously and tried to build a consensus about the ways forward and the measures that we are taking. I should be very happy to meet him and the hon. Member for Chipping Barnet (Mrs. Villiers)—if she can fit it into her diary—so that we can discuss these matters.

I very much look forward to that meeting, when we can discuss Oxford days. When the Economic Secretary publishes the review to which he referred, will he learn lessons from the Treasury’s past mistakes? The Treasury’s permanent secretary has confirmed that when steps were taken to freeze terrorist funds in 2001 a loophole was left open that allowed terrorist assets to go on being transferred. The Treasury closed the loophole only two months ago, when news broke that Abu Hamza was playing the property market from his prison cell. Why did the Treasury not spot that glaring error for five years, when it is clear that Abu Hamza was able to spot it? Why do the Chancellor’s claims on security fall apart on closer examination, just like his claims on the economy?

I shall be very happy to have a serious meeting to discuss these serious matters. We discussed them at last month’s Treasury questions, and I wrote to the shadow Chief Secretary to the Treasury to offer her a meeting, but unfortunately she had to cancel. The meeting is being rearranged, and when we get together we can discuss the details.

In the meantime, I advise the shadow Chancellor to stop repeating statements that are factually incorrect. The police and security services advise us on these matters, which they looked at in 2005. They submitted a report, and I can tell the hon. Gentleman that there was no illegal transaction at all that involved Abu Hamza. As I said, I shall be happy to discuss these matters with the hon. Member for Chipping Barnet when she can fit a meeting in. In my letter to her I said that there was no evidence that Abu Hamza bought any properties while he was subject to an asset freeze or in prison. Moreover, there is no evidence that the financial sanctions against him were breached, or that funds from the sale or use of properties had been diverted to him or to terrorism.

I advise the shadow Chief Secretary and the shadow Chancellor to look at the details of the matter and listen to the advice of the police and security services, as the Government do. When we have the meeting that we are arranging, I will be able to discuss these matters in detail and seriously—if that is possible with the hon. Gentleman. Then we may be able to put an end to false and erroneous statements that undermine the national interest.

PFI Projects

2. What recent representations he has received on the National Audit Office’s access to the accounts of companies involved in private finance initiative projects. (104883)

The most recent representation was in the Hansard Society report in July. Last December, we introduced an addition to the standard PFI contract that gives the NAO access, within reason, to all such documentation and requires contractors to agree up front that they will disclose publicly all but the most commercially sensitive information.

As both a Labour MP and a public sector accountant, I am politically delighted with the huge health infrastructural investment, but professionally disappointed that much of it has been rooted in PFI, whose spiralling costs and deepening inflexibility are aggravating NHS budgetary difficulties. Therefore much greater NAO access to PFI company accounts is urgently needed to expose their worrying lack of probity, efficiency and accountability. However, does the Chief Secretary believe that the incoming Prime Minister next summer will get a grip of the Treasury policy shapers, whose ardent love affair with private sector finance has stored up such serious problems for his future Administration?

The PFI has made an important, albeit minority, contribution to the big boost in public sector investment of the past few years. I agree that better transparency and accountability improve management and performance, and we have made much headway in that direction. However, it is very important to maintain the programme so that the progress that has been made with new hospital building, new schools and other public sector investment can continue to go from strength to strength.

Is it now Treasury policy, agreed with the Office for National Statistics, that PFI investment in hospitals is public sector investment, not private sector investment? Will the Minister say whether the National Audit Office is told each time that a hospital PFI contract is doubled in length from 30 years to 60 years because the original terms are too generous? Is that information normally given to the NAO and is it usually approved by the Treasury?

I welcome the hon. Gentleman’s contribution. Thanks to freedom of information, the Department of Health places on its website detailed information on the profitability of each PFI contract. On the specific point, I did not quite grasp the question that he asked about the NAO information. I will gladly come back to him on that.

Will my right hon. Friend accept congratulations from many of the people in my constituency, whose children are now being taught in the seven new PFI-built schools? Those schools had been on the books to be built for years and years, but never appeared until this Government took office.

I gladly accept that point and I thank my hon. Friend for it. She will have heard the announcement that my right hon. Friend the Chancellor made yesterday about £36 billion of investment in education over the next four years, to ensure that many more children and communities around the country benefit in the way that her constituents already have.

Several years ago the Chancellor called PFI

“a cynical distortion of public finance”.

Does the Minister agree with him?

Of course, under the Conservative Government there were serious problems with PFI. [Interruption.] Absolutely. Not least of those problems was the fact that they could not make it work. For years under the Conservative Government we were waiting for the programme even to start. Under this Government, however, we have seen the problem solved and impressive and important progress.

Sir John Bourn, the head of the National Audit Office, told the Public Accounts Committee in February this year that too many PFI schemes were off balance sheet, even where the majority of risk was borne by the public sector, not the private sector. Given that the Chancellor told us yesterday that he plans to borrow about £167 billion, if Labour stays in power over the next five years, is it not time that we had an honest appraisal of the true state of the nation’s balance sheet, including the £48.4 billion cost of PFI?

The hon. Lady should tell the House whether she is in favour or against the big programme of public investment that the PFI initiative has provided the country with. We have provided full information about the scale of the liabilities and the extent of the programme, and we will continue to do so.

Lyons Review

3. What discussions he has had with the Office of Government Commerce on the measurement of the wider social and economic benefits of departmental relocations under the Lyons review. (104884)

I can announce that, since the Lyons report recommended 20,000 civil service relocations by 2010, 10,179 posts have already been announced for relocation. Some 1,200 of those posts are in the east and west midlands. The Lyons review presented evidence that movement of posts would offer positive economic and social benefits for the receiving destination. That is now the subject of a review that will be published in the new year.

I thank my right hon. Friend for that reply. May I remind him of our objective in north Staffordshire and Stoke-on-Trent of getting jobs relocated there from the Government estate? Given the information in yesterday’s pre-Budget report that more than half of the jobs to be relocated have now been relocated, will he look closely at the guidance from the Office of Government Commerce and, in particular, the e-PIMS mapping system, which tends to highlight areas that already have parts of the Government estate? In Stoke-on-Trent, we do not have that Government estate and we desperately need the Chancellor to recognise the social and economic case for relocation of jobs to our area.

I will look at that. When my hon. Friend asked me a question yesterday about the textiles and other industries—the pottery industry—in her area, I said that we would hold a meeting with her and other local MPs. The fact is that some of the 1,200 jobs relocated to the midlands have been relocated to her constituency—from the Department for Environment, Food and Rural Affairs and from Her Majesty’s Revenue and Customs. However, I appreciate that, although unemployment has fallen substantially in her constituency since 1997, from 1,880 to 1,326, jobs need to be created for the future. That is why we will also look carefully at how local enterprise grants can go to her constituency in future.

Yesterday, the Chancellor recycled announcements and fiddled his fiscal rules. Has he given Sir Michael Lyons the same misleading information as he gave the public last month about increases in central Government grant for next year’s local finance settlement? In south Shropshire in my constituency, the public were told that the Chancellor was increasing that grant by 5.9 per cent., but it ended up being 3.4 per cent.

I see that the hon. Gentleman has asked not about relocation of jobs to his constituency, but about Government grants. I think he will agree that Government grants to local authorities have gone up every year, continue to go up this year and will go up next year, which is a very different situation from what happened under the Conservative Government.

My right hon. Friend should be congratulated on the progress of relocation of jobs and administrative centres since the Lyons review, but does he agree that many other bodies that receive Government money could also be relocated in other more deserving areas?

That is exactly what we are looking at. My hon. Friend may be interested to know that the Training and Development Agency is moving to Manchester, the Qualifications and Curriculum Authority to Coventry and the Standards Board to the north-west; and that there are other relocations right across the whole of the UK. We will continue to look further into relocations—first because we believe that they are about best value for money and, secondly, because we believe that they can be of great benefit to constituencies and regions like my hon. Friend’s, where there is a continuing need to create more jobs for the future.

The relocation of civil servants raises issues about lack of geographical coverage: for instance, HMRC will now apparently be fighting fraud in London with a team based in Portsmouth. What does the Chancellor say to Mr. Clive Murray, who has 16 years experience as an HMRC compliance officer and who wrote to me last month about the centralisation of anti-fraud teams to ask how

“somehow or other overworked staff in Portsmouth will be able to find crooks throughout London and the South East by purely technological means unknown to them before”?

How is the Clunking Fist going to make that work?

We have created the most modern system of investigating fraud and I think that the hon. Gentleman will agree that the changes in HMRC and more generally in our approach to dealing with criminal fraud have been major and substantial. I do not quite understand the hon. Gentleman’s point when he says that relocation has been unbalanced throughout the whole of the UK. Relocations are also taking place in the south-east region, from the centre of London to some of the south-east’s higher unemployment areas. The House should know that, so far as the 10,000 reallocated jobs are concerned, 2,000 went to Yorkshire, about 1,000 to the midlands, 2,500 to Wales, 693 to the south-west, and the east of England and the north-east have also received some relocations. It is important to correct the misrepresentation, as these relocations are taking place right across the UK.

The Chancellor will be aware that unemployment in my constituency has dropped since 1997 and that it continues to drop, even since last month’s announcement. Will my right hon. Friend tell me how I should campaign to get some of the relocated jobs into my constituency?

I am grateful to my hon. Friend, who has fought for jobs in his constituency. He is right that, as a result of the new deal and other Government initiatives, unemployment in his constituency is lower now than it was in 1997. A report will be published soon on the economic and social benefits of relocation. I suggest that, following that, we have a meeting to look into how jobs can be relocated to new areas that have not yet benefited from the relocation policy.

Banking and Lending Services

4. What steps he is taking to ensure that benefit claimants and people on low incomes have ready access to regulated banking and loans services. (104885)

The Government’s goal is to halve the number of people without access to a bank account. We have established a £120 million financial inclusion fund and an independent financial inclusion taskforce, which has recently reported to me that we are making good progress towards that goal. I can tell the House today that we have appointed two new members of the taskforce: Bridget McIntyre, the UK chief executive of Royal and Sun Alliance, and Danielle Walker Palmour, director of the Friends Provident Foundation.

The Farepak disaster has thrown a spotlight on the financial barriers and debt burdens faced by the poorest people in this country. How is the Treasury using this opportunity to promote the good work of organisations like credit unions and to warn against loan sharks and doorstep lenders?

My hon. Friend is quite right to highlight the important role that credit unions can play. It is important that we crack down on loan sharks as we learn lessons from the terrible Farepak debacle. As she knows, we are putting £36 million into supporting credit unions for low-income lending. In addition, there are two pilot schemes—one of which I visited in Birmingham last Friday—for cracking down on illegal loan sharks. Over the past year or two, the Birmingham team has helped 1,000 victims and wiped out more than £1 million worth of debt. A team in Glasgow is doing the same work. We have put £1.2 million aside to continue those pilots for a further year and to extend them to Sheffield, Liverpool and west Yorkshire. The Government are determined to crack down on loan sharks and to make available the resources to do so.

I fully support the hon. Member for North-East Derbyshire (Natascha Engel), who put an important question, but in addition to ensuring that people on low incomes have access to resources should not the Government be doing more to prevent the financial services industry, particularly banks and credit card companies, from bombarding people to borrow money for irresponsible purposes? Can we do more to regulate those organisations to prevent them from tempting people on low incomes?

As the hon. Gentleman knows, the Office of Fair Trading is responsible for such regulation. As a result of the Farepak problems, a review of the regulatory framework of such schemes is under way. The Department of Trade and Industry is also holding an investigation into the particulars of the case. In addition, we at the Treasury have asked Brian Pomeroy to carry out a review for us of the debt implications of hamper schemes and savings clubs. I have asked him to look into who uses hamper schemes, which are often poor value for money, why they opt for such schemes rather than mainstream financial services products, and in the light of that, to consider whether the savings needs and debts of those groups can be better met by mainstream financial services providers; and to consider what we can do to promote consumer awareness in that area. I hope that the hon. Gentleman can see that we are acting to try to make sure that we learn the right lessons from the problems of recent weeks.

As the Minister is aware, the Treasury Committee has recently produced three reports on financial inclusion and I thank him for his ready co-operation with us. The main conclusion of those reports is that the poor pay more for their credit, and as 3 million people still have no access whatever to bank accounts there is still a mountain to climb. The Committee looked at one good aspect—the savings gateway, which, with matched pound for pound contributions from the Government, helps people on low incomes who do not benefit from tax relief. Will my hon. Friend ensure that the savings gateway pilot is encouraged throughout the country to help people on low incomes to save?

I am grateful to my right hon. Friend; he and his Committee have played an important leadership role on those matters in recent months and we are studying his report in detail. He raises some particular issues about cheque clearing and generic advice, on which we are already acting. I hope that the review that I have asked Brian Pomeroy to carry out will tell us precisely what more we need to do to make sure that our savings mechanisms for low-income savers work well. I very much look forward to the report the Committee will soon produce on access to automated teller machines in low income areas. I know that my right hon. Friend has done important work on that subject and I hope that we shall be able to welcome the conclusions of the report. I can assure him that we are giving close consideration to all the issues he raises in his reports and we shall respond in the new year.

Red Diesel

5. What recent progress has been made in negotiations to extend the derogation from EU regulations to enable UK pleasure boats to use red diesel in 2007; and if he will make a statement. (104886)

I know that the derogation that permits the use of red diesel in Britain is highly valued by private boat owners and users. Thirty-four separate derogations from the directive are held by member states. None has yet been approved by the Commission and 14 have been rejected so far. Late yesterday afternoon, it was confirmed to me that the Commission had decided not to renew the UK’s application for a fresh derogation for private boats. I know that will be unwelcome news. As we have argued to the Commission, it could be highly complex and costly to implement the measure, so today I asked officials to meet concerned and affected organisations soon to discuss the implications of the Commission’s decision.

I thank the Minister for that answer, and he is right that the terms of the Commission’s communication to the Council of the European Union are disappointing. Is he telling the House that that communication effectively kills the application for the derogation, as it is, of course, a communication to the Council? What can we do to ensure that the necessary pumps and facilities will be put in place in every marina and pier that will require them before 1 January? I have pursued the Minister on that point for a number of years. The issue could have been dealt with much more quickly and much sooner, if he had had the backbone to deal with it.

We put the strongest possible case to the Commission, and we prepared that case in close co-operation with, and with contributions from, many of the organisations affected. We could have done little more to press the case. I have personally spoken with and written to the Commissioner on the issue, but there is no further stage in the process. First, we need to discuss the implications of the Commission’s decisions. Secondly, we will consult widely on implementing the directive. Thirdly, we will have to legislate, and implement the changes. I made it clear to the Commissioner that it is important to allow the UK a suitable period in which to translate the Commission’s decision into the implementation of the changes required. The Commissioner acknowledged that point, and we will work with the boating associations on that in the coming months.

The derogation relates to pleasure boats, but not working boats. Can my hon. Friend tell me how much tax revenue is forgone each year because of the red diesel tax concession for those engaging in aquatic leisure pursuits?

It is fair to say that my hon. Friend has not been one of the strongest proponents for continuing the derogation. He is right that the derogation applies to private boat owners. Commercial boat owners and commercial interests will continue to benefit from reduced rates of duty on fuel. The revenue that we expect to gain if we are forced to implement the three derogations that we currently hold—and we have applied to the Commission for their renewal—totals about £10 million. The revenue gain is totally out of proportion to the cost of implementation, the complexity that may result for the industry, and the disadvantage to users. That was the core of the case that we put to the Commission, and I am disappointed that it rejected continuing the derogation for private boat owners.

The decision will be met with great dismay in marinas in ports such as Scarborough and Whitby. Does the case not expose the myth of the UK veto on taxation matters? A stealth tax is being imposed on us by the European Commission, against the wishes and the request of the British Government. Who runs Britain?

I know the hon. Gentleman’s constituency well and I recognise the concern that will be felt in Scarborough and Whitby. However, I must point out to him the source of the derogation. The principle that road fuel level duty should be applied to private boat owners was agreed not in 2003 under the energy products directive, but in 1992 under the mineral oil structures directive, by the previous Government.

I am sure that my hon. Friend will know that, as has been stated, the new regulation will be impossible to police, and it will add a further burden to our law enforcement agencies. However, is it not about time that we woke up to the fact that red diesel is outdated? It is just as polluting and bad for our environment as ordinary diesel. Should we not work towards cutting out red diesel? To meet the costs that that would mean for the industry and users, we could come to some tax arrangements that would allow us to phase in that change over the next decade.

My hon. Friend is right that, in some respects, red diesel is more polluting than mainstream fuels. He will have noted that, yesterday, my right hon. Friend the Chancellor announced a special duty rate in the pre-Budget report to encourage rail operators to use biofuels mixed with red diesel to reduce the environmental impact. Red diesel is valuable to many commercial sectors that have been given permission to use it. The consequences of moving away from red diesel would be profound, but in the case of the derogation that we are considering this morning, its environmental impact is negligible, which was part of our case to the Commission for retaining it.

BBC Licence Fee

6. What recent discussions he has had with the Office for National Statistics on whether the BBC licence fee should be treated as a tax. (104887)

There have not been any discussions between Treasury Ministers and the Office for National Statistics on the reclassification of the BBC licence fee, which is a matter solely for the national statistician, not for Ministers. It has been done solely for the purposes of compiling the national accounts, and it has been done consistent with national guidelines.

Given that the Chancellor is one of the strongest advocates of modern British values, does my hon. Friend share my hope that, after careful scrutiny, he will decide to back one of the most trusted British brands—the BBC—and agree an adequate increase in the licence fee to allow a successful digital switchover, a move in production to Manchester and more quality programming, even if that annoys Mr. R. Murdoch, who would love to see a cash-strapped BBC and who opposes Government plans for a digital switchover.

As chair of the all-party BBC group, I accept that my hon. Friend is more interested in the size of the licence fee than its statistical classification. However, he follows these things closely, so he knows that the licence fee has risen by 15 per cent. above inflation since 1997. He knows, too, that the BBC’s income has risen above that because of the growth in the number of households and improved clamping-down on evasion of the licence fee. We can settle the new licence fee for the next period at a level that is fair to the BBC and to the licence fee payer, and that allows the BBC to lead and fund the digital switchover, while making sure that it is available to everyone in the country.

The deputy chairman is acting as chairman pro tem, and we will hold discussions as appropriate. We will hold them with the new chairman when one is appointed.

Does my hon. Friend support access to the licence fee for the community radio fund, so that in areas such as Wrexham, where the BBC refuses to provide a local radio station, the community radio station that will begin broadcasting in the new year will have access to public funding?

We are considering all the relevant matters in decisions on the licence fee for the future period. We will make an announcement as soon as we can, when the work is completed.


I announced yesterday new measures to help lone parents and the young unemployed into work. Since 1997, 900,000 lone parents have benefited from the new deal, and 122,000 disabled men and women have found jobs. We have helped 316,000 young people and 283,000 of the long-term unemployed, which is one reason why there are now 2.5 million more people in work than in 1997. The answer is not to abolish the new deal but to extend it into a new deal for jobs and skills.

Last year, unemployment increased in 527 constituencies across the United Kingdom. In Wellingborough, unemployment increased by 17.6 per cent. There are, and I have checked my figures, more people unemployed in Wellingborough today than there were nine years ago. Is this “here today, gone tomorrow” Chancellor proud of that record?

I know more about Wellingborough than almost any other constituency in the country. The claimant count is down from 1,856 in May 1997 to 1,535 now. Youth unemployment in the hon. Gentleman’s constituency is down by 47 per cent. since 1997, and adult unemployment is down by 71 per cent. The count on employment shows that not a few hundred but several thousand new jobs have been created in his constituency since the last election.

I hope that the hon. Gentleman is more serious about creating jobs in the future. On April 15 2005, he said this in the Northamptonshire Evening Telegraph, “We want to get rid of red tape, but if that means unemployment, I am sorry, they will get another job. We are not here to create jobs.” I hope that he will support us on the new deal.

Does the Chancellor agree that as a result of the coalfield plan, we have made progress in coal-mining areas throughout Britain? I have spoken in many of those areas, where there have been 40 to 50 per cent. reductions in unemployment—at one time, many of those pit villages experienced unemployment of 15 per cent., and in some cases the figure reached 20 per cent. We will need a little bit more money for junction 29A, which goes straight into Markham pit yard. That is where we are going to get rid of all the pit tips and the lines of coke, which will be replaced by industrial premises and 5,000 jobs. Give us the extra money.

My hon. Friend has outlined the high road to employment. Looking at every region of the United Kingdom since 1997, there are 160,000 new jobs in the west midlands, 200,000 new jobs in the east midlands, 200,000 new jobs in Scotland and 200,000 new jobs in Yorkshire and Humberside. The one thing that the Opposition cannot say is that the 2.5 million new jobs that have been created in Britain in the past 10 years is not a record for this country. There is a higher proportion of people in work in this country than in most of the other advanced industrial economies. The Opposition should support the new deal, rather than trying to abolish it.

According to the Joseph Rowntree Foundation this week, unemployment among adults under 25 has never fallen below 10 per cent. since the Chancellor came into office, is three times greater than for adults over 25 and is now rising. Does the Chancellor agree with the Joseph Rowntree Foundation? Will he accept that that is a problem? And why does he think that policy has so far failed that group of people?

The hon. Gentleman might also have said that unemployment has fallen in his constituency by 54 per cent. since 1997 and that it has fallen for the young people that he is talking about. It is important that the House knows the employment figures on 18 to 24-year-olds since 1997, despite what the Opposition say. There were 3,230,000 young people in work in 1997; by 2006, the figure was 3,600,000, which is an increase of more than 300,000.

I recently paid another visit to the Single Parent Action Network, which has its national headquarters in my constituency. It has just received nearly £400,000 in lottery grant to expand its study centre work. Does my right hon. Friend agree that sometimes it is important that single parents have a year or two to gain qualifications, so that when they enter the job market they can go for better-skilled, better-paid jobs, rather than entering work straight away? And will he tell me what the Government are doing to support that?

One of the great changes that has taken place since 1997 is that the number of single parents entering work has risen substantially. When we came into power, the figure was about 43 per cent., and it has now risen to nearly 58 per cent.—we are on the road to raising it to around 70 per cent. in this country. One of the reasons why we have been able to make that change is by providing training support and child care help to lone parents to enable them to make those decisions. In particular, we have been able to help those people with the sort of courses recommended by my hon. Friend. Again, that part of the new deal is essential to the creation of jobs. I wish that there were all-party support for the new deal, instead of the Opposition parties trying to abolish it.

In the light of research that every 10 per cent. increase in unemployment results in a 30 per cent. increase in home repossessions, will the Chancellor call in the banks to negotiate a code of conduct with them to ensure that job losses do not lead to the loss of homes? In that context, can he confirm an alarming fact on page 224 of the Red Book, where the Government appear to project that claimant count unemployment will rise to more than 1 million in 2007-08? Is that correct?

No, because we do not make projections about the claimant count. I have to tell the hon. Gentleman that historically no Government have predicted what unemployment will be in a year’s time. I have to tell him also that in 1997 unemployment was 1.6 million and that since then it has fallen by 700,000 to 900,000. That is an achievement in itself.

As for mortgages, the hon. Gentleman will probably remember that 1.5 million people were in negative equity at the beginning of the 1990s. It is because interest rates remain low that so few people, in comparison with that figure, are in negative equity and that there are now so many fewer repossessions. I hope that he will support an economic policy, contrary to the one that he represents at the moment, that will ensure economic stability through low inflation and low interest rates.

Unemployment in my constituency halved in the first four years of this Government, but sadly it plateaued, and in the past year it has increased by almost 22 per cent. and is now 7.7 per cent.—more than double the national average. Can the Chancellor tell me what fresh initiatives in the pre-Budget report will bring some hope to my constituents?

As my hon. Friend knows, unemployment in his constituency is still very much below what it was in 1997, as a result of the new deal. Yesterday we announced more help for single parents and the young unemployed to get into work. We will carefully consider, area by area, whether in local employment offices or in the regions, what local discretion can be exercised to allow jobcentres to enable jobs to be created in those areas. We are determined to get more people into jobs. My hon. Friend must recognise that there are now 2.5 million more people in work than there were in 1997 and that the percentage of the adult population in work—75 per cent.—is higher than in most countries. We will continue to create jobs, but we will need the new deal to do that, not its abolition.

Can the Chancellor confirm the simple but little-known claim that unemployment among young men in Britain is now the highest in the whole developed world? A yes or a no will do.

It is completely untrue. Unemployment among young people in France is nearly 20 per cent. [Hon. Members: “Young men.”] I said that unemployment among young people in France is about 20 per cent. If the hon. Gentleman were to look at the figures for France and for many other industrialised countries, he would also be in a position to know that in his constituency unemployment is down by 25 per cent. since 1997. I hope that the Opposition will start to think about their policy. If they seriously want to get more young men and young women into work, how can they possibly support the abolition of all the measures that are necessary to get people into work? Instead of attacking the unemployed, they should be attacking unemployment.

Gershon Target

8. What progress has been made towards the Gershon efficiency savings target; and if he will make a statement. (104889)

As we set out in the pre-Budget report, at the September halfway point in the three-year Gershon efficiency programme, Departments and local authorities had reported annual efficiency gains amounting to £13.3 billion-worth of the £21 billion target.

To corroborate the figure that the Minister quoted, would he be willing to publish an independently audited report setting out the savings by Department and by programme? Could he give the House information about the five biggest savings that have been identified as part of the Gershon programme?

The departmental figures will be in the departmental autumn reports. There has been a lot of scrutiny of this programme by the National Audit Office—that has been welcome—which said that the programme has been more systematic than previous attempts. It made several observations when it reported in February and since then, we have been working with it to ensure that the numbers are more robust. I think that it will report again early in the new year, and I look forward to hearing what it has to say.

On additional numbers, I can tell the hon. Gentleman that of the £13.3 billion-worth of overall savings, £5.5 billion came from procurement, £2.4 billion came from productive time, and £1.5 billion came from policy funding and regulation. I agree that it is important that we provide full information on the programme, because the more transparency there is, the better the chances of success.

Does my right hon. Friend agree that it is right, when possible, to make savings in bureaucracy and the administrative function of Government in order to move resources to front-line public services such as policing, schools and hospitals? In doing that, will he reject outright any proposals that the Treasury may have received to reduce overall public expenditure, as the Conservative party proposes?

I completely agree. My hon. Friend heard my right hon. Friend the Chancellor announce yesterday that each Department will be required to reduce its spending on administration by 5 per cent. year on year throughout the comprehensive spending review. I also agree with my hon. Friend about the way in which the freed-up resources should be used. We shall certainly reject proposals for £20 billion-worth of tax cuts in the Tory tax report, the £40 billion in tax cuts that the Cornerstone group proposes or the £50 billion in tax cuts that the No Turning Back group proposes. The priority needs to be to equip Britain for the future.

Why are valuable jobs being cut in Revenue offices in objective 1 areas—which are, by definition, deprived—in Wales? At the same time, jobs are being moved to Cardiff, Swansea and Wrexham, which are prosperous areas where the labour market is tight. What is the sense of that?

I remind the hon. Gentleman that there are 100,000 more jobs in Wales since 1997. It is important to deliver public services as efficiently as possible in Wales as elsewhere. We are relocating jobs through the Gershon programme and the Lyons recommendations to Wales as to every other part of the country. However, it is vital that we deliver services as efficiently as possible.

Given that yesterday the Chancellor set out massively increased borrowing requirements for the Government over the next five years, has the Gershon report failed to achieve savings or is it some other failure by the Treasury that requires every family in the UK to borrow an extra £10,000 in the next five years to support the Government’s public spending programme?

We will meet our fiscal rules over the cycle. We do not support a third fiscal rule, as the hon. Lady may. However, the Gershon programme is delivering the savings that it was designed to produce—£21 billion in the current spending review period. Yesterday, we set out an ambition to release £26 billion over the three years of the comprehensive spending review, thus making a big contribution to value for money for taxpayers.

Millennium Development Goal

9. What progress is being made towards the millennium development goal of education for every child; what financial contribution the UK will make to meeting that target; and if he will make a statement. (104891)

The United Kingdom is committed to spending at least £8.5 billion on aid for education over the next 10 years. We are entering into 10-year agreements to help finance poor countries’ education plans and we have called an international donors’ conference on education for early 2007.

I thank my right hon. Friend for that reply and for his commitment and leadership in achieving that specific millennium development goal. Research by Save the Children shows that half the 77 million children who are currently not in education live in conflict zones. The pigmy villagers that I met in Bukavu in the Democratic Republic of the Congo earlier this year were desperate for their children to receive an education. Will my right hon. Friend ensure that half of all education spending for reaching the millennium development goal goes to children in conflict-affected fragile states? It is so important to offer children, especially those who have been in militias, an alternative.

My hon. Friend is absolutely right. The latest figures show that 39 million children—half of the world’s children who do not go to primary school—live in fragile, conflict-afflicted states. That is a particular problem where traditional and conventional systems of education do not provide for those young children. Something must be done in those places. The Red Cross and Médecins sans Frontières deliver health care behind conflict lines. It is now important to consider whether we could establish an organisation to help deliver educational services to young children, even in broken-down states and those where there are conflicts. I look forward to working with our international partners and the World Bank on that. Perhaps a fast-track initiative can help provide new opportunities for children who are otherwise the victims of not only conflict but illiteracy and poverty.

Given that Ghana, Kenya and Tanzania have all scrapped school fees in recent years and subsequently enjoyed a dramatic rise in pupil attendance, does the Chancellor agree that, when providing funds to meet the millennium development goal on primary education, he should ask for explicit commitments from recipient Governments that they will abandon policies that restrict access and adopt policies that promote it?

I am grateful to the hon. Gentleman for asking that question, because it allows me to say that the support that we are giving is for free primary education. When we sign agreements that give countries long-term funding, it enables them to make the long-term decision that, whatever is happening from year to year, they will be able to fund education free of charge over the long term. When I was in Kenya, I heard that, in the week in which it made education free for primary school children, 1 million children turned up to be registered for school. They had been denied that education for years—or all their lives, in most cases—and now they were able to go to school free of charge. We will continue to push for free education as part of these plans, and I hope that we can persuade other countries that that is an essential element of providing opportunity and an escape from poverty for young people in developing countries.

Yesterday, Joseph Kabila was inaugurated as president of the Congo after its first election in 40 years. During that election, I met women who felt desperate about their own and their children’s lack of education. Does my right hon. Friend agree that education is critical if we are to entrench democracy? Will he encourage his fellow Ministers to continue to support, and also pressurise, newly elected Congolese politicians to pursue and tackle issues of good governance, security and the distribution of mining and tax revenues in order to create the conditions in which we can meet this millennium development goal?

I know that my hon. Friend has taken a particular interest in the problems of that country, and I hope that, after yesterday’s inauguration, things will progress there. We are ready to provide funds for education, and we are working with 17 African countries on 10-year plans for their education. We are also working with Canada, the Netherlands, Sweden and Norway on long-term predictable financing. Now we need to win over all the other members of the G7 to that project; that is the task for next year.

Employment (Scotland)

This year alone, there are 20,000 more people in work in Scotland, and the total increase in employment since 1997 has been 200,000. There are now a record 2.47 million people in work in Scotland.

I welcome those figures. My right hon. Friend will be aware that the Scottish National party—whose representative is, surprisingly, no longer in the Chamber—is fixated by the idea that the rise in the growth rate is the only true indicator of Scotland’s wealth. Does my right hon. Friend not agree that the way in which we use that growth to create jobs and improve skills is a key component on which the Scots will judge us? Will he give me his assurance that we will prioritise those groups that have still to enter the job market, and introduce real and practical policies that will give them that opportunity?

My hon. Friend is absolutely right. Growth in Scotland—like growth in the United Kingdom—has risen faster than in the euro area over the past 10 years, and employment has increased even faster. In her own area of Glasgow, unemployment, which stood at 85,000 at its peak under the Conservative Government, is now 17,000, and long-term and youth unemployment are both down substantially. It is important to point out, given that the SNP is not represented in the Chamber today—even when there is a question on employment in Scotland, its members fail to turn up to debate the issue—that the real future for Scotland is as part of the United Kingdom, where it will benefit from the growth-creating strategies of this Government, the new deal and other employment measures.

What forecasts for employment in Scotland has the Chancellor made for 2007-08? Has he now had a chance to read his own Budget Red Book and to reflect on the point made by the Liberal Democrat shadow Chancellor earlier? Will he confirm that my hon. Friend’s assumption for unemployment, audited for the National Audit Office, is that it will rise slowly to more than 1 million in that period?

Once again, burying himself in the detail, the hon. Gentleman has missed the main point. [Interruption.] The main point—[Interruption.] The main point—if Opposition Members will listen—is that it is not an assumption by the Government at all. It is not an assumption made by the Government, it is not an assumption compiled by the Government, and it is not an assumption used by the Government. It comes from independent forecasters outside Government, and it is nothing to do with a forecast made by the Government.

Charity Sales (VAT)

Charities already benefit from VAT zero rating or exemptions on many goods that they supply, donated items and goods sold in connection with fundraising. Total VAT reliefs for charities are worth more than £200 million per year, which forms part of the £2.6 billion in tax reliefs for charities and charitable giving provided each year.

As my right hon. Friend will know, I have represented the concerns of my constituent Catherine Haynes and others about items such as the BBC Children in Need TOGS celebrity calendar and the Janet and John CD. What assurances can she give my constituents that when they buy such charity goods, there will be special VAT arrangements for them in the future?

I can give the assurance that the available VAT exemptions and zero rates for fundraising sales made by charities are applied as widely as possible under the European Union agreements governing VAT reliefs and exemptions. Very generous gift aid relief means that charities and fundraising organisations such as Children in Need can claim 28p for every pound donated. Last year that meant that the Government paid charities £728 million through gift aid relief.

Business of the House

The business for next week will be as follows:

Monday 11 december—Second Reading of the Offender Management Bill, followed by proceedings on the Consolidated Fund Bill.

Tuesday 12 December—Second Reading of the Greater London Authority Bill.

Wednesday 13 December—Second Reading of the Justice and Security (Northern Ireland) Bill.

Thursday 14 December—A debate on fisheries on a motion for the Adjournment of the House.

Friday 15 December—The House will not be sitting.

The provisional business for the week commencing 18 December will be as follows:

Monday 18 December—Second reading of the Digital Switchover (Disclosure of Information) Bill.

Tuesday 19 December—Motion on the Christmas recess Adjournment.

I thank the Leader of the House for giving us the business up to the recess.

Yesterday, in the United States, the Iraq study group published its report. It is a chilling commentary on the management of the Iraq war and its aftermath. The Prime Minister is in the United States today for talks with President Bush following the report’s publication. Undoubtedly those talks will cover not only the report but the response of both Governments to its findings, and proposals for the future of our involvement in Iraq. May we have a statement from the Prime Minister before the recess on the Iraq study group report and future UK involvement in Iraq?

The Department of Trade and Industry is expected to issue a report on the future of the Post Office next week. It should cover support for rural post offices and the replacement for the Post Office card account. Can the Leader of the House confirm that there will be an oral statement from the Secretary of State for Trade and Industry so that Members can question him on the report? Given that the subject is of great concern to Members in all parts of the House, as Government decisions have led to the closure of many post offices—not just in rural areas, but in urban areas such as Ross road and Woodlands Park in my constituency—may we have a debate on the future of the Post Office in the new year, in Government time?

The Leader of the House will be aware that new procedures have been introduced for the Committee stages of Bills. The House voted on them only a few weeks ago. Among other things, the new procedures allow Public Bill Committees to take evidence during consideration of Bills. I think that when the Leader of the House said that they would come into force after 1 January, many Members thought that that meant that any Committees sitting after that date would be able to take public evidence. However, I understand that the new procedures will not apply to any Bill introduced—not just any that has had its Second Reading—before 1 January. That means, for example, that the Committee on the Greater London Authority Bill will not be able to take evidence from either the Mayor of London or from London borough council leaders. Is that another sleight of hand by the Government, or will the Leader of the House reconsider, to ensure that the will of the House is put into practice?

Yesterday the Chancellor gave us the pre-Budget report. There is a pattern to such things—Labour Members cheer them on the day in the House, and a few days later the Chancellor’s promises start to unravel. This one, however, started unravelling as soon as he sat down. Not only did he give us reheated spin on education and fail to mention the crisis in the NHS once—which, I presume, means that he supports the cuts in the NHS—but his claim to be addressing green issues struck a false note. Under this Government, carbon emissions have gone up and the burden of green taxes has fallen. The verdict on the Chancellor from Ed Matthews of Friends of the Earth was:

“I would give him probably one out of 10…I think it’s pretty feeble really. He’s got a terrible record. For 10 years he’s failed to provide a green budget.”

Hon. Members may recall that earlier this year, in the Budget, the Chancellor promised

“to radically reform vehicle excise duty…introducing…a zero rate for a small number of cars with the very lowest carbon emissions”.—[Official Report, 22 March 2006; Vol. 444, c. 295.]

As it turned out, no cars eligible for that zero-rated road tax are currently available to buy in Britain.

Yesterday we heard about zero-carbon homes. The Chancellor announced

“plans to ensure that within 10 years every new home will be a zero-carbon home”.—[Official Report, 6 December 2006; Vol. 454, c. 309.]

Last night on “Newsnight”, the Chief Secretary to the Treasury said that there were already some zero-carbon homes in the UK. How many are there? He was not quite sure. Where are they? In a development somewhere, he said. What part of the country are they in? He did not know. So—

Order. The right hon. Lady must understand that a lot of Members want to speak today. We have two debates to come, and Members will be disappointed if they are not able to participate. Her case about the business of next week must be concise. I do not want a rehash of yesterday’s pre-Budget report.

My very next sentence, Mr. Speaker, was to be as follows: can we have a statement from the Chancellor clarifying his policy and explaining how many zero-carbon homes there are, where they are and what exactly qualifies as a zero-carbon home? Alternatively, will we find out that, as with every announcement from the Chancellor, he smiles on the day and people suffer ever after?

The right hon. Lady asked me first about the Iraq study group’s important and timely report. The Prime Minister will give his initial reactions to that at a press conference later today in Washington—[Hon. Members: “Oh!”] Well, that is where he is. Even with his great skills, there is no way that he can suddenly whisk back here to make a statement. On the issue of a statement, it is not usual to make statements on bilateral visits of that kind. There will, of course, be Prime Minister’s questions next Wednesday—[Interruption.] It will be good enough.

On the Post Office, my right hon. Friend the Secretary of State for Trade and Industry intends to make an oral statement. As the right hon. Lady is trying to help position her party as an alternative Government—I am glad to notice the smirking laughter from the hon. Member for Ribble Valley (Mr. Evans) with regard to that statement—let me say that the idea that “the Government are to blame for the closure of post offices” is simply incorrect. Post office closures have been caused by technological changes that have led to a catastrophic drop in customers, which would have happened under any Government. What would not have happened under the previous Government, however, is the £2 billion of additional subsidy to help rural post offices in particular, many of which have fewer than 15 to 20 customers a week.

On Committee stages of Bills, I do not have the exact text of what I said, but I made it clear when introducing the measures that we were putting before the House a plan that the default setting of evidence sessions should apply in respect of Bills that had their Second Reading after 1 January. I am pretty certain that I said to the House that, for that reason, we anticipated that only five Bills or so would have the procedure during the current Session.

However, on the Greater London Authority Bill and the Offender Management Bill, I undertake, without commitment, to talk to my right hon. Friends who are handling those Bills to see whether they are willing to introduce such sessions. There is no sleight of hand; we proposed the measure to ensure that this change, which is of profound importance to the way in which the House scrutinises Bills, gets properly bedded in.

Lastly, at some length, the right hon. Lady went on about yesterday’s brilliant statement by my right hon. Friend the Chancellor of the Exchequer. The problem that the Conservative party has is that we have had an unparalleled rate of economic success over the last 10 years, which puts into dismal perspective the record of the previous Government. She asks for a statement; we had a statement yesterday.

If the right hon. Lady wants to ask detailed questions about the statement, she should table some written parliamentary questions. Also, the Chancellor has just been here for a whole hour answering questions—when, to my certain knowledge, the right hon. Lady was not in the Chamber.

Is my right hon. Friend aware of recent reports from some employers who are frightened or reluctant to display festive decorations in the workplace for fear of offending other religious cultures? Will he join me in sending out a signal that that is absolute nonsense, and that we should be able to celebrate accordingly in this country?

I am aware of the reports and I share my hon. Friend’s view that it is total nonsense. My column in the Lancashire Telegraph this week is about exactly that subject. The simple truth is that my Muslim constituents and friends also wish to see Christmas celebrated. What is forgotten by those who come out with this nonsense is that those of the Muslim faith honour our prophets, and those of the Jewish religion, as much as they honour their own prophets.

I am afraid that a press conference in Washington DC is not an appropriate response to this House to a fundamental review of policy in Iraq that has inevitable consequences for British policy. We need a statement here; what is more, we need a debate here on our position on Iraq.

I understand that the Andaman islanders have only five numbers in their language—one, two, one more, some more and all. That is approximately the level of financial scrutiny that the House is able to give Government spending. Today is Estimates day, and we will discuss the lamentable record of the Government on affordable housing and the scandalous response of the Government to the ombudsman on pensions. What we will not have an opportunity to do is to debate the estimates. Is there not a case for better scrutiny by this House of the Government’s spending? That is our primary function, and it is one that I think we do not perform properly.

Will there be a statement next week on the BBC licence fee, as we will discuss the Digital Switchover (Disclosure of Information) Bill on Monday week, and it is important that the licence fee decision be made before the Bill is debated? Can we have a statement, and a subsequent debate on an amendable motion, to give Members the opportunity to discuss the BBC licence fee properly?

Lastly, may we have a debate on, and perhaps a review of, the Licensing Act 2003—in respect not of alcohol licences, the area that has so often engendered debate, but of public performances? Here I ought to declare an interest, as honorary president of the National Association of Brass Band Conductors, west of England area. The Leader of the House may be aware that a council in Cornwall determined that a brass band in its area could perfectly properly play Christmas carols, provided that it restricted itself to carols such as “Away in a Manger” and “Silent Night”—but that if it strayed to playing anything that did not have a directly religious content, such as “Jingle Bells”, “Frosty the Snowman” or “Rudolph the Red-nosed Reindeer”, it would have to pay a licence fee. Happily, that particular situation has been satisfactorily resolved, but there are huge discrepancies between council licensing committees throughout the country as to what comprises a public performance. Can we not have some degree of consistency, and one that errs in favour of the Christmas spirit?

On the first item that the hon. Gentleman raises about the Iraq study group, we accept that that is an important review and, as I have told the House, the Prime Minister will answer questions here for half an hour next Wednesday. The hon. Gentleman asks for a debate as well. I cannot promise that there will be a debate on Iraq, or foreign policy more generally, before Christmas, but I shall certainly note that he has made a request for one after Christmas.

The hon. Gentleman also asks whether we can have better opportunities to debate estimates. The Modernisation Committee is currently conducting an inquiry into the use of non-legislative time in this House—which I think is eccentrically distributed at present—and I hope that he will put forward his own evidence on that, as I think he has raised an important issue.

I note what the hon. Gentleman says about the BBC licence fee, and on his final point, on which I think it is fair to say that he was blowing his own trumpet—

At least my last comment was unscripted—although I accept that it was just as bad as many of the right hon. Lady’s. The hon. Gentleman has a strong case for an immediate review, based on what he says about the kinds of difficulties that local authorities are getting into over Christmas carols. I promise to draw what he says to the attention of my right hon. Friend the Secretary of State for Culture, Media and Sport.

Will my right hon. Friend give time for a debate on the teaching hospitals and other hospitals in Lancashire, because of the effect that the independent treatment centre might have on them? We know that consideration is being given to handing over 60 per cent. of work. That poses a threat to the staff who work in those hospitals. The time has come to ensure that we have a full debate on that matter—and I know that my right hon. Friend is sympathetic to that point of view.

I am always sympathetic to my hon. Friend; I do not necessarily always agree with him, but that is a different matter. As he knows, there has been huge investment in the national health service in Lancashire, including in the East Lancashire Hospitals NHS Trust, Blackburn, the sum for which is £110 million, the Lancashire teaching hospitals and the Wrightington, Wigan and Leigh NHS Trust, the Royal Albert Edward infirmary and Blackpool and Fylde cardiac centre. I have talked to my hon. Friend about the effect of the so-called CATS scheme—capture, assess, treat and support—and I understand the concerns that there are about it. Like him, I am in urgent discussions with the strategic health authority and the trusts involved, and we will follow that up. I also hope that he has an opportunity to raise the matter in a debate in Westminster Hall.

Week after week, the Leader of the House shows that he does not understand what has happened to the post office network. His hon. Friend the Member for Vauxhall (Kate Hoey), is chairman of the all-party group on sub-post offices, of which I have the honour to be secretary. Is it possible for her to inform him that the real problem is that some of my post offices used to get 70 per cent. of their income from benefits, and that more than £400 million in benefit income has been deliberately taken away by this Government, along with TV licences, Driver and Vehicle Licensing Agency documents and so forth? They are now left floundering. What is the role of the post office network? Adam Crozier, the chief executive, said that he needed only 4,000 of the 14,400. Can we have a full debate and a statement in the House from the Minister concerned?

I understand the point about the role of post offices, and post offices in my constituency have also been closed, but there is a reason for that. There is no point in the hon. Gentleman trying to make mischief out of a seminal change in people’s behaviour. People no longer go to the post office to buy their TV licences and to get their benefits. They now prefer to have their benefits paid into their bank account and to buy their TV licences by direct debit. [Interruption.]

Last week, the Leader of the House turned down a request for a debate on home helps no longer being provided for many frail and vulnerable people. At the same time as he turned down that request, a 90-year-old war veteran in a wheelchair was in my constituency office because he had been assessed as being ineligible for a home help. How can a warm-hearted, generous Leader of the House such as my right hon. Friend grant a debate on fisheries next week, but refuse one on the frail and vulnerable being denied home helps?

I suppose it is because I must have made a mistake last week. I share my hon. Friend’s profound concern about this issue. I was not trying to turn down his request—I made some other points and said that it was difficult to find Government time for such a debate—but I very much hope that will be able to use the many opportunities in Westminster Hall or on the Adjournment to raise the issue. Meanwhile, I will do again what I did last week—draw his concern to the attention of our right hon. Friend the Secretary of State for Work and Pensions.

Yesterday, as column 307 of Hansard shows, the Chancellor made a fleeting reference to a very significant reorganisation of NHS clinical research and the Medical Research Council, which will have a combined budget of £1 billion. On the same day, David Cooksey produced one of the most far-reaching reports on how we deal with clinical and pure medical research. Will the Leader of the House ask the appropriate Minister to make a statement to this House on the Cooksey report, and may we have a full debate on this issue, which will affect every Member of this House?

It is an important report, and although we cannot have statements on every such report, I accept the basis of what the hon. Gentleman says, and I will consult my colleagues on whether we can have a debate on the issue.

Can the Leader of the House find time for a debate on the workings of the NHS Appointments Commission, which again in Warrington has managed to appoint only two out of the seven primary care trust members from Warrington, North? The PCT is stuffed full of business people and accountants, but there are no representatives of the most health-deprived areas. Will he draw to the attention of our right hon. and hon. Friends in the Department of Health to how profoundly dissatisfied many Members of this House are with the way in which the commission is operating, and its failure to widen participation?

I am happy to do so; I know that my hon. Friend’s unhappiness is widely shared among Members in all parts of the House. These days, people are reflecting on whether such a commission is an appropriate way to make that kind of appointment.

May I return to the Iraq review report, which is perhaps the most important issue facing this Parliament and other democracies at this time? Is it not important that we in no way undermine the morale of our service personnel in Iraq, while showing total solidarity with, and support for, the fledgling democracy in Iraq? Is it not important, therefore, that the Prime Minister, who is in the United States talking to President Bush about this issue, should make a statement in this House before we rise for the summer recess? [Laughter.]

I can almost guarantee that the Prime Minister will make a statement on Iraq before we rise for the summer recess, but as the for the Christmas recess, I cannot make that promise. I repeat: the Prime Minister, if he is nowhere else, will be here next Wednesday, and I am sure that the Iraq study group and the consequences of it will be a dominant subject for questions during that half hour.

My right hon. Friend may be aware of the recent comments by General Sir Mike Jackson about the care and well-being of our service personnel, which were a typical example of yet another military snob pining for the return of a Conservative Government. Will my right hon. Friend use his good offices to remind General Jackson and other senior ranks in our armed forces that there was an opportunity during the recent debate on the Armed Forces Bill for him—or, indeed, for any other senior military person—to express concern about the care and well-being of service personnel? Bearing in mind the fact that we asked for a federation for the armed forces, not a trade union—

Order. The hon. Gentleman should be asking about next week’s business. At this time of day, we do not have a forum for complaining about speeches that were made outside this House.

I know that the Leader of the House will accept that he has a great responsibility to ensure that this House is relevant to the people whom we represent. Will he pause and reflect that people out there realise that the Iraq study group report is immensely important? They are pleased that our Prime Minister is visiting President Bush in Washington today, and they are aware that he is returning tomorrow. They simply do not understand, however, why he is not going to make a statement on Monday, and they will not think that Prime Minister’s Question Time—which, as the Leader of the House knows, is diverse—is any substitute.

I note what the right hon. Gentleman says. Let me make it clear that the Prime Minister is not slow in coming forward to make statements—

I will of course have a word with him—on this and many other subjects. However, I do not want to hold out the promise of a statement in advance of parliamentary questions to the Prime Minister next Wednesday.

Can we have an urgent statement from the Prime Minister on his latest initiative, e-petitions? I signed one yesterday, and the No. 10 website thanked me and urged me to tell my friends—so here I am, telling my friends. I reflected on this, and I wonder how influential these e-petitions are, and whether I should be signing more.

My hon. Friend should. I know what a friend of the Prime Minister he is, and I must tell him that whenever I go into the Prime Minister’s study, the Prime Minister is at his computer terminal, saying, “Look at this—that young lad Prentice just signed another petition. I must bear him in mind for a job.”

May I return to the subject of Iraq, and the need for a full debate on the Baker-Hamilton report? The Leader of the House will have seen what it says about violence, insurgency and criminality, and about the Iraqi Government’s failure to make any advance on national reconciliation, or even to provide basic services. Is it not important that this House debate at least one question—perhaps he can answer it now, as he was Foreign Secretary at the time in question: to what extent do the Government accept responsibility for the existing situation in Iraq?

Just on that, let me make it clear that we in the Government accept our responsibilities in respect of Iraq. Those of us who made the recommendation to the House—I was one of them—accept our responsibilities, and we have made that clear. Of all of us who accept our responsibilities, the Prime Minister is very clear about them, so that is not an issue. Equally, we now have a responsibility, in a very serious situation, charted by the Iraq study group, to ensure a better future for the Iraqi people—a point on which everybody agrees, regardless of the original position that they took on the war.

I, too, want to raise the issue of Iraq, but to take another line. I hope that my right hon. Friend agrees with me that one of the few positives in Iraq has been the development of an independent trade union movement—but is he aware that the Iraqi Government’s decrees are stifling that development? Will he ask the Foreign Secretary to make a statement explaining exactly how we will support the Iraqi trade union movement? I am particularly concerned that they need the strength to stand alone, whatever happens in the future.

I have seen my hon. Friend’s early-day motion 405 in that respect and I will certainly tell my right hon. Friend the Foreign Secretary of his concerns. Iraq started well post-war in defending labour rights, but I know that there has been some backward movement since then.

Debates in the House recently on the NHS have been rightly dominated by the issue of deficits, but an even more fundamental problem is the fact that morale among nursing staff in the NHS is at an all-time low and is beginning to have an impact on patient care. In addition, 185,000 nurses are due to leave the NHS over the next five years and there has been a reduction in the number of student nurse places. I have asked this question before and I shall ask it again: can nursing staff have their own debate in this House, so that they may have access to their MPs to put their cases forward, instead of doing it through lobbying groups?

I do not accept what the hon. Lady says about the morale of nurses. In the east of England area that covers her constituency, there has been an increase of 8,000 in the number of nurses since 1997, on top of the increased number of GPs and consultants, together with a lot of investment in hospital services and other health services. On the issue of a debate, there are many opportunities to raise issues in the House, although I wish that there were more. I hope that the hon. Lady will give evidence to the Modernisation Committee about how we may better use non-legislative time, both Opposition and Government.

Can my right hon. Friend find time for a debate about credit companies, especially Provident Personal Credit, which is targeting hard-working families who were caught up in the Farepak scandal? It suggests that they should make their Christmas more affordable, but charges a typical APR of 177 per cent. It is time that we put a cap on such companies, because that is nothing but legalised theft.

I share my hon. Friend’s concern about the issue and I applaud him for his work on it. When he gave me a copy of the leaflet, I thought that the APR was a misprint, but it is not. I notice that the small print also claims that there are “no hidden charges”—on an APR of 177 per cent. This is a very serious issue and I will draw it to the attention of my right hon. Friend the Secretary of State for Trade and Industry.

You may not know, Mr. Speaker, that I am a member of a great organisation called the Campaign against Political Correctness. An ICM poll has just found that 80 per cent. of people are fed up with political correctness, including 79 per cent. of women and 72 per cent. of people who did not class themselves as white British. Given that widespread concern, may we have a debate on political correctness to find out what we can do to roll back the tide of political correctness that has done so much damage to this country?

The concern about so-called political correctness, for example in respect of the celebration of Christmas, is not confined to white people. My Muslim constituents are just as concerned about it, and so are those of Afro-Caribbean heritage. Everybody is concerned about it. I shall send the hon. Gentleman a copy of the excellent article I wrote for the Lancashire Telegraph today, in which I ask who comes out with such nonsense. Anybody who articulates it is in ignorance about the nature of our culture and religious heritage.

May I put it to the Foreign—I mean Leader of the House—[Interruption.] The right hon. Gentleman moves jobs so quickly. May I put it to the Leader of the House that the Prime Minister is involved in no mere routine bilateral in Washington. He has gone over to witness the seizing of the reins of foreign and defence policy by the grown-ups of American politics from a discredited White House, which is accompanying the collapse of British defence and foreign policy, the central plank of which has been so-called victory in Iraq. It really is not acceptable for the Prime Minister to return to the UK without giving a statement to the House on what amounts to a substantial change in Government policy. I hope that the Leader of the House will prevail on the Prime Minister on that point.

If my right hon. Friend the Prime Minister were to be persuaded to come here next Monday, I am not sure that the hon. Gentleman’s words would necessarily tip the balance. I note what he says and repeat that if there is no other opportunity, there will be an opportunity at Prime Minister’s questions.

Given the Prime Minister’s shameful refusal to come to the House to respond to the Iraq study group report, we will have plenty of time to discuss future passport policy. Will the Leader of the House keep in mind early-day motion 336?

[That this House notes that it is the intention of the Government that from the Spring of 2007 all first-time applicants for a passport shall present themselves for a personal interview and that from 2009 all applicants for a passport, including renewals, shall present themselves for an interview; further notes that the numbers involved are very great, being over 650,000 in 2007 and rising to an annual figure of around 6,500,000 in 2009 and beyond; believes that the provision of 69 interview offices to meet the demand will be quite inadequate for the purpose; and calls on Ministers to reconsider these proposals, in any event to greatly increase the number of interview offices that will be available, and to abandon the general requirement that applicants for renewal of passports shall submit themselves for a personal interview.]

The proposal for personal interviews for all passport applicants, including renewals, is a catastrophe waiting to happen and the House needs to discuss it so that we can call on the Government to change their policy.

I am not sure that it is a catastrophe waiting to happen, but as I was Home Secretary when there were one or two difficulties in obtaining passports I take such warnings with some seriousness. The idea of the interviews is to cut down on serious passport fraud, but I will raise the issue with my right hon. Friend the Home Secretary.

Benefits Uprating

With permission, Mr. Speaker, I wish to make a statement on benefits uprating in the context of our reforms of pensions and our commitment to tackle poverty and build an active welfare state. I shall place full details of the uprating in the Vote Office and arrange for the figures to be published in the Official Report. I can confirm that most national insurance benefits will rise by the retail prices index, which is 3.6 per cent., and that most income-related benefits will be uprated by Rossi, which is 3 per cent.

From next April, the basic state pension will increase by £3.05 a week for single pensioners and by £4.85 a week for couples, bringing the pension up to £87.30 for a single pensioner and £139.60 for couples. That is a real-terms rise of 9 per cent. since 1997. Next year, the minimum guarantee element of pension credit will rise, as it has since its introduction, in line with earnings. In 1997, the poorest pensioners were expected to live on just £68.80 a week. This rise means that from April no single pensioner need live on less than £119.05 a week and no couple on less than £181.70 a week. And in the Pensions Bill published last week, we will legislate to ensure that that progress is locked in.

Pension credit is now benefiting 2.7 million pensioner households, with an average weekly award of around £47. The work of the Pension Service means that we are reaching more people and ensuring that they are able to claim their entitlements as easily as possible. We have increased the take up of housing benefit and council tax benefit by those claiming pension credit through the implementation of a new, streamlined telephone application process. More than 350 additional successful housing and council tax benefit claims have been generated each week over the past year. In addition, we have contacted existing pension credit customers not claiming housing or council tax benefits, and as a result have paid out nearly £30 million in backdated claims.

We now spend more than £10 billion a year more on pensioners than if we had simply continued the policies that we inherited in 1997. Pensioner incomes have risen across the board, with the poorest benefiting the most. We have lifted more than 2 million pensioners out of absolute poverty, and 1 million out of relative poverty. On average, pensioner households next year will now be £1,450 a year better off in real terms than they would have been under the 1997 system, with the poorest third £2,100 a year better off.

Alongside that rapid progress in the fight against pensioner poverty, we have introduced measures that have helped all pensioners, and will continue to do so. Through the warm front programme, we are now able to offer financial support to all pensioner homes looking to install a new heating system. And we are providing a suite of energy efficiency measures, including insulation and central heating, to low income households. By the end of 2008, we will have insulated 2.7 million homes. As my right hon. Friend the Chancellor announced yesterday, in the coming year we will extend the Warm Front programme, benefiting a further 300,000 pensioner and other households most vulnerable to fuel poverty.

We have now reached a position in which pensioners are less likely to be poor than the population as a whole. That is unprecedented during a time of sustained economic growth, and an achievement that I believe the whole House should welcome.

The Pensions Bill that we published last week builds on the consensus created by the Pensions Commission and the national pensions debate to provide an enduring pensions settlement. To provide a solid platform on which people can save for retirement, we will widen the coverage of the basic state pension and increase its generosity by linking its uprating to earnings. The link to earnings will result in a pension that by 2050 will be worth twice as much as it would have been without reform.

We will tackle inequalities in the current system, and particularly those faced by women and carers, through the introduction of a modernised contributory principle that recognises and rewards social contributions alongside work. Today, around 30 per cent. of women receive a full basic state pension on retirement. Our reforms mean that that figure will rise to 75 per cent. in 2010 and to 90 per cent. in 2025. We will tackle the problem of complexity in the current system through a radical simplification of the state pension, and we will streamline the private pension regulatory environment to make it easier for people to plan and save.

Because it is crucial that we do not burden our children and grandchildren with the cost of a population spending longer and longer in retirement, we will gradually raise the state pension age to 68 by 2046, thereby ensuring fairness between generations and helping to secure the long-term financial stability and sustainability of the pension system.

We are laying the foundations for a lasting pensions settlement, but we will truly eliminate inequality in retirement only when we eliminate inequality in working life. That is why our welfare reforms and our aspiration for an 80 per cent. employment rate are so important. It is why we are committed to tackling poverty, and why we want to have an enabling welfare state.

A decade ago, the UK had the highest child poverty rate in the industrialised world. It is now falling faster than anywhere in the EU. Since 1997, 2 million children have been taken out of absolute poverty, and nearly 1 million out of relative poverty. From April, the poorest children will receive £64 a week through child benefit and the child tax credit. In 1997, they received only £28. My right hon. Friend the Chancellor announced yesterday that, because we know that the last months of pregnancy and first weeks of a child’s life can bring extra costs, from 2009 mothers will be eligible for child benefit from the 29th week of their pregnancy. That means an extra £200 for the first child, and up to an extra £130 for subsequent children.

The standard rate of maternity allowance and statutory maternity pay will be increased by £3.90 to £112.75 a week. Statutory paternity pay and adoption pay will also be increased in parallel to £112.75.

In 1997, paid maternity leave lasted 16 weeks. From April 2007, that will rise to 39 weeks, and by the end of this Parliament we intend to extend statutory maternity pay and maternity allowance to 52 weeks. At the same time, we intend to introduce an additional period of paternity leave for employed fathers. For the first time, parents will be able to divide paid maternity and paternity leave equally between them if they wish, thus allowing both parents to play a greater role in the first year of their child’s life. In addition, for the seventh successive year, we are freezing non-dependent deductions to relieve the pressure on low-income parents who are accommodating their adult children.

We know that work is the best route out of poverty, and today there are more people in work than ever before. Employment is up by 2.5 million since 1997 and it has risen in every region and country of the UK, with the biggest increases in the neighbourhoods and cities that started in the worst situation. Since 1997, we have increased the employment rate for groups in society that have previously been disadvantaged. Lone parents are up 11 percentage points, and disabled people are up 9 percentage points. Ethnic minorities are up 5 percentage points, and older workers are up nearly 7 percentage points. That means that more than 300,000 more lone parents, 900,000 more disabled people, 1 million more people from ethnic minorities and 1.5 million more older workers are in work than in 1997.

There are 1 million fewer people on benefits. The numbers on incapacity benefits are falling, not rising. For the first time in 50 years, the UK has the best combination of high employment, low unemployment and low inactivity of any of the G8 countries.

However, we have further to go if we are to meet the challenges of rapid economic change. As the Leitch review highlighted on Tuesday, the shape of our work force needs to change rapidly to fit the needs of our future economy. Our future success will hinge not just on getting people into work but on supporting them to stay in work and to acquire the skills, confidence and ambition to progress though the workplace.

As my right hon. Friend the Chancellor said yesterday, we want British workers to gain the necessary skills for the jobs of the future. So we intend to raise the number of apprenticeships to 500,000 by 2020. Through the Train to Gain programme we will increase the number of adults learning basic workplace skills from 100,000 last year to 350,000 a year by 2011.

Our Welfare Reform Bill will build upon the success of pathways to work, delivering on our commitment to reform incapacity benefits while ensuring security for those who are unable to work. Together with our cities strategy, it will offer a new approach to delivering employment services to some of our most disadvantaged communities.

Our pathways to work pilots now cover a third of the country, and will be nationwide by 2008. They have continued to deliver outstanding results: the Institute for Fiscal Studies confirms that there has been an increase of over 9 percentage points in the number of people leaving incapacity benefit in pathways areas, as compared with the rest of the country.

We are making great strides in tackling discrimination and breaking down the barriers that have previously stood between disabled people and work. We have also taken crucial steps in tackling discrimination against older workers. The introduction this October of the UK’s first legislation on age discrimination means that people can no longer be denied jobs because of prejudice, and that they have an equal chance of training and promotion, whatever their age.

This year’s uprating moves us further towards our aspiration of a fair and inclusive society that offers opportunity and independence for all. It reinforces our commitments to tackle poverty and exclusion and ensure security in retirement. I commend this statement to the house.

I should like to thank the Minister for his usual courtesy in allowing me an advance copy of his statement. Naturally, I welcome the increases in benefits, as far as they go. We will certainly not follow the example set by the Liberal Democrats a couple of years ago and vote against the uprating orders. [Interruption.] I have obviously drawn blood with that remark.

The Minister was right to emphasise the position of pensioners. He boasted of having increased the pension by 9 per cent. since 1997, but has he not seen the recent report that shows that each year pensioners face their own distinctive inflation rate of 9 per cent? The Government have rightly given priority to tackling poverty—although they have given themselves a boost by moving the goalposts on the targets in that area—but the issue of pensioner poverty is every bit as important. Does the Minister accept that 2 million pensioners still live in poverty?

Why was there no move to increase winter fuel payments for the elderly, especially given the recent sharp rises in energy prices? Why was there no further help for pensioners with their council tax payments, which on average have doubled since 1997? Was the help with those payments merely a pre-election bribe?

Does the Minister agree with Mervyn Kohler of Help the Aged? He has said:

“It is bordering on an insult to recycle the same Christmas presents year after year, and brazenly claim that the problem of pensioner poverty is sorted.”

Does the Minister accept that there is nothing in the pension reform package to assist existing pensioners? Is not that especially unfair to women pensioners, who either are retired already or will retire before 2010?

Does the Minister accept that there is a particular problem with benefits take-up by pensioners? Up to 1.6 million pensioners do not claim the pension credit to which they are entitled. The worst take-up of all has always been for council tax benefit, with up to 2.2 million pensioners failing to claim. The latest figures show a reduction in the numbers claiming over the previous year. What are the Government doing to encourage the take-up of that benefit, which is crucial for pensioners, who often live on their own?

The Minister rightly said that work is the best route out of poverty. We agree, but far too many people are still trapped in an overly complex benefits system. Will he confirm that 1 million people on incapacity benefit want jobs? Will he also confirm that the number of people receiving incapacity benefit for five years or more is now 20 times as great as it was when the Government came to power? In the small print—one should always look at the small print—of the pre-Budget report yesterday, the income threshold for tax credits was frozen at £5,220. Will he confirm that, as a result, many people will see a fall in the value of their tax credits, and that someone working 30 hours a week on the minimum wage will pay a marginal tax rate of 70 per cent.? How is that designed to tackle poverty or to get people out of benefits and into work?

Will the Minister confirm that £2.7 billion was lost due to benefit fraud and error last year? That is a wholly unacceptable level of loss of benefit payments. Does he agree that the Government are also set to miss spectacularly their own target for reducing the amount of overpaid housing benefit to claimants of working age by 25 per cent. by this year?

Will the Minister tell me what plans his Department has for benefit simplification? For example, the current system for disabled people is extraordinarily complex. In the Committee stage of the Welfare Reform Bill, my colleagues questioned the necessity of separate assessment phases for limited capability for work and limited capability for work-related activity. Will he promise to move towards a single assessment process and will he tell the House what he and his colleagues are doing to simplify the benefits system overall?

I welcome the fact that the hon. Gentleman will not be voting against the measures. I was looking at the exchanges from last year, when he was teasing my predecessor about welfare reform. It is interesting to look back. The hon. Gentleman said that the Government were dithering about incapacity benefit reform. We are now legislating on it. He said that the Government would do nothing about the Turner report. We have now brought forward a Bill on it. He said that the Government would do nothing about the Child Support Agency. We have a White Paper due shortly. It is quite clear that, over the last year, there has been real progress on welfare reform. We are legislating to implement the things that he said last year we would do nothing about. I am glad that he recognises that and that the Opposition support us on quite a lot of this.

In answer to the hon. Gentleman’s detailed questions, I think that the rate of inflation that he referred to is the pensioner poverty index, which is a technical measure. It is related only to the proportion of pensioners who get most of their income from the state—75 per cent., I think. Of course, the vast majority of them are on pension credit and their pension credit will go up in line with earnings. We are the first Government to do that. They used to have to live on £68.80; it is now going up to nearly £120. We have made the commitment that we will continue to do that in relation to earnings. In fact, we are going to legislate for that. I am sure that the Conservatives will join us in voting for that to continue to be uprated in line with earnings, because that is the certainty that the poorest pensioners in our country deserve. Of course, there is always more that we can do on pensioner poverty. However, it is worth remembering that when we came to power there were more than 3 million pensioners in poverty. Now there are fewer than 1 million. That has been achieved only because of the policies that we put in place—policies that the Opposition have opposed at every single stage.

The hon. Gentleman asked what more we could do to increase take-up. We are doing exactly that. I am happy to provide him with a briefing on the pensions transformation programme, which is one of the leading programmes on that in the world. It is making a significant difference. The National Audit Office, which reported on the Pension Service recently, made it clear that good progress had been made. It made some suggestions—in particular, about how we can reach the poorest pensioners in our society and how we can make sure that pensioners claim all the benefits that they are entitled to—which we will look at. I urge any hon. Member who is worried about this matter to go on a visit to look at how the local service is helping people to claim their benefits, and to see the real progress that is being made and the way that that is transforming the incomes of some of the poorest pensioners in our society.

As part of that programme, we are responding to the point that the hon. Gentleman made about council tax benefit. We want more pensioners to be able to claim that and there is a radical new way for them to do so. There is now a three-page form where there used to be a 26-page-form. Claims can be made over the phone in a matter of minutes. We are looking forward to that starting to make a big difference. As I said in my statement, we are already paying out £30 million extra in backdated claims because of the data-matching exercise that we did.

The hon. Gentleman raised the issue of incapacity benefit reform. As he knows, there is a major Bill going through the House on that. I thought that he was slightly churlish in not acknowledging the fact that there are now 900,000 more disabled people in work than there were before and in not acknowledging the great success of pathways to work, which is recognised by independent experts as one of the most successful programmes anywhere in the world for people who are on inactive benefits.

The hon. Gentleman finished by talking about fraud and simplification, which is an important subject. Our simplification unit is constantly looking at ways of simplifying benefits. For example, we have just announced a radical simplification of the state second pension system, which will mean that people will know that they will get £1.40 a week extra in retirement for every year that they care or contribute. We are always looking for opportunities to simplify the system, not least because that can help to reduce error and to deal with fraud. It is worth remembering that, before we came to power, the Tories never even measured what fraud was going on in the system. We have reduced fraud in income support and jobseeker’s allowance by two thirds. That is another area where we have made significant progress and one that I hope that the House will welcome.

I welcome my hon. Friend’s statement. More than 10,000 pensioners in Tooting will benefit from the increase in the basic state pension. A significant proportion of them will benefit from the increase in pension credit. Will he join me in paying tribute to the staff at Eaga, who have done such a great job in increasing knowledge of and information about the Warm Front initiative? I have held two events in Tooting over the last year, which have increased take-up. Does he share my concern that we need to do more to extend the reach of the new initiatives that are being announced, to make sure that all our pensioners—even the poorest and those from the most deprived communities—will benefit from some of the announcements about initiatives that he has made today?

I completely agree with my hon. Friend. The Eaga partnership has made real progress on getting people to take up energy efficiency measures and to get new central heating systems fitted. However, it is important that we reach everybody who is entitled to that help and particularly people who may be socially isolated. The extra funding announced yesterday by the Chancellor will aim to do exactly that. I urge hon. Members to make sure that they publicise the Eaga partnership and the work of the Warm Front scheme to as many of their constituents as possible.

May I also thank the Minister for his Department’s typical courtesy in releasing the statement to us well in advance? He is entitled to draw attention in his comments to those achievements that the Government have made in this area since 1997. However, may I gently suggest that there was quite a large measure of complacency in his statement, particularly set against what is going to be a far less benign environment over the next few years? Will he confirm that in the Chancellor’s Budget book yesterday, the Government’s projection for unemployment over the next year is that it will rise above 1 million and that their projection for public expenditure is that it will be growing, in current terms, at less than the growth rate of the economy over the period of the next spending review? Is that not going to make it significantly tougher to meet the Government’s targets on poverty across the board?

We are dealing with an uprating statement, but there was no uprating of the winter heating allowance. Perhaps the Minister can confirm that and remind us when there was last an uprating of the winter heating allowance. Will he confirm that energy prices have risen by something like 50 per cent. over the last four years? Will he also confirm that, although his Government have a commitment to eliminate fuel poverty by 2010, the Department of Trade and Industry is now projecting that fuel poverty will double from 1 million households to 2 million households between 2004 and 2006. In the light of that, is it not surprising that the Government are not doing more on the winter heating allowance?

The hon. Member for Eastbourne (Mr. Waterson) is still clearly quite sore about the fact that his party did not vote against the disgraceful rise of 75p in the basic state pension a couple of years ago. We make no apology at all for voting against that. Does not the lack of progress on the winter heating payment reinforce the case for re-linking and for bringing forward the restoration of the link between the basic state pension and earnings? Is the Minister embarrassed that he is still not in a position to tell the House whether the earnings link will be restored by 2012? Will he confirm that we may have to wait until 2015?

The Minister pointed out that much of what the Government have done for pensioners has been on means-tested benefits. He gave the impression that the take-up of means-tested benefits is improving, but will he confirm that up to 1.6 million pensioners are not receiving the pension credit and that about 2.2 million pensioners are not receiving council tax benefit? When about 45 per cent. of all the pensioners entitled to council tax benefit are not actually getting it, how can the Minister tell us that take-up is improving or even at a satisfactory level? Surely that reinforces the case for a higher basic state pension, which would take more people out of means-testing and give personal accounts a chance to work.

Will the Minister tell us what the Government are doing to simplify the benefits system, as means-testing is only one aspect of the complexity? Will he confirm that there are now 51 different benefits and 250 different rates—something like double the number of 30 years ago? Is that not a major challenge for many claimants? Will he confirm that the Government have made grossly inadequate progress on reducing the number of people on incapacity benefit since 1997? Will he also confirm that the rolling out of the pathways project to all who want to take advantage of it is to be halted because of cuts in his Department’s administration budget, which could have very serious consequences? Is he not worried that the Government seem to have a lot of money to spend on keeping people in dependency, but not much to help those who want to work to get back into employment?

Finally, may I raise the issue of whether we need a more fundamental review of the levels of many benefits that are not linked to earnings. The Minister will be aware that, since 1979, jobseeker’s allowance and its equivalents, for example, have shrunk from about 23 per cent. of average earnings to little more than 10 per cent. now. If the Government want to continue to reduce poverty, will they not therefore at some stage have to review the benefits that are not simply in the priority area of child poverty? Will he consider not only trying to simplify the benefits system, but bringing some of the other benefits that have fallen so far behind up to a level that will stand a chance of keeping people out of relative poverty?

As usual, the Liberal Democrat money tree is in evidence again, with a whole bunch of unfunded spending promises, which we will continue to tot up on his account. I reject the hon. Gentleman’s accusation that we are in any way adopting a complacent approach to welfare reform. Our approach aims to get 1 million people off IB and to reach an 80 per cent. employment rate. We are proposing probably the most radical reform of the pensions system since Beveridge and we have just published the Lisa Harker report on child poverty. Of course there is more to do. We are in no way reticent about bringing forward radical plans where they are needed to continue to reform the welfare state. We want to ensure a welfare state that is not only generous and able to lift people out of poverty, but active in encouraging people to get into work, providing the right support and the right conditionality to help them do exactly that.

The hon. Gentleman raised the issue of the winter fuel allowance. As he knows, there was no winter fuel allowance before 1997. It was first introduced at the rate of £20 a year and it is now £200 a year, so it has gone up far faster than earnings and far faster than inflation. For people over 80 years old, it is £300 a year. I remind the House that before we came to power, pensioners could get £60 million a year for help with heating bills; today they can get more than £2 billion, which is quite a significant difference.

The hon. Gentleman also asked about uptake of pension credit. As I said, we want to do more. The National Audit Office—not normally known for being overly generous to Departments—said that we had made very good progress. People recognise that the Pension Service has done an excellent job. It is particularly important to get money to the poorest in society who need it. Take-up of the guarantee credit is now between 70 and 80 per cent. It is important for Members not to talk down pension credit or say that somehow it is old-fashioned means-testing. It is a system for getting money to the poorest in society; it means that the poorest third in our society get an extra £2,000 a year—a massive difference compared with 1997. We want to do more, but people should acknowledge the work that has been done.

The hon. Gentleman asked when we would introduce the earnings link. As recently as a few months ago, he was probably saying that we were never going to legislate for that. He may have been surprised that we have legislated for it in the Pensions Bill. I look forward to seeing him bring forward his proposals. I think that he is to propose a citizens pension, and we will be asking him exactly how it would be funded. Would it be funded by cutting back on the state second pension, taking money away from people; by cutting back on pension credit allowances that allow disabled people to get £160 a week; or by a raid on working families—taking money off them and reducing their incentive to save for their retirement? We look forward to seeing the detail of the hon. Gentleman’s policy. Like the rest of Liberal Democrat policies, it will probably come from the money tree.

The hon. Gentleman asked finally why pensioners’ money should be going up in line with earnings and he also referred to children. The answer is that since we came to power we have recognised that pensioners should share in the country’s growing wealth. We accept the principle that, as the country gets richer, so should pensioners. In fact, pensioners’ incomes have gone up significantly faster than earnings over the past 10 years—of which we are quite rightly proud.

The best route out of poverty for people of working age is not the benefits system. Whether they be lone parents or disabled people, the best route out of poverty is work. Our system is intended to encourage people to get out of poverty by getting into work. That is exactly what we will continue to do.

I heard what the Minister said about taking pensioners out of poverty. I had thought that, with the Government’s intention of increasing the age at which people can retire, they just wanted to stop people from becoming pensioners in the first place. Is it not a fact that council tax has doubled since 1997 and that a huge chunk of pensioners are not able to get any benefits to help them stem that doubling of council tax payments? What are the Government going to do to protect the huge chunk of people who have worked all their lives and have small levels of savings or a small second pension from the doubling of council tax?

That is yet another division between the Tory Back Benchers and their Front-Bench team, given that their Front Benchers support the raise in the state pension age. If the Conservatives want to be a serious political party, they will have to face up to big decisions. If the hon. Gentleman is not prepared to support the consensus in the House on pensions, that is absolutely fine.

I am responding to the hon. Gentleman’s first point and I shall now respond to his second.

The right way for people to take up the benefit is to call the Pension Service. As I have explained, the system is far simpler than it used to be. There used to be a 26-page form and there is now a three-page form. It can be done in minutes, so I hope that the hon. Gentleman will encourage his constituents to take up what is owed to them. The previous Government used means-tested benefits as a way of discouraging people from taking up benefits; we do everything that we can to ensure that people do take them up.

I reassure my hon. Friend that many of us on the Labour Benches who also voted against the 75p pension increase are very much happier with the direction in which the Government are now moving on pensions and with this year’s statement on pensions. However, will he acknowledge that some of today’s pensioners may not benefit from the longer-term reforms, and therefore consider uprating the savings component as well as the guarantee component of pension credit in line with earnings? In the context of next year’s council tax increases, will he also consider whether there might still be a need for general help for pensioners with council tax that is free of benefit and tax clawbacks?

The Chancellor has just made his pre-Budget report and I am sure that he will take my hon. Friend’s comments as the first representation on the Budget. I am glad that our policy on pensions has increased general well-being and that my hon. Friend is much happier than he was with what the Government are doing. The savings credit goes up broadly in line with earnings—in fact, I think it has been going up faster. We want to make sure that we reduce the amount of means-testing in the system, so we are making some changes, but our principle continues to be that we want to ensure that the poorest in society have a safety net that rises in line with earnings and that we reward people’s modest savings above that level. That is what the pension credit has done and will continue to do.

May I direct the Minister’s attention to pensioners and council tax? He appears to avoid questions on the matter or to avoid responding positively to them. Does he share with me and many Members on both sides of the House—not least his hon. Friend the Member for Newcastle upon Tyne, Central (Jim Cousins), who has just contributed a question—the concern that elderly people feel that they have to risk going to prison for non-payment of council tax because they can no longer meet the huge council tax rises that have taken place? Is the Minister saying that the problem is dealt with in his benefits uprating statement, or are we to see more retired people in court, risking prison, because they cannot pay their council tax?

As the hon. Gentleman knows, there is no reason for any older person to end up in court because of council tax. The key thing is for people to take up council tax benefit if they are struggling to pay and, if I may say so, for councils to moderate their council tax increases. My local authority tries hard to make sure that council tax goes up less fast than inflation and I hope that the hon. Gentleman will be pressing his to do the same thing, thanks to the above-inflation money that the Government have given local authorities over the past few years—in contrast to his Government—and the extra money for schools announced in the Chancellor’s statement yesterday.

In his opening remarks, the Minister said that he wanted to reduce prejudice in employment. He also announced improvements in maternity benefit, which are welcome to pregnant women and new mums but less welcome to small employers whose firms employ only a handful of people. When the absent employee is a key worker such firms cannot afford to employ an additional person to take on their duties. Has the Minister considered how small firms can be helped so that the increase in maternity benefit does not have an adverse effect on potential employment?

I welcome the hon. Lady’s support for the progress that is being made on maternity and paternity leave. I understand that my hon. Friend the Minister for Employment and Welfare Reform is in discussion with representatives of the small business sector to make sure that the hon. Lady’s concerns are addressed, and I am sure that he would be happy to meet her to discuss those issues.

I think that the Minister said in his statement that the Pension Service is encouraging pension credit take-up by visiting pensioners in their own homes. My father, Mr. William Bone—a man of great integrity and a public servant all his life—is a little frail now. A little while ago, he rang me because he was concerned about a telephone call he had received from the Government as they wanted to meet him to investigate his finances. I attended the meeting, which was, of course, about taking up pension credit, and it was fine. I asked the gentleman how many of the people he had visited had actually been able to take up pension credit and he replied, “Absolutely none”. I am worried that frail, elderly people are concerned about such visits.

The Pension Service is sensitive in such cases and there is specific training to make sure that people deal with customers appropriately. Age Concern carried out research with people who had gone through that process with the Pension Service. There have been concerns that older people do not find it helpful to use the telephone, but actually 70 or 80 per cent. of them found the experience very satisfactory or satisfactory. We introduced a local service of home visits for people who did not want to use the telephone. We try to use the right approach and we always try to be sensitive to the needs of older people to make sure that they understand exactly what they are being asked.

How concerned is the Minister that pensioners are, in effect, facing an inflation rate that could be three times the rate faced by the rest of us? Should not far more work be done by his Department to ensure that pensioners are protected from those cost-of-living increases? In that regard, was not this year, of all years, the time to do something serious about the winter fuel allowance, given the massive utility bill increases for pensioners?

That is why the inflation rate in the pension for next year will be higher than in recent years. Over the past 15 to 18 years, inflation faced by pensioners has gone up less fast than the retail prices index overall. I am not sure that linking pensions to a smaller subsection of the overall inflation figures would be a sensible policy, as it would result in much more fluctuation. We agree that inflation is not the right measure for the future; we will be linking the pension to earnings, which will address many of the hon. Gentleman’s concerns, and I am sure that his party, too, will back that measure.

One group of people who, sadly, do not take up the benefits that they deserve, or for whom the take-up rate is low, are terminally ill patients, and although there is a special fast-track benefit system for them, it is clearly not working. Will the Minister look into how benefits for terminally ill people can be fast-tracked so that they do not have to worry about their financial situation at such a desperate time?

That is an important point and we are looking to address it, in part through the Welfare Reform Bill. We take the matter seriously throughout the whole benefits system. The hon. Gentleman is correct to raise it and we shall continue to address it.

Points of Order

On a point of order, Mr. Deputy Speaker. A year ago, on 11 December at one minute past 6, my constituency and half of eastern England was rocked by the largest explosion this country has seen since the second world war. The following day the Deputy Prime Minister responded perfectly well by kindly coming to the House to make a statement about the disaster and how plans were going. At present, I am dealing with five Secretaries of State on the continued problems for my constituency following the Buncefield explosion, but no Minister has come to the House since about the matter, even though it was promised that the House would be fully informed about the progress of the inquiry and the reconstruction. Can you advise me, Mr. Deputy Speaker, how I can get a Minister to come to the House to tell the country and my constituents what is going on with regard to that disaster?

I understand the hon. Gentleman’s great concern about that very serious matter. Ministers on the Treasury Bench will no doubt have heard his remarks, but it sounds to me like an ideal subject for an Adjournment debate.

On a point of order, Mr. Deputy Speaker. On 4 December, the Under-Secretary of State for the Home Department, the hon. Member for Bradford, South (Mr. Sutcliffe), responded to my question about potential cuts in the integrated drug treatment programme by saying that he did not accept that the Government had cut the programme. I have since had the opportunity to check the position. Paul Hayes, the chief executive of the National Treatment Agency for Substance Misuse confirmed that the £28 million pledged to the scheme for 2006-07 would be “scaled back” to just £12 million. I checked in the “Oxford English Dictionary” that the definition of “cut” is “reduce” or “cease”, so do you, Mr. Deputy Speaker, share my concern that the Minister may have inadvertently misled the House and that the position needs to be corrected?

I understand the matter that the hon. Gentleman raises. There is a great problem with the interpretation of statistics of all kinds, but all I can suggest is that he pursues the matter as vigorously as he normally does.


Income Tax

Mr. Chancellor of the Exchequer, supported by Mr. Secretary Darling, Mr. Secretary Hutton, Mr. Stephen Timms, Dawn Primarolo, John Healey and Ed Balls, presented a Bill to restate, with minor changes, certain enactments relating to income tax; and for connected purposes.: And the same was read the First time; and ordered to be read a Second time on Monday 11 December, and to be printed. Explanatory notes to be printed [Bill 14].


[1st Allotted Day]

supplementary estimates 2006-07

Affordable Housing

[Relevant documents: The Third Report from the Select Committee on the Office of the Deputy Prime Minister: Housing, Planning, Local Government and the Regions (now the Communities and Local Government Committee), Session 2005-06, HC 703, on Affordability and the Supply of Housing, and the Government response thereto, Cm. 6912.]

Motion made, and Question proposed,

That, for the year ending with 31st March 2007, for expenditure by the Department for Communities and Local Government—

(1) further resources, not exceeding £1,351,500,000, be authorised for use as set out in HC 2,

(2) a further sum, not exceeding £1,357,195,000, be granted to Her Majesty out of the Consolidated Fund, to meet the costs as so set out, and

(3) limits as so set out be set on appropriations in aid.—[Jonathan Shaw.]

Access to housing, especially affordable housing, is a key issue for all our constituents and it is becoming ever more urgent. I am sure that we all know from our constituency case loads about the effect of the shortage of housing on individuals. It reduces the ability of young people to buy their own home and puts enormous pressure on social housing, especially social rented housing, and families are trapped in overcrowded and sometimes substandard housing. That was the reason why the Communities and Local Government Committee—although, at the time, it was the Select Committee on the Office of the Deputy Prime Minister—decided to devote its first large investigation to the subject of the affordability and supply of housing. I am sure that that is also the reason why there are many hon. Members in the Chamber. I know that a great many of them wish to speak, so I will try to keep my remarks fairly short.

Over the past 15 years, it is indisputable that the annual rate of house building has fallen while the rate of household growth has increased. There was an upturn in the number of houses built in 2005—there were 160,000 built, which was the highest number since 1994-95—but there is clearly still a need for further increases. Although there is a slight excess of houses over households nationally—the figure was 1.7 per cent. in 2003—that figure is falling and there is enormous regional variation.

The Committee endorsed the Government’s view that the rate of house building must be increased if problems of house shortages are not themselves to increase. However, given that the latest estimates of household growth are even higher than before, at 209,000 households a year, the Committee questioned whether the Government’s target of an extra 200,000 houses a year by 2016 was actually enough. We urged that the target should be regularly revisited and reviewed.

The Committee also thought that national figures were not especially informative, given that there was such huge regional variation. Some 60 per cent. of household growth is occurring in London, the east, the south-east and the south-west. There are already 3.5 per cent. more households than homes in London. The National Housing Federation, in an excellent leaflet that I commend to hon. Members as a source of statistics, highlights the scale of the “affordability chasm” in the south-east, such is the extent of the problem. Of course, the Committee accepted that there are housing hot spots in many other parts of the country and that affordability problems are both increasing and occurring in parts of the country in which they previously did not.

The Committee felt that it was absolutely crucial that regional and local house building targets reflected regional needs. We thought that they should not be just dictated by the market, but that equal weight should be given to the needs of local economies and environmental and social issues. In the regional and local context, this is not just a question of housing numbers. Additional housing should match local demand through both a mix of tenure and a range of housing sizes and types.

The hon. Lady makes a powerful argument about housing targets. However, she will be aware that on the eastern and western flanks of the city that we represent, the planning authority is not the local authority, but an unelected, unaccountable quango. Does she agree that if any community is to be genuinely sustainable, it must have the support of local people, and that the planning authority should thus be accountable to local people, not the national Government?

I hope that the hon. Gentleman will forgive me, but I am speaking as the Chair of the Select Committee. I am trying to represent the all-party Committee’s report, which was supported by Conservative Members. I would ask that we do not divert the debate by concentrating on the city that both he and I represent. There will be plenty of other forums in which to deal with those specific problems in our city, which, as he knows, I feel as strongly about as him.

Given that over the past five years house prices have risen sharply and that average earnings are about £5,000 a head lower in rural areas than in urban areas, does the hon. Lady agree that in legitimately seeking an expansion in the quantity of housing available in areas such as mine and others, it is important that the Government address in terms both the requirements for infrastructure in general and my constituents’ concerns about water shortages, sewerage capacity and implications for the food plain?

Indeed. The Committee made recommendations on those matters, which I shall come to later.

As I said, housing planning needs to be related to regional and local economic planning. Employment and housing need to be related to each other. Account must be taken of the fact that employment has run ahead of housing in some parts of the country, while the reverse has been the case in others.

On housing tenure, the Committee noted that the major decrease in house building numbers has been seen in the provision of social housing. Of course, council housing stock has been eroded through the right to buy. We accept that home ownership is an aspiration for very many because it both meets housing need and provides a way of gaining access to wealth and equity. We also supported the Government’s schemes to promote access to home ownership through shared ownership and equity schemes, but we felt that there had to be not only an increase in the supply of shared ownership schemes, but support for people to enter the market. Support for equity mortgages could otherwise just further price growth, which would not improve the situation.

We were worried that there was insufficient emphasis on the supply of social rented housing. When Shelter gave evidence to the Committee, we endorsed its target of building an extra 20,000 new social rented homes annually. We were worried that the Housing Corporation had enormously increased the proportion of its funding being spent on shared ownership. Although social rented housing still represents slightly more than half the housing provided by the Housing Corporation, we want investment in social rented housing to be protected by requiring the corporation to spend a certain percentage of its funds on such housing, rather than allowing the proportion to erode further.

A great deal of the pressure for housing growth is coming from changing demography. Again, demographic pressures vary from region to region, but, broadly speaking, there has been an increase in the number of one-person households, which has happened partly because we are all living longer and also because of changing family patterns and relationship breakdown. Those factors need to be reflected in the housing provided in regions. There are shortages in new family housing in many regions, especially social rented family housing. We want to make it clear that new housing must meet the increasing needs of the elderly population, by including provision for sheltered housing, and include housing for people with disabilities.

As part of building more sustainable communities, the Government have quite rightly put an emphasis on increasing density in new housing developments. That makes the best use of land and can be much more public transport-friendly. The Committee stressed, however, that that must not lead to a preponderance of smaller units and flats simply to achieve that density. There are examples in which high density has been achieved successfully while still providing family housing. We want the Government to ensure that funding streams are sufficiently flexible and that local authorities are encouraged to use their planning powers effectively to ensure that high density is achieved with a proper mix of housing sizes and tenures.

The Committee wants the best use to be made of existing housing and we urge the Government to increase their target on reusing empty homes. We were persuaded that further measures were needed to discourage the purchase of second homes in places such as rural areas and those in which in-comers purchasing second homes, who usually have higher incomes than the existing population, are driving up house prices and depriving local people of access to the housing supply. The Government have not been persuaded on either of those points.

My hon. Friend refers to the priority of ensuring that empty housing is reused. Is not the greater use of under-occupied housing a parallel issue? In the estates for which I am responsible—no doubt my hon. Friend will have had similar experiences—I often find that three or four-bedroom local authority houses are occupied for long periods by an elderly person for want of either appropriate sheltered accommodation, or a financial incentive to free that house up for a family. What does the Committee have to say about that?

I do not recall the Committee addressing that specific issue, but it is dealt with in the points that we made about the need to take account of the increasing number of elderly people when planning what types of new housing—both housing for sale and social housing—is to be provided. One problem that local authorities have in persuading elderly tenants to move out of their present housing and into new properties is that they often do not have suitable, attractive sheltered housing. Clearly, no one would want to force elderly people to move out of their homes into less acceptable accommodation.

The Committee recognised that housing makes an enormous contribution to climate change, and that factors such as where and how new housing is provided could have an environmental impact. Planning plays a key role in facilitating methods of development that minimise effects on the environment, but the issue is not clear-cut. New build concentrated in and around urban areas, and in expanding urban areas—even if it is on a greenfield site, and so has a negative environmental impact in that way—can reduce commuting, if there is an excess of local jobs. That would have a positive environmental impact. It could make public transport a much more realistic alternative, as well as regenerating and revitalising our cities. That is an issue on which the balance must be struck locally. It is, of course, extremely important for the quality of life of people living in our cities, including new residents, that green spaces in cities be protected, and not used for urban packing.

Because of the upward trend in building regulations, new housing is much more sustainable than most existing housing. The Committee urged the Department for Communities and Local Government to sign up to a climate change public service agreement, and we want the code for sustainable buildings to be strengthened still further. The Government’s moves on a commitment to zero-carbon housing are welcome.

In the context of the debate on new housing and climate change, did the Committee examine, or make a recommendation on, the issue of changing building regulations to promote the use of geothermal heating, or any other form of heat-preserving structures, in developments?

Not specifically, but the Committee welcomed the fact that building regulations were being improved, and that the code for sustainable building has put much more emphasis on microgeneration and renewable energy. The Committee welcomed the measures that were being taken, but we thought that the measures should have gone further, and should have been faster.

Some evidence to the Committee, particularly from the midlands and the north, showed that freeing up development on greenfield sites could discourage development on difficult brownfield sites, which is often crucial to urban regeneration. The Committee recommended that planning policy statement 3, which at the time of our report was in draft, should restore the sequential approach to prioritising brownfield, but that is not a recommendation to which the Government agreed. They argued that local authorities can deal with that issue through the planning and local development frameworks.

Finally, on infrastructure—I am sorry that the hon. Member for Buckingham (John Bercow) has left the Chamber, but I am sure that he will read Hansard tomorrow—obviously, if new housing and new housing areas are being created, we need to create new communities. The provision of infrastructure such as roads, schools, GP surgeries and so on is crucial. In some parts of the country, such as Kent and the Thames Gateway, building land is available, some of which has had planning permission for quite some time, although that permission has not been implemented, because the area needs the infrastructure to make those development sites viable.

The precise mechanisms for funding infrastructure were not part of the investigation or of our report, but I am sure that hon. Members will note that the Government are today publishing—indeed, they may already have done so—the next stage in consultation on the planning gain supplement, on which the Committee has also reported. That could, in future, be a mechanism for providing a guaranteed source of funding for the infrastructure that will be needed when new housing comes on stream. In growth areas such as Milton Keynes and Ashford, there is already such a mechanism: the infrastructure tariff, under powers in section 106 of the Town and Country Planning Act 1990, which ensures that developer contributions come through, and that there is forward funding, so that infrastructure is provided in a timely manner—indeed, sometimes before the housing is provided.

Does my hon. Friend not agree that it would be beneficial if section 106 agreements gave an exact definition of “affordable housing”, setting out the criteria that would have to be met, specifying the bedroom groups and giving more detail? She may know of a case in my constituency in which affordable homes were offered at 90 per cent. equity, at a cost of between £300,000 and £400,000. Inevitably, they were taken up only by people on very high incomes, such as City bankers, yet because of the lax way in which section 106 agreements are drafted the homes still counted towards Wandsworth borough council’s affordable housing target.

I am aware of that case, and there is clearly a concern—particularly in London, where land values are very high—that the affordable housing powers under section 106 are not operating as effectively as they might. In another report, the Committee urged the Government to look again at section 106 and to consider ways in which it could be used more effectively, as there seems to be considerable variation in the way in which local authorities use those powers. Some of them use the powers extremely effectively, but there is evidence that many do not.

Finally, I simply repeat that the issue is incredibly important to the people whom we represent, and to young people in particular, who unfortunately do not have the same expectations about being able to buy their own home that their parents may have had. The Committee’s report provides an overview of the main issues in the subject, and gives key recommendations. I hope that, at the end of the debate, the Government will respond positively, not only to the recommendations, but to other issues that I am sure hon. Members will raise in the debate.

Liberal Democrat Members welcome the rise in public and political awareness of the housing issue, which is clearly a major policy concern. We welcome the debate, and I congratulate the hon. Member for Milton Keynes, South-West (Dr. Starkey) and her Committee on producing a thoughtful, thorough and balanced report that is challenging and provocative in places. Its measured language sometimes disguises the fact that it points out that things are essentially going from bad to worse, and that in many respects Government policy is not yet fit for purpose—and, indeed, that the Government are perhaps not even properly engaged on the right issues.

The report, and other reports that have come to our attention, suggest that we have a problem with housing. There is not enough of it; it is not of the right type, in the right place or at the right price; and, in many ways, it is not sustainable economically, socially or environmentally. Clearly, putting all that right is not a simple job, and it cannot all be done by the Government or the House, however hard we try. There are, however, some clear messages in the Select Committee’s report, and I hope that when the Government respond to the debate, they will pick up on those messages, as well as some of the report’s more refined points.

As well as the Select Committee report, there has been the Barker review, a Shelter report, and a Town and Country Planning Association report—a range of documents, all of which essentially make the same key points. The first of those points is the deficiency in the provision of social housing in England. Some 600,000 social housing units have been sold through the right-to-buy mechanism, and although expanding owner-occupation is, of course, a good thing, it means that there has been a significant reduction in the social housing stock. In addition, since Labour came to power in 1997, the waiting list for social housing has gone up from 1 million to 1.5 million families. Some 525,000 families have been added to the waiting list for social housing at a time when 600,000 social houses and housing units have been lost in the sector.

We know from reports, including some paragraphs of the Select Committee report, that 94,000 families are homeless or in temporary accommodation; another 500,000 are in overcrowded accommodation, especially in the south-east and London. However, every part of the country is affected, including my constituency in Greater Manchester. Some £14 billion has been stripped from the social housing budget as a result of right-to-buy sales. That money could have built a year’s supply of housing, so the Liberal Democrats strongly endorse the construction of more social housing, as recommended by the Select Committee and by other reports, including the Barker report. It is essential that we tackle that problem.

Will the hon. Gentleman therefore recommend that Islington council set an overall target of 50 per cent. of new-build social housing, as opposed to its present mealy-mouthed policy?

That sounds very much like our exchange in Westminster Hall a week or two ago. I shall come on to the question of the proportion of affordable homes that local authorities can or should provide in their planning agenda, but I should like to know whether the Government accept the 48,000 additional social housing units a year recommended by the Barker report? Do they prefer the 54,000 figure recommended by the Cambridge Centre for Housing and Planning, or do they advocate a different figure? The figures that the Department is using are clearly inadequate—a fact that the Select Committee report underlines.

The hon. Gentleman has been admirably clear about the increased housing supply that he would like, but how will it be paid for? Will it be funded by increased Housing Corporation grant, or by developer contribution, because, as the hon. Member for Milton Keynes, South-West (Dr. Starkey) suggested, suppliers of market housing provide a proportion of social housing? If it is the former, by how much should taxes increase? If it is the latter, how much additional market housing is needed to provide that additional social housing?

That brings us to the crux of the issue raised by the hon. Member for Milton Keynes, South-West. How can we use the planning and development system to lever in more social housing? I draw the hon. Gentleman’s attention to South Shropshire district council and other councils that set a high affordability requirement for developers who submit proposals. My colleagues on South Shropshire council set a 50 per cent. requirement, of which 50 per cent., or a quarter of the overall total, is social housing for rent, enabling people to be taken off the rented social housing list and given accommodation.

Cambridge city council set a 50 per cent. affordability target, but it was not backed by the inspector, so it fell to 40 per cent. The inspector said that the system is constrained by national policy. Contrary to what the hon. Member for Islington, South and Finsbury (Emily Thornberry) said, the problem is rarely local policy, but the national policy framework. I hope that the Minister will deal with that point in her speech.

I thank my hon. Friend for raising that serious matter. Many local authorities would like to go further and faster in setting affordability requirements in their area.

May I finish my sentence? That is what residents want, too. In surveys across the country, the majority of residents—some 68 per cent.—say that more affordable housing should be available in their area. There is therefore public will for such provision and, in many cases, local councils are willing to deliver. It is true that national guidelines have been used to inhibit that development. Will the Minister tell us how PPS3 and the affordable housing paper that she has just published will help? Will she scotch the rumour that the planning Bill will include measures to remove those decisions from the local level and subject them to national regulation? Will she agree that affordability should be determined by local planners, and if planners wish to opt for high levels of affordability they should be permitted to do so?

I am grateful to the hon. Gentleman for giving the example of South Shropshire district council, which is in my constituency, and on which I have the great pleasure of continuing to serve as a local councillor. Regrettably, however, its policy is not the uniform and unqualified success that he would like to portray. I should like to highlight two issues. First, several developers are keen to apply for developments in the district but have been deterred by the significant affordable housing requirement—they cannot make the figures stack up.

Order. I am reluctant to intervene on the hon. Gentleman, but he appears to be gently embarking on a speech. Perhaps he should leave it there, as I know he is seeking to catch my eye.

I was warned in a dream that the hon. Gentleman had some information. Having visited south Shropshire and talked to residents, I gained the impression that the programme was popular and successful. I am sure that he will contradict me if I am wrong, but, whatever some developers believe, there is no shortage of developers willing to invest in the area. I am not surprised, because it is an attractive area in which housing demand is high. Another issue highlighted by the Select Committee report is the shortage of housing units in most areas.