Skip to main content

Commons Chamber

Volume 459: debated on Tuesday 17 April 2007

House of Commons

Tuesday 17 April 2007

The House met at half-past Two o’clock


[Mr. Speaker in the Chair]

Oral Answers to Questions


The Secretary of State was asked—

Roads (East Anglia)

1. When he next expects to meet representatives of local authorities in East Anglia to discuss improvements to trunk roads. (131449)

That is a pity. Is the Minister aware that the A47 is vital to Norfolk’s economic future, especially given the rapid expansion of Norwich airport and towns such as King’s Lynn in my constituency? Is he aware that most of the A47 is substandard single carriageway and that many villages in my area, such as Middleton and East Winch, are crying out for bypasses? Why has the road been downgraded from a route of national importance to one of only regional importance? Will he reverse that decision?

No, I cannot promise to reverse that decision, as the distinction between routes of regional or national importance was made according to objective criteria on which we consulted and were discussed before they were put in place. Unfortunately, the local regional funding process gave no priority to dualling the A47. We have looked into the possibility of building small-scale bypasses for the two villages mentioned by the hon. Gentleman, but they make no economic or environmental sense in the absence of any overall dualling of the A47.

On a point of order, Mr. Speaker. In view of the disgraceful nature of that reply, I plan to raise the matter on the Adjournment.

Railways (Overcrowding)

We will continue to increase capacity through the franchising process and in other ways. In particular, I announced on 14 March that the high level output specification, to be published in the summer, will include a commitment to 1,000 extra carriages. They will be targeted on the most congested routes on the network.

The Government’s announcement of extra carriages for longer trains is to be welcomed, but does the Secretary of State accept that many commuters and other travellers in my constituency are paying considerably higher fares for the doubtful privilege of travelling in the equivalent of cattle class? That is simply not acceptable, for reasons of comfort and, more particularly, safety. When can travellers expect to see improvements?

With the greatest respect to the hon. Lady, what is not acceptable is for a party to suggest that it is possible to deliver lower fares, higher levels of investment—

Order. It is not for the Secretary of State to talk about the hon. Lady’s party. He is responsible for giving ministerial replies.

As I was saying, Mr. Speaker, that is not the approach that the Government have adopted. Instead, we have committed ourselves to 1,000 extra carriages. Moreover, it will be of particular interest to people in the Congleton constituency that bidders for the new cross-country franchise have been asked to make proposals for an increase in seating capacity of at least 30 per cent. on key sections of the franchise. In addition, I can assure the hon. Lady that we pay serious regard to passenger safety, that it is a matter of continuing concern in my Department, and that we are continuing to work on it.

Thanks to a very effective local campaign, First Great Western has reinstated much-needed commuter services at Severn Tunnel Junction in my constituency. However, the company has now reduced capacity, which has led to overcrowding. Will my right hon. Friend join me in pressing First Great Western to ensure that passengers can travel in comfort and safety on that route?

I assure my hon. Friend that I have been in regular dialogue with First Great Western in recent months, and that I have impressed on the company that the standards of service that it has provided on those routes under its franchise have fallen below what passengers and the rest of us have the right to expect. Discussions are continuing, and work with the company is under way. It is now up to First Great Western to offer the level of improvement to which it has made a commitment.

How much faith can we have in the Government’s ability to tackle climate change when it will be another seven years—that is, 17 years since the Government were first elected—before full capacity in the most environmentally sustainable system of transport is achieved? What sort of record is that?

I fear that the hon. Gentleman should read his brief from Conservative central office more carefully. If the guidance suggests that the problems that he describes in fact exist, perhaps he should take that up with its authors. Let me share with him some of the recent capacity enhancements that the Government have delivered. For example, the ongoing Great Western high-speed train refurbishments are increasing seating capacity by about 20 per cent. In addition, the Chiltern route upgrade between London, Marylebone and Birmingham was completed in 2005 and is increasing frequency, while the introduction of Meridian Trains on the midland main line in 2004-05 resulted in increased capacity. The hon. Gentleman is right: we recognise that there is more to do, given that more people are using the railways. That is why between February and March 2007 there was 12-car running on the south-west mainline between Southampton and Portsmouth and London Waterloo, why a new service between Kettering and London will be introduced in December 2008, and why new domestic services will be introduced on the channel tunnel rail link between Kent and London in 2009. That is the Department’s ongoing work, and the suggestion that—

Thank you, Mr. Speaker. May I also thank my right hon. Friend for his announcement of the 1,000 new railway carriages? What might be the effect on that investment of considering breaking up Network Rail?

I have already spoken about our additional capacity and investment in the railways—for example, on the west coast main line. I do not believe it would be wise to break the west coast main line into the 14 component parts represented by the train operating companies that work on the line. The more sensible approach is to recognise that the stability of the industry structure that we have secured in recent years and the sustained investment have not only enhanced capacity on the railway but increased performance and safety.

One way of tackling overcrowding is to increase frequency. In the context of services to Inverness, two things can be done: frequency can be increased between Inverness and London through the east coast main line franchise, and Network Rail can make the necessary investment to reduce journey times between Inverness and Edinburgh to under three hours. Will the Secretary of State use his good offices to support both those outcomes?

The hon. Gentleman is well aware that responsibility for many aspects of rail policy now rests with the Scottish Executive; I will certainly undertake to ensure that his comments are passed on.

My right hon. Friend has rightly spoken about the benefits of upgrading the west coast main line. Will he look at ways of ensuring that the benefits of upgrading are felt as widely as possible by improving inter-city rail services between Edinburgh and north-west England, especially Manchester?

My hon. Friend is right in recognising that there have been significant improvements on the west coast main line as a result of the sustained investment in recent years—not only in services operating from the north to Manchester but in services from London to Manchester, where there has been a significant transfer, or a modal shift, from use of air services to use of the train. There are potential benefits to be gained not just on a single route but in many parts of the country as a result of the investment in the west coast main line.

If the Secretary of State really wants to reduce overcrowding on our railways, why does his Department not try to do less rather than more? His Department has more day-to-day control over the railways than it had before privatisation. Virgin Trains wants to operate 11 carriages per Pendolino train and the rolling stock company wants to provide the carriages. Why does the Department not just butt out and let them get on with it?

The hon. Gentleman makes an uncharacteristically ill-informed observation. I can assure him that in the correspondence and discussions that I have had directly with Virgin Trains about its proposals to increase the number of carriages on the Pendolino trains the relationship with the Department for Transport has been constructive and positive. I am confident that we will find a way through in terms of financing.

As for the substantive allegation that the hon. Gentleman levels that there is greater operational control, it is determined by the effective operation of many train operating companies under the present franchising system, which in part explains the fact that record numbers of people now use the railway compared with previous years.

My right hon. Friend will be aware that certain rail operators such as Southern have used overcrowding as an excuse to ban bikes on trains. Will he assure me that in forthcoming strategy documents this will be reviewed? It is obviously of great environmental importance that we tie up bike and rail travel.

A distinction can be drawn between peak-time travel, when pressure on the network is greatest, and other times, but I assure my hon. Friend that the importance of accommodating not only the commuter and business traveller but leisure travellers and those who want to take bikes on trains is recognised.

Last week it emerged that the Scottish Labour party has been holding talks with Network Rail about giving it the right to run track and trains in Scotland. May I ask the Secretary of State, who as you will recall, Mr. Speaker, is also Scottish Secretary and plays a leading role in running the Scottish Labour campaign, whether those talks have his support?

You, Mr. Speaker, can imagine that this was a matter in which I took some interest last week. I was interested in the letter that Network Rail sent to the newspaper that published the suggestions, and I was interested in the comments of the First Minister, who said that he had absolutely no intention of renationalising the railway in Scotland. I can confirm that it is certainly not the stated policy of the Government, for the reasons that I have already outlined. It is for others to explain why breaking up the Network Rail infrastructure into its 14 component parts on the west coast main line would improve safety, performance or reliability.

As the Government always remind us, Network Rail is a private company, so let us be clear: does the Secretary of State support the principle of Network Rail running trains as well in Scotland?

Let me make two points in response to that question. First, as I have already outlined to the House, there is a significant degree of devolution in the rail industry in Scotland as a result of a transfer undertaken by my predecessor in this office. Secondly, on the substantive point, the right focus for Network Rail is to continue to deliver not just the efficiencies secured in recent years but the engineering excellence that has led to higher levels of rail safety and performance than was experienced as a direct consequence of the Tories’ botched privatisation of the railways.

Will the Secretary of State disregard the point made by the Liberal Democrat spokesman and take an interest in the Virgin Trains proposal for longer Pendolino trains? Is my right hon. Friend aware that the leasing company’s excuse for not taking action at present is a competition investigation? Will he take action to smooth through that problem and get those trains longer as soon as possible?

I assure my hon. Friend that it is not a prospective offer that I am making—I have already been directly involved in discussions with Virgin Trains and have spoken to Sir Richard Branson.

Night Flights

There are no plans to change the new night flying restrictions that were introduced for the period between October 2006 and 2012 for Heathrow, Gatwick and Stansted airports.

The way in which the Government measure the noise impact of night flights is flawed. Why are no measurements taken of noise impact in some of the worst affected boroughs, such as Hammersmith and Fulham and Wandsworth, and why do the measurements that are taken apply only to take-offs and not to landings?

Perhaps I can assure the hon. Gentleman by pointing out that the footprint is what matters. Under Heathrow’s new night noise regime, which covers the six years from 2006 to 2012, although movements will be the same the noise quota will be down.

Everyone accepts the increasing economic importance of India and China, but does the Minister accept that early morning flights from those locations are getting ever earlier and are, therefore, disturbing the sleep of hundreds of thousands of Londoners? What will she do to try to ensure that we have a regime that keeps such night flights to an absolute minimum?

We have a strict night flight regime, under which, as I indicated, there is control both on movements and the noise quota. I am glad that the hon. Gentleman recognises—or I hope he does—that air travel benefits society as a whole, but I accept that its impacts are distributed unevenly. That is why we are keen to bear down on night noise and ensure that the quotas are stuck to. If the hon. Gentleman has evidence to the contrary, I am sure he will take it up with the airport concerned, and if he fails to get satisfaction I am sure he will draw the matter to my attention.

The Minister will be aware that operators that run excessively noisy planes can be fined. I am sure she is also aware that last year the average fine for an excessively noisy plane was only £570—probably not enough to buy a seat on most flights. Does she agree that a £570 fine is unacceptably low and, if so, what will she do to make sure that we properly clamp down on plane operators who breach noise limits so that it makes a difference to their behaviour?

The best way forward in reducing noise is, first, to acknowledge that new aircraft are getting quieter, and we have worked towards achieving that. In addition, there are better operational practices, which the Government have encouraged, as well as a move to improve international standards through discussions in the international community. Those are the strongest and most direct ways to reduce noise and inconvenience to the hon. Lady and other constituents.

Bus Services

Public funding of bus services now totals £2.5 billion annually. Decisions on the allocation of departmental funding in future years will be taken later this year as part of the current comprehensive spending review.

I thank my hon. Friend for that reply. Will she confirm that some of the money will support local authorities such as County Durham, which is developing plans to improve bus services in the area? Following the publication of “Putting Passengers First”, how quickly is her Department likely to respond to restructuring bids?

My hon. Friend’s support—and that of her local authority—for “Putting Passengers First” is extremely welcome. I am glad to hear that County Durham is working with operators to improve punctuality and services. It can also start to prepare the ground for community transport being given a greater role. I encourage my hon. Friend to support the authority in responding to the consultation on the draft road transport Bill. I look forward to meeting a delegation and would be happy to discuss my hon. Friend’s points.

Is the Minister aware that my constituents in Newport, Shropshire have to take up to three buses to visit Princess Royal hospital as out-patients? Does she agree that that is unacceptable, and will she undertake to meet me and a delegation from the hospital to discuss public transport to and from the Princess Royal so that elderly people in particular do not suffer from having to make such long journeys?

I am happy to agree to such a meeting, as the hon. Gentleman has requested. Of course, “Putting Passengers First” is all about providing the biggest shake-up of buses for some 20 years since deregulation under the Conservatives. It is rewarding to see that the Opposition now admit that they got it wrong, but I would indeed be delighted to meet the hon. Gentleman.

First Group, Stagecoach, Arriva and other bus companies are increasingly ripping off the public purse. They withdraw from ordinary routes in order to get subsidy on routes that are perfectly viable and they put up fares to get extra money out of the concessionary fare system. In that context, I welcome “Putting Passengers First” as a way of tackling that problem. The passenger transport executive group has estimated that the proposals would take—

It appears that the question, if not the process, was too long. If my hon. Friend is referring to “Quality Contracts”, the estimate is some 14 to 20 months, but we are working closely on that with stakeholders, including PTEs. We will publish a draft timetable alongside the road transport Bill.

Why will the Minister not support direct Government payments to bus companies to cover the cost of free bus journeys for the elderly to ensure that no local authority or PTE area is short-changed?

The extension of concessionary fares to cover 11 million people who are able to have free national off-peak travel is a very welcome Government policy. I am keen to ensure, as are all parties, that we have the right system of reimbursement. We are working with all the relevant people to find the right way forward. My interest is in ensuring that those 11 million people all benefit from the £1 billion of Government investment and free off-peak travel and that they can get out and about.

The bus pass scheme has transformed the situation for many elderly people in my constituency, who are delighted with their ability to roam. Would my hon. Friend please make a special effort to ensure that new powers are given to traffic commissioners so that they can insist that the companies getting large subsidies actually deliver value for money? That would be a nice change, and we would all be delighted by it.

I am, as always, delighted by my hon. Friend’s informed support of Government policy to help older and disabled people up and down the country. I agree about traffic commissioners, who will have a greater opportunity to bring local authorities as well as bus operators to account on issues of punctuality, which are of great importance.

Eddington Report

5. What plans he has to take forward recommendations of the report by Sir Rod Eddington on transport; and if he will make a statement. (131454)

The Government set out in the December 2006 pre-Budget report how we intend to take forward the recommendations of the Eddington study, taking account of transport's wider economic, social and environmental objectives. In the coming months, the Government will review their strategy, processes and delivery on transport in the light of the Eddington and Stern reports. We will provide a detailed response to the Eddington study alongside the comprehensive spending review later this year.

Eddington states that two priorities for transport policy should be expanding airports and relieving congested and growing city catchments. The Government are quite keen on the former, but less so on the latter. Can the Secretary of State confirm when a decision is going to be taken on what must be the best example of a project to relieve a congested and growing city catchment area—Crossrail?

I would not entirely accept that characterisation of the Eddington study. Eddington had three principal concerns: first, the challenge of growth cities; secondly, inter-urban connections; and, thirdly, global gateways, which include our ports as well as our airports. On the substantive point that the hon. Gentleman made, we continue our support for Crossrail. There has been real progress with the Bill and we have made it clear that a decision about Crossrail will be made in the context of the spending review.

Yesterday, Sir Rod Eddington indicated at the Select Committee hearing that by 2014 the west coast main line would be running to full capacity and that there is a business case for a high-speed line, but the fact is that there is a lead time of 10 years. When will the Minister announce that there is going to be a new high-speed line on the west coast?

With due respect to my hon. Friend, one of the intriguing features of the discussion about the high-speed train line is the number of hon. Members who presume that it will stop in their constituency. In fact, Sir Rod Eddington gave a searching critique of the case for a high-speed rail line in the course of his report. We have a separate manifesto commitment that we will give consideration to a high-speed rail line and we are reflecting on the recommendations and the insights in relation to the high-speed rail line in the Eddington report at the moment.

Is not our distance from getting anywhere near Eddington’s recommendations on dealing with commuter congestion demonstrated by the fact that Southeastern trains is reported in last night’s Evening Standard to be proposing to weigh commuters as they get on to the trains serving my constituency, to see just how overcrowded the trains are? Will the Minister come to my suffering and physically challenged constituents’ aid with an announcement of significant capacity enhancements on the London commuter network?

I note with civility that the hon. Gentleman did not note any interest before making the observation. He really should not believe everything he reads in the newspapers. As hon. Members can imagine, I took some interest in that story in the Evening Standard. The suggestion was that one of the train operating companies is weighing carriages—rather than individual passengers. Perhaps he will be relieved to hear that. It is, however, fair to say that there is a real challenge in relation to capacity in the south-east and across the network. That is why we have announced the 1,000 extra carriages and why it will be one of the key priorities for the high-level output specification. [Interruption.] From a sedentary position, the hon. Member for Epsom and Ewell (Chris Grayling) suggests that there will be no new carriages until 2014. That is simply untrue. The first of the carriages will be available on the network by the end of next year.

One of the central parts of the Eddington report was the importance of supermarkets and their distribution networks. I wonder whether my right hon. Friend shares my concern about the behaviour of Tesco in my constituency. On the day that it announced £2.5 billion of profits, it is cutting the terms and conditions of staff, threatening derecognition of the union and telling staff that unless they sign a new contract they will be sacked. Will he tell Tesco to go back to the negotiating table and resolve the dispute?

Sir Rod Eddington said that unless national road pricing was in place by 2015 there would have to be a substantial increase in inter-urban road building. Are the Government going to have national road pricing up and running by 2015? If not, what are they going to do?

As I have stated many times at the Dispatch Box, the position remains that we believe that the right way forward is first to have local pilots, developing local solutions to the congestion challenges in local communities. On the basis of the facts that emerge from those local congestion charging experiences, we will be able as a country to make a judgment on the merits of a national system of road pricing.

Rail Services

The March 2006 target of 85 per cent. punctuality and reliability was met with performance reaching 86 per cent. by that date. Since then, the Department for Transport has been working successfully with train operating companies to create the conditions for further improvement. Punctuality and reliability on the railway are now at 88 per cent. on average.

I thank my hon. Friend for his reply, but I have to tell him that punctuality and reliability are not words that my constituents in Bridgend use in relation to First Great Western. I know that that is true among the constituents of my colleagues along the whole of the south Wales corridor. What meetings is the Minister having with First Great Western, and will he please press it to start to improve its reliability and punctuality?

My hon. Friend knows that I have raised First Great Western’s performance with the company on several occasions. It accepts that its performance following the production of the December 2006 timetable was not acceptable. I know that my hon. Friend will welcome the recovery plan that has been drawn up jointly by First Great Western and Network Rail to improve performance. I assure her that my right hon. Friend the Secretary of State and I will continue to apply any pressure necessary to bring about the improvements in performance that we wish to see.

In terms of distance from London, the train service to Gloucestershire is one of the worst in the country. To improve the reliability and punctuality of the service—again, it is operated by First Great Western—would the Minister support an increase in rail capacity when that is put to him by Network Rail? The company has feasibility money to dual the line from Swindon to Kemble and from Oxford to Worcester Shrub Hill. Will the Minister support those proposals when they come before him?

Of course, the Government are always willing to consider capacity improvements when there is a robust business case. If the hon. Gentleman wishes to write to me with more details of the proposal, I will be more than happy to look at them.

Given the horrific experience that we have recently been having in Swansea with First Great Western, when the Minister meets the company will he look for a commitment above and beyond its existing franchise? While the company has the franchise agreement now, I am severely worried about the service in the future.

I know that my hon. Friend has campaigned long and hard on this issue. She will understand the Government’s position: we must have certain minimum specifications. Unlike the Conservative party, we believe that a minimum level of service that must be provided by franchisees should be written into franchise agreements.

I know that my hon. Friend is especially worried about the removal of the 17.15 service from Cardiff to Swansea and the effect of overcapacity on services run by Arriva Trains Wales. She will know that I went down to Cardiff two months ago and travelled on the Arriva Trains Wales connecting services from Cardiff to Swansea. I know that she will be disappointed that I found that there was plenty of spare capacity on those services. However, I will be more than happy to speak to First Great Western to ensure that it meets its commitments under the franchise agreement.

I am sure that the Minister will acknowledge the great improvement in reliability and punctuality on the c2c line since it was privatised. However, is he aware that some of my constituents were trapped on a train last week for more than seven hours because of problems on the line? Will he look into bringing forward work on the line’s signalling and overhead power lines?

I am delighted that the hon. Gentleman acknowledges the improved efficiency and performance on the rail network. There are inevitably occasions when passengers are inconvenienced, which is always a matter of some regret. However, I hope that he will acknowledge that the record amounts that are about to be invested in the network by Network Rail will lead to a major step change in the improvement of the infrastructure in this country.

Rail Services

Journey times on the west coast main line have already been substantially reduced and will be further improved with completion of the west coast route modernisation in late 2008. Stoke-on-Trent is now an hour and a half from London. Before September 2004, the journey took almost two hours.

I am grateful to my hon. Friend for his response. As a result of the fantastic improvements to rail services and times, my constituents can transact business with London. Indeed, Stoke-on-Trent is now an excellent place for business. When my hon. Friend next discusses with Network Rail further improvements to train times along the west coast main line, will he press it on the fact that, after almost 50 years, Longton railway bridge still awaits a repainting job?

I know the Longton bridge extremely well, and I am distraught to hear that it has not yet been painted, after all these years. If my hon. Friend wishes me to raise the issue with Network Rail on his behalf, I am more than happy to do so.

Train times from Milton Keynes have actually increased, because Virgin trains no longer stop there during peak hours. As the Minister may recall, back in January I raised the fact that Milton Keynes commuters are upset that although two Virgin trains do stop there, no one is allowed to get on the trains, despite there being more than 300 seats on each train. At the time, the Secretary of State said that the issue in Milton Keynes was the platforms, but that has now been changed, and he has admitted that there is no issue with platform lengths in Milton Keynes. May I finally have an answer on why those two trains stop in Milton Keynes to let people off, but do not allow anybody on?

The Pendolino trains do not pick up passengers at Milton Keynes because they are designed not for short-distance commuter traffic, but long-distance traffic. They are not designed as relatively short-haul commuter business services, which are provided by Silverlink and will be provided by the new west midlands franchise.

I congratulate Virgin Trains on the remarkable progress that we have made on the west coast line. With luck, next year we will be back to the times that we achieved in the mid-1960s, when the west coast electrified line was first introduced. The one thing that we have not achieved is a programme that serves the users of the west coast line. There are still too few trains that stop to pick up people at towns such as Tamworth, although many more trains stop at stations down the line that serve smaller populations. Will the Minister look at the way timetables are organised there, particularly as that is where the cross-country lines cross the lines that run from the top to the bottom of the country, which means that a hub station should be created at Tamworth?

Work is still under way on the timetables for late 2008 and early 2009, and I cannot make any comment on the service that Tamworth will receive, but I hope that my hon. Friend will accept that the west coast main line modernisation will provide a major economic boost to the whole country and will provide a much-improved service for the many hundreds of thousands of passengers who use that service every year.

Road Funding

8. What funding commitments have been made for roads up to 2015; and if he will make a statement. (131457)

I am grateful for that reply. I am sure that the Minister is aware that good transport links are an important factor in stimulating local economies. Will he ensure that there is sufficient capacity in his departmental budget, and in the regional development agency budgets, to make sure that local economies can be stimulated by new road links to any new developments built in the period that I mentioned?

Of course my hon. Friend is absolutely right, and the regenerative effects of new road links are one of the things that have to be taken into account when road schemes are prioritised. However, it is important for him to interact with local stakeholders, whose advice we now rely on when prioritising funding. The funding that we get for road improvements will be distributed fairly across the country, and then we will work with local stakeholders to decide how to prioritise the spending.

Norfolk’s economic success is being stifled by the Government’s lack of investment in the roads infrastructure, as my hon. Friend the Member for North-West Norfolk (Mr. Bellingham) pointed out. Will the Minister finally join me in saying yes to the upgrade of the A11, which needs to take place if Norfolk is to realise its true economic potential?

I admire the hon. Gentleman’s advocacy of that road scheme, but I again offer him the advice that I have given him on several occasions: it is necessary for him to win the support of local stakeholders if he is to get the scheme prioritised, so that work on it can start within the time scale that he wants. At the moment, the scheme is prioritised, but it will not happen as quickly as the hon. Gentleman would want. It is for him to go back to regional stakeholders and increase the priority of the scheme. By the by, it might be a good idea if he and his colleagues supported some of the measures that the Government have put forward to raise the money to pay for the road improvements that he and his colleagues want.

The last time there was any major investment in the Gateshead A1 western bypass, which runs—or should I say crawls—through my constituency, was more than 20 years ago. When can we expect further investment to bring that important artery up to national standards?

Once again, significant investment in road improvements is being made in the north-east, but my hon. Friend must work with local stakeholders to achieve priority for schemes that he wants in his area. We are trying our best to stick as closely as possible to priorities recommended to us by the local regions, and we will continue to do our best to stick to those priorities.

The Minister said in reply to a supplementary that resources for roads would be allocated fairly across the country. There are many Opposition Members who would think that that was an untruth, but I do not accuse him of telling an untruth to the House. Will he give me an assurance that resources will be allocated fairly and that Conservative authorities such as Macclesfield borough council and Cheshire county council, which have been under-resourced, particularly in east Cheshire, will in future receive a fair allocation of resources in accordance with the prosperity that they create in Cheshire and the north-west.

When we decided to go for a regional funding allocation, we began with an open consultation, which included all the regions, local authorities, and Opposition Members, to decide how the money was to be allocated to the regions. We have stuck to that formula, so it is clear that the money has been fairly distributed. I have received representations since then from every region in the country saying that they would like to change the system, because they have come up with a system that would benefit their region at the expense of every other region. I am afraid that life is simply not like that, and if we want more money for the regions we must raise more money overall, and that comes down to the hon. Gentleman and the Opposition occasionally supporting the Government in raising that money.

Constitutional Affairs

The Minister of State was asked—

Electoral Fraud

The Government have taken significant steps in recent years to tighten up the security of the electoral process, and to assist police and prosecutors in tackling electoral fraud. Those measures are primarily established by the Electoral Administration Act 2006, and associated secondary legislation.

I welcome those improvements in security, but I am sure that the Minister agrees that the introduction of postal voting damaged public confidence in the voting system because of the increased risk of fraud. What specific parallel measures has her Department introduced to ensure that the internet, telephone and advance voting pilot projects, too, are not subject to fraud?

First, may I make it clear that incidents of fraud remain isolated, and have arisen in a relatively small handful of wards? As for the pilots, we have put in place clear security measures, which will be monitored by the Electoral Commission and by ourselves. Every local authority that has asked to pilot innovative ways of allowing people to vote has done so in the clear knowledge that it wants to make sure that the system is as secure and accessible as possible.

Does my hon. Friend the Minister agree that an important weapon in combating electoral fraud is the requirement to ensure that the electoral register is accurate and up to date? Will she therefore place a duty on electoral registration officers to use all available databases to make sure that the registration system is as accurate and up to date as possible?

My hon. Friend makes a very important point. As I have often said at the Dispatch Box, the fact that 3 million people are not on the register who should be on it is a slight to our democracy and something that we must challenge. He is quite right, too, that the Electoral Administration Act has given local registration officers further powers to use all means of registration to ensure that people who are eligible to vote are on the register and able to vote. I am constantly hearing about new ways of trying to provide further opportunities for registration officers to make such changes.

The Minister seems to be living in a slightly different world from the rest of us. Has she read Sir Alistair Graham’s speech in January, in which he said:

“How does DCA or the Electoral Commission know about the extent of electoral fraud when neither of them have kept any statistics nor have undertaken any research on the issue? Is it that, in their obsession with increasing participation at all costs, they have turned a blind eye to the risks of electoral fraud and its consequences on the integrity of our democratic system?”

Will the Minister respond to Sir Alistair Graham, who made a telling point?

Frankly, Sir Alistair Graham made no such thing. In that speech, which I have read in detail, Sir Alistair Graham waved about the figure of 390 cases of electoral fraud. In fact, the Electoral Commission has been conducting a detailed analysis of those cases, and so far it has discovered that very few of them include allegations relating specifically to voting offences. Sir Alistair Graham and the hon. Gentleman need to understand the difference between offences involving under-age candidates, imprints on leaflets and so on and offences involving people personating others and other kinds of voting fraud. Those are very different things, and they should not be put in the same basket.

Has the Minister had the opportunity to read the Electoral Commission report on allegations of electoral malpractice between 2000 and 2006? It shows that in 25,057 elections in seven years there were only 91 cases involving any allegations of electoral malpractice. That represents 0.00363172 per cent. of elections in which there was even an allegation of malpractice. Is it not more important that we make sure that everybody has a chance to vote as easily as possible than following up the rumour-mongering and scandal-mongering by Opposition parties?

The Minister will know that the Committee on Standards in Public Life warned that impersonation was the most common form of electoral fraud. The election commissioner in Birmingham warned that well-organised fraudsters were getting away with scores of personated votes. Given that, which Minister is responsible for the latest fiasco that the new laws to tackle impersonation will not be introduced for this year’s major set of local elections, because they were so badly drafted? Is that not yet another sign of Government incompetence in the face of growing corruption and fraud?

The hon. Gentleman is just plain wrong. In the local elections in May, there will be personal identifiers for postal votes, which is where there have been allegations in the past of possible fraud. All local authorities involved in local elections in May have already sent out all the information to potential postal voters, and I am confident that they will work as hard as possible under the guidance of the Electoral Commission and with the support of the police to ensure that our elections are, as my hon. Friend the Member for Rhondda (Chris Bryant) has said, as safe, secure and democratically available as we can possibly make them.

Royal Prerogative

As I said on 30 January, the Government keep policy in that area under review but do not see the case for a wide-ranging consultation exercise at this time.

The BBC recently described royal prerogative powers as

“A series of historic powers, officially held by the Queen, that have, in reality, been passed to politicians.”

Royal prerogative powers allow decisions to be taken without the backing of or consultation with Parliament. Does the Minister agree that in a democracy, decisions taken without the backing of or consultation with Parliament should be illegal? May we have a review to address that anachronistic anomaly once and for all?

My right hon. and learned Friend the Lord Chancellor provided a statement on the Government’s position on this in the House of Lords on 7 February this year, at Hansard column 705. Moreover, the Prime Minister is very keen to ensure that Parliament has its views known, and he has made statements to that effect in recent months. In 2003, for example, there was a substantive motion in Parliament on the Iraq war. We are of course prepared to legislate to constrain the prerogative powers when it is appropriate to do so.

Given that in 2004 the Select Committee on Public Administration said that

“the case for reform is unanswerable”,

as we come to the end of 10 years of Blair-led Labour Government where ministerial Executive power remains as great as ever, will the Minister accept that making peace and war, making treaties such as the extradition treaty and taking away passports from British citizens in Guantanamo Bay are matters that should be governed not by Ministers but by Parliament, and that unless the Government move on this they will remain a Government who seem to be more keen on retaining power than sharing it?

We should be cautious in this field; let me give an example of why. We must be careful about introducing legislation in some of these areas where we would then have the undesirability of their being overseen by the courts, which would not necessarily be a good thing. Indeed, it should be for Parliament, rather than the courts, to comment on some of these issues. The Government have to be accountable to Parliament for their decisions, including decisions on the deployment of armed forces. Parliament’s rights are therefore fully protected under the existing arrangements. That does not mean to say that the Government are not prepared to look at prerogative powers again. We have done that in the past and we are still prepared to do so. We will continue to listen to views on the subject, although at the moment we see no reason to do anything different from the present situation.

I agree most strongly with my hon. Friend the Member for Dundee, West (Mr. McGovern). Would it not be useful for my hon. Friend the Minister to look at other parliamentary democracies, especially those with constitutional monarchies such as our own, to see how they do things and perhaps to make some progressive reforms in the light of that?

It is difficult to translate specific constitutional arrangements from one country to another. Procedures in the United Kingdom must reflect our constitutional arrangements. There are occasions when the Executive’s ability to take decisions quickly and to be flexible in using the prerogative powers remains an important cornerstone of our constitution. I am not sure that one can easily transfer what may be good in one country to make it fit here. However, as I say, we constantly keep all these matters under review.

Does the Minister agree that the most important royal prerogative is that of taking this country to war? Can she conceive of a situation whereby we would take this country to war without the endorsement of this House? If so, would she consider changing the royal prerogative in this respect?

The hon. Gentleman asks whether I can conceive of a situation arising in relation to going to war. In order to reassure him, let me quote what the Prime Minister said:

“I cannot conceive of a situation in which a Government…is going to go to war—except in circumstances where militarily for the security of the country it needs to act immediately—without a full parliamentary debate”.

That sums up the Government’s position very well.

I am pleasantly surprised to be called. The Under-Secretary said that she would listen carefully to representations. May I draw it to her attention that nobody has spoken in favour of her conservative position on the matter? There is a case for root and branch review of the power of the monarchical institution, including the prerogative powers, which are not always exercised only by Government. The right hon. Member for Suffolk, Coastal (Mr. Gummer) drew attention to the fact that no Catholic has been made a member of the Order of the Thistle for hundreds of years—that is royal prerogative. It is unacceptable. We need to re-examine the whole monarchical institution.

Although I may have a great deal of sympathy with my hon. Friend’s example, I have said repeatedly—today and on other occasions—that we keep such matters under review. I shall take the specific example back for further consideration.

Postal Voting

We are introducing a range of new measures at the May 2007 local elections that are designed to strengthen the security of postal voting. They build on the measures that were successfully introduced in May 2006. The introduction of personal identifiers for postal voters is especially important and will help ensure that postal votes are safe and secure.

During the passage of the Electoral Administration Act 2006, I raised with the Minister of State advice from the banking sector and subsequently wrote to her. The Under-Secretary kindly replied in April last year. Will she update the House on the discussions with the banking sector and their results?

I must apologise to the hon. Gentleman and the House. Thanks to his question, I have discovered that no such discussions took place. It is often said that “Questions were asked in the House”—I shall certainly ensure that questions are asked elsewhere about why the discussions have not yet taken place and that he is informed of them as soon as they do.

Has the Department put in place any mechanism to examine how many people have not renewed their postal votes under the new regime? Will the Department consider the effectiveness of the verification procedures after the elections?

I assure my hon. Friend that we will consider carefully, with the Electoral Commission’s support, the effect of the new legislation on postal voting. We are constantly gathering information about the number of people who apply for postal votes. We will ensure that we can make comparisons about the new system’s effect on the electorate.

In response to a written question of mine on 28 March, in regard to postal vote fraud, the Under-Secretary said:

“The Government do not consider there is sufficient justification to make further changes that would restrict the availability of postal voting… as is the case in Northern Ireland.”—[Official Report, 28 March 2007; Vol. 458, c. 1597W.]

Does the Under-Secretary claim that availability to vote surpasses the integrity of the vote? Is not that Government approach one of extreme complacency?

The hon. Gentleman constantly raises the example of Northern Ireland and I constantly have to remind him that the measures that we took in Northern Ireland meant that registration dropped by more than 10 per cent. Approximately 3.5 million people who should be on the register in England and Wales are not. That is a great democratic deficit. It might suit the Conservative party for fewer people to be on the register and able to vote, but it does not suit those of us who believe in democracy.

Why did not the Under-Secretary ensure that all the secondary legislation was correctly drafted and in place to give returning officers the full power to enforce the postal vote safeguards in the way that Parliament intended?

The right hon. Gentleman is right. It is most unfortunate that we could not do what he suggested. We will ensure that the regulations are drafted correctly in future. It was unfortunate that we could not get that right for 3 May, but I hope that we shall ensure that everything is exactly as it should be in future.

Legal Aid

I have received oral and written representations from rural law firms and their representatives as part of the ongoing consultation into the implementation of our legal aid changes. I have personally been to more than 25 meetings with 1,000 practitioners, including many rural providers, and we took their concerns heavily into account when we revised our proposals and published them earlier last year.

I am grateful to the Minister for that response. I assume that, having listened to those representations, she will be fully aware of the concerns such as those expressed by the solicitors in my constituency that the few who still provide legal aid services in rural areas are actively contemplating withdrawing from those services as a result of the Government’s proposals. What will then happen to vulnerable people in rural areas who cannot get representation under legal aid?

We have just been through an exercise in renewing a contract for legal aid in almost identical terms to the one that prevailed before. A number of firms said that they would not sign because they did not intend to carry on, but I am pleased to say that, in the end, all of them did. If the hon. Gentleman has any particular difficulties in this regard, I would ask him please to come and see me about them, but we are confident that rural providers will do well out of our proposals.

I asked the Minister a similar question to this on 6 March, and I then discussed her answer with representatives of a local firm in which I have great confidence. They said that the new contract proposals for family and criminal work amounted to financial suicide, that they had been signed under duress and that many firms would indeed back out in an orderly fashion later this year. Is there not a real risk that we are creating a national chain of “Advocacy Is Us”, which will be based in cities, providing a service that is down to a price rather than up to a standard, and which will denude rural areas?

No, there is not the slightest likelihood of that happening. I am anxious to encourage smaller firms to stay in business. The family fees do not represent financial suicide; they have been put together with a lot of input from the profession, for which we are very grateful. Nor do the criminal fees, which have also been put together with the greatest possible care. They are based on the average claims in the areas of the police station duty rotas. All of this involves the same budget as before. Everyone should have the confidence to go through the transition, as the signatures on the contracts now suggest is happening. They must get over the transition—it is not a simple one; I accept that—and then look forward to a very good future in legal aid.

To be fair, the Minister has engaged with people who are complaining about services in rural areas. However, I have a letter here from a specialist in mental health law, Julie Burton, which is addressed to the Lord Chancellor. In it, she says that publicly funded legal advice lawyers are leaving the service “in droves”. She is the only mental health lawyer in the whole of north and mid-Wales, but she, too, is going to give up. She has dedicated her life to this work but, after 25 years, she can see no alternative.

With great respect to the hon. Gentleman, he is not correct to say that firms are leaving in droves. Of the solicitors who had signed up to the last contract, 94 per cent. have signed up to the new one. That does not suggest that they are leaving in droves; it represents a pretty average fall-away. I am sorry to hear about the lady in Wales. We will have to look for someone else who can provide that service to the vulnerable population that she serves, but I hope that she will reconsider.

Planning (Consultation)

I beg to move,

That leave be given to bring in a Bill to require local planning authorities to consult or notify persons living outside their area about specified matters; and for connected purposes.

I must say that this is the best attended 10-minute rule Bill debate that I have ever come across. The title of the Bill is unlikely to set the world on fire. It will certainly not result in dancing in the streets or spontaneous outbreaks of public joy. I am sorry, folks, but the Planning (Consultation) Bill sounds profoundly dull—[Hon. Members: “Hear, hear!”] I am getting cheers of support. In reality, however, it is important to everyone.

The law of planning has become a dangerous, bureaucratic minefield. It is said that there are only three people left in England who are capable of understanding it: one died young; one fled the country; and the other expert has now gone completely mad. It is understandable why. Anything to do with planning usually involves piles of paperwork, loads of legislation and acres of anxiety. People who are seeking permission to put up a porch at the front of their house will know, as will hon. Members, exactly what I am talking about. That person needs the householder application form, perhaps listed building consent and, let us not forget, the full and outline applications and the lawful development certificate. He will even need to give a consent form to the council to put up a notice. By now that person will have filled up enough of an official’s bumper mailbag to paper the walls of Buckingham palace and Westminster abbey. The application will have been scrutinised by planning officers, subjected to all the rigours of building regulations and put out to the public for their views—or will it?

I am concerned about several aspects of the existing public consultation. The whole process is extremely vague and open to different interpretations by different officials in different town halls. What happens in one place is not necessarily what happens in the district next door, but with the agreement of the House I hope to introduce an improvement—something to make life more sensible for those at the sharp end of the planning maze.

Consultation should mean what it says on the packet. We need a decent definition of the word itself. The “Pocket Oxford English Dictionary” suggests the following meaning:

“seeking information or advice…taking into consideration the views of people”

and importantly

“considering feelings”.

I am quite sure every planner and politician in the land would endorse those sentiments and vow that consultation is a splendid thing and part of everything they do for everybody. However, it is rather like motherhood and apple pie: no one could possibly disagree with the general idea. But with such a woolly meaning, consultation can be as good or as bad as politicians or planners prefer.

The trouble is that too many planners and politicians are prepared to settle for the barest minimum when it comes to the standard consultation period. The blame lies, I am sorry to say, right here in Westminster. The House has always fought shy of spelling out what consultation should be—how local people are to be canvassed, how views are to be assessed, what account is taken of opinions, how many meetings will be held, or whether there be any meetings at all. The remit to consult is certainly written into all local government legislation, but dotting the i’s and crossing the t’s has always been left to the locals. Basically, the House has, I am afraid, copped out.

The aim of my Bill is to give an exact definition of the term “consultation” and to ensure that the relevant people are consulted. Surely it is such a sensible aim that nobody could possibly object to it. I still wonder why it was not introduced years ago. To illustrate my point, I shall give a real-life example of how our planning system can let down the people whom it is meant to protect. A farmer wanted to put up a new poultry unit in my constituency. Farmland frequently straddles authority boundaries. This farmer bunged in the planning application to the council for the area where the unit was proposed, but the council had no legal obligation to tell the people a couple of hundred yards away about it because they lived in another local authority area. The result was a lot of disgruntled folk who thought that they were being cheated.

The problem is not just a rural one, however. If someone wants to build anything in his urban back yard and the local authority boundary is close by, the people who ought to have a say do not get it. That is plainly wrong and should be put right, and this is where the political controversy may begin, because there seems to be a conflict between those who want to free up the planning process and see applications go through more quickly and those who would like the public to get a bigger voice. I believe that the two goals are not incompatible.

I am absolutely certain that the law as it stands leaves an awful lot to be desired. It also leaves a lot of people dissatisfied. Some things have been done to ease the burden of those who wish to submit planning applications, and in almost every area it can be done online by computer, cutting out paperwork and trips to the council offices. The quid pro quo is that councils are beginning to use their online services as an excuse for consultation. Someone can make an online planning application and people can see it—[Interruption.]

I am not offended by having my Bill talked about, Mr. Speaker! In fact, it is a great accolade.

Information technology has become a get-out—a way of avoiding telling people what is going on.

I appreciate the dilemma faced by local authorities. Some planning areas are very busy. In Wandsworth, here in London, 30,000 consultation letters were sent last year. However, the obligation actually to do anything is non-existent. The only requirement is for a period of 21 days during which action can be taken. The planning authority has a duty to put up notices, usually in small print on A4 pieces of paper pinned to telegraph poles. One needs a magnifying glass to decipher what they say, and one would have to be a planning anorak to stop and read one in the first place. Bigger developments require a planning authority to buy one tiny advertisement in the local paper, which is usually hidden away on page 99 if it gets that far. There is a woolly commitment to consulting interest groups, residents and—how I hate this word—stakeholders. The politician who coined the word should be made to use a stake himself.

There are good intentions, but they are not law. Every planning authority can do as much or as little as it likes to keep people posted; no planning authority has any legal obligation to tell people outside its areas what is going on. That means that unless there is a planning application to build a nuclear power station, an airport or a Tesco store, they will not be told. That deficit in the planning process makes a mockery of the existing law, and seriously undermines what has become a major cross-party commitment to be seen to be consulting.

The Government swear by consultation. Hundreds of different consultations are currently taking place: we need only look at the No. 10 website to see that. Those with strong opinions and ample time should be free to add to debates, but there is one small drawback. Consultation does not involve any debate at all. The public are invited to pour in opinion, which can then be conveniently polarised, twisted or ignored. The scale of the consultation industry is reminiscent of the old maxim “Divide and rule”. There are now so many official consultations that it is impossible to keep abreast of any of them. Moreover, the Government have opened up consultation far too widely.

Consultation involves small complications, but big complications are much more serious. Consultations are voluntary, they are not binding, and no one has a say. There has to be a proper “code of conduct”. Imagine what Moses would have said if God had handed him a code of conduct instead of the ten commandments. “Thou shalt not covet thy neighbour’s ass” has a better ring to it than “Perhaps we should leave the neighbour’s donkey alone”.

Private Members’ Bills such as this are designed to establish effective procedures by which all councils must abide. It is no longer good enough to tell people what the council feels that it should be telling them. It must no longer be acceptable to insert a tiny notice in the form of a classified advertisement in the local paper. Under my Bill, the nature of proposals must be crystal clear, and they must be advertised so that people can see notices, understand them and—more important—respond to them. Local authorities will have to go out of their way to let people know what they are doing, and the Bill will specify precisely how far out of their way they will have to go.

Critics may say that this will cost money. It is necessary merely to amend, not to reinvent the wheel, and paying for the maximum sensible standards will surely save more in the long term. If planners and politicians listen to local opinion first and take action on the basis of what people really want, town halls will get on a great deal better. We can all cite cases from all over the country in which that has not happened. Perhaps the most obvious local example is my own county council, which ill-fatedly put up hundreds of road signs without consulting. The public were upset, and all the signs came down again. That is not good enough.

The tragedy is that local authorities are not doing anything wrong, but are obeying the law. The Bill spells out what is necessary. It makes sense, and I commend it to the House.

Question put and agreed to.

Bill ordered to be brought in by Mr. Ian Liddell-Grainger, Kelvin Hopkins, Mr. Mark Francois, Rob Marris, Mr. Ben Wallace, Mr. Lindsay Hoyle, Mr. Henry Bellingham and Mr. David Clelland.

Planning (consultation)

Mr. Ian Liddell-Grainger accordingly presented a Bill to require local planning authorities to consult or notify persons living outside their area about specified matters; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Friday 19 October, and to be printed [Bill 90].

Opposition Day

[8th allotted day]

Occupational Pensions

We now come to the eighth allotted Opposition day, and the debate is on occupational pensions. I inform the House that I have selected the amendment in the name of the Prime Minister.

I beg to move,

That this House has no confidence in the Chancellor of the Exchequer’s handling of occupational pensions.

That simple motion reflects the following four simple charges. First, that in his first Budget this Chancellor introduced a stealth tax on pension funds that his own civil servants warned him would blow a big hole in those funds’ finances. Secondly, that in the decade since that Budget that is precisely what has happened; we have seen what the Labour pensions Minister at the time describes as the “large-scale desolation” of our pension system. Thirdly, that that desolation has left millions with a shortfall in their retirement funds and 125,000 people with little or no pension at all. Finally, that this Chancellor has from the start acted with stealth, blocked all attempts to get at the truth and now blames everyone but himself for the destruction that he has brought to Britain’s pensions. In short, the abolition of dividend tax credits was, in the words of the Prime Minister’s own economic adviser at the time,

“a mad thing to do”

and quite “crackers”.

It would do the hon. Gentleman’s career a great deal of good if he did not read out the prepared questions of the Economic Secretary to the Treasury. I will come on to what we think we can do to help pensions, and there will be an opportunity tomorrow for the hon. Gentleman to vote for changes that would help those 125,000 people. That raises a question that he will have to answer when we have that debate tomorrow.

I shall give way to the hon. Member for Stourbridge (Lynda Waltho), and perhaps she will tell us whether she will vote for the amendments that would help those 125,000 people.

I would like the hon. Gentleman to tell me whether he agrees with his colleague, the hon. Member for Eastbourne (Mr. Waterson), who today on “The Daily Politics” show led people to believe that the Tory party would look at bringing back the dividend tax credit. What would the hon. Gentleman’s party do?

Now that the Secretary of State for Environment, Food and Rural Affairs has withdrawn from the Labour leadership race, Labour Members are queuing up to ask the Chancellor’s questions in our debates. I will come on to talk about what the hon. Lady and I can do to help those pensioners. Indeed, there is a vote tomorrow in which she can take part.

I was talking about the Chancellor of the Exchequer, and may I say how pleased we are that Macavity has finally been dragged kicking and screaming out of hiding on the very day when homeowners and pensioners are coming to terms with the latest rise in inflation? Not long ago, the Chancellor was telling the Treasury Committee that he expected

“inflation to come down significantly over the course of the next few months.”

Today he received a letter from the Governor of the Bank of England explaining why it is rising. Well, the Chancellor never was much of a forecaster.

Whether in terms of rising inflation, the record tax burden, the billions of pounds that we see being wasted on projects such as the NHS computer system, or that con-trick Budget—or, indeed, the pensions raid—this Chancellor’s boast of economic competence is unravelling before our eyes. [Interruption.] The first, and worst, of all his mistakes was that raid on pensions. When he stands up to respond, let us find out if he can look Britain’s pension holders in the eye and say “sorry”. One Browne has already done that this week. [Interruption.] Let us see if another Brown has the courage to do so again today.

The road to the Chancellor’s first and worst stealth tax began, strangely enough, in a hotel room, because the pension tax plans were dreamt up—[Interruption.]

Order. It is far too noisy in the Chamber. The hon. Gentleman is entitled to be heard—[Interruption.] I do not want to have to tell you a second time, Mr. Balls.

The plans for the pension tax raid were, strangely enough, dreamt up in a hotel room. They were dreamt up by the small cabal of the then shadow Chancellor, which included the Economic Secretary, in the penthouse suite of the Grosvenor House hotel, which was taken by the hon. Member for Coventry, North-West (Mr. Robinson), who I see has also brought a copy of his book into the Chamber. He is the Chancellor’s former paymaster in more ways than one. It is all there in the hon. Gentleman’s memoirs, which are titled “The Unconventional Minister”. I guess that unconventional meant that he was bankrolling the Chancellor, and providing Tuscan villas to the Prime Minister and mortgages to Peter Mandelson.

It is clear from the memoirs that right from the start the tax on pensions was never about encouraging retained profits or increased investment, or any of the other excuses that the Chancellor still peddles. The paymaster says in his book:

“We needed the money. It had to come from somewhere. We set a target of increasing revenues by £5 billion per annum…There were not many options. If the target was going to be met, then tax credits had to go.”

Of course, they were still in opposition while the plans were being drawn up—

Perhaps the hon. Gentleman can tell us whether he knew of the plans before he campaigned in that election.

It is clear from what the hon. Gentleman has said so far that basic GCSE economics was not on the curriculum of the minor public school that he attended. Would he acknowledge the force of the argument by many independent economic observers that the pension fund deficits and the closures of schemes have much more to do with the extended and unjustified holidays from employer contributions and extended life spans than with any of the actions to which he refers?

Let me tell the hon. Gentleman what the right hon. Member for Birkenhead (Mr. Field) said recently. He was the Minister for Pensions at the time and he said:

“When Labour gained power in 1997, Britain’s occupational pensions were the envy of the world…Ten years on the scene is one of large-scale desolation.”

Would the shadow Chancellor like to quote what I said about the two body blows to pension schemes? The first was under the Conservative Government when they taxed surpluses on pension funds.

We will wait for the right hon. Gentleman’s speech, when he can tell us about the second blow to pensions. I did read his article in which he talked about the changes that Lord Lawson made and the tax on the pension surpluses, but as the right hon. Gentleman says, by 1997, the pension system was in extremely good shape. He has said that on several occasions. While of course he makes the point about Lord Lawson’s tax, the fact was that when this Government came in, the occupational pension system was strong and the right hon. Gentleman, as the Minister for Pensions at the time, did not know—as the electorate did not know—that the Government were planning to abolish dividend tax credit.

There are two points. One is whether the assets looked strong. The second is the crucial factor of the running down of pension surpluses. If the hon. Gentleman were more honest—[Hon. Members: “Oh!”] I am sorry, if he were more accurate, he would admit that his party fatally weakened pensions. That makes the charge that he is trying to make more serious, not less serious.

The right hon. Gentleman has said on several occasions that when Labour came to office, we had one of the strongest pension provisions in Europe. Now we have probably some of the weakest. That was the situation in 1997. The right hon. Member for Birkenhead did not know about the dividend tax changes because, presumably, they were kept secret from him. They have done enormous damage, as I think he understands—[Interruption.] It is no good the Chancellor joining in the cheering, as he has not spoken to the right hon. Gentleman for 10 years.

Order. The hon. Gentleman has indicated that he is not giving way. Also, I appeal to hon. Members not to shout across the Chamber. If they do, they run the risk of being expelled from the Chamber. That is what will happen.

The Government kept their stealth plans secret—from the public, from the rest of the Labour party, and even from the then Leader of the Opposition. Clearly, the Chancellor was starting as he meant to continue. According to the memoirs, the tax plans were locked in a safe in that hotel room throughout the election, while the rest of the Labour party went around the country campaigning on a promise not to increase taxes at all.

Does the hon. Gentleman remember that Norman Lamont, who was Chancellor in 1993, said that dividend tax credits had to go because they distorted the market? On five separate occasions over their 18 years in office, the Conservative Government reduced the level of dividend tax credit. Is he contradicting the policies adopted by that Conservative Government?

I can tell the right hon. Gentleman that Norman Lamont—Lord Lamont—did not abolish dividend tax credits. That is why they were there for the present Chancellor to abolish them in 1997. When Treasury civil servants proposed to my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke) that he should abolish them, he absolutely rejected the idea, because he knew the damage that would be done to pensions.

No. I shall get on with my speech and take some interventions later.

The Chancellor and the man who is now Economic Secretary dropped their tax bombshell on to the laps of Treasury civil servants the day after the 1997 general election. Their advice was clear, and we know the truth thanks to the two-year campaign undertaken by The Times. I congratulate that newspaper on its efforts, which it maintained despite the costs incurred.

The Chancellor should be condemned for his efforts to stop that campaign. Indeed, I hope that he will be able to confirm something that a member of the Government told me privately yesterday—[Interruption.] I can tell the House that someone in my job gets quite a lot of advice about the Chancellor from members of the Government.

Yesterday, I was told that the documents were finally released only because the Permanent Secretary to the Treasury refused to go on funding the legal costs involved in blocking their release.[ Hon. Members: “Oh!”] As I said, I hear many stories from Labour Members about the Chancellor. When the right hon. Gentleman responds to the debate, perhaps he will confirm the truth of that story.

In the end, the Chancellor was forced to release the documents. However, he did so very late on the Friday afternoon after the House had begun its Easter recess. The Government have made a habit of burying bad news, but that was one of their shabbiest attempts, and I am pleased to say that it failed spectacularly.

We can now see the Treasury advice, and understand why the Chancellor was so desperate to conceal it from the public. In its submissions to the Chancellor in May and June 1997, the Inland Revenue warned that

“abolishing tax credits would make a big hole in pension scheme finances”

and that

“the change would lead to a reduction in pension benefits for the lower paid”—

the same people whom he had just hit with his Budget. The Revenue also told the Chancellor that

“any loss of pension could be difficult for someone on a small income to cope with”,

and it advised him that

“everyone in a money purchase scheme is a potential loser.”

Officials at the Inland Revenue ended up by saying that they did not imagine that the Chancellor would want them

“to consult the DSS before Budget Day.”

On that note, may I welcome the Secretary of State for Work and Pensions, whose private views about the Chancellor are now so public?

Of course, when Labour Members listened to the Chancellor make his 1997 Budget speech at the Dispatch Box, none of them could have guessed that when he promised to undertake a long-needed reform of company taxation to encourage investment, he meant that he was about to clobber their pensions with a stealth tax worth £5 billion a year.

That first Budget speech established the reputation for stealth and dishonesty that all the right hon. Gentleman’s subsequent 10 Budget speeches have lived up to, and none more so than the con trick that he delivered a month ago.

This, Mr. Speaker, is what I said in that Budget:

“The second is a structural reform that will also encourage investment.

The present system of tax credits encourages companies to pay out dividends rather than reinvest their profits. This cannot be the best way of encouraging investment for the long term, as was acknowledged by the previous Government. Many pension funds are in substantial surplus and at present many companies are enjoying pension holidays, so this is the right time to undertake a long-needed reform. … so with immediate effect, I proposed to abolish tax credits paid to pension funds”.

Now, will the hon. Gentleman withdraw the accusation that the House of Commons was not told in 1997? The House of Commons was told not only what we were doing but why we were doing it and why, incidentally, the previous Government had cut the tax credit five times.

The Chancellor never told the House of Commons that he was hitting people with a £5 billion tax raid on the pensions. Not once did he say that.

Of course, my right hon. Friend the Member for Richmond, Yorks (Mr. Hague), the then Leader of the Opposition, did say that abolishing dividend tax credits would mean that

“pensions will be smaller and pensioners will be worse off.”—[Official Report, 2 July 1997; Vol. 297, c. 306-321.]

That is of course exactly what has happened. The figures speak for themselves; 60,000 occupational pension schemes have been wound up or, as the right hon. Member for Birkenhead said in the article:

“five sixths of the final salary schemes that have closed have done so since 2000; in other words, they have closed on our watch”.

Only a third of the remaining final salary schemes are open to new members, and 125,000 people have lost all or most of their pension altogether. I give way to anyone who will vote for that amendment tomorrow.

Did Lord Lamont’s special adviser, the right hon. Member for Witney (Mr. Cameron), agree with Lord Lamont when he cut dividend tax credit in 1993 that it distorted the commercial decisions of British companies? Did his special adviser accept and agree with that, or not?

May I give some advice to the hon. Lady? Reading out the planted questions of the Labour Whips Office will not give her that preferment that she has been seeking under the current Prime Minister or indeed under the next one.

When my hon. Friend referred to the 125,000 people who have lost their occupational pensions, is he aware of the extraordinary and disgraceful rumour that, when confronted with the victims of the pension raid, the Chancellor said, “These are not our people.” Will my hon. Friend comment on that extraordinary remark?

It would not surprise me, because those people work hard and save hard, and they want to be independent of the state, so they are not really the Chancellor’s sort of people at all.

I am grateful to my hon. Friend the shadow Chancellor for giving way. Is he aware that I represent a large number of former Albert Fisher employees, who have lost the vast majority of their occupational pensions? The compensation currently on offer under the financial assistance scheme is inadequate. Does my hon. Friend understand their resentment and anger about what is going on?

I absolutely understand their anger. I will come on to talk in some detail about what we can all do tomorrow to help those people.

The Chancellor denies all the damage that has been done.

I will give way to the hon. Gentleman because I know that he has some of these cases in his constituency, and it is a seat that we hope to take at the next election. Perhaps he can tell us how he will be voting.

If the hon. Gentleman is referring to the Turner and Newall case, it has absolutely nothing to do with this issue; it is to do with the administration of the American parent company, nothing else. The hon. Gentleman has been speaking for 20 minutes and has not yet mentioned changes in interest rates, changes in the stock market, the pension contribution holidays that were taken or increased life expectancy. Is he seriously implying that none of those issues has had any effect on pensions and that it is all down to dividend tax credits? No one believes that.

Of course the stock market crash and rising life expectancy have had an impact, but I am debating what the Chancellor of the Exchequer is responsible for—the pensions tax.

Let me make a little progress in my speech. I shall be happy to take lots of interventions because I want the Chancellor to take lots when he speaks, which is not his habit.

The Chancellor has denied all the damage that has been done. The day after that Budget he said:

“Pensioners…will not lose out over this.”

Ten years on, he is still peddling that ridiculous line. Tell it to the single parent, working part-time, contributing about £100 a month, who has to increase her annual contributions by £850 to make up the damage caused by the Chancellor’s decision, or the young professional—[Interruption.] I know Labour Members do not like to hear about those people. Perhaps they are not Labour people any more. A young professional who started her pension plan four years ago and contributes £400 a month will have to work 21 months longer, or increase her contributions by almost £1,000 a year, thanks to the Chancellor.

Rather than acknowledging responsibility, all we have heard from the Chancellor and his cronies is an increasingly desperate string of excuses. They were trotted out by the Economic Secretary on the “Today” programme a fortnight ago. It was a vintage performance. I know that the Chancellor is thinking about who might take his job when he moves next door, as he hopes. The Leader of the House of Commons has his hopes, as does the Secretary of State for Trade and Industry, but I think I speak on behalf of the whole Conservative party when I ask: please may we have the Economic Secretary? We think he is a real vote winner.

In the “Today” programme interview—the hon. Gentleman’s first big test as a Minister—he made a number of extraordinary claims. The first was that the pension funds had been long-term gainers from the new pensions tax.

The hon. Gentleman nods to repeat that claim. Indeed, the Chancellor repeated the claim a week later. Taking £100 billion from pension funds and telling them they were gainers has to take the prize for the most unbelievable political statement of the year. Richard Lambert does not believe it; the Economic Secretary should listen to him because he gave the hon. Gentleman his first job. Richard Lambert said that the tax raid made

“a significant contribution to the weakening of the country’s occupational pensions platform.”

The hon. Gentleman should listen to the Prime Minister’s former pension adviser. She said:

“The Chancellor will go down in history as the one who destroyed our pensions system.”

The president of the National Association of Pension Funds said:

“This was the biggest attack on pensions in living memory. Even Robert Maxwell only took £450 million.”

What is it with Labour MPs and pensions?

Is my hon. Friend aware that the Institute of Actuaries said that £150 billion may yet be a conservative estimate of the cost to the funds? Will he press the Chancellor to tell us today how much the tax has cost pension funds? Have the Government made estimates and what are they?

I agree with my hon. Friend. When the Chancellor speaks, he would do well to tell us what the Treasury’s estimate is of the damage done to British pensions by the money taken out of pension funds, but perhaps we shall have to wait a couple of years for the next freedom of information request.

I want to carry on talking about the comments made by the Economic Secretary on the radio. He said, “Don’t blame us. It was all the idea of the CBI. They were demanding that we abolish dividend tax credit.”

It is no good the hon. Gentleman shaking his head—that is what he said. How did the CBI respond to his claim? The then director general, Adair Turner, went on the radio to say that it was “completely untrue” and that

“at no time whatsoever did the CBI support the policy…when the change was introduced…I wrote to the Chancellor expressing our disagreement.”

If the hon. Gentleman disagrees with that comment, perhaps he would like to intervene. [Hon. Members: “Come on.”] It is the hon. Gentleman’s big moment in front of the Chancellor—he might get the job he is looking for.

Of course, it is not just the Economic Secretary who has made that claim. The Chancellor himself made it at the CBI conference in 2004. In answer to a question from the audience, he said that the case for abolishing dividend tax credits

“was made originally by the CBI”—

a claim that we now know from Lord Turner is completely untrue. Since the Chancellor has discovered the art of the intervention, perhaps he will intervene now to disagree with me. No, he does not want to.

The third claim of the Chancellor is that the tax change was done to encourage long-term investment in the economy. He may well say that in his speech today, but the fact is that documents released by the Treasury show that the Chancellor had known all along that that was not the case. The advice he received from the Inland Revenue on 22 May that year clearly says that

“the view of the economists is that overall the reform will be broadly neutral in terms of the amount of investment.”

Today we learn for the first time that one of the Chancellor’s own Ministers was warning at the time of the damage that would be done by his tax.

I shall give way, as I wonder what the hon. Gentleman believes has been the impact on investment.

Will the hon. Gentleman explain why, if the abolition of the tax credit was so devastating to pension funds, those funds’ assets rose by more than £150 billion in the three years after that?

I have just read quotes from the CBI and the National Association of Pension Funds that show that there has been a devastating blow to pension funds and that more than £100 billion has been taken out of pensions. That is the case and people’s retirements have been raided. That was, indeed, predicted.

I want to make some progress.

That was predicted by David Simon, the chairman of BP, who wrote that abolishing dividend tax credits would

“reduce funds available for reinvestment”


“significantly jaundice… the attitudes of investors in UK projects”.

If officials were saying that there would be no overall effect on investment and Ministers were warning of a negative impact, why were the public told that investment would go up? Why? [Interruption.] The Economic Secretary is peddling another claim that is simply not the case. Business investment as a proportion of GDP has been at a record low.

Now, Mr. Speaker, we hear a lot of excuses from the Chancellor about his pensions tax. What we never hear is any expression of sympathy for the millions who have had their retirement funds raided. [Interruption.] Off go the boot boys. As I say, we never hear any expression of sympathy. In Budget after Budget, we hear nothing from the Chancellor about what we can do to restore confidence in pensions and nothing about how to help those who do the right thing.

Unlike the Chancellor, we are listening to the pensions industry and we are working with British businesses on the tax and regulatory changes that are needed. However, there is something that we can do right now for the 125,000 people who have lost some or all of their pensions because their company went bust. I imagine that every MP has met some of those people in their constituency surgeries: their stories are heartbreaking, their dreams shattered with a lifetime of hard work and saving lost—and all through no fault of their own.

We know that some of the fault lies with the Government. The parliamentary ombudsman made that clear in talking about “maladministration”. The Labour chair of the Public Administration Committee agrees with that verdict. He says that the Government should stop quibbling over this and act to find an acceptable solution for the thousands affected. That is the opinion of the chair of the Public Administration Committee and I agree with him. I believe that all of us, Government and Opposition alike, have a duty to help those people.

So far, frankly, the help has been inadequate. The Government’s financial assistance scheme has cost £9 million to administer, but has paid out just £3 million to date. Even by this Chancellor’s standards, that is pretty poor value for money. We need a new approach, an approach that meets our moral obligations to those victims—[Interruption.] Yes, the moral obligation that we all owe to those people. It is an approach that we need to adopt without placing a long-term additional burden on the public exchequer.

My hon. Friend the shadow pensions Minister has, along with Government Members, tabled amendments to the Pensions Bill, which reports to the House tomorrow. The effect of those amendments would be to create a lifeboat fund for the 125,000 people under the management of the Pension Protection Fund. The lifeboat fund would start making payments immediately to top up pensions to PPF levels—90 per cent. of the total expected pension package. It would include the 6,000 people whose employers remain solvent, but whose pension scheme has gone bust. I agree with the hon. Member for Cardiff, North (Julie Morgan), who may be in the Chamber, although I cannot see her, that it is unjust to leave those unfortunate people facing financial ruin.

How much would all this cost? According to the e-mail that the Secretary of State for Work and Pensions sent to the parliamentary Labour party and which we have a copy of, the net present value cost is £600 million. The annual cash requirement begins at around £30 million, rises to a peak of perhaps three times that in 20 years’ time and then falls to zero. To get the money flowing now, the Treasury should make a loan to the lifeboat fund. That is the precedent of what the Government did with Robert Maxwell. The Treasury should then recover the money, on behalf of the fund, from the hundreds of millions of pounds of unclaimed pension assets that the industry itself confirms exist.

The amendments tomorrow command cross-party support and we will discover today whether they have the support of the Chancellor of the Exchequer. Perhaps he can tell us now. It is time for him to start making amends for the damage that he has done. The Chancellor has made many mistakes in his long time at the Treasury—mistakes that are now coming home to roost. But surely the Chancellor’s biggest mistake was his first: his £100 billion raid on the nation’s pensions. Why did he do it? As one of my hon. Friends says, we are told that the millions who work hard and save hard for their pension are not his kind of people. In his eyes, their greatest sin is that they want to be independent of the state. In our eyes, that is one of their greatest virtues. For 10 years, the Chancellor has twisted and turned and done everything possible to duck his responsibility and conceal the truth, but the great British pension theft was his crime. The Chancellor has raided the retirement hopes of millions and wrought desolation on the British pension system. We have no confidence in his management of pensions. We have no confidence that he has the answers for the future. Now it is time for him to stand up, face the music, and tell us all that he is sorry.

I beg to move, to leave out from ‘House’ to the end of the Question, and to add instead thereof:

‘notes and welcomes the acts of this Chancellor and Government to tackle the legacy of pensions mis-selling, support occupational pensions through a Pension Protection Fund set up for the first time and anew Pensions Regulator, further support 125,000 people through the Financial Assistance Scheme whose occupational pensions were affected by employer insolvency, set out the long-term framework for pensions through the new Pensions Bill, including re-linking the uprating of the basic State Pension to average earnings, introduce a new scheme of low cost personal accounts and stakeholder pensions of which over three million have been created, remove the dividend tax credit, make reductions in corporation tax which have contributed to the 50 per cent. rise in business investment and helped the UK economy to grow in each of the last 39 quarters and introduce the winter fuel allowance, free television licences and the Pension Credit to provide an additional framework of support for today’s pensioners.’.

I relish this debate. I will answer every question put to me. But as this is a debate about occupational pensions, why did the shadow Chancellor not mention first of all that we are the first Government in history to ensure protection for pensioners when their company goes bust? That was not done by the Conservatives; it was done by Labour—not sympathy, but action. Why did not the shadow Chancellor start by also recognising that, retrospectively, we are helping those employees whose companies have gone bust? That is the means by which we are helping the 125,000 who suffered not because of a dividend tax credit, but because their company went bust. We are also—the shadow Chancellor does not recognise this—the first Government to address seriously the mis-selling of pensions that we inherited from the Conservatives. When we took office in 1997, 2 per cent. of the mis-selling had been dealt with. Within two years, the figure was 98 per cent. That was not done by the Conservatives; it was action by a Labour Government.

Will the shadow Chancellor not also acknowledge that we are the first Government to create an auto-enrolment pension scheme that will mean that all—[Interruption.] I will give way to all the hon. Members who want to intervene once I have set out my argument and shown that the shadow Chancellor has made a series of mistakes.

We are the first Government to create an auto-enrolment pension scheme that will mean that all taxpayers have a pension from work. That was never done by the Conservatives; it has been implemented by Labour. We are the first Government to make it a priority to tackle pensioner poverty. That is why we have introduced the pension credit, the winter allowance, and the free TV licence for the over-75s—opposed by the Conservative party in the 2001 election. We will be the first Government in 30 years to restore the link between pensions and earnings when we introduce our long-term changes as a result of the Pensions Bill.

Despite what the shadow Chancellor has been saying throughout the debate, what actually happened to the pension assets from 1996 to the present day is that the assets of pension funds in 1996 were—

I will give way in a minute, but I think that the shadow Chancellor should have an education before I do so.

In 1996, the assets of pension funds were £549 billion. By 1999, they were £820 billion. By 2006, even after the stock market crash, the assets of pension funds were more than a trillion pounds. In other words, the assets of pension funds have doubled during the period of this Labour Government.

I will let people in when I have finished putting these factual points.

Let me also tell the shadow Chancellor that in 1996, the total income of pension funds was £34.4 billion. By 1999, it was £39.6 billion. By 2006, the figure was twice as much as it was in 1996: £71.3 billion.

I will give way in a minute.

If anyone expects the Conservative party to be more helpful to pensioners than we have been, let me read what the shadow Chancellor said at a meeting organised by The Independent at the Conservative party conference:

“There are lots of Conservatives who come up to me and say we’ve really got to put more money into the pensions … the test of whether we are ready for government is whether we can resist those additional”

calls for public expenditure.

I will give way in one second.

The strength of our argument is not just the points that I have made. It is based on the rock of the economy and making the right long-term decisions for the country. It is on the rock of the economy that occupational pensions and any other services in our country depend. I tell the House that I do not apologise for the three long-term decisions that I took in 1997 in the interest of stability and growth in this country: first, to make the Bank of England independent, which was opposed by the Conservatives; secondly, to build a fiscal framework for this country that allowed us to double public investment, which was opposed by the Conservatives; and, thirdly, to remove the bias against long-term investment in our economy. That bias was recognised by the previous Chancellor, and, to achieve that, we cut corporation tax by 2p in the pound.

If the shadow Chancellor wants to cut corporation tax by 2p in the pound, as we did in 1997, why cannot he tell us how he could fund that other than by withdrawing the dividend tax credit? Why does he continue to tell us that he wants more investment in the economy while refusing to back the measures that increased investment in the economy? Why does he tell us that he opposes in principle the withdrawal of the dividend tax credit when his own Government said that it was a bias against investment in 1992 and when he cannot tell us that he would restore it if ever he came to power? Why does he not admit that the Leader of the Opposition was the adviser to Lord Lamont on the fifth occasion on which the dividend tax credit was cut?

I am just about to give way.

The shadow Chancellor says that he wants long-term answers to the problems of the economy, but every position that he takes—refusing to replace the dividend tax credit with something else and refusing to tell us how he would fund corporation tax cuts—shows that he has learned nothing from two years as shadow Chancellor. His approach is short-termist, opportunistic and insubstantial. We take the long-term decisions for the economy; he has a short-termist approach.

When the hon. Gentleman became shadow Chancellor, he said that far too often the Conservative party had been perceived as opportunist. He said:

“we have sacrificed long term credibility for the prospect of winning the support of an aggrieved section of the population or … winning a vote”

in Parliament. He continued:

“Short termism has hampered attempts to develop a long term … policy.”

That is exactly where the Conservative party is today.

I am extremely grateful to the Chancellor for giving way. As ever, he prefers to talk about the policies of the Opposition, rather than the results of his own policies. Will he give an answer today, and say what estimate he and the Treasury make of the impact on pension funds of the pension tax raid that he authorised in his first Budget in 1997? Give us a straight answer!

The hon. Gentleman clearly has not read the papers in any depth. What the Treasury said was that actuaries would assume that there would be a 7 to 20 per cent. fall in the share price immediately after the announcement, but in fact the share price rose. It rose by 0.5 per cent., then it rose by 12 per cent. over the quarter, and then it rose by 27 per cent. over the year. That is why the assets of pension funds, which is the big issue, rose from £549 billion in 1996 to £820 billion by 1999.

I will deal with other interventions later, but perhaps the hon. Member for Beverley and Holderness (Mr. Stuart) will tell me something: he is a member of the Cornerstone group—

Is he not? [Interruption.] Oh, he is. Is he apologising? The Cornerstone group proposes £40 billion of tax cuts, but not one of them is to restore the dividend tax credit.