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Commons Chamber

Volume 464: debated on Thursday 18 October 2007

House of Commons

Thursday 18 October 2007

The House met at half-past Ten o’clock


[Mr. Speaker in the Chair]

Oral Answers to Questions


The Chancellor of the Exchequer was asked—

Tax Credits

1. If he will make a statement on the findings of the Parliamentary Commissioner for Administration’s report “Tax Credits: Getting it Wrong”. (158859)

As the House knows, tax credits benefit some 6 million families and nearly 20 million people. We remain committed to continually improving the operational delivery of tax credits. I intend to respond positively to the ombudsman’s report which, for example, makes useful recommendations on the changes to the proposed procedures for recovering overpayments. In the introduction to her report, the ombudsman states:

“I know from HMRC’s response to my first report, and the dialogue that they have since continued to have with my Office, that they are committed to understanding and improving the customer experience.”

I assure the House that I welcome the ombudsman’s second report. It is a helpful and valuable tool that we will use to inform the development of the tax credit system.

I thank the Minister for that answer, but errors are still made in approximately 2 million of the 6 million claims for tax credits. As a result, many people entitled to tax credits do not apply for them. Will the Minister give the figures for my constituency—or for the whole of Edinburgh, including the Chancellor’s constituency—for those who are entitled to, but do not receive, tax credits?

I do not have that specific breakdown, but I can tell the hon. Gentleman that, in Edinburgh, West, 7,300 families and 12,200 children benefit from tax credits. He may also like to know that, in families with children whose household income is under £10,000, 97 per cent. of those entitled to the benefit and support of tax credits are receiving them.

In my constituency, 9,500 families get tax credits, worth an average of £3,000 a year. Recently, I surveyed the almost 150 constituents who have contacted me about tax credit problems: 94 per cent. said that they were satisfied with how their complaint was dealt with, and three quarters of the cases were resolved in the constituents’ favour. Does my right hon. Friend agree that the real threat to tax credits is not miscalculation, which affects relatively few people, but the fact that everybody’s tax credit would be at risk if the Conservatives were ever to get back to power?

I agree with my hon. Friend, and am grateful for the detail that he has provided about customer satisfaction. However, I acknowledge that the ombudsman’s report was highly critical, in particular of Her Majesty’s Revenue and Customs’ decision making about recovery of overpayments. I can tell the House that HMRC will replace the so-called and very disliked “reasonable belief test” with a clearer test that will set out customers’ responsibilities for checking factual information. HMRC will play that information back to customers but, importantly, it will have a time limit for action on mistakes reported to it. I believe that that will lead to a fairer allocation of responsibilities between the customer and the Department.

This is the most damning report, and all of us know from constituency experience that every word is justified—indeed, the language is very moderate. Do not the Government realise that if they give a couple of thousand pounds to a family, that is agreeable to the family, but if they want a thousand pounds back, that causes financial disaster? Will the Government recognise that with this complicated system, it is those who most need help who are least capable of dealing with its complexities?

I acknowledge a degree of justice in what the hon. Gentleman says, but HMRC has taken note of customers’ experiences and feedback in its response to the problem. That response has also been informed by the first report from the ombudsman and by the issues that hon. Members have raised with Ministers in this House. As my hon. Friend the Member for City of York (Hugh Bayley) rightly pointed out, the HMRC is responding in a way that is improving customers’ experience, although I accept that we are not where we want to be when it comes to the delivery of services. A further improvement will follow from the pilot that HMRC began in March and, under the transformation programme, people who report that their household has broken down will be allowed from November to terminate their old joint claim and make new, single claims in one telephone call. So far, more than 70 per cent. of customers involved in the pilot suffered no break in their payments and their new claims were processed within a week. I think that the result will be a material benefit to the more than 170,000 tax credit customers who, unfortunately, find themselves in those circumstances, and we are working to improve the system all the time.

May I say to my right hon. Friend that, when tax credits work, they work very well and are welcomed by everyone, but that the big problem arises when they go wrong, as they stay wrong even when every effort is made to put them right? I look forward to hearing her say that more money will be made available for training and that the software involved will be refined. That is needed because, at present, it fails to recognise when a problem has been rectified. Those are the difficulties that we need to concentrate on, so will she use her good offices to put them right?

I will certainly do that. I assure my hon. Friend that we acknowledge and accept that training is an important aspect of the improvements that HMRC can bring to the customer experience. Indeed, training will be ongoing over the next few weeks to deal with a number of issues across tax credits. However, that is not the only area that we will improve. A lot of work is going on, and I commend the staff of the tax credit offices for their enthusiasm in bringing about improvements to the tax credits customer experience.

Does the Minister accept that there is absolutely nothing in the ombudsman’s report that we and the Prime Minister have not known about for the past two or three years? Why has it taken so long for the Government to get on top of the shambles that has seriously affected many of the people whom the tax credit system was designed to serve? When will the Minister give this new guidance, and will she assure us that she will first consult hon. Members who are concerned about the issue? Will she respond to the ombudsman’s recommendation—

The hon. Gentleman asks a series of questions. I will have to check Hansard if I am to respond to all of them—obviously they were part of his leadership campaign.

The take-up of tax credits is at an unprecedented level. New figures that were published in March showed that 97 per cent. of families on incomes below £10,000 were claiming their entitlement to child tax credits. The changes that I have proposed today, the detail of which will become public after we have finished the consultation with the ombudsman and other organisations with which we are engaged, will improve the way in which customers of the tax credit system are dealt with when overpayments are made. There is a range of reasons why an overpayment can occur. However, the House acknowledges—indeed, the Conservative party has come to acknowledge—the value of tax credits in tackling the serious problem of poverty in society.

For the past two years, HMRC accounts have had to be qualified by the Auditor General because of the tax credit shambles that the ombudsman described in her latest report. The Minister does not sound confident, but can she assure the House that it will be possible to sign off next year’s accounts?

I accept that a position in which the accounts are not signed off is not a good place to be. We are working to bring about changes that will enable the tax credits office to correct that situation. I welcome the Conservative party’s acknowledgment that poverty is a threat that challenges society. It also now accepts that tax credits are proving highly successful in combating child poverty. I go further and welcome the comments of the right hon. Member for Witney (Mr. Cameron) on Tuesday 16 October:

“Do not tell me that a society which can decode the human genome…build the world’s greatest financial centre…and provide the young men and women that form the finest armed forces on earth…cannot fight and win the battle against poverty.”

That is precisely what we in government are doing.

Education and Training

2. What recent assessment he made of the impact on the economy of providing education and training for 16 to 18-year-olds. (158860)

By 2020 the economy will need 5 million more people with higher-level skills. Since 1997, 150,000 more 16 to 18-year-olds are in education or training, and the number of young people in apprenticeships has more than trebled to 250,000. Over the same period, the UK’s gross domestic product per capita has risen from being last in the G7 in 1996 to second only to the US in 2006. To close the gap further, we have committed to expanding the scope of educational and development opportunities for all. We will therefore deliver 3.7 million adult qualifications over the forthcoming comprehensive spending review period.

I am grateful for my hon. Friend’s reply because with the excellent stewardship of Russell Strutt, the principal of Central Sussex college, which has a campus in Crawley, 34 per cent. of 16 to 18-year-olds attending that college receive education maintenance allowances. The allowances have played a significant role in keeping our 16 to 18-year-olds in education, which improves not only their life chances, but the economy of the Gatwick diamond area. Does my hon. Friend agree that that is wise spending for any Government?

My hon. Friend is exactly right. The positive effect of education maintenance allowances is there for all to see—I see it in my constituency. They enable those who might not have been motivated in the past to stay on and get the qualifications and training needed in a modern economy to do just that. That benefits not only those individuals and their potential earning power later in life, but our economy.

I know that the Minister makes great play of the success of the new deal, but does she not recognise the importance of skills that people in their 20s and 30s can take forward? Does she not agree that one of the biggest social concerns here in the capital city is that while literally hundreds of thousands of people come from eastern Europe to take on relatively unskilled jobs, we have the highest level of unemployment— 8.5 per cent.—of any region in the UK?

To drive down rates of unemployment, it is important that we give our young people and young adults the education, training and access to opportunities that they need in a modern economy. I am surprised that the hon. Gentleman did not welcome the fact that we have created 2.6 million extra jobs, and that levels of employment are the highest seen in the economy for many years. I would have expected him to at least acknowledge the Government’s success in terms of employment.

Given the importance of engineering to the economy, what efforts is the Minister making to promote engineering among 16 to 18-year-olds, so that we can ensure that our youngsters have those skills in future, and take them up in the economy?

As we move forwards, it is important to ensure that education and skills training fits high-value jobs and employment opportunities. We and colleagues in the Department for Innovation, Universities and Skills are working closely with employers involved in the train to gain initiative to develop the new diploma, and to ensure that our 250,000 apprenticeships are properly based and focused on high-value jobs. Those are the jobs that we wish our youngsters to be trained for in future. I assure my hon. Friend that manufacturing, technology and engineering feature strongly in our efforts.

The number of 16 to 18-year-olds who are not in education, employment or training rose by 40 per cent. between 1997 and 2006. Given the increase in the number of 16 to 18-year-olds in that invidious position, and in light of those unacceptable facts, how can the Minister justify the spending on the new deal for young people?

First, I would question the hon. Gentleman’s facts. There has in fact been a fall in the number of people who are not in education, employment or training as a percentage of the population concerned in the past 10 years. He also has to recognise that 625,000 more youngsters are in education and training than were 10 years ago, and 189,000 more are in work. He needs to remember that the category of those not in education, employment or training includes parents who are caring for their children, people who are in part-time training, people who have disabilities, and people who are off on gap years.

Financial Advice

The Government are committed to providing high-quality financial advice to all sections of society. That is why we commissioned the independent expert, Otto Thoresen, to examine the feasibility of a high-quality national generic financial advice service. His interim report is due shortly, and his final report is due in the new year. We will respond next spring.

I thank my hon. Friend for that answer, but I am extremely concerned about the situation that the Norwich and District citizens advice bureau faces, and I am sure that what I say about Norwich is true of other places across the country. The number of cases dealt with by the debt advisory services has gone from 24,000—that is the average at Carrow road, which is where Norwich City football club’s ground is—to more than 30,000 in the past year. We need guidance on keeping the services going, on helping the advisers, on credit unions, perhaps, and on informing the public of what is available to them. The services are in crisis management and it is not tolerable.

I agree with my hon. Friend, and that is one of the reasons why last week’s pre-Budget report included, I am delighted to say, an announcement of £130 million for our financial inclusion fund over the comprehensive spending review period. That is up from £120 million in the current period. The current fund has been used to pay for about 500 debt advisers across the country. I do not know about the situation in Norwich, but I am happy to look into it. We will decide how to spend the additional money by the end of the year. I would have thought that the availability of those funds would enable us to continue, if not increase, the provision of advice that is already available.

Do the Chancellor and the other Treasury Ministers recall that in past years, their party attached tremendous importance to the ownership of the commanding heights of the economy? What is their policy now towards sovereign wealth funds? Are they taking expert legal advice on how to treat them, bearing in mind that the United States, Germany, France and Japan will not allow their major companies to be bought by foreign Governments, but we, apparently, are contemplating doing so?

I was wondering when the hon. Gentleman would get to the European examples. I was not part of Militant Tendency myself, but I am clear about our current policy. As my right hon. Friend the Chancellor made clear earlier this year, we welcome investment into Britain. We think our country is richer as a result of having open borders, inward investment and open trade. That is our policy, whether it is a sovereign wealth fund or any other that invests in Britain.

The Minister may be aware that the Treasury Committee produced three reports on financial inclusion in 2006 alone. We are pleased to note that the Government have taken up a number of the initiatives proposed. The main conclusion of those reports is that poorer people are excluded from financial services. With that in mind and in advance of Otto Thoresen’s report, does my hon. Friend agree that generic financial advice not tied to particular sales products is the most effective building block in creating an effective financial inclusion strategy?

I agree with my right hon. Friend, and I congratulate him and his Committee on the important work that they are undertaking. The answer to his question is yes, and that is why we have commissioned Otto Thoresen to do his work. He has made it clear that he sees a need for so-called generic financial advice that is not tied to a particular product. We are currently working out the best means of providing that in a way that is accessible to everyone, with different delivery channels depending on the needs of the individual. I look forward to working with him and his Committee in developing these proposals further.

Of course we welcome the Government’s belated attempts to ensure that all families have access to genuinely independent generic advice, but surely that is just one side of the coin when some banks are behaving so irresponsibly? In light of the Chancellor’s comments in the Daily Mail this morning, does the Minister agree that when her Department made the decision to bail out Northern Rock with taxpayers’ money, it should have done so on the condition that the board and senior management were dismissed?

No, absolutely not, because it is the board and the management that are responsible for the company. We are not interested in acting as shadow directors or in any way limiting the freedom of the private sector to work effectively. We took the actions that we took in the public interest to guarantee deposits and prevent contagion in that bank.

On behalf of my hon. Friend the Member for North-East Derbyshire (Natascha Engel) and myself, I congratulate the Government on accepting our sound financial and employment advice, with the result that we have saved the jobs at the Markham tax office from today. It is a wonderful achievement. Whatever she does, my hon. Friend the Minister should not take any financial advice from the Notting Hill finance group. Therein lies a problem. We would finish up with 3 million unemployed, mortgage rates at 10 per cent. and Black Wednesday.

I could not agree more. I congratulate my hon. Friend and my hon. Friend the Member for North-East Derbyshire (Natascha Engel) on the success of their local campaign. I can reassure my hon. Friend the Member for Bolsover (Mr. Skinner) that I have no intention of taking any financial advice from the Opposition, particularly their leader, who I understand was advising the then Government on Black Wednesday.

The Minister and I agree on the need for people to have access to high-quality financial advice, but did she read last week about the tragic case of a Mr. D of Westminster who, following poor advice from his neighbour, increased capital gains tax paid by successful entrepreneurs and cut it for those who sell their second homes? What does she think she can do to make sure that Mr. D and his colleagues get better advice next time round?

I am entirely confident that we acted on the best possible advice. I remind the hon. Gentleman that the headline rate of capital gains tax, even after the changes, is still half what it was when his party was in power. Capital gains tax is now simple and sustainable, and it is one of the most competitive rates internationally. The annual exemption remains at £9,200.

Inheritance Tax

4. What he expects the annual cost to be of the increase in the inheritance tax thresholds announced in the pre-Budget report beyond those announced prior to the pre-Budget report. (158862)

The costs are published in the pre-Budget report, and 12 million married couples and civil partnerships will benefit from a combined inheritance tax allowance of up to £600,000, rising to £700,000 in April 2010. The entitlement will also extend to all 3 million widows and widowers.

The reliable figure that I have for the total cost is £1.4 billion—I am disappointed that my right hon. Friend was unable to give it—which is a similar sum to the cost of introducing long-term care. Why are the Government spending money on Tory priorities, when they could be spending money on much fairer measures to help people whose inheritance is less than £300,000 and who risk losing even that should they need long-term care?

Not for the first time, I do not agree with my hon. Friend, and she will not be surprised to learn that. We should recognise the fact that husbands and wives contribute to assets held by the family, including the family home, and I therefore think it right that, in the event of a widow’s death, she can use her husband’s unexpired inheritance tax allowance, effectively increasing the amount of money that can be deducted from any tax liability. As a result of what we are doing, the allowance covers the value of about 97 per cent. of houses in this country, which is the right thing to do. I also think it right to help people who need long-term care, and we have increased the amount of money available to do that.

Will the Chancellor confirm that the press notice accompanying the March Budget proposals on inheritance tax described them as “fair and targeted” and stated that they will give certainty to families “up to 2010-2011”? Does his claim that his sudden panic doubling of the allowance had nothing to do with the announcement by the shadow Chancellor eight days before give us a completely new definition of political serendipity?

Just before yesterday’s football, I tuned into MPTV, where I saw the hon. Gentleman trying to run that line while questioning Treasury officials—and rather unsuccessfully, at that. The Budget earlier this year set out proposals to increase the allowance. It has always been the case that all taxes are kept under review. I decided at a very early stage that that was the right thing to do on inheritance tax, which is why I did it. The big difference between the Government and the Opposition is that we can make that change, because we can afford to do so. The Conservative proposals would cost more than £3 billion, and they have failed to identify any credible source for raising that money, which adds to the black hole in their finances. They have promised more than £6 billion in tax reductions, but they have offered no convincing explanation of how they would meet that gap.

As I have said, it is, of course, open to any political party to make proposals to increase the threshold, but they must ask themselves where the money would come from. The Conservatives have not identified any credible source for raising anything like the £3.5 billion that they promised in just one conference speech. It is possible to spend an extra £1 billion, but most of the benefit would go to a small minority of estates over £850,000. Both because it would be inequitable to do that and, crucially, because it could not be afforded, it would be wrong to accept the Conservative proposals. All political parties get into huge trouble when they start making promises that they cannot possibly afford. If they do that, they will end up increasing borrowing, putting up interest rates and putting up mortgage rates, which is exactly what happened to the Conservatives in the early 1990s.

Would the Chancellor like to uncross his fingers, look you, Mr. Speaker, straight in the eye and assert that the Government would have made their inheritance tax announcement if the Conservative Opposition had not made their promise to raise the threshold to £1 million?

Yes, I would. It is right to recognise that, in this day and age, most husbands and wives contribute to the family assets. If a husband who has not used up his allowances dies, his wife should be able to inherit them. The key difference between us and the Conservative party is that we can make those tax reductions because we can afford to. The Conservatives have now made tax promises worth more than £6 billion, yet they have no idea how they will be able to finance them.

The raising of the inheritance tax thresholds has certainly been driven by a tripling of UK house prices in the past 10 years or so. Has the Chancellor seen this morning’s international report suggesting that UK house prices are about 40 per cent. higher than they should be economically? Would any amendment be made to inheritance tax policy if house prices drifted down in the next few years, as some people suggest they will?

I read yesterday’s report for this year from the International Monetary Fund—which, incidentally, says yet again that the UK economy will be the fastest-growing major developed economy. Although it has, of course, cut its growth expectations for next year, it also recognises that the UK economy is fundamentally strong and will continue to grow. The IMF’s projections are very much in line with those that I set out to the House last week. On housing, it is encouraging that we are in a position quite different from the one we were in 10 or 15 years ago, when 3 million people were out of work, interest rates hit 15 per cent. and mortgage rates made it very difficult for people to meet their repayments. As I said last week, the UK economy is in a much stronger position than it was at that time. As the IMF recognises, we will get through this time of international uncertainty.

The capital taxes structure of the Chancellor’s inheritance tax proposals extends the recognition of marriage. Do the Government believe that the case for recognising marriage through the tax system is a moral one?

The tax system, which includes inheritance tax, has always recognised marriage. It is important that we recognise and support marriage, but we have always made it clear that we should not discriminate against children simply because of their family circumstances. Since 1997, we have done all we can—through tax credits or child benefit—to help families with children, because that gives children the best possible start in life.

What is the Chancellor’s forecast of house prices that underlies his forecast of revenues for the next two years? In the light of his recent comments that I have heard, he thinks that house prices will fall: by how much, and over what period?

I did not say that. All the projections were set out in last week’s pre-Budget report. Many people expect the housing market to slow, and we cannot be sure what the full effect will be of the problems that started in the United States. In my interview that appeared in today’s Daily Mail, I said that lenders must be realistic when they offer loans. They must be confident that the asset is sufficient to repay the loan and that the repayments can be met. A little realism would be extremely helpful not only for individuals but for the housing market in general.

Income Tax

5. What estimate he has made of the impact on disposable income of changes in the rate of income tax since 1997. (158863)

As a result of personal tax and benefit reforms since 1997, households are, on average, £1,050 per year better off. Following the publication of September’s inflation figures, I can announce that from next April the basic state pension will rise by £3.40 to £90.70 a week, and by £5.45 to £145.05 a week for a couple. Full details of all the upratings are published today.

I thank the Chancellor for his reply. Is he concerned about the uSwitch report, which says that people’s disposable incomes are at their lowest level for 10 years? Since Labour came to power, council tax has doubled, home prices are, as we have just heard, 40 per cent. above a realistic value according to the IMF, and people are spending a fifth of their disposable income on servicing debt. Sir Alan Greenspan, the former head of the US reserve, believes that there is a 50 per cent. chance of a recession in the USA. What probability does the Chancellor think there is of a recession in the UK?

Disposable income in this country has risen by 25 per cent. since 1997. As the hon. Gentleman will know, many measures, including tax credits, have helped families, particularly families on low incomes with children. That is very important.

As for council tax, we have increased the amount of money available to councils to keep down the level of increases. I made it very clear last week that I see no reason why councils should have to increase their council tax to unacceptable levels. I would say to the hon. Gentleman, who represents the Liberal party, that when one looks at the detail of the Liberal party’s policy, one will find that people who would not consider themselves to be terribly well off would be considerably worse off as a result of a local income tax.

Child Trust Fund

There is no doubt that our policy on child trust funds has increased levels of saving. Before the scheme was introduced, 30 per cent. of children had no savings accounts; now everybody will, regardless of their background, with more than 3 million accounts already being opened for our children. The data that will be published next week on additional contributions by families into accounts will enable us to assess the continuing impact of child trust funds on family saving patterns.

I thank the Minister for that. I invite her to come to Erdington to try to help explain to ordinary families how important it is to top up their child trust fund, particularly in the many communities such as mine where almost one in two of those ordinary families do not have anybody in work.

I would be extremely happy to take up my hon. Friend’s invitation to come to his constituency; it would be a pleasure. In recognition of the difficulties faced by low-income families, the Government give double contributions to children with child trust funds—£500 at birth and £500 at age seven compared with £250 for other families.

My hon. Friend makes an extremely valid point about encouraging family members and friends to top up their children’s accounts. That is why, alongside my right hon. Friend the Secretary of State for Children, Schools and Families, we recently announced £11.5 million for education about the financial implications of child trust funds so that we can encourage the families of the children with such funds to understand that a small amount invested now could make a huge difference later. I will write to my hon. Friend and to all Members of the House to encourage them to take a personal lead in ensuring that their constituents understand the benefits of making small contributions when a child is young so that they have a significant asset at the age of 18.

My hon. Friend has had for several months the results of the second pilot for the savings gateway. I understand that that shows a very positive benefit for family savings. When can we expect those pilots to be rolled out nationwide so that families can take advantage of them?

I am grateful to my hon. Friend for his comments. As the Chancellor announced in the pre-Budget report last week, we are commissioning the necessary technical work to understand how and when a national roll-out could be implemented and when it could happen according to the technical requirements. My predecessor said with regard to the savings gateway that it is not a question of if, but when. I share that view.

Business Taxation

7. What assessment he has made of the likely impact on the competitiveness of the UK economy of the changes to business taxation announced in the pre-Budget report. (158865)

The economy is expected to grow at a faster rate than any of its G7 competitors in 2007, as confirmed in the IMF’s “World Economic Outlook”, which was published yesterday. Last week, I announced several measures to help to maintain that environment and to promote a fairer and simpler tax system.

By giving capital gains tax breaks to benefit business speculators and buy-to-let investors while punishing businesses seeking to invest in the long term, is not the Chancellor putting short-term political expediency before the long-term stability of our economy?

No, 18 per cent. is less than half the headline capital gains tax rate that we had 10 years ago. It is competitive in terms of the other developed countries. Somebody who starts up a business, develops it and then sells it keeps 82 per cent. of the gain that they make. There is a personal allowance of £9,200, which will especially help people who have employee share ownership schemes. There is also roll-over relief, which allows somebody who is selling a business and wants to reinvest their money back into capital gains to do so. The change that we announced is the right thing to do. It simplifies the tax system, which will bring long-term gains to our economy.

Has the Chancellor seen the welcome that the Chartered Institute of Taxation gave to his approach to tax simplification for businesses? Do businesses not clamour for simplification of their taxation? Does he agree that even when proposals have many more winners than losers, it is still a good idea to consult on them?

The proposal that we have put forward has been welcomed in many quarters. Indeed, I noticed that the Conservative party’s tax reform commission criticised the present system, calling it a

“current complex system of taper relief and indexation.”

The change is justified, will make a difference and will make the system easier for people to understand. Apparently, 75 per cent. of the people who pay capital gains tax find it so complex that they have to consult a lawyer or accountant. When something reaches that degree of complexity, we need to examine it, and this is the right thing to do.

As there are potentially more than 10 million losers from last week’s proposed changes to capital taxation—6 million in employee share schemes and 4.5 million owners of small and medium-sized enterprises—has the Chancellor calculated how many gainers, such as second-home owners or owners of substantial investment portfolios, there will be?

The hon. Gentleman mentioned employee share option schemes, which I have always supported. As the capital gains tax has an annual allowance of £9,200, it is highly unlikely that many employees in such schemes would exhaust that and therefore have to pay capital gains tax. The tax is paid by a comparatively small number of people and the allowance does protect the people whom I am sure everybody in the House would like to support.

The Chancellor will be aware of the comments made by Scottish Financial Enterprise, the Scottish Chambers of Commerce, the Institute of Directors, the CBI, the Federation of Small Businesses in Scotland, and others about the capital gains tax changes, particularly those on the potential damage to SMEs, which are the bedrock of the Scottish economy. Will he listen to those organisations, and if they can make a credible case that the changes will lead to reduced competitiveness or weakened investment, will he be prepared to review the decision that he took last week?

I am always happy to listen to what Scottish businesses have to say, but I should tell the hon. Gentleman that the number of SMEs has grown by 21 per cent. in this country—there are now more than 760,000 more—and they have gained from a wide variety of measures that support them. Yesterday, I was interested to see a Conservative party press release that said that, according to something called the Entrepreneurs Organisation, if taper relief were to be scrapped, 33 per cent. of the people surveyed would emigrate. I was concerned about that, so I looked up the survey on the website and found that the Conservatives relied upon a survey of 12 people. Moreover, it was carried out three months before I made my announcement, and when I checked to see what the 12 people were saying, I found that one of them had said:

“The UK is a marvellous place to start a business”.

The Conservatives need to do some homework before they start criticising our proposals.

Why does the Chancellor think that he has managed this amazing feat of uniting the CBI, the Institute of Directors, the Federation of Small Businesses and the British Chambers of Commerce in condemning his capital gains proposals? Between now and next April, when he is due to implement the proposals, in which month does he think he will have to withdraw them?

I have made my proposals because I think that they are the right thing to do. Having a single rate of capital gains tax is right. It will help businesses and, taken together with other measures that we have put in place that help businesses, especially those that are starting up, it will be good for the economy. As I said, one of the single biggest things that helps business in this country is the fact that we have a strong, stable economy, precisely because we have not made irresponsible promises on tax and spending, which would undermine the stability upon which businesses depend.

May I press the Chancellor on the one part of his pre-Budget report that was not written by us? The four leading business organisations in the United Kingdom say that the capital gains tax increase came as a

“bolt out of the blue”—

the point made by the hon. Member for Stafford (Mr. Kidney)—and will

“set back the growth of the economy over coming years by discouraging long-term investment”.

Even the Chief Secretary—we welcome the candour that he brings to his job—says that

“Yes, there is a tax rise”


“Yes, there will be losers”.

Is that correct? Who will lose out?

As I said, I believe that having a single rate for capital gains tax is the right thing to do. There are personal allowances of £9,200 and a continuation of roll-over relief that enables people who sell their business and want to re-invest to do so. Inevitably, whenever changes are made to the tax system and the rate is simplified, there will be people who do not like the changes, but they are the right thing to do in the long-term interests of business.

The Chancellor did not actually answer my question and spell out who will lose out, so I will have to do it for him. Millions of small businesses will lose out, and millions of employees who have shares in their company could be at risk. The whole entrepreneurial culture that the previous Chancellor used to bang on about from the Dispatch Box is under threat. That is why the Government’s small business adviser says that the change will penalise investment and Labour Members on the Select Committee are urging the Chancellor to reconsider. Even his good friend the Secretary of State for Business, Enterprise and Regulatory Reform is now lobbying the Treasury to reconsider. Why does the Chancellor not admit that he has made a mistake on capital gains tax and get the U-turn out of the way quickly? The latest survey of business opinion shows that fewer than one in five think that he understands business. He has ceded so much of the political and intellectual agenda to us: why not cede a little more?

If I were the hon. Gentleman, I would not rely over much on surveys if they consist of asking 12 people what they think about a proposal that had not even been promulgated at the time that they were questioned. When we find that one person seriously considered emigrating, we can hardly be impressed by that.

In relation to the proposals generally, I think that simplifying the tax system is necessary and a single rate of capital gains tax is the right thing to do. Although I accept that some people are not entirely happy about it, others have welcomed the proposal, and therefore I intend to proceed with the changes that we are making. In the long term, they will benefit businesses, along with all the other measures that we are taking to support business—not just small businesses, but larger companies, through the reduction in corporation tax.

Council Tax

8. What estimate he has made of the impact on disposable income of changes in the levels of council tax since 1997. (158866)

Between 1997-98 and 2005-06, average net council tax paid by households has increased by £6 a week in real terms. Over the same period, disposable income increased by £90 a week in real terms.

I thank the Chief Secretary for that answer, but the Chancellor has already said this morning that councils should not have to keep raising council tax. However, in the pre-Budget statement, he said that it will rise by up to 5 per cent. every year. The average council tax bill for a band D property was £688 in 1997 and it will be £1,529 at the end of the comprehensive spending review—an increase of 122 per cent. How can the Chief Secretary justify that burden, and when will the Government show leadership and introduce a fair and sensible system of local taxation?

May I correct the hon. Gentleman? The Chancellor did not say that council tax would increase by 5 per cent. He said that the resources made available in the spending review will allow councils to keep rises substantially below 5 per cent.

In the three years of this spending review, including the current year, we have seen three of the four lowest council tax rises on record. I know that the hon. Gentleman and his colleagues like to blame us for everything, but I hope that he will accept that his party has some responsibility in these matters. I gently point out to him that the average council tax per dwelling for 2007-08 in Labour areas is £938, but in Lib Dem council areas it is £1,139—a grand total of £199 more.

I can add to what the Chief Secretary said. In Aberdeen, under a Liberal council, our council tax is far higher than it ever was under a Labour council. What assessment has my right hon. Friend made of the impact on disposable income of a local income tax, if it were to be introduced? In particular, what would the impact be on families where both parents are working, at a time in their lives when expenditure on such things as a mortgage or bringing up children is probably at its highest?

My hon. Friend is right to raise such matters. It is important that we proceed with great caution in this area, and explain clearly to the public the implications of any changes to the council tax system. To amplify her point, I shall quote from the Lyons report, in which Sir Michael Lyons concluded:

“I am not convinced, for example, that a pensioner household with a relatively modest income but significant savings or housing equity, is less able to pay than a young family with a larger income but no other assets. In this light I have some concerns, about whether abandoning property taxes for income taxes would be fair; in practice, this might simply replace one sort of perceived unfairness with another.”

Members on the Opposition Benches would do well to read and reflect on Sir Michael’s comments.

I remind the Chief Secretary that in places such as Worcestershire, the council tax has more than doubled since 1997, which places a terrific burden on pensioners, who have not seen their pensions go up by 100 per cent. He might remember that back in 2005, the Government deemed that the burden of the council tax on pensioners was such that they should be eligible for £200 help towards it. However, since 2005, this help has not been forthcoming. Can the Chief Secretary explain why?

The Government have made help available to pensioners to deal with the council tax through council tax benefits. The council tax benefit rules are more generous for pensioners in that, if the claimant is over 60 and receives the guaranteed element of pension credit, there is no upper limit on the amount of capital that they may have.

We are helping pensioners through the council tax system, but I also gently point out to the hon. Lady that, whereas the average council tax per dwelling in 2007-08 in Labour areas is £938, in Conservative areas it is £1,200—although that is slightly lower than in Lib Dem areas. I ask her for a little more humility in these matters, and more acceptance of the responsibility of the effects of her colleagues’ political decisions.

Does my right hon. Friend agree that one of the technical factors that tends to cause council tax increases in some areas is the operation of the floors-and-ceilings regime? It is intended to aid the transition to appropriate funding for local authorities, but over a long period—in the case of Broxtowe, five years—it has the effect of leaving the council underfunded. Will he raise that issue in discussions with his colleagues in the Department for Communities and Local Government?

I thank my hon. Friend for his question. Having attended last week the cross-party group SIGOMA, the special interest group of municipal authorities, which represents a number of councils, I am more familiar than I ever wanted to be with the effects of damping, double damping and floors and ceilings. Now that the overall allocations have been made to Departments in the spending review, the matters that he raises are primarily the responsibility of the Secretary of State for the Department for Communities and Local Government. I am sure that the representations that he, along with other hon. Members, is making about the fairness of the allocation system for the fund will be heard during the course of the next few weeks and months.

Efficiency Savings

10. If he will make a statement on the level of efficiency savings required from local authorities in 2008-09. (158868)

“Delivering Value for Money in Local Government” sets out the expected value-for-money savings for the years covered by the comprehensive spending review, and has been published on the Department for Communities and Local Government website. The target of 3 per cent. of net cash-releasing savings per annum is consistent with the wider public sector target. The relevant figures for 2008-09 show net cash-releasing savings of £1.1 billion resource and £0.4 billion capital.

Will the 3 per cent. efficiency saving target be applied after the revenue support grant is given to councils or will it be top-sliced off the national RSG settlement before it is distributed to councils?

The distribution of the revenue support grant has been decided in the comprehensive spending review by an examination of the potential for efficiency savings and the pressures on specific individual resources. That has led to the 1 per cent. real-terms increase in the comprehensive spending review 2007 for local authorities. If the hon. Gentleman was accurate and top-slicing had occurred, the settlement would be minus 3 per cent.


11. What recent assessment he has made of the economic impact of the quality and range of skills of the UK work force. (158869)

As Lord Leitch set out in his independent report about the United Kingdom’s long-term skills needs, the improving skills profile in the UK work force over time has contributed to economic growth. The Government will increase expenditure on higher education and adult skills in England by more than £2 billion in the next three years. That will support further improvements in the UK skills base at all levels.

I warmly welcome the investment in skills that was announced in the past week. Does my hon. Friend agree that, if we are to use the money effectively, it is important to point out that the skills required for excellence in our traditional manufacturing such as engineering and automotive are highly transferable to growth areas—for example, environmental technologies? Does she also agree that making that link in practice in our initiatives is important not only for prosperity but for raising aspiration in industrial areas, such as mine and hers, that are undergoing transition?

I could not agree more with my hon. Friend. In passing, I note that the National Skills Academy for Manufacturing was formally launched this year and that its head office is in the west midlands. One of the pilot areas for the train to gain technical level 3 skills in the workplace is also in the west midlands. Nearly 7,000 west midlands businesses have been engaged with 8,000 low-skilled employees to improve their basic skills.

Council Tax

12. What estimate he has made of the impact of the spending plans announced in the comprehensive spending review on the level of council tax in the next three years. (158870)

As my right hon. Friend the Chancellor set out in his pre-Budget report statement, we expect the overall council tax rise in the next three years to be substantially below 5 per cent.

Is the Chief Secretary aware that the Local Government Association has described the spending plans as the worst financial settlement for councils in a decade? Is not it the case that, in counties such as Essex, where demand-led social services such as social care are increasingly costly—the costs are rising far faster than inflation—the inevitable result of the settlement will be higher council tax bills, which hit pensioners and many of the most vulnerable in society hardest?

Under the Government since 1997, real-terms growth in the funds that central Government provide to local government has happened in every single year. That was not the case before 1997, when there were real-terms cuts in the funding to local government. The funds allocated last week fulfil the bottom-line request of the Local Government Association in its formal submission to the comprehensive spending review. It is now up to councils to keep council tax down, and, as I pointed out to the hon. Member for Bromsgrove (Miss Kirkbride) a moment ago, the Conservative party bears as much responsibility as any other party for ensuring that that happens.

Tax Credits

13. What plans he has to tackle the issues concerning the tax credit system identified by the Parliamentary Commissioner for Administration. (158871)

As I said earlier, the ombudsman’s report is highly critical of Her Majesty’s Revenue and Customs and the tax credit system. On the positive side, it recognises HMRC’s progress on administration and welcomes the change in policy that I outlined today for recovering overpayment. It makes further recommendations to ensure that the policy is effective. Her Majesty’s Revenue and Customs does not want to reject any recommendations outright. Some require thought about exactly how we respond to them, and I believe that we will be able to respond positively.

I thank the Minister for her answer. I hope that she will respond positively to point 4.4, which asks:

“Does such a system…truly meet the needs of this particular customer group?”

I hope, too, that she will take on board the advice of Citizens Advice that it might be time to look again at introducing fixed awards, which would improve stability. Is not the fundamental problem that people who are trying to budget on a weekly basis cannot cope with the retrospective nature of the changes to their finances? That puts them in such a difficult position that it is beginning to frighten people off from claiming.

Citizens Advice has produced a serious report that looks at the issue carefully, but I do not see any evidence in a fall-off in the numbers of claimants who are receiving their entitlements. I acknowledge that there is a fear and I take that seriously, but tax credits offer a flexible system of support for 6 million families, as I have said, which equates to nearly 20 million people. Up to 700,000 families would receive less support under a fixed system. Although we are considering all such ideas, that is not the way to go. We must improve the delivery and administration of tax credits, which I believe is a better system than a fixed payments system.

Climate Change

15. What recent assessment he has made of the likely impact on the economy of climate change over the next 10 years. (158873)

The Stern review found that the costs of avoiding the most dangerous impacts of climate change are significant but manageable and could amount to around 1 per cent. of global gross domestic product. Those costs will be minimised with co-ordinated international action and are significantly less than the costs of inaction. Modelling for the energy White Paper suggests that there could be transition costs to the UK economy of between 1 and 2 per cent. of gross domestic product in 2020 in reducing emissions by 30 per cent., working from the 1990 base.

Climate change is of course a huge problem facing our country and the world. Far too often in this Chamber and around the world, we have debates on the causes of climate change, but not enough on the effects. May I seek my hon. Friend’s assurance that the Treasury will liaise with other Departments to ensure that that imbalance is rectified and that we have much more co-ordinated action between Departments, perhaps led by the Treasury as the main funder, on adapting to the inevitable climate change that we will experience, and are already experiencing, this century?

I can reassure my hon. Friend that that is precisely what the Treasury will be doing. The climate change Bill, which is due to come before the House, will create for the first time measured carbon markets and reductions. That will give us a tool to enable co-ordinated action in the UK. However, as he is aware, since the UK is responsible for only 2 per cent. of world emissions, international action is a key too.

Business of the House

Before announcing the business I can tell the House that the Commons calendar, from November this year until October 2008, was published earlier today and is available in the Vote Office. I am sure that hon. Members will be interested to know that we plan to rise for the Christmas recess on Tuesday 18 December.

The business for the week commencing 22 October will be:

Monday 22 October—Statement by the Prime Minister following the European Council meeting. Motion to approve a Ways and Means resolution on the Serious Crime Bill [Lords]. Remaining stages of the Serious Crime Bill [Lords].

Tuesday 23 October—Carry-over motion for the Crossrail Bill followed by motions relating to the House of Commons Members’ Fund and a motion to take note of the outstanding reports of the Public Accounts Committee to which the Government have replied. Details will be given in the Official Report.

Wednesday 24 October—Consideration of Lords amendments, followed by consideration of Lords amendments to the Local Government and Public Involvement in Health Bill, followed by, if necessary, consideration of Lords amendments.

Thursday 25 October—Motions relating to House business, including the report from the Select Committee on Modernisation of the House of Commons and from the Procedure Committee.

It may assist the House if I tell hon. Members that I have today published the Government’s response to the Modernisation Committee’s first report of the 2006-07 Session, “Revitalising the Chamber: the role of the back bench Member”. It is now available to all hon. Members from the Vote Office. I intend to table the relevant motions in due course.

Friday 26 October—The House will not be sitting.

The provisional business for the week commencing 29 October will be:

Monday 29 October—Consideration of Lords amendments, followed by a debate on Burma on a motion for the Adjournment of the House followed by, if necessary, consideration of Lords amendments.

Tuesday 30 October—If necessary, consideration of Lords amendments. The House will be prorogued when Royal Assent to all Acts has been signified.

I hope that it will be possible to prorogue no later than Tuesday 30 October. The House will understand that that is subject to the progress of business in both Houses, but that looks the most likely date at the moment.

I should also like to inform the House that the business in Westminster Hall in October will be:

Thursday 25 October—A debate on the report from the Environmental Audit Committee on the EU emissions trading scheme.

I am today bringing forward measures that will allow for corrections to be made in Hansard and for letters from non-departmental public body chairs to be published in Hansard for the first time. Full details are available in written ministerial statements. I am grateful to the Select Committee on Procedure for its advice on both points.

I thank the right hon. and learned Lady for giving us the future business.

In the current cycle of oral questions, important issues such as local government and justice are squeezed into 30-minute sessions. Will the Government introduce a new cycle of questions to change that in the new Session of Parliament?

Yesterday, the Health Secretary told the House that the report on obesity “deserves discussion in Parliament”. Will the Leader of the House commit to such a debate in Government time? Will she also confirm that there will be no single equalities Bill in the Queen’s Speech? Will she tell the House why she announced that not to Parliament but to guests at a drinks party at the Labour party conference?

Will the right hon. and learned Lady explain why the Criminal Justice and Immigration Bill, which was given its Second Reading last week, amends the Legal Services Bill, which has not even passed through Parliament yet? Amending a Bill before it becomes law is incompetent even by this Government’s standards. On the subject of criminal justice, according to a leaked Ministry of Justice document Labour’s flagship scheme of open-ended sentences for violent criminals could be scrapped. Whether from the Home Office or the Ministry of Justice, Labour’s answer to violent crime is always the same: let the perpetrators out of prison early. May we have a debate on crime and punishment?

This week, the Committee on Standards in Public Life revealed that nearly 400 Labour party donors, candidates, and election agents have been given jobs on Government quangos in the past year. May we have a debate in Government time on public appointments so that we can discuss Labour’s government by stealth?

In the latest Government flip-flop, the Chief Secretary to the Treasury has said:

“It’s not wrong that the tax system should recognise…marriage”,

and that there is a

“metropolitan myth that Labour people are all a bit liberal”.

As one of those metropolitan liberals, will the right hon. and learned Lady commit to a debate in Government time on how to support families in the tax system?

We have just had Treasury questions, but groups representing large and small businesses say that the new Chancellor’s changes to capital gains tax risk

“serious damage to this country’s entrepreneurial culture”.

The Business Secretary is apparently going to lobby the Treasury on this, and I understand that, in Treasury questions, the hon. Member for Stafford (Mr. Kidney) raised the issue of the lack of consultation on the measure. May we have a debate in Government time so that the House can consider in full the consequences of that crippling tax change?

Two and a half years ago, the EU referendum Bill—the European Union Bill—was introduced to Parliament, yet the Prime Minister will go to Lisbon today to agree the renamed constitution without a referendum. The Government’s representative on the convention says that he has

“copped out from a specific promise made to voters”.

Last week the Leader of the House could not even bring herself to defend the Prime Minister’s decision not to hold a referendum, so perhaps she, too, thinks that he has copped out of his promise. After his tantrum before the European Scrutiny Committee, will the Foreign Secretary make a separate statement on the Floor of the House on why the Government are depriving the British people of their say?

We have no plan to change the questions rota.

A full statement was made to the House on the question of obesity, which is a continuing concern. I have no doubt that, as and when there is new information to be given to the House, further statements will be made, and it is always possible for Members to raise the matter on the Adjournment or in Westminster Hall. We all want good facilities for exercise, proper labelling and prevention of excessive advertising to children of foods with fat, sugar and salt; we all share that important desire and want to work together across government and across the political parties on it.

The right hon. Lady mentioned the question of the equalities legislation. There has been no change to whether there will be a Bill on equalities, to which we are committed. We were not committed to an equalities Bill for the Queen’s Speech this November; we had committed to a draft Bill before the 2008 Queen’s Speech. However, I can tell the right hon. Lady that we issued a consultation paper and received many responses, some of which suggested major changes in policy. We are considering the response to the consultation paper and therefore a draft Bill will not be possible if there is a change of policy that needs consideration and discussion. I welcome the fact that she supports the quest for equality and I hope that she will work with us to bring about a strong equality Bill for the 21st century. There is certainly no question of backing down on equality issues; she might find that it is quite the opposite—which I hope she will welcome if it proves possible.

The right hon. Lady mentioned that the Criminal Justice and Immigration Bill is being amended by the Legal Services Bill, but I understand that that is not the case. She also mentioned leaked documents, allegedly from the Ministry of Justice. I am not going to comment on leaked documents, but I simply do not accept the suggestion that the Government have somehow focused insufficiently on rape and other sexual offences. We have toughened the law on rape; we have ensured that the police and prosecutors strengthen their work on rape; and we provide good support for victims. There will, of course, be a debate on crime on Monday.

The right hon. Lady raises the question of public appointments. If she is concerned about any individual appointments, she can always bring them to my attention. She will know that the public appointments system is transparent and independent. [Interruption.] In fact, any hon. Member who has a complaint about a public appointment can bring it to my attention.

The right hon. Lady mentioned family and marriage. My right hon. Friend the Chief Secretary, who was in his place a few moments ago, assured me that he is not planning to become the House of Commons marriage guidance counsellor. His comments were made in a rather wider context than appeared and the Government’s position remains this: we recognise that families come in all shapes and sizes; we recognise that no Government policy can make men and women happy together in their marriages. If there is such a policy, please tell us what it is and we will adopt it. Meanwhile, it is the job of Government to get on and support families with children and families with older relatives.

The right hon. Lady also mentioned capital gains tax. It is, of course, the case that when any tax is under discussion, consideration will be given to the questions of simplicity, fairness, international competitiveness and revenue raising. They will all have been considered across the piece by the Chancellor. Our record is one of sustained growth in the economy and high employment.

The right hon. Lady raised a question on the handling of the EU treaty. As I have said, there will be a statement in the House on Monday. I remind Members that this country has greatly benefited from our membership of the European Union. [Interruption.] I would like to take this opportunity to say a few words about that, because we should debate EU issues in the context of the importance of our membership to the economy, the climate and to tackling—[Interruption.]

Order. It would be nice if I could hear what the Leader of the House is saying. I cannot do so if other Members are talking across the Floor.

As I said last week, if the Government agree to a treaty, it will come before this House to be ratified and there will be debate in this House. As Leader of the House I will ensure that there is sufficient time properly to discuss it and to hear the views of all Members.

I agree with the following comments in a letter printed today in The Times:

“The measures contained in the treaty…are in the UK’s…interests…As a result of the treaty, the UK’s share of voting in the Council increases by 45 per cent…the EU is crucial to the UK’s long-term interests.”

Those are the words not of the Foreign Secretary, but of the former Conservative Cabinet Minister, Leon Brittan, and I strongly agree with him.

Two people die every week on Tyneside as a result of an asbestos-related injury contracted through their life in work. Does the Leader of the House agree that pleural plaques—scarring of the lungs through exposure to asbestos—is a workplace injury? Will she therefore join me in condemning those out-of-touch Law Lords who are stopping working-class people getting their rightful compensation, and will she tell me—either now, or later in the day after she has had time to consider it—when we can get this matter before the House? We must do so as soon as possible so that we can legislate to right this terrible wrong.

I thank my hon. Friend for raising that important issue, and I am aware of the work that he and other Members have done to bring to the attention of the House and the Government the devastating effect of asbestos-related lung disease. The Government have a good record on ensuring that there is compensation for those whose lives are devastated by this range of terrible diseases. My hon. Friend raises the question of the House of Lords judgment, which was delivered only yesterday. It is being considered. The Law Lords’ responsibility is to decide what the law is and how to apply it, but it is for this House to consider whether the law is right and adequate, and we will make that consideration after we have had a chance to study the judgment.

The Leader of the House is to be thanked for her statements, not only about the business but about other matters. May we as soon as possible—ideally next week—have a wide-ranging debate on the diary of the parliamentary year, so that we might end up with a saner arrangement than at present? We could, for example, have a regular start to the Session every year in October; we could have a small carry-over at the beginning of September finishing before the party conferences, and then make a clean start afterwards. That would give us a much more orderly annual programme.

In that context, I also hope that we will be allowed to address the allocation of time for questioning Departments, as the right hon. Member for Maidenhead (Mrs. May) asked. It is nonsense that so little time is set aside for colleagues to question major Departments such as the Ministry of Justice—in which the Leader of the House so respectably served.

I anticipate that next week we will get some written statements, as well as the Prime Minister’s oral statement on the Lisbon meeting on Monday. I ask the Leader of the House to tell her colleagues that it will not be helpful if there is, as usual, a raft of written statements in the last two days of the parliamentary year when Members have no chance to ask questions and follow them up. May we therefore have those statements earlier next week, so that they can be dealt with when all Members are present?

The Leader of the House announced that there would be a debate on Public Accounts Committee reports next week—although, enigmatically, we were told that the reports themselves would be available elsewhere and that people could look them up. We really need a system allowing Select Committee reports to be debated on a much more routine basis, Department by Department. Some excellent work is done by colleagues in all Select Committees, and I know that there is a system of selecting some reports for debate, but I am sure that the House and the country would welcome regular non-partisan debates on, for instance, Health Committee and Education Committee reports.

Some important reports on immigration were published this week by the Home Office, the Department for Work and Pensions and the Treasury. Because the issue is always emotive and because there is so much misinformation and distortion of information, may we have a proper debate on immigration early in the new year on a motion for the Adjournment of the House? The nation thinks that it is important, and opinion polls show that it is important. A debate that is not prompted by a partisan motion must be the best way of proceeding. It is important that we get the facts out, and not the prejudice.

The hon. Gentleman makes some important points about the parliamentary year and about opportunities to debate Select Committee reports. The Modernisation Committee will be examining the way in which debates on particular topics are allocated over the year, including annual departmental debates. That can also be discussed on Thursday, when we will debate the Modernisation Committee’s report.

I am sure that there was discussion between the usual channels before it was decided not to make any changes in the current rota of oral questions. It is always difficult to achieve the right balance, but if Members have any proposals about how the system should be changed—especially in view of the departmental changes that have taken place—I ask them to convey them to me. If there has been no consultation I am sorry, but we will undertake to examine any proposals that Members present.

The hon. Gentleman spoke of shed loads of written statements arriving at once just before the rising of the House. I think that Ministers’ minds are focused by the fact that the House is about to rise and time is running out, but I undertake to write to my colleagues and remind them not to leave all the statements until the last day. I realise that the cumulative effect makes things difficult for Members.

I note that on 24 October a debate on the control of illegal immigrants will take place in Westminster Hall. It should be borne in mind that Britain has been built on waves of immigration, that the economy has grown steadily and that unemployment has fallen over the past 10 years, but we must get the balance right in Britain’s interests, which is why there will be a points-based system from next year. All those matters are considered by the migration impact forum and obviously they are kept under review. However, I will bring the hon. Gentleman’s proposals for a debate in Government time to the attention of my colleagues.

The Leader of the House will be aware that the BBC’s recent announcement about the future of its news-gathering services comes hot on the heels of ITV’s proposals to slash its commitment to regional news, which includes doing away with a dedicated news service in the east midlands. May we have a debate on the future of radio and television news services, and may we also have an opportunity to press both providers to ensure that their news services are well resourced and able to provide adequate coverage in each of our regions?

Members will have an opportunity to raise those important issues on Monday 29 October, during questions to the Secretary of State for Culture, Media and Sport.

I am aware of great concern in the regions about the changes in ITV regional news coverage, and there have of course been announcements about the BBC today. The Government’s position is that the BBC is very important indeed, which is why they have allowed a steady increase in the licence fee above inflation over the past 10 years, but I have sympathy—as, I am sure, does my hon. Friend—for those who complain that against a background of an increased licence fee the BBC chooses to pay some presenters millions of pounds a year while at the same time making thousands of BBC programme makers face redundancy.

Why have the Government not published the Senior Salaries Review Body’s report on Members’ salaries, which they received in July?

The usual process is that the Government publish their response and then allow a debate shortly thereafter in which all Members can participate. That will happen shortly.

Will my right hon. Friend consider finding time for a debate on the future of bus services in Preston? The present situation is terrible. A bus company, Stagecoach, is using underhand methods and dirty tactics to try to push the Preston bus company off the road. I should be grateful if my right hon. Friend would examine the position in some detail.

I will draw to the attention of my right hon. Friend the Secretary of State for Transport what my hon. Friend has said about the important issue of public transport in Preston. My hon. Friend will, of course, have an opportunity to raise it at Transport questions next Tuesday.

Will the Leader of the House have a word with the Secretary of State for Justice, and invite him to give the House an update on the review of the criminal injuries compensation scheme? I have tabled an all-party motion, early-day motion 2146, to draw attention to the problem that currently exists.

That this House believes that the Criminal Injuries Compensation Scheme should be amended to reflect the true cost to the lives of those injured in terrorist attacks in mainland Britain; notes that some victims of the 7th July 2005 bombings in London have yet to receive full compensation or have received minimal offers of compensation by the Criminal Injuries Compensation Authority; and calls on the Government to respond to the Green Paper ‘Rebuilding Lives' and uprate the limit of £500,000 and tariffs set in 1996.

The problem is that under the current scheme those who suffer as a result of terrorist outrages such as bombings cannot obtain enough money to take them through the rest of their lives in any way that is tolerable. The tariffs were set back in 1996, and do not cover the terrible injuries that people suffer. I am about to meet the family of one of those victims, and I should very much like the Secretary of State for Justice to update the House on his thinking.

I am sure the whole House agrees with what the hon. Gentleman has said about the importance of ensuring that those who suffer the devastating effects of injury caused by crime are properly compensated and properly treated by the system. I will draw his points to the attention of my right hon. Friend the Secretary of State for Justice, whom he will of course have an opportunity to question next week.

I am sure that my right hon. Friend will want to congratulate His Holiness the Dalai Lama on receiving the congressional gold medal from President Bush in Washington last night. I had the privilege of meeting the Dalai Lama earlier this month when I went to northern India with the all-party Tibet group. Will my right hon. Friend find time for a debate in which we can highlight the peaceful struggle of the Tibetan people for autonomy?

I pay tribute to the work of my hon. Friend and her colleagues in the all-party group on Tibet. She will know that we consistently urge China to engage in serious negotiations with the Dalai Lama’s representatives in order to build a peaceful, sustainable and legitimate solution for Tibet. Embassy officials visit Tibet regularly, and work closely with the relevant non-governmental organisations. We also regularly raise the need to respect the Tibetan culture and language as well as ensuring economic advance there. I will bring my hon. Friend’s comments to the attention of my right hon. Friend the Foreign Secretary.

May we have a statement on when the Government intend to implement their manifesto commitment to review the Postal Services Act 2000? Later this month Sunday collections will be withdrawn, and mail deliveries are occurring later and later in the day. We need to strengthen the universal service obligation in order to stop our postal services from simply getting worse and worse. When will the promised review take place?

I will find out about that. As I cannot give the hon. Gentleman the information that he needs, I will ask my right hon. Friend the Secretary of State for Business, Enterprise and Regulatory Reform to write to him, and to place a copy of the letter in the Library. We all hope that the Royal Mail dispute will be settled soon.

Mark Glover, the distinguished animal welfare campaigner who is chair of the organisation Respect for Animals, goes on trial today in Canada for the dreadful crime of filming a seal hunt. Given the widespread aversion to seal clubbing among hon. Members of all parties, will the Leader of the House agree to an early debate on a ban on seal product imports into Britain?

I will bring my hon. Friend’s comments to the attention of the relevant Minister. Although Canada’s criminal law is a matter for that country, the Government are strong supporters of animal welfare.

Does the Leader of the House agree that there are far too many fat Members of Parliament? Speaking as one of them—I feel that I should declare my interest—I welcome the recent report in the Financial Times about proposals to refurbish the House, which include replacing the shooting range with a swimming pool. Will she consider the matter soon, and make a statement?

I am sorry; I got the first bit about us all being fat but missed the hon. Gentleman’s final question.

I am suggesting that too many MPs are fat, including me. We could replace the shooting range with a swimming pool, a proposal that has been commented on in the newspapers, and I wanted to know what the Leader of the House thought about it.

All hon. Members will have an opportunity to comment on the proposal, as there will be a debate in Westminster Hall later this afternoon on issues that come within the purview of the House of Commons Commission. We want to make sure that all workplaces and neighbourhoods have good exercise and healthy eating facilities. We in the Palace of Westminster are really rather ahead of the game in that respect.

May I raise another weighty matter? May we have a debate on how the Conservatives and Liberals on Leeds city council are attempting to undermine democracy in their latest review of polling stations in the city? The plan to close 16 polling stations in my constituency alone will make voting harder for more than 10,000 people. That flies in the face of electoral guidelines, and smells of gerrymandering. At the very least, will the Leader of the House have a meeting with me so that I can express my concerns?

My hon. Friend raises a very important question. As well as taking it up with Ministers in the Ministry of Justice, he should seek a meeting with the chairman of the Electoral Commission. We must make sure that people have access to polling stations, as that is especially important for elderly people who may not want to vote by post and who prefer to put their ballot papers in the ballot box. I am concerned about the proposal to close 16 polling stations in my hon. Friend’s constituency, as we want to encourage people to vote, and not deter them from doing so. I look forward to hearing from my hon. Friend about whether he has been able to stop the proposal.

Does the Leader of the House accept that not all Members of Parliament are fat? In his first statement to the House of Commons, the Prime Minister launched the document “The Governance of Britain”. In paragraph 104, it states that the House of Commons scrutinises the Treasury’s plans and objectives in its pre-Budget report debate. What has happened to that debate? Why are we debating the House of Commons Members’ fund next Tuesday, instead of the comprehensive spending review and the PBR?

The debate on the reports from the Modernisation Committee will give us an opportunity to discuss how we allocate the days set aside for debating defence, for example, or the Queen’s Speech, or the Budget. We need to step back and take an overview of the year so that as many matters as possible can be debated. The PBR has not always been followed by days of debate, but the right hon. Gentleman has raised this matter with me before and we can discuss it further on Thursday.

Will the Leader of the House find time for a debate on domestic violence and intimate-partner murder? I recently visited the family justice centre in Croydon, at the request of a victim of stalking who believes that the centre saved her life. The only one of its kind in the country, the centre is breaking new ground and achieving magnificent results—as is shown by the fact that there were zero murders in Croydon in the past year. I should really like to see how such provision can be extended across the country.

I strongly agree with my hon. Friend’s comments about Croydon’s family justice centre, which is doing very good work. Domestic violence should have no place in the 21st century. No matter what is going on in a relationship, there is no justification for resorting to violence. Domestic violence can be prevented if police, prosecutors, local authorities and local voluntary organisations work closely together, and it is a scandal that it still accounts for a quarter of all reported violent crime, with two homicides every year. Certain reviews are under way in the Ministry of Justice with a view to toughening the law so that perpetrators of domestic homicide can no longer give the excuse, “It’s not my fault I killed her, it’s her fault for provoking me.”

May I draw the Leader of the House’s attention to early-day motion 2113?

That this House is concerned at the changes to the guidance on business rates for public houses; notes that changes to the Non-Domestic Rating Reference Manual will mean the levy will be raised for pubs with quizzes, televisions, pool tables, dart boards or a football team; believes this could result in an increase of £440 a year in their business rates which for some remote pubs paying £1,000 a year in rates could see their tax bill increase by almost half under new rules; further believes that this would have a devastating impact for some pubs with the Campaign for Real Ale already estimating that 56 pubs are already closing permanently each month; and calls on the Government to amend the guidance for inspectors so that business rates do not rise further for pubs in 2010 but instead they are allowed to remain thriving at the heart of many communities.

Even by the standards of this Government’s stealth taxes, hammering pubs that organise quizzes or have a football team with extra business rates seems pretty crazy. Many villages have lost their shops or are threatened with losing their post offices. For them, the village pub is very often the most important community facility left, so hammering the ones that are successful and doing community work with higher business rates is crazy.

The settled communities of Snibston, Sinope, Coalville, Castle Donington, Ibstock and Battram in North-West Leicestershire are being driven to distraction by the amount of unauthorised camping by the Travelling community, and by the associated social and environmental problems. Will the Leader of the House arrange a debate in the near future about the workings of the Criminal Justice and Public Order Act 1994 and the Anti-social Behaviour Act 2003 to see how they can be altered to improve the co-operation and speed of action of the relevant authorities as they tackle those very serious problems, and especially the provision of transit sites in the county of Leicestershire?

I will do as my hon. Friend suggests. Another question that no doubt will be raised has to do with whether the current legislation is being enforced effectively and in the way that local communities want. That is a matter for police, prosecutors and local authorities, and might be an appropriate subject for discussion by the local criminal justice board.

May we have an urgent debate in Government time on British tourism? It is Britain’s fifth largest industry, and it has been heavily affected by regulation. VisitBritain’s budget has remained at the same level for 12 years, and in today’s newspapers the organisation warns that the UK tourism industry could lose about £2 billion if the Government do not do more to invest. More people are choosing to holiday abroad, and we are missing out on overseas visitors coming to the UK. That does not bode well in the lead-up to the Olympics, when we should be harnessing our tourist potential.

No doubt the hon. Gentleman could raise that point during next week’s Culture, Media and Sport questions. He is suggesting that there should be more investment. The Government have invested a great deal to support businesses involved in tourism, especially, but not only, in our seaside towns. If he believes that there should be extra public investment, he should back the revenue-raising measures that the Government have put in place. We seem to be hearing alternate points: one Conservative Member says that tax should be cut, but immediately after, another Conservative Member asks for extra spending. Perhaps Conservative Members could get their act together and work out which it is.

I listened with interest to the Leader of the House’s reply to my hon. Friend the Member for Jarrow (Mr. Hepburn). I know that she has not had time to study the judgment, but, having looked at it, I can tell her that it recognises that pleural plaques cause a physiological change, but cruelly decides that the people affected should not be compensated. Will she therefore ask the Secretary of State for Justice to consider bringing forth legislation quickly to overturn the Lords decision because it is quite clear that this group of workers will not get justice in the courts?

My hon. Friend makes an important point. We need to ensure that if justice is not done in a way that accords with our public policy commitment, we consider what action to take, and take it swiftly, so that people do not lose out. The problem with such matters is that people’s lives are the issue. This is not just a technical matter that can be discussed in the fullness of time. People want this considered promptly, and I know that his all-party group will give the matter full consideration and offer the Government its views, which I am sure will be welcomed.

Is there not an overwhelming case this year for the Prime Minister to fulfil his promise to hold a debate on the pre-Budget report when we see that the CBI, the Institute of Directors, the Federation of Small Businesses, the chambers of commerce and the TUC all oppose the new capital gains tax proposals? The right hon. and learned Lady’s colleague, the hon. Member for Stafford (Mr. Kidney), says that there has been insufficient time for consultation. May we have a debate as soon as possible, preferably straight after the Queen’s Speech?

I recognise hon. Members’ concern about the lack of opportunity to debate the pre-Budget report in Government time. I will give the matter serious consideration. As far as capital gains tax is concerned, all I can say is that the Chancellor has to take a view across the piece. The range of rates from 10 per cent. to 40 per cent. was certainly good for the profits of the accountants and lawyers who had to help businesses to work out their liability. We have a beneficial regime for business across the tax system as a whole. Of course, the tax threshold is such that no tax is imposed at all unless the gain is above £9,000.

Is my right hon. and learned Friend aware that too many autistic children in Kent—and probably elsewhere, too—are not getting either the education or educational support that their parents think they need and deserve? I am absolutely delighted that the hon. Member for Buckingham (John Bercow) will be carrying out a review of educational support for children with communications difficulties. However, in the meantime, may we have a debate in the House so that we can contribute our personal experiences of this serious problem to inform that review?

I know that that is a matter of real concern throughout the country and on both sides of the House. Perhaps we will give consideration to whether we can have such a debate in Government time, although whether we await the report on which the hon. Member for Buckingham is leading will be a question of timing. I absolutely agree with my hon. Friend and undertake to ensure that we have a debate as soon as possible on autism and the response that all services need to give to support families dealing with autistic children.

May we have a debate in the House about the targeting of the deprived area fund? Roehampton ward—this concerns my constituents living on the Alton and Lennox estates especially—does not receive any support from the fund, even though Putney jobcentre was closed earlier this year. Part of the problem in London is that because we have the most affluent parts of society living next to the most deprived, the assessment at a ward level often creates an average picture that means that the neediest communities do not receive the support from the fund that was intended. May we have a debate in Government time so that we can resolve these problems?

Overall, I think that the hon. Lady would recognise that we have massively increased investment in deprived areas in a range of ways, including through Sure Start and the new deal for communities. Such public investment has been very important, so I take it that she supports our revenue proposals to ensure that we can put investment in all deprived areas, including that in her constituency.

Does the Leader of the House accept that the top concern for many people is health-care-acquired infection? Businesses in Stafford—and, no doubt, throughout the country—are offering the NHS solutions on how to make hospitals and other places of treatment cleaner. May we have a debate in which the Department of Health can be urged to give more urgency to the evaluation of those offers?

My hon. Friend raises a really important point about the science of tackling infection control and improving the processes of screening, isolation, hand cleaning and deep cleaning. We all recognise that this is something that needs to be improved. I will bring the matter to the attention of my right hon. Friend the Secretary of State for Health, who has already responded to an urgent question this week.

Having managed to lose well over a stone since 1 August without so much as dipping a big toe into a swimming pool, may I express some frustration that the highly successful House of Commons shooting team is continually picked on by politically correct people on both sides of the House whenever they want an easy target, especially as we beat the House of Lords every year?

On a more serious note, may I ask the Leader of the House whether she heard on the news yesterday about the couple who tortured their child to death by holding the toddler’s limbs over a red-hot cooking plate again and again? They have been sentenced respectively to 12 and six years in prison. Does she agree that if the court sees fit to put monsters like that away for 12 and six years, it is quite wrong that they should be released, as they will be under existing Government policy, after only six and three years? May we have a debate on early release schemes?

The House has discussed on numerous occasions the law and practice surrounding the release of prisoners. Of course, sentencing in an individual case is a matter for a judge. If there is a view that a sentence is unduly lenient, the Law Officers can refer the case to the Court of Appeal. The House sets the legislative framework and we debate that at the time at which we pass the relevant laws.

May we have a debate on the long-term future of manufacturing industry in this country, especially regarding the impact of existing employment legislation on this country’s workers? The Leader of the House might be aware that there was a breath of fresh air in this place yesterday when hundreds of manufacturing workers came to make representations to their MPs. While I recognise the significant amount that the Government have put into upskilling such workers, those people are genuinely worried that their jobs could be easily disposed of under existing employment legislation. Will she remind her Cabinet colleagues that manufacturing industry is an important factor in this country?

We are all very well aware of the importance of manufacturing. I recognise—my hon. Friend has brought this to the attention of the House on several occasions—that with all the talk about services and financial services, those working in the important manufacturing sector sometimes feel that they are invisible. The lobby made important points. The Government are determined to do whatever is necessary to help and support this country’s manufacturing industry, including, especially, improving skills and the opportunity for exports.

I hugely welcome what has been said about the needs of autistic children, and the forthcoming debate on Burma, which I have sought strenuously for the past two and a half years. May we please have a debate, in Government time and on the Floor of the House, on housing development in the south-east? The Government have hitherto always accepted that the extra 1,000 houses a year that are to be built in Aylesbury vale in each of the next 20 years would have to be accompanied by adequate infrastructure, but the Government’s panel of inspectors has now publicly stated that it does not think that the development need be contingent on “necessary infrastructure”. Do we not need a debate to resolve the confusion, and to determine how we can go ahead with development in my area in a way that leads to an improvement, not a deterioration, in my constituents’ quality of life?

The hon. Gentleman will know, because we have published the Government’s draft legislative programme, that there will be legislation on housing and planning in the Queen’s Speech. He mentions housing in the south-east. That issue is a classic example of why the proposals in “The Governance of Britain” report on regional accountability are important. Aside from through Westminster Hall, we do not have any way of making the Government accountable, through Members of the House, for actions that affect a region. The regional committees proposed in “The Governance of Britain” would aim to do exactly that. I am grateful for his welcome for my comments about giving him more opportunity to debate support services for autistic children and their families.

I was perhaps not as aware as I should have been that the hon. Gentleman has been asking for a debate on Burma for two years; I have only been Leader of the House since July. He has raised the issue of Burma on a number of occasions, and that is why I arranged for us to have a debate.

Yesterday I secured a 90-minute Westminster Hall debate on the important issue of the Government’s extraordinary decision to axe the Defence Export Services Organisation. The Government did a great discourtesy to not only the House but the hundreds of thousands of people who work in that important sector of the economy by sending along not a Defence Minister, who would perhaps have understood the issue, but the Minister for Employment Relations and Postal Affairs. Will the Leader of the House correct that discourtesy by allowing a further debate on the Floor of the House, on an issue relating to £5 billion-worth of exports every year?

I will certainly look into the decision about which Minister should handle the debate. I hope that the hon. Gentleman got answers that reflected the Government’s concern on the issue. Of course, there are Defence questions next Monday.

I listened with great care to what the right hon. and learned Lady said to my right hon. Friend the shadow Leader of the House about the single equality Bill. During the consultation, many disability organisations expressed great concerns about the removal of the disability equality duty, and they would welcome a change of Government policy, if there has indeed been a change. Will the Leader of the House ensure that, if the Bill does not come before the House until after the Queen’s Speech of 2008, she will at least publish a draft Bill at an early stage, as she successfully did with the Coroners Bill, so that the organisations concerned, and Members of the House, get a proper chance to scrutinise it?

I think that it is important that we get the policy right, and we will get the policy right on the basis of full discussion. Once broad policy decisions have been taken, I hope that we can publish draft clauses, even if we cannot publish a full draft Bill. On disability organisations and people who are concerned about discrimination and prejudice on grounds of age, sexual orientation, gender or race, there is no question of weakening current laws that protect people from discrimination and propose equality of opportunity—quite the reverse. We want to make sure that we have strong and effective laws. If we can move the issue out of the zone of dispute, disagreement and political point-scoring, and if we can move to a consensus about the fact that we all benefit from a fair and equal society, it will be a huge change. That would be a basis on which to build radical and progressive legislation, and I will look to the hon. Gentleman for his support.

May we have a debate on funding for new schools? “I before E”, or “infrastructure before expansion”, is vital in communities such as Milton Keynes. We recognise that we will need seven new schools in the next three years to keep pace with Government housing targets, so does the Leader of the House understand the anger felt in Milton Keynes this week at the news that the basic need allocation for the new schools has been slashed from £30 million to just £10 million? That means that four of those seven new schools will not be built. Whatever happened to “Education, education, education”?

I know that the Minister for Schools and Learners is meeting those involved in the Milton Keynes situation, but I ask the hon. Gentleman to acknowledge that there has been massive investment in new teachers, and in primary and secondary school buildings. Of course, we would always like to see more being done, and I now realise that the hon. Gentleman would give us a great deal of support for extra public spending on education.

May we have an emergency debate on the fact that the Department for Environment, Food and Rural Affairs apparently plans to bully and cajole the British public into buying UHT instead of fresh, pasteurised milk? May we learn whether the Government are prepared to stand up for the Great British pinta, or do they not have a lot of bottle?

I do not think that there would be any point in holding such a debate, because DEFRA has no such plans.

At the beginning of business questions, my right hon. Friend the shadow Leader of the House asked an important question about the huge numbers of Labour party members being appointed to quangos. The Leader of the House said that if we knew of any individual case, we could refer it to her, but with all respect, that is not the essence and spirit of the question. The spirit of the question, I believe, concerns the sheer numbers of Labour party members appointed to quangos. With Labour party membership collapsing, why are so many Labour party members being appointed to quangos? We demand a debate on the issue.

My response to the shadow Leader of the House was that there are transparent processes for ensuring that the best person gets any job that is in the public interest. There is a great degree of independence, and I simply asked for evidence that it had been inappropriately exercised. The point is that one cannot simply look at the sheer numbers; one has to ask whether the system is transparent, independent and operated effectively. I am asking for any evidence that shows that it has not been operated effectively.

May we have an urgent debate on Turkey? Will the Leader of the House join me in calling on the Turkish Government to show restraint, to not invade northern Iraq, and to stop shelling northern Iraqi villages? Similarly, will she call on the PKK to stop killing Turkish troops and personnel? Does she agree that if Turkey wants to be a member of the wider European family, this is an opportunity for it to show that it is an international, responsible player in the community of Europe, and should it not show restraint?

I absolutely agree with every point that the hon. Gentleman has made, so I will not repeat what he said to the House. I simply say that he was spot on in all respects.

The Prime Minister said that important announcements would be made to Parliament, so I was surprised to receive an e-mail from the work force manager of Revenue and Customs, who attached a letter from the chairman, in which it was announced that a number of tax offices in West Yorkshire were to be closed, including two in Shipley, Hockney house and Crown house, which were previously earmarked for retention. Given the importance of the issue, not only to the people whose lives will be affected by the decision but to the local economy in Shipley, will the right hon. and learned Lady ensure that the Chancellor comes to the House and makes a statement on why those decisions have been made?

I do not know whether the hon. Gentleman raised the matter at Treasury questions, as the Chancellor was in the House only an hour or so ago—[Interruption.] I take the point. We are concerned to ensure that important ministerial decisions are announced to the House. I am sure the hon. Gentleman will consider writing to the Chancellor with the point about the decisions that have been made locally concerning his tax offices.

Third Sector Review

[Relevant documents: The written and oral evidence taken before the Select Committee on Public Administration on Third Sector Commissioning, HC 540-i to iv of Session 2006-07.]

Motion made, and Question proposed, That this House do now adjourn.—[Tony Cunningham.]

It is a privilege to open the debate on the third sector review concerning the work of the voluntary sector, social enterprises and many charities throughout the country. I start by putting on record my thanks to the more than 1,000 third sector organisations that took part in the consultation that led up to the review.

The central case that is made in the review is that we must celebrate and protect the diversity of the third sector, which is made up of organisations diverse in their size, so we should support small as well as large organisations, and diverse in their activities, from local volunteer-led groups to those delivering public services and campaigning. To support this diversity, we need Government to play their part, not seeing the third sector as picking up the pieces from failure of Government funding, but as being able to reach out and empower people in ways that Government often cannot do. I acknowledge that Government need to be a better partner in this process—in their funding for third sector organisations, in their understanding of the role that those organisations can play in our society, and in their respect for the sector’s independence.

I welcome the announcement of a further £85 million for third sector infrastructure development. Can my right hon. Friend give me more information about the distribution mechanism? Will he ensure that smaller community and volunteer-led organisations will get proper access to that significant money?

Absolutely. I think my hon. Friend is referring to the money for Capacitybuilders. Those who run Capacitybuilders recognise the need to get the money that they distribute down to the smallest organisations, including the ones that I met in Stockport when I was fortunate enough to visit my hon. Friend’s constituency. The Improving Reach programme is designed to get the money to such organisations. I am sure that Capacitybuilders will have heard her remarks.

Notwithstanding the Minister’s reply to the hon. Member for Stockport (Ann Coffey), is it not the case that 68 per cent. of statutory funding still goes to charities with a turnover of £1 million or more, meaning that many small community charities, including many in my constituency in Shropshire, are not receiving statutory funding, despite the fact that they have a great track record in providing the very services that the Government say they want to see provided in the community?

The hon. Gentleman makes an important point about the role of small organisations. I merely caution him that we should not get into a mindset that small is always better. There are many large organisations around the country—for example, Age Concern, which has local branches that do fantastic work throughout the country. I take the point that he makes about the need to get money to small organisations.

I do not expect my right hon. Friend to give me an answer immediately, but will he look at the situation of Hillfields WATCH, an organisation that deals with issues ranging from asylum seekers to the unemployed and police matters? It is struggling to find funding, and every three years it finds itself in that same situation. Will he give me an undertaking that he will meet a small delegation from Coventry to discuss the matter?

I thank my hon. Friend for that. I will ensure that I or the Minister with responsibility for the third sector, my hon. Friend the Member for Corby (Phil Hope), meets the delegation.

That takes me to an important point about the review. We have announced an £80 million small grants programme precisely for the kind of organisations to which the hon. Member for The Wrekin (Mark Pritchard) and my hon. Friend the Member for Coventry, South (Mr. Cunningham) referred. We all know from our own constituencies that the smallest organisations can make a huge difference to building civil society and bringing people together. I think of an organisation in my constituency, if I may mention it. In Adwick le Street, where I live, Brodsworth cricket club does an extraordinary job of giving young boys and girls a chance to play cricket. That is a way in which the community can come together in a place where there are fewer community institutions than there used to be, given the closure of the pits and so on.

On the £80 million fund that my right hon. Friend mentioned, a real concern is the time that it will take to put in place the necessary distribution mechanisms. I know that the community foundation network and the Community Fund in my constituency have a shortfall of previous grants and are not clear when the money will come on stream. Can they be assured that there will be a chance for their experience in distributing grants to be used, without damaging delay?

My hon. Friend, who is a former Minister with responsibility for the voluntary sector, makes an important point. We want to use organisations such as the community foundation to help to distribute the money because of their local knowledge about what is needed. Also, we want to ensure—this is an issue for small organisations throughout the country—that the application process is not the bureaucratic and cumbersome process that many organisations complain about.

We need to be honest in this debate. There is always a dilemma for Government between taking the risks of the streamlined process of applying for money—a risk that we should be taking—and the more bureaucratic monitoring processes that sometimes operate. In relation to the small grants programme, it is important that the money gets out quickly. We will help to ensure that that happens, and that it is distributed in the simplest way possible so that small organisations can access it.

In addition to the allocation of resources—the following proposal was in the Opposition’s submission in relation to these matters—we are making £50 million available to organisations such as the community foundation as an endowment. That will allow them to build up the resources that they can distribute in future years without having to come back to Government. It will also allow them to get money in from the private sector and other organisations in the community that might want to contribute. Community foundations do a fantastic job, and an independent source of money will make a difference to them.

On the subject of what happens at local level, I want to deal with asset transfers from local authorities to small organisations. Issues of funding and stability of funding—three-year funding is important—are crucial to the health of small organisations. When I was Minister with responsibility for the third sector, I was struck by what asset transfer can do for local organisations. I visited the Goodwin centre in Hull, which has transformed part of the city because it was given an asset which gave it the financial stability that many third sector organisations do not have.

We have made available £30 million to help to fund innovative projects in this area, but more work needs to be done. We need to encourage local authorities to see voluntary organisations not as the enemy, as they are sometimes seen, but as an ally in helping to improve local communities. Of course, people can raise issues of accountability when assets are transferred to community organisations, but projects such as the Goodwin centre in Hull show how those issues can be dealt with. The people who run the centre are elected by the local neighbourhood.

Does the Minister agree that one of the problems is that such organisations often secure very short-term funding, which is often taken away just when they have got up steam on a particular project? Glory projects are often funded, but ongoing good work, which makes a big difference in local communities, does not seem to attract funding. Will he indicate whether the funding that he has outlined today will address the problems that charities face?

The hon. Gentleman has made two important points. First, he raised the issue of stable funding, which is why we have introduced the move towards three-year funding. We are driving that process through central Government, and when local authorities are examined on how they spend their resources, for the first time one of the issues will be whether they fund third sector organisations for a number of years or for just one year at a time. Secondly, he raised the question whether funding is for innovation or for the core part of what third sector organisations do. I do not have an easy solution to the problem. It is partly about having stability in Government programmes so that we do not keep introducing new programmes, but it is also about establishing an awareness among funders that the issue involves not only funding new projects, but funding existing good projects.

Will the Minister take this opportunity to encourage the Tory-Liberal leadership of Birmingham city council to take a more enlightened and creative view on asset transfer to local community groups rather than, as a cynic would say, taking a protective, defensive view of its funds and assets, squeezing what it can out of the Government and not passing funding on to particularly deprived local communities, such as mine?

My hon. Friend has made his point in a characteristically eloquent way, and I am happy to agree with him. The issue is important around the country. When I have visited my hon. Friends’ constituencies, I have found unused assets and a frustration in the local community that such assets cannot be deployed for the purposes that people want to use them for. In such cases, local communities sometimes feel that there is a blockage in the local authority.

The Minister has, of course, made the correct choice.

On the previous intervention, the Minister’s introduction has been characterised by good sense, and there is a degree of common purpose across all parties. It may be that local authorities in particular areas—I have no idea about Birmingham—are not performing as well as we might like, but I hope he agrees that there is both good practice and bad practice among councils controlled by all parties. We can best make progress by approaching the matter with a common purpose, rather than trying to make partisan points.

My hon. Friend the Member for Birmingham, Erdington (Mr. Simon) was making a point about his specific experience, which is absolutely legitimate. There is an issue about culture change across the piece on the way in which third sector organisations are treated and the way in which they contribute to our society. There is a big issue about culture change for both local authorities and central Government, and I freely acknowledge that all parties need to engage in that task.

The hon. Member for Lewes (Norman Baker) referred to my introduction, which I fear that I will not get through if I keep giving way.

It is certainly a good thing to be non-partisan, where we can, but it is difficult when we consider the record of Liberal Democrat councils up and down the country. My authority is run by a bizarre Liberal Democrat-SNP coalition, which inherited a three-year programme of funding for local organisations. Local groups are having their three-year funding programmes scrapped. They think that they have secured the certainty of three-year funding, but then they find that their budget has been cut.

My hon. Friend has described a serious case. The community groups that he has mentioned should examine the Compact. I am sure that my hon. Friend the Member for Corby (Phil Hope), the Minister with responsibility for the third sector, will be happy to discuss the matter with him.

Will the Minister accept the entirely non-partisan point that there is a problem with short-term funding for staff and for professional development? Many voluntary organisations seem to spend February and March either rushing around looking for bits of money or giving professional staff notice, which is not conducive to the proper development of the sector.

I agree with the hon. Gentleman, who has made an important point about stability of funding. Although there will always be cases in which voluntary sector organisations must search for more resources, the annual cycle of looking for such resources seems to be a barrier to efficiency that saps the energy of many organisations.

The second message from the review concerned the way in which the third sector can transform people’s experience of public services in a diverse range of areas from youth services to drug rehabilitation. Again, the issue is culture change. In the course of the review, I have learned that we will make change happen and get local councils and other agencies of government to work with third sector organisations by helping those organisations to understand the contribution that third sector organisations can make.

When I visited Manchester, I was struck by the work of Sunderland Home Care Associates, which part of the city has taken on. It is an employee-run organisation in which elderly people are looked after in their own homes. The commissioners of services in Manchester saw the impact of what Sunderland Home Care Associates was doing and realised that it was not a fluffy organisation, but a serious, professional one that could make a real difference to people. That led them to take on Sunderland Home Care Associates and to form an alliance. That is why the review discusses the training programme for the 2,000 most important commissioners of public services. Helping those commissioners to understand the role that third sector organisations can play is important, which is why we are building on it in the review. We are also making new finance available for third sector organisations through the Futurebuilders fund to allow them to help to deliver public services.

Much of the funding for social enterprises and co-operatives goes through bodies such as the regional development agencies. Will the Minister extend the offer of training throughout the civil service to organisations such as the RDAs, which are in an excellent position to deliver services on the ground? As he has said, third sector organisations can transform the delivery of public services, which is especially true of co-operatives working at a local level, where real people can deliver real services rather than using large bureaucracies or, as is sometimes the case, private sector companies that are located miles away and have nothing to do with the locality.

My hon. Friend has made an important point. My hon. Friend the Member for Corby, who is the Minister with responsibility for the third sector, has said that he met the RDAs yesterday. We are making finance available to the RDAs to promote social enterprise, which is important.

On the role that social enterprises can play, some of the most inspiring people whom I have met in the third sector work in social enterprises, large and small. I am thinking of Tim Smit who runs the Eden Project, which is an extraordinary project that has done amazing things for Cornwall. I am also thinking about small social enterprises in my constituency that help disabled men and women and people with learning disabilities.

The Government do not create inspiring social entrepreneurs, but we can help or hinder them. Part of the task for the Government is finding new ways of helping to finance social enterprise. That is why we are interested in the idea of a social investment bank, which would create a new stream of finance for social enterprise. That is also why £10 million is available to pioneer different ways in which social enterprises can be funded.

Government needs to be a better customer of social enterprise. Again, that is partly about culture change—convincing those who commission services that social enterprises in areas such as recycling or waste management can compete with large private sector organisations and that the safe option is not necessarily always to go for the conventional option of a large private sector conglomerate. I am thinking of, for example, ECT, which provides recycling and waste services.

The Minister mentioned commissioning. Will he say on the record that in that commissioning of services there will be no discrimination against faith-based organisations, whether Muslim, Jewish or Christian? Some people have expressed concern to me that, because their organisation is faith-based, some commissioning agencies—whether local authorities or the RDAs—might discriminate. On the record, what, in the Minister’s view, should occur in such a situation?

I fear that the treacle of bipartisanship is flowing; I agree with the hon. Gentleman. I am not in favour of faith-based organisations proselytising through public services, but the reasons that bring people to provide such services should not be a bar to their doing so. I am happy to put that on the record.

I want to make a bit more progress; perhaps later I shall give way again.

By working with the sector, the Government need to do the best job of championing social enterprise and what it can do for our country. Only one in four people knows what social enterprise is; that is a bar to young people coming into social enterprise, to the financing of it and to people buying from it. That is why we set up the social enterprise ambassadors programme, in which 25 very high-profile names—some of which I mentioned—will go round the country talking about social enterprise and what it can do for communities.

The review’s fourth message is about volunteering. Youth volunteering, in particular, can bring together different groups, allow people to express their values and help them to build careers in later life. As hon. Members will know, in 2004 the Government set up the Russell Commission to carry out a review on youth action. As a result, the independent charity v was established. Already, v has created more than 200,000 volunteering opportunities for young people, including a number of full-time opportunities. It has also helped 415 projects run by voluntary organisations and partnered with companies such as ITV, T-Mobile, and MTV. The partnership with this last is interesting: MTV helped to promote the charity, and with Oxfam set up the Oxjam music festival, which was run by more than 12,000 volunteers. The concerts did great things for the people who came and for the young volunteers who helped to set them up. We are investing further in v, as we believe that it can create hundreds of thousands more volunteering opportunities.

A range of intergenerational volunteering issues need to be addressed. Such volunteering is important in helping to bring young and old people together. A big issue in many communities up and down the country is about a feeling that goes both ways: young people’s suspicion of the old, and elderly people’s fear of the young. I want us to make further progress on finding ways to bridge those divides through volunteering.

The public sector can do a better job of taking a lead on employee volunteering. If we are to persuade the private sector to release its employees for volunteering in our communities, we—starting with the civil service, then going further—need to do better in showing that we are giving people time off so that they can volunteer in their communities.

Does my right hon. Friend agree that one way of changing the culture, particularly in respect of local authorities, is for there to be a good, strong scheme for local authority staff to volunteer in local charities? In that way, they would understand better what local charities, local organisations and the third sector generally have to contend with at the sharp end—when they are putting in bids or dealing with health and safety issues. Local authority staff would then have a much better perspective, and that would help the culture change.

I agree with my hon. Friend, who makes an important point. There is an all-party commission on volunteering led by Baroness Julia Neuberger, and I hope that it will consider the issue that he has raised. Such secondments and the mixing of people from local authorities and the voluntary sector are the way to break down the barriers and suspicions I mentioned earlier.

The fifth and final message from the review is about third sector organisations’ ability to be advocates for social change. It is important to understand why that is important. Third sector organisations often speak up for those who have the least representation in our society. Examples from the past few years show what such organisations can achieve: the work of charities campaigning for respite care for disabled children; the efforts of such organisations as Carers UK to speak up for the rights of carers; and the achievements of Scope in changing attitudes and legislation on disability on behalf of disabled men and women. In recognition of such roles, the principle of advocacy and campaigning was set out in the Compact established in 1998. However, the review found that many organisations—and I saw this myself—are deterred from advocating and campaigning.

I shall give way in a minute.

Such organisations are deterred partly because of the perception of the rules, and partly—we need to be honest about this—because they fear that if they are funded by the Government, they might endanger that funding by criticising the Government. As the Charity Commission said in April 2007:

“We are aware from our work with charities that trustees sometimes exercise a considerable degree of self-censorship in undertaking campaigns, and may not be aware of the extent to which they can campaign”.

That is why the Charity Commission has issued a new briefing document on campaigning and is reviewing its guidance. We all have a responsibility to make people understand what that is and is not about. It is not about charities supporting political parties. As the Charity Commission says, and as was clear from the Charities Act 2006, which I took through the House of Commons,

“a charity must not support a political party or candidate.”

Furthermore, as I have said many times, the law does not allow—and nor should it in future allow—charities to be set up for political purposes. The issue is about organisations being able to campaign to change the law.

I hope that all hon. Members will support charities’ right to advocate, partly because we all have our own personal experiences of charities that we have worked with. I include the hon. Member for Tunbridge Wells (Greg Clark), who has expressed concerns about the issue of charity campaigning. I have discovered that he is a prominent supporter of the campaign by the charity Garden Organic to change the law on the planning classification of gardens. On its website, that charity says that one of its purposes is

“to campaign where we can make a real difference.”

It urges its members to take action—to

“write to the minister for housing and planning…sign the petition on the Number 10 website”


“make a donation to help us continue lobbying for change”.

The website also pays tribute to the hon. Gentleman’s work on its campaign, and he paid tribute to the help that he received from the charity with his private Member’s Bill last year.

My position is that, whether or not I agree with Garden Organic, I defend absolutely—