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Commons Chamber

Volume 468: debated on Thursday 29 November 2007

House of Commons

Thursday 29 November 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—

Local Government Finance

1. What recent discussions he has had with the Secretary of State for Communities and Local Government on the system of local government finance in 2007-08. (169063)

Treasury Ministers meet regularly with ministerial colleagues in the Department for Communities and Local Government to discuss a wide variety of issues, including local government finance. The local government settlement for 2007-08 was set out to the House in December 2006. The Secretary of State will announce the next provisional finance settlement very shortly.

I am the only Member of the House whose constituents have lower council tax bills this year than last year, thanks to the new Conservative council in Hammersmith and Fulham. Across the UK, council tax has almost doubled under Labour in the past 10 years, but despite that, the Government claim to want lower bills. How can hard-pressed councils deliver lower bills, faced as they are with the worst financial settlement in 10 years under the Government?

May I point out to the hon. Gentleman that there have been real-terms increases for councils in every year of this Government? That was not the case in the last four years of the Conservative Government. Councils have seen real-terms increases of 39 per cent. in their resources. The hon. Gentleman did not mention that his local authority is also pursuing an extremely aggressive programme of cuts in services locally. Given that his council received a 3.4 per cent. increase from the Government last year, we would argue strongly that that was sufficient both to keep council tax down in Hammersmith and Fulham and to maintain good services for vulnerable people in his community.

When my right hon. Friend is considering the settlement, particularly in the case of Hammersmith and Fulham council, will he look at the £34 million of cuts aimed at vulnerable people in that borough, which are being made to achieve a 50p a week cut in council tax? Those cuts are embarrassing to many Conservative councils, which are wondering how they will convince the Government that they are short of money when Hammersmith and Fulham appears to be able to come up with sums of money simply by attacking vulnerable people in the borough.

We gave a generous increase to the council last year, which should be sufficient to keep council tax down and provide good services to vulnerable people. I am aware that there have been some changes to the provision of social services in Hammersmith and Fulham, and other changes too. We believe that the funding given was enough to keep council tax down and provide the services that my hon. Friend’s constituents depend upon.

Is it right, given the additional responsibilities that are placed upon local government by central Government, that, on the one hand, the resources allocated—certainly to my own council—are inadequate, while, on the other, if councils wish to raise the council tax locally in order to provide the level of service that they believe people deserve and expect, they are not able to do so because they are capped?

There is a legitimate criticism to be made about the level of burden that is placed on local authorities by central Government—I hear the hon. Gentleman on that point. That is why, working together, the Secretary of State for Communities and Local Government and I, in order to inform the spending review, have conducted a rigorous exercise cutting the number of targets that we place on local government. There will be a significant reduction in those targets, down to a total of 198 from well over 1,000. I understand the message delivered by the hon. Gentleman, but we are clear that the settlement that we have provided in the comprehensive spending review enables councils to keep council tax rises to substantially below 5 per cent. and also to improve services and maintain good quality services that people depend upon.

Does my right hon. Friend think it interesting that when the Conservative chairman of the Local Government Association recently commented that this was the worst settlement for local government in the past 10 years, he made no comparison with settlements of 15, 20 or 25 years ago?

My hon. Friend raises an incredibly important point: so often the context is missing. I have those figures—11, 12, 13 and 14 years ago, there were real-terms cuts every year in the funding provided from central Government to local government. In 1995-96, for instance, there was a 4.6 per cent. cut. As my hon. Friend will remember from his background in local government in Sheffield, that caused deep and devastating cuts in the services that his constituents at that time greatly depended upon. That is the difference between our record and the record of the Conservatives, and they should show a little more humility when commenting on such matters.

Bank Charges

2. What assessment the Government have made of the time taken by the Office of Fair Trading to investigate bank charges. (169064)

The Government have made no such assessment. The OFT began its formal investigation into whether the charges levied by banks breach the unfairness test in the Unfair Terms in Consumer Contracts Regulations 1999 in April 2007. Until recently, there had been no High Court cases on that subject, but it soon became clear that a wider test case was needed to resolve the issue and to provide legal certainty. That process is now under way, and it is initially focused on clarifying whether the regulations apply or not.

I thank the Economic Secretary for that full answer, for which I am most appreciative. Millions of families could face additional bank charges, because data files containing their banking details are God knows where. [Hon. Members: “Reading.”] Will the Government assure me that they have spoken to the banks to ensure that, if the loss of data leads to identity fraud that causes accounts to be overdrawn through no fault of the families themselves, the Government will underwrite the resulting charges, ensuring that individuals do not suffer for the deplorable error of Her Majesty’s Revenue and Customs?

The Government are, of course, in continual dialogue with the banks, but as the banks have reported to us that there is no evidence of fraudulent activity, I consider the hon. Gentleman’s question to be hypothetical.

It is a frustrating time for many of my constituents who are caught up in the waiver as they wait for the test case to come to court in January. Will the waiver be revoked if the case does not make progress or if it is delayed?

I understand the frustration faced by my hon. Friend’s constituents and, indeed, the constituents of all hon. Members. However, the decision on the waiver is entirely for the Financial Services Authority, which recently completed a review of it, and concluded that on the whole, although there are some issues to be looked at, the waiver is operating satisfactorily. It is inappropriate for me to say more while a legal case is ongoing.

One of the conditions of the waiver was that the banks did not make materially adverse changes to their charges, which is precisely what they are doing. Most recently, the Co-op bank lifted its daily overdraft rate, which particularly affects low-income customers. Because the condition of the waiver is now being breached, surely the Economic Secretary should be calling for the FSA to raise it.

The waiver is a matter for the FSA. As I have said to my hon. Friend the Member for Newport, East (Jessica Morden), the FSA recently completed a review of the waiver consulting both consumer groups and banks. The findings suggest that the waiver is working satisfactorily. If the hon. Gentleman has evidence to the contrary, I would be happy to pass it on to the FSA.

HMRC (Personal Data)

3. What recent assessment he has made of the implications of the loss by Her Majesty’s Revenue and Customs of personal data. (169065)

I refer the hon. Gentleman to the statement that I made in the House on 20 November and to what I said in yesterday’s debate.

It is clear that the matter goes much wider. On 31 October, my constituent, Mr. King of Bexhill, received a letter from HMRC, in which he was advised that a CD that had been sent to his pension provider, Standard Life, containing his surname, national insurance number, date of birth and plan reference number, had gone missing. He wants to know how many other CDs went missing before the CD that was sent to Standard Life, as well as the one that was sent out by HMRC with 25 million names on it. How many CDs went missing? How many of them have been accounted for? How many of them are still missing? And why, when CDs have gone missing in the past, did Ministers not act beforehand?

On the discs that went missing from the Standard Life, the hon. Gentleman will recall that I referred to that matter specifically in my statement on 20 November. As a result of that incident, HMRC wrote to all those affected, including the hon. Gentleman’s constituent. The circumstances relating to the losses of that material, and in relation to the much larger loss of child benefit records, are currently the subject of investigation by Kieran Poynter, the senior partner at PricewaterhouseCoopers. We will have his interim report in three weeks’ time, and, as I said yesterday—I do not think that the hon. Gentleman was here for yesterday’s debate—I intend to report to the House when I get that report.

In yesterday’s debate, the Government said that HMRC is still sending out CDs from time to time and encrypting them only when necessary. Why is it necessary to send out any CDs, and why, if CDs must be sent out, which is obviously the worst possible method, is it not always necessary to encrypt them?

It is necessary from time to time for information to be sent between offices, which is normal. We have ensured that procedures have been tightened, particularly in relation to bulk transfer. The transfer of information by HMRC will be the subject of the report that I have commissioned. I agree with the hon. Gentleman, many hon. Members and many people outside this House that we need thoroughly to examine how information is transferred and to ask ourselves whether it needs to leave a particular building in the first place. If information needs to be transferred, we need to consider the necessary security such as encryption or another appropriate measure. I have given Kieran Poynter wide-ranging terms of reference, so that he can cover all those matters. We will receive his interim report fairly shortly, and we will get a wider report in the spring, which will allow us to take whatever action is appropriate.

Does the Chancellor now regret that both he and the Prime Minister specifically allocated initial responsibility to a junior official? Does the Chancellor regret that that individual has been hounded and forced into hiding?

As I said yesterday, what I said in my statement on 20 November was absolutely correct in accordance with the information that I had then and that I have now. I covered all such matters in yesterday’s debate. As I say, we will have the interim report from Kieran Poynter very shortly; that will allow us to draw conclusions and take the necessary action as a result of what happened.

After the Chancellor was informed of the loss of the data, why did it take him six days to inform the banks? Why does it appear from the e-mails released by the National Audit Office that it took seven days before HMRC searched the offices of the NAO?

Again, I explained that when I gave my statement on 20 November. When I was told what had happened, I asked HMRC to carry out a thorough search, using its Customs investigations officers. When it was clear that that had not found anything, the Metropolitan police were called in and they carried out various searches. The position is that various buildings belonging to Revenue and Customs and the NAO were searched at various times as it became clear that the discs had gone missing. However, I covered all those points, both in my statement and in the debate yesterday. As I say, not only is the Metropolitan police investigation continuing, but we will have the results of Mr. Poynter’s review fairly shortly. We can then discuss the matters further.

Northern Rock

4. If he will publish the letter of advice that he received from the Governor of the Bank of England on support for Northern Rock. (169066)

As I said to the Treasury Committee on 25 October and in my statement to the House on 19 November, I do not believe that it would be in the public interest to publish the letters at this time. But I will keep the position under review, as I said then.

How, precisely, are the Government funding the £25 billion support package for Northern Rock? If that support is, as we are told, coming from the “contingency fund”, how much is left in that fund?

The money provided by the Bank of England comes directly from it, but of course the Government stand behind the Bank of England to provide the necessary support. However, I say this to the hon. Gentleman: when I authorised the Bank of England to provide support for the Northern Rock bank, that was widely welcomed; indeed, the Leader of the Opposition said that he wholeheartedly supported it. I am sorry that many Conservatives are now trying to run away from that decision. I believe that it was absolutely right then and it remains the right thing to do now.

Does the Chancellor of the Exchequer recall that way back in February 1974, the Government had to intervene on another giant, Burmah Oil? They had to take it over because otherwise it might have caused a run in various other areas. The result was that Burmah Oil’s price rise was enormous in the following months, when Margaret Thatcher’s husband decided to sue the Government because he wanted the elevated price rather than the price when Burmah Oil collapsed and—

I do remember Burmah Oil, but not in sufficient detail to be able to comment on what my hon. Friend has said. As I said a few moments ago, it was absolutely right to support Northern Rock when it got into difficulties because of the wider interests of maintaining financial stability in the system.

Does the Chancellor not appreciate that his lack of transparency on all these issues gives further rise to the suspicion that his actions in mid-September were driven more by keeping his own heartlands in the north-east happy and by his having an eye towards what was going to be an early election? Does he not realise that transparency is now of key importance if there is to be general confidence in his actions on Northern Rock, going forward?

The hon. Gentleman makes light of the importance of Northern Rock to the north-east of England. It is a very important company that employs more than 60,000 people. It was decided that we should intervene to support Northern Rock because of the threat to the wider banking system if it had gone down. I repeat that I was absolutely right to authorise that support and, having authorised it, we need to see it through. A lot of Opposition Members are now trying to run away from that decision, which they initially supported. It was the right thing to do because it was important that we maintained confidence and stability in the banking system. That is why we will continue to do whatever is necessary to ensure that that happens.

Can the Chancellor clarify the exact level of security that the Government have on their £24 billion loan to Northern Rock? Is it not the case that while half of it has good security, the other half is optimistically secured against the bank’s free assets, the value of which is now under question in the falling housing market?

As I said when we last discussed these matters in the House, the Bank of England’s lending is secured against assets currently held by Northern Rock, as we would expect. I am not sure whether the Liberal position is that we should or should not have intervened; that is not terribly clear to me. However, having decided to take the action to support Northern Rock, it is important to see it through. At the moment, discussions are taking place with Virgin with a view to a possible acquisition, and clearly I will keep the House informed. Having decided on a course of action, the important thing is to see it through to ensure that we can maintain stability in the wider system as well as ensuring that we do everything that we can to help the position in relation to Northern Rock.

Given the huge amount of taxpayers’ money now pledged, rumoured to be about £25 billion, why should the actual amount of the loan, the terms of the loan and the repayment schedule continue to be kept secret from Parliament?

For the very good reason that if central banks provided what would in effect be a running commentary on such support, they would find it difficult to be able to intervene. The hon. Gentleman is a member of the Treasury Committee, and one of the questions that it is considering for the future is how the Bank of England and other central banks provide effective support. There has been a lot of discussion about that. Providing a running commentary on what central banks happen to be doing at times such as this would not be a very good idea, but, as I said when I appeared before the Committee, I know that it is considering the matter, and I will be happy to consider any recommendations that it has.

The protection of the position of the depositors and shareholders of Northern Rock is of pre-eminent importance, but does the Chancellor agree that while the liquidity crisis of the world’s largest banks continues, consideration should be given to an easing of the regulatory capital requirement under the Basle agreement?

I agree with the hon. Gentleman that protecting depositors is important; that is why I provided the guarantees that I did when Northern Rock got into difficulty. In relation to the wider issues, I also agree that it is not just capital adequacy that is important but the availability of liquidity. The House may be aware that the Bank of England announced this morning that it is injecting additional sums into the system through its market operations, especially as we approach the year-end, when banks will be reporting. I think that the Governor made a statement to that effect when he appeared before the Treasury Committee earlier today.

I am sure that many people will welcome the fact that the Bank has said that it will make that facility available and that it stands ready to take whatever action is appropriate to ensure that overnight bank lending rates remain as close as possible to the Bank’s current rate.

The Chancellor previously told the House that he could not publish the letters from the Governor of the Bank of England and the chairman of the Financial Services Authority because although the Governor agreed to his letter being published, the chairman of the FSA did not agree to his letter being published. Question 4 asks the Chancellor to publish the Governor’s letter. Will he ask the chairman of the FSA if he has any objection to the Governor’s letter being published, and if he does not, will the right hon. Gentleman give the House a commitment that he will publish it?

As I said in my initial reply, I will keep the matter under review, but I have also said that the Governor’s letter, the letter from the chairman of the FSA and my reply to them have to be seen as a whole. I do not think that it is in the public interest to publish them at the present time.

Work Force Skills

5. What recent assessment he has made of the economic impact of the quality and range of skills of the UK work force. (169067)

7. What recent assessment he has made of the economic impact of the quality and range of skills of the UK work force. (169069)

As Lord Leitch set out in his independent report on the UK’s long-term skills needs, the improving skills profile in the UK work force over time has contributed to economic growth. He also concluded that a skilled work force are increasingly critical if the UK is to continue to grow to meet global challenges. [Interruption.] Therefore, the Government will increase expenditure on higher education and adult skills by £2.2 billion over the next three years to support further improvements in the UK skills base at all levels.

Order. The hon. Member for Bolsover (Mr. Skinner) has had his question and now he must listen to others. It is something he will have to learn, and it is not too late for him to learn after all his years in this House.

Would my hon. Friend agree that for regions such as the north-east, a highly skilled work force are essential? Would she congratulate the North East Process Industry Cluster, based in Teesside, which is doing a lot, not only to identify skills shortages and to ensure that they are filled, but to encourage youngsters in schools and to target women with regard to the good career structure in the process industries?

My hon. Friend is absolutely right. It is important that the Government and employers work together to identify those areas where there are skills shortages and act with the money that we have been able to give to deal with them. The latest national employers’ skills survey has just demonstrated a fall in employers reporting skills gaps—down from 22 per cent. of employers in 2003 to only 15 per cent. this year.

Does my hon. Friend agree that employers must play a much bigger role in improving the skills levels of the UK work force? Does she also agree that more must be done to get employers to meet this challenge?

I agree with my hon. Friend’s comments. That is why the train to gain budget, which involved employers closely in the design and supply of training in employment, has been doubled and will stand at £1 billion by 2010-11.

Given the constant complaints of industry about the poor technical skills base in this country, why is it, after 10 years, that we still lag so dramatically behind competitor countries such as France and Germany?

We started from a lower base after 18 wasted Conservative years, which saw apprenticeships all but destroyed, massive youth unemployment and an entire generation condemned to the scrap heap. We have made great progress in the last 10 years, and we intend to make even more in the next three.

Given the need for great skill when undertaking banking transactions, such as making large loans or keeping money markets liquid, what plans are there for Treasury Ministers to go on courses?

Does my hon. Friend agree that this Government’s commitment to skills has led to 1.8 million people finding jobs because of the new deal? Because of that and other skills initiatives, and the strong economy, unemployment in my constituency is now beneath the national average. Under the Tories it was 40 per cent. in some areas.

I agree wholeheartedly with my hon. Friend. We now have 2.8 million more people in work than we had 10 years ago, and 1 million fewer on out-of-work benefits, which cuts the bill of failure and allows us to give opportunities to many people that were never there in the 18 wasted Tory years. We intend to continue, deepen and broaden that good record.

The Minister will have seen in the newspapers this morning that the UK has fallen down the world rankings in the league for the reading skills of 10-year-olds. Does she consider that to be a good thing for UK skills in computing or a bad thing for UK skills overall?

One-to-one support is being funded in the comprehensive spending review. I might ask the hon. Lady what her views are on ageism in the work force, given her comments earlier.

My hon. Friend the Member for North Durham (Mr. Jones) praised apprenticeship schemes on Teesside. I want to praise apprenticeship schemes on Deeside. The Airbus factory in Broughton in north Wales has run 1,200 apprenticeships over the past 10 years, and dozens of those young apprentices are from my constituency. Those top-quality jobs have primed our local economy, which is one of the fastest growing in the country. What plans does my hon. Friend have to come and visit the Broughton factory and see the best practice in the UK?

I am more than happy to visit my hon. Friend’s constituency to see the great work that is being done. The Government have funded a renaissance in apprenticeships. There are now 250,000, and there were only 87,000 when we came into power. We have further plans to create 500,000 by the end of the comprehensive spending review period. Those apprenticeships offer fantastic skills and opportunities, none of which was available during the era of mass unemployment when the Conservatives were last in power.

Public Sector Pensions

6. What the liability is for the pensions of public sector employees; and if he will make a statement. (169068)

The latest published estimate of the total liability for the UK’s unfunded public service pension schemes is £530 billion as at 31 March 2005. As we stated in the pre-Budget report, updated estimates will be published alongside the next long-term public finances report.

Despite being repeatedly pressed by the Opposition, why has it taken the Government so long to address the anomaly whereby the discount rate applied to the public sector pensions liability calculation has not for years reflected the Government’s cost of borrowing, which is what private sector companies are required to do?

The hon. Gentleman will know that those are complex calculations. The Government makes updated assessments of the discount rate. Indeed, we are applying new figures released from the Office for National Statistics in October and will come back soon with an updated assessment of the long-term liability. We will publish that in the context of the long-term report on the health of the public finances, which will be published in the new year.

The Minister has just admitted that the last Government assessment of public sector pension liability is well over two and a half years old. I am sure that the hon. Member for Bolsover (Mr. Skinner) will be interested, because he no doubt represents a large part of that liability.

Actuaries Watson Wyatt estimate that the liability today could be as high as £960 billion. Perhaps the Minister can confirm whether the two-and-a-half to three-year cycle between forecasting public sector pension liability is a new approach to Government policy, or did Ministers not get round to doing it earlier merely because of incompetence?

I shall let my hon. Friend speak for himself.

The Conservative party has to be a bit careful with the figures. Let us be clear about what the estimates are. They are notional figures that relate to all future payments that will have to be made over eight decades. The hon. Lady’s colleague, the shadow Chief Secretary, told the Sunday Mirror last week that that will mean that

“Every family in Britain will pay £33,000 to fund the pension promises he has made to public sector workers.”

Yes, he says. That is an alarming and misleading statement to make to the families of this country. They will not have to find £33,000 to fund those commitments.

As for my hon. Friend the Member for Bolsover (Mr. Skinner), with age comes a certain maturity and wisdom that are sadly lacking among those on the Conservative Front Bench.

Is it not worth remembering that pensions are deferred salaries? The work that we get from our public sector, on low pay and working long hours, means that the liabilities of the public sector pension are value for money.

I endorse my hon. Friend’s comments. We have been looking at public sector schemes, which—especially the teachers’ scheme, the civil service scheme and the NHS scheme—have been subject to reform in recent years. Let us remember that those reforms, which we debated, were difficult, but, as my hon. Friend rightly says, they are sustainable as they go forward now, and give a fair return to those valuable public sector workers who provide services on which we all depend. The implication of the quote of the shadow Chief Secretary that I read out is that the Opposition would not fund those schemes in the way in which we propose. They need to explain to public sector workers exactly what they would do to those pension schemes.

The Chief Secretary has just referred to the public sector pension liabilities, which pay the pensions of millions of public sector workers who have retired over many years, as though they were some rough estimate that the Government can choose to publish when they like. They are already nearly a year behind their original schedule for publishing the figures. Surely he should take the matter far more seriously.

I take it extremely seriously. As I explained to the hon. Member for East Devon (Mr. Swire), it is a complex calculation and we will therefore take our time to get it right. It is a complex figure which should not be grossly simplified and misrepresented. The previous long-term public finance report, which was published last December—nearly but not quite a year ago—stated that public sector pension schemes were sustainable over 50 years. That is a fair judgment which we made and put into the public domain. When we have new figures, we will put them in the public domain so that a balanced judgment can made on them rather than the alarmist and misleading debate that the hon. Gentleman and his colleagues are trying to get going.

Schools (Funding)

Per pupil expenditure in England has risen from under £2,500 in 1997 to £5,600 in 2007-08. That has supported a sustained increase in attainment. In 2007, 60.3 per cent. of pupils achieved five or more GCSEs at grade A to C—up from 45.1 per cent. in 1997.

Schools in my constituency have improved considerably under Labour, but official unemployment is still 10 per cent. and worklessness is nearly 50 per cent. after 10 years of a Labour Government. How will we convince kids to buy into staying on at school and in education up to the age of 18 when, in my constituency, on finishing education they still cannot get a job?

I recognise the issues to which my hon. Friend draws attention because my constituency has a similar profile to his. The figures that I read out do not show that the improvement in schools has been much more marked in areas such as those that he and I represent than it has been in the rest of the country. I believe that that will bring long-term benefits to the economies of Leigh and the part of Birmingham that he represents. Long-term unemployment is significantly down in the west midlands from around 36,000 to 11,000, but he is right: as the Prime Minister made clear this week, we need to do more to integrate the benefits system and the skills services on offer to get people back into work.

Could the disconnect between results in the constituency of the hon. Member for Birmingham, Erdington (Mr. Simon) and the hundreds of millions of pounds spent on education in the past 15 or so years be accounted for by the university of Cambridge’s primary review report, which was produced this month? It stated that the hundreds of millions of pounds have been spent on various educational policies, which were poorly researched, not tried out on the ground and largely a waste of money.

I hear that complaint from Conservative Members. [Interruption.] I have the greatest respect for my old university, but the figures that I read out tell an impressive story. Sixty kids out of every 100 leave school with better skills as opposed to 45 kids out of every 100. That is 15 more kids in every 100, which is a significant improvement in 10 years. However, as I said to my hon. Friend the Member for Birmingham, Erdington (Mr. Simon), the position is much better in constituencies such as mine, where the figure for schools whose pupils get five A to Cs at O-level was approximately 15 per cent. in 1997. That has increased to around 50 per cent. today. The investment has led to a big improvement. I would be surprised if the hon. Gentleman had not seen better school buildings and more teachers in his area.

Can I tell the Minister about a great news story in my constituency, where new specialist engineering colleges such as Freebrough college are opening thanks to £5 million of Government support? Thanks to the Government’s commitment to engineering, we will see many engineers in years to come. May I thank the Minister for the support that he has given to my constituency, particularly in rural parts, and ask him to ensure that investment keeps coming through?

I am happy to accept that and should like to repay the compliment to my hon. Friend for all the work that he has done to improve education on Teesside. He is absolutely right: because of the policies that the Government have taken forward, areas such as Teesside are benefiting from much closer integration between the business community and the education service. That is why the Opposition are taking on, lock, stock and barrel, the proposals that we have put forward to improve education in this country.

Credit Unions

The Government regularly meet representatives from the voluntary sector. I most recently met credit unions when I visited Manchester about a month ago, where I was delighted to visit the offices of Manchester credit union and meet representatives of the Association of British Credit Unions Ltd.

Just over a year since the Farepak fiasco, what further steps are being taken to help credit unions such as the Cashfields credit union based in Hucknall meet the needs of the more economically disadvantaged members of our society?

I was delighted to hear of the formation of Cashfields in my hon. Friend’s constituency. I understand that it is relatively new and I wish it every success. Following the collapse of Farepak, more that 100 credit unions throughout the country now offer Christmas savings accounts, which is to be welcomed. I shall shortly be publishing the results of the Government’s financial inclusion action plan, which will include further measures to support the growth of credit unions.

Tax Credits

Accuracy in processing remains high, at around 97 per cent. As the House knows, tax credits provide crucial support to some 6 million hard-working families in Britain. Tax credits staff are working hard to improve the service to customers.

What action are the Government taking to amend the 35-year-old European regulations that require the payment of child tax credits to migrant workers whose children live abroad, about which the Government tell us nothing, but which should be fair to both migrant workers and host nations, such as the UK, Germany, France, Italy and Austria?

As the hon. Gentleman said, those rules have been in place for a long time. The Government are in discussion with European partners about all such rules, as they affect all our citizens throughout Europe. He will know that changing rules of that nature requires agreement throughout the whole of Europe.

Personal Data

11. What recent assessment he has made of the implications of the loss by Her Majesty’s Revenue and Customs of personal data. (169073)

We have heard a lot about what advice has been given to banks regarding the loss of personal details. Given the sort of information that has been lost by the Government, one thing that could be dangerous is its use to apply for credit cards. What action have the Government taken in that regard?

We have been in consultation with organisations such as Experian to discuss what could be done to protect people from identity fraud and to prevent the use of that information by criminal elements. As things stand, both the police and the banks are advising us that there is no evidence of fraudulent use of the information, which we believe could still be found. That is why the police inquiry and the searches are ongoing.

The Minister will know that I have apologised to the Chancellor for yesterday. I do not hold Ministers accountable for the random actions of individuals, but Ministers do have to answer for the fact that individuals can access data, even after so many security reviews, without a relatively simple management system overlay to provide an audit trail and to ring alarm bells.

I am grateful to the hon. Gentleman for the apology that he has offered for yesterday, although it was a very entertaining intervention. In response to his question, I would say that he is right. That is why we have invited Kieran Poynter to conduct a review. That will not take a long time; we need swift action on this in order to be satisfied that all the necessary protection and security is in place. My right hon. Friend and I look forward to receiving the interim report on 14 December.


The Government recognise the major contribution that co-operatives make in providing greater choice and diversity in financial services and the wider economy. We intend to update the legislation governing co-operatives to enable them to compete with other companies and to serve their local communities more effectively. We consulted on legislative reform in the summer, and I am pleased to say that we received more than 200 responses. We will publish further consultations later this month.

I greatly welcome the work that the Government and my hon. Friend are doing on reviewing the industrial and provident society legislation. I agree that co-operatives play a huge role across the country. In advance of introducing any primary legislation, will she review whether steps could be taken immediately under regulatory reform legislation to increase the £20,000 limit on withdrawable share capital? Will she also consider relaxing the requirement on interim accounts that exists for co-ops in the same way that it does for companies?

I am grateful for my hon. Friend’s suggestions. When we publish our ideas on these matters before the end of the year, we will look at absolutely everything with a view to making legislative and non-legislative changes. I will certainly take on board the points that she has made. In response to her wider point, I agree that co-ops play an extremely important part in the dynamism of our economy. I want to remove all barriers that prevent them from competing on a level playing field and from growing.

Topical Questions

The Treasury’s aim is to raise the rate of sustainable growth and to achieve rising prosperity and a better quality of life with economic and employment opportunities for everyone.

As the Chancellor has just said, the Treasury’s aim is to raise the rate of sustainable growth and to improve quality of life, but, given that Britain is three times richer but no happier than it was 50 years ago, does he think that it is time to look beyond the crude measure of gross domestic product and to monitor other indicators of well-being?

I am willing to consider a Liberal Democrat happiness index, although I am not sure how happy the hon. Lady can be at the moment, given that most of her colleagues appear to be out on the campaign trail. Over the past 10 years, we have seen our economy grow in every quarter. We have had 10 years of uninterrupted growth, which has resulted in fewer people being out of work, more people being in work and historically low interest and mortgage rates. That has led to our country’s growing prosperity. Our job is to ensure that that prosperity continues and, above all, to ensure that everyone has the opportunity to participate in it.

T2. Unemployment in Wrexham has fallen by more than 36 per cent. in the past 10 years, and by 3.5 per cent. in the past year. How much money has the Exchequer saved by not pursuing the Tory policy of paying the cost of wasted lives? (169055)

My hon. Friend is quite right. We are spending about £5 billion less on unemployment benefits than we were 10 years ago. One of the advantages of having a strong economy with more people in work is that money is not wasted on unemployment benefits, as it was as a result of the high levels of unemployment that we saw 10 or 15 years ago. Also, we are paying less in debt interest because the level of borrowing and debt that the Conservatives ran up meant that that was the first call on a lot of the extra money that was spent.

T3. Notwithstanding the so-called credit crunch, high street banks with commission-hungry staff are still aggressively selling credit to the hard-up and the desperate, with the resulting unrepayable debt too often chased by bullying or unprincipled collectors. What action is planned to strengthen and enforce the voluntary banking code and the Office of Fair Trading’s debt collection guidelines, both of which seem to be routinely flouted by a section of the financial services industry that is still rather too lightly regulated? (169056)

I share my hon. Friend’s concerns about aggressive credit selling. That is one of the reasons why we are supporting the growth of the credit union sector, which can provide affordable credit to those who need it. An independent review of the voluntary banking code has recently been completed, and the banks published the review’s recommendations and their response last week, on 22 November. That confirmed that the banks will strengthen and enhance the code in key areas, including the provision of more support for people in financial difficulty and the introduction of enhancements to responsible lending practices, involving the rigorous assessment of borrowers before loans are made, which I hope will help. In addition, the Government have made extensive changes to consumer credit legislation to strengthen consumer protection.

May I ask the Chancellor a question about what the Governor of the Bank of England has just told the Treasury Select Committee? He said that “the short-term outlook” for the economy is “uncomfortable” and “highly uncertain” with slowing growth and rising inflation. Is that assessment shared by the Chancellor and what impact does he think it will have on public borrowing this year?

The hon. Gentleman is right that the Governor spoke to the Treasury Committee this morning and said that there is continuing uncertainty in the financial markets—something that I have said on a number of occasions over the past few weeks. We do not yet know the full extent of that uncertainty, particularly in the United States, which is important because of the size of the US Government.

The Governor said today that he expects the economy to slow down, which is exactly what I said in the pre-Budget report when I revised downwards our growth expectations. The Governor also said today that inflation has come down since the peak in March this year, but the Monetary Policy Committee will keep that under review.

Perhaps the Chancellor could answer my question on borrowing when he gets up again. Will he also deal with the point that the Governor has announced an emergency five-week facility over the year-end because of what he calls

“the fragility in the banking system”?

Clearly, the tripartite arrangements set up by the Government did not work as expected in September, which the Government have explicitly acknowledged in setting up a review of those arrangements. What assurances can the Chancellor give the House now as we approach this difficult year-end period that measures are in place to ensure that the tripartite arrangements will work much better if there is a problem in a particular bank? Will we know who is in charge in a liquidity crisis?

I appreciate that the hon. Gentleman asked about borrowing. I set out my forecasts in the pre-Budget report and I will keep the House updated. For the past 10 years borrowing generally has been very substantially lower than we have seen in the past.

I said in reply to an earlier question that the Governor has announced additional facilities to be put into the system, which is the right thing to do, especially having regard to the present uncertainty. The House will know that a number of banks are due to report, although the Governor made the point in his remarks this morning that what banks have been able to report has reassured the markets in respect of individual institutions. I assure the House that the Bank of England, the Financial Services Authority and the Treasury are keeping these things under constant review and that we will take whatever action is appropriate. Today’s announcement by the Bank of England, putting money into the system, will be welcomed. It is entirely the right thing to do. Indeed, the US Fed and the European Central Bank have taken similar action over the past few days.

T4. My right hon. Friend will be aware of the success of renewable obligation certificates in ensuring investment in onshore wind farms. Has he given consideration to what further can be done so that our fiscal regime ensures the speedy development of other forms of renewables? (169057)

The Government are committed to meeting their share of the EU renewables target and the energy White Paper set out a range of measures that we are taking forward, which will triple the amount of renewable energy in the UK. That includes—in direct response to my hon. Friend’s question—a planning reform Bill that will speed up issues, allowing both offshore and onshore wind farms to be brought to bear and to generate electricity in that renewable form much more quickly than would have been the case before the reforms.

Of all the problems that we face at the moment, I would have thought that the hon. Gentleman could have come up with a better question than that.

T6. As my right hon. Friend probably knows, over the last few years I have been pressing for action on sports taxation issues in particular. I remind her that I have written about the need for work to be done to ensure that in this sporting nation—in the build-up to 2012, and following the disaster of England’s recent football performance—joined-up thinking must include examination of the way in which we deal with tax and sport, and the contribution of sport to the economy. Will my right hon. Friend agree to meet me as soon as possible to discuss some of the smaller issues, on which we could make progress fairly quickly, and also some of the bigger issues, such as corporation tax and VAT, which might require more long-term work? (169059)

Of course I should be happy to meet my hon. Friend to discuss the wide range of tax issues that he wishes to raise, involving the way in which we support athletes and sports organisations in the United Kingdom. He will know, however, that in partnership with the lottery the Government have already committed themselves to significant funding for our elite athletes in particular in the run-up to the Olympic games, as well as support to encourage sportsmen and women to put something back into grass-roots sport and inspire young people.

T7. Is an early solution envisaged to the inequitable problem of the damping mechanism in local government financing, which has a very bad effect on councils such as Wirral? (169060)

As I said earlier, the Secretary of State for Communities and Local Government will make a statement on the provisional local government settlement for the next three years very shortly, and my hon. Friend will have an opportunity to comment further then. However, I am sure that the Secretary of State and her colleagues have noted his points about damping. The challenge is to ensure that there is enough stability in the local government system, while at the same time making progress towards equity and conveying funds where the needs are greatest. That is the balance that must be struck.

In the comprehensive spending review, will the Chancellor ensure that there is a balance between money given to schools in rural areas and money given to schools in urban areas? Is he not disappointed that after 10 years, and despite all the money that the Government have invested in reading in schools, the school reading age figures are the worst ever?

Standards have improved, partly because—as was pointed out a few moments ago by my right hon. Friend the Chief Secretary—we have been increasing spending in schools. As for the balance of spending in rural and urban schools, it will be taken into account by my right hon. Friend the Secretary of State for Children, Schools and Families. However, the hon. Lady must face the fact that if we are to improve skills, particularly reading skills, we must be prepared to put the necessary money into schools as well as reforming them. So far, the Conservatives show little appreciation of that.

T8. Apprenticeships are very important in my constituency and it is great news that the number has trebled over the past 10 years, but can my right hon. Friend assure me that we will have the resources to double the current number so that my constituents’ families can develop world-class skills? (169062)

I can give my hon. Friend that assurance. There is a target of 400,000 apprenticeships in England; we have 250,000 today, and my hon. Friend’s constituency is getting its fair share. I also note that over the past 10 years of economic success enjoyed under this Government there has been a welcome increase in the number of people there who are economically active there, from 37,000 to 46,900.

Can the Chancellor put the record straight? Last week, during business questions, the Leader of the House said of the measures the Chancellor was taking in relation to Northern Rock:

“we are concerned to ensure that no Northern Rock shareholder, employee or saver loses out.”—[Official Report, 22 November 2007; Vol. 467, c. 1347.]

Is that actually the policy?

I set out our approach to Northern Rock in my statement on 19 November. I said then that the Government’s priorities were first to ensure that the money lent by the Bank of England was returned, secondly to ensure that we protected the interests of depositors, and thirdly to ensure the wider stability of the financial system. Those are and remain the Government’s objectives, and I think everyone is aware of that.

Is my hon. Friend aware that according to a recent report commissioned by the Union of Construction, Allied Trades and Technicians, bogus self-employment in the construction industry is losing the Exchequer £2.5 billion? Will he take measures to deal with that?

The recent estimates that we have made of the money lost to the Exchequer from bogus self-employment in the construction industry is closer to £360 million, but I assure my hon. Friend that I am looking into what we can do on that difficult and complex area of construction.

For each pound that the public sector has lent to Northern Rock, how much specific security has the Bank of England taken for the taxpayer?

As I have said on many occasions, all the lending made by the Bank of England is secured against Northern Rock’s assets. That remains the case and, as I said a few moments ago in reply to the hon. Member for Uxbridge (Mr. Randall), one of my three central objectives in relation to getting a solution is to make sure that the money is repaid.

My right hon. Friend will be aware of the notorious NatWest Three’s decision yesterday to plead guilty to conspiring with Enron staff to defraud NatWest of $19 million. Does he agree that that vindicates the changes that the Government made to our extradition rules with the US, and that Opposition claims that—

Like many Members, I heard that news this morning on the radio, but I do not have the details so I cannot comment on them. I believe, however, that our country has the right extradition arrangements, and that we will always act in the best public interest.

Business of the House

The business for the week commencing 3 December will be as follows:

Monday 3 December—Remaining stages of the Child Maintenance and Other Payments Bill.

Tuesday 4 December—It is expected that there will be an oral statement on the publication of the board of inquiry report into the Nimrod crash, followed by Opposition day [3rd allotted day]. There will be a debate entitled “Politicisation of the Civil Service”, followed by a debate on the performance of the Department for Environment, Food and Rural Affairs.

Wednesday 5 December—It is expected that there will be an oral statement on the annual benefit uprating, followed by Estimates [1st allotted day]. There will be a debate on standards of conduct in public life, followed by a debate on benefits simplification. Details will be given in the Official Report. At 7 pm, the House will be asked to agree all outstanding estimates.

Thursday 6 December—It is expected that there will be an oral statement on annual uprating of local authority allocations, followed by a topical debate: subject to be announced, followed by proceedings on the Consolidated Fund Bill, followed by a general debate on fisheries.

Friday 7 December—The House will not be sitting.

The provisional business for the week commencing 10 December will include:

Monday 10 December—Second Reading of the Planning Bill.

[Wednesday 5 December:

Public Administration Committee, “Ethics and Standards: The Regulation of Conduct in Public Life”—Fourth Report of Session 2006-07, HC 121-I.

Work and Pensions Committee, “Benefits Simplification” —Seventh Report of Session 2006-07, HC 436-I.]

I thank the right hon. and learned Lady for coming to the House and giving us the future business. I am only sorry that she refused my request that she come to the House earlier this week to make a statement on the sleaze scandal that engulfs her. This afternoon’s topical debate, chosen by the right hon. and learned Lady, is on the prospects for apprenticeships in England. Why are we not debating genuinely topical issues, such as party funding sleaze? [Interruption.] The right hon. and learned Lady—[Interruption.]

Order. The right hon. Lady is still in order, but I caution her that she must stay in order and remember that we are talking about the business of next week.

Thank you, Mr. Speaker. I shall refer to a number of items of business for next week. On the issue I have just referred to, I say to the right hon. and learned Lady that she might be Labour party chairman, but she is also Leader of this House, and her first duty must be to Parliament and not to her party. May we have a statement on the political party funding Bill? During Labour’s deputy leadership campaign, the Secretary of State for Environment, Food and Rural Affairs declined a dodgy donation from Janet Kidd, after being warned by Baroness Jay that the donation was in fact from David Abrahams. At the same time, we now know—

Order. That is nothing to do with the business for next week. [Hon. Members: “It is.”] Order. Let me be the referee. I say that it is nothing to do with the business of next week, and I tell the right hon. Lady that she must move on from this subject. She has made her point. It is possible to overdo it, and she should move on—[Interruption.] Order. It does not help when others shout across the Chamber. I am trying to be the referee. Let us move on.

This morning, the Home Secretary said that the Government are considering changes to legislation as a result of the issues arising from the party funding debacle in the Labour party. If the Home Secretary was prepared to make that statement to the media, she should have been prepared to come to this House and answer our questions.

May we have a debate in Government time on the Government’s internal communications? We have had several issues over the past week in which it was clear that a Member of the House of Lords, Baroness Jay, who sits on the Government Benches, revealed certain information about party funding to the Secretary of State for Environment, Food and Rural Affairs and to others. We now have working in the Leader of the House’s office someone who used to administer the 1000 club of donors to the Labour party. However, the Leader of the House says that none of those people ever asked her—

Order. The right hon. Lady may ask about communications, but let us not get into the detail of this matter. There will be other opportunities—[Interruption.] Order. We are talking about business questions. The right hon. Lady is experienced enough to know that she should ask for something to be debated and then move on. She should not go into the detail of this particular matter, because that is for another time.

Thank you for your advice, Mr. Speaker. I try to be as helpful to the House as possible in giving explanations as to why debates on certain matters might be necessary. These matters do drive at the heart of Government—

Order. Do not shout at me, Mr. Stuart. As I have told the House before, I am guided by the rules that the House has given me, and those rules tell me that this is business questions. So do not tell me how to do my job. You would not know where to start.

Thank you, Mr. Speaker. There are already questions about a planning application in Durham, and the Secretary of State for Communities and Local Government has said that she has initiated a review of the issue of planning applications by third-party intermediaries. When will she make a statement to the House about the outcome of that review?

May we have a debate in Government time on the proper functioning of the ministerial code so that the Leader of the House can explain why, in the middle of September, she declared a donation to her deputy leadership campaign to the permanent secretary at the Department for Constitutional Affairs? With new questions emerging today about the role of Jon Mendelsohn, such a debate—[Interruption.]

Thank you, Mr. Speaker.

Such a debate would enable the Leader of the House to say whether her campaign team was approached by Mr. Mendelsohn about whether they wanted to be put in touch with secret donors. There are several questions to be answered and the Leader of the House must make a full statement.

The Leader of the House, the Prime Minister and the Labour party treasurer are like the three wise monkeys. They see no evil, hear no evil and speak no evil. Quite simply, it won’t wash. The public know sleaze when they see it. The people know spin when they hear it, and the voters will know what to do when they have their say: they will get rid of this sleazy Labour Government.

The right hon. Lady’s questions give me the opportunity to tell the House what I have already said publicly. In respect of my deputy leadership campaign and donations to it, my campaign team and I acted at all times in good faith. We acted at all times within both the letter and the spirit of the law. We had three very clear rules: we would accept donations only from people we knew personally, whom members of the campaign team knew personally or who were existing donors. We checked every donor to ensure that they were on the electoral register as a permissible donor. When we discovered there was a problem—

Order. I remind the Leader of the House that I told the shadow Leader of the House that at times she was going beyond the business of the House. The right hon. and learned Lady is now going beyond the business of the House. She does not need to say those things—she is not discussing the business of the House.

Mr. Speaker, I am explaining why I am not seeking to give a statement to the House on the deputy leadership campaign finances, because at all times—

Order. The right hon. and learned Lady should not go into the detail of the matter because it is not the business for next week. She has said that she acted in good faith; she should now move on.

Thank you, Mr. Deputy Speaker—[Hon. Members: “Mr. Speaker!”]—Mr. Speaker.

The right hon. Member for Maidenhead (Mrs. May) can huff and puff but she will not blow this Leader of the House down—[Interruption.] I will deal with the business of the House.

The right hon. Lady asked about topical debates. The proposal came from the Modernisation Committee. The Government responded and we brought a Standing Order before the House to change the rules. The first topical debate, which was very well attended, was on immigration and was suggested by the right hon. Lady. The second topical debate was on climate change—a matter we all regard as important and topical. Today, we have a topical debate on apprenticeships. The right hon. Lady is perfectly entitled to propose subjects for topical debates, which we announce on Mondays, and I welcome her and other Members doing so. If they make proposals, I will consider them.

The right hon. Lady talked about the comments of the Home Secretary this morning, when my right hon. Friend was asked about party funding. The shadow Leader of the House and Members know that in the Queen’s Speech we announced our intention to legislate on party funding. The Liberal Democrats were prepared to co-operate in all-party talks, but unfortunately we have not been able to bring our conclusions to the House because the Conservatives walked away from the talks.

The right hon. Lady asked when the Secretary of State for Communities and Local Government will come to the House to report on her review. My right hon. Friend will do so when the review is concluded.

May we have a debate on the increases in military spending that have been authorised under the Government to assist our troops in Iraq and Afghanistan, and to discuss the remarkable fact that last Tuesday General Sir Richard Dannatt and Colonel Richard Westley came to the House to brief 50 Members of both Houses on what they called the significant increases that had taken place, yet last Friday a group of superannuated military top brass, in a comfortable billet in the other place, opened a huge bombardment on the Government for doing the opposite?

There are Defence questions next Monday and no doubt my hon. Friend will have an opportunity to catch the Speaker’s eye to raise that point, especially as there are topical as well as pre-planned oral questions. As he raises an important point about defence spending, may I point out that the UK spends more on defence than any country in the world except the United States? The Conservatives were cutting defence spending. When we came in we increased it. Were the Defence Secretary to be making a statement on that point, I think he would be saying that while we have increased defence spending, the Tories were cutting it, and although they now say they want it increased they will not say by how much or as what percentage of GDP. They will not say where the money will come from and they will not say what would have to be cut to pay for it.

In recent days, we have had the opportunity to debate why the Government have put at risk millions of pounds of taxpayers’ money as a result of the first run on a bank in 100 years. We have also had a chance, today and previously, to debate why the Government have put millions of benefit recipients at risk of having their personal data lost through the incompetence of Revenue and Customs. However, given that events of recent days show that the interpretation of the law has put the Leader of the House’s own party at risk of being investigated yet again by the police—because of hundreds of thousands of pounds of dodgy donations—will she accept that, whatever her personal view, the topical debate for next week should be the funding of political parties and the restoration of public confidence? That is what the public want us to debate. Her party and ours—and I hope the Tories, as well—should debate that on the Floor of the House next week.

Secondly, although we have had a written statement, may we have an early opportunity to debate the Commonwealth conference and its outcomes? Many people in the House think that the Commonwealth is very important. There was not a prime ministerial statement—in our view, there should have been—but we could at least take the opportunity to hold an early debate on the talks in Uganda and their implications. Linked to that, it is World AIDS day this Saturday. AIDS and HIV are hugely important issues, not just in this country but across the world. Is the Leader of the House willing to take the initiative of holding a regular debate at about this time of year on what we can do both at home and abroad to reduce the incidence of AIDS and HIV, and the suffering of those who have contracted those infections?

Lastly, may we have an early debate on human rights abroad, particularly in countries such as Saudi Arabia, where we now learn that a woman who has been gang-raped is likely to be imprisoned and subject to the lash by a Government we entertained only the other day with a state visit to this country? That is not acceptable by any definition. This country needs the opportunity to debate the matter, when other countries that are meant to be our allies clearly do not understand what human rights really are.

The hon. Gentleman raised the question of Northern Rock. He knows that the Chancellor has made many statements on Northern Rock and has kept the House fully informed. He was answering questions at the Dispatch Box only a few moments ago. He will have emphasised, and I will re-emphasise, that our first consideration is the financial security of the banking system and its importance for this country. We must also have at the forefront of our mind the question of the financial security of those who have deposited savings in Northern Rock, and we must remember the many thousands of people who work for Northern Rock, which is an important institution. The hon. Gentleman can raise his concerns, but we have the right priorities at the front of our mind and we are keeping the House informed at all times, as we are in relation to the Revenue and Customs issue that he raised.

The hon. Gentleman raised a question about the interpretation of the law. It has been made clear to the House that, as the Prime Minister said yesterday, there was a wrong registration, for which the general secretary of the Labour party has taken responsibility. He has resigned and we have established our own Labour party inquiry. I repeat to the hon. Gentleman that, as I said to the right hon. Member for Maidenhead, I have acted in good faith and within the letter and spirit of the law at all times. However, I will take what he says as a representation for a topical debate next week.

The hon. Gentleman raised the serious question of floggings and whippings in Saudi Arabia. We are very clear in this country that we stand shoulder to shoulder with the international community in believing that floggings and whippings are in breach of human rights. They are a violation of human rights and we deplore them wherever they happen in the world.

The hon. Gentleman raised the important question of World AIDS day. Given the importance of international development and of tackling poor health and poverty throughout the world, the House, in addition to International Development questions, has regular debates on international development in not only this Chamber, but Westminster Hall. We will continue to do so.

In any discussions that we have on rules and regulations surrounding planning applications, may we take account of the terms of early-day motion 313, which I tabled on 19 November and has been signed by many hon. Members, including the hon. Member for Hexham (Mr. Atkinson)?

[That this House congratulates the North East Chamber of Commerce, The Journal newspaper, local politicians and all involved in the successful Go for Jobs campaign; thanks those transport Ministers who listened to the campaign and acted to bring about an end to restrictions on economic growth in the region caused by Article 14 Orders; and calls upon the Government to recognise that the excellent economic progress in the North East over the past 10 years will only be sustained and improved with a clear and comprehensive plan for the improvement of the region's major road and transport infrastructure.]

The early-day motion draws attention to the fact that a large part of the responsibility for convincing the Highways Agency to lift article 14 orders in the north-east, including in Durham, lies with The Journal newspaper and the North East chamber of commerce.

I will draw my hon. Friend’s comments to the attention of my right hon. Friend the Secretary of State for Communities and Local Government.

When it comes to selecting the topical debate for next week and subsequent weeks, will the right hon. and learned Lady consider either delegating that choice to Mr. Speaker, or making the choice by ballot, because it really is not appropriate that she herself should decide what is topical and what is not?

What is appropriate is for me, as Leader of the House, to do what the House has asked me to do under its Standing Orders. That is what I will do. The House will be aware that the Modernisation Committee, in its report “Revitalising the Chamber”, proposed topical debates and suggested that they should be

“announced by the Leader of the House”.

The Government responded to the report by saying that they would be

“announced by the Leader of the House following discussions”.

We are only—[Interruption.] Bear with me on this. This is the third week in which we have had a topical debate. We are genuinely concerned to make the debate in this House what Back Benchers want to debate and for it to be topical. This is only the third week, and we will review the system early in the new year. The House agreed, through the passing of its Standing Order, to the decision being made by the Leader of the House. The very first debate that I selected was on immigration, which was a subject chosen by not my ministerial colleagues, but the right hon. Member for Maidenhead, so I have been fair at all times. We will have to review the situation as it goes forward. I hope to be able to show that the House can be confident in the way in which I choose topical debates. However, if the House wants any amendments to the Standing Order, Members will have to propose them and we will have to reconsider the matter.

May we have an early debate on the way in which different agencies work together to tackle crime? The 101 service, which is based in Pontprennau in my constituency of Cardiff, North, is losing its grant from the Home Office next spring. The service has been an excellent example of the local authority, the police and other agencies working together. May we have a debate to discuss how such initiatives can continue?

I congratulate the 101 service on its important work. I will draw the matter to the attention of my right hon. Friend the Home Secretary.

Can the Leader of the House explain why she chose today’s topical debate, given that no one made representations for that subject? Will she ensure that next week’s topical debate deals with the loss of public confidence arising from what is happening in government at the moment, and the loss of confidence in parliamentary democracy as a result of what is going on in the Labour party, in particular?

What is going on in government at the moment is that the Government are getting on with running the country—[Interruption.] If the hon. Gentleman wants to suggest that we change the process by which we choose topical debates, or to make a proposal on what he considers to be topical, I suggest that he does so.

Will the Leader of the House find time for a debate next week in which the acting leader of the Lib Dems and the two candidates for the Lib Dem leadership can tell the House and the country when they are going to pay back the dodgy 2 million quid that they got from Michael Brown?

I thank my right hon. Friend for his point. We appreciate the fact that the Liberal Democrats have been prepared to engage in party talks about how we agree a consensus on the legislation for party funding reform that we proposed in our Queen’s Speech.

I seek to work closely and constructively with the right hon. and learned Lady in her capacity as Leader of the House. Will she give further consideration to the request from Conservative Members that the way in which topical debates are chosen be more transparent and democratic? If it is necessary for the Modernisation Committee to consider amendments to the current Standing Order, will she be willing to have such a discussion in the Modernisation Committee so that the Standing Order can be changed to ensure that the topical debate is just that—current and topical?

I thank the hon. Gentleman for that point. I understand the House’s concern and that it wants to get the process right to ensure that topical debates serve the purpose for which they were intended. However, the proposal was brought to the House only a few weeks ago. The House made a decision and I am carrying out my duties under the Standing Order. If hon. Members want to reconsider the situation and think that the Standing Order should be drawn differently and the process should be different, they can make a proposal. No one made such a proposal in the debate in which we considered the Standing Order, but if hon. Members want to reflect on the matter, they can bring a proposal forward. My only interest is ensuring that the House gets what it wants: topical debates.

My right hon. and learned Friend will be well aware of the case of Mrs. Gibbons, who is about to appear in court in Khartoum. This is a dreadful case and I hope that the Foreign Office is doing everything possible to get her early release. However, will my right hon. and learned Friend also reflect on the fact that it is absolutely vital that we go ahead with peace talks regarding the situation in Darfur? We must recognise that there are no representatives from the Sudan People’s Liberation Movement on the Government of national unity. These are difficult times in Sudan, so will the Government ensure that they continue to play a real part in trying to bring peace to that bedevilled land?

I pay tribute my hon. Friend’s role in the all-party group on Sudan. Let me first respond to his point on Gillian Gibbons. I can tell the House that the Foreign Secretary will be seeing the Sudanese ambassador this afternoon. The Government—and everyone, I am sure—want her free and back home, where she belongs, as soon as possible.

My hon. Friend mentioned the need for peace in Darfur. The Foreign Office wants to work with all the international community to ensure that we have peace in that terrible conflict situation.

Once we have had our proper topical debate on party funding, can some time be made available for a short debate on the operation of the Maritime and Coastguard Agency? The Leader of the House will be aware that agency staff have been in dispute with the management over pay since the earlier part of this year. The chief executive has now announced a major reorganisation aimed at cutting costs. There is real concern in the shipping industry that the agency will try to walk away from some of its responsibilities, such as ship inspection and seafarer certification. These are matters of concern to not only island and coastal communities, but the shipping industry, which earns something in the region of £322 a second for the UK. Surely that is something to which we can give some time.

I shall take that as a representation for a topical debate next week. I also remind the hon. Gentleman that there is a debate on fisheries on Thursday. I know that that is not entirely on the point that he mentioned, but some of the issues that he is concerned about could be raised in that debate.

My right hon. and learned Friend will be aware that in a previous Session, the Gambling Act 2005 went through the House, and part of that Act concerned the creation of 16 new casinos, large and small. My constituency was to have one of the large ones, but unfortunately that plan was scuppered in the other place by the Opposition. It would have meant significant regeneration for parts of Great Yarmouth and the 15 other areas. Will my right hon. and learned Friend tell us when the proposal will come back before the House, so that we can get on with the fantastic job that has been done over the past 10 years to regenerate one of the most deprived areas of the country?

I pay tribute to my hon. Friend’s work in support of the regeneration of the seaside town of Great Yarmouth. I will bring his comments to the attention of my right hon. Friend the Secretary of State for Culture, Media and Sport.

I wonder whether the Leader of the House will provide an early statement on the role of the permanent secretary as the recipient of information. I understand that the right hon. and learned Lady told the Justice permanent secretary of a donation that she had received. It is not clear to me what permanent secretaries should do with such information, particularly when it is about party funding issues, and not general matters for Government.

The position on registration is as follows. There is a requirement to register donations above a certain limit with the Electoral Commission. Under the ministerial code, Ministers have to register any donations with the Cabinet Office. There is also the requirement to register in the Register of Members’ Interests. I registered all donations fully in accordance with all those three authorities. The right hon. Gentleman raised the issue of the permanent secretary in the Department for Constitutional Affairs, as did the right hon. Member for Maidenhead (Mrs. May)—I am sorry that I did not get a chance to reply to her point earlier. It is custom and practice for a Minister to make declarations to the permanent secretary in the Department in which they are—[Interruption]—or were. That was the Department in which I was at the time. In addition, I made full declarations in the Register of Members’ Interests, and to the Electoral Commission and the Cabinet Office. During the course of the campaign I had been at the Department for Constitutional Affairs, so I provided the full information to the permanent secretary.

This Christmas in my constituency, the Ryhope allotment holders and pigeon men face eviction from their site by a mysterious company called Worktalent Ltd. The site contains the world’s only listed pigeon cree, or loft, as others may know it. It provides local families and children with education opportunities. Will my right hon. and learned Friend consider making time available to debate early-day motion 239, which is supported by Members on both sides of the House, so that the House can consider supporting the Ryhope pigeon men and getting the facilities back into the ownership of the community, where they belong?

[That this House supports the campaign by the Ryhope Allotment Holders to maintain and protect their environment which includes the world's only listed pigeon cree; calls upon the owners of Worktalent Ltd to withdraw their notice to terminate the lease; and believes that these historic allotments should be held in trust by the community and provide facilities for local children to enjoy and understand horticulture and the care of pigeons.]

The Government have a clear strong position on pigeon-fancying: we are wholly in favour of it. As Leader of the House, may I take the opportunity to congratulate and support the work of the Ryhope pigeon-fanciers?

I want to raise a point relating to the business of the House on the Order Paper. You know, Mr. Speaker, that yesterday, in answer to a question that I put, the Prime Minister said:

“There is not an iota of evidence to suggest that at any time until Saturday the Leader of the House knew that the donation was being given by a third party.”—[Official Report, 28 November 2007; Vol. 468, c. 281.]

That question related specifically to donations made not to the right hon. and learned Lady but to the Government party. There is a topical debate today. The right hon. and learned Lady told the Modernisation Committee yesterday that there was no request whatever from anyone in the House that we discuss the question of apprenticeships. As the right hon. Lady is now at the Dispatch Box, will she take the decision to dump today’s business and remain at the Dispatch Box, and let us test the veracity of what the Prime Minister said?

I am sorry that the hon. Gentleman is so contemptuous of the important issue of apprenticeships. There are something like 600,000 vacancies in the economy, and if any person in the country cannot be employed, it is largely because they lack the skills that would enable them to fill those vacancies. I absolutely do not accept his argument that it is not topical and important to discuss apprenticeship, the manufacturing industry and apprenticeship in the House this afternoon. If he wants to make proposals on how we change the system of choosing topical debates, let him make them.

May we have an early debate on the future of zoos, particularly Edinburgh zoo, which is threatened by the Liberal Democrat council’s disgraceful decision to prevent the zoo from selling some land for development purposes—a decision that puts its future in jeopardy?

Edinburgh zoo is world-famous, and zoos are not only an important family day out, but important educational facilities. I know that my hon. Friend’s view is that it is typical of the Lib Dem council to be so out of touch with voters that it does not realise that.

In this place, we are all honourable Members, and the Leader of the House, above all, is meant to epitomise that. For the purposes of the business of the House next week, will she tell us her definition of the word “honour”?

Has my right hon. and learned Friend seen early-day motion 426, which I was asked to table by the European Scrutiny Committee, and which members of the Committee and I have signed? It asks for a specific debate on the European reform treaty before it is signed.

[That this House notes the recommendations from the European Scrutiny Committee of the House for a debate on the EU Reform Treaty before it is ratified; and calls for that debate to be arranged by the Government to allow the House to focus specifically on the Treaty.]

Our Prime Minister will sign the treaty on 19 December, but we have not had a debate in the House on a substantive motion relating to the reform treaty. I urge my right hon. and learned Friend to realise that it is possible for the Government to lance the boil of the accusation that we are somehow signing the treaty in secret.

I do not think that there is anything secret about what the Government are doing on the European reform treaty. There was a report after the summit that agreed the treaty. There will be many days—days aplenty—of debate on the Floor of the House when we debate the EU reform treaty Bill referred to in the Queen’s Speech. My hon. Friend will know that under the guidance of the Deputy Leader of the House of Commons, a review was held of how the House will undertake European scrutiny, to ensure that the good work that he does with his Committee can be improved.

During a recent statement on Northern Rock, the Chancellor published a consultation document called “Banking reform—protecting depositors”. The deadline for replies is 5 December, next week. However, as the Northern Rock problems have continued—not least because of the failure to disclose the letters from the Bank of England and the Financial Services Authority—there is now concern that the tripartite arrangement between the FSA, the Bank and the Treasury may not be the best model for overseeing and regulating the banking industry in this country. Will the Leader of the House ask the Chancellor to make an early statement specifically on the tripartite arrangement between the Bank, the FSA and the Treasury, and will she ask him to put back the deadline for responses to the consultation, so that information in that statement can be fully considered and fed back in any replies?

The hon. Gentleman needs to come to the House a bit earlier if he wants to make that point, because the Chancellor of the Exchequer was just dealing with the issues that he mentions under topical questions. If the hon. Gentleman had caught the Speaker’s eye, no doubt he could have raised that point. The Chancellor has been very forthcoming, and will continue to be so.

As chair of the all-party Scottish football group, I ask my right hon. and learned Friend whether we could have a debate on how genuine fans can access the people’s game. She may be aware that next year the European championship will not be shown in Scotland, but will be shown in England. Will she use her good offices and her influence with the appropriate Minister and Department to carry out an investigation into why the Scottish people are denied the opportunity to watch football, unless they have satellite television?

My hon. Friend raises an important issue that will be of concern to millions of people, and I will bring it to the attention of my ministerial colleagues.

In support of the remarks of the Chairman of the European Scrutiny Committee, I draw the attention of the Leader of the House to the fact that the report produced by the Committee is unprecedented since 1972, because it is a unanimous expression of grave dissatisfaction with the way in which the Government have conducted themselves. With reference to the answer that the Leader of the House gave to the hon. Member for Linlithgow and East Falkirk (Michael Connarty), I regret to say that she is wrong. Under the requirements of the House, including Standing Orders, if the European Scrutiny Committee keeps a document under reserve, there is an obligation on the Government to hold a debate before that document is signed. Therefore it is imperative, and it is an obligation on the Government, to hold that debate before the Prime Minister signs the treaty.

The hon. Gentleman is a member of the European Scrutiny Committee. I hope he will make his proposals about how we can reform and improve the way in which we carry out European scrutiny in the House. Everybody would agree that it is important that the public have confidence that the House is scrutinising European legislation properly. We do not think that that is the case at present, and in the next couple of months we will introduce proposals, which we will discuss with all parties, to reform and improve European scrutiny.

We do not have points of order at this stage. After the statement the hon. Gentleman can raise a point of order.

Does the Leader of the House recall that the Foreign Secretary promised in July, both in the House and in writing, that there would be a debate on Zimbabwe in this Session before Christmas? Given that next weekend Mugabe is coming to a European Union-African Union conference—our Prime Minister should be congratulated on saying firmly that he will not be there—is this not an opportunity for us to debate why the European Union seems to be cancelling the sanction that refused Mugabe travel in order to allow him to attend the conference? Would that not be a wonderful subject for the topical debate next Thursday?

I will take my hon. Friend’s proposal as the subject of a topical debate. She has a long-standing concern about the matter and has raised it many times. I know that it is of concern to all Members of the House.

Will the Leader of the House find time to debate the situation in Bangladesh, where not only have 3,000 people died, but with rising sea levels and climate change, up to 30 million people could be at risk in future? The debate would be appreciated by the House and by the Bangladeshi community. There was a 30-minute debate last night, for which no Department for International Development Minister was available. I should like to see the Secretary of State for International Development taking his place in that debate.

As the hon. Gentleman says, there was a debate in the House last night on the important subject of Bangladesh, and I know that many hon. Members attended and intervened. We will keep under review whether adequate time is being made available or whether information should be provided on Government action and the situation in Bangladesh.

Reverting to next Thursday’s business and the topical debate that she announced, the right hon. and learned Lady might have noticed a growing appetite among those on the Opposition Benches for a more transparent process for selection. She explained that if we are to change the process, we will have to vote so to do, but in the meantime would it not enhance confidence in the selection process if she published the list of topics from which she made her choice?

I would like to knock on the head the idea that somehow we have come up with a proposal about how this should be dealt with, and the Opposition have an alternative agenda, which we are trying to suppress. That is not the case. If the right hon. Gentleman wants to make proposals about how the debates should change, of course we will listen to them. These are early days for topical debates. We want to make sure that they go well.

It is almost a year and a half since Farepak went into liquidation, and people are facing a second Christmas without a resolution. My understanding is that a report has been prepared by the Government. May we have an assurance from the Leader of the House that it will be published quickly, and that we will have a proper debate in the House about the recommendations in the report?

I am sure the whole House would wish to congratulate my hon. Friend the Member for Blaydon (Mr. Anderson) on his award. He makes a serious point about Farepak. He will know that it is being investigated under the Companies Act. We are very concerned that the situation should never occur again. He has done important work by continually raising the subject.

How on earth can we, or the public, have confidence in debates in the House and in European scrutiny unless there is a full and appropriate debate in the House before the Prime Minister goes to sign the treaty? Never mind the proposals for much-needed improvements in European scrutiny. Will the Leader of the House deal with the point that it would be a breach of the existing arrangements for scrutiny unless we have a debate in the House before the Prime Minister takes that action?

We have numerous debates on European issues and numerous opportunities to raise them. If the hon. Gentleman wants to propose that as a subject to be debated on the Adjournment or in Westminster Hall, to add to all the hours that are available to discuss Europe, he is welcome to do so. As I have made clear to the House, and make clear again for the benefit of the right hon. Member for Maidenhead, we will reform the way in which the European Scrutiny Committee works.

The hon. Gentleman cannot raise a point of order until after the statement. He has been here a while, has he not?


I wish to make a statement on the modernisation of Remploy. Since Remploy was founded in 1945, it has played a central role in the lives of thousands of disabled men and women by providing supported employment for those who need it and, increasingly, by placing others in mainstream employment.

Both as a local MP and as a Minister, I have for the past 17 years worked closely with and supported Remploy and, as Secretary of State for Work and Pensions, Remploy workers will continue to have my full support. May I record the grateful thanks of the House for the diligence and commitment of my hon. Friend the Minister for Disabled People.

Of course, the world has developed dramatically since the end of the second world war, not least in how the aspirations and expectations of disabled people have changed, and changed for the better. The vast majority want jobs in mainstream employment, and that is the Government’s priority. That is why we extended the scope of the Disability Discrimination Act 1995. That is why we have been transforming the support that we give to disabled people, moving away from a system that abandons people to the margins to one that helps them to realise their potential.

That is why we spent £66 million last year on the Workstep programme to support 17,000 disabled people. That is why we spent £62 million on access to work, to help 24,000 people. These programmes are already helping disabled people to take their place in an inclusive society. That is why we are introducing the employment and support allowance, which will replace incapacity benefit next autumn. That is why we are extending pathways to work across the country by April next year, offering tailored support to help people on incapacity benefit back into work. And that is why last year, Remploy’s employment services division placed 5,000 disabled people in mainstream employment, for the first time outstripping the number employed by the factory network.

We have helped more disabled people into jobs than ever before. For example, since 2001 the new deal for disabled people has helped over 150,000 into work. None the less, there remains a vital role for supported employment, providing a chance to work for thousands of disabled people who might not otherwise be immediately ready for mainstream work. That has been a central part of Remploy’s work since it was founded, but increasingly, Remploy has struggled to fulfil this role effectively.

Low-wage, low-skill competition from countries like China and the EU accession states has put Remploy factories under enormous pressure. In turn, Remploy has failed to move adequately into higher-value, higher-skill work. Losses have spiralled, and Remploy’s ability to support disabled people has been put at risk. Change is therefore essential for Remploy’s 83 factories across the country, and the 5,000 people whom they employ.

Following the National Audit Office’s report in 2005 and the independent report by PricewaterhouseCoopers and Dr. Stephen Duckworth of Disability Matters last summer, Ministers asked Remploy to develop a new five-year restructuring plan. This was to modernise the business, avoid compulsory redundancy for Remploy’s disabled workers, support substantially larger numbers of disabled people into mainstream work, and stay within a funding envelope of a £555 million taxpayer subsidy over five years, to ensure that escalating costs do not put at risk funding for other Department for Work and Pensions programmes for disabled people.

The reality is that without modernisation Remploy deficits would obliterate our other programmes to help disabled people into mainstream work. With no change, in five years’ time Remploy would require £171 million a year on current trends. That would be £60 million over the £111 million funding envelope, which represents nearly the entire current annual Workstep budget.

In May 2007, Remploy made a proposal, for consultation with the trade unions, to close or merge 43 of the 83 Remploy factories. When I took over as Secretary of State a month later, however, it was clear that national and local management had not exhausted procurement opportunities to maintain the maximum number of Remploy sites. There was also a huge gulf between Remploy management and the trade unions, and the likelihood of destructive confrontation.

In August I therefore asked Roger Poole, a former assistant general secretary of Unison, to act as the independent chairman of fresh negotiations, and I want to record my thanks for the way in which he managed to achieve real dialogue and progress. Although there was no agreement on factory closures, there was significant common ground for the first time. There was agreement on the £555 million funding subsidy, on the quadrupling to 20,000 the number of disabled people Remploy would help into mainstream work, on significant cuts in management jobs and costs, on more efficient working practices, and on the vital importance of generating more public sector contracts—and, in consequence, the need for fewer factory closures.

In September I reaffirmed Government policy on Remploy: that everyone should do their utmost to get a negotiated outcome; that there would be no factory closures without ministerial agreement; and that all public authorities should be encouraged to take advantage of European procurement rules allowing contracts to be reserved for supported businesses. I also reaffirmed, as I do again today, that there would be no compulsory redundancies for Remploy’s disabled workers and that they would retain the protection of Remploy’s terms and conditions, including—uniquely for workers facing plant closures or transfers—their salaries and final salary pensions. Both workers and management now need certainty to end the insecurity and worry for Remploy employees and their families and to allow Remploy management to begin the radical changes that we all recognise are needed.

The final proposals that I am announcing today represent the best package for Remploy’s disabled employees in those difficult circumstances. Copies of the modernisation plan are available in the Vote Office, and a letter with agreed proposals to the trade unions has been deposited in the Library. There will be 15 fewer factory closures, with 55 factories remaining open and 11 merging—down from 32 closures to 17. The sales target for public procurement will increase to £461 million over five years, up from £298 million since the company’s proposals in May. That is a huge and challenging 130 per cent. increase over the current rate of sales of £200 million. There will be a total cost saving of £59 million from around 25 per cent. fewer managers, changes in working practices and reductions in non-wage costs.

Last week I had productive discussions with the leaders of the GMB, Unite and Community, joined by Remploy chairman Ian Russell, and I pay tribute to Ian Russell for his energy and commitment to get the best for Remploy workers. As a result, we have reached further agreements to protect Remploy’s future and its workers. New skills in public procurement will be brought in to ensure that its marketing and sales effort is targeted appropriately. Appropriate employment advice will be available to all disabled employees whose factories are closing. Remploy will provide a travel-to-work package wherever necessary, where employees transfer as a result of mergers. Furthermore, Remploy has been contacted by third parties interested in keeping some form of production or training at six of the sites due for closure—Lydney, Glasgow Hillington, St. Helens, Treforest, Ystradgynlais and Brynamman. At four other sites—Mansfield, Pinxton, Plymouth and York—there is the possibility of staff transfers to nearby plants, most of which are local authority-supported.

I know there will be disappointment that we are unable to keep even more factories open, but the reality is that it is simply not viable. For those sites, including those mentioned above, this is my message: if management, trade unions, MPs and others come up with a credible option involving a takeover or transfer, we will, of course, co-operate, and Remploy will help to facilitate. However, time is very short. The new funding envelope starts in four months’ time—from 1 April 2008.

We have managed to keep open 55 sites only on the basis of very stretching procurement targets and a tough forward plan. It will be up to everyone with an interest in Remploy—Government, management, trade unions, local MPs and other political representatives— to pull together to ensure that those factories meet their ambitious targets, otherwise they, too, could be put at risk.

The proposals that I have presented today are both realistic about the challenges facing Remploy and ambitious for the future. The plan makes some difficult choices, and many hon. Members wish that the circumstances were different, but we are where we are. What is now vital is that everyone concentrates their efforts on making the new Remploy a success. There will be a top-to-bottom restructuring and reskilling of Remploy. The plan will deliver a new beginning for Remploy requiring a radically new approach across the entire operation, which must include better management and better union relations. Last week, I agreed with union leaders that the modernisation and procurement plan will be properly monitored to ensure that it remains on course, so that Remploy can look to the future with a degree of confidence not enjoyed for some years—the people that it was set up to serve deserve no less. I commend this statement to the House.

I start by thanking the Secretary of State for giving me advance sight of the statement.

Today’s announcement will come as a massive disappointment for thousands of Remploy workers, some of whom are in my constituency at the factory in Leatherhead, which is to be closed as a result of today’s news. I suspect that it is also a massive disappointment for hon. Members on both sides of the House who have campaigned in support of the factories threatened with closures. I do not imagine that many Labour Members entered Parliament expecting to be part of a Government who would take tough decisions such as this.

We know and understand the nature of the challenge that Remploy faces, and I know that its staff do as well. I have visited several of the threatened factories, which have hard-working and committed work forces who are very anxious about the future. No one on either side of the Hou