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Prime Minister

Volume 470: debated on Wednesday 16 January 2008

The Prime Minister was asked—


This morning I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall have further such meetings later today.

Despite a decade of economic stability with low inflation and low interest rates, my constituents—[Interruption.]

Thank you, Mr. Speaker.

Despite those achievements, my constituents are now understandably concerned about the way in which global economic issues affect them. How does my right hon. Friend feel that these events compare with those of the early 1990s, when Britain was plunged into recession after recession?

It is right that people are concerned about what is happening in the global economy, and it is right that people want to know, as a result of global financial turbulence, what will happen to our economy over the next few months. That is why I am pleased to say that yesterday’s inflation figures showed that our inflation rate was 2.1 per cent., half the rate in America, and why I am also pleased to report that today’s employment figures showed that employment had risen by 175,000 in the last quarter, and was up by a quarter of a million over the year. Unemployment is down, the claimant count is down and inactivity is down. Under our Government, unemployment is down and employment up: we have the best employment record in history.

Last year, the Government promised that they would get back all the taxpayers’ money lent to Northern Rock. Can the Prime Minister tell us the exact amount of both the loans and the guarantees, and will he repeat today the pledge that all the taxpayers’ money will be paid back?

That is our intention. If I may say so, I welcome the chance to bring the House up to date on what is happening with Northern Rock. Northern Rock shareholders and depositors were let down by bad management. It was a bad business plan.

In September, the Leader of the Opposition was good enough to say that he overwhelmingly supported our action. The action that we took was first to ensure that there was stability in the economy, and we said that to ensure stability we would secure the deposits of all Northern Rock depositors. We also said that we would stand behind the company with support from the Bank of England. In the next few weeks we will consider how we can find buyers for Northern Rock, and I think everyone in the House would say that we should rule out no option in doing so. That is the right course to take.

Let me tell all Members what comes first. We had to intervene to ensure stability, so that the instability of Northern Rock would not spread across the economy. That is what we have achieved over the past four months, and the Opposition should be supporting us, not criticising us.

I asked the Prime Minister a very specific question about the figures. I think that the taxpayers, each of whom is currently lending about £1,800 to this bank, would like the figures to be confirmed in the House of Commons. It has been reported that the taxpayer is exposed to the tune of £55 billion: £26 billion of emergency loans and £29 billion of guarantees. Will the Prime Minister confirm those specific figures?

The Governor of the Bank of England announces the figures on what is happening every week, but I have to ask the Leader of the Opposition: he said in September—[Interruption.]

The Leader of the Opposition wholeheartedly supported our action. He said that it was right to inject “liquidity to Northern Rock”. Is he changing his mind?

Let the Leader of the Opposition answer in the way he wants to answer—[Interruption.] Order. He does not have to answer the Prime Minister's question.

I asked the Prime Minister a specific question about the figures, which he simply could not bear to read out. That is what taxpayers who are worried about supporting the bank and about the extent of the support are asking about.

Let me ask the Prime Minister something else. At the time that the guarantee was given, was he advised that the level of taxpayer support could reach this huge level of £55 billion?

I have said that we will do what is necessary to protect the stability of the economy. I do not apologise for taking the action that is necessary because it has ensured the stability of the economy. Perhaps the Leader of the Opposition will answer the question: does he still support our action?

For once, I did not ask the Prime Minister for an apology. I just asked him a straight question about the figures and whether he was advised about how bad it could be. He will not give an answer, so we do not know whether he was advised that the taxpayer could be in to the tune of £55 billion.

Let me ask the Prime Minister another specific question and see whether he can answer this one. Can he give an assurance that the level of support required from the taxpayer cannot get any higher than £55 billion?

It is precisely for that reason that we do not provide a running commentary on figures. Under any Government, including the previous Government, it was not the practice to pre-empt what the Bank of England does, which is to announce the figures itself, but I have to return to this point. We intervened to ensure stability in the economy and to ensure that Northern Rock would not spread across the economy to the rest of the financial system. We also intervened to protect depositors. Both those objectives in the past four months have been achieved. Is the right hon. Gentleman now telling me that, from a position of wholeheartedly supporting that action, he is now against it—yes or no?

I will tell you what you did. When it came to the need for a total guarantee of deposits, you dithered and delayed. When it came to the opportunity of pushing for a sale with Lloyds TSB, you dithered and delayed, and when it came to the advice that you were getting to sell the bank straight after the bank run, you dithered and delayed. Why did you dither and delay? It was because you were planning a general election. Will the Prime Minister confirm that he received advice from his financial advisers to push for an immediate sale after the bank run?

No, and there was no offer from Lloyds TSB, as the right hon. Gentleman alleges. He should return to the substance of the issue: if we had not intervened to save Northern Rock, there was a danger that that would spread across the whole economy. He supported our doing that in September. Does he still support us now? If we had not intervened, depositors would have lost their money. Their money has been protected. He supported us in September on that. Does he support us now? I say that we have taken the right, consistent action in the interests of the stability of the economy. To go backwards and forwards as he is doing would put the stability of the economy at risk.

The substance of the issue is that it is the Prime Minister’s regulatory system, it is his bank failure, it is his dithering, and it is his failure to deal with this issue. If it is the case, as he says, that he was not advised to go for an immediate sale, can he explain why the Bank of England was quoted as saying that he was

“unable to focus because morale throughout the government is so low”?

The fact is that we have had months of dithering and billions of pounds of taxpayers’ money is at risk. Does the Prime Minister accept that, if nationalisation goes ahead, it will be a massive failure of Government policy and a fresh chapter in the incompetence of this Government?

The Bank of England supports our action, the Financial Services Authority supports our action, and the right hon. Gentleman used to support our action—[Interruption.]

The Bank of England supports our action, the Financial Services Authority supports our action, and the Opposition used to support our action. I have looked at the policy of the Opposition between Sunday and Wednesday: on Sunday, the right hon. Gentleman said he was against nationalisation; on Monday at his press conference he said, perhaps by mistake, that we should look at nationalisation; and on Tuesday night’s “Newsnight” the shadow Chancellor said that we should look at administration, which is a route to a fire sale of the asset. They change their position every day; the only change they represent is that they change their positions all the time. We are for stability; they would bring instability.

Were the Prime Minister and his Government aware of his predecessor’s plan to attend the conference of the main party of the French right to announce his candidacy for the presidency of the European Union, as a prelude to his candidacy for the presidency of the world, the universe and everything? Did the Prime Minister know of that intended candidacy when his predecessor was negotiating the European constitution, and did that not represent a conflict of interests?

My right hon. Friend the former Prime Minister is doing a wonderful job because he is speaking up for peace in the middle east; I approve of his taking up any opportunity he gets to put his advocacy of a peaceful settlement for the middle east, and he was right to do so.

Q3. On new year’s day, little Hermione Bateman was born, 11 weeks prematurely. She is alive today only because of the prompt expert help she received from my local hospital. Is the Prime Minister aware that in 15 months’ time a baby such as Hermione will have to be taken 21 miles to Hastings to access such emergency care? Why are babies’ lives being put at risk in this way? (179209)

I am aware of the issues the hon. Gentleman raises, but the recommendations on the reconfiguration of maternity services were made by consultants and clinicians on the ground, and they are in the interests of the safety of all patients, all mothers, and all daughters and sons who are born. I hope that, on reflection, the hon. Gentleman will look at the massive investment we are making in the national health service, both in his area and in other areas. There are six new hospital developments in the whole of the region that he represents, and there have been 7,000 new staff, and waiting times of six months or more, of which there were 30,000 in 1997, are down to 57. That is what the health service is achieving.

Q2. Does the Prime Minister agree that the security of supply of electricity generation is a priority for any country’s well-being and true independence? Can the Prime Minister assure me that the Energy Bill, which gets its Second Reading next Tuesday, will protect the Scottish economy from any political gerrymandering of the planning laws envisaged by the Scottish National party Administration in Edinburgh? (179208)

My hon. Friend takes a great interest in energy matters. The availability of secure energy is one of the big issues affecting this country, and it is what led to the energy White Paper last week, to our decision on nuclear power, and to our decisions to extend renewable sources of energy, to make ourselves less dependent on foreign sources of energy and to cut the carbon that is used in energy. I hope that every part of the United Kingdom will feel able to support all those decisions.

The Royal Institution of Chartered Surveyors says that home repossessions will rocket this year by 50 per cent., with one repossession every 12 minutes. What comfort can the Prime Minister offer the 45,000 British families who now face the prospect of losing their homes this year?

What I can say to them is that we are determined to have low interest rates; to have low interest rates we have to have low inflation; and to have low inflation we have to have a decent economic policy, which I am afraid the hon. Gentleman’s party does not have.

The reality is that the Prime Minister allowed, on his watch, grossly irresponsible lending practices by banks to destabilise the housing market. Will he act now to ensure that mortgage lenders take their responsibilities seriously and do more to stop evictions, or will he just sit there wringing his hands while British families lose their homes?

I think that the hon. Gentleman forgets that there are 1.5 million more home owners under a Labour Government than there were before our Government started. We have extended home ownership to all regions of the country and to people who previously could not afford it.

I have been given a copy of the dossier on the hon. Gentleman that, unfortunately, was prepared by the person sitting next to him, who suggests that on every major economic and social issue the leader of the Liberal party has flip-flopped, and keeps flip-flopping.

Q4. Following on from the point raised by the leader of the Liberal Democrats, may I ask the Prime Minister whether he is aware of the very positive impact that this Government’s housing market renewal programme is having in former mining areas, such as Grimethorpe and Thurnscoe in the Barnsley area of my constituency and Mexborough in the Doncaster area of my constituency, in terms of future housing provision? Does he agree that such a programme has to be built around a principle of community sustainability and against a backdrop of a sound and stable economy, which this Government have provided for the past 11 years? (179210)

I am grateful to my hon. Friend because, as he says, massive housing investment has been made in his constituency—this is the answer to the Liberal party’s point—and that housing investment will continue with £1 billion more provided in the next three years. We are determined to remove substandard housing, to have more affordable housing and to extend home ownership, but that is possible only if we run a strong economy. I say to all Members of this House that ours is the country that has managed to have low inflation at the start of this year, half that of America, and at the same time has seen jobs expanding when unemployment is rising in America and in other countries, and that gives me hope that our economy can withstand what is clearly global financial turbulence.

Q5. The Prime Minister has made it clear that the Secretary of State for Work and Pensions is a dead man walking, so what arrangements is he making for a competency transplant? (179211)

When it comes to the work of the Secretary of State for Work and Pensions, unemployment is down; employment is up; more single parents are in jobs; fewer people are claiming incapacity benefit; more long-term unemployed people are getting back to work; and, since my right hon. Friend became Secretary of State, hundreds of contracts have been signed with local employers to get thousands of people back to work. That is why I have confidence in what he is doing.


We continue to monitor the humanitarian situation in Darfur. Some 4 million people are dependent on food aid, 2 million people have been displaced and 280,000 people have had to leave the country. We continue to work with the United Nations and the African Union to bring peace to that troubled region.

The fact that the Darfur genocide is now entering its sixth year is largely down to the UN Security Council, especially China, which has blocked or diluted efforts to stop the violence, leading the Khartoum regime to treat the United Nations-African Union Mission in Darfur protection force with contempt. Will my right hon. Friend say how he will tackle the continued failure of the UN to secure compliance with its own edicts and decisions, so that the looming threat of the withdrawal of humanitarian organisations such as Médecins sans Frontières can be avoided?

I praise my hon. Friend for his long-standing commitment to, and interest in, the area of Darfur and the problems that people are facing. As I said a minute ago, the problems are appalling and run to hundreds of thousands of people having been displaced or being on aid.

My hon. Friend mentions China. I talked to the Premier of China this morning about this very issue, because I believe that China and the United Kingdom can work with other countries to make sure that the Government of Sudan ensure that a ceasefire is properly administered, to bring in the African Union peacekeeping force, which is supported by the United Nations—20,000 more peacekeepers—and to move towards political talks that can bring a political settlement, where all parties, including those that did not attend the previous talks, are brought to the table. On my visit to China, I intend to continue the talks with Premier Wen so that all of us, including the Chinese Government, add to the pressure for a peaceful settlement in Darfur.


Q7. The Prime Minister talks about low inflation, but the cost of living index is rising hugely. Food prices have gone up 7 per cent., energy prices have gone up 15 per cent. and petrol product prices have risen by more than 20 per cent. Why is the rate of inflation running at a higher rate now than the one his Government inherited? (179213)

But it is not. Inflation is 2.1 per cent. The hon. Lady makes an important point: energy prices have been rising—coal, oil and gas—by 60 to 80 per cent. in every part of the world. Food prices have been rising as a result of what has happened to the harvest. Therefore, it is all the more remarkable that our inflation is 2.1 per cent., when it is 3 per cent. in the euro area and 4 per cent. in America, on the same comparable index. That is why we have been able to bring down interest rates in the past few months, but they have not been able to do so in the euro area. We approach the global financial turbulence with low inflation, low interest rates and high employment, and if we can make the right long-term decisions on the economy, we can withstand the global financial turbulence. To say that oil and other commodity prices are going up and that we still have low inflation shows the achievement in getting inflation down.

Q8. On Monday, the Prime Minister said that he was very worried about the content of video and computer games. Some of those games, such as Manhunt 2, depict scenes of torture and murder using hammers, knives and guns. They seem to make a virtue of gratuitous and graphic violence. Will he meet a delegation of Members, including the hon. Member for Canterbury (Mr. Brazier), who has a private Member’s Bill on the subject, to see what further steps the industry can take to show better responsibility? Does my right hon. Friend, as a parent, agree that— (179214)

My right hon. Friend is right, and this is an issue that concerns all parties in the House and every parent. It is right that we look again at the classification system for those games and at what is happening on the internet in influencing young children. That is why the Secretary of State for Children, Schools and Families has set up the Byron review, in which Dr. Tanya Byron is looking at these very issues. We want children to be able to enjoy the benefits of the internet and video games, without being influenced by the pornography or violence of them. Dr. Byron will report in March 2008 and while it would be premature for me to say what she is likely to recommend, the classification system is one of the things that she is looking at. I hope that when we get the report we can have a debate in this House. I would be happy to meet my right hon. Friend’s delegation and move forward whatever changes in the law are necessary.

Last Saturday, three children in my constituency had their grandmother murdered by their father, Gary Weddell, who then committed suicide, after he had been granted bail after being charged with the murder of his wife, the mother of the children concerned. Will the Prime Minister please ensure that the case is looked into, so that lessons are learnt and so that no other family has to endure a similar tragedy?

This is indeed a set of tragic circumstances that are almost difficult even to contemplate—that someone was let out on bail and then apparently is alleged to have murdered his mother-in-law and then to have taken his own life. The question is why bail was given. It is not in the power of the Government to give bail, although of course it is up to us to look at any laws affecting that. It was a decision by the judge, who set down an amount of money and probably took into account the fact that the man was a policeman. Those are the things that we have to look at, and if any changes in the law are necessary, we will make them.

Q9. Does my right hon. Friend agree that we can invest £8.4 billion in the supply of social housing over the next three years because of this Government’s sound stewardship of the economy, which is very different from the Tory record? It is because of their neglect that there was a £19 billion housing repair bill when they left office. (179215)

I hope that all parties will welcome the 50 per cent. increase in social housing that we are about to bring about through the measures that we are taking in the public spending review. I hope particularly that young couples will benefit from the supply both of affordable rented housing and of affordable housing to buy. I hope that the Opposition will reconsider their policy of opposing many of the housing measures that are intended to deliver more housing space for more people in this country.

The Plain English Campaign today described the consultation on Heathrow expansion as atrocious and said:

“This document effectively takes away human rights…No ordinary person could be expected to read and understand this”.

Will the Prime Minister please instruct the Department for Transport to withdraw the consultation until it can be written in comprehensible language, and will he tell Ministers and officials that it is a disgrace that none of them will attend a single public meeting on that crucial point?

The hon. Lady gives the impression that because of the wording of the document she does not understand the issue at stake, which is whether there will be a new runway at Heathrow. The consultation is there for the public to involve themselves in. I hope that people will join it vigorously, and then a decision can be made.

Q10. Daresbury laboratory in my constituency has been carrying out world-leading scientific research for 46 years. The science and innovation campus at Daresbury is a huge success, attracting science and high-tech businesses and creating high-quality jobs. Two reviews are about to take place—the McKillop review and the light source review—both of which will have an impact on the future of Daresbury laboratory. The knee-jerk reaction of the Science and Technology Facilities Council to cut research grants by 25 per cent. and staff by 25 per cent. to meet an £80 million shortfall in its £1.9 billion budget is a cause for concern— (179216)

Daresbury is a world-class facility. I am proud that we have such a facility in our country and in the north-west region, as well as an innovation centre that is world beating and path breaking in its research. My hon. Friend is absolutely right that there are two reviews. The McKillop review will consider how best we can meet the future needs of Daresbury. We have increased the amount of money to be spent on the Science and Technology Facilities Council by 13 per cent. during the spending review period. I hope that we will be able to see an expansion of the work done at Daresbury, which will benefit the whole country.

I apologise, Mr. Speaker. There are times when I am on another planet; that was one of them.

Will the Prime Minister assure us that Mr. Stephen Carter, his chosen nominee for Northern Rock, has no residual interest whatsoever in Brunswick Group?

Q12. In my constituency, people living in the most deprived areas have a life expectancy seven years shorter than those in the most affluent areas a couple of miles away, yet national reports have indicated that they could have many years added to their lifespan if they made some lifestyle changes. Will my right hon. Friend assure me that in years to come the NHS will reach out to my constituents and advise them on how to change their lifestyles so that they can lead healthier and longer lives? (179218)

I praise the work that my hon. Friend does in the health service, in particular among carers. We attended a seminar on that issue in Leeds on Friday, where carers asked us to do more to make their lives better, particularly with respite care. As far as inequalities and life chances are concerned, we are putting forward measures for check-ups, screening and preventive vaccines so that people can identify their risk of heart disease, stroke and cancer. That will save lives, particularly in the communities that my hon. Friend is talking about.

Q15. What was the point of invading Iraq, which led to the deaths of 150,000 Iraqis, just to hand over Basra to militant Shi’a militias while the army is holed up in the airport? (179221)

Violence in Basra has gone down by 90 per cent. over the past few months. Our troops there are doing a great job in training the Iraqi army’s security forces and the Iraqi police. It is wrong for the hon. Gentleman to diminish the effect of building economic prosperity in the Basra area. As for invading Iraq in the first place, Saddam Hussein had offended UN resolutions and the international community for more than a decade.

Q13. Although I do not foresee any great demand for my kidneys or liver, may I welcome the Prime Minister’s proposals on human transplants? On a much more serious note, will he act on the matter urgently, as people are dying every day for lack of donors? (179219)

As my hon. Friend knows, a report on organ donations is to be published today. It will recommend ways to increase the number of people prepared, under the present system, to give their organs when they die to save other people’s lives. More than 1,000 people lose their lives each year because no organs are available for transplant. Another report on this matter will be prepared later this year, and one proposal that may be worth discussing then is that, while people may opt out of organ donation, there could be a family veto on whether organ donation can go ahead. I believe that that would satisfy many religious objections, while at the same time ensuring that thousands of people are saved as a result of organ donations being available. I hope that there will be all-party support for taking action.

Following the Government’s recent naval base review, there was widespread concern at Plymouth’s Devonport naval base that ships currently based there could be moved to Portsmouth in the next few years. Will the Prime Minister reassure the base’s work force that their reward for generations of dedicated service to this nation’s security will not be simply death by a thousand cuts?

As the hon. Gentleman knows, Plymouth will refit the Trident submarine, and it has a huge amount of work in the years ahead. A massive amount of investment has gone into Plymouth, and I can assure him of our commitment to the dock yard there. At the same time, he will acknowledge that that commitment is possible only because we are spending more on defence every year. We will continue to do so, and that depends on there being a healthy economy.