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Volume 470: debated on Wednesday 23 January 2008

Before I list my engagements, I am sure that the whole House will join me in sending our profound condolences to the family and friends of Corporal Darryl Gardiner of the Royal Electrical and Mechanical Engineers, who was killed in Afghanistan on Sunday. His death reaffirms our deep gratitude to those who have lost their lives in the service of our country. Our thoughts are also with Corporal Gardiner’s five colleagues who were injured in the attack.

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.

I join the Prime Minister in paying tribute to Corporal Darryl Gardiner.

Will the Prime Minister please tell us what exactly is happening on Britain’s streets when the Home Secretary needs an armed police escort to go and buy a kebab? [Interruption.]

I want everyone in Britain to be, and feel, safe on our streets. Crime is down 32 per cent. since 1997, and violent crime is down 31 per cent. There are more police than ever in our country, and we will do everything in our power to ensure the safety of our citizens.

Q2. My question is about flood defences. When a community has been flooded, the people there feel great fear and anxiety the next time there is heavy rainfall. That happened in Carlisle on Monday. Parts of the city have good flood defences, and extra defences will be put in place where they are needed, but what is happening nationally? The Government have massively increased funding for flood defences since last year’s tremendous downpours, but that will not be enough. [Interruption.] Will the Prime Minister assure the House that he will look to the insurance companies and local authorities for other funding sources? Will he review—[Interruption.] (180920)

I sympathise with those of my hon. Friend’s constituents who are facing floods, and with everyone around the country who has been hit by them. Sir Michael Pitt has undertaken a review of our policies since last summer’s floods, and we will implement all his recommendations. However, expenditure on flood defences was £300 million in 1997: this year, it is £600 million, and it will rise to £800 million in 2011. That means that more than £2 billion will be spent on flood defences in the next three years, and of course we will consult with local authorities to ensure that the money is spent in the best way.

I join the Prime Minister in paying tribute to Corporal Darryl Gardiner, who was killed in southern Afghanistan on Sunday. He died serving our country.

Taxpayers have the right to know what their total exposure is under the Prime Minister’s latest plan for Northern Rock. Let us be clear: the rescue package is as much for his reputation as it is for the business. If the bonds are not paid back, and if Northern Rock fails to meet its obligations, what is the total exposure? How much?

The loans and bonds are secured against the assets of Northern Rock, which, as everyone understands, has a high-quality loan book. It is our intention to get the best deal for taxpayers: they will get their money back, and make a profit.

The Prime Minister will not tell us how much the taxpayer is in for, but the figure is £55 billion. Effectively, he has lumped every household in the country with a second mortgage. Taxpayers want to know how long it will be before they are off the hook, so will he say how many years it will be before the bonds are repaid?

We would be the first to be repaid under the scheme. The loans and the bonds are secured against the assets of Northern Rock. I think that the right hon. Gentleman should think very carefully about what he has been saying about Northern Rock. In September, he said that he was wholeheartedly behind our proposals to save the company. Then, in the last few weeks, he and his shadow Chancellor have toyed with nationalisation, administration and a private sale. Is it not about time that the Opposition were consistent in their thinking about Northern Rock?

The Prime Minister talks about changing positions, but last week he was all in favour of nationalisation. Then, he gets a tough time at Prime Minister’s questions, he gets on an aeroplane with Richard Branson and he drops the whole plan. The Prime Minister will not tell us how much taxpayers are in for or how long they will have to wait to get their money back. It is like a used car salesman who will not tell someone the price, will not tell them the mileage, and will not give them a warranty. He has gone from Prudence to Del Boy without even touching the ground. This deal depends on a massive effective subsidy from the British taxpayer to Northern Rock shareholders through either lower borrowing or a guarantee. So can the Prime Minister tell us how much that taxpayer subsidy is?

The loans and the bonds are secured against the assets of Northern Rock. It is as clear as that. If I may say so, the reason why we intervened is the reason why we still are intervening: to secure the stability of the economy. I believe that all parties in the House should be in favour of ensuring that what happened at Northern Rock does not spread to the rest of the economy. I believe that all parties in the House would want to ensure that the depositors of Northern Rock and other building societies are protected, but what we are now seeing is the height of opportunism on the part of the Conservative party. One day it favours nationalisation; another day it favours a private sale; then the shadow Chancellor says that his favoured option is now administration. Let me just tell the House what administration means. It means a fire sale of the assets, it means closing down the company and it means the Government losing billions of pounds. It is the worst possible solution and the Conservatives are not only guilty of inconsistency, but guilty of putting the stability of the economy at risk.

The fact that the Prime Minister will not answer a single question just shows what a dodgy deal this is. He asks about administration. Does he not understand that administration and liquidation are different things? Let me put it this way. Administration is what the Government are in at the moment; liquidation is what is going to happen by the British people at the next election.

The more people hear about this deal, the more they realise that it is a complete con. The Prime Minister is taking a lot of debt, packaging it up and selling it off as bonds. This is a sub-prime deal from a sub-Prime Minister. Let us see whether he can just answer this one simple question. Can he at least tell us what fee is being paid to Goldman Sachs?

That is a matter of negotiation between the Treasury and Goldman Sachs, and it will be published at the right time.

Let us look at the Opposition’s policy of administration. Administration means a fire sale of the assets; it means selling off the assets at the bottom of the market and losing billions of pounds of money. The shadow Chancellor rejected administration in November but is now proposing it in January. The Opposition’s policy is the worst possible policy for dealing with the problem and they have flip-flopped between nationalisation, private sales and administration. They have no credibility on the economy and the reason why we intervened is the reason why we think that the economic record of this Government is a good one. For 10 years we have preserved the stability of the economy. The figures out today show that growth in Britain was 3.1 per cent. last year, and it is the highest growth of the G7. We have more people in employment than ever before and we have lower inflation than our major competitors. That is the recipe for moving forward, not the flip-flop policies of the Opposition.

Only this Prime Minister could talk about low inflation when families filling up at the pumps are paying £1.07 for a litre of petrol. People wonder what planet he is living on.

The Prime Minister will not tell us how much the taxpayer is liable for, he will not tell us for how long the taxpayer has got to prop up this business, he will not tell us what the subsidy is and he will not say how much he will pay to Goldman Sachs. Will he at least say this: in retrospect, does he recognise that it was a complete error of judgment to get on an aeroplane with one of the principal bidders, Richard Branson, and fly round the world?

Not at all, and just remember that the Opposition supported our policy in September and October, but for opportunistic reasons, they have moved against it. Let me tell the right hon. Gentleman about inflation in the economy. Inflation in Britain is 2 per cent. In the Euro area it is 3 per cent., and in America it is 4 per cent. We have kept inflation low because we have made the difficult decisions that the Opposition would never face up to. As for the economy, his own adviser—the arts spokesman for the Conservative party—said only yesterday:

“in the 90s…what killed people were paying 15 per cent. interest rates on their mortgages.”

That was under the Conservative Government. He continued:

“Now, there is no reason for interest rates to go up excessively…because we…still live in a low inflation economy.”

That is what a Conservative party spokesman said. The right hon. Gentleman should acknowledge that that spokesman is right and he is wrong.

What everybody knows is that taking one of the principal buyers of the business round the world was bad judgment. The deal is bad judgment, and the worst judgment of all was leaving Britain with the highest budget deficit in Europe at a time of economic difficulty. The Prime Minister is now synonymous with delay and dithering. Is not the Northern Rock deal just damaging, dodgy, extra debt from a failed Prime Minister?

It is not bad judgment to take British business men and women to win orders for British exports in China and India. I have no apology to make for that. As for the right hon. Gentleman’s policies, we get from him merely slogans, and no substance whatever. If I may say so, the record of this Government, as he will find when he goes to Davos this week, is acknowledged around the world. We have low inflation, low interest rates and high employment, and had the best growth of any industrialised country in the last year. We are determined to maintain the stability of the British economy; it would be put at risk under Conservative policies for instability. We are the party of stability, and will always remain so.

In contrast to what we have just heard from the Leader of the Opposition, given all the turbulence in global markets and the impact that that can have on people’s everyday lives, is not the most important thing to continue with the Government’s measures for economic stability, which have brought us low inflation, low interest rates and high employment? That is the best way of sustaining economic strength for the future.

Only yesterday, a former Chancellor of the Exchequer, while acknowledging the difficult conditions in the world economy and the problems of the last few days, said of Britain:

“we have maintained a good level of growth last year. The level of employment in the country is quite good. Some of our businesses are extremely competitive. The level of earnings remains quite high.”

That is the record, acknowledged by a former Chancellor. Is it not about time that the shadow Chancellor and the Leader of the Opposition acknowledged that we are doing the right things by the British economy? In spite of their views, we will continue to do so.

May I associate myself with the expressions of condolence and sympathy for the friends and family of Corporal Darryl Gardiner?

As we have heard, the Prime Minister this week unveiled his cunning plan to nationalise all the risks of Northern Rock, but to privatise the profits. How can he justify fleecing the taxpayer by handing a blank cheque to the private sector, when he knows, unlike the Conservatives, that temporary nationalisation is the right thing to do?

In the proposals that we put forward, we share in all the benefits as the Northern Rock company, or its successor company, does better. If he looks at the small print, the hon. Gentleman will see that we are protecting the interests of the taxpayer in the best way possible. Again, I am afraid that it is very difficult to listen to the Liberal party on economic policy. Yesterday he spent another £2 billion; a few weeks before that he said that he had £1 billion of extra spending commitments, but he could not justify them or explain how the money would be spent. None of his policies add up. Is it not time that he went back to the drawing board?

Is not the real truth that the Prime Minister will not nationalise the bank because he is running scared of the Conservative party? [Interruption.] It has no solutions—[Interruption.]

The Opposition have no solutions of their own. When will the Prime Minister stop listening to them and do what he knows to be right? Or will he continue to insist that British taxpayers pay through the nose for years to come because of his own lack of leadership?

May I just say it in this way: nationalisation is one of the options that is open to us, as the Chancellor has made clear—nationalisation, public ownership, but it would be on the road back to private ownership, as the Liberal Democrat shadow Chancellor has acknowledged. But we are right to look at every option. If commercial companies come to us and say that they have proposals to run Northern Rock in a better way in the interests of the shareholders and depositors than it is being run at present, we are right to look at those proposals. It would be a mistake for us to reject proposals coming from the private sector, as the hon. Gentleman seems to want to do. All options are on the table. We will do what is best by the shareholders and the depositors of Northern Rock, and we are determined at all times to maintain the stability of the economy. We have done that for four months after Northern Rock went into difficulties. We have maintained stability and the difficulties have not spread into other companies and other institutions. We are determined to continue to maintain stability, and all our decisions will be made on that basis.

Q3. May I ask the Prime Minister to focus on the plight of the working poor in this country? Is he aware that despite the clear intentions of the customers who leave tips to people in the hotel, restaurant and hospitality industry, the tips are not paid in addition to those people’s minimum wage, but are paid as part of the minimum wage? That must be addressed. Will he agree to meet me and other MPs who have been campaigning on the issue, to discuss how his Government can at last end that shameful practice? (180921)

Of course I am happy to meet my hon. Friend and colleagues to talk about the future of the minimum wage. Where tips are paid directly to the employee, they go to the employee. Where they are paid through Visa or through a bill, that is a matter for the employer to negotiate with the employee. The great success of the minimum wage is that it has risen by 50 per cent. since 1999, faster than wages in the economy. The Conservative party said that the minimum wage would cost us 2 million jobs. We introduced the minimum wage, we have raised it by 50 per cent. and we have created more than 2 million jobs.

The Prime Minister has just quoted with approval the reasons that I gave yesterday why this year’s sharp slowdown in the economy might yet not turn into a recession. I thank him for that. Does he also agree with my view that he handed on the public finances to his successor in a quite appalling mess, which means that fiscal policy cannot be used to help in the present situation, that his dithering and incompetence over Northern Rock have added very considerably to our existing indebtedness, and that the fiscal rules on which he used to rely when making his claims to economic stability are now quite incredible and have been shattered by his own policy?

I know that the right hon. and learned Gentleman is trying to rescue himself with his own party after his unguarded comments yesterday about the success of the British economy. As someone who inherited a very difficult economic situation from him in 1997, may I tell him that we have observed all our fiscal rules. We made the Bank of England independent against his advice. We have had 10 years of growth, which the Conservatives would never have had. He predicted a recession in 1997; there was no recession. We have maintained stability, which he would not have done.

Q4. The latest economic survey for the north-east shows high levels of business confidence, and there is no doubt that the region’s economy has improved under the stewardship of my right hon. Friend, with massive reductions in unemployment and record levels of employment. Much remains to be done, however, to reduce the gap between the north-east and other regions. What does my right hon. Friend consider to be the greatest threat to continued progress— (180922)

Long-term unemployment in the north has fallen by 70 per cent. Long-term youth unemployment has fallen by more than 70 per cent. More people are working in the north of England as a result of the Government’s policies, and we are determined to maintain that. That success would be put at risk by opportunistic policies that risked the public services in favour of £10 billion of tax cuts and meant that we could not spend on health, education and the new deal in the interests of the people of the north. That is why I urge people to favour our policies against the policies of the Opposition.

Q5. The Prime Minister was obviously able to answer that question, because it was one that he wrote earlier. Last week, the Government announced that Gloucestershire would be a pilot area for short breaks for disabled children. My Conservative colleagues on the council are already working with local parents to develop that. The Prime Minister will know that in the comprehensive spending review he promised that NHS spending would match that coming from the Department for Children, Schools and Families. Can he confirm that my local primary care trust will indeed get £3.6 million over the next three years to pay for those short breaks? (180923)

I can confirm that primary care trusts will get money to make it possible for there to be breaks for carers of children. I agree that we have to do more for disabled children, about whom we have had a review, and for the carers of disabled children. I had a seminar with many carers in Leeds only a few days ago. There is support for more action on respite care, more help for carers’ pensions, more for the carer’s allowance and more support for carers in all their different needs. We are determined to move that agenda forward, and I hope that there will be all-party support for that.

Given that reply, does my right hon. Friend agree that following the reviews conducted for this House on disabled children and their families, the £34 million allocated to Scotland should be spent on the relevant services, including the NHS—and those alone? That is happening in every other constituent part of the United Kingdom.

I am grateful to my right hon. Friend, who has taken a long-term interest in these matters and piloted through a major Bill for the protection of disabled people. The money allocated for disabled children and disabled people should go to disabled children and disabled people, and we will do everything in our power to make sure that, in every part of the United Kingdom, the needs of the disabled are properly recognised.

Q6. With police investigations under way into four projects of the London Development Agency, and with millions of pounds of central Government money unaccounted for, will the Prime Minister join me, and colleagues from across the House, in calling for an independent investigation into corruption at the LDA and the role of Mayor Ken Livingstone? (180924)

That is a matter for the police. If we look at London, we see that jobs are up, police numbers are up, crime is down and transport is getting more investment. That is why we need a Labour Mayor.

Q7. Working people in my constituency are just as concerned about their employment prospects as those who come from abroad to work in the UK. Will my right hon. Friend protect both British and overseas workers by guaranteeing fair wages and conditions for all? In the absence of a European directive, will he ensure support for domestic legislation that protects agency workers? (180925)

My hon. Friend is absolutely right to raise the question of vulnerable workers in the United Kingdom—those who have come here to work or who were already in the United Kingdom. That is why we have created a forum to deal with many of those issues. As for the agency workers directive, we look forward to there being a European agreement on that. If there is not a European agreement, of course we will look at what we can do domestically to protect workers and ensure that they have the rights that they should have.

In an age gone by, the Prime Minister might well have been a covenanter. Is he concerned about the current breach of the covenant with the military and about the breach, as we speak, of the covenant with the police services of England and Wales?

The Chief of the General Staff has said that there is not a breach. That is because we are spending more on defence than ever before. Over the course of the last year, we have made arrangements to give better allowances to those serving our country abroad. We are doing everything in our power to make sure that they are not only safe and well protected, but given the best allowances and accommodation. We will continue to do everything in our power to protect our military forces.

As far as the police are concerned, there has been a 39 per cent. rise in police pay over the last 10 years. People understand that in the fight against inflation it was necessary to stage public sector pay awards. I would like to have given the police more. I would like to have given the nurses more, and more to other public sector workers who found that their wages were staged. But if pay rises are wiped out by ever-rising inflation, no benefit will go to the police or anybody else who receives those pay rises.

I hope that over the course of the next year, we can move to a two or three-year pay agreement that will give stability and certainty to the police and other public sector workers. We believe that they do a great job. The important thing, however, is to recognise that in the fight against inflation it is necessary to take action at the right time. Others might not take that action. We did.

Q8. If Britain’s economy is to continue to meet the challenge of global competitiveness, we need to continue to upskill workers. In that context, the recent announcement on ELQ—equivalent or lower qualification—funding is a welcome recognition that the concerns of the Open university and others have been listened to. What more are the Government doing to help mature students and women returners, in particular, to access higher education? (180926)

No one has fought harder for the Open university than my hon. Friend. I congratulate her, as the MP for Milton Keynes, on what she has achieved in fighting for that institution. We have just allocated £100 million to give grants to 20,000 people to get their first degree. She is absolutely right: there are 2.5 million people in this country who have a qualification level just below higher education, many of whom want a second chance to get a degree. We want to do more, particularly for women and mature students, to make that possible, and over the course of the next few years we will set out plans to make that happen.

Q9. I am asking this question as an honorary vice-president of the Royal College of Midwives. With the number of midwives and student midwives falling, with last year’s cut in NHS resources for maternity services, and with the birth rate in this country dramatically rising, what urgent steps will the Government take to ensure that there is no deterioration in maternity services for pregnant women; and how will they honour the guarantees in their maternity strategy? (180927)

I share with the hon. Gentleman the desire to do more to help midwives and maternity services in this country. I thank him for his work as honorary vice-president of the Royal College of Midwives. The figures show that between 1997 and now there has been an increase of 2,084 midwives and a 20 per cent. increase in the number of students entering training for midwifery. We accept that we need to do more, and we will do more, with 1,000 more midwives in the years to come. I hope that that answers the hon. Gentleman’s question. Britain remains one of the safest places in the world for children to be born, and we will ensure that we do everything in our power, with the Darzi report and the announcements that we will soon make, to ensure that that remains the case, and we will ensure that midwifery is properly financed.

Would my right hon. Friend care to congratulate the miners of Tower colliery in my constituency, who over the past 13 years, after investing their own redundancy pay in a miners’ co-operative, have been highly successful, despite the efforts of the Conservatives to shut them down?

I was pleased to visit Tower colliery and give support to the miners who had invested their own savings for all these years. We were able to support that colliery with operating and investment aid. I believe that some of the former miners will be able to continue their careers in deep mining, but the colliery is now exhausted. I want to thank them for their efforts, proving that working people can get together and make a success of a project that other parties said would never work, and to thank my right hon. Friend for her efforts in ensuring that Tower colliery was a great success during those years.

Q11. The Department for Work and Pensions holds records on tens of thousands of women in their 60s who would be eligible to boost their basic state pension under a very complicated scheme that most of them have never heard of. Will the Prime Minister ensure that the DWP simply tells those women what they are entitled to? (180929)

We will do what we can to ensure that women in their 60s have proper pension rights. As the hon. Gentleman knows, this is one of the areas where over many decades we have not done enough to secure rights for elderly women. Under the Pensions Bill, more women will get the basic state pension and will not have to have a smaller pension, as before, but we will try to do our best to ensure that women in their 60s get pension rights as well.

Q12. When the Prime Minister was in China recently, what talks did he have about co-operation in research and development in the science sector? Will he ensure that the UK marine science sector is as well resourced as possible so that it can make the most of its global reputation in partnerships with China and elsewhere? (180930)

In China, I was able to say that the marine centre in my hon. Friend’s constituency has very strong links with that country. We will do what we can to sign more agreements with China on scientific co-operation. My hon. Friend understands that under this Government the science budget has doubled. Science has never been better financed. That would not have happened under the policies of the Opposition. We will continue to support the science and technology of Britain.

When the Prime Minister was in China, did he receive assurances that British journalists could visit Tibet, which is currently occupied by China?

On my visit to China, I made it clear to the Chinese Government that we believed that journalists should not only be free to move within China, but free to interview people during the Olympic games. I hope that the offer that the Chinese authorities have made will be sustained after the Olympics, and I hope that international pressure will back up our efforts to ensure that journalists have the right of free movement.