House of Commons
Thursday 24 April 2008
The House met at half-past Ten o’clock
[Mr. Speaker in the Chair]
Broads Authority Bill (By Order)
Order for Third Reading read.
To be read the Third time on 7 May.
Bournemouth Borough Council Bill [Lords](By Order)
Canterbury City Council Bill (By Order)
Leeds City Council Bill (By Order)
London Local Authorities (Shopping Bags) Bill (By Order)
Manchester City Council Bill [Lords] (By Order)
Nottingham City Council Bill (By Order)
Reading Borough Council Bill (By Order)
Orders for Second Reading read.
To be read a Second time on 1 May.
Oral Answers to Questions
The Chancellor of the Exchequer was asked—
“Protecting Tax Revenues”, which was published by Her Majesty’s Revenue and Customs alongside the Budget, sets out the progress made so far and how HMRC is responding to new challenges by further strengthening the strategy. Let me be clear: our approach is based on providing a modern and competitive tax system, which promotes opportunity and enterprise while ensuring that everyone pays their fair share.
I thank my right hon. Friend for her answer, but she will be aware of the recent TUC report, “The Missing Billions”, which identifies at least £33 billion of lost revenue per annum. If even a third of that money were collected, we could easily compensate the 10 per cent. tax losers, immediately restore the earnings link to pensions and pay for free long-term care for all, among other things. Does this not simply require a modicum of political will to collect the money?
First, I do not accept the TUC’s figures, which include reliefs from savings and enterprise and are based on a range of speculative assumptions. It is difficult to measure tax losses that arise from the use of avoidance devices. I hope that my hon. Friend accepts that all recent Budgets have included measures to close down avoidance schemes with a potential cost of between £1 billion to £1.5 billion a year. There have been notable successes, such as halving excise fraud. The measures have already reduced underpayments of tax by more than £5 billion a year compared with five years ago. I therefore hope that he accepts that there is a concerted effort to do exactly as he suggests.
I wonder whether, in our modern and transparent taxation system, we can look at the bonuses that are paid to City workers. Last year, it was estimated that the amount increased to more than £1 billion. Some individuals got a £50 million bonus every year. Such pay increases not only distort housing prices in London and the south-east, but distort society.
Despite what the Financial Secretary has said, there are many higher estimates for tax avoidance than the figure that my hon. Friend the Member for Luton, North (Kelvin Hopkins) suggested. In The Guardian this week, the estimable Prem Sikka estimates it to be between 20 and 30 per cent. of tax take. Is there not more that we can do? Will my right hon. Friend consider setting up a working party, including my hon. Friends the Members for Luton, North and for Great Grimsby (Mr. Mitchell), and advised by Prem Sikka? Perhaps then we could avoid some of the angst and heartache that we have seen this week in the days leading up to today.
High energy prices continue to affect all economies, and at the recent G7, International Monetary Fund and World Bank meetings, we called for urgent international action by those bodies to improve the functioning of the oil markets, including increasing transparency and investment, as well as supply of oil.
The Warm Front scheme has been welcome in reducing fuel poverty, but what efforts is my right hon. Friend making to reduce the costs of the preferred contractors, especially in light of the growing evidence that local contractors can do the same work for far less money? Has he also considered the criticism that the scheme is just not flexible enough?
I am grateful to my hon. Friend for his welcome of scheme in general. I think that about 7,000 households in his constituency have been affected by measures to help conserve energy through greater insulation. The point that he raises is a real concern, especially at a time when the industry is about to enter a major programme, through the carbon emissions reduction target, to insulate homes throughout the country. It would be a pity if contractors were to take advantage of that and charge more than ought to be charged. His other point was about ensuring adequate competition so that local contractors and others can get the work, which would also help drive down prices. He raises a real concern, which I want to look into, to make sure that all the work is not only done, but done as cheaply and efficiently as possible.
In the Chancellor’s reply to me on Monday, he stressed that rating agencies should not be relied on as a definitive guide in judging the stability of energy companies and other utilities. Given the high levels of leverage in energy companies, will he discuss with the regulator, Ofgem, what measures can be taken to ensure long-term stability, so that crises will not precipitate a collapse of those companies, due to the levels of debt that they are currently incurring?
I will certainly raise the matter with Ofgem. As my hon. Friend said, he raised it with me on Monday. Whether we are talking about a utility company or a bank, I am clear that a credit rating agency should be relied upon to give advice that will help inform directors’ decisions, but it should not be taken as the last piece of advice. In other words, the decision should not be taken by the credit rating agency; it must be one for the directors to take.
The other thing that would greatly help utility companies in this country, particularly in relation to energy supply, is for us to ensure that the supply of energy in the European Union is truly opened up so that we can actually see what is going on. The Commission has taken some welcome steps, which Neelie Kroes initiated a year or so ago, but frankly the progress is far too slow. It is important that we do everything we can to ensure that the market is more open, because that will help British energy companies and therefore, importantly, consumers, whether businesses or individuals.
Why is it that three months after the Chancellor’s high-profile intervention on electricity prices no action has been taken to refer to the big, vertically integrated producers that suppress competition the Competition Commission or to stop the blatant price discrimination against low-income metered consumers? Is that not another case, as with the banks, of powerful companies running rings round ineffectual regulators and Ministers?
No, I do not accept that. What is clearly the case, especially over the past year or so, is that the prices being paid by businesses and consumers have gone up. A lot of that is to do with very high oil prices, which have remained far higher than people forecast even a year ago. Oil prices are significantly higher than they were then. We have a competitive market, but as the hon. Gentleman knows, Ofgem is looking into the situation. I raised it with Ofgem at the turn of the year, because I want to ensure that our market is competitive and that there are no anti-competitive practices.
Since then, the Government have also engaged with energy companies to get them to increase the amount of money that they spend on customers with low incomes and, crucially, to do something about the unfair high payments that were imposed upon customers with pre-payment meters who, by definition, were on lower incomes than everybody else. Action is being taken, but rather like with the hon. Gentleman’s fairy tale on Monday, he might want to look at all the facts and not just some of them.
Although I welcome the interim and short-term measures that my right hon. Friend is taking, is he also considering alternative energies, such as those of the Energy Technologies Institute, which is based at Loughborough university, at the hub of a £1 billion investment? Those are the things that will reduce our reliance on oil in the long term, especially at $120 a barrel, at which it could remain for the foreseeable future. Will he ensure increased investment in those alternatives, not only for the long-term security of the nation’s energy, but for all of us suffering from the increased energy prices caused by changes currently taking place in the world?
I agree with my hon. Friend. Indeed, the thrust of the energy White Paper that I published last summer was, first, to reduce our demand for energy, through increased conservation and measures to ensure that businesses and we as individuals use less energy, which is critical. The second thing is that we need to reduce our dependence on carbon sources of energy. That is one of the reasons that the Government believe that we should rebuild nuclear capacity. However, my hon. Friend is quite right that renewable energy must play a crucial role. The renewables obligation helps the growth of renewable energy. Indeed, we have seen a huge increase over the past few years, although we have a long way to go.
The problem with renewable energy that we also need to tackle is that sooner or later people must face up to the fact that if we want renewable energy, we have to give the go-ahead to wind farms onshore or offshore. The problem, certainly in this House, is that there are people who say, “Yes, we want to be greener”, but who then go on to say, “But not anywhere near me.” That is something that we as a country are going to have to resolve. I agree with my hon. Friend, however, that conserving energy and getting more renewable energy must be two of the centrepieces of any energy strategy if we are serious about tackling climate change and reducing bills for consumers, whether they are businesses or individuals.
The Chancellor will know that the high price of energy is hitting those on fixed incomes particularly hard, especially older and more vulnerable people. When will he be in a position to give the House details of the extra help announced yesterday that is to be given to 60 to 65-year-olds?
I hope that I can do that in the reasonably near future, but I want to make sure that we have bottomed out exactly how these payments can be made and what mechanism will be used. It will almost certainly be done through the winter fuel payment mechanism, because it is already there and we would not need to legislate for anything different. The hon. Lady will recall that, in the Budget, I increased the amount of money going to people over the age of 60 by £50 for this year, over and above the winter fuel payment. That was partly to reflect the fact that, as she has pointed out, people over the age of 60 are often, although not always, on fixed incomes. That payment will help them and will be widely welcomed. Those payments will go out in the autumn.
Is my right hon. Friend aware that electricity bills in south Wales are 10 per cent. higher than in England, causing obvious problems to individual constituents and businesses? Has he made any assessment of the effect of those higher bills on the Welsh economy?
As I said earlier, the higher energy bills are affecting all parts of the UK, although I note what my hon. Friend has said about south Wales. They are also affecting every other country in the world. This is a matter of major concern, which is why we need to do three things. The first is to ensure that we have a genuinely competitive market. While we have made strides in this country—far more than many other countries, particularly in the European Union—we need to do far more to ensure that there is no anti-competitive behaviour. Secondly, we need to ensure that we take action to become more efficient with the amount of energy that we use. The third element, given that the root cause of the problem internationally is the continuing high price of oil, is that we need to take action to increase the production of crude oil, to increase our refining capacity, and to make those markets far more open than they are at present. All those things need to be done, because energy prices are crucial, particularly for heavy industry in south Wales as well as for consumers. I am very conscious of this issue, and we need to take action here as well as internationally.
When the Chancellor is considering alternative forms of energy, will he bear in mind his responsibility for the stewardship of the economy in general? Will he reflect that the erection of onshore wind farms can often despoil the countryside, deter tourists and have a bad effect on revenue as a consequence?
The hon. Gentleman amplifies the point that I made a few moments ago. Of course we have to balance our need to generate electricity, whether from coal-fired, gas-fired or nuclear power stations or from onshore wind farms, with the fact that we need to take environmental considerations into account. If we want more renewable energy, however, we have to put it somewhere—[Interruption.] Someone says from a sedentary position, “Offshore.” Yes, indeed. However, our experience is that there have been almost as many objections to offshore wind farms as there are to onshore wind farms—[Interruption.] Not from the fish, but often from people with quite legitimate concerns that need to be addressed. If we are serious about getting more renewable energy, we actually have to build it. I would say to some, although not all, Opposition Members who say that they want renewable energy that they will need to reconcile that with their often robust opposition to building any more wind farms.
The Government have an excellent record on tackling fuel poverty, but the challenging targets to eliminate fuel poverty by 2016 are now looking difficult to achieve. Energy companies are increasing the amount that they spend on social tariffs to £150 million. Is the Chancellor confident that the voluntary approach is going to work and does he rule out mandatory tariffs?
My hon. Friend is quite right that we have reached an agreement with the energy companies to increase the amount of money they spend on social tariffs. It is far easier to proceed on the basis of voluntary agreement because it avoids all sorts of difficulties, and I very much hope that electricity companies will recognise that people feel very strongly about this approach and that it is something that they want to see, and I want to see that agreement implemented.
Vehicle Excise Duty
Nissan produces a number of different models of Micra, which have a range of carbon dioxide emission outputs—from 125 g to 175 g a kilometre. Using 2008-09 rates of vehicle excise duty, the percentage change for Micras varies between minus 25 and plus 25 in 2009-10, and between minus 21 per cent. and plus 24 per cent. in 2010-11, reflecting the fact that there are a range of emissions choices with this model of car, as there are with many others.
The issue is that the VED rate changes are designed to increase the incentive for people to buy the least emitting—the best—car in a class, which is why they are designed to reward those who buy best in class with respect to emissions by giving them a reduction in their VED rates.
Micra man. [Laughter.]
Does not the Minister accept that a very large number of motorists believe that the changes to VED bands to be introduced from 2009-10 are merely yet another stealth tax on cars, that the duty increases are in the main excessive and that they take no account of those people in my constituency—the farming community of Macclesfield and those in the hill country of the area—who need to use 4x4s? Will the Government look again into the need for 4x4s in many parts of the country?
We now know that the changes to vehicle excise duty announced in the Budget were not a green tax; in fact, they were more of a brown tax or an eco-stealth tax. The reality is that we now know that the changes will raise £4 billion over the next three years. The Treasury admitted in parliamentary questions that motor vehicle CO2 emissions will be reduced—by 2020, I should add—by one tenth of 1 per cent. That is a disgrace: it has nothing to do with saving the planet and everything to do with—
I will do. We also know—[Laughter.] I am coming to it, Mr. Speaker. Of the £4 billion raised, £2.5 billion will go on low-income families and £375 million will be paid next year. Will the Minister add the band A to J losers to the 10p compensation package review? The Government have reviewed capital gains tax and non-doms, so is it not time to review vehicle excise duty?
I am not sure quite how to categorise the emissions that we have just heard from the hon. Lady, so I had better not try. I can, however, tell her that as a result of these changes, in respect of 15 of the 30 best-selling cars of 2006 drivers will be better off, and in respect of nine they will be no worse off, while 55 per cent. of drivers will be better off or no worse off.
During the period of temporary public ownership, Northern Rock will be managed on an arm’s length commercial basis. On 31 March, its board published a detailed business plan that meets the Government’s objectives.
In his recent ministerial statement the Chancellor said that the Government would hold the board accountable for performance against the business plan, but one of the commitments in the plan is that the bank will treat all customers fairly. In the light of today’s expected test-case judgment, can the Chancellor explain how the Government intend to hold the board to account over the bank’s fair treatment of its customers in respect of its charges?
As I told the House on Monday, the measures announced by the Bank of England will take a great deal of pressure off banks. As I said then, they are a further step towards stabilising the financial markets. The benefits of the reductions in the Bank of England’s rate, and the other support that it has introduced, can be passed on.
As for mortgage rates, it is important for two things to happen. It is important for institutions to rebuild their capital position, and we want banks and building societies to be robust enough to be able to continue to do that. As I said, I should like the benefits to be passed on, but as the hon. Gentleman will realise when he has had an opportunity to sit down and think about it, it is important for institutions to examine their own capital positions so that they can strengthen them, especially at a time when we are undergoing so much turbulence and uncertainty. The measures that we announced on Monday, together with the other steps taken by the Bank of England, will help to reduce the pressure that we face, and help those benefits to be passed on to consumers.
During the recess, the Chief Secretary wrote to me admitting that the independent valuer should treat Northern Rock as though it were in administration. Has the Chancellor appointed a valuer? Does he expect ordinary shareholders to receive any value, given that they rank below £400 million-worth of preference shareholders? And does he now recognise that Northern Rock is effectively in administration?
It is not, and—as the hon. Gentleman knows, because he follows these matters—the compensation regime was set down in the Banking (Special Provisions) Act 2008, which Parliament passed in February. However, it is right for the valuation of the bank to be based on the fact that it owes rather a lot of money to the Bank of England. That was the reason for our proposals, which were accepted by the House. I believe that Members in all parts of the House accept that this is a bank that got into huge difficulties, and that if the Bank of England had not intervened it would have gone under. We must be fair not just to people who are involved with the bank, but to taxpayers as a whole.
May I take the Chancellor back to his answer to my hon. Friend the Member for Hammersmith and Fulham (Mr. Hands)? Why has a bank that he nationalised refused to heed his calls to reduce its mortgage rate and pass on the reductions in the Bank of England base rate? Why has a bank that the Government put into public ownership not listened to his advice?
At our last Question Time, the Conservatives complained that Northern Rock was offering rates that were more competitive than those in the rest of the banking sector. Today they are complaining that it is not. Right from the start, the Conservatives’ position on Northern Rock has been all over the place. They have had different positions for every week of the year, most of them contradictory.
As I told the House earlier this week, I believe that the Government have put in place, through the Bank of England, measures that will help to stabilise the financial markets. We are already seeing some evidence of that, but the financial markets are going through a period of unprecedented uncertainty and turbulence, and it is important that the banks—Northern Rock or any other—make sure that they have a secure base on which to proceed. As I have said, I hope that the benefits of both the reduction in interest rates and the additional money and support that the Bank of England has been able to give will be passed on, particularly to mortgage payers.
Welfare Tax Credits
The latest published figures show that in 2005-06, 91 per cent. of the money for child tax credit and 82 per cent. of the money for working tax credit has been claimed.
I thank my right hon. Friend for her answer. Will she confirm that since 2005 the Government have made changes to these tax credits which mean that there are far fewer reclaims of overpayment of child tax credit and far more childless workers eligible to receive working tax credit? Why cannot the Treasury and the Revenue make it automatic that people receive the tax credit to which they are entitled, and if that is not possible, will they engage with Members of Parliament, trade unions, employers, local government and third sector organisations such as Citizens Advice in raising awareness of the availability of these tax credits and campaigning for their take-up?
I am grateful to my hon. Friend for the first suggestion in his question, although I think he will find that legislation requires people to claim—to make an application for—their tax credits. I recognise that more needs to be done to boost take-up of working tax credit by those without children. That is a particularly hard group to reach. I hope I can reassure my hon. Friend by telling him that Her Majesty’s Revenue and Customs has been conducting a campaign aimed at this group. It plans to repeat it in the autumn, increasing its intensity so that it reaches more than 7.5 million households within the priority areas where it believes many people in these groups live, and about 3 million households will receive door-drop leaflets. In addition, HMRC is targeting employers in sectors where it expects there will be high eligibility, and we are also working with the trade unions. Promoting the take-up of tax credit is not a new interest of mine; we have been working hard on it. I am grateful to him for his interest, and I would be happy to discuss what further measures we might be able to take.
The Government have prayed in aid the use of tax credits in dealing with the removal of the 10p tax rate. Notwithstanding what the right hon. Lady has just said by way of an answer and the statements of the Chancellor and the Prime Minister yesterday, will she tell the House how many million people will still be losers by virtue of the removal of the 10p tax rate who will not be able to be helped by virtue of tax credits?
The right hon. Gentleman will have heard the comments yesterday and through this week of my right hon. Friends the Chancellor and the Prime Minister, and he will know that I have had a long-standing interest in improving the take-up of working tax credits—as, indeed, has my predecessor. More work remains to be done in this area and we are redoubling our efforts. I do not at present have the details to respond to the specifics of the right hon. Gentleman’s question, but that will be part of the work we will do going forward.
Does the Minister accept that some people on low incomes have in the past had difficulty in coping with tax credit overpayments and that that is acting as a disincentive to some for claiming tax credits? We need a strategy to deal with this matter, to make sure they claim what they are entitled to.
Absolutely, and I am grateful to my hon. Friend for raising that point. HMRC has developed a series of initiatives through the tax credits transformation programme, including increased support for those renewing their claims—particularly people who have had difficulty in renewing in the past—and enhanced assistance for those making new claims, which involves longer conversations with tax credit office support staff and better training and support for staff in tax credit call centres, to make sure that the customer experiences in renewing their claims and making new claims mean that customers get the tax credits they are entitled to as quickly as possible.
Yes, we have said for many years that we believe the best route out of poverty is through work. The support that we have in place is designed to assist people not only to find jobs through our active labour market policies, which the hon. Gentleman will have noted have had considerable success, but to ensure that work pays and provides the benefits that one would expect once people are in work.
Is my right hon. Friend aware that a Library paper prepared for me shows that families who earn up to £520 a week where one adult works for 30 hours and there are two children gain £10 a week through the changes to the tax and tax credits system? There has been a lot of debate about this Budget, but what will she do to ensure that a large number of families who might not have thought about claiming tax credits know that they will benefit a great deal from it?
I am grateful for my hon. Friend’s question. She and I have discussed this subject, and I am interested in the further evidence that she has brought to the attention of the House. I hope that she will be pleased to learn that I am encouraging Her Majesty’s Revenue and Customs to do further work through the transformation programme, including work on new guidance for families, work on more accessible information and work with the national network of children’s centres that is now in place. I am grateful to the staff at the tax credits offices, who are so enthusiastically taking up these improvements in how they work in order to benefit the customers whom they serve.
In March 2007, the Prime Minister told the Select Committee on Treasury that take-up of working tax credits by households without children had increased by 100,000 since 2004-05 and that, partly as a consequence of that, it was incorrect to say that 5.3 million households would lose out as a result of the doubling of the 10p rate. Will the Financial Secretary confirm that the Prime Minister was wrong to say that working tax credit take-up had increased by 100,000 and wrong to deny that 5.3 million households were losing out from the scrapping of the 10p rate? Will she confirm that the problem in trying to use working tax credits for households without children to cobble together a compensation package for the 5.3 million households who are losing out is that the take-up rate is only 22 per cent?
No, the hon. Gentleman knows that the rate of take-up of tax credits is higher than that of any previous system of income-related financial support for working families. The take-up rate was 50 per cent. in the early years of family income support and only 57 per cent. for family credit, but it is 62 per cent. for working families tax credit. This system is successful, although I accept, as I have said repeatedly this morning, that there is further work to do in respect of households without children. HMRC and I are working hard to improve take-up—[Interruption.] He says 22 per cent. from a sedentary position. That fact is in the public domain and I do not quarrel with it, which is why I have said repeatedly to him, his colleagues and Labour Members that there is work to do and we are committed to taking it forward.
Investment in the health service improves facilities and care, and it helps the local economy both directly, by providing employment, and through improving the health of the local work force.
I can confirm to my right hon. Friend that exactly that is happening in Blackpool. Is she aware that in recent years, £70 million of capital investment has been made in Blackpool Victoria hospital to create new cardiac care and haematology units and much more? Not only has that created new jobs in the economy for contractors and providers, and for 100 new nurses, but, of course, it has improved health care. Will she continue that investment and her good work?
I assure my hon. Friend that the Government intend to continue making significant increases; there is provision for a 4 per cent. real increase in health spending during this comprehensive spending review period. We recognise the benefits that health care investment can bring to the local economy. As she says, it means jobs for nurses, but it also means improvements in health. There has been a 17 per cent. drop in cancer deaths over the past few years as a result of much of the extra investment in the national health service, which has gone into providing new drugs and better treatment facilities.
Given that so much expenditure on hospitals in recent years has been through off-balance sheet private finance initiative and public-private partnership projects, is the Minister comfortable with the notion that, effectively, the next generation of taxpayers will have to pay for jam today in hospitals and other areas of public expenditure?
I am astonished to hear that the hon. Gentleman seems to be against new hospitals, PFI projects and the chance of investment in the future. It is often right to borrow to invest in the future and to deliver the kinds of services from which people will benefit for many generations to come. We are proud of that level of investment. I am sorry—I think his constituents will be sorry, too—if he is setting his face against the new and important capital investment in the NHS.
Welfare Tax Credits
I am so pleased that the hon. Gentleman could join us. He may not have heard me comment that the tax credit system is now working well for the 6 million families who benefit from tax credits, but I continue to look for opportunities to improve their experience. A revised version of the award notice, reflecting comments from the voluntary and community sectors, has, as he knows, been in use since April 2006.
I was here for the whole of the previous exchange, which I noted. I noted in particular that three quarters of people who are entitled to working tax credit do not claim it. I also know that nearly 1 million people were not given the amount that they should have received. Given that there are two four-page forms and that, as the Minister says, the target audience is the people who are most likely not to get the forms right, what will she do, rather than merely saying she is committed, which I do not doubt, to ensure that the system delivers, if it is meant to be the answer to all the Government’s new-found difficulties?
I can talk about Liverpool if the hon. Gentleman wants me to. HMRC has already conducted a campaign aimed specifically at one group: families without children who should potentially be receiving working tax credit. I hope that the hon. Member for North Southwark and Bermondsey (Simon Hughes) will accept that this is a particularly hard group to reach and to encourage to claim. It is for precisely that reason that HMRC has focused its effort. It is working with three different groups in which it believes that we could improve take-up: new mums, some ethnic minority groups and the group that I just mentioned. HMRC realises that there is more work to be done.
It is not just a matter of words; HMRC is making a real effort. It deserves to be commended for its work. It is too early yet to see the outcome of that increased effort, but there is no doubt that the effort is being made not only through the leaflet campaign to which I referred, but through targeted radio promoting the use of tax credits to those groups. We believe that they listen to local radio programmes more than other perhaps more conventional methods of advertising.
It became clear from the correspondence that I received about the abolition of the 10p tax rate that there was still a large amount of ignorance about who could claim and who qualified for working tax credit. That might help to explain why take-up is so low. Another explanation is that people with disabilities find it difficult to get more than the number of hours that must be worked in order to qualify for tax credit, on top of the complication of filling out the form. Will my right hon. Friend reconsider the qualifications for working tax credit for those with disabilities, to make it easier for them to qualify without having to work the 30 hours, which they find a high hurdle to overcome? That would also help to address the group that is losing out as a result of the abolition of the 10p tax rate.
My hon. Friend makes a valuable point, which I am happy to consider. I will closely examine the whole area as we go forward to ensure that all those who are entitled to receive working tax credit, whether or not they are impacted on by the questions around the 10p tax rate, can do so. Equally, I want to examine how we can help people in the way that my hon. Friend has suggested. I will consider whether it will be advisable to do so through the tax credit system or perhaps some other means.
The savings ratio is affected by the macro-economic conditions, the financial market conditions and consumer attitudes at any one time. The Government are currently forecasting an increase in the household savings ratio, partly in response to current economic conditions.
Why did the Chancellor abandon prudence some nine years ago to increase dramatically the size and cost of Government and public expenditure, while discouraging saving by a combination of inflation and high personal taxation? Now that the housing market has gone virtually from boom to bust, and it is estimated that UK personal indebtedness is rising by £1 million every five minutes, what further action will the Chancellor take to improve the savings ratio, which is so important for stability in the economy?
I have to say that I completely disagree with the hon. Lady’s diagnosis of the economic situation. We have invested, it is true, in schools, hospitals, education, health care and transport infrastructure, and that has had a very big impact on things like standards in school and the number of deaths from heart disease and cancer. We have also seen big improvements in our economic prosperity. We have gone from being at the bottom of the G7 league to being second from the top in prosperity per head of population. That is a very big improvement in our economic wealth and well-being, and it is as a result of the investment and macro-economic decisions that this Government have taken.
The core purpose of the Treasury remains to ensure the stability of the economy, to promote growth and to manage the public finances. Last week, the new figures showed that employment in the United Kingdom had reached a new record of 29.5 million people, which demonstrates the underlying strength and resilience of our economy.
In an earlier response, the hon. Member for North Ayrshire and Arran (Ms Clark) responded to a question about the rescue package for the 10p rate of tax by saying that she could not reveal, or did not know, all the details in that package. Given the sensitivities on both sides of the House, and given the fact that another member of the Chancellor’s Front-Bench team was reluctant to reveal other details last night in the press, will the Chancellor answer two very straightforward questions about the contents of the package? First, which elements of it will and will not be—
I think that I am right in saying that my hon. Friend the Member for North Ayrshire and Arran (Ms Clark) asked a question rather than sought to answer it.
On the proposals, I set out in a letter to the Chairman of the Treasury Committee how I propose to proceed, both in relation to a specific group—people between the ages of 60 and 64, whose incomes do not change that much and for whom there is a readily available mechanism for additional payments through the winter fuel payment—and in relation to everybody else who was affected. I said that there were certain areas that I wanted to look at in relation to tax credits and the national minimum wage, and that I would be setting out proposals and would return to the matter in the pre-Budget report. That is what I said at the weekend and in the letter to the Treasury Committee, which set out quite clearly how I intend to proceed.
As I said in my letter yesterday, the first area in which we can take action is in relation to 60 to 64-year-olds. On the others, if my hon. Friend looks at the letter, she will see that I said that our focus is on allowing that the average losses from the abolition of the 10p band can be offset. I want to do that for this year. Because the groups concerned are diverse, and because the effect of any change to the tax system can be quite complex, it will take time—this is why it will not be until the pre-Budget report that I can come back to it—to work out in which way we can help groups. I suspect that there may be different ways.
I have made my intention very clear. It is all very well for the Conservatives to raise these matters, but they would have more credibility if they had a single proposal that might help.
I understand that I have been barred from more pubs than anyone else in the country, including pubs that I have never been in and many that I have never even heard of. It is the first time that I have ever come across that.
We raised the duty on alcohol primarily to finance what we are doing to increase the amount paid to people over 60 through the winter fuel payment, and to help families with children. I took account of the fact that the average price of a bottle of wine, for example, has fallen over the past 10 years. I know that pubs around the country face certain difficulties, although I think that the hon. Gentleman will acknowledge that there has been a change in people’s habits generally. However, constraints in the EU rules mean that it is not possible to have differential rates for beer that is bought as on-sales or off-sales. Of course, I have a great deal of sympathy for anyone running a business and trying to attract new customers, but I think that what I did in relation to alcohol was right, especially when one considers where a lot of that alcohol has been going. Finally, I can tell the hon. Gentleman that we are not proposing to change the Budget at all.
The most important reason why the Chancellor was able to come to his decision yesterday on the 10p tax band is that the economy is strong enough to pay out the money that people are going to get. The economy never allowed previous Governments to find the money to reverse a Budget proposal. On Black Wednesday, for example, the Conservatives did not have two ha’pennies to rub together.
As ever, my hon. Friend is quite right— the British economy is very strong and stable. As I said in response to the first topical question, unemployment is at its lowest since the early 1970s and employment is at record levels. Those facts make a huge difference. The situation is quite different from the one that we faced when the housing market in particular got into trouble in the early 1990s, because at that time there were more than 3 million people out of work. My hon. Friend is right that people will remember what happened when the previous Conservative Government got into economic difficulties that resulted in immense hardship for millions.
We are not prepared to allow that to happen, but we cannot be complacent. As I have said on many occasions, economies around the world are slowing and Governments will have to face up to the consequences. Even so, our economy is in a much better position and is more resilient than it ever was in any of the years when the Conservatives were in government.
What is becoming clear this morning is that this incompetent Government cannot organise even a humiliating U-turn without messing it up. Last night, the Chief Secretary to the Treasury was with me in the “Newsnight” TV studio and said that she could not confirm that the rescue package would be backdated. This morning, the right hon. Member for Birkenhead (Mr. Field) said:
“I think Yvette was badly briefed. The agreement—and this is an agreement that the Prime Minister actually put his stamp on—was that…the whole package would be backdated to April the first.”
Who speaks for the Government—the right hon. Member for Birkenhead and his conversations with the Prime Minister, or the Chief Secretary to the Treasury?
First, the hon. Gentleman’s position on this—[Hon. Members: “Answer.”] Well, he is the man who supported the abolition of the 10p rate 12 months ago. When my right hon. Friend the Member for Birkenhead (Mr. Field) tabled his amendment 12 months ago, far from supporting it, the hon. Gentleman abstained. About two weeks ago, the Conservative party’s policy was to reinstate the 10p band, and when confronted with the fact that that would cost him about £7 billion, he said that it was a holding position. Now, he has no position at all.
As I told the House just a few moments ago, I set out how I intend to proceed in the letter that I sent to the Chairman of the Treasury Committee, and I made it clear that, in relation to the first group—pensioners between the ages of 60 and 64—because their incomes do not tend to change that much, I am confident that we will be able to make a payment to them, probably by the same mechanism as the winter fuel payment is made, to cover their position for this year. I also said in relation to all the other people who are affected that this is something that I want to look at, and I will come back to the House in the pre-Budget report, as I said at the weekend and as I said yesterday. However, as my letter says, our focus is to ensure that we allow the average losses from the abolition of the 10p band to be offset for this year. That is something that I fully intend to proceed with, and I will come back to the House when I have specific proposals to make.
First, the Chancellor is in no position to lecture anyone about consistency, when he said on Sunday that he would not reopen his Budget and then did so three days later. Secondly, no one is interested in the letter that he sent to the Treasury Committee; what we are interested in is the conversation between the right hon. Member for Birkenhead and the Prime Minister. The right hon. Member for Birkenhead says clearly, and he said it again on the radio this morning:
“there is no mistake about this—the agreement will be backdated to April first.”
So will the Chancellor get up, stop all this waffle about the pre-Budget report and what the Chief Secretary did or did not say and make it clear that the agreement between the right hon. Member for Birkenhead and the Prime Minister, which the Chancellor was obviously not part of, is that the package will be backdated—yes, or no?
The hon. Gentleman should be interested in the letter that I sent to the Chairman of the Treasury Committee because it sets out the Government’s position. Like many others, no doubt, I heard my right hon. Friend the Member for Birkenhead on the radio this morning, and as he rightly said, because the people affected by the removal of the 10p band are disparate and are affected in different ways, it will be necessary for the Government to consider a range of measures to help them. However, as I say in my letter, my focus is to allow us to offset the average losses from the abolition of that band for this year. That is what I intend to do, and I fully intend to come back to the House in the pre-Budget report to set out precisely how I will do it. I have a commitment to do something about the problem. It is abundantly clear that the Opposition have absolutely no interest in it whatever and regard this as a political game.
My hon. Friend is right. Right from the start, we have been committed, principally through the work undertaken by my right hon. Friend the Prime Minister when he was the Chancellor, not just to take action here at home to ensure that we meet our international obligations, but crucially and additionally, to work with other countries to write off the debt that poor countries faced. Liberia is perhaps an excellent example of where the international community has, albeit after a bit of a struggle, come together to try to remove the debts from that country, to give it a chance to get back on its feet and to improve the living standards of its people. I believe that the action that we have taken in relation to development and writing off debt right across the world has been a model of what all Governments ought to be doing. I should like to see us do more, but my hon. Friend is absolutely right: that is something that any humane Government ought to be doing, and they should be doing it because it is the right thing to do, not just morally but economically.
Well, looking at the international figures, we see that in the 10 years up to 1997 the UK was the bottom of the G7, in terms of income per head. It is now the second highest, behind the US, as a result of the decisions that we have taken. The tax burden today remains lower than the average over the 1980s, when the right hon. Gentleman and members of his party were in charge.
I appreciate the point that the hon. Gentleman makes and, if I may show my usual lack of partisanship, I know that the hon. Member for Na h-Eileanan an Iar (Mr. MacNeil) would have raised the issue had we got to his question. Having filled my car up with diesel in Lewis just a couple of weeks ago, I am acutely aware of how high the petrol prices are. There are two things that I can say. First, I cannot promise to do so myself, but I am sure that one of my ministerial colleagues will be happy to meet the hon. Member for Orkney and Shetland (Mr. Carmichael).
Secondly, I am struck by the variation in petrol prices across the highlands and islands; they vary substantially. I noticed an excellent article in the Stornoway Gazette a couple of weeks ago—I like to keep informed—that drew attention to the fact that the price of diesel seems to vary quite a bit depending on which side of the Minch one is on. The hon. Member for Na h-Eileanan an Iar has, I think, raised the matter with the Office of Fair Trading, but the fact that there is such variation, when it is not abundantly clear why that is, is something that perhaps all of us ought to have a look at.
Absolute nonsense. The Conservative party ought to continue to reflect on the fact that on this issue, as on so many others, its positions are completely contradictory. The Conservative party has absolutely no coherent strategies for helping people on low incomes, for getting children out of poverty, or for helping older people and people on low incomes who do not have children. We do. We are determined to improve people’s living standards, and that is precisely what we will do.
Business of the House
Will the Deputy Leader of the House give the forthcoming business?
The business for the week commencing 28 April will be:
Monday 28 April—Consideration in Committee of the Finance Bill.
Tuesday 29 April—Conclusion of consideration in Committee of the Finance Bill.
Wednesday 30 April—Remaining stages of the Energy Bill.
Thursday 1 May—Topical debate: subject to be announced, followed by a general debate on child poverty in Scotland.
Friday 2 May—The House will not be sitting.
The provisional business for the week commencing 5 May will include:
Monday 5 May—The House will not be sitting.
Tuesday 6 May—Consideration of Lords amendments to the Criminal Justice and Immigration Bill.
Wednesday 7 May—Opposition Day [11th allotted day][First part]. There will be a debate on an Opposition motion, subject to be announced. After that, the Chairman of Ways and Means will name opposed private business for consideration. If necessary, that will be followed by consideration of Lords amendments. The House will not adjourn until the Speaker has signified Royal Assent.
Thursday 8 May—Topical debate: subject to be announced, followed by a general debate on defence in the world.
Friday 9 May—Private Members’ Bills.
I should also like to inform the House that the business in Westminster Hall for 1 May and 8 May will be:
Thursday 1 May—A debate on the report from the International Development Committee on sanitation and water.
Thursday 8 May—A debate on the report from the Health Committee on the National Institute for Health and Clinical Excellence.
I express my thanks for that information.
This morning, the Leader of the House issued a written statement on topical debates. Given the importance of those debates, an oral statement would be more appropriate, giving Members an opportunity to question her proposals. This morning the Prime Minister, too, issued a written statement to report on the NATO summit in Bucharest. To date, the Government have come to the House to make an oral statement following such a meeting. Why did we not have an oral statement this time? What is the Prime Minister trying to hide? Yesterday, the Chancellor announced a U-turn on the 10p tax in a letter to the Treasury Committee, instead of making an oral statement to the House. Will the Deputy Leader of the House give Members an assurance that her colleagues will start practising what they preach and treat Parliament with the respect that it deserves?
Last week, the Home Secretary said that police forces under pressure from migrants settling in their areas would get extra funds, but we now know there is to be no additional money, and that the fund had already been announced by the Home Office in February. We need a statement from the Home Secretary apologising for recycling a statement and for trying to gain cheap political advantage during the local election campaign.
On Tuesday, the Work and Pensions Secretary announced that poverty figures, due to be published in March, but then delayed until early May, have been delayed again until June. Given public concern over rising prices, particularly on food and fuel, that procrastination does little to allay people’s fears. The Secretary of State needs to explain the impact of soaring prices on Britain’s poorest families, and may I suggest that the subject of next week’s topical debate should be the cost of living?
On the subject of the cost of living, Ken Livingstone said that he would not put up tube fares, but it is reported that he has done a secret deal to do just that—another reason why the man is not fit to be Mayor of London. Can we have a debate on honesty in politics?
The Public Accounts Committee has said that the Government were “entirely unrealistic” when they made their original estimate of the cost of the 2012 Olympics. The massive rise in the budget was a result of their ignoring basic considerations such as contingency provision, VAT and security measures. The Minister for the Olympics has some serious explaining to do, and she should make a statement about costly incompetence in her Department.
The Office for National Statistics has announced that it will make house visits to interview nearly half a million people every year and ask a range of personal and intimate questions at an annual cost to the taxpayer of £3.5 million. There will be questions on salaries, 35 questions on contraception, and questions on former sexual partners—a subject on which we know the leader of the Lib Dems is more than happy to respond. Those questions are extraordinarily intrusive—
I am raising them because of the Government’s incompetence in not allowing questions to be asked in the first place. Those questions are extraordinarily intrusive, and it is widely accepted that such surveys are inaccurate. The Secretary of State for Communities and Local Government should come to the House and explain this scandalous waste of taxpayers’ money.
Yesterday, on St. George’s day, we read in the papers that England has been wiped off a map of Europe drawn up by Brussels bureaucrats. The map makes no reference to England, or indeed Britain, and has even renamed the English channel the “Channel Sea”. It is all very well the Prime Minister putting up patriotic flags on top of No. 10 Downing street, but he needs to make an urgent statement to tell us what he is doing to protect Britain’s interests in Europe and Britain’s identity.
So, Mr. Speaker, there you have it. We have a Government who dither, who spend millions on sex surveys while millions of their people worry about the cost of food, and who betray their people by refusing to stand up for them in Europe.
Once again, the hon. Gentleman has gone completely over the top. Every week at business questions we have to listen to wild hyperbole. Last time I looked, England was still on the map.
The public will not be taken in by crocodile tears from a party which, while it claims to be concerned about the low paid, opposed the minimum wage, and which, while it claims to be concerned about economic insecurity, produced 3 million unemployed. I shall not delay the House further. Instead, I shall move on to the substantive points that the hon. Gentleman found time to make.
On topical debates, as the hon. Gentleman knows, we have instituted a review. We would be pleased to have the views of hon. Members on the way topical debates are going. Members are welcome to come and see the Leader of the House or to write to us.
With reference to the oral statement relating to the European Council—
Oh, it was NATO; I am sorry. I misheard what the hon. Member for North-West Cambridgeshire (Mr. Vara) said.
On the 10p rate, the hon. Gentleman asked why the Chancellor of the Exchequer had written to the Treasury Committee, rather than producing an oral statement. We have had ample opportunity and we will continue to have ample opportunity to discuss the matter. The Prime Minister answered questions yesterday. As the hon. Member for North-West Cambridgeshire knows, the Chancellor was standing at the Dispatch Box about five minutes ago answering questions on the matter. On Monday there will be a debate on clause 3 of the Finance Bill, when all the issues can be fully aired.
The Home Secretary’s announcement about policing was perfectly in accordance with the rules because it related to national, not local, issues. As I am sure the hon. Gentleman knows if he has read properly the written ministerial statement from my right hon. Friend the Secretary of State for Work and Pensions, the delay to the publication of the statistics about households on low incomes is due to a technical difficulty with the statisticians. The decision was taken by officials and had nothing to do with Ministers.
I accept the hon. Gentleman’s suggestion for a topical debate for next week. We will accept that alongside all the other suggestions that we receive.
The hon. Gentleman made a point about the candidates for the mayoralty of London. He failed to take account of the fact that Ken Livingstone has been at the forefront of developing public transport in London, unlike the candidate whom the hon. Gentleman supports, who did not even have time to make a speech when his own colleagues had given him an opportunity to do so yesterday in a debate on crime in London.
The hon. Gentleman raised the issue of the costings for the Olympic games. He should be aware that the costings were established not in the most recent National Audit Office report, but more than a year ago, in January 2007. The fact that we have a full NAO report and that the PAC has an opportunity to consider it shows that there is adequate parliamentary scrutiny. The hon. Gentleman knows perfectly well that the Office for National Statistics has now been set up as an independent body and that it is undertaking those surveys to produce statistics. However, I am sure that the head of statistics will read his remarks in Hansard.
Before I sit down, I should like to pay tribute to Gwyneth Dunwoody, who was a regular at business questions. More than that, she was a remarkable woman, a great parliamentarian and a formidable Chair of the Transport Committee. I am sure that the whole House will miss her greatly.
My hon. Friend will be aware of the massive concern across the House about the situation in Zimbabwe. There is to be a Westminster Hall debate on the issue next week, but will my hon. Friend make sure that there is also a statement to the House about it next week, so that we get information on a fast-moving situation and so that we can press for measures such as tighter sanctions on Zimbabwe? In that way, we can try to get the regime to release the election results and let Zimbabwe move on to a renewed democracy.
My hon. Friend is absolutely right. She has taken a long-standing interest in the affairs of Zimbabwe. The Prime Minister made clear everybody’s total disgust at Mugabe’s treatment of the election results and the importance of standing by a proper democratic outcome that respects the will of the people of Zimbabwe.
As my hon. Friend says, there will be a Westminster Hall debate on Zimbabwe next Tuesday. I do not know whether she is aware that the arms shipment, about which many people were concerned, has been turned away from South Africa. I am sure that the whole House will welcome that news. She may be aware that the European Union has an arms embargo on Zimbabwe. The Government believe that it would be excellent if as many other countries as possible joined that embargo.
May I associate myself and my colleagues with the tributes made by the hon. Lady—and you, Mr. Speaker, earlier this week—to Gwyneth Dunwoody? She was a formidable, doughty and relentless parliamentarian, and by being so gained huge respect across the House and outside it. She also broke two great records. She was the woman who served for the longest continuous period in Parliament, a record previously held by Barbara Castle, and the woman who served for the longest period overall, a record previously held by Irene Ward. She was a phenomenal parliamentary contributor, and we send our condolences through the Deputy Leader of the House to her family and friends and her constituents in Crewe and Nantwich.
Through the Deputy Leader of the House, I should like to thank the Leader of the House for her letter explaining why she is not here today. She is at the funeral of Gloria Taylor, Damilola Taylor’s mother. We send our love and sympathy to the Taylor family, who have suffered two terrible blows in far too short a time.
May I ask the Deputy Leader of the House three questions about business, all of which are about the economy and matters about which we heard the Chancellor and colleagues speaking earlier? First, will the hon. Lady assure me that, on Monday and Tuesday, when we debate the Finance Bill, there will be time to debate adequately the working tax credit? In particular, if the Government are determined to use the credit as the method of giving back to the poor, may we debate how we can change a situation in which under a quarter of those eligible as working couples with no children obtain working tax credit, and under a third of those who earn less than £10,000 obtain it?
There is also the fact that 2 million people get working tax credit repayments that they should not get, and 1 million do not get the ones that they should. It is no good having a reliance on this system if it works so badly for so many people. I hope that the Deputy Leader of the House can assure us that on Monday or Tuesday there will be time to debate that issue instead of just saying that that is the mechanism for dealing with the Government’s recent difficulties.
On Wednesday, we have the debate that the Deputy Leader of the House announced on the remaining stages of the Energy Bill. She has heard before the exchanges about giving enough time for Opposition new clauses and amendments. May I ask specifically that we have time to debate why someone who pays their energy bills by direct debit may have fuel bills on average £400 lower than people who have prepayment meters? People who pay by prepayment meter are the poorest and those who pay by direct debit have the most stable incomes, bank accounts and the rest. If we are going to deal with the poor and energy bills we need to be able to help those people, who are clobbered most and can afford least.
One of the effects of the credit crunch appears now to be impacting on housing associations, which have to borrow in the private sector for the house building that they contribute to social housing. The Government have an ambitious target of 3 million extra homes by 2020, and an affordable housing target of approaching 100,000 homes a year by 2010-11. May we soon have a debate about achieving the objective of building the affordable homes that we need in London and across Britain? At the moment, the banks are less willing to lend, the housing associations therefore have less money to spend, and the risk is that the ambitious targets turn to nothing and people have additional housing problems in addition to all the other ones that we know about.
The Leader of the House will be most pleased when she reads what the hon. Gentleman said. She particularly asked me to mention the excellent work that is being done by the Damilola Taylor Trust for deprived young people in London, and I am sure that she will be pleased to see his remarks about that.
The hon. Gentleman asked about the handling of the Finance Bill in Committee of the whole House on Monday and Tuesday. As he knows, we voted last Monday to devote two days to those proceedings. As he also knows, the selection of amendments is a matter for the Speaker, not for the Leader of the House. I am sure that we will balance the importance of this issue against the other important tax measures that we are to discuss. I do not, however, fully accept his characterisation of working tax credits, which, in truth, have helped and continue to help 6 million households and 10 million children.
Turning to the hon. Gentleman’s questions about the Energy Bill, fuel poverty is of course one of the issues that can be raised in the debate next Wednesday. I am not sure from his remarks whether he is fully aware that the energy companies are now putting in £100 million, £125 million and £150 million to support vulnerable customers over the next three years. That has to be set alongside the perfectly legitimate questions that he raised.
I will take the hon. Gentleman’s remarks about the importance of affordable house building as a suggestion for a topical debate, if I may. I am not sure whether he knows that the target for building 200,000 houses includes 70,000 per year that should be affordable.
Does my hon. Friend agree that given the strong emotions, fears and opinions expressed by some about a few controversial aspects of the Human Fertilisation and Embryology Bill, additional time should be allocated to debate those matters on the Floor of this House, not just in Committee?
I do understand the importance of the issues in the Human Fertilisation and Embryology Bill. That importance is the reason why all parties have agreed to give their Members free votes on the ethical issues that are contained within it. We will take account of my hon. Friend’s point when we come to the timetabling, which will be announced in the business statement of the preceding week.
As the hon. Gentleman knows, the last word will be had by this House when it debates the Baker report, which will, as I am sure he also knows, examine two things—not only the comparator and the settlement in the current year but how to establish an independent mechanism, which the whole House voted for in January. He can rest assured that he and all hon. Members will have an opportunity to come back before the summer recess to discuss that important issue.
Will my hon. Friend allow the House an early opportunity for an oral statement or a debate on the effectiveness of British humanitarian aid to Gaza? Those of us who were in that sad territory last week found that apart from food aid, no aid at all is being effective in that area because of the complete closure of the territory’s borders that Israel has imposed. That territory is on the verge of total collapse, and I do not believe the aid that we have promised is getting through and doing what it should, whether it is bilateral, European or United Nations aid.
May I revert to the question asked by the shadow Deputy Leader of the House as to whether there is to be an oral statement on the NATO summit, to which I am afraid we heard no answer? It seems irrefutable that on Sunday Russia shot down an unmanned aerial vehicle owned and flown by Georgia. Last week, Russia appeared to take legal steps to recognise separatists in Georgia. The Defence Committee has just produced a major report about NATO suggesting that there is a crisis of political will in NATO. What is happening in Afghanistan at the moment requires an oral statement on the Floor of the House. Why on earth is this the first time for decades that there has not been one?
Yesterday, the Prime Minister said that it was a matter of public debate as to whether St. George’s day should become a bank holiday, so as part of and in the spirit of that, may we have a debate in this House so that Members can express their support for that long overdue measure?
I will take that as another request for a topical debate. I am sure that my hon. Friend is aware that under this Labour Government people’s entitlement to take bank holidays has already been increased by four days, and in a year’s time they will get a further four days’ guaranteed bank holidays.
As diesel in my constituency costs up to £1.33 per litre, the Chancellor is probably getting more of that sort of revenue from my constituents than from anybody else. Could we have a debate on looking to introduce a system of fuel duty taxation in rural Scotland and the Scottish islands similar to that in rural France, where duty is cut by 3 per cent.? I hope that the Deputy Leader of the House will make time for such a debate. If such a measure were introduced, the Chancellor would still be getting more fuel duty from my constituency than anywhere else.
If the hon. Gentleman had serious proposals on the taxation of fuel, he should have tabled an amendment to the Finance Bill, and he could have had the opportunity to debate it properly next week. What he is saying is absolutely typical of the irresponsible approach his party takes to this matter.
Will my hon. Friend organise an early debate on the use—or possible misuse—of health service records? I am raising this issue because my constituents, Mr. Wood and Mr. Womble of Handsworth, Sheffield, received a survey asking for their views on the NHS. There is nothing strange about that, except that no one else in the area received it, and they had both recently had hospital appointments. My colleagues who are also Sheffield Members of Parliament have constituents who received the same survey, all of whom had recently had hospital appointments. I am asking for a debate and an inquiry by the Secretary of State because the surveys were produced not by any organisation connected with the health service, but by the Lib Dems in conjunction with their local election campaign.
Has the Deputy Leader of the House or her right hon. and learned Friend the Leader of the House yet had time to reflect fully on the latest report from the Procedure Committee, which recommends that the House introduce a system of electronic petitioning? Does she agree that in order better to look after those whom we serve, we need to recognise that the internet is here to stay, and to amend some of our procedures accordingly? When can we expect a Government response?
I am not exactly going to give in to it, but I will respond to the helpful report from the Procedure Committee on this important question. Of course, it is vital that we maintain and strengthen connections between citizens and Parliament. Petitioning is clearly an important channel for doing that. We will study the matter seriously and come back with a response soon.
I would like to draw the attention of the Deputy Leader of the House to early-day motion 1391.
[That this House is alarmed by the proposal of INEOS to reduce the pension rights of the workforce at the former BP oil refinery and chemicals complex at Grangemouth, Scotland, from that which had been part of the terms and conditions of employment of the workforce when INEOS bought the BP site; acknowledges that the INEOS proposal is to create a two-tier workforce with all new employees being denied a final salary pension; notes that as a result of the new proposal 97 per cent. of trade union members in an 86 per cent. ballot return voted for strike action after exhaustive negotiations; expresses concern at the aggressive tactics of INEOS senior management in undermining the agreed consultative processes; and supports the efforts of the INEOS workforce and their trade union UNITE to sustain existing pension arrangements on this very profitable complex for the benefit of all current and future employees.]
I thank the House authorities for organising a statement on the situation at Grangemouth after this Question Time, but could my hon. Friend ask the Scotland Office to co-operate with the Select Committee on Scottish Affairs to set up an inquiry into the promises made when BP sold the facility to INEOS, including the pensions now being attacked, and into the closures that have taken place on that site since INEOS bought the plant? We need to compare the promises made with the reality of that company’s behaviour in Scotland.
The hon. Lady has been very helpful with regard to the ongoing situation of Southwest One in the county of Somerset. I have subsequently learned something about it, so could we have a debate on the matter? The Government’s consultancy body, 4ps, was brought in to sort out the deal in Somerset. It was fired, and another company was brought in. That company made it clear that it was accredited by the Government’s consultants, 4ps, which is a blatant lie put out by the county council and the chief executive of the county. This matter has now cost the county of Somerset more than half a billion pounds and 1,400 jobs. Unless the situation is sorted out rapidly, through a debate in this House so that we can get to the bottom of the deal, it will rebound badly not only on the Government but on the taxpayers of Somerset.
I took up the matter when the hon. Gentleman raised it before, and I thought we had agreed that it was not a political matter. I do not know whether he has been in touch with the National Audit Office, as I suggested—I see that he has. To get to the bottom of the matter, we need to use the institutions available to us, and the NAO is excellent in such situations.
When can we have an educational debate in the House to inform the Conservatives about one of this Government’s best reforms? Probably one of the most serious reforms to go through this House in the past 10 years is the establishment of the UK Statistics Authority, which in its compilation and publication of statistics will be free from interference from political parties or any political narrative. Is it not disappointing that less than a month after it was set up, the Conservative party is trying to interfere with the work of the authority—
My hon. Friend is right in that the new independent Statistics Authority that we set up under legislation earlier this month will firmly guarantee the independence of statistics. He may also be aware that scrutiny of the authority will be carried out by the Public Administration Committee. I hope that it will be able to consider the authority’s work. As he knows, all Select Committee reports may be debated in Westminster Hall.
May we have an urgent debate on the activities of the Driving Standards Agency and its attitude to public service? The agency is about to close the driving test centre in Trowbridge, which means that my constituents will have to make a 46-mile round trip to Chippenham, not only to take a test but to practise for one. When the new enhanced motorcycle test begins later this year, they will have to go to Exeter. To put that into context for people who do not know the geography of the west country, that journey is equivalent to someone from central London having to go to Maidstone for a car test and to Eastbourne for a motorcycle test. Is that an acceptable standard of public service?
I add my tribute to my constituency next-door neighbour and truly remarkable colleague, Gwyneth Dunwoody.
I have tabled early-day motion 1363.
[That this House calls for an investigation into Newcastle-under-Lyme's Conservative- and Liberal Democrat-led Council's handling of the writing off of business rates owed by companies co-owned by Peter Whieldon, a Conservative councillor for the Seabridge ward; notes that on 28th March 2007, the Borough Cabinet agreed to write off amounts of £16,618 and £13,300 in business rates owed by two of Mr Whieldon's insolvent companies in respect of the Albion Pub in Newcastle; notes, too, that on 26th March 2008 the Cabinet agreed to write off a further £13,441 owed by another insolvent company, also co-owned by Mr Whieldon; recognises further that Mr Whieldon is still trading through new companies at several licensed premises in Newcastle and Stoke-on-Trent, including the Albion; notes that the Conservative and Liberal Democratic leadership of Newcastle Council has so far kept these write-offs confidential, notwithstanding his status as a councillor; regrets, therefore, the shameful failure of the council to bring this to the attention of council tax and business rate payers in the borough, and electors in Seabridge ward, through a public statement; believes that this failure exhibits a gross error of judgment by the Council, which also is to the detriment of local businesses that compete fairly for trade, pay their business rates and settle all their debts; and further calls, therefore, for an explanation in the public interest by the Conservative and Liberal Democrat leadership of the Council of its handling of this affair.]
May we have a debate on that motion and early-day motions 1364 and 1365, which I tabled this week? They concern the conduct of Newcastle-under-Lyme borough councillor, Peter Whieldon, whose companies have left a trail of debt across north Staffordshire, including more than £100,000 in business rates owed to Newcastle-under-Lyme and Stoke-on-Trent councils.
Does the Deputy Leader of the House agree that it would be entirely proper to have a debate in this place on what constitutes unethical behaviour by councillors, and on the importance of strong political leadership in exposing such conduct in the public interest, which has been sadly lacking in the case of Newcastle-under-Lyme borough council in this case? It knew about his conduct, and wrote off his business debts behind closed doors, making no public statement. Disgracefully, Mr. Whieldon is again standing as a Conservative council candidate in these elections.
Most of our constituents and most of us accept that we will need more houses in our country over the next 20 years. My democratically elected district council decided that we would need about 6,000 in Salisbury. The South West regional assembly said that we might need 8,000. The Government then imposed 12,400 without consultation. Last night, there was a meeting of 1,000 of my constituents in Salisbury city hall to express their outrage at this top-down planning imposition. May we have a debate on the local development framework and preferred housing options to see whether the Government really believe that housing problems can be dealt with by imposition from Whitehall, rather than by organic, sustainable growth from the bottom up?
The hon. Gentleman must appreciate that there is a serious housing shortage in this country and that, if we are to alleviate it, houses must be built. The Government’s targets for house building are designed to ensure that everybody can live in decent homes. The hon. Gentleman is perfectly free to apply for an Adjournment debate.
Last week, I was privileged to lead the Inter-Parliamentary Union delegation to Israel and the occupied territories, to which my hon. Friend the Member for High Peak (Tom Levitt) has already referred. The seriousness of the crisis is demonstrated by Shifa hospital—the main trauma hospital for the Gaza strip—which already regularly generates its own electricity. It pointed out that if its electricity supply failed, it would lose 80 patients in 30 minutes, and that if electricity failed for a week, an additional 250 dialysis patients would also die. The Quartet meets next week in London, where another important meeting will also take place of those who donate money to help Gazans and others in the occupied territories. May I echo my hon. Friend’s request for at least a statement after those two meetings, the week after next?
I will convey my hon. Friends’ requests to the Foreign Secretary because the position is about not only aid but political developments. It is important that some shift in the political situation occurs. I will therefore draw the matter to the attention of the Foreign and Commonwealth Office as well as to that of the Department for International Development.
May I observe to you, Mr. Speaker, that more than 20 minutes of business questions, which are important to the House, has been taken up by Front Benchers? I wonder whether that is normal and whether you might give advice.
My question to the Deputy Leader of the House is in support of that asked by the hon. Member for Northampton, North (Ms Keeble). Although there may be a debate on Zimbabwe and sanctions in Westminster Hall, the whole House should have an opportunity—as the Government have promised on so many occasions—to debate the uniquely disastrous situation in Zimbabwe, where an election has been held but, three weeks later, no one knows the result. Surely we want to support the view of a growing number of African countries and hold a debate so that we can influence what happens.
Yesterday afternoon, in the Attlee suite in Portcullis House, the all-party group on sustainable aviation, of which I am an officer, was pleased to receive a report from Jeff Gazzard of the Aviation Environment Federation, which exposed the distortions, inaccuracies and heroic assumptions that underpin official policy on aviation and its impact on the environment and climate change. In the light of his startling figures and conclusions, may I make a submission to the Deputy Leader of the House for an urgent debate in the Chamber to examine that crucial matter, which affects so many people, especially those who live around the nation’s regional airports, including East Midlands airport in north-west Leicestershire?
My hon. Friend is right. Aviation is one of the fastest growing sources of greenhouse gases. That is why a more sustainable aviation industry is important. It is also why the Government have made negotiating an EU emissions trading scheme, which incorporates aviation, a priority. I will pass on his remarks to the relevant Department.
This week is national depression awareness week. It is an important fact that one in five people in this country will suffer from depression at some point in their lives. May we have a debate on what the Government are doing to tackle the problem and the wider issue of how good mental health can be positively promoted, just as we promote good physical health?
The hon. Lady is absolutely right. Mental health is important, and that is why the Secretary of State for Health announced a programme to increase the amount of psychotherapy that people can get on the national health service. I will consider her suggestion.
May we have a debate in Government time on the behaviour of HSBC? The bank has made a profit of £35 billion in the past three years, but it is closing its facility in my constituency and transferring the bulk of 164 jobs to Malaysia. That is not the only outrageous way in which the management has treated the staff: it has brought them in, one by one, and told them that they cannot speak publicly about the issue. I am sure that my hon. Friend agrees that behaving like 19th century pit owners is unacceptable.
May I tell the Deputy Leader of the House that on Monday No. 10 suggested that the Prime Minister would make an oral statement to the House on Wednesday about the outcome of the NATO summit? Clearly, he was blown off course by this week’s events. It is still not too late for an oral statement on that important summit. It is unprecedented for a Prime Minister not to make a statement to the House after a Heads of Government meeting at NATO. The Government regularly acclaim NATO as the cornerstone of our defence. The Prime Minister’s failure to make a statement on the summit’s outcome sends the wrong signal about the importance that the Government attach to NATO.
The Deputy Leader of the House will be aware that Monday is international workers memorial day, which commemorates those who have died as a result of work. Does she agree that it would be fitting for the House to mark that in some way, and to have a debate on what further can be done to prevent incidents at work that lead to fatalities?
May we have an urgent debate on cowboy and dodgy builders, especially foreign construction companies such as Bovale, which is based in the Republic of Ireland? That company is destroying large parts of Shropshire, not least Priorslee lake which is a designated county wildlife site. Is the Deputy Leader of the House aware of the—at best—dodgy reputation of the company’s owners, Tom and Michael Bailey? Is it not time that the Department for Communities and Local Government had a black list of companies so that it could warn local authorities not to deal with those that destroy wildlife and have disreputable financial backgrounds?
Will the Deputy Leader of the House ensure that we extend the time on Monday so that Treasury Ministers can explain to the House in detail the way in which they are dealing with the 10p tax shambles? It is crazy that a Labour Back Bencher, however august, can appear on the “Today” programme to tell us about a discussion that he had with the Prime Minister about backdating the claim, yet the Chancellor of the Exchequer comes to the House knowing nothing about it. May we please have sufficient time on Monday to ensure that Treasury Ministers explain to the House how they will fiddle around with the national minimum wage, working family tax credits and the winter fuel allowances? Will they backdate the claim to 1 April? May we hear the answer from Treasury Ministers, not Labour Back Benchers on the “Today” programme?
Following that totally unacceptable reply to the question asked by my hon. Friend the Member for Banbury (Tony Baldry), may I point out to the Deputy Leader of the House that the right hon. Member for Birkenhead (Mr. Field) told the nation on the “Today” programme this morning that he had received absolute guarantees from the Prime Minister that all measures to offset the harm of the abolition of the 10p rate of tax would be backdated to April of this year? The right hon. Gentleman also said that the Chief Secretary had been ill briefed on “Newsnight” last night. However, that was countered by the Chancellor of the Exchequer at the Dispatch Box less than an hour ago. We have no idea whatever what is going to happen. If we are to reach a decision and vote on that aspect of the Finance Bill next Monday, the Deputy Leader of the House must now give us an absolute assurance that the Chancellor of the Exchequer will make the position completely clear before we do so. Will she do so immediately?
The Chancellor of the Exchequer did make the position clear 45 minutes ago. He referred to his letter that sets out the programme of work that is going to be carried out over the next few months. The Government have been happy to listen to those who are genuinely concerned about poverty, but there seems to be some inconsistency in the position of Opposition Members.
I hope that we can have a full day’s debate on Zimbabwe next week. So incompetent is Robert Mugabe that he could not even rig his own election properly and is now trying to steal it. While he is doing that, 4 million people have moved to live in South Africa and millions more are living with hyperinflation and starvation. Some African leaders have shown true leadership. Indeed, even in South Africa Speaker Mbete has spoken out, saying that the election results should be declared. Sadly, President Mbeki has not shown the same leadership. Please can we have an urgent debate next week on the issue?
I know that the hon. Gentleman is concerned about the situation in Zimbabwe, as is everybody. Everybody utterly condemns the reports of violence that are coming from that country. I will relay the requests that have been made to the Foreign and Commonwealth Office.
Further to the questions posed by the hon. Member for Northampton, North (Ms Keeble) and, more recently, my hon. Friends the Members for Macclesfield (Sir Nicholas Winterton) and for Ribble Valley (Mr. Evans), may I reiterate the request that we have a full day’s debate on Zimbabwe in Government time on the Floor of the House? Given that under the truly tyrannical and despicable leadership of the mass murderer Mugabe too many people have suffered too much for too long, with too little done to help them, is it not time that we debated on the Floor of the House how the Government will seek to persuade the United Nations to translate its commitment to the responsibility to protect from fine-sounding words into concrete action?
May we have a debate on the Equality and Human Rights Commission? Cultural diversity is one of Milton Keynes’s greatest strengths. I am sure that the Deputy Leader of House will join me in commending the work of the Milton Keynes racial equality council. However, does she share my concern at the news this week that all funding for that organisation has been cut by the Government from 1 April this year? What message does that send to minority groups in Milton Keynes?
My three local newspapers, the Bradford Telegraph and Argus, the Keighley News and the Ilkley Gazette, have all taken the regrettable decision to remove their “Court in brief” sections, not because they wanted to do so but because HM Courts Service has introduced excessive charges for the information. I hope that the Deputy Leader of the House will agree that that goes totally against the grain of open justice. I quite understand why the Government are embarrassed about the lenient sentences handed out to criminals in our courts, but surely it is a rather weasel tactic to implement excessive charges to stop newspapers reporting them. Can we have a statement from the Justice Secretary on how the matter will be resolved?
Industrial Action (Grangemouth)
With permission, Mr. Speaker, I should like to make a statement on the implications of the industrial action at the Grangemouth refinery, which, I regret to report, is scheduled to begin on Sunday and last for 48 hours. Throughout the past few days we have kept in close contact with Scottish Ministers, both parties to the dispute and the industry as a whole. I am particularly grateful to ACAS for its efforts to resolve matters between the parties.
Our first priority now is to ensure the maintenance of sufficient fuel supplies during the period of industrial action. Over the past few days, significant additional supplies of imported fuel have been made available in Scotland. I have been advised by the industry that there is sufficient fuel to resupply forecourts and other users ahead of the planned industrial action. The industry has also advised us that, at present, fuel stocks at Grangemouth, together with planned imports of finished product through Grangemouth to replace lost production, should be sufficient to maintain supplies through the period of industrial action and the consequent restarting of the plant.
We are already working under our established memorandum of understanding with industry to develop a jointly managed approach that allows fuel suppliers to work together to maximise available fuel. We also have available, if necessary, the national emergency plan for fuel, which can be used to ensure that fuel is available for priority groups such as the emergency services. Our best assessment is that there is at present no need for the Government to take action under their emergency powers. We are working closely with the Scottish Executive and the regional forums in Scotland to prepare for further action, should that become necessary. We will not hesitate to use the emergency powers if that becomes necessary.
The oil companies have reported significant increases in fuel uptake this week in response to concerns about shortages of fuel. Although this response is perfectly understandable, I want to emphasise that industry has made it clear that there is sufficient fuel available via imports and that any localised shortages will be resupplied quickly.
It is also essential to prevent the industrial action at Grangemouth from disrupting the flow of North sea oil and gas associated with the Forties pipeline system and the Kinneil processing plant at Grangemouth. There can be no justification whatever for any action that adversely affects production of oil and gas from the North sea. Continuing production depends on power, steam and cooling water being delivered by or through the Grangemouth site. Discussions are continuing this morning on ensuring the continuance of these vital utilities, and of course it is essential that they be maintained.
Finally, there is a need to protect critical equipment to allow a rapid return to normal operation following the period of industrial action. That will require the provision of safety cover for the INEOS refinery and petrochemical plants. It will also require maintaining the steam supply throughout the plant to ensure the integrity of steam lines, pipes and production units.
The dispute is one for INEOS and Unite to resolve as a matter of urgency. The Government’s view is that they both have a responsibility to minimise the impacts of their dispute on the public and the wider economy. I urge both sides to get back to the negotiating table as quickly as possible to resolve the dispute without any further harm being done to the public and the economy. We will continue to monitor the situation, working closely with the Scottish Executive, emergency services, local authorities and other key agencies.
My hon. Friend the Member for Rutland and Melton (Alan Duncan) apologises to the House for his inability to be here for the statement.
I thank the Secretary of State for advance sight of the statement on a matter which is of particular concern to people in Scotland. May I begin by agreeing with him that the parties should get back round the negotiating table as a matter of urgency? I would ask both sides to lift their horizons beyond their own immediate interests, and to show a maturity and responsibility which reflects the serious consequences that this dispute could have for the public and the economy.
I am pleased to learn that there has been close working with the Scottish Government, and I would grateful if the Secretary of State provided a little more detail on that. I do not know whether he has seen any of the headline-grabbing pronouncements from Scotland’s First Minister in the past few days, but it would seem that, for once, even his mythical powers have been unable to resolve this situation.
I welcome the proportioned tones of the Secretary of State’s words, as he will be aware that there has been much speculation about the impact that this shutdown could have on individuals, services and the economy. Does he agree that we need to maintain a sense of proportion in relation to these events and to ensure that all analysis is objective? That will be the only way to deliver reassurance to the public that there is no need for the panic buying of petrol or the stockpiling of supplies.
Will the Secretary of State join me in endorsing the view of the AA that if people act sensibly then there will be no shortages? Where fuel is being provided by contingency measures, will he confirm that it will be equitably distributed throughout Scotland and not just to major centres of population? Can he also confirm that, as this situation does not represent a more general shortage, he would not expect there to be any impact on petrol prices at the garage forecourt anywhere in the United Kingdom? Will he monitor what happens to petrol prices to make sure that no one tries to take advantage of the situation and to push their prices up unfairly?
The Secretary of State will be aware that the industry believes that a two-day strike is damaging but containable, but there is profound concern about the implications of a longer dispute, which would undoubtedly increase the risk of serious shortages. How is he monitoring that situation? At what point, for example, would he expect Cobra to meet to establish what further action might be needed? In the meantime, can he give the House more details of how his Department is working with the industry to secure fuel from other sources to make up for the shortfall while Grangemouth is out of action? To what extent does he understand that fuel has been stockpiled to minimise the effect of the strike on the public?
The Secretary of State will also be fully aware that huge costs are associated with ships that are waiting to load up with oil but cannot do so because of the industrial action. What is his understanding of the legal implications of this, and who will be liable for the extra costs incurred?
Finally, what is his understanding of the impact that the strike will have on plans to invest in the future of Grangemouth? What impact does he think a strike will have on INEOS’s ability to fund the £750 million investment programme necessary to modernise the plant? In that respect, does he agree that a strike will put jobs at risk and damage the interests of those working at Grangemouth and of a vital British industry?
I am grateful to the hon. Gentleman for the manner of his response and for his comments. I agree that there is no need for panic buying in Scotland or anywhere else, and I hope that hon. Members from all corners of the House will reflect that message in their comments today. I can assure him that the objective of our discussions with the industry in Scotland is to maintain fuel supplies for all consumers in Scotland, wherever they are. That is important not just in the central belt, but in rural areas and the highlands as well. It is also important for industrial consumers, including the airlines operating in Scotland, which need jet fuel and kerosene. There is absolutely no justification for profiteering, given the adequacy of the levels of supply in Scotland, and I condemn absolutely anyone who seeks to take unfair and inappropriate advantage of the current situation. We are looking carefully at that matter.
The hon. Gentleman has asked me a number of questions about what would happen if the dispute were to escalate. I am sure that he will understand that I do not want to speculate about hypotheticals today, but I can assure him and every Member of the House that it is the UK Government’s absolute and firm responsibility to ensure that there is continuity of supply, that the emergency services are protected first and foremost, and that we do everything in our power, if there were to be such an event, to minimise the wider impact on the community in Scotland and elsewhere in the United Kingdom.
It is rarely the case that industrial action advances a cause with the wider public, and I do not believe, in these circumstances, that it is fair or reasonable to expect the wider community in Scotland to be disadvantaged in any way by this dispute between INEOS and the Unite union. It is incumbent on all the parties to the dispute to find a way of getting back to the table as quickly as possible and to resolve the dispute, so that the Scottish public and Scottish industry can get on with their future.
I thank the Secretary of State for coming to the House to make this statement. I know that my hon. Friend the Member for Orkney and Shetland (Mr. Carmichael) has been trying to table an urgent question on this matter for some time, as it particularly affects people in Scotland.
I want to echo the Secretary of State’s observation that it is essential that INEOS and Unite get back round the negotiating table as soon as possible. I welcome his assurance that adequacy of fuel supply is assured for Scotland, particularly in rural areas. It simply cannot be the case that a piece of brinkmanship and a petty dispute about pensions should hold the economy of Scotland to ransom. Does he recognise, however, that his statement follows a week of panic buying? Many Scottish colleagues are already reporting localised—albeit, as he says, short-term—shortages of fuel. Does he think that an earlier, public intervention by the Government could have prevented that? Having said that, I welcome his statement today. It was extremely helpful.
The Secretary of State also mentioned profiteering, a matter that a number of Scottish colleagues have raised. He might be aware that there is a system in Western Australia called FuelWatch, which publishes tomorrow’s fuel prices today. Does he think that such a public display of information could be helpful in the UK in counteracting that unacceptable practice? He said that contingency plans were in place in case of need. Will he tell the House how close he believes this two-week stoppage could bring Scottish oil supplies to that point of need? I appreciate his point about not wishing to discuss the details regarding Cobra, but he will also be aware that the public find it reassuring to understand the extent to which the Government have planned for that need.
Finally, how confident is the Secretary of State that what he calls “well-functioning markets” are likely to deliver the investment in UK refinery capacity and function that the Wood Mackenzie report says we need? As the Conservative spokesperson has already mentioned, INEOS’s own briefing states that its investment programme is contingent on a resolution of this dispute in its favour. Does the Secretary of State believe that that demonstrates the vulnerability of the UK’s security of supply to unforeseen events?
I shall deal with some of the points that the hon. Lady has raised. We made our position clear on Tuesday in relation to this dispute and to the need for people to buy fuel normally during the run-up to any potential industrial action at Grangemouth. We felt that it was perfectly reasonable not to make a statement to the House of Commons at that time, given that discussions were continuing between ACAS, INEOS and the trade unions, and that there was a prospect that the dispute would be called off. Now that the dispute is clearly scheduled to take place, I believe that this is the right time for the Government to make a statement.
Let me correct one thing that the hon. Lady said. It is not a two-week stoppage; it is a two-day stoppage—[Interruption.] I am not trying to trip her up; she does not need to worry about trying to come back in. Because it is a two-day stoppage, and because of the action that the industry took in the run-up to the dispute, and the action that can be taken during the dispute, we are confident—and the industry has reassured us—that there is adequacy of supply in Scotland. That is why we are not activating any of the emergency powers. There is no need to do so, given the adequacy of the levels of fuel supply.
The hon. Lady has rightly asked about the planning that goes into all eventualities. It is comprehensive and extensive, and I would be happy to extend an invitation to her and to the hon. Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell) to have a briefing with my officials, to reassure them about the level of planning and the adequacy of those arrangements.
May I first, through you, Mr. Deputy Speaker, reprimand the hon. Member for Brent, East (Sarah Teather) for referring to this as a “petty” dispute over pensions? It is all very well for us sitting here with our final salary pensions—much higher than anyone’s in the industry—to call this a petty dispute when people’s standards of living are being attacked.
Is the Secretary of State aware that the breakdown of talks yesterday took place because although the trade union was willing to talk about the safety and integrity of the plant so that it could be started up very quickly, all the company seemed to be doing was talking through fancy public relations companies and bringing in very expensive barristers to threaten the trade union with action in the courts? In fact, the company did not try to negotiate at all. Oddly enough, it said that it wanted to return to the position of three months ago, yet this dispute, as we know, started eight months ago when the company brought new workers on site with different terms and conditions of employment from those already there—with no final salary pension scheme and contributions taken out of their salary, which was not the deal when BP sold the plant to INEOS.
May I suggest that the solution is to put it to Mr. Jim Ratcliffe, the owner of INEOS, that if the company is willing to return to the position of eight months ago, when everyone coming on to the site had the same terms and conditions of employment—a final salary pension that is non-contributory, as it was under BP—the negotiations could be resumed with good will? Mr. Ratcliffe was willing to come and see me when he was lobbying to buy BP, and I am willing to meet him privately at any time to talk about how to solve the problem.
I do not dispute for a second the importance of pension rights for the work force at Grangemouth, but my responsibility in all these matters is not to get drawn into taking sides in the dispute. There is a dispute between the parties and I have already said that I very much hope for a sensible settlement so that business can get back to normal at Grangemouth, which I strongly believe is also the desire of the trade unions there, as they will be the most immediate group to lose out. My responsibility to the House and the people of Scotland is very clear: it is to maintain essential fuel supplies, ensure that the economy of Scotland does not suffer as a result of the industrial action, and make sure that there is no ripple effect out into the North sea in respect of production from the Forties pipeline system.
My hon. Friend was right to refer to agreements that have already been secured in respect of safety at Grangemouth and to the ongoing provision of essential utilities on the site. I commend the unions for their willingness to ensure that there is no damage to the basic infrastructure at Grangemouth, but it is absolutely essential—it is impossible to exaggerate the importance of this—that there is also an agreement to ensure the safety and security of the Forties pipeline itself. It simply cannot be in anyone’s interest for any fundamental damage to be done to the long-term value of the infrastructure that links Grangemouth to the North sea. If that were to happen, it would be a tremendous own goal, which would serve no one’s interests.
I also welcome the Secretary of State’s statement and very much hope that he is right in his assessment of the situation. May I press him on the question of co-operation and communication with the Scottish Executive? Will he give an assurance that some thinking is being done about how priority can be given to the maintenance of supplies to vital public services—fire, police and ambulance services, but also ferry and air services that provide lifeline routes to communities that are heavily reliant on them—should that become necessary at some future date?
I am grateful to the hon. Gentleman for giving me the opportunity to give that assurance; it was remiss of me not to have dealt with the matter in my response to the hon. Member for Dumfriesshire, Clydesdale and Tweeddale. We have had discussions with the Scottish Executive; I spoke to the First Minister on Monday and again this morning, and my hon. Friend the Minister for Energy has had discussions with the Scottish Finance Minister as well. We will keep in close communication with the Scottish Executive; it is important that we do so.
On the question of the emergency services, my point is that there are adequate fuel supplies in Scotland, so we do not need to activate the national emergency plan, which rests fundamentally on the assumption that there is no adequate supply, thus highlighting the need to prioritise supply to the emergency services. Should the situation in Scotland change, we will not hesitate, as I have already made clear today, to use the powers that we have to prioritise the supply of essential fuel to vital emergency services. I also want to make it clear to the hon. Member for Orkney and Shetland (Mr. Carmichael) and other hon. Members who represent the remoter constituencies in Scotland that Caledonian-MacBrayne has clarified that no services will be interrupted and that we are sure that airline operators have sufficient jet fuel to maintain a regular service.
I fully support the Secretary of State’s comment about the need for a speedy negotiated settlement so that industrial action is averted. Does he agree, however, that this is yet another example of new workers being brought in to undercut the wages and conditions of the existing work force, and that we need to look at the employment law regime to ensure that we provide protections and do not have two-tier work forces in the private sector? Does he agree that we also need to look into the pensions issue, and that pensions should be treated as deferred pay and a pensions regime should exist so that people have security in their retirement? Clearly, the reduction of pensions entitlements is a major cause of concern for the work force at this time.
I agree with my hon. Friend about the importance of pensions to working people. Of course we recognise that, and we have a clear framework of law in the UK in respect of the protection and security of accrued rights in final salary schemes such as the one at Grangemouth—and they cannot be interfered with. There is also a clear statutory procedure if any changes are proposed to future rights under those pension schemes. I believe that our employment law framework is robust and appropriate and that it guarantees essential rights to workers while also allowing companies to manage change when they need to do that. Rather than get embroiled in a blow-by-blow account of what has happened or a post-mortem, I would rather focus on the importance of ensuring and maintaining fuel supplies in Scotland—they are secure and they can be maintained—and on bringing this industrial action, which will ultimately benefit no one and may hurt a lot of people, to an end as soon as possible.
Does the Secretary of State agree that the seriousness of the situation is underlined by the fact that if the walk-out goes ahead on Sunday, it will be the first of its type in any UK oil refinery for no less than 73 years? Indeed, the chief executive of INEOS, Tom Crotty, has described how the strike will
“cause chaos and disruption for the people of Scotland”—
irrespective of the best efforts of Governments either here or in Holyrood.
We have heard reports over the last few days of people queuing at petrol stations and forecourts in Inverness. Maintaining fuel supplies to the highlands does not mean maintaining them only in the populous centres such as Inverness, Dingwall and Fort William, but in Wester Ross, Skye and Lochalsh and the small isle areas, which are very much at the end of the line physically and require reassurance. Will the Government take up the suggestion of my colleague at Holyrood, Nicol Stephen, that in view of the anecdotal reports we have heard of prices being jacked up despite the reassurance and the fact that there are no immediate shortages, the Competition Commission may in due course wish to look at the activities of the oil companies over this period?
Let me deal with the last of the right hon. Gentleman’s points first. It is the role of the UK competition authorities to keep a close eye on the way in which markets operate. If there is any evidence of anti-competitive behaviour, we would expect the Office of Fair Trading and the Competition Commission to get stuck into it. We must not allow consumers to be ripped off in those circumstances.
As to the right hon. Gentleman’s main point, I agree about the importance of preserving fuel supplies across Scotland and to all parts of Scotland. That is absolutely what the industry, the Scottish Executive and ourselves are working to ensure. I take issue with the comments about causing chaos and confusion. There is no reason for chaos and there is absolutely no reason for confusion. The unions gave important undertakings yesterday and today about preserving the continuity of utilities operations on the Grangemouth site. Yes, we are in unchartered waters; this has not happened before. The complex technology at Grangemouth requires constant maintenance and utility provision, but I think that it is agreed that it is in no one’s interest to damage the essential infrastructure there. I certainly hope that common sense prevails in that regard.
I welcome my right hon. Friend’s statement and I endorse the view that the matter needs to be resolved as quickly as possible and that it can be resolved only by negotiation. I am concerned about how the threat to the processes and the plant is being discussed in the debate. My experience and involvement in industrial disputes, including in the oil and gas industry, suggests that the unions go out of their way to ensure that the integrity of health and safety services, as well as the production equipment, is upheld. Nobody has an interest in destroying the future of the place where they work. Everyone is well aware that when they return to work they must have a proper working relationship.
I am worried by what my right hon. Friend has said about the threat to the North sea oil and gas industry. I hope that the issue is not being raised by management without proper discussion with the unions to ensure that both sides are satisfied that the integrity of the system is being preserved by agreement.
My hon. Friend is right. As I have tried to make clear, it is in no one’s interest for any fundamental damage to be caused to the vital infrastructure at Grangemouth. However, there is real concern about the provision of utilities, particularly on the BP Kinneil site at Grangemouth. That is essential if production from the Forties pipeline is not to be disrupted. I do not think we are exaggerating the consequences of that. I am hopeful of a good outcome from the continuing discussions on maintaining high steam pressure for Kinneil, which is absolutely essential. As I have said, I am confident that good sense will prevail.
I welcome the statement, and hope that the Secretary of State’s contact with the Scottish Government will continue in the same constructive spirit. Although this is principally a Scottish problem, I understand that Grangemouth supplies parts of the north of England and Northern Ireland as well.
I welcome the Secretary of State’s assurance, which has also been given by the Scottish Government, that there are sufficient supplies. I hope he understands how important it is for politicians of all parties, and also the media, to do nothing that would cause the problems to escalate. It has been reported—and I know from experience in my area and adjoining constituencies—that there has been a run on petrol stations, some of which have run out of fuel, particularly unleaded fuel and diesel. That is causing difficulties in some rural areas.
The Secretary of State mentioned looking into the activities of oil companies. There is evidence, at least anecdotal, that some stations have jacked up their prices considerably during the dispute. While I appreciate that there may be an investigation at a later date, has the Secretary of State any powers to take immediate action if there is any evidence that that is happening?
It would not be appropriate for anyone to grandstand in relation to this dispute, and I hope that that temptation will be resisted. I think we should work together sensibly to try to resolve the problems. Certainly we envisage no difficulty: we have good working relations with the Scottish Executive, which we will preserve. It is in everyone’s best interests to ensure that fuel supply is as close to normal as it can be.
The hon. Gentleman is right to say that there have been some local shortages, but I understand that they were corrected as soon as possible. There could well be more in the next few days—I do not wish to pretend that such difficulties could not arise—but the essential point for his constituents and people throughout Scotland is that supply is sufficient, and there is no reason for people to start buying fuel other than in the normal way. There is enough diesel and petrol for Scotland, and there are enough industrial supplies. That is the most important message.
I share my right hon. Friend’s sentiments, and hope that the company and my colleagues in Unite reach a negotiated settlement quickly. He mentioned profiteering. Two days ago I was contacted by a business man in my constituency who wanted to purchase red diesel. He approached about half a dozen of his usual suppliers, and was told that the price of red diesel had increased by 5p per litre if he bought less than 1,000 litres, and by 10p per litre if he bought more than 1,000 litres. What is taking place is not just profiteering, but sheer naked exploitation on the back of a dispute. I hope that my right hon. Friend will send a clear message to those who are intent on exploiting the situation that that is not acceptable.
I strongly agree, and I have made clear that there is absolutely no excuse or justification for that type of sharp practice. If there is any evidence of collusion between suppliers on prices, it will suggest a potential violation of competition law. There is an appropriate mechanism for investigating and bringing about redress in such circumstances. I invite my hon. Friend to give me the details of his constituent’s experience.
I welcome the Secretary of State’s assurances about supplies, which I hope will be noted. As for what was said by the hon. Member for Dumfries and Galloway (Mr. Brown), is it not up to forecourt owners and managers to act responsibly and inform their customers that they can secure future supplies and manage them sensibly?
I am, however, concerned about the implications of the dispute for the security and continuity of production in the North sea. Many of us have thousands of constituents who work in the North sea, and who must fear that a dispute downstream could threaten their livelihoods and their long-term future in upstream activity. Can the Secretary of State assure us that he will investigate thoroughly the integrity of the system downstream and upstream, to ensure that no dispute of this kind can cause serious long-term damage to production capacity and delivery in the North sea and the future employment of people whose livelihoods depend on it?
Yes, I can give the right hon. Gentleman that assurance. I have spoken to Tony Woodley, the general secretary of Unite. Thousands of Unite members also work in the North sea, and it is in no one’s interests, including theirs, for the dispute to have a ripple effect on production upstream.
As with all events such as this, there are lessons to be learnt. I am sure that once the dispute is brought swiftly to a conclusion, as I hope it will be, we can all reflect on what should be done to ensure better protection of continuity of supply and vital infrastructure should a similar situation arise in future.
May I reinforce the needs of rural communities? I am glad that the Secretary of State is keen to protect the whole of Scotland, not just urban areas. May I also ask him to ensure that there is proper monitoring to prevent price exploitation?
What can be done about the impact on the North sea, short of exhorting people not to do anything that might jeopardise production? Has the Secretary of State any powers to intervene to protect production and vital infrastructure?
I have a number of emergency powers under the Energy Act 1976 and the Civil Contingencies Act 2004. The only questions concern when they can and should be used, and their extent and duration. I assure the hon. Gentleman that the Government are fully equipped with a range of powers to deal with emergencies.
I beg to move,
That this House has considered the matter of supermarkets.
Today’s debate provides us with an excellent opportunity to focus on the role of supermarkets, and to consider how their activities affect people, communities, the economy and the environment. Many of us have a peculiar love-hate relationship with our local superstore. We like the convenience of being able to obtain a wide range of goods in one place, at one time and at a reasonable price, but we want to ensure the hearts of villages and towns are not destroyed by out-of-town developments and our high streets are not cloned into homogeneous parades of shops selling the same products from the same stores in town after town. Many of us also care very much whether producers and farmers—whether they farm in Britain or in developing countries—get a fair price for the products they sell.
Whatever anyone’s stance on the issue, no one can deny that our supermarket chains have a unique place in this country. They exert an incredible influence over what we buy, how we buy, and where we buy. Their actions hold sway over many varied issues, and I am sure that a number of them will be raised today.
Although it is not in my brief, I am more than aware of Members’ concerns about the ability of supermarkets to expand their empires at the expense of local shops. Our “town centre first” policy has produced some real success. However, the Department for Communities and Local Government has now decided to conduct a review of planning policy statement 6, and to introduce a tougher impact test to give councils more capacity to refuse big developments that put small shops in town centres at risk.
World food prices are the latest issue to top the supermarket agenda. On Tuesday, recognising that the poorest would be hit hardest, the Prime Minister hosted a summit with leading experts—including the head of the World Food Programme—to discuss ways of tackling the problem. My focus in this debate, however, will be on the supermarkets’ role in climate change and waste.
Supermarkets have a key role to play on climate change. As large businesses, they need to reduce the carbon impacts of their operations. Many have secured real reductions through energy efficiencies and new technologies, but to drive down their emissions further we are introducing the carbon reduction commitment through the Climate Change Bill. That will create a domestic cap-and-trade emissions scheme covering all enterprises whose annual half-hourly metered electricity use is above 6,000 MW hours, which will include supermarkets.
I regret to have to say that I do not have that figure with me. We can endeavour to get hold of it, however, and I will write to the hon. Gentleman if I have it. As I think he will know, we in the UK are responsible—in terms of our own productions here, as opposed to the goods we bring in—for 2 per cent. of total global CO2 emissions, but we have to take on our responsibility, as does every section of society, and I know that the supermarkets understand that.
As consumer-facing organisations, supermarkets also wield huge influence over the purchasing habits and lifestyle choices of millions of individuals. As they have expanded beyond groceries, supermarkets have given us cheap clothes and electrical and electronic goods. Like all goods, they come with a carbon price, which Government can no longer ignore. Supermarkets’ voluntary phase-out of incandescent light bulbs is already helping consumers to save money and reduce carbon emissions. Many organisations are now interested in the carbon footprint of individual products, so the Department for Environment, Food and Rural Affairs, the Carbon Trust and the British Standards Institution are working with retailers to develop a methodology that could lead to carbon labelling, and which will certainly lead to retailers being able to reduce carbon footprints.
The last time I and the hon. Member for Shipley (Philip Davies) were in the Chamber addressing a related topic, I was critical of ASDA Wal-Mart, but on this occasion I wish to congratulate it. Does the Minister endorse the initiative that it and Leicestershire county council launched some time ago of a packaging amnesty that allowed consumers to return excessive packaging, and, as part of an overall campaign, of encouraging shoppers to be alert to excess packaging and to try to select products that minimise their carbon footprint?
I thank my hon. Friend for his intervention, which anticipates something I intend to say later. I am happy to congratulate those in his constituency who have been active in trying to improve packaging issues.
DEFRA is working directly with supermarkets, retailers and manufacturers to reduce the energy consumption of products such as set-top boxes and stand-by mechanisms. Helping the consumer to acquire the least energy-consuming products by choice-editing is a vital part of our fight against climate change.
Fast fashion and cheap clothes are adding to our carbon footprints. Only last week, I read a newspaper headline quoting a shopper at Primark, who said:
“So cheap you can almost wear it and throw it”.
And throw it we do—more than 1.5 million tonnes of clothing waste per annum. Once again, however, the Government are taking action, by working with retailers and others on a clothing road map analysing the carbon impacts from seed-sowing through manufacture and sale to disposal of the clothes we wear. This, too, is designed to minimise environmental impact, including carbon emissions.
What, however, is top of the list in my ministerial postbag on supermarkets? As I am sure Members will guess, the answer is packaging. Surveys show that most people feel there is too much packaging on products on sale today. Packaging serves multiple purposes, of course. It is used to catch the eye of the customer. It can serve to keep a product fresh, or to protect it, or make it easier to store or move. People realise that they have to pay for packaging, however, and when the packaging is finished with, it occupies as much as a fifth of their household waste bin. As council tax payers, they then end up paying again to get rid of it. When it becomes waste, packaging also contributes to climate change.
As individual consumers, we have a responsibility and there is action we can take. We can opt for goods with less wrapping, buy loose goods and reuse and recycle more of the packaging we acquire. However, people also expect the Government to act.
I assure the hon. Gentleman that surveys show very clearly that people expect the Government to lead on these issues—and lead we will.
Eighteen months ago, senior representatives from the country’s biggest grocers, the Government, and the Waste and Resources Action Programme agreed the Courtauld commitment. Courtauld is about reducing packaging and food waste, such as by keeping wrapping to a minimum and finding new means of “lightweighting” those containers with which we are all so familiar. The signatories to the agreement are responsible for about 40 per cent. of the packaging in this country. Their first target was to end the growth in packaging waste this year—to de-link growth in packaging from growth in GDP. I believe they are on target, and look forward to the report that is to come.