House of Commons
Thursday 9 October 2008
The House met at half-past Ten o’clock
[Mr. Speaker in the Chair]
London Local Authorities (Shopping Bags) Bill (By Order)
Order for Second Reading read.
To be read a Second time on Thursday 16 October.
Manchester City Council Bill [Lords] (By Order)
Order read for resuming adjourned debate on Question [12 June], That the Bill be now read a Second time.
Debate to be resumed on Thursday 16 October.
Bournemouth Borough Council Bill [Lords] (By Order)
Canterbury City Council Bill (By Order)
Leeds City Council Bill (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 Thursday 16 October.
Oral Answers to Questions
The hon. Member for Middlesbrough, representing the Church Commissioners, was asked—
I have not discussed the subject with the archbishop since June, when we had our annual meeting of the Church Commissioners, but I know that he, like me, would agree with the hon. Lady that parish churches and their congregations are at the heart of rural life. The national stipends benchmark is £21,600, although dioceses set their own policy on the application of national recommendations.
I am most grateful to the hon. Gentleman for that answer. May I express my concern that rural parish vicars are being asked to spread themselves very thinly. As the hon. Gentleman has said, they go to the heart of rural life, but in the midst of the current rural crisis, is that having an impact on recruitment? What is he doing to ensure that we have sufficient parish priests to cope with all the parishes that require pastors?
I have sympathy with the points that the hon. Lady makes and with the difficulties that parish priests will have with the cost of living, as have the rest of our citizens at the moment. The policy on parish priests is set by the Archbishops Council, but the commissioners have a role in supporting the ministry. In 2007, we spent almost £178 million, including £105 million on pensions, nearly £33 million on parish mission and ministry support, nearly £25 million on bishops ministry and nearly £7 million on support for cathedrals. As the hon. Lady knows, apart from the stipend, the clergy remuneration package for parish priests in rural areas includes the provision of housing, the payment of council tax, water charges and maintenance costs, a non-contributory pension, removal grants and subsidised insurance in high-risk areas. The hon. Lady has made a valid point about how many more parish priests we can get in rural areas, and the Church will take it into account.
In addition to the question of stipends, will the Second Church Estates Commissioner tell us about the state of discussions between the Church Commissioners and Her Majesty’s Revenue and Customs and the Treasury on the approved motor mileage allowance, which is tax free, because it seems to me that the clergy are currently subsidising their employers.
I have never seen myself as a trade union leader for vicars, but on this occasion I am happy to do so, because I, too, believe that the parish church is the heart of rural life. Vicars have disappeared from certain areas in my constituency, which means that other vicars have had to double up or even treble up in order to cover those parishes. I hope that discussions will take place with the Archbishop of Canterbury to ensure that the pay package for priests is sufficiently attractive to allow all parishes to be covered.
As I said earlier, we think that parish priests are adequately covered in terms of finance, but it is true that churches in outlying villages are closed. When I go to my church in the north-east of England, it is always sad to find it closed. Stipends need to be flexible enough to allow the Church to put clergy where they are best deployed and consistent enough to avoid impeding mobility. Hon. Members have made important points today, which I will take back to the Church.
King James Bible
The 2011 Trust has been established to celebrate that important anniversary through a series of lectures, exhibitions and concerts, culminating in a service of thanksgiving at Westminster abbey on 16 November 2011. I know that the commissioners and the House of Commons will wish the trust well in its work.
That is very good news. Of course, the King James Bible made the Bible accessible to every man and woman in the country. As the translator said,
“there should be one more exact translation of the Holy Scriptures into the English tongue”,
so it really is good news that there will be celebrations in 2011. Perhaps, in these troubled times, it is worth recalling one phrase from the King James Bible:
“The grass withereth, and the flower thereof falleth away: But the word of the Lord endureth for ever.”
I am grateful to the hon. Gentleman for his remarks on the pertinence of the text. The authorised version of the Bible is one that we were all brought up on. I was personally saddened when the phrase
“If I wash myself with snow water”
was changed so that the new Bible read “with water”. I thought that that was a sad difference between the two Bibles. When I have the opportunity to give a reading, I always use the old version rather than the new.
The hon. Gentleman will know that the 2011 Trust is chaired by my right hon. Friend the Member for Birkenhead (Mr. Field). Its patron is His Royal Highness the Prince of Wales, and my friend the Dean of Westminster is a member. The trust was launched earlier this year in Poet’s Corner in Westminster abbey, with speeches by the Bishop of London and Lord Bragg. You will wish to know, Mr. Speaker, as it is a very important point, that the Bible was written and translated in a room in Westminster abbey. It is a very august room; we had a meeting there with the Archbishop of Canterbury not long ago. Anyone who is interested in the history of that particular version of the Bible ought to pay a visit sometime; they will be very impressed.
The King James Bible owes much to William Tyndale’s New Testament of 1526 and Thomas Cranmer’s Book of Common Prayer of 1549—two of the greatest works in our national literature. They were fundamental in shaping the culture and philosophy of all English-speaking nations. Does my hon. Friend agree that without those books English would not be the predominant world language, with its amazing vitality, splendour and versatility, and that our Government should therefore fund a rather more substantial celebration in three years’ time?
I am happy to take up my hon. Friend’s point about the Government providing additional funding. As the pre-Budget report will be produced in two weeks’ time, perhaps we can make a Budget submission on that point. My hon. Friend referred to 1526 and onwards, and the contribution that the authorised version made to our literature. That contribution is enormous, and may go on for ever. As for the future, he will be happy to know that the trust is busy commissioning new music and literature, developing educational school projects, publishing new texts, including a green Bible, and undertaking a host of other activities. It is working ecumenically and it will involve museums, galleries, libraries, the media, publishers and, of course, the Church, so the strands that began in 1526 continue to this day.
If these particular splendid words are to endure for ever, would it not be a very good idea to ensure that every child attending a Church of England school is given a copy, not of a green Bible, but of the King James Bible, to commemorate the anniversary?
That is an interesting suggestion. May I divert the House briefly, Mr. Speaker? Mr. Randolph Churchill’s mouth could never be kept closed, so, during the war, to keep him quiet for a while, he was bet a couple of crates of brandy that he could not read the authorised version of the Bible from cover to cover. Even Randolph Churchill failed in that task; he lost his bet. I would be happy for schoolchildren to have a copy of the authorised version, but I would not recommend that they tried to read it from cover to cover.
Electoral Commission Committee
The hon. Member for Gosport, representing the Speaker's Committee on the Electoral Commission, was asked—
The Electoral Commission informs me that it has issued guidance to electoral registration officers that includes advice on the registration of qualifying Commonwealth citizens. It has not, however, undertaken any specific assessment of the effectiveness of procedures for registering Commonwealth citizens on the electoral register.
I thank my hon. Friend for that answer. I am worried that many Commonwealth citizens in this country without indefinite leave to remain may inadvertently be putting themselves on the electoral register because of a failure to understand the rules. I accessed the Electoral Commission website yesterday and downloaded a standard electoral registration form. The declaration at point 3 is that the person registering is a citizen of a Commonwealth country. That, however, is not sufficient for somebody to be eligible for the register. Will the Electoral Commission review the procedures for the form?
My hon. Friend is well known for being particularly assiduous and having a good eye for detail, and on this occasion he has put his finger on a specific and significant point. The “About my vote” website carries a marginal note that states:
“You can register to vote if you are 16 years old or over and a British citizen or an Irish, qualifying Commonwealth or European Union citizen who is resident in the UK.”
However, yesterday I printed the application form to test it and saw that that marginal note is not repeated in the printed form. I could well understand someone printing out the form without the marginal note and entering on the register someone who was not qualified to vote. I have drawn the point to the Electoral Commission’s attention. It is grateful for the point, and it will take up the issue and change the form. We are grateful to my hon. Friend.
I wonder whether you, Mr. Speaker, and the hon. Member for Gosport (Sir Peter Viggers) have read schedule 1 to the new Political Parties and Elections Bill, which relates to the Electoral Commission. Under the Bill, the Electoral Commission, on receipt of any allegation about any donation that it decides can thus be investigated, has extraordinary powers to order a break-in at any home of any candidate or agent for a council or parliamentary seat, and to order the removal of all that person’s records. That will be an extraordinary interference in democratic politics and involve every single candidate, past and future, for council or parliamentary seats—and their agents and associates. The House has to consider that very seriously. Frankly, any letter of complaint to the Electoral Commission would mean that the home of everybody involved in politics could be ransacked on the pleasure of that obscure body.
I was wondering whether the attention of the Speaker’s Committee on the Electoral Commission had been drawn to a certain episode in my constituency. An election court there has decided that the Conservative candidate in a recent election and his cohorts stuffed the electoral register with ineligible, and in some cases arguably non-existent, people—many of whom were Commonwealth citizens; that, Mr. Speaker, is how the episode connects to the original question.
I remember vividly a Polish woman at the electoral court pointing out that five Pakistanis were not living in her one-bedroom flat. She said to the judge, “I might be Polish, but I am not stupid!” It struck me that it was important that we take action to prevent such ballot-stuffing—“roll-stuffing”, the judge called it—from happening in other constituencies. Has the hon. Member for Gosport (Sir Peter Viggers) discussed that problem, and does he have a view on how we can prevent it from happening elsewhere?
Yes, indeed: since 2003 the Electoral Commission has taken the view—and expressed it forcefully—that individual registration would help to clarify and firm up the accuracy of the register and make it less likely that circumstances such as those in Slough that the hon. Lady has described will occur. That is the central thrust of the Electoral Commission’s view on how we can improve the register in practice.
Does the hon. Gentleman realise that many people have concerns directly opposite to those of the hon. Member for Kettering (Mr. Hollobone)? There must be millions of eligible Commonwealth citizens in the United Kingdom. My experience of general and local elections—we have one of the latter in our borough today—is that I might find out when I knock on a door and discover a South African, Australian, New Zealander, Ugandan or whoever that they do not realise that they have the right to vote, although they have an absolute qualification without any argument. Will the hon. Gentleman consider whether we need a much better system for assessing how many people are in that category and for making sure that they know? Perhaps notices about people’s entitlements could be given to them as they arrive and their passports are checked at immigration.
The Electoral Commission is running a campaign, which I think, without reference to the notes, is costing £300,000—some 4 per cent. of its budget—to encourage Commonwealth citizens who are eligible to vote in the United Kingdom but who have not yet registered to register.
Listening to my hon. Friend the Member for Kettering (Mr. Hollobone) and the hon. Member for Slough (Fiona Mactaggart) one would think that there were far too many people on the electoral roll who should not be there. However, in my experience of delivering surveys in my constituency, one goes down a road where the electoral roll says that there are 100 houses, but there are 120 houses, so in fact a huge number of people are missing from the electoral roll. Has that issue been addressed?
Yes; a significant number of people are not registered who could be registered, and some are registered who should not be registered. The Electoral Commission has studied this in some detail over the years and has come back to the central view that the best way ahead is individual registration—removing the responsibility for registration from the head of household, who can make mistakes or not act, and putting responsibility on to individual voters.
The Solicitor-General was asked—
The proportion of successful prosecutions by the CPS in domestic violence cases has gone up from 55 per cent. in March 2005 to over 72 per cent. in June 2008, and the number of cases has gone up from about 35,000 to 63,000 over the same period.
Will the Solicitor-General congratulate the CPS in Nottingham on working very closely with the crime and drugs partnership in promoting a scheme whereby the young people who witness domestic violence are treated as quickly as possible so that the trauma that they experience does not ultimately turn them into people who perpetuate domestic violence? This is often an inter-generational issue. Will the Attorney-General ensure that the CPS in Nottingham continues its excellent work to break that inter-generational cycle so that we do not have another generation of abusers and people perpetrating domestic violence coming along in future years?
I assure my hon. Friend that not only my right hon. and learned Friend the Attorney-General but I will ensure that Nottingham CPS carries on the very good work that it is doing. In general, the CPS now has a very good model of community engagement. It is aware that, in order to get complaints that it can prosecute and to ensure that the effects that my hon. Friend describes can be tackled, it needs to work closely with the non-statutory sector. I read with great interest his recent piece of work on this; it is a very impressive piece in which he makes the point that he just made.
The hon. Member for Nottingham, North (Mr. Allen) makes an important point about the effects that domestic violence can have on inter-generational issues. Is the Solicitor-General happy about how the courts take account when cases are taken to prosecution of the effect that domestic violence has on children in the home?
The Crown Prosecution Service deals with prosecutions rather than with the impact on children, if there have been no offences against children. However, the problem is well known. Some model court procedures, most notably in Croydon, try to cross the boundaries between criminal cases and civil cases so that the impact on families can be taken into account and there can be no loss of information, for instance, between the civil and criminal courts from an unnecessary separation. The question was whether I am content. I would not say that I am content, but we are taking strong steps in the direction of ensuring that children’s interests are as protected as they can be.
The National Fraud Strategic Authority was established on 1 October as an executive agency of the Attorney-General’s office. It will lead on the development and delivery of the UK’s first national fraud strategy, which will co-ordinate the national effort to combat fraud. The Serious Fraud Office is developing stronger structures to enhance its ability to prosecute. Today, there is a very positive report from the CPS inspectorate about the fraud prosecution service in the CPS. It has an 85 per cent. conviction rate and very strong casework, and it is very highly regarded.
Notwithstanding what the Solicitor-General has just said, following the departure at the start of the summer of director Robert Wardle, I understand that more than a third of senior management at the Serious Fraud Office have left. The general public know that a huge amount of public money has been spent on trials with no outcome at all. Is the Solicitor-General really happy with what is going on in her Department? Will she reassure everyone that the money being spent is well spent, and that the Government are serious in combating serious fraud?
It would be very hard not to convince the public that we are serious in combating serious fraud, given that we have just done a review of it, and streamlined legislation dealing with offending. We have a new specialist unit in the Crown Prosecution Service since the failure over the Jubilee line case, and we have what I can only describe—quite contrary to the way in which the hon. Gentleman puts it—as a strengthened Serious Fraud Office. I had the opportunity to talk to its new director last night. He is moving the structures forward and he intends to put victims at the heart of his business, be they City companies or individuals. The proposal is that about a third of staff will investigate and prosecute company fraud, a third will attend to overseas corruption and bribery, and the final third will deal with the most serious and complex individual and commercial frauds. He is very confident that the changes he has made will be beneficial.
Another part of the picture on the effectiveness of efforts to deal with serious fraud is the SFO’s reputation for independence and objectivity—a reputation that will be of immense importance in coming months because of the current financial turmoil, which is sure to lead to accusations of wrongdoing at some point. May I ask the Solicitor-General to reconsider the provisions in the Constitutional Renewal Bill that allow the situation to continue where there can be political interference in SFO investigations on the ground of national security, as defined solely by politicians? As we saw in the BAE case, national security is the politician’s flexible friend.
The hon. Gentleman, like some other Members in his party, simply never learns—going on and on and on about the BAE case. We are investigating BAE, with a view to prosecution, in a number of areas. I remind him of what the House of Lords said in its judgment about BAE. The decision that the director of the SFO, and no one else, took not to continue with the prosecution, which the hon. Gentleman simply cannot get off his mind—he must have it under his pillow every night—is that the director was not only “lawfully entitled” to make that decision, but that it could
“be doubted whether a responsible decision-maker could, on the facts before the Director, have decided otherwise.”
Is it not time that the Liberal Democrats grew out of this?
I have discussed with ministerial colleagues a number of measures to address the problem of prostitution, arising mostly from the review of demand that the Government have just completed. A number were announced by the Home Secretary in Manchester recently. They include: tightening legislation on kerb-crawling, new powers to close down brothels, greater restrictions on lap-dancing clubs and a new offence of paying for sex with someone who is controlled for another’s gain. The full results of the review should be available later this autumn.
I welcome the fact that lap-dancing establishments are included within those considerations, because it seems to me that the boundary between prostitution, massage parlours, escort agencies and lap-dancing is pretty unclear, and all of them encourage an unhealthy objectification of women. May I ask the Solicitor-General to ensure that local authorities are well aware of the powers that they now have to license and regulate lap-dancing clubs, and that they act effectively to clean up this area?
I fully echo all that my hon. Friend says about the objectification of women and the damaging assault on the bid for equality that sexual objectification makes. It is deplorable. Local authorities have powers but we intend to give them and local communities greater and better powers to control the opening and regulation of lap-dancing clubs. We will consult stakeholders about the best way forward. My hon. Friend the Member for City of Durham (Dr. Blackman-Woods) made some proposals in a recent Bill, but as soon as we have consulted stakeholders, we will pass the measures as quickly as we can.
I welcome the Solicitor-General’s comments on the review that the Government are carrying out, but she may also agree that supply and demand are intricately linked. In that context, the convictions for human trafficking—one of the major sources of supply for prostitution in this country—is not good: 232 arrests, but only 134 charges, and about 70 cases leading to conviction. Can the Solicitor-General help the House to understand where the problem lies? Is it in the prosecution process for securing the convictions or in the link between the Crown Prosecution Service and the police? Where are the difficulties and what can be done to tackle them?
I take the hon. and learned Gentleman’s point about the link between demand and supply. The number of prosecutions for trafficking offences is increasing exponentially, although I take his point about that. They have quadrupled since 2005 and he should recall that many sorts of offences are prosecuted—not necessarily only those under trafficking legislation—when a trafficking situation is found. They include false imprisonment, rape, kidnapping and threats to kill, and do not show up in the records as pure trafficking convictions.
We are concentrating on demand because it is clear that 58 per cent. of the population would ban prostitution entirely and make it an offence, if they were satisfied—as I am—that it encourages trafficking. We will look closely at bringing into force deterrent legislation to try to cut demand.
Women and Equality
The Minister for Women and Equality was asked—
Rape Crisis Centres
The Government continue to step up action to tackle the menace of rape and bring offenders to justice. It is particularly important that we support victims of rape, and that is why we set up the special fund for rape crisis centres in March. Eight centres have applied so far and all received the full amount that they requested, totalling just over £175,000. We are doing a second round of grants: there have been 21 applications and decisions will be announced shortly.
I thank the Minister for that reply. There has been much uncertainty about the funding of rape crisis centres since July and that does little to help them provide the service that rape victims deserve. What plans has the Minister for a more stable and long-term approach to funding rape crisis centres so that we can have more stability in that important service?
As I have just said, a further round of grants will be made to local rape crisis centres. That will help them as they apply for further finances locally. In addition, the Home Secretary has announced £1.6 million in funding for new and existing sexual assault referral centres. The new funding will go towards building 10 new sexual assault referral centres and providing additional resources for the 22 existing sexual assault referral centres. We want a SARC in every area. Also, the victims fund has given money to organisations that are members of the umbrella organisation, the Survivors Trust.
I have asked the House to recognise that we have made progress. There has been a 45 per cent. increase in the number of men convicted of rape since 1997. That is the result of a combination of better support for victims, better support for witnesses in court, a change in the substantive law, specialist teams of expert, trained prosecutors and excellent police work. I pay tribute to all those who are involved in supporting victims of rape and bringing the perpetrators to justice.
May I begin by welcoming the hon. Member for Liverpool, Garston (Maria Eagle) to her new role in what I am sure she will find a very worthwhile area of work?
The emergency fund for rape crisis centres was welcomed by all, yet seven months on, less than 20 per cent. of the fund has been distributed to front-line services, and centres are suffering as a result. The Minister has just referred to a further round of funding, but that may be too late for some centres. For example, funding for Barnsley’s sexual abuse and rape crisis helpline ends this month, and without emergency funds the helpline might not be able to continue. It filled in all the paperwork at the beginning of September, but is still waiting for a decision. The emergency fund was supposed to provide reassurance for rape crisis centres, not add to their uncertainty, so will the right hon. and learned Lady ensure that the funding reaches those centres that urgently need it, to keep such vital services open?
We are of course determined to keep vital services open. That is why we set up the emergency fund, and I thank the right hon. Lady for her welcome for that. She will have noticed from my earlier comments that every single one of the rape crisis centres that applied to that fund was a given a grant of the full amount for which it applied. We have made absolutely sure that those who fear that the future of their rape crisis centre is in jeopardy have been invited to apply—indeed, all are invited to apply—and that they are able to receive full funding. There is more funding in the pipeline through the emergency fund, but there is also further support that comes from the victims fund set up by the Ministry of Justice.
Of course the £1 million of emergency funding was welcome, but my impression from talking to the rape crisis centre in Cambridge is that it understands the money to be purely short-term money, which does not help to stabilise the long-term position at all. Local rape crisis centres are being given the impression that for core funding they should look solely to local government, while central Government concentrate on the sexual assault referral centres. Does the right hon. and learned Lady accept that that is not very reassuring for local rape crisis centres? Such centres provide a service that is complementary to, but different from sexual assault referral centres: they concentrate on the victims’ short, medium and long-term needs, whereas sexual assault referral centres, quite rightly, have at the centre of their concerns the criminal justice process.
The hon. Gentleman is absolutely right to say that we must ensure not only that we have the pioneering work on sexual assault carried out by the sexual assault referral centres, to which I pay tribute for developing and continuing such an important way of working, but that we have long-term counselling, which rape crisis centres add in to the support for victims of rape at the local level. There are a number of sources of finance for rape crisis centres, but because there was a problem earlier in the year, we set up the emergency fund.
We have done a great deal over the past 11 years to recognise the problems in the criminal justice system for victims of rape. We have made changes in the substantive law and supported changes in the way the police, the Crown Prosecution Service and the judiciary work. I pay tribute to the work that my hon. and learned Friend the Solicitor-General has done in leading a review of the substantive law. We will leave no stone unturned in ensuring that we protect people from that crime and bring perpetrators to justice.
Equality Bill (Wales)
An event to launch the consultation on proposals for the equality Bill was held in Cardiff in June last year. There have been regular discussions between Government Equalities Office officials and their counterparts in the Wales Office and the Welsh Assembly. My predecessor, my hon. Friend the Member for Stevenage (Barbara Follett), wrote to the Welsh Assembly Government about the equality Bill in June, and in November there will be a meeting with Welsh organisations in Cardiff.
I thank my hon. Friend for that reply and welcome her warmly to her new post. I was pleased to visit the Women’s Turnaround project in Cardiff with her in the summer. In her discussions about the equality Bill in Wales, will she ensure that she involves criminal justice organisations, so that issues relating to women victims and women offenders, such as the harsher sentences that women receive in the courts, can be discussed?
I begin by thanking my hon. Friend and the right hon. Member for Maidenhead (Mrs. May) for welcoming me. This is not quite the first time that I have worked on equalities issues as a Minister. I spent four years as Minister for disabled people and took the Disability Discrimination Act 2005 through the House, so I feel as though I am returning to an area in which I have worked before, to see what progress has been made and what more can be done.
To answer my hon. Friend’s substantive question, if we are to make progress, it is vital to involve the criminal justice agencies and the system as a whole in the equality Bill’s provisions. The public sector duty for which the Bill will legislate will help in that respect. I hope that my joint responsibilities with the Ministry of Justice—I am still in charge of implementing the Corston agenda and ensuring that women are not disadvantaged by the way in which the system of criminal justice, particularly prisons and custody, applies to them—will also be helpful.
Will the Minister be meeting representatives of the Welsh Language Board, which has a particular function of promoting the equality of the Welsh language, and Alun Ffred Jones, the Welsh Assembly Minister who is currently preparing the legislative competence order on the Welsh language? That will have profound implications for the equality debate in Wales.
I am always happy to meet anyone who is interested in equality, even the hon. Gentleman, so I am happy to take up his suggestion. I must make the point, however, that language is not at present included as a protected characteristic in any EU or domestic discrimination law. I understand that some people think that it ought to be, but that would present significant policy implications. That is true not only of Welsh, of course; many other minority languages are spoken in Britain, including visual, gestural languages—the sign languages. Minority languages have some protection under the Council of Europe minority language charter, but sign languages do not. The hon. Gentleman is raising large policy issues, which I am of course happy to discuss further.
Equal Pay (Part-time Workers)
The most recent step was taken last week, when the national minimum wage was increased to £5.73 an hour, which is 60 per cent. higher than when it was introduced. Two thirds of beneficiaries of the national minimum wage are women, including many who work part time.
I thank my hon. Friend for her reply and congratulate the Government on consistently and successfully challenging discrimination and tackling the pay gap. However, while the pay gap experienced by women continues to narrow, its underlying causes persist. Will she therefore give a commitment that the Government will implement a widespread cultural change to tackle the undervaluation of women’s work?
My hon. Friend is right to note the significant progress that has been made and to highlight the fact that it remains difficult to close the gender pay gap completely and to ensure that discrimination does not affect disabled people and black people, who are significantly disadvantaged in the labour market as a result of discrimination and in other ways. She is right to say that promoting cultural change is important, but it cannot be achieved overnight. However, that is the entire purpose of the new equality Bill, which will introduce a new equality duty, end age discrimination, require transparency, extend the scope for positive action, and strengthen enforcement. All those measures, which will be dealt with in the new Bill, will enable us to take a major step forward in closing the pay gap, and I hope that we will have my hon. Friend’s support.
I, too, congratulate the hon. Lady on her appointment, and I wish her well in fulfilling her responsibilities. I applaud the efforts that are being made to tackle the gender pay gap, but note that the problem remains naggingly and infuriatingly persistent. Will she tell the House why the gender pay gap among part-time employees is worse in the public sector than in the private sector?
I am not convinced that it is worse in the public sector. No doubt we can compare notes outside the Chamber and resume hostilities if what he says proves to be correct.
Apart from the fact that many women are crowded into part-time occupations, which are generally lower paid, which accounts for the greater extent of the gap between part-time working, whether by men or women, and full-time male working, which is the biggest of the gender pay gaps, what the hon. Gentleman says illustrates the complexity of some of the issues. Not only discrimination, but work patterns and all sorts of other factors are involved. That is one reason why we have the national equality panel—a group of independent academics who are trying to help us to understand fully what we need to do to rid our society of those unacceptable gaps in pay based on gender.
Obviously, the hon. Gentleman has a contribution to make and his record in the House in this respect is good. I look forward to working with him across the usual boundaries to try to make a real difference to our society as a whole.
I add my welcome to those given to the Minister. Aberdeen has one of the widest gender pay gaps in the country, if not the widest. That is true of part-time and full-time work. How might the public procurement potential contained in the proposed equality Bill help to deal with that problem?
I can see why my hon. Friend is interested in the matter, given what she says about her constituency. She has highlighted an important lever that the public sector can use to lead by example. Every year, £160 billion-worth of contracts are let by the public sector, and some are let to the private sector. The equality duty will require, as the gender equality duty already requires, that goods and services are not distributed in a discriminatory fashion, so there is real potential to use public procurement to encourage the private sector to make much better progress in that respect. I hope that that is something we will look at.
Leader of the House
The Leader of the House was asked—
The Cabinet Office produces guidance for Departments on handling correspondence from Members of Parliament, Members of the House of Lords, Members of the European Parliament and Members of devolved Assemblies. All Departments should set targets, which should not exceed 20 working days. A copy of the guidance is in the Library of the House, and earlier this morning I placed a copy on the letter board for the hon. Gentleman.
First, let me welcome the hon. Gentleman to his new post. I am aware of the guidance and I have a copy of it. As he rightly says, the figure is 20 days, but I wrote to the Department of Health on 28 July on a serious matter with national implications for the treatment of NHS patients. Seventy-four days—10 and a half weeks—have passed and my office has chased the matter up 10 times to try to get a reply, but we have not had one. Will the hon. Gentleman help me to get a reply and will he remind all Ministers that replying to Members’ letters is not just something that they should get round to, but a constitutional duty to perform out of respect for our constituents?
I am grateful for the hon. Gentleman’s kind comment at the beginning of his remarks. What he describes is clearly not acceptable, and I shall ensure that he gets an answer as soon as possible. The guidance is extremely clear:
“Departments must ensure that:
(i) all replies to letters from MPs are of the highest quality—accurate, clear and helpful.
(ii) every effort is made to reply promptly and in line with departments’ own published standards for answering ministerial correspondence.”
While 204,925 letters a year are answered by Ministers, the Department of Health is one of the better-performing Departments, with 92 per cent. of letters responded to in time.
On 22 January, I wrote to the Department for Business, Enterprise and Regulatory Reform on behalf of my constituent, George Young. My office chased the letter up four times, and I finally received a reply on 8 September. I welcome the Minister to his new post, but will he encourage the Secretary of State for Business, Enterprise and Regulatory Reform to send one of his minions to the Dispatch Box to make a statement confirming that that delay and others like it are completely unacceptable, and that the Department will remove its collective finger from wherever it may happen to have inserted it?
The hon. Gentleman tempts me, but I will not go down that route. It is clear that hon. Members must have swift answers. Those who are elected to the House should get swift and substantive answers to the questions that they ask on their own behalf or on behalf of their constituents. Previous Leaders and Deputy Leaders of the House have made it absolutely clear that we intend to pursue this matter to ensure that Members get replies as swiftly as possible. That is as true for the Department that the hon. Gentleman mentioned as for any other. When there are pinch points, I would be grateful if hon. Members mentioned them to me so that we can sort them out and ensure that all hon. Members get swift replies.
Public Bill Committees (Evidence)
We have made an assessment of the effectiveness of the new system of Public Bill Committees taking oral and written evidence, which seems to be working well.
I have pleasure in agreeing with the Minister, and I too congratulate him on his appointment. We have known each other for a long time—in the Culture, Media and Sport Committee on which we both served, I hasten to add. But does he accept that while the innovation is to be applauded and welcomed, it can only be acceptable if there is sufficient time to take evidence? Often, such Committees have insufficient time and the people whom Members want to interview are unavailable. What can we do to extend the amount of interview time?
I am grateful to the hon. Gentleman for his kind comments. I think that I speak on behalf of the whole House when I say that we are delighted that the Colombian police have released him so that he can be with us today.
I accept the hon. Gentleman’s point. The system is new. Clearly, it is considerably better that Committees are able to take written and oral evidence, and it is entirely up to Committees whether they choose to do so. In the past year, most Committees that have had the opportunity to take such evidence have done so if pre-legislative scrutiny has not already taken place. In the Health and Social Care Public Bill Committee, the hon. Member for Eddisbury (Mr. O'Brien) made it clear that he was extremely happy with the amount of time and the organisation of the witnesses provided. Likewise, in the Education and Skills Public Bill Committee, the hon. Member for Bognor Regis and Littlehampton (Mr. Gibb) was absolutely delighted with the consensus on the programme motion. Perhaps we need to consider some points, but I think that the system is working well.
Written Ministerial Replies
Successive Leaders and Deputy Leaders of the House have made it a priority to oversee the effective operation of the questions process and to ensure that Ministers and Departments are fully aware of their obligations to the House. Inquiries are made of particular Departments when problems are known to have arisen, or when hon. Members make representations. Most recently, steps have been taken to follow up the pattern of the answering of written questions tabled by the hon. Gentleman in July and September.
I am grateful to the Deputy Leader of the House for that answer, and I too welcome him to his post. I acknowledge the work of the Leader of the House in chasing up Departments following my letter to her. Having said that, I am still waiting for answers to 17 questions tabled a week before the summer recess. Of the 85 named day questions that I tabled, 55 were not answered on the named day, and on average the answers were 19 days late. That is not acceptable. What will the hon. Gentleman and the right hon. and learned Lady do to ensure that Ministers deliver on their promises to the House?
My gratitude continues, this time to the hon. Gentleman for his kind comments. He has shown the House that he is an extremely assiduous Member, including during the recess. Many members of the public might think that Members of Parliament work only when the House is sitting, but he was assiduous in tabling questions even during the bank holiday week. During the three days in September, 807 questions were tabled. That is a good innovation, but it is clear that further work is necessary to ensure that a greater number of questions are answered more swiftly and substantively. As the hon. Gentleman has taken a long-standing interest in such issues, with two debates in Westminster Hall on ministerial accountability, I am happy to take forward some of those issues jointly with him.
I too congratulate the hon. Gentleman. He has been an excellent Back Bencher hitherto, and I believe that he will be a friend to Back Benchers.
I have had experiences similar to those of my hon. Friend the Member for Forest of Dean (Mr. Harper). Quite often in the past I have written to Ministers but have not received replies in time, so I now table more written parliamentary questions. It really is not satisfactory for the hon. Gentleman to say that he will examine the position and try to improve it; he must take action, because otherwise Back Benchers will continue to be let down by the Government.
I think I can do no better than to repeat the invitation that I issued earlier. I understand that there are pinch points in particular Departments, and I shall be happy to work with any hon. Members to ensure that they receive swift and substantive answers.
The hon. Member for Forest of Dean described the Leader of the House as the policewoman in this context. If she is the policewoman, I am happy to be the community support officer.
I too welcome the hon. Gentleman to his new post. Can he explain why two or three goes at a Department are so often needed for a Member to obtain an answer that could have been provided in the first instance? Can he also explain why certain Departments, particularly the Northern Ireland Office, are so reluctant to give details of meetings that Ministers have held with third parties? Although such information is widely promulgated in the press, Members of Parliament experience great difficulty in finding out directly from Departments what has been going on.
I will look into the second point that the hon. Gentleman raised. Perhaps if we have a conversation outside the Chamber, he could explain more fully the sort of issue that worries him.
It is true that written parliamentary questions are an important part of holding the Government to account and of holding to account other organisations that are accountable to the Government. It is also true that the number of tabled written questions has risen dramatically, from 46 a day in the 1960s to 139 a day in the 1980s, and to 439 a day this year. I welcome that—I do not decry it—but obviously, as the hon. Gentleman has pointed out, if that is because Members have to ask the same question three times, Ministers may sometimes be making a rod for their own back. It would be better to sort the matter out promptly on the first occasion, rather than make Members return to it again and again.
May I add my congratulations to the hon. Gentleman on his promotion? He will be the fourth Deputy Leader of the House with whom I have worked.
Last year when Parliament prorogued, 263 written parliamentary questions remained unanswered, 23 of them for more than three months. Notwithstanding what the Deputy Leader of the House said earlier, will he or the Leader of the House undertake to prevail on their ministerial colleagues to ensure that this year they do not hide behind the veil of a prorogation, and that they give proper replies, even if the replies are inconvenient to the Government?
I do not think it is a question of convenience. The simple fact is that the Leader of the House and I are determined to deliver swift and substantive answers to hon. Members as soon as possible. However, I will look specifically into what happened before prorogation last year so that, as far as is humanly possible, we can ensure that it does not happen again.
Incidentally, I remember going to one of the hon. Gentleman’s local churches when I was youth chaplain for the Peterborough diocese. The hymn that was played was “One More Step Along the Road I Go”.
House of Commons Commission
The hon. Member for North Devon, representing the House of Commons Commission, was asked—
In 2007-08, some 10,000 bottles of sparkling water and 11,400 bottles of still water were supplied for use in Committee Rooms. That is broadly in line with the amounts supplied in the previous year, but an increase on the amounts supplied in the year before that. The Commission is well aware of the concern about the matter, and the Department of Facilities is exploring other options.
I thank the hon. Gentleman for his response. He has good environmental credentials and he will know that bottled water can generate emissions up to 600 times greater than those from tap water. It is particularly embarrassing when representatives of the water industry attend meetings of the all-party parliamentary group on water. There is perfectly good water in our taps. May I encourage the hon. Gentleman to do all he can to make tap water available at our meetings, where the work can be very thirst-making?
The hon. Lady may know from previous exchanges on this matter that I have a lot sympathy with what she says. The Administration Committee looked at the issue in April and decided at that stage to make no change, but as I have mentioned, the Department of Facilities is looking at other options and this will provide another opportunity for the matter to be considered. I urge the hon. Lady and anyone of the same view to lobby the Administration Committee when the time comes for it to look into the matter again.
Although I am pleased that the hon. Gentleman is sympathetic, it was several months ago when he said in response to a question from me that other options were being looked at. The wheels are turning very slowly on this serious matter. Out in the real world people are turning from bottled water for environmental reasons, but we do not seem to be able to do the same. Can we speed up the process?
Leader of the House
The Leader of the House was asked—
Secretaries of State are answerable to Members of the House in which they sit. Additionally, they respond to requests by Select Committees.
Unlike his Cabinet colleagues, the future Lord Mandelson will not be spending his weekends meeting constituents, undertaking casework and justifying policy to party members. In short, he has no mandate and will be directly accountable neither to the electorate nor to this House. To bridge that democratic deficit, does my right hon. and learned Friend the Leader of the House agree that he should be requested and required to attend departmental questions and to make ministerial statements from the green Benches of this place and not the purple settees of GMTV?
The Minister of State, Department for Business, Enterprise and Regulatory Reform, my hon. Friend the Member for Wolverhampton, South-East (Mr. McFadden), will be accountable for the Department’s work in this House. The Secretary of State will be accountable for his Department’s work to the House of Lords. No doubt, written and oral statements will be made where appropriate, and that Department will be fully accountable to both Houses for its work.
I thank the hon. Gentleman for that point. He will, of course, be aware that accountability of all Ministers to the House in which they sit is important, but Cabinet appointments are not a matter for this House; they are a matter for the Prime Minister, as I know the hon. Gentleman understands.
Business of the House
The business next week will be as follows:
Monday 13 October—A general debate on promoting democracy and human rights.
Tuesday 14 October—Second Reading of the Banking Bill.
Wednesday 15 October—Consideration of a supplementary estimate relating to HM Treasury, followed by proceedings on the Consolidated Fund (Appropriation) (No. 3) Bill, followed by a general debate on local government delivering for local people.
Thursday 16 October—Topical debate: subject to be announced, followed by a general debate on access to primary care.
Friday 17 October—Private Members’ Bills.
The provisional business for the week commencing 20 October will include:
Monday 20 October—Second Reading of the Political Parties and Elections Bill.
Tuesday 21 October—Opposition Day [19th allotted day]. There will be a debate on an Opposition motion. Subject to be announced.
Wednesday 22 October—Remaining stages of the Human Fertilisation and Embryology Bill [Lords].
Thursday 23 October—Topical debate: subject to be announced, followed by motion to take note of the outstanding reports of the Public Accounts Committee to which the Government have replied. Details will be given in the Official Report.
The information is as follows:
That this House takes note of the 5th, the 8th, the 14th to the 29th, the 31st to the 35th, the 37th, the 38th, the 42nd and the 50th Reports and the 1st and 2nd Special Reports of the Committee of Public Accounts of Sessions 2007-08, and of the Treasury Minutes on these Reports (Cm 7366 and 7453).
I thank the Leader of the House for her business statement. All Conservative Members welcomed the Chancellor’s statement yesterday, and both my right hon. Friend the Member for Witney (Mr. Cameron) and my hon. Friend the Member for Tatton (Mr. Osborne) have made clear our commitment to work with the Government through these difficult times. Next week, as she has just announced, we will debate the banking reform Bill, which includes changes to the powers of the Bank of England. Obviously, I welcome today’s topical debate on financial stability, but the general public will rightly expect Parliament to spend more than an hour and a half debating the financial crisis. Will the Leader of the House therefore change next week’s business to provide for a full debate on the financial crisis?
One group of people particularly hard hit by the ups and downs of the stock markets are those who, at age 75, are obliged to take out an annuity. Given the current economic conditions, we think it important that people should have the freedom to choose to delay buying their annuity. My hon. Friend the shadow Secretary of State for Work and Pensions has today written to the Secretary of State for Work and Pensions asking him to put a temporary moratorium on this rule, and offering to work together on this. Can the Leader of the House confirm that the Government will indeed consider this, so that these people are not unduly penalised by circumstances completely out of their control?
In recent days, our attention has obviously been focused on the financial markets, but there are problems lying ahead for everyone. The International Monetary Fund said yesterday that the world was entering a major downturn, with Europe and the US either already in, or on the brink of, recession. It predicts that the UK economy will contract by 0.1 per cent. next year. These conditions will of course require the Chancellor to revise his economic forecasts, which makes his autumn statement even more significant than usual. Will the Leader of the House therefore now give us the date for the Chancellor’s pre-Budget Report?
Earlier this week The Times reported that the Government plan to drop their unpopular proposal to hold terror suspects for 42 days without charge because it is widely expected that the measure will be resoundingly defeated in the House of Lords next Monday. Can the Leader of the House confirm that the report in The Times was accurate, or, if not, when we should expect to debate the measure again in this House?
Finally, I turn to two, more parochial House points. I welcome the right hon. and learned Lady’s written statement this morning extending the consultation period on her proposals regarding the audit and assurance of MPs’ allowances—something that I suggested to her over the recess. Can she tell us how many responses she has received so far, and will she confirm that she will not hold any further such consultations over a recess? Can she also confirm that the chairmanship of Select Committees is a matter for the decision of those Committees? If so, will she explain why, over the recess, the hon. Member for Gloucester (Mr. Dhanda) was reportedly offered the chairmanship of the south-west regional committee—a committee that has not even been established by this House, let alone had decisions made on its membership? The right hon. and learned Lady has already suspended Standing Orders once to parachute in the Government’s choice to the chairmanship of the Home Affairs Select Committee. Will she now guarantee this will not happen again, and that from now on she will stand up for the independence of Select Committees and the rights of this House?
The right hon. Lady is right in saying that the chairmanship of a Select Committee is a matter for the members of the relevant Committee.
The consultation paper on the audit and assurance of Members’ allowances was issued late on—at the end of July or even early August—and because the consultation was under way during the recess, and because a very small number of colleagues have responded, we have accepted the right hon. Lady’s suggestion that we extend the consultation period. Work is already under way, following the resolutions of this House—including the abolition of the John Lewis list, among a number of measures—to improve the audit and assurance of Members’ allowances, but further steps need consideration. We want the full involvement of Members in this, to make absolutely sure that they have the resources they need to do their work, and to ensure that the public have full confidence that public money is being properly spent.
The right hon. Lady asked about the Counter-Terrorism Bill. She will be aware that, following debate and discussion in this House and the House having formed its view, the Bill is now under consideration in the House of Lords. Following their lordships’ consideration of it, it will be dealt with in the usual way and will return to this House.
The right hon. Lady asked whether I could give the House the date of the pre-Budget report. I will announce that in due course in the normal way. She also raised the issue of how this House makes sure that we have proper debates on the very important issue of the moment—the stability of the economy. As she said, the Chancellor made a statement yesterday; the Conservatives chose the economy as the subject of their Opposition day debate on Tuesday; and we have arranged a further debate in this House, to be led by the Financial Secretary to the Treasury this afternoon. We can all be clear that we agree on two things. First, when there is a matter of such national importance as this, it is right that the Government involve the Opposition and that we all work together on the issue. Secondly, if legislation is needed, consultation should take place, the terms of it should be respected and the House should be able to legislate on the matters promptly—that is very important. I know that all hon. Members will bear with us if we need to change the business of the House to accommodate important legislation on economic matters.
We also all agree that there must be adequate time to debate these important issues, because this is not just a question of the problem in the financial services industry and the banking sector; these problems affect homebuyers, small businesses, depositors and those buying annuities, to whom the right hon. Lady referred, all of whom are at the top of our concerns. We want to ensure that these important issues are fully debated in this House and that Ministers are fully accountable to this House.
First, may I ask the Leader of the House to pass on our thanks to her colleague, the hon. Member for Bishop Auckland (Helen Goodman), for her helpfulness when she was Deputy Leader of the House, and to welcome her new Deputy Leader of the House to his position?
In the spirit of co-operation in trying to maximise the opportunity for Parliament urgently to debate matters relating to the national and global financial crisis, which clearly are of huge concern outside this building, may I clarify one thing and ask two questions about the business that the Leader of the House has announced? She announced a debate next week on local government. We have read and heard reports that significant numbers of local councils had invested public money in Icelandic banks that have gone bust. I gather that the figure involved may be up to £500 million and that more than 20 local councils may be involved, as well as police authorities and transport authorities. Will she ensure, before the debate on Wednesday, that Ministers responsible for local government give an indication—it might be better if it were an indication, rather than a final view—of what the Government propose to do to assist local councils? Many councils are already cutting local services, including social services, and, whatever their party affiliation, they want to ensure that further cuts do not have to be made as a result of the present crisis.
Secondly, the Leader of the House rightly mentioned the concerns of small business about the present financial position. Small business organisations have made it clear that they are still receiving letters from banks offering loans at rates of 15 per cent. The majority of the British work force works in small businesses, rather than in big businesses, so can she see whether we can have a debate in this place with the new team at the Department for Business, Enterprise and Regulatory Reform—with or without the Secretary of State—on what can be done to ensure that huge numbers of small businesses do not go under in the days immediately following the events of the past two weeks?
Thirdly, the Leader of the House knows as well as I do that in boroughs such as ours, and probably in every local authority in the country, affordable housing is one of the most urgent needs. Local authorities and housing associations will clearly be in greater difficulty borrowing money to build the programmes to which they have already committed themselves or that they wanted to build. May we have a debate on how to ensure that the plans of the Government, of London government, of London councils and of all local authorities can be implemented, because loads of people are desperately waiting for the housing that they need?
Lastly, on an in-House matter, I persistently asked before the summer that we ensure that we have time on Report on Government Bills to debate Opposition and Government Back Bencher amendments and new clauses. We know of six Government Bills that are in the pipeline between now and the end of term, including the Human Fertilisation and Embryology Bill. Given that, even yesterday, some amendments and new clauses could not be debated for lack of time—such as the important issue of whether smacking should be allowed—can we please ensure that Parliament can do its job properly and debate the issues that colleagues from all parties put on the agenda, instead of having debate closed down by Government guillotines?
I thank the hon. Gentleman for his comments in appreciation of the excellent work of the former Deputy Leader of the House, my hon. Friend the Member for Bishop Auckland (Helen Goodman), and I pay tribute to her. I also join hon. Members in welcoming her excellent successor, my hon. Friend the Member for Rhondda (Chris Bryant).
It is important for the hon. Gentleman to remember that the resources that have been going into local government from central Government have increased year on year. He is right to say that local government services are very important, and we want to ensure that they are protected. There will be an opportunity for hon. Members to ask the Financial Secretary to the Treasury questions about local government deposits this afternoon in the topical debate.
The hon. Gentleman mentions the important issue of the effect of the financial and banking crisis on the work of small businesses. We all agree that small businesses are critical to the economy and to employment prospects, and they need an effective banking system to survive and prosper. It is important that work is undertaken at European level, through the European Investment Bank; at national level, through the actions of the Treasury and other Departments; and at regional level. Small businesses are the focus of the Government’s concern, and we will take all steps necessary to ensure that they can continue their important work.
The hon. Gentleman also mentioned the Human Fertilisation and Embryology Bill. I remind the House that we have already had 81 hours of debate across the two Houses on that Bill, so we have sought to make adequate time available to debate that important issue. Additionally, there have been two full days of debate on the Floor of the House, followed by a free vote on those issues of conscience. When the Bill comes back to this House, we will have further opportunity for debate.
The hon. Gentleman raised an important point about housing. The plans are important not only to increase the supply of housing, but because they touch on the question of public sector investment in infrastructure, whether in transport, industry, housing or even people’s skills. The Government have two obligations. First, we must see the country through this immediate crisis, ensuring that we give most support to those who are most directly affected and those who are most vulnerable. Secondly, we must not do anything to undermine the strengthening of the economy in the future. The forecast is that, once we have got through the present difficult circumstances, the economy has bright prospects for the future. For that reason, we do not want to cut infrastructure projects that need further investment, and that is why the Chancellor has announced that he believes that it is sensible to allow borrowing to rise to find our way through the crisis and to sustain investment for the future.
Order. I seek the co-operation of hon. Members. There is heavy demand to participate in the two time-limited debates that follow business questions. I cannot promise to call every hon. Member who wishes to put a question to the Leader of the House, but we will make more progress if we have one question per Member, especially if it relates to next week’s business. I am sure that the Leader of the House will also give as concise answers as she can.
First, may I say to the right hon. Member for Maidenhead (Mrs. May) that she should not believe everything she reads in the papers? I, too, express my good wishes to my hon. Friend the Member for Rhondda (Chris Bryant) on his appointment, which is richly deserved.
May I tell my right hon. and learned Friend the Leader of the House that I am pleased to see how much time is being allocated to discuss the financial crisis? She will be well aware that Labour Members and Opposition Members are particularly concerned about the important merger between HBOS and Lloyds TSB. A lot of concern has already been expressed by Front and Back Benchers about jobs in Yorkshire and in Scotland. May I add to that my concern—
I thank my hon. Friend for his question and I know that he is assiduous in his attention to his constituents—those whose jobs are affected by the crisis, depositors who are concerned about whether their deposits will be assured, and shareholders. I know that he will continue to play an important part in future debates and we will ensure that those debates are available to the House.
Last year, the pre-Budget report was published on 9 October—today’s date. It is disappointing that the Leader of the House was unable to give any indication of when it might be published this year. Last year, inexcusably, the Government gave the House no time whatsoever to debate the pre-Budget report. In view of its importance this year, will the Leader of the House guarantee time to debate it?
Consideration has been given to how we allocate days for debate following the Queen’s Speech and the Budget and, as the right hon. Gentleman said, to the opportunities for a full-day debate following the pre-Budget report. He will find that there will be ample time to debate all the issues and I shall make the announcement about the date of the pre-Budget report in the normal way.
Given all that went on during the summer recess—the war between Russia and Georgia and the crisis in the global financial markets—will my right hon. and learned Friend consider bringing Parliament back for two weeks in September on a permanent basis, as we once agreed to do? We quietly reneged on that agreement when the public attention was off us. Would that not enhance the esteem in which we are held, as well as the democratic process?
My hon. Friend is consistent—I will say that—in raising that point. The Chancellor has made a statement on the financial markets since the House returned. My hon. Friend will know that next Monday, as I just have announced, there will be an opportunity, led by my right hon. Friend the Minister for Europe, to debate democracy and human rights. It will be an opportunity for Members to debate the things that have happened in Georgia over the summer.
Does the right hon. and learned Lady agree that one of the historic and most important functions of this House is to control supply? That being so, will she ensure that yesterday’s proposals are enshrined either in primary legislation or, alternatively, in amendable resolutions of this House, so that we can change them if we do not agree or reject them if we think that they are entirely wrong?
When the Government seek to take action that requires primary legislation, we will come before the House. If secondary legislation is required, there are procedures for that. If action does not require either secondary or primary legislation, the information will be given to the House by way of written or oral statements or will be supplied in debates. There will be an opportunity for the House to hold Ministers to account for all the actions that they take.
In the summer recess, two schoolchildren in Aberdeenshire were killed when they got off their school bus. The Yellow School Bus Commission, which was chaired by my right hon. Friend the Member for Sheffield, Brightside (Mr. Blunkett), also published its report. The commission took evidence in Aberdeen from Robert Gordon’s school, which uses yellow buses. I understand that the right hon. Member for Gordon (Malcolm Bruce) hopes to table a Bill later in the Session that will address some of the issues to do with school bus safety and the safety of our children travelling to and from school. Will my right hon. and learned Friend guarantee that she will give that Bill clear passage?
I express my condolences to the families mentioned by my hon. Friend. I also congratulate my right hon. Friend the Member for Sheffield, Brightside (Mr. Blunkett) on his work on the Yellow School Bus Commission. These are important issues that affect congestion as well as safety, pollution and the affordability of school travel, and I will ensure that we take into account the points that my hon. Friend raises.
Is the Leader of the House aware that during this time of acute crisis in the banking sector, more of our constituents are moving deposits into the Post Office and into National Savings accounts? Surely, now is not the time for the Department for Work and Pensions even to consider getting rid of the Post Office card account. Will the right hon. and learned Lady guarantee today that in these tumultuous times the Post Office card account will be kept in place?
Will the Leader of the House consider making room for a debate on an issue of great importance to rail travellers in Milton Keynes? London Midland appears to have taken the opportunity of “fare simplification” to increase off-peak fares by about 10 per cent. At a time when we should be encouraging people to use rail rather than the roads, that seems highly unfortunate and worthy of a debate in this House.
With the best will in the world, surely the Leader of the House must realise that the public will think that it is totally inadequate that on most days next week we will not be discussing the economic crisis. With the problems of pensions and annuities already mentioned by my right hon. Friend the Member for Maidenhead (Mrs. May), will the Leader of the House at least assure us that she will keep matters under review and will return early next week to change the business so that we look relevant to the public? Otherwise, it will do huge damage to this House.
We will debate matters touching on the economy on Tuesday and Wednesday next week, but the right hon. Gentleman does not need to wait that long. He need wait only until the end of this business, when he can raise issues in the topical debate. I assure the House that as well as ensuring that the Government’s general business gets through we will bend over backwards to ensure that the House has the opportunity to debate the very important economic issues.
Earlier this week, an independent report commissioned by local councillors in my area showed that the economic impact of tolls on the Humber bridge was costing the region more than £1 billion in economic activity. Given the difficulties that we are facing in our local economies, could the subject of next week’s topical debate be Government initiatives that could help economic growth in areas across the whole country? Will my right hon. and learned Friend ensure that Humber bridge tolls are part of such a debate?
My local authority, on a cross-party basis, is very concerned about the fate of the £5.5 million that it had deposited with a subsidiary of Landsbanki and wants to know when it will hear in the House a debate that will ensure that we can get the reassurances from Treasury Ministers that have been offered to retail depositors. There is a concern on behalf of council tax payers that the money invested in line with guidelines set by the Treasury will be lost and that as a consequence council tax will rise.
Can we find time next week for a debate on parliamentary protocol, in particular on the importance of respecting confidentiality when a bipartisan approach to a national crisis leads to off-the-record briefings by senior Opposition politicians? It was a little unseemly to see the shadow Chancellor haring round TV studios last weekend, sharing with the nation the thoughts of the Governor of the Bank of England, his new best friend.
My hon. Friend makes a very important point. He reinforces the point that I made at the outset about the importance of the Government’s acting decisively but, wherever possible, on a bipartisan basis. The markets are sensitive to debate and discussion and things that are said can affect people’s living standards by affecting share prices and confidence, so it is very important that when any confidential discussions are entered into, that confidentiality is respected.
Was the Leader of the House surprised that Parliament was not recalled from recess, when we face the worst economic crisis for 100 years and are going from boom to bust? Is it not a good idea to amend Standing Order No. 13 to ensure that it is up to the Speaker whether the House is recalled in future?
In June, Michelle and six-year-old Jayden had their gas cut off by Scottish Power, leaving them without cooking, heating and lighting for more than four months. Scottish Power is owned by a company that made a profit of €200 million last year, and it wants my constituent to pay £350 for extra pipe work to install a rip-off pre-charge meter. Can we have a debate in the near future to examine the social responsibility of utilities such as Scottish Power to help people such as Michelle across the country?
That is an important and timely suggestion for a topical debate, and no doubt it will attract the support of many hon. Members. As the Prime Minister said yesterday at Prime Minister’s questions, we must ensure that the energy companies operate fairly in respect of hard-pressed consumers at this difficult time.
I do not agree with the hon. Gentleman. When one thinks of the effect of the current economic climate on businesses big and small, one sees that the work of regional development agencies and of strategic regional authorities is even more important. The fact that such bodies are not properly accountable to Members of this House needs to be acted on. When the Modernisation Committee conducted an inquiry on regional Committees, there was not agreement in Committee on how they should be established, but there was full agreement that there is a need for this House better to hold to account such agencies, which are very important at the regional level. We will proceed in due course, and the hon. Gentleman will have a chance to join the debate and vote on the matter.
The Child Support Agency has required one of my constituents to pay several thousand pounds of arrears in 12 months. My constituent does not dispute the arrears, which he wants to pay, and he is currently looking after the children for whom the arrears were incurred. Can we debate the way in which the CSA deals with arrears at this time of economic slowdown? My concern is that those who want to face up to their responsibilities will be penalised by an excessively stringent approach to arrears as the economy slows further, while those who want to avoid their arrears will continue to do so.
My hon. Friend makes an important point. First and foremost, we should examine the issue from the viewpoint of the children. It is right to expect fathers who can do so to pay a fair proportion of their income to their own children. It is therefore best if people do not get into arrears in the first place. Perhaps I can ask him to seek a meeting with the Secretary of State for Work and Pensions in respect of his individual constituent.
The remaining stages of the Human Fertilisation and Embryology Bill are due to be taken on 22 October. Will the Leader of the House accept that that Bill is a highly inappropriate vehicle to impose a fundamental change in relation to the law on abortion in Northern Ireland? Given that the communities and all parties in Northern Ireland are united on the issue, if devolution is to mean anything, the wishes of the people of Northern Ireland should be respected in that regard.
Obviously it is very important that the question of the view of the parties in Northern Ireland is taken into account, irrespective of the issue that is being raised. It is also important that the views of men and women are taken into account in all parts of the United Kingdom when services are being considered. As the hon. Gentleman said, the Human Fertilisation and Embryology Bill will come before the House next week, and no doubt he will be able to make his points in the debate.
Can we have a debate on the long-term future of regional airports? My right hon. and learned Friend may be aware of the recent decision by British Airways to relocate its cabin crew staff from Glasgow airport and other regional airports throughout the UK, which has resulted in significant job losses. Does she agree that British Airways is hardly an appropriate brand name, when it sees regional airports as trading posts? It is happy to take the natives’ money, but it will not trust the natives on its aircraft.
I will raise that important point, which is also the subject of my hon. Friend’s early-day motion 2208 on British Airways job losses at Glasgow airport.
[That this House expresses its concern at the continuing loss of jobs by British Airways staff at Glasgow Airport and other regional airports across the UK; notes that these job losses demonstrate a clear lack of commitment by BA to serving regional airports outside London, is not in the best interests of the travelling public, undermines the long-term security of the workforce and treats regional airports such as Glasgow as trading posts; and believes that British Airways should reconsider this decision or go the whole way and rebrand themselves London Airways.]
I will raise those important points with the Secretary of State for Transport, the Secretary of State for Business, Enterprise and Regulatory Reform and the Secretary of State for Scotland.
The people of Hertfordshire will be surprised by the Leader of the House’s decision not to call for a statement on local government finance problems due to banks crashing in Iceland. In Hertfordshire, £17 million is invested in those banks. That investment was made in good faith and at the Government’s request, because the assets were being held. That will cause a shortfall in cash flow as well as a shortfall in next year’s funding, because the interest was required to go forward. Can we have an immediate statement on how local government will survive in that situation?
I have put next week’s business before the House. We arranged for this week a debate on financial stability, which will take place shortly. As well as having the opportunity to speak in that debate, Members will be able to ask the Minister questions during his speech.
There is a requirement for utility companies to provide their customers with at least one bill every two years. Here in London my electricity provider does that, but Powergen, my electricity supplier in Bolton, rarely provides me with a bill. As a result, Powergen got me in debt to the tune of £1,000 last year. It read my meter two months ago, but no bill has followed, and several of my constituents are in debt as a result of such terrible behaviour by several power companies. I echo the request for a topical debate on the behaviour of the providers of power to our homes, which could extend to the provision of social tariffs, smart meters and feed-in tariffs.
My hon. Friend makes an important point. Without pre-empting myself or anybody else with whom I might discuss the issue, I think that the question of how energy companies are operating in this difficult situation is a front-runner for next week’s topical debate.
Notwithstanding what the Leader of the House has already said, may I appeal to her spirit of generosity and urge her to announce in a statement next week that there will in fact be two days, not one day, for the remaining stages of the Human Fertilisation and Embryology Bill, both because that is right in itself in view of the array of opinions on the subject and, indeed, because it would represent a display of strength and receptiveness on the part of the Government?
I was just looking for information about the amount of debate that there has already been. In considering whether there will be enough debate, the House should recognise how much debate has already taken place on the Human Fertilisation and Embryology Bill. In total, the Bill has been debated on the Floor of both Houses for 81 hours, with 10 sessions in the Lords and, so far, seven in the Commons. We have already had two days on the Floor of the House discussing amendments and new clauses on the basis of free votes on conscience issues. I stand second to no one in believing that the House should debate these heartfelt issues properly, but taking a view across all the business coming through this House, I think that 81 hours probably amounts to adequate debate.
Will my right hon. and learned Friend take an early opportunity to correct a false impression created by a question asked earlier today by the hon. Member for Kettering (Mr. Hollobone)? The question implied that Commonwealth citizens resident in Britain who have limited leave to remain, such as the wives of British citizens, are not eligible to vote in elections, but they are.
May we have a debate on the tagging system for prisoners who are on early release, and on the inefficiency and incompetence in a particular case in which a young man in my constituency was returned to prison for an extra three months through no fault of his own? Perhaps a debate could be held in Westminster Hall.
The hon. Gentleman refers to the important issue of recall to prison for those released on licence who are subject to conditions in respect of their tag. I know that that is a very controversial issue, because obviously recall to prison is a drastic step. I suggest that, in the first instance, he raise the question with the Home Secretary.
My right hon. and learned Friend will be aware that a number of Members on both sides of the House have written to express their concern about the deterioration of the situation in Sri Lanka, and about the Sri Lankan Government’s bombing of areas in the north and east of the country. I appreciate that there is a debate next week on human rights, but most Members who have written feel that that would be inadequate to deal with the subject, and that a special debate should be called for.
I will take my hon. Friend’s proposal as a suggestion for a topical debate, but as he anticipated, I think that there will be an opportunity to discuss the important issues relating to Sri Lanka next Monday. I know that he is very concerned about his constituents who have families in Sri Lanka, and he is assiduous in his concern for their welfare and the welfare of their relatives. However, I suggest that he try to catch the Speaker’s eye in the debate on Monday.
Yesterday, amidst all the financial turmoil in the markets, the Government still found time to whip their MPs—and, in a break with usual practice, even members of the Government—to ensure that they voted against my ten-minute Bill in favour of openness and transparency in the making of law. Given that, will the Leader of the House find time for a debate in the House on openness and transparency, so that we can establish once and for all whether the Government are actually in favour of it?
It is nearly two years since the collapse of the Farepak Christmas saving scheme. May we have a debate in Government time on the inquiry that was set up last year? It was due to report first at Christmas, then Easter, and then before the recess, but did not do so. Tens of thousands of decent, hard-working families deserve to know what happened to their money. Margaret Rettie in my constituency paid hundreds of pounds at 20 past 3 on the day on which the company collapsed; it did so at a quarter past 4. People like her deserve answers.
The whole House will have every sympathy with my hon. Friend’s point. We are all well aware that the people who lost money to Farepak were those who could least afford to do so. The fact that they are still waiting for the report is not acceptable. I thank him for raising the issue, as he has done consistently. We really do need to get the matter sorted out. I will work with the Deputy Leader of the House to make sure that we get some answers fast.
May we have an early statement or debate on the changes proposed by Her Majesty’s Revenue and Customs to the seafarers’ earnings deduction scheme? The change will affect people throughout the merchant navy, but it will have a particularly severe impact on those working in the North sea in the offshore oil and gas sector because of the proposals to backdate the changes. It is an issue on which Parliament really ought to have a voice.
I understand that my right hon. Friend the Financial Secretary to the Treasury, who has just joined us in the Chamber, is looking into the issue, so perhaps in the first instance the hon. Gentleman might seek a meeting with him to discuss how far my right hon. Friend has got in progressing the matter.
Will the right hon. and learned Lady arrange for the Secretary of State for Communities and Local Government to come to the House next week to make a statement on local government finance? The problem is not just the fact that local authorities have money frozen in Icelandic banks—in Oxfordshire, some £28 million-plus has been frozen or perhaps lost. There is another issue: many local authorities, in the course of their business, work with cash surpluses that they have to deposit. They need guidance from the Department for Communities and Local Government on what is acceptable practice, so that they can ensure that the money is protected. They would like to invest it in UK banks—they do not want to hold it themselves—but they want some safeguards and protection. It is a matter for the Department for Communities and Local Government—
In addition to the opportunity presented by the debate that follows this business statement, there will be a general debate next Wednesday on local government delivering for local people. All the hon. Gentleman’s points can be raised and answered by Ministers in that debate.
Thousands of holidaymakers across the country were recently left stranded, distressed and hugely out of pocket, through no fault of their own, as a result of a number of failures on the part of airlines. In 2004 and 2006, the Select Committee on Transport made a request, which the Civil Aviation Authority supported, that an airline levy be charged covering all passengers, particularly those who book their accommodation independently. Will the Leader of the House allow a debate—possibly a topical debate—next week or the week after to enable all of us who represent those passengers to debate the issue? We could debate the review of the European package travel directive at the same time.
I will raise the points that the hon. Lady has brought before the House with the new Secretary of State for Transport. We were all appalled to see what happened to those who were left stranded around the world. The Foreign and Commonwealth Office’s consular offices across the world did what they could. Many people were eligible for compensation, but some who booked online, or independently, were not.
May we have an urgent debate on the future of general practitioner services? Why are the Government intent on removing the dispensing powers and services of GPs, particularly in rural areas? That will leave patients in my constituency having to travel far further to collect their medicines. Will the Government have a rethink about this?
There will be a general debate on access to primary care next Thursday. I suggest that the hon. Gentleman catch the Speaker’s eye in that debate and raise his constituents’ concerns then. However, I remind him and the House that there has been unprecedented investment in, and improvement to, primary care services since this Government came to power and made the NHS a priority. [Interruption.] I hear Opposition Members say that that has been wasted. Before we came to power, many of my constituents could not even get on a GP’s list, because the lists were closed. When they managed to appeal and did get on a GP’s list, they sometimes found that they had to wait weeks for an appointment, and when they did get to see the GP, it was often a locum who was completely knackered. GP services have been substantially improved.
May we have a debate on the performance of the UK Border Agency? A constituent of mine who has been asked to sponsor someone from Sierra Leone has been told that he must send details of all his bank accounts and savings to Sierra Leone, so that the applicant can give them to the embassy there. Why does he have to send all his bank details abroad? Why could he not take them to someone in the UK? It is a ludicrous policy.
My local authority, the London borough of Havering, is one of the councils that has had its accounts with an Icelandic bank frozen. I heard what the Leader of the House said about the opportunities presented by the topical debate, but she will appreciate that the ability to ask questions on this specific issue will be limited. As for waiting until next Wednesday, as we see, a lot of things could happen before then. In light of comments made by a number of hon. Members, will she reconsider speaking to Ministers in the Department for Communities and Local Government, and will she encourage them to make an urgent statement on the issue on Monday, to allow detailed questioning on it?
Things are getting a bit surreal: hon. Members are taking up time in asking me to find time, but I am telling them that they can put their questions to the Financial Secretary to the Treasury, who is here. I understand that he will report on meetings with the Local Government Association, so instead of asking me, why do those hon. Members not just ask him?
Residents in Kettering have been waiting ages for a long overdue announcement from the Department for Transport and the Highways Agency about the Government’s plans to expand the A14 around Kettering. Will the Leader of the House be kind enough to urge the Department for Transport to make a statement in the House on the issue next week?
May we have a debate on the administration of the education maintenance allowance system? I have been contacted by a number of young people in my constituency who should have qualified automatically for the allowance, but have waited more than eight weeks for it to be processed. I am concerned that a number of other people across the country might be affected in a similar way. I would appreciate the opportunity for a debate with the Minister.
My right hon. Friend the Secretary of State for Children, Schools and Families has already devoted a great deal of attention to that issue. The hon. Lady is right: those who are awarded the education maintenance allowance need it promptly. I shall raise her points with my right hon. Friend and see whether there can be a further written statement or other process to make sure that he is fully accountable to the House on that important issue.
When time allows, may we have a debate about the Black Police Association, a divisive organisation that is stirring up racial tensions? If there were a white police association, the Leader of the House would be first in line to be outraged about it. I cannot see the legal or moral difference between a white police association and a black one. May we have a debate on the issue? Like many other people in the country, I think that the association should be scrapped.
It is very important that the Metropolitan police should command the confidence of the diverse communities in London whose security it is there to protect and whose co-operation it needs to investigate crime and prevent it from happening. Historically, black and Asian people have been under-represented in the Metropolitan police, but a great deal has been done to increase its black and Asian members. Much of that has been due to Sir Ian Blair; I pay tribute to the fact that he has made sure that more black and Asian people have been recruited to the police to ensure full public confidence.
As the hon. Gentleman may know, the Home Secretary has announced that there will be an inquiry into black and Asian recruitment, not only in the police but across the board. There is the Black Police Association but no white police association because of the under-representation of black and Asian people. That is why we back the work to increase the numbers of black and Asian members of the police service.
TOPICAL DEBATE Financial Stability
I beg to move,
That this House has considered the matter of financial stability.
The events in the USA in the past few weeks and in Europe in the past few days have demonstrated once again the global nature and sheer scale of the problems affecting the financial system. What started in America last year has now spread to every part of the world. Disruption in global financial markets has intensified, particularly over the past few weeks, and people are rightly concerned about what is happening. As well as the USA and ourselves, Ireland, Germany, the Netherlands, France, Spain, Denmark, Austria, Belgium and Iceland are affected; these are global problems that need international, as well as national, responses. My right hon. Friends the Prime Minister and the Chancellor of the Exchequer have made it absolutely clear that we will do whatever is necessary and right to maintain stability. Along with Governments across the world, we have the responsibility to support a stable, well-functioning banking system.
Financial transactions are at the heart of everything that we do: they allow people to buy goods, pay for services, buy homes, save for pensions and invest for growth and prosperity. It is essential that we take action both to support the banking system as a whole and to intervene in particular cases when it is necessary to do so. It is not a case of one or the other; general support and individual intervention are needed. We want to work with other countries to tackle the causes of these problems as well as deal with their consequences.
Yesterday, the Chancellor announced to the House the decisive, comprehensive action that the Government are taking to restore confidence in the banking system and put banks on a stronger footing. That has been widely welcomed.
The House welcomes what my right hon. Friend has said about financial stability. One of the underlying reasons for the weakness in our and America’s banking systems is the weakness in the housing market and the fact that increasing numbers of people are unable to pay their mortgages. What will be done, as autumn turns to winter and winter turns to new year, to make sure that our constituents do not find themselves at the mercy of repossession? What will be done to support people in their homes and against arbitrary repossession?
I am sure that my hon. Friend will welcome yesterday’s Bank of England announcement of a reduction in interest rates. Of course, if we are successful, as we hope we will be, in opening up the lending market again, we will see the housing market—and, indeed, other parts of the economy—benefit from that change. It is essential that we take action both to support the system as a whole and to intervene in particular cases when we need to.
Does my right hon. Friend accept that some people must be puzzled? Over the years, we have been told by all kinds of people that state intervention is wrong, that any form of extending public ownership is highly undesirable and that all such measures would undoubtedly lead to wicked socialism, which is no doubt being considered in Washington. Is it not also puzzling that at this moment, when there is such a crisis in financial markets across the world, it is precisely state intervention that is essential?
My hon. Friend is absolutely right. I have been struck by how some people who have customarily denounced any form of Government intervention are now calling for precisely that intervention.
There are three strands to what the Chancellor announced yesterday: first, the provision of sufficient liquidity now; secondly, making available new capital to UK banks and building societies to strengthen their resources and restructure their finances while maintaining support for the real economy; and thirdly, ensuring that the banking system has the funds that it needs to maintain lending in the medium term.
The Financial Secretary has mentioned three points, but are there not really four? First, there is a transfer of debt to the national purse; secondly, there is a deferral of debt from today until tomorrow. The third and fourth points are the subsequent choice between cutting public spending or increasing taxes.
No. The three strands are precisely as I have set them out. I am not sure whether the hon. Gentleman is expressing opposition to the package; in common with others outside the House, Conservatives have generally welcomed the proposals as precisely the decisive and bold action that is needed, given the circumstances that have resulted from the problems in the USA.
The Financial Secretary mentioned the need for bold action. In his statement yesterday, the Chancellor said that he had frozen the assets of the subsidiaries of Landsbanki in this country as a first step in trying to address the issue of retail deposits at that bank. However, he was not so clear about what was intended in respect of local authority deposits with the bank. My local authority, the London borough of Sutton, has £5.5 million in a subsidiary of that company. It was invested in a prudent fashion and in line with guidelines issued by the Treasury. The authority wants to know what will happen to that money and whether the Government will stand with it and council tax payers to make sure that the money is safe.
I am aware that my right hon. and learned Friend the Leader of the House fielded several questions about this at business questions. I can tell the hon. Gentleman that there will be a meeting this afternoon between my hon. Friend the Economic Secretary, my hon. Friend the Minister for Local Government and the Local Government Association to consider exactly this issue.
The hon. Member for The Wrekin (Mark Pritchard), who has now left the Chamber, asked about affordability. Does my right hon. Friend take some reassurance from the editorial in today’s Financial Times, which says:
“The government can afford this plan. National debt is relatively low and the UK can borrow more”?
When the Conservatives left office, our national debt was 47 per cent. of gross national product. We have got it down to 37 per cent., which has created, through good economic management, the room for this kind of intervention when it is so necessary.
The Minister will be aware that Norfolk county council is among a number of local authorities with money on deposit with subsidiaries of Icelandic banks. It seems to many of us that, in the circumstances post-Northern Rock, that was not the wisest thing to have done. Did the Treasury give any specific instructions or advice to those local authorities?
If a local authority has any concerns about that, I suggest that it contact the Local Government Association, which, as I said, has a meeting with my hon. Friends this afternoon.
Within the package of proposals that we have brought forward, we will ensure that where public funds are involved there will be conditions on remuneration arrangements in banks—we do not want rewards for excessive risk-taking—and to secure and maintain credit to home buyers and to small businesses. The proposals have been widely welcomed. As well as supporting stability in the financial system, they will protect depositors, safeguard their interests and play an important part in the international response to this global crisis. In turn—
I will make a little more progress before I give way again.
In turn, that should help people and businesses to support the economy in these extraordinary times. Whenever possible, countries should work and act together to maintain stability. My right hon. Friend the Chancellor has agreed with European Union Finance Ministers to work together to rebuild confidence in the banking system. All member states have now committed to immediate steps to enhance depositor protection. My right hon. Friend will also be in Washington this weekend to discuss steps to be taken internationally, including on strengthening the system of international supervision, and the Prime Minister has agreed with other major countries on a meeting of Heads of Government to ensure that international action is taken.
It has been necessary for Government to take decisive steps to strengthen the stability of the banking system. The best solution to a firm’s specific concern is, where it is available, a private sector solution. On 18 September, it was therefore announced that Lloyds TSB and HBOS were to merge following market turbulence whereby HBOS found itself in increasing financial difficulties as investors lost confidence in its ability to continue operating. To help to secure the deal quickly in the best interests of wider financial stability, the Government have changed competition rules to allow financial stability to be considered in the scrutiny of this merger. The decision on whether the merger should be referred to the Competition Commission will be taken in the normal way by the Secretary of State for Business, Enterprise and Regulatory Reform in the light of implications for competition and financial stability, and an affirmative resolution will be made to add the maintenance of UK financial stability to the list of public interest considerations in the Enterprise Act 2002.
This banking crisis followed a severe oil price shock in the summer, with the price of oil reaching $150 a barrel. Since then, it has fallen by 40 or 50 per cent., but the price of petrol and diesel at the pumps has remained stubbornly high. Is the Minister considering the possibility of investigating anti-competitiveness among the oil companies at petrol stations, because this is having a real impact on household budgets?
The fall in the price of oil is certainly very welcome. There are also indications that the recent increases in food prices are moderating. However, the hon. Gentleman is absolutely right—those reductions need to be reflected in the prices charged to ordinary consumers.
I hesitate to interrupt my right hon. Friend’s flow, but it had already been interrupted.
Not enough is being made of the fact that there will be strict controls through the Financial Services Authority on compensation packages for the executive directors of these various banks. Let me remind the Financial Secretary of what the Chancellor said:
“In reaching agreement on capital investment the Government will need to take into account dividend policies and executive compensation practices and will require full commitment to support lending to small businesses and home buyers.”
Can the Financial Secretary repeat that today, because it is being overlooked in the outside world, where there seems to be a view that we are going to skate away from these so-called golden parachutes?
Let me make a little more progress, if I may.
I talked about our response to the difficulties of HBOS, so let me move on to Bradford & Bingley. Purely private solutions to firm-specific problems are not always available, and there will be circumstances in which the Government need to take steps to deliver solutions with the private sector to ensure that depositors are protected and that banking services are not disrupted. Following a period of extreme market dislocation, Bradford & Bingley found itself in increasing difficulties as investors lost confidence in its continued independence. On 17 September, the FSA declared that Bradford & Bingley no longer met its threshold conditions as a deposit taker, and after consultation with the FSA and the Bank of England, and having explored all the options, we announced that Bradford & Bingley’s UK and Isle of Man retail deposit business, along with its branch network, would be transferred to Abbey. The remainder of Bradford & Bingley’s business was taken into public ownership through the transfer to the Treasury of the company’s shares. That included its mortgage book, personal loan book, headquarters and relevant staff. The remainder of Bradford & Bingley’s business will be run down over time—for example, as mortgages are repaid by its customers. The Treasury and the financial services compensation scheme will recover payments in the wind-down. The financial services compensation scheme paid out approximately £14 billion to enable retail deposits covered by the scheme to be transferred to Abbey. The Treasury has also made a payment to Abbey for retail deposit amounts not covered by the financial services compensation scheme—some £4 billion. We fully expect taxpayers to get the full £4 billion back.
The Minister has been talking about the recovery of assets. He will be aware that the Chancellor said that Icelandic accounts had been frozen and that steps would be taken to recover the assets. Can the Minister give any further update on the measures that are being taken and on any further discussions that have taken place with the Icelandic authorities on the recovery of those funds?
I will come to the position of the Icelandic banks in a moment, but I wanted first to update the House on the range of issues that have emerged.
If there are losses at the end of the wind-down of Bradford & Bingley, the cost will be met first by Bradford & Bingley shareholders and subordinated debt-holders. The financial sector and the Treasury will then share any further losses between them. It is anticipated that the financial sector will bear a significant proportion of any such further losses from future profits when financial markets return to normal. It would require some £4 billion of impairments on the mortgage assets before the Treasury and the taxpayer suffered significant losses. Moody’s credit rating agency estimates that asset impairments will amount to about £1.2 billion. We are confident that, through quick and decisive action, we are doing whatever it takes to stabilise the financial system in the UK while protecting the taxpayer.
Savers at Bradford & Bingley are now savers at Abbey, with the assurance of their deposits being with a major bank. Savings can be accessed in the usual way and remain covered by the financial services compensation scheme. Bradford & Bingley’s branches, call centres and internet operations continue to be open for business as usual. The Government have also guaranteed that for those working in Bradford & Bingley’s headquarters, there will be no compulsory redundancies over the next six months, employee terms and conditions will remain unchanged, and pension rights will be protected.
On the issue that the hon. Member for Hornchurch (James Brokenshire) just pressed me on, acting yesterday on the advice of the Bank and the Financial Services Authority, and in light of recent announcements by the Icelandic authorities, the Chancellor took action to protect retail depositors in three Icelandic banking operations in the UK: Icesave, which is a UK-based branch of Landsbanki; Heritable, which is a UK-based banking subsidiary of Landsbanki; and Kaupthing, Singer and Friedlander, which is a UK-based banking subsidiary of Kaupthing bank. That action was taken to ensure stability of the UK financial system and savers’ money is now safe and secure.
As my right hon. Friend the Chancellor made clear, all the deposits by retail savers will be protected.
Yesterday, the FSA deemed Icesave to be in default. Because of the Chancellor’s decision, no retail depositor will lose any money as a result of the closure of Icesave. The Treasury and the financial services compensation scheme are working with the Icelandic authorities and their deposit insurance scheme to ensure that depositors are paid back as quickly as possible. My right hon. Friend the Chancellor emphasised to the Icelandic Finance Minister that UK depositors in Icesave should have the same protections as depositors in Iceland, and receive their deposits back in full promptly. Arrangements are being put in place to ensure that all ISA customers of Icesave will continue to benefit from the tax-free status of their accounts.
To protect UK economic interests, the Government have frozen the funds and financial assets held by the Icelandic bank, Landsbanki. We fully understand the exceptionally difficult challenges faced by the Icelandic Government and the pressure that they are under. We want to work co-operatively and constructively with them, particularly to ensure that depositors and creditors are protected. We have, though, been unable to obtain complete clarity from Iceland on the position, so the freeze we introduced is a precautionary measure protecting UK interests, and it could be lifted once safeguards are in place to prevent action detrimental to the UK economy.
I just have a quick question on the freezing of assets. Could the Financial Secretary clarify under which legislation the assets were frozen? My understanding from reports in today’s newspapers is that the freezing took place under anti-terrorism legislation, and I am interested to know how the Government justified freezing the assets through such legislation.
The important thing was to safeguard UK economic interests. The hon. Lady is quite right: the power used happened to be in the Anti-Terrorism, Crime and Security Act 2001, but it was felt necessary to protect UK economic interests.
Yesterday, the FSA also deemed that Heritable and Kaupthing did not meet threshold conditions. In order to provide for as much business continuity as possible, the majority of Heritable’s retail deposits, and the Edge accounts in Kaupthing, were transferred to ING Direct, using the Banking (Special Provisions) Act 2008. ING Direct is working rapidly to ensure business as usual for customers. Action by the tripartite authorities protects savers’ money and provides certainty for retail depositors. The transfer of the retail deposit book has been backed by cash from the Treasury and the financial services—
Over recent months, we have seen the impact of the credit crunch move beyond the banking system, first to home owners and now to businesses. What was seen as a problem of banks being unwilling to lend to each other has become a problem of banks being unable or unwilling to lend to their customers. In the mortgage market, that has been characterised by lower loan-to-value ratios as banks ration credit, and higher interest rates as the spread between the London interbank offered rate—LIBOR—and the base rate widens. Businesses are seeing comparable issues. For example, businesses have seen their overdraft rates go up from 10 per cent. to 15 per cent. The markets seized up because of concerns about banks’ capital and their ability to withstand losses, which added to concerns about liquidity.