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Oral Answers to Questions

Volume 485: debated on Wednesday 10 December 2008

Scotland

The Secretary of State was asked—

Calman Commission

The Calman commission was set up after a vote of the Scottish Parliament and supported by Labour, the Conservatives, the Liberal Democrats, trade unions and Scottish businesses. I welcome its interim report.

Does the Secretary of State think that the current system of funding is fair to the rest of the United Kingdom, especially the north-east of England?

I know that the hon. Gentleman has great affection and passion for the north-east of England, but the fact is that the funding settlement that has been established across the UK has been in place in a period during which Conservative and Labour Governments have been in power. The hon. Gentleman raises the type of issue that the Calman commission, through Anton Muscatelli’s work with his expert group, will be considering, and it would be wrong of me to second-guess that process at this time. That work has to continue.

I welcome the Calman report as a sound, thorough piece of evidential work. The evidence shows that in the financial crisis, with the loss of two of our dear banks in Scotland, Scotland on its own would not have been able to cope. [Interruption.] Is there not a case—[Interruption.] Is there not a case for looking at the evidence, working for devolution, and ensuring that we have good government in health, education and community care—all areas that are crying out for good policies, which the Administration in Scotland are not delivering?

My right hon. Friend is typically right on the money. In his chairmanship of the Select Committee on Treasury, he shows great expertise in these issues. Despite the SNP heckling and haranguing him, the fact is that the £37 billion investment by the UK taxpayer in the two Scottish-based banks is more than the entire budget of the Scottish Government. That shows yet again that in good times the Union of the United Kingdom helps to make us all more prosperous, and in more difficult times it makes us safer and stronger.

The Calman commission has not yet had time to consider the £1 billion of cuts announced by the UK Government, which will impact negatively on Scottish social services. With the Labour and Conservative parties working hand in hand in the Calman commission, is it not time for the Secretary of State to be honest about the Tory-type cuts that he is now in favour of?

Not at all, because in the recent pre-Budget report we saw an additional £2 billion go into the pockets and purses of Scots. Across the country and across the world, Governments are trying to find ways to drive efficiencies. I will not take any lectures from the hon. Gentleman. His party argued for lighter regulation of the banking system, just as it started to collapse; his party argued for an oil fund, just as oil prices fell from $150 a barrel to $42; and his party argued that Scotland should be just like Iceland, when the International Monetary Fund was being called in to save the latter’s economy.

Surely the Secretary of State cannot be telling us the accurate position when he says that the Royal Bank of Scotland and the Bank of Scotland were getting more money than the whole of Scottish Government. Surely those figures cannot be true. Could he tell us a little more about that?

I would like to thank my hon. Friend for his question. The small number of SNP Members were heckling, so perhaps my hon. Friend was not able to hear. We are investing £20 billion of UK taxpayers’ money in the Royal Bank of Scotland, and £17 billion based on the HBOS-Lloyds TSB merger proposals. That direct investment in those banks has led to the Royal Bank of Scotland taking an entirely sensitive approach to small businesses in Scotland, and where that bank has led, we look forward to other banks following.

We share the Secretary of State’s welcome for the Calman commission. Does he note the contrast between the application and thoroughness of the interim Calman report and the so-called national conversation, which appears to be little more than a taxpayer-funded blog site for insomniac nationalists? Does he share my disappointment not only with the content but with the tone of the First Minister’s response to the interim report? Will he therefore use his best endeavours to persuade the First Minister that now is the time to show that he is a man not a mouse—to use the First Minister’s own analogy—by abandoning the national conversation, which does not have the support of the Scottish Parliament, and by engaging, as many in the Scottish Government wish to do, in the Calman process?

The hon. Gentleman is right to say that it is both surprising and disappointing that Scottish Government Ministers will not give evidence to the Calman commission. Of course, Scottish civil servants cannot give evidence to the Calman commission. He is absolutely right to say that if the Scottish Government continue to wish to see this process provide the high-quality outcome that we all want, that position should change over the next few months. The hon. Gentleman is right: there are a number of insomniac SNP supporters across Scotland at the moment. That is partly because their economic dream has turned into a nightmare and their ambitions of Scotland being just another Iceland are really a nightmare come true.

I have particular warmth for Scotland and all the people who live there because I have Scottish blood in my veins and I represented a substantially Scottish ward on the local authority until I came to this place.

Further to the point made by the hon. Member for Blaby (Mr. Robathan), he and I represent constituencies in the east midlands of England that have a population not dissimilar to that of Scotland and a social, economic and demographic profile close to that of Scotland. However, public expenditure in the east midlands is 20 per cent. less per head than it is in Scotland. No one wants to take away from Scotland, but does the Secretary of State hope that one day the east midlands of England will rise to receive the largesse that those north of the border receive?

My hon. Friend raises an important point. Anton Muscatelli looked in great detail at the funding balance and other issues, and the Calman commission will reflect on that and produce its proposals next year. Whether it is in Leicestershire, Lanarkshire or north or south of the border, the United Kingdom provides us with great prosperity in good times and great security in more difficult times. That is a situation that all of us in the House—except one, two, three, four, five and one other who is not in the Chamber at the moment—wish to continue.

Does the Secretary of State accept that today’s exchanges highlight the need for the financial issue to be addressed and that central to that will be the tax-raising position of the Scottish Parliament? Does he recall the Prime Minister telling the CBI dinner in September:

“Devolution has worked, but I do see one problem…the Scottish Parliament is wholly accountable for the budget it spends but not for the size of its budget…That is why we asked the Calman Commission to look carefully at the financial accountability of the Scottish Parliament”?

Is that still a statement of Government policy and can we expect to see that reflected in future submissions from the Scotland Office to the Calman commission?

I am sure it will come as no surprise to the hon. Gentleman to hear that the Prime Minister was speaking on behalf of the Government, and it is important for that to be the case. The Calman commission and Anton Muscatelli have looked at those specifics in precise and great detail. Today’s exchanges have also shown the merit of having a dispassionate, thorough, detailed analytic piece of work such as that currently being produced by the Calman commission. We look forward to the commission’s final report next year and we will continue to give evidence to it. I say again that I think the process would be stronger if the Scottish Government joined the UK Government and gave evidence to the commission.

Energy

My Department and I are in regular contact with all sectors of the energy industry, including clean coal, oil and gas, renewables and the nuclear industry.

I thank my right hon. Friend for that answer. I know that he will be playing a part in Pilot, the cross-industry, Government and trade union committee. Does he agree that the best way to secure Scotland’s future energy needs is to ensure that we maximise the recovery of the oil and gas that we already know are in the North sea, particularly in the west of Shetland? What will he do to encourage the Treasury and the Department for Energy and Climate Change to ensure that we successfully get the gas finds that are already being exploited by Total and others in the west of Shetland basin to shore, so that they can fulfil Scotland’s future energy needs?

My hon. Friend speaks with great experience and a detailed understanding of the oil and gas industry, particularly in the North sea. I had the opportunity of visiting and speaking at the oil and gas supply chain conference last month. It is clear, as my hon. Friend rightly said, that a large proportion of the untapped oil reserves lie west of Shetland. I met Total and others when I was in Aberdeen to discuss that very issue. Those conversations need to continue within government and with the industry so that we can exploit that natural resource in the North sea for years to come.

Has the Secretary of State had a chance to look at the report on Scotland’s energy by the Scottish Council for Development and Industry, which found that Scotland can meet

“its target of 50 per cent. of electricity from renewable sources by 2020”

but also that

“Scotland needs £10 billion of investment in new electricity generation between now and 2020”?

How does that fit with his Government’s plan to cut £1 billion from the Scottish Government’s budget?

I have to remind the hon. Gentleman, as I did his hon. Friend the hon. Member for Moray (Angus Robertson), that a few days ago the pre-Budget report put £2 billion back into the pockets and purses of Scottish taxpayers. That is an important point to bear in mind. I know that the hon. Member for Angus (Mr. Weir) and his party have a virulent ideological opposition to the nuclear industry, but as he referred to yesterday’s report by the SCDI, which he quoted selectively, perhaps I can add a quotation. The report also said:

“it is our view that nuclear power should be considered as a potential part of the longer term generation base in Scotland.”

The SCDI speaks the truth.

Does my right hon. Friend agree that one of the energy industry’s problems is sourcing skills? Is he aware that his right hon. Friend the Secretary of State for Innovation, Universities and Skills has earmarked £50 million for high-level skills training in the oil and gas industry, but that there is no such fund in Scotland? The Minister I wrote to in Scotland says that the Scottish Executive have no plan to deal with the problem in Scotland, but that they will bring out a report in the spring, two years after they were elected. Is it not a concern that Scotland may have to go to England to find trained, skilled workers to work in our energy industry?

It is indeed a fact that the oil and gas industry in Scotland, as well as the energy sector more generally, needs access to the most highly skilled workers, not only from throughout the UK but from across the world. There is global competition for those highly skilled workers, which is why I, along with the industry, announced a working group to look into the issue. I share my hon. Friend’s concerns that if the Scottish Executive cannot ensure that Scotland has the highest quality workers and apprentices to exploit the opportunities in the oil and gas industry, that will be a blow to the Scottish economy.

Is the Secretary of State aware of the potential of marine energy in the Pentland firth to provide something in the order of 31 GW for Scotland’s future energy needs? Is he further aware that, although the Crown Estate has started applications for the licensing process, applications are being limited to 20 MW and five years, which is possibly a barrier to future development? Will he use his good offices to speak both to the companies that are making applications and the Crown Estate to see whether a better method can be found for applications?

I listened with great interest to the hon. Gentleman’s genuine point. My hon. Friend the Under-Secretary and I recently met the Crown Estate, so I should be happy to meet him to discuss the issues that he raises. His point is important. For two centuries Scotland relied on its geology, through the exploitation of coal, for our energy. Now we increasingly have to rely on our geography, through the exploitation of natural resources, including wind and wave power.

When he meets the energy companies, will my right hon. Friend raise the fact that although the prices of commodities in the market place have dropped like a stone in the past few months, that has not been passed on to consumers? What is he doing in that respect?

It is entirely unacceptable if the energy companies do not pass on these lower prices to Scottish and UK consumers, and we will continue to press them on that point. Additionally, it is important that the social tariffs that have been announced are more highly publicised. They offer support for tens of thousands of Scots, and are worth hundreds of pounds. The energy companies must not only agree to the social tariffs but publicise them so that they can be taken up.

Reference has already been made to the Scottish Council for Development and Industry report, but does the Secretary of State recognise that not only the business community but every other objective analysis suggests that if there are no new nuclear power stations in Scotland, the lights will go out? Can he offer any hope, not only on the security of energy supply in Scotland but on the economic benefits that the new nuclear development offers to constituencies such as my own, or does he share the nuclear industry’s pessimistic view that, because of the actions of the Scottish Parliament, there is no prospect of new nuclear development in Scotland in the foreseeable future?

I should like to say to the hon. Gentleman:

“We cannot afford for the Scottish Government to play fast and loose with the security and reliability of our future electricity supplies and run the risk of the lights going out in Scotland”.

[Interruption.] Hon. Members may scoff, but those are not my words; they are the words of Liz Cameron, the chief executive of the Scottish Chambers of Commerce. The fact is that the Scottish National party Government are isolated on this issue. Business, trade unions and experts know that the nuclear industry must be part of a balanced energy policy in the United Kingdom and in Scotland.

Post Office Card Account

3. What discussions he has had with ministerial colleagues on the use of the Post Office card account in Scotland. (240212)

My right hon. Friend and I have regular discussions with ministerial colleagues on a range of issues. I particularly welcome the awarding of the Post Office card account contract to Post Office Ltd.

I thank my hon. Friend for that answer. We should be talking about expanding post office services, and looking at the savings gateway project, which was announced by the Post Office last week. We should also be encouraging the roll-out of more free ATMs—many people are unaware that those operated by the Post Office are free. There are now only nine banks in my area, but there are 19 post offices, and we should also be considering expanding the post office network in such a way that it can become the people’s bank.

My hon. Friend is absolutely right. The Post Office is a trusted brand that is considered reliable, safe and secure, and I am delighted that the pre-Budget report announced that the savings gateway account will be available through the Post Office. We estimate that about 725,000 people in Scotland will be eligible to open an account from 2010. We all know that, in times of economic difficulty, saving even a small amount of money can make a real difference to the quality of people’s lives.

East Dunbartonshire has lost a third of its post offices in recent years, and others have been threatened. What other plans do the Government have to build on their belated, but very welcome, decision to save the Post Office card account, in order to deliver many more Government services through the post office network and to give the remaining post offices a much more secure future?

I recently met Ian McKay, the director of Scottish affairs at Royal Mail, and I know that Royal Mail is considering bringing a number of innovative products to market through the Royal Mail services. It believes that it now has a sustainable network in Scotland, and it is working hard to ensure that the universal service is maintained. That is exactly why the Government have set up the Hooper review, which will report to the Government later this year on how we are going to sustain the universal service in the long term.

Is my hon. Friend aware of the discussions that are currently taking place on the possibility of post offices offering credit union services in their branches? The credit union movement is particularly strong in Scotland, and it is playing a particularly important role in the current financial situation. Will my hon. Friend ask her officials to look into this possibility, to see whether such an arrangement could bring added business into the post office network in our communities?

My hon. Friend has had long experience with personal debt advice services, and has supported them through his chairmanship of the all-party group on debt and personal finance. I fully agree that there is an important possible link-up between Royal Mail and the credit unions, and I would be happy to work with him to pursue that matter with Royal Mail.

Calman Commission

4. Whether he has discussed the findings in the interim report of the Commission for Scottish Devolution with the First Minister. (240213)

I am very disappointed by that. The First Minister has a tendency to conflate the interests of the Scottish National party with the interests of Scotland. It would very much be in the interests of Scotland if Scottish Government civil servants were able to give evidence to the Calman commission. If the Secretary of State manages to have that conversation, perhaps he could use his undoubted charm to persuade the First Minister to remove the ban and let them give evidence.

It is, as I said, both disappointing and surprising that Scottish Government Ministers will not give evidence; and Scottish Government civil servants cannot give evidence to the process. I want to strike a tone whereby I work with all Scots in Scotland’s interests and I am just disappointed that that offer has not been taken up by the First Minister and the Scottish Government.

It is clear that by next summer the Calman commission will have completed its work and a final report will be published. In the light of the fact that Scotland’s First Minister and the Scottish National party are not really interested in better governance for Scotland—[Interruption.] We hear about the Tory-Labour pact, and I am in favour of pacts so far as the Union of the United Kingdom of Great Britain is concerned, as opposed to the arc of insolvency offered by the SNP and its swivel-eyed supporters. Will the Secretary of State please tell us his plans for the Government timetable when the final report is published in the summer?

We cannot dictate to the Calman commission the timetable for the publication of its report, but we continue to engage with it and we will respond to it. The fact is that Scotland gets the best of both worlds: it has the benefit of a devolved Parliament in Edinburgh and the security of the UK Parliament, which provides a sense of security and stability in these very difficult times.

UK Fishing Quota

5. What recent representations he has received on the management of the UK fishing quota in Scotland. (240214)

My right hon. Friend and I have not received any recent representations on the management of the UK fishing quota in Scotland, but I am aware of current industry concerns.

Does my hon. Friend agree that the current EU proposals on fishing quotas will have a devastating impact on the west coast and island fishing communities in Scotland if they are not vigorously challenged and changed at the Fisheries Council on 18 and 19 December? Will she further suggest to Ministers in the Scottish Government that, at this crucial time, some of their proposals such as dual registration have more to do with a separatist agenda than with benefiting fishermen in Scotland?

My right hon. Friend has always taken a keen interest in the western isles and the fishing industry there. Our focus next week is on the year-end negotiations and, despite the different policy approaches, we will not jeopardise the UK position in them. We are working closely with all Administrations within the UK. Last week, my hon. Friend the Under-Secretary of State for Environment, Food and Rural Affairs, who has responsibility for fisheries, and I met west coast fishermen to discuss what viable alternatives we could offer at next week’s negotiations. We believe that we are working hard to put forward a package that will preserve fishing in the west coast.

Will the Minister join the Scottish Government in supporting Scottish fishing communities and retain the quota in Scotland? We know that the Minister has been silent on the staggering £1 billion of cuts that Labour’s pre-Budget report will deliver to Scotland. We know of the £120 million of consequential prison spending to come to Scotland and of the HBOS measures, but there has again been silence, endangering 20,000 jobs in Scotland—[Interruption.]

I am surprised that the hon. Gentleman takes so little interest in his own fishing communities and refuses to listen to them when they have made it quite clear that they do not want any change in the current fishing quotas system or the terms of the ability to transfer licences within the UK. We are not prepared to take risks with the UK fishing industry as a whole and we are working hard, along with the industry and all the other devolved Administrations, to achieve the best possible deal next week. It is time that the SNP Government, rather than producing a Christmas card with a fishing boat on top of it, actually spoke up for fishermen.

Does my hon. Friend agree that although it is vital to secure in Brussels the best results in the fisheries negotiations on quotas, it is also important to secure an extension of local fisheries management schemes so that we can move away from the policy of discards that requires fishermen to throw fish out of quota back into the sea? We need to make real progress for our fishermen and real progress on conservation.

I thank my right hon. Friend for that question. I very much welcome the agreement that has just been reached between the EU and Norway, which will mean a significant reduction in discard in North sea fishing, while at the same time see 30 per cent. more fish from Scottish fleets delivered to Scotland. That represents the success and strength of a united approach to the discussions.

Great Britain Football Team

6. What recent discussions he has had with ministerial colleagues on the creation of a Great Britain football team for the 2012 Olympics. (240215)

I met my right hon. Friend the Secretary of State for Culture, Media and Sport last month. I am passionate about our national sport and national team. If there is to be a one-off under-23 football Team GB at the London Olympics, I want to make sure that it does not affect any of the home nations.

Will the Secretary of State not get it into his skull that the Scottish Football Association, the tartan army and the vast majority of Scottish football fans want nothing whatsoever to do with his Team GB, and that his and the Prime Minister’s attempt to bully Scotland into a Team GB threatens the very continuation of the Scottish football team? Will he now take the advice that Sebastian Coe so sagely offered the SFA—“Go away and do absolutely nothing to threaten our team”?

It is true, of course, that all politics is personal, and for the hon. Gentleman all politics is personal insult. He does not want a one-off British Olympic football team, but nor does he want a British Olympic cycling team that Chris Hoy did so well in, a British rowing team that Katherine Grainger did so well in, and a British Paralympics team that Aileen McGlynn did so well in. The fact is that he does not believe in a country called Britain, so it is hardly surprising that he does not want to see any representation of Britain at the Olympic games, but I am pleased to say that the majority of Scots continue to support the United Kingdom of these great islands.

Prime Minister

The Prime Minister was asked—

Engagements

Before listing my engagements, I am sure that the whole House will wish to join me in sending our profound condolences to the family and friends of Lance Corporal David Wilson of the 9th Regiment Army Air Corps, who died in Iraq on Thursday. We owe him and all those who have lost their lives serving our country a deep debt of gratitude.

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

I thank my right hon. Friend for that reply, and may I offer my condolences to the family concerned?

Businesses, including small businesses, have welcomed the measures brought in to help them through the current downturn. They are, however, concerned about the do nothing, “Let’s just see what happens” from the Conservative party. They also have concerns about the way in which, and the speed at which, banks are responding to their requests. Will the Prime Minister please reassure me that this Government will do all they can for home owners, those businesses and the people who work in them?

We will do everything it takes. We led the way in recapitalising our banks. We led the way in arguing for a fiscal expansion, which other countries are now taking up. We will be leading the way in the next few days with more help for the unemployed, announced in the welfare reform White Paper that we are putting forward today to help people into work; more help for home owners when we have the mortgage summit tomorrow with the housing and building society industry; and more help for small businesses when we announce our new measures that are in addition to the national loan guarantee scheme that we have proposed—in addition also to the work that we are doing to help defer the expenses of people who are faced with big bills as a result of income tax. We are taking action. The Conservatives would do nothing.

I join the Prime Minister in paying tribute to Lance Corporal David Wilson. His family, including his fiancée, Michelle, and his young daughter, Poppy, have suffered a devastating loss, and the whole House will want to send its condolences to them.

I am going to ask the Prime Minister again about the need to get banks lending to businesses. Putting taxpayers’ money into the banks was something supported by all parts of the House in order, yes, to rescue the banking system, but as the Governor of the Bank of England says, the purpose of recapitalisation was not

“merely to protect the banks”,

but to ensure that

“the flow of lending to the real economy could continue at normal rates”.

Does the Prime Minister accept that on those terms, his recapitalisation has failed? When is he going to change it?

The first point of recapitalisation was to save banks that would otherwise have collapsed. We not only saved the world—[Laughter.]—saved the banks and led the way—[Interruption.] We not only saved the banks—[Interruption.]

Not only did we work with other countries to save the world’s banking—[Interruption.] Not only did we work with other countries to save the world’s banking system, but not one depositor actually lost any money in Britain. That is the first thing. The second thing is to get the banks into a position in which they can resume lending, and that is why interest rates have come down by 3.5 per cent.—something that the Opposition said was not possible, but which actually happened. The third thing to do is to work to remove all the barriers to interest rates and to the lending of money by the banks, and that is what we are doing in discussion with the banks now. The Opposition may not like the fact that we led the world in saving the banking system, but we did.

Well, it is now on the record. The Prime Minister is so busy talking about saving the world that he has forgotten about the businesses in the country that he is supposed to be governing. All over the country there are businesses that have had interest rates increased and overdrafts restricted. I have one here: a business in Derbyshire whose overdraft facility was restricted even though its order book was full, and which has had to lay off 11 people as a result.

This recapitalisation scheme is not working. It needs to change if the banks are to start lending again. The Prime Minister keeps saying that everyone in the world has copied it, but no one has copied the details. He is lending to the banks at 12 per cent. and expecting them to lend out at 6 per cent. Other countries are not copying that, even though he thinks he is saving the world. Is that not one of the things that need to change, and change now?

The right hon. Gentleman forgets that in addition to recapitalising the banks, we have set up the small business loan guarantee scheme with an extra £1 billion. That would not be possible if we took the advice of the Conservative party. We have put an extra £1 billion into export credits for small businesses, which would not be possible if we took the advice of the Conservative party. We are getting £4 billion from the European Investment Bank. Four banks in Britain are already using that scheme, which will enable money to flow to small businesses. And, at the same time, the Inland Revenue—Her Majesty’s Revenue and Customs—is saying to people that we will defer payments of VAT, national insurance and income tax, and corporation tax, to enable them to have the cash flow that is necessary.

So we are taking the measures that are necessary. Unfortunately, to do that one has to be able to put a fiscal injection into the economy. Unfortunately, the Conservative party opposes the extra investment that is needed. Unfortunately, the Conservative party is still clinging to the failed policies of the 1980s.

The fiscal stimulus has nothing to do with saving the businesses that are going bust and that need lending from banks. The Prime Minister talks about the loan guarantee scheme. Does he know what percentage of loans to business the loan guarantee scheme covers? Does he know? It is 0.2 per cent.: that is how big it is. I know that the Prime Minister has been around the world boasting about his recapitalisation scheme, so he is reluctant to change it but, for the good of the economy and our businesses, it has got to change.

If it is all going so well—if it is all going so swimmingly—why did the Council of Mortgage Lenders say this yesterday? It said:

“The government needs to decide on its key priority. The tug of war with lenders being pulled in every direction at once needs to end.”

Government policy, the council says, is “conflicting and incoherent”. Why does it think that Government policy is conflicting and incoherent?

The Council of Mortgage Lenders has just supported our proposal to deal with repossessions in the mortgage market, something that not even the Conservative party was able to support. We are taking the action that is necessary. I am sorry to have to teach the right hon. Gentleman what an economy is about, but if we are putting money into the small business loan guarantee system, if we are putting money into export credit, if we are putting public money into supporting businesses through a difficult period by deferring income tax and corporation tax and national insurance and VAT, we are using taxpayers’ money rightly to help small businesses.

Unfortunately, the difference between our two parties is that the right hon. Gentleman would do absolutely nothing and let the recession run its course, while we are prepared to take the action that is necessary but accept that it costs money. It is no good him complaining about extra borrowing if he is not prepared to take the action that is necessary to help small businesses.

The difference between us and the Prime Minister is that while he thinks he is saving the world, we are talking about businesses in the real world in the British economy. The Governor of the Bank of England says:

“The single most pressing challenge to domestic economic policy is to get the banking system to resume lending”.

If the Prime Minister was not wasting so much time and everyone’s money on his pointless VAT cut, he could have spent more time on this.

Just as the Government supported lending between the banks, is it not now time to underwrite lending to businesses? Is that not the way to keep them afloat and to keep people in work? Will the Prime Minister now finally accept our proposal for a national loan guarantee scheme to make sure that happens?

The right hon. Gentleman is refusing to spend any taxpayers’ money in helping us out of this difficulty. As for his rejection of the VAT cut we are giving to consumers to enable them to spend, I hope he will ask the Chairman of the Public Accounts Committee to apologise, when saying that he was against the VAT cut, for asking:

“How will it help the poor to give them a few pence off consumer items they don’t need?”

If ever that was uncaring Conservatism—the right hon. Gentleman should ask the Chairman of the Public Accounts Committee to apologise.

Why cannot the Prime Minister answer the question about our national loan guarantee scheme? It is a fully worked-through proposal that could help business now. The CBI has welcomed it, as have the Institute of Directors and the Federation of Small Businesses, and The Guardian newspaper today—[Interruption.] Well, The Guardian gets Government leaks without anyone being arrested. The Guardian said:

“The Conservatives have been advocating a national loans guarantee scheme that the Treasury may be trying to adapt”.

So, on the day the Prime Minister is copying our welfare reforms—we will have a statement on that in a minute—will he swallow his pride and admit that he needs to copy our proposal for a national loan guarantee scheme? Is that not the way to get business trading and to keep Britain working?

Again, I have got to teach the right hon. Gentleman something. We have already got a business loan guarantee scheme; it is worth £1 billion and it was announced as an extension in the Budget. If the Conservatives have not realised that, they can be of no help to small businesses in their constituencies. On top of that, we have an export credit scheme; on top of that, we have deferred expenditure on VAT and income tax; and on top of that, we have the European Investment Bank scheme. I just said in answer to the first question put to me that we will do more in the next few days because we want to do everything we can to help the economy move forward, but that cannot be done without being prepared to put the injection of money into the economy, and if the Conservatives stand for the policies of the 1980s and 1990s—when they did nothing as the unemployed and small businesses went to the wall—and do not allow the extra expenditure, they are on the wrong side of history.

The Prime Minister is on the wrong side of mathematics. The loan guarantee scheme, worth £1 billion, covers 0.2 per cent. of business lending. He cannot accuse us of doing nothing on a day when we are proposing a multi-billion pound scheme to get business lending again.

But let us take a moment to look at the Prime Minister’s record. What did he do to put money aside for a rainy day? Nothing. What did he do to stop the fastest rise in unemployment for 17 years? Nothing. And what has he done to get real credit moving in the real economy? Absolutely nothing. He said he would abolish—

Wait a minute—the Prime Minister can save the world in a few moments if he likes. He said he would abolish boom and bust; he has brought this country to the brink of bankruptcy and the deepest recession of the G7. Is not the person responsible him?

Yesterday, the leader of the Conservative party said he would spend no more money; he said he would do nothing more through more finance to help people. He then went on to say he would cut spending in 2010; that means cutting spending on the health service, education and other public services. The Conservative party enters 2009 with exactly the same policies it had in the 1980s. It will say anything to disguise the fact that it will do nothing; that is the Conservative party we know, and it is not fit for Government.

Actually, it is quite nice to have a Prime Minister who would save the world when we are faced with an Opposition who can barely save face.

May I ask the Prime Minister specifically to address the initiatives that he has been taking in respect of the need for a new architecture to underpin the international financial institutions? Will he take the lead in looking at the opportunities to introduce a Tobin tax through the World Bank to ensure that we are able to protect long-term and serious investment, but deter speculators from playing the terribly destructive role that they have played in throwing us into the current recession?

There are many proposals to deal with the reform of international financial institutions to make them more able to deal with the problems that the world faces, not just the financial stability problems, but climate change. One such proposal is the Tobin tax, which has been found by many people who have looked at it not to be implementable. Another is to increase the resources available to the International Monetary Fund and the World Bank, and that is something that we are examining now.

I would like to add my own expressions of sympathy and condolence to the family and friends of Lance Corporal David Wilson, who tragically lost his life in Iraq.

Recently, a single mother with small children came to see me in Sheffield—[Interruption.]

She had with her a bundle of letters from the Government demanding her tax credits back. The letters were almost entirely incomprehensible, except for the bit that said that she was going to be dragged to court to pay back money to the Government that she did not have—she was terrified. Does the Prime Minister think that is the kind of help that people need in a recession?

Tax credits have increased, and they have helped more children out of poverty than any other policy that we have had. Of course, if the right hon. Gentleman wishes to bring details of the individual case to my attention, I shall look at it. But I think he should recognise that tax credits have taken more children out of poverty than any other single measure.

The Prime Minister is deluding himself. I know that he thinks he is Atlas carrying the world on his shoulders, but the fact is that I have figures to show that he is now dragging 35 low-income families a day to court—that is 10 times as many as last year. The tax credits system that he created is confused, bureaucratic and cruel. When will he move to a system of fixed payments, so that people do not have to live in fear of the money that they get today being taken away by him tomorrow?

If there was a system of purely fixed payments, we could not adjust the help that is necessary either when people become unemployed or when their family income falls substantially. The whole point of having a flexible system is to enable us to respond to the changes in people’s circumstances. Of course, I shall look at the individual case that the right hon. Gentleman has brought before the House, but I think he has got to recognise that 6 million families in this country receive child tax credits, that they benefit from them—in some cases, by £70 for the first child—and that that has done much to take people out of poverty, and will continue to do so. If he is seriously interested in attacking child poverty, he should be supporting tax credits, not opposing them.

The most important single reform of the health service that my constituents want is to have general practitioner surgeries open in the evenings or at weekends. Can the Prime Minister confirm that nearly 5,000 GP surgeries—more than half the total—are offering extended hours, and can he say when all of them will do so?

GP surgeries are now open in 65 per cent. of the areas of the country in the evenings or at weekends. They are open because we demanded—[Interruption.] Well, the Opposition’s policy is that GPs make their own decisions, and that would mean that large numbers of GP surgeries would not be open in the evenings or at weekends. We have taken the decision and we have provided the money. It is only possible to provide the money for that by increasing the health service budget—that would not now be possible under the Conservatives’ plans.

Q2. The Warmer Homes and Energy Conservation Act 2000, which I had the honour of introducing, places a duty on the Government to pursue a strategy to eliminate fuel poverty for vulnerable people by 2010 and for everyone by 2016. Given that the current strategy is clearly failing, with 5.4 million people now in fuel poverty, will the Prime Minister tear up the present strategy, listen to his own advisory group, save lives this winter and meet the targets in the Act? (241361)

We have just raised the winter allowance for pensioners to £250 for the winter months, and to £400 for those aged over 80. There was no winter fuel allowance under the Conservatives. We have also introduced insulation schemes that enable people to insulate and draught-proof their homes, and to fit central heating. The Warm Front and other schemes are being increased in value in the next period of time. Of course in the last few months oil prices have pushed up gas and electricity bills, but oil prices are coming down, and we want to see gas and electricity bills coming down. That will have a big impact on our ability to tackle fuel poverty.

Q3. Buying local and paying promptly are two important ways of helping small businesses to stay in business. As well as encouraging local and national Government to play their part, will the Prime Minister also urge bigger private businesses to play a part too? (241362)

Today the Business Secretary is holding a meeting to discuss a prompt payment code with the Institute of Credit Management. That means that we are asking others to join us in the early payments that Departments are now making to businesses and others. I believe that other public authorities can do that, and that some of our mainstream large businesses should be in a position to help smaller businesses. We will have a new prompt payment code and I hope that as many businesses as possible will sign up to it.

Will the Prime Minister apply the same pressure to the Student Loans Company to reduce interest rates as he has to the banks? If the response is yes, can he ensure that any reductions are backdated to match the timing of the Bank of England reductions?

Of course I will look at what the hon. Gentleman says. He may know that the arrangements for student loans and the interest rate charge have been set down by this House and are reviewed from time to time.

Q4. When it comes to helping those on benefits back into work, does my right hon. Friend agree that compassion and support are as important as compulsion in achieving that objective? (241363)

In our welfare reform paper, we propose giving more help to people who need it, especially to enable them to return to work. We will also give people with disabilities the power to control their budgets, make their own choices about how best their condition can be treated, and how services can meet their needs. We intend to legislate for a right for those with disabilities who want to do so to control a single budget comprising services, benefits and other support. That is showing compassion as well as moving forward with reform.

Tonight the actual moment of death of my former constituent, Craig Ewert, will be shown on Sky Television. Many people recognise that there is a real issue in terms of how we approach assisted dying, but at the moment it is illegal. Health and palliative care groups, as well as disability and other faith groups, oppose assisted dying. Does the Prime Minister regard this programme as being in the public interest, or is it simply distasteful voyeurism?

These are very difficult issues, and we should all remember that at the heart of any individual case is a family in very difficult circumstances, who have to make difficult choices that none of us would want to have to make. It is a matter of conscience and there are differing views on both sides of the House about what should be done. It is necessary to ensure that there is never a case in which a sick or elderly person feels under pressure to agree to an assisted death or that it is the expected thing to do. That is why I have always opposed legislation on assisted death.

Specifically on the programme itself, I think that it is very important that these issues are dealt with sensitively and without sensationalism. I hope that broadcasters remember that they have a wider duty to the general public. Of course, this will be a matter for the television watchdogs when the broadcast is shown.

Q5. Residents were outraged when the biggest lap-dancing club in the country was given a 24-hour licence by my local Lib-Dem council. However, the good news, as they understand it, is that we will increase the regulation of such establishments. Is my right hon. Friend in a position to give us any further details today? (241364)

We believe that any such applications should take into account the wishes of local residents and should be sensitive to the needs of people in the area. We intend to legislate on that basis in the near future.

Q6. My constituents, Mr. Steve Smith of T. J. Trucking and Mr. David Nettley of Transport Enterprise Ltd, have both written to me in anger and desperation at their inability to get credit from their banks—banks that are now financed by the taxpayer. They particularly say that Government help for small businesses is making it worse for them. Will the Prime Minister now adopt a national loan guarantee scheme for small businesses, as we recommend? (241365)

There is a small business loan guarantee scheme—[Interruption.] It is no use the Opposition denying the reality. There is a small business loan guarantee scheme, which is being increased to £1 billion. In addition, the firms in the hon. Gentleman’s constituency can ask the Inland Revenue to defer tax and VAT payments. At the same time, of course, I hope that they will soon benefit from the price of fuel coming down. However, I do not know whether the Opposition are prepared to admit that we are taking action on the small business loan guarantee, on export credits and on deferring tax. It is no use their denying the reality. I agree that we will be doing more in the next few days, but it is important to recognise what is available at the moment and to give people the real help that is available now. We will finance that help, whereas the Opposition would not.

I know that my right hon. Friend has always been a supporter of the credit union movement, and particularly of community-based credit unions such as those that I have in the Braes area of my constituency. Is he concerned that an order is going through at the moment that will basically turn every single credit union into a basic bank and every account into a current account, allowing people to withdraw all their deposits at any time? That is a great blow to the community-based credit union movement. Will he ask his Ministers to reconsider that proposal?

The purpose of the legislation is to enable credit unions to do more than they have been able to do in the past. Of course, we will respond to consultations and to such information and recommendations as my hon. Friend wishes to give to us. There is an £80 million growth fund to expand the capacity of credit unions and community development finance. Since 2006, credit unions have helped 110,000 people. They are a major element in our financial system and we want to give them all the support they need.

Q7. The Select Committee on Children, Schools and Families has just received chilling evidence from the chief inspector of schools at Ofsted. Between 1 April 2007 and 31 August 2008, 210 children died as a result of abuse—three times the number that we were led to believe by the Department. Does the Prime Minister agree that there must be something profoundly wrong with our society for it to have such a death toll of the innocent? What can he do to do something about it? (241366)

We have to do everything in our power to prevent the needless loss of young life as a result of child abuse. First, we must ensure that child protection arrangements are effective everywhere and that is why Lord Laming has been asked to undertake his urgent review of the progress that has been made. Secondly, we need to train social workers more effectively and that is why we have set aside £73 million for better training of our social workers in the years to come. Thirdly, the hon. Gentleman has heard from Ofsted today and we are asking Ofsted to carry out inspections annually across the country—not biennially, but annually—in every area of children’s services. When the case reviews are inadequate, an independent panel must immediately convene to reconsider those reviews and report properly in the future. When we have Lord Laming’s recommendations, we will take further action. If any mistake is being made, people should be penalised, and if there is anything to change in the law, we should do it immediately.

Q8. As chair of the all-party heart group, I would like to inform the House that last year each Member of the House lost 300 constituents to heart disease. The current 10-year plan to combat heart disease finishes next year. It has been an outright success, with a 45 per cent. drop in heart-related deaths. Will the Prime Minister ensure that his next 10-year plan is as successful? (241367)

Ten years ago, there were 35,000 heart operations in the country: now, there are 80,000 almost every year. Ten years ago, people waited up to two years for a heart operation: now, virtually nobody waits more than three months. Mortality rates for cardiovascular disease are now the lowest since records began. I believe that we have a duty to fund the health service properly to enable it to tackle heart and other diseases in the way that doctors want, and with the speed that everybody wants. That depends on a properly funded health service. That would not be possible with the policies now being pursued by the Opposition, but we will continue to fund the health service for the future.

The reality is that, right across the UK, small and medium-sized businesses are going to the wall because the banks are not extending credit on reasonable terms. We appreciate that action has been taken, but what further positive action can be taken to ensure that credit gets to the SMEs to stop them going bust?

That is exactly what we want to do, and that is why we are encouraging the banks. Schemes have been announced by HSBC and other banks in the last few days. We are pressing them to announce further measures in the next few days. I believe that to match what the Government have done, the banks must now respond in the way that I am suggesting. I believe that no small business with a good project and good investment plans but which needs working capital or an overdraft should find that such a facility has been withdrawn. We are at one in trying to make sure that the banks operate for the public interest in this way.