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?
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—
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.
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.
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?
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.
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.
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.
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.