House of Commons
Wednesday 10 December 2008
The House met at half-past Eleven o’clock
[Mr. Speaker in the Chair]
Oral Answers to Questions
The Secretary of State was asked—
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.
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.
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
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.
There are no current plans to do so.
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
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
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.
The Prime Minister was asked—
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.
With permission, Mr. Speaker, I should like to make a statement on our White Paper “Raising expectations and increasing support: reforming welfare for the future”.
This White Paper will transform lives. We know that the support that we offer helps people get back to work. It can turn lives around. We want to make sure that as many people as possible have this chance. That is why we want virtually everyone claiming benefits to be preparing for, or looking for, work. It is a fair deal—more support, in return for higher expectations.
That is a deal that has always underpinned the welfare state. As early as 1911, those claiming from the unemployment exchange could be disqualified if they refused a suitable job offer. It is a deal that was extended by the Beveridge report, and one that was championed by the 1945 Labour Government.
In 1947, Herbert Morrison said that
“we have no hands or brains to waste, and no resources to fritter away on those who don’t contribute to our national effort.”
Today, when the national effort is about a global downturn, we can no more afford to waste taxpayers’ money on those who play the system than they could then. But most of all we cannot afford to waste a single person’s talent.
We inherited a welfare state in which fewer than a third of claimants had to do anything in return for their benefits. Even that third got paltry support to get back in to work, while the rest got nothing. That truly was a welfare state that wasted talent and money. We paid for the costs of failure because we were not prepared to invest in the possibility of change. This Government set about putting that right. We taxed the excess profits of the privatised utilities to create the new deal. We merged the Benefits Agency and the Employment Service to create Jobcentre Plus, so that everyone who signed on for benefits signed up for work, too. That was the first phase of reform—deepening the obligations to work, so that there was no fifth option of just staying on benefits. We saw that those obligations caused youth unemployment and long-term unemployment to tumble, so we set about the second phase of reform and widened the scope of those obligations to work. We piloted helping those on incapacity benefit, first with the new deal for disabled people and then with the groundbreaking pathways to work programme, which increases a person’s chance of being in work by 25 per cent. Now we are rolling that out.
Since April, we have required all new claimants to take part, except those with the most severe conditions, and in October, we replaced incapacity benefit with the employment and support allowance, which focuses on what people can do, not what they cannot do. We improved help for lone parents. With the help of the new deal for lone parents, over 300,000 more lone parents are in work, but we wanted more people to benefit, so we are requiring lone parents of children between the ages of seven and 16 to look for work. We expect that to increase employment and lift 70,000 children out of poverty.
The White Paper will kick off the third phase of welfare reform. It is based on the simple idea that no one should be left behind, and that virtually everyone should be required to take up the support that we know works. It is built on the recommendations of two independent reviews, the Freud and Gregg reviews. The White Paper confirms that we will implement the Freud report in full, including his “invest to save” proposal, in which private and voluntary providers invest money in helping more people back in to work, and get paid out of the resulting benefit savings. Professor Paul Gregg’s report was published last week. The White Paper confirms our support for his vision. It sets out how we will put it into legislation and pilot his recommendations so that nearly all claimants are either preparing for work or looking for work.
We will migrate everyone on incapacity benefit on to the employment and support allowance. Under the new benefit, the poorest and most disabled will get nearly £16 a week extra. Everyone else will get support to manage their conditions and prepare for work. They will be required to attend interviews to develop their plan to do so, and advisers will be able to require them to implement that plan. We agree with the Gregg report’s recommendation that parents should not be left until their youngest child is seven before they are given help to get back into, or prepare for, work.
The support that we offer lone parents has been transformed since 1997. We pay a £40-a-week bonus to any lone parent going back into work. We pay 80 per cent. of their child care costs. We pay for travel costs to job interviews, and for interview clothes, if necessary. When the parent finds works, there is a £300 emergency fund to help them, if needed. We can also help people with more serious problems such as depression, debt or drug addiction. Most of all, we have made work pay. A lone parent who has one child and works 35 hours a week will be on at least £304 a week in April next year, compared to £182 in 1999. Thanks to the minimum wage and tax credits, such parents are now more than £100 a week better off.
Our goal is simple: we want more parents to benefit from help, so that they can help themselves and their children. That is why conditionality is so important in the welfare state. Only 5 per cent. of incapacity benefit stock claimants voluntarily take up the support that the pathways to work programme offers, and only around one in four lone parents takes up the support offered by their new deal. Partners in couples in which no one is working face even fewer obligations than lone parents.
The Gregg report found that
“Conditionality backed with a regime of sanctions improves outcomes.”
As a result of such a regime, the UK enters the downturn with the second lowest unemployment rate in the G7. However, the report also found that countries such as Denmark and the Netherlands had lower unemployment and child poverty rates than the UK, so if we want to abolish child poverty and improve social mobility, we need a welfare state that learns from the example of those countries. The Queen’s Speech made it clear that we will reinforce our commitment to ending child poverty in legislation that the Government will introduce in this Session. The White Paper is the other side of the coin, matching higher support with higher expectations.
Some people say that we should be slowing down the pace of welfare reform because of the downturn. The Government believe that we should do exactly the opposite. We should not repeat the mistakes of the recessions of the ’80s and ’90s, when hundreds of thousands of people were shuffled on to inactive benefits to keep the unemployment count down, and trapped there without support, abandoned and scarring our communities. In contrast, we are investing £1.3 billion in helping people find work, but we will have increasing requirements of people the longer they are out of work, to make sure that they do not fall out of touch with the world of work. After a year, everyone will be allocated to a private or voluntary provider, and expected to do four weeks’ full-time activity. After two years, we will pilot requiring people to work full time for their benefit.
The White Paper will also support children whose parents’ relationship has broken down. We will bring forward legislation so that it becomes the default option for both parents to register the birth of their child, whether they are married or not. And we will fully disregard child maintenance when working out income-related benefits from April 2010, so that children can take full advantage of the money provided for their upbringing.
The White Paper also makes clear our intention to apply new benefit rules for problem heroin and crack users. Instead of receiving jobseeker’s allowance, or the employment and support allowance, crack and heroin users will receive a treatment allowance, alongside an obligation that they address their problem.
There needs to be help for people to find and keep work, as well as responsibilities to look for work, so we will double the access to work budget to allow more people than ever before the support that they need to stay in work, and because we recognise that disabled people are the experts in their own lives, we will legislate for disabled people to have the right to exercise choice and control over the support they receive from the state. This right to control will be a major step towards achieving equality for disabled people by 2025. It will be a transformation in the rights of disabled people.
These reforms point the way to a fairer society where children do not grow up in poverty, disabled people enjoy real equality, and everyone is given real help to overcome the barriers to fulfilling their potential. Yes, the reforms are about looking after taxpayers’ money, but they are also about looking after the future, by making sure that we do not waste anybody’s talent. I commend the statement to the House.
I would normally thank the Secretary of State for an advance copy of his statement, but instead of doing that, may I ask him to explain to the House why he has given such an extensive briefing about the content of the statement over the past few days in the media? Does he not think that briefing the media in that way, ahead of the House, flies in the face of both the rulings that have come from the Chair in the past few months, and the now rather hollow commitments made by the Prime Minister when he was first elected to that position, about the importance of the House?
I pay tribute to the work of David Freud. It was his report, commissioned by Tony Blair and comprehensively rejected by the current Prime Minister three years ago, that started the debate in Britain. When we published our Green Paper in January, we drew heavily on David Freud’s work and added to it the recommendations for mandatory community work to be added to the back to work process in the UK. All those recommendations—David Freud’s and ours—have now, it appears, been adopted by the Government.
We know that the Secretary of State will face a big rebellion on his Back Benches, so may I assure him that we will give the proposals our support? We know that his Back Benchers, his union backers and his own social security adviser are clearly opposed to the measures, but as much of what he is proposing comes from the work that we published in January, I can assure him that Conservative votes will help the measures on to the statute book, even if Labour Members try to stop them.
There will certainly be issues for debate when the Bill comes before the House. I think the Government are wrong to extend from six months to 12 months the date when young people are referred for specialist back to work support. We would change that in government. I am glad the Secretary of State agreed with me that the proposals in the Gregg report to make lone parents of one-year-olds prepare for work were just plain wrong. Even so, I remain unconvinced by some of his other proposals on lone parents, and we will want to debate those vigorously when the Bill comes before the House. There are far too many pilots in the proposals. After 11 years in office, surely the Government can, for a change, do something properly and not just pilot it.
There is one huge, unanswered issue, on which I would like the Secretary of State to concentrate his response to me. He has rightly accepted our proposal to put every single person currently claiming incapacity benefit through an independent medical assessment; that is clearly the right thing to do. However, it will also be a complete waste of time if adequate back to work places are not available for the people who go through the test and are told that they have the ability to prepare for work.
Our intention was always to fund those extra places for a proportion of 2.6 million people through the so-called departmental expenditure limits-annual managed expenditure, or DEL-AME, switch—the invest to save mechanism—using initial savings from getting people off benefits and into work to fund the cost of the programmes that get them there. The Secretary of State has said only that he intends to pilot that plan in two areas after 2010. However, the assessments start in 2010. What will happen in the rest of the country? Where will the extra places come from, and how much extra money does the Secretary of State have to put into the budget for the pathways to work programme after 2010 to pay for those extra places? If those places are not there, many of these proposals will not be worth the paper on which they are written.
We have had a wasted decade for welfare reform. The Government promised change, but failed to deliver it in the good times. Now unemployment is rising and these proposals will be much more difficult to deliver. The measures in the White Paper are mostly right for Britain and we will vote for them. It is a shame, however, that the Government have talked for so long and done so little. Let us hope that, this time, they will finally do something—start the real reform process and establish proper foundations for change that will enable the next Conservative Government finally to end Britain’s entitlement culture.
I am glad that at last the hon. Gentleman has acknowledged that it was this Labour Government who commissioned the Freud report; normally, he goes around creating the impression that it was his report. We are implementing it in full in this White Paper.
I am slightly confused about the hon. Gentleman’s position on these welfare reforms. Originally, he said that the Opposition would welcome the proposals enthusiastically; last week, he said that he thought that we were going a bit over the top; on Sunday, he said that the proposals did not constitute welfare reform; and by Monday, he went back to saying that he would back them enthusiastically. That is confusing, but the confusion is not mine—it is due to the fact that the policy of the Conservative party is confused. It does not know what it thinks because its modernisation was a spray job. It is increasingly falling back on exactly the ideas of the ’80s and ’90s that created the problems in the welfare state which we have had to address.
The hon. Gentleman used to say that he would give these proposals his full backing. However, if people listen to what he has said today, I think that they will see that he is trying to maintain a tiny bit of wriggle room. I tell him this: he can either be statesman-like and do the right thing for the country or play politics. He cannot do both at the same time. That is the test to which we shall hold him—will he support the full reforms in the White Paper or will he try to have his cake and eat it, and play politics while trying to say that he is doing the right thing?
The hon. Gentleman raised a number of points. He said that he wanted me to direct my remarks to the questions about extra funding. There is extra funding in this package for the pathways to work programme to be extended to people who are migrating from incapacity benefit to ESA. He has no such funding at all. Given his party leader’s remarks yesterday on the radio, he has a real problem. He would have to cut spending in our Department. The Conservatives said that the borrowing in the pre-Budget report was reckless, but it allocated an extra £1 billion and this White Paper allocates still further money. None of that would be available to him. He has already committed to cutting the new deal, and he would have to make even further cuts.
The hon. Gentleman said that he would bring forward further proposals. We will apply three tests to them. First, are they fair? Secondly, would they work? Thirdly, how would they be funded? There is no point in his bringing forward theoretical proposals for which he has no money. He cannot just go around talking about the invest to save proposals as if they were some kind of magical piggy bank. We can proceed only at the pace that David Freud recommended.
The hon. Gentleman suggested that we were not implementing David Freud’s proposals, but he has an article in today’s papers saying that we are doing exactly what he recommended. It is right that we should do what he said, which is to pilot the scheme, not in two areas but in five, and then to make sure that we evaluate it and roll it out on the basis of that success. That is exactly what David Freud recommended.
The hon. Gentleman can no longer go around saying that there will be extra money from that process, because it is simply not available under his proposals. Nor can he say that he would pay for what he calls “ending the couples penalty” out of further welfare savings. He agrees with what we are doing, so there would be no further welfare savings to be had. I hope that in future he will make it clear that he would have no money for his proposal.
The hon. Gentleman has completely misunderstood the Gregg report. It does not say that we should make parents look for work when their child is aged one—it says that people should prepare for work. It gives them ownership of their own journey back into work. It says that they should be able to develop a personalised action plan, but then, as their children get older, in certain circumstances it is also right that they should be required to carry out that action plan. Like the rest of the White Paper, this proposal is about reducing child poverty, reducing unemployment and transforming lives. We believe in this because we think that the welfare state is the solution; the Conservatives do not, because they believe that the welfare state is the problem. On Sunday, the hon. Gentleman’s leader said that 5 million people in this country could all be a potential Karen Matthews. That is an insult to people on benefits, and it lets people like Karen Matthews off the hook. I think that in future Conservative Members should dissociate themselves from their leader’s remarks.
I commend the Secretary of State for the White Paper, particularly the move to greater flexibility for advisers and for the invest to save project. Does he agree that the global downturn means that many more people, in addition to the 2.5 million who already rely on legal, but very high, domestic credit repayments will require support and help? Does he also agree that the consultation launched a fortnight ago on the reform of the social fund should lead to a much more radical approach based on the partnerships in invest-to-save projects that would allow the public, private and voluntary sectors to expand dramatically the availability of affordable credit to the millions of people who would otherwise find themselves reliant on loan sharks who demand incredible payments that those people cannot afford to make?
My right hon. Friend is absolutely right. I pay tribute to him for starting off the process of welfare reform that we are announcing today. I also pay tribute to him for campaigning to reform the social fund. We think that it does great work, but that it could be improved by ensuring that people get financial advice alongside help with their finances. That is why we want to consider whether we could use that money to subsidise credit unions to do their job even better by helping people with their financial needs but also ensuring that they get out of debt.
I thank the Secretary of State for advance notice of the statement. I agree with the hon. Member for Epsom and Ewell (Chris Grayling), however, that it is disappointing that the Secretary of State held a press briefing on these measures before he came to the House, although both that briefing and the statement are almost pointless given the extent to which the proposals were trailed in the media over the weekend.
The Government have not consulted on the proposal to push lone parents with children as young as three or four years of age from income support on to JSA, because it was not in the Green Paper, although it was trailed quite strongly at the weekend. Clearly, it was not proposed earlier because the Secretary of State knew that there would be very little support for it, least of all among his own Back Benchers, and certainly among civil society organisations, which have raised serious concerns about that proposal. It is far too soon to consider such a proposal given that the Government have only recently brought in changes to the regime for lone parents and have not even assessed the progress of those changes. It was only three weeks ago that the Government started to move 300,000 lone parents from income support on to JSA. Many organisations, including the Social Security Advisory Committee, and many Members of this House have expressed concerns about whether enough flexible working opportunities, affordable child care, and appropriate personalised support are available. It is worrying that there is not yet enough evidence to suggest whether those changes will be successful and what their impact will be on child poverty. The Government have already admitted that they cannot guarantee that lone parents will be better off as a result of the changes that have already been introduced, so why is the Secretary of State proposing to go so much further before they have even evaluated those changes?
Why is Labour attacking lone parents and demonising people who are losing their jobs during a recession? The Secretary of State said that some people say that we should be slowing down the pace of welfare reform because of the downturn. Liberal Democrats are not saying that; instead, we believe that he should take account of the downturn and not penalise people who are suffering as a result. He referred to people who are long-term unemployed as “offenders”, which is not only counter-productive but also illuminating. The work-for-the dole proposals treat the long-term unemployed as though they were criminals on community service. The rhetoric that is being used demonises those who are on benefits. International examples show that the work-for-the dole option is not a success—it does nothing to develop skills and confidence and nothing to make people more employable. Why are the Government pushing ahead with a policy that has been shown to fail internationally?
On tailored support, the Secretary of State talks about responsibilities. We all share the view that people have responsibilities, but so do the Government. Beveridge strongly believed in helping people back into work. Why, under the JSA regime, is there no tailored support until somebody has been unemployed for a year? That is a very long time to wait when everybody agrees that early intervention is absolutely crucial in getting people back into work.
The Government are talking about making sanctions stronger. The Secretary of State says that he is implementing the Gregg review, but he seems to be overlooking the parts where Professor Gregg said that before introducing stricter sanctions, the Government had to ensure that they introduced proper tailored support for individuals. The Government seem to be picking the bits that they like and ignoring the bits that they do not like. Could the Secretary of State confirm whether he is going to implement all the recommendations in the Gregg report or only the bits that the Tories like? At the heart of the approach that the Government are proposing is the idea that work is the best route out of poverty. Of course, everybody agrees that that should be the case, but given that more than half of children in poverty have a working parent, work does not always pay at the moment. Before the Government places sanctions on people, they need to ensure that people are better off in work. Can the Secretary of State confirm how he is going to ensure that the changes will not just move people from out-of-work poverty to in-work poverty?
These proposals highlight primarily the fact that the Tories are showing their true colours—gone seems to be compassionate conservatism. It is hard to know who is hanging on the coat tails of whom. The Tories and the Government are arguing about whose idea was whose—they almost come across as squabbling brothers. We all agree that the system needs to be overhauled, but for the Government merely to target the most vulnerable and play “Are you tough enough?” with the Tories is not the way forward.
I did not hold a press briefing, and I hope that the hon. Lady will withdraw that comment.
The hon. Lady has fundamentally misunderstood what this is all about. It is about transforming people’s lives. It is about ensuring that we provide people with help and support so that they can get back into work and help their children to have a better standard of living and high aspirations for themselves. That is exactly the right thing to be doing.
On lone parents and the Gregg review, we are not saying that we are going to bring in those changes before the lone parent changes that are currently being introduced. This is about the next stage of welfare reform. It is right that lone parents should have to look for work when their child reaches the lower age of seven years, but Paul Gregg was not saying that parents of younger children should be made to work, or to look for work, but that they should prepare for work. We have fantastic help for people who need to get out of debt or to address serious issues such as mental health or drug problems. We also have help in relation to child care, confidence issues and training. It is right that people should go in and develop an action plan so that they can prepare for work, but then also, at the right time, be expected to take it up. It is all about ensuring that we end child poverty in this country—something that the Liberal Democrats have said is an “unnecessary distraction”. They are neither prepared to put in the support for people nor to address their high expectations to ensure that they get back into work to help themselves out of poverty.
This is the right approach that builds on the best approaches around the world, which involve full-time activity among other things. The hon. Lady is wrong to say that international evidence shows that that does not work. It does not work if that activity is of low quality, has no job search and does not help people to develop skills. It does work, however, if it involves full-time activity that teaches people skills, such as turning up on time and being presentable, and it ensures that people are looking for work. That approach is followed in countries such as the Netherlands and Denmark, and we will follow that approach because it is right for people.
The hon. Lady says that we should not deal with people who are repeatedly failing to live up to their obligations. I completely disagree. If people are taking money and playing the system without trying to get back into work, that is an abuse of the system. It is wrong for people to do that, and requiring those who do it to undertake full-time activity in return for benefits is the right approach because it is not fair on everyone else if they abuse the system in that way.
Finally, the hon. Lady asked what we will do to make work pay. We have transformed the situation: a lone parent working for a full week is more than £100 better off than in 1999, and that is even more than they would have had before 1997 thanks to the introduction of the minimum wage, which her party opposed. On top of that, we pay a £40 premium per week for people when they go into work. We are also piloting a £25 better-off guarantee. That is the right approach: more support and higher expectations. I am sorry that she does not support it.
I thank my right hon. Friend for his continuing efforts to support more disabled people and others getting into work. Does he agree that some media reports about the threat of sanctions against benefit recipients have caused anxiety among many people, not least those with mental health conditions? Such reports can be incredibly counter-productive in relation to what the Government seek to do. Moreover, they may discourage those entitled to benefits from claiming them. Can my right hon. Friend say how he intends to address those concerns?
I entirely agree with my hon. Friend, and I want to pay tribute to him for all the work that he does in championing the rights of disabled people in this House. It is right that we should give power to disabled people because society still discriminates against them and we need to ensure that they have the support and power to get themselves back into work and to achieve their aspirations, just the same as anybody else. No one should ever demonise or discriminate against disabled people, and we will ensure that that does not happen.
I start by welcoming the statement. As the Secretary of State knows, a year ago, the Centre for Social Justice published a series of reforms, many of which went alongside Freud, but some went slightly further. What the Secretary of State is saying is along those lines, so I welcome what he says. As he knows, the Centre for Social Justice and I have worked with the hon. Member for Nottingham, North (Mr. Allen) on early-years intervention, and on the idea that empathy and bonding between the age of one and two is vital. I suspect that that idea, which I recommend, is reflected by his rejection of any talk of forcing people into work at that stage of a child’s life.
I would, however, like to raise one issue. The Secretary of State talked about a lot of ways of getting lone parents back into work, and we know how difficult that is. When he refers to 32 hours work a week actually paying he is right, but one of the biggest problems is that many of the lone parents that we saw who worked between 16 and 32 hours complained hugely about the massive withdrawal rates that they suffered. I know that the issue is a difficult one, but the benefit block means that some of them take back only 10p in the pound for each of the hours that they work. That is a major issue and a disincentive for many of them. Losing housing benefit after falling out of employment and then finding it can take months to get it back is a major disincentive. Will he consider those matters in the next few months and bring some suggestions forward?
I welcome what the right hon. Gentleman says. Just to clarify, we are not rejecting a proposal that lone parents of children aged between one and seven should be made to work because no such proposal was made. Paul Gregg did not make such a proposal; he thinks that they should be preparing for work and that they should do that at a pace that is right for them.
The right hon. Gentleman raises an important point. In any welfare system that uses a taper, the taper can either apply to lots of people, who end up being means-tested across a wide-range of incomes, or it can be very sharp, and money is withdrawn very quickly. There is no perfect solution. We think that we have improved the situation substantially with the working tax credit and the minimum wage. The next issue to consider is housing benefit, and the White Paper announces that we will consult next year on reforms to the housing benefit system, looking at working incentives to ensure that there is fairness with regard to those who are working and those who are not, so that people on benefits do not end up getting subsidies for rents that those who work could never afford.
My right hon. Friend will be aware that there has been a huge increase in the number of child care places available through the Government’s national child care strategy, but many of those places are available during regular working hours. Will he do all that he can to ensure that more child care is available at weekends and in the evenings so that the lone parents who I meet in Blackpool can take advantage of jobs in retail, the hospitality trade, pubs, clubs and the tourist industry? At the moment, they cannot.
My hon. Friend makes an important point, and she gives me the opportunity to make it clear that this is not about targeting lone parents. In fact, the people who have the least obligations in the system at the moment are couples who are parents and are out of work. We want to ensure that we expect the same of them as we do of lone parents. That is the right thing to do. She is also right about the centrality of child care. We have made it clear in our reforms to the regime for lone parents and the jobseeker’s allowance that if there is no appropriate child care, parents should not be expected to take up work, because that child care should be the first priority. We need to continue to expand child care. We have doubled investment. As she knows, from 2010, all secondary schools will be expected to have wrap-around child care in the evenings and before school, and we need to ensure that people have that support in the holidays—that is very important for people.
I broadly welcome the reforms that the Secretary of State has introduced, but with some concerns. I am sure that all hon. Members would agree that there are those on benefits who genuinely want to get back into work to give themselves some pride, and to make a contribution to society. The Secretary of State hit on one vital point. All hon. Members will agree that a hardcore percentage of individuals have spent their lives creaming benefits off the state. Can the Secretary of State assure us that his proposals will deal with that?
Our proposals will ensure that there are clear expectations of people, and if people repeatedly fail to live up to their obligations, they will face clear sanctions. They will either lose their benefit, or be required to do full-time work in return for their benefit. That is the right thing to do, but it will apply to a tiny proportion of people. The vast majority of people are never sanctioned. Of those who are sanctioned, the vast majority are only sanctioned once, and half of them think it was the right thing to do in the first place.
I thank the Secretary of State for his statement. Some of us, however, are unsure of some of his proposals because of our constituency experience. Can he colour in for us how the right to control will be meaningful for disabled people, and whether it will apply to people with all recognised long-term conditions? On invest to save, and the proposal that the private and voluntary sectors should compete to win commission-driven contracts, how will he ensure that the process works in a fair way, and allows the voluntary sector to compete credibly What scale of investment will it need to muster, and will the process disadvantage areas where there are recognised concentrations of high, long-term unemployment, where such contracts will be less attractive? If conditionality and sanctions are to be the order of the day for lone parents and other people on modest benefits, when will the Government extend that principle to the banks?
I think that the Leader of the Opposition said that we had too much conditionality with regard to the banks.
My hon. Friend is right to point to the need for the DEL-AME mechanism in areas with higher levels of inactivity, which is exactly what we are providing. That mechanism will be more attractive in areas where there are more people who need help to get back into work, and therefore the areas that he mentioned would be particularly helped. We want to consult people on how the right to control will work; it will be a fundamental reform to the way in which support for disabled people works in practice. We want to consult people on which funding streams should be included. People would clearly not want defence or refuse collection to be included in a right to control, where they could take control of those matters in an individual budget, but if support is given to help disabled people, we want them to have control of it. If they are happy with what they are getting from local authorities and others, they can continue with it, but if they are not, they have the power to say, “No, I want to take this money and spend it in the way that I think fit.” That gives power to disabled people, and it will lead to a real transformation.
It is for you to decide, Mr. Speaker, whether the Secretary of State’s claim that he did not brief the press despite issuing a press release requires an apology to this House. None the less, I wholeheartedly welcome the statement, now he has brought it to the House, just as I have welcomed innumerable statements of similar rhetoric from his predecessor. Can he assure me that attributing more substance to his statement than to all those previous statements made during the past 10 years is not a triumph of hope over experience? Can he explain, given his rhetoric and Freud’s arithmetic, both of which I support and which suggest that the savings from getting people back to work should exceed the costs of doing so, why he requires more than a temporary increase in his budget to bring this about? More specifically, can he tell us what safeguards he proposes, so that fully disregarding child maintenance when working out income-related benefits will not create a direct incentive for couples to split up? When they are together, couples get no allowance for the income earned typically by the father in helping to bring up the children, and it is important to consider that. I hope that he has found a way of overcoming that, but if he has not, he should be aware of the problem.
The problem that we inherited from the right hon. Gentleman—he was one of my predecessors—is that the money was not put in to help people back into work. The Conservative Government cut benefits, not unemployment queues, and the number of those claiming incapacity benefit increased from 700,000 to 2.6 million. We now have a million fewer people on benefits precisely because we have been prepared to do what he never did: invest money in getting people back into work, rather than just paying the cost of the failure to do so.
The right hon. Gentleman is right to say that we want to put money into getting people back into work precisely to reduce the costs of their not working. That is exactly the right thing to do. In relation to child maintenance, we are trying to solve the problem of the way in which the Child Support Agency was created, which meant that benefits were going straight to the Treasury, not to parents. There was no proper incentive for people to give money to their ex-partner, because they thought it would go to the taxpayer rather than to the parent. This measure means that money will go to the children. It has been widely welcomed and it is absolutely the right thing to do.
I represent a coalfield community where, under the Conservatives’ failed policies, thousands of people were thrown on to incapacity benefit and were more likely to die on it than ever to work again, so I very much welcome these reforms. However, may I press the Secretary of State specifically for clarification that lone parents will not be required to take a job unless affordable child care is available? I would also like a better-off calculation to be done for them, so that they are better off and their children can be rescued from poverty. The matter of couples should also be looked at carefully, particularly the way the tax credit system works, because it is often not worth their while to get into work and off benefit. Finally, the revolving door syndrome, whereby people get a job but then come back out of employment and cannot immediately claim benefit or pay their mortgage, could become a problem that needs to be addressed. Dealing with those matters would help to ensure that the attempt to get genuinely full employment was successful.
On the first three assurances that my right hon. Friend asks for, I can say yes, yes and yes. On the fourth, I can say that that is absolutely the case, because of the work he did. He started the process of making sure that we assess tax credits, housing benefit and other benefits from the Department for Work and Pensions together in one office. We will now be able to roll that out across the country. We want to look at both how people can have stability when they go back into work and how housing benefit reforms can help to ensure that people have certainty that, when they go back into work, they will continue to get that level of funding. That is one of the fundamental points that we want to consider in the housing benefit reforms.
We are taking forward the radical reforms that my right hon. Friend put in place, particularly in relation to lone parents, and he is absolutely right to say that this is about helping the thousands of people—
At the end of the Secretary of State’s statement, he said that he would legislate to give disabled people the right to have choice in and control over services and support received from the state. I welcome that. He will know that local authority social services departments are introducing personally directed support over the next three years. Will the legislation cover the support that disabled people get from the national health service?
It will not cover things such as accident and emergency care, because that would not be the right approach. The NHS is running individual budget pilot schemes and we do not want to confuse the picture. It is right for the NHS to have such pilot schemes, for example, in relation to chronic care, because we are trying to build on previous individual budget pilots, which worked well, but had two problems: first, people sometimes did not have the powers to have individual budgets in practice and, secondly, although those pilots were good within particular funding streams, they were less good for allowing people to pull different funding streams into one budget. That is what this right will create for disabled people. We will have eight trailblazer authorities to see exactly how the measure will work in practice, and introduce legislation to roll it out if that is successful.
I have a constituent who, after working all his life, was diagnosed with a serious, life-threatening disease in his early 60s. He is now 63 and the Department’s doctor has decided that, following treatment, he can now return to work and his incapacity benefit has been stopped. At his age, it is unlikely that the jobcentre will look seriously for a job for him and it is even more unlikely than any employer will take him on. Will my right hon. Friend consider allowing people of that age and in those circumstances the opportunity to self-certify for incapacity benefit—for the higher levels of the new benefit that he is proposing?
I do not know if we can go as far as self-certification, but I know that my hon. Friend has met ministerial colleagues about that case, which he feels is distressing. Those decisions are taken independently of Ministers by medical professionals, but I am happy to look at the case and see whether any general lessons can be learned for the work capability assessment, which will be part of the employment and support allowance regime.
I thank the Secretary of State for advance notice of his statement. We all support the idea that as many people as possible should be getting into work, but can he guarantee that the jobs will be there? It has been suggested that in my constituency, for every single job, there are some 33 people available and looking for work. Does he agree that it is the most vulnerable who are likely to lose out from this kind of proposal and that there must be a safety net and a minimum income for every person in this country? Does he also agree that it is the ordinary folk who currently struggle with the complexities and bureaucracy of the system and that the danger is that they will suffer in the future? Does he share my concern about some of the words used, such as “wasting money”, “benefit savings” and “offenders”, which suggest that the direction of this proposal is towards a Conservative policy?
This is not about penalising the most vulnerable; it is about helping them and ensuring that they have support and the expectation that they will take up that support. It is worth pointing out that in the past 11 years, Scotland has gone from having higher unemployment than the national average to having lower unemployment than the national average, because of the policies that we have put in place. Unfortunately, I think that the SNP Executive—the hon. Gentleman can nod if he wants to—will refuse to have policies to help people with drug problems to address those problems, and will not supply treatment places. They are cutting training policies and apprenticeships, so that people will not have help to get back into work; and they are not going to use the NHS to help people to tackle problems of ill health at work. They are cutting away the very support that has helped people to get back into work during the past 10 years. That is a retrograde step and I hope that they will change their mind.
Mrs. Anne McGuire (Stirling) (Lab): I welcome my right hon. Friend’s statement and ask him to recognise that some of the fears that individuals and organisations are expressing are founded on their experience during the ’80s and ’90s when, along with colleagues such as my hon. Friend the Member for Glasgow, South-West (Mr. Davidson), we had to manage training programmes that were little to do support or individuality. During the consultation on the White Paper, will he recognise those fears and emphasise that conditionality is about investment in people, not benefit cuts?
My right hon. Friend is absolutely right. I thank her for her help in developing the Green Paper and the White Paper and for all her fantastic work with disabled people. She championed the right to control and I am glad that we are putting it into legislation, as a tribute to the work that she did.
Following the question asked by my right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley), can the Secretary of State tell the House how he would explain to hard-working couples with families who struggle to pay all their bills and taxes how it is fair that parents who have separated should have their child maintenance disregarded for income-related benefits? Can he reassure the House that that change, unlike other Labour reforms to the benefit system, will not provide an incentive for couples to live separately in order to boost their incomes?
I can indeed give the hon. Lady that reassurance, because there are no child maintenance payments where the parents stay together. If money is being paid, it is right that it should go to the children. That is the right thing to do and it has been widely supported by organisations that represent poor children.
Has the Secretary of State considered the problem of the high level of private sector rents, particularly in major cities such as London? Families are routinely placed in private rented accommodation by local authorities, where the rents can be as much as £300 to £400 a week, and when people are offered jobs, they cannot afford to take them because they will be considerably worse off. Is he prepared to tackle such excessive rents and the need, I believe, for rent control and a housing benefit taper that reflects the problem that too many families face?
My hon. Friend identifies a problem that our housing benefit review intends to look into. The problem particularly affects inner-city London constituencies such as his, so if he and a group of London MPs would like to meet me to discuss it, I would be happy to work with him.
Will the Secretary of State provide a little more detail to that part of his statement where he said that instead of receiving jobseeker’s allowance or employment and support allowance, crack and heroin users will receive a treatment allowance, alongside an obligation that they address their problem? Will he tell the House whether that is confined to just crack and heroin or whether it extends to other addictive drugs and alcohol? Will he also explain what protections he plans to build into the disbursement mechanism to reduce the risk of vulnerable drug addicts going out and spending the money inappropriately? Will he confirm that the obligation that they address their problems is a—
The problem now is that people can receive JSA or ESA, but have no obligation to address their drugs problems. By sharing information across Government, we are ensuring that we have much better information about who has a drug problem. That is the right thing to do, because there is no point in putting people through a back to work regime if they have a serious drugs problem. The other problem in the system is that it is hard to check whether people are undertaking their treatment. We therefore think it right that, instead of being in the JSA regime, people should be on the treatment allowance. In return for that, however, they have to show that they are taking steps to address their drugs problem. Otherwise, the money will just go straight into drug dealers’ pockets.
I welcome my right hon. Friend’s statement and I am sure that all of us who want to make our long-term commitment to abolish child poverty a reality will strongly support the White Paper. Given its emphasis on returning to work, does he agree that there will be an increased need for work readiness skills training and that colleges of further education and the voluntary and private sectors could have a role in delivering area and sector-specific programmes?
That is a very important point. Ensuring that the skills support we offer people is appropriate to them is one of the things that I am working on closely with the Secretary of State for Innovation, Universities and Skills. We want to ensure that that skills provision specifically addresses work readiness. FE colleges spend quite a lot of money on that already and we want to ensure that our work is supported. My hon. Friend knows that we are integrating skills into the welfare system. I thank him for his help in developing the housing benefit and social fund proposals that we are taking forward in the White Paper.
I noted with interest the Secretary of State’s statement that the sanction for those not meeting the conditions would be having to work for their benefits. What will be the ultimate sanction for anyone who refuses to work for their benefits or to participate in a scheme? Who will monitor how well the schemes are working, if it is a private or public provider giving feedback on whether people are complying and getting something out of the system?
I hope that I can reassure the hon. Lady that sanctions are not enforced by private or voluntary providers, but by Jobcentre Plus advisers and expert decision makers. As is the case now, if people refuse to take a job, they can lose their benefits for six months—that has been in the system ever since 1911. If people fail completely to comply with the system, they lose their benefits for six months. That is the ultimate backstop, but virtually no one gets there, because people can avoid a sanction simply by ensuring that they do what is expected of them.
My right hon. Friend knows that my constituency still has relatively high levels of structural unemployment. His proposals today will almost certainly be welcomed as a way of tackling those structural problems. However, will he ensure that areas have the capacity relative to their needs, so that areas of relatively high unemployment such as mine have training places and the ability to enable people to return to work?
Yes, absolutely. That is one of the reasons why we are bringing forward the extra funding. However, just as the money is important, so too is devolving power to the people who can use it most effectively. We will make it clear in the White Paper that we want to devolve power to local authorities that want to work with us on tackling worklessness. Manchester is one area where we can make the greatest progress, because there is an opportunity to devolve power across Greater Manchester, to ensure that we deal with exactly the issues that my hon. Friend raises.
Further to the point made by the right hon. Member for Chingford and Woodford Green (Mr. Duncan Smith), does the Secretary of State accept that there are times when some parents of children over seven need to be with their children, which means that full-time work might not be a realistic option for them? What assurances can he give us that parents who choose part-time work in the best interests of their children will not be financially penalised for doing so?
Within the regime for lone parents, they can choose part-time work after their child is seven if they think that it is the right thing for them. If a lone parent’s child is disabled, they do not have to be looking for work. If there is a problem or crisis, such as the child being excluded from school, the system is flexible, in order to ensure that people can best balance looking after their children and working, exactly as the hon. Lady describes.
Will special consideration be given to the parents of children aged between six and 12 who have severe disabilities, especially learning disabilities, where the parents have a special caring role? My right hon. Friend will be aware that there was a carers’ parliamentary lobby here last Thursday. Will the White Paper that he has described to us today link with the Government’s response to the Select Committee on Work and Pensions report on valuing carers, which was published last August?
Yes it will. My hon. Friend made representations to me about her view that we should not go ahead with the proposal to move carers on to jobseeker’s allowance. We have made it clear that we will not do that, but will look at the right approach as part of our work on long-term care and a single working-age benefit. On her first point, which she is absolutely right to make, parents who care for disabled children who receive carer’s allowance will be outside the conditionality regime completely. If they are on JSA but their child receives the middle or higher rate of the disability living allowance, they do not have to look for work either. I hope that that reassures my hon. Friend.
I listened carefully to the Secretary of State’s reply to the point that the right hon. Member for Neath (Mr. Hain) made about the revolving door problem, whereby people who have gone into work but who cannot hold on to their job suffer when they go back on benefits. That problem exists today. I have written to the Secretary of State a number of times about people who have suffered from long-term sickness, particularly those with depression or drug problems, being petrified that if they do not hold on to a job—sadly, that happens—they will be unable to pick up the benefits that they need to survive. I am not talking about just housing benefit, but other benefits as well. Can we look into the problem now, as the pilots proceed, so that we can protect such people and encourage them into work, rather than scare them?
One of the key elements in the new employment and support allowance for the group that the hon. Gentleman is talking about will be the much greater ability for people to try out work while keeping their benefits. They will be able to do 16 hours a week work at the minimum wage, which will give people with depression, for example, the ability to try out something to see whether they can manage. It is important to point out that most people now recognise that being in work is a very good way of helping people with depression, but what the hon. Gentleman says is absolutely right.
We have 2 million unemployed, we are facing the longest and deepest recession in our lifetime, the Government have laid off 30,000 workers in the Department for Work and Pensions—the very people who are there to assist people to get back into work—and the lack of affordable child care has been admitted by the Prime Minister, yet we are threatening to withdraw benefits from some of the poorest people in our society. What measures will be put in place to protect the children in families that lose their benefits from falling into even more severe poverty?
This measure is about reducing child poverty. We think that our reforms to lone parent benefits will lift 70,000 children out of poverty, and it is right that we should do that. We know that, when a parent is working, their child is eight times less likely to be in poverty than if they are not working. It is also worth saying that, where we can make our Department more efficient, it is right that we should do that. We have used the reduction in the number of people working for us to increase the number of people on the front line: the number of personal advisers has increased by 1,500. Now that we have a rising claimant count, we have announced that we will be spending more than £1 billion more, and that means 6,000 more posts in jobcentres, which I think my hon. Friend might welcome.
Many of the measures in my right hon. Friend’s statement are welcome, but what consideration is being given to the experience of bringing up children well and of creating a welcoming and stable home on a low income as being excellent preparation for paid work? What measures are in the White Paper to ensure that such work is valued, recognised and supported?
That is exactly why we are saying that the JSA regime should not be taken down to parents in that category and that people should instead be coming in and developing action plans that work at their own pace. If they do not want to go back to work when the child reaches one or two, or older, that is absolutely their right. That is the correct approach. We must ensure that people find out about the support that is available, including child care and Sure Start, and about the help that can enable them to bring up their children in exactly the way that my hon. Friend wants. I am happy to discuss this matter further with her, if she would like to.
Many decisions are taken in this House based on laudable principles, but the interpretation of the decisions and the way in which they are applied outside the House can be a real problem. As MPs, we are the first in line to have to deal with these problems. Will the Secretary of State ensure that we have direct access to a hotline, so that we can deal with these matters properly? May I also suggest that he meets the Secretaries of State for Scotland, Wales and Northern Ireland, because many of the vehicles for the provision of health services, nursery care and so on are dealt with by the devolved Administrations? If we are to carry these measures through, it is important that he meets those people to ensure that this can all be done properly.
I can give my hon. Friend that assurance. Indeed, it was the present Secretary of State for Scotland, when he was Minister with responsibility for welfare reform, who started this process off. I have also met representatives of all three devolved Administrations to ensure that we can work together. My hon. Friend is right to say that MPs need to be able to deal with any issues that their constituents raise, and I am happy to look into the possibility of a hotline. I will write to him to let him know more about that.
Further to the question raised by my hon. Friend the Member for Midlothian (Mr. Hamilton), will the Secretary of State tell us what will be done to change the culture among some of the people in his Department? A constituent of mine, a bricklayer, suffered a hernia and had to undergo an operation. He contracted an infection and, while he was waiting for his fourth operation, he was told that he had not scored enough points on his incapacity benefit form. He had an open wound in his stomach, yet he was told that he was fit for work and that he should go on to jobseeker’s allowance. That decision was callous and wrong, and it was not overturned on appeal. If we are going to deal with such people in the way that my hon. Friend has suggested, we need to deal with them as people and not through forms and box ticking. Will the Secretary of State assure the House that, where such a culture exists in his Department, it will be changed?
My hon. Friend is right to say that one of the big challenges here is to give advisers the flexibility and skills to help people in the right way. I am sorry that he feels that his constituent was not treated properly by the Department. Those decisions are taken independently of Ministers—that has always been the case—but I am happy to look into the case that he has raised. We need to ensure that people are treated according to their personal circumstances, and not according to whichever group of claimants they happen to be in. This is exactly what the Gregg review is about, and I hope that it will work on that issue.
Is the Secretary of State not being too soft in his approach to the dependency culture, particularly in relation to drug abuse? It sounds as though there is going to be a reward for drug abusers. Why is he not extending the treatment for drug abusers to alcohol abusers? Will he take my assurance that not all Glasgow Members of Parliament take the view that they have to stand up for rascals and chancers? We believe that the Scottish Government should be supporting this initiative from Westminster—even though it is from Westminster—to help decent people into employment.
I know that I shall need the help of the Opposition in the coming rebellion over how we are not being tough enough on drug users, and perhaps the hon. Member for Epsom and Ewell (Chris Grayling) will be able to help me with that. I am pleased that my hon. Friend welcomes the approach that we are taking, and I know that he also supports what Glasgow city council is doing on apprenticeships and getting people back into work. We have announced today that that area is going to have one of the pilots for the DEL-AME projects that we are introducing.
My hon. Friend mentioned drug users. We are prepared to look at including alcoholics, but it is harder to identify people who have alcohol problems. If he has any suggestions on how to do that, we would be happy to look at them. We offer specific help to people who self-identify, but if there are better ways of doing that, we will be happy to look into them. This is not about giving more help to people who are drug users; it is about ensuring that they go into treatment rather than just taking the money and spending it on drugs.
I very much welcome the clarification from the Secretary of State that the Gregg review’s proposals for lone parents whose children have reached the age of one will not involve forcing them to go out and find work immediately, but will instead involve preparing for work. One of the best ways for such people to prepare for work might be to go into full-time education, but at the moment the system penalises them if, for example, they want to go to university full time rather than working part time. Will my right hon. Friend assure me that, as part of the review, he will ensure that people who want to do a full-time university course will not lose their other associated benefits, and that they will not be treated like a normal student? In that way, they will be able to take their course and, when their child reaches the age of seven, they will be able to have a decent career rather than a job that pays only the minimum wage.
I am relatively confident that the answer to that question is yes, but if it is not, I will write to my hon. Friend. People who are on JSA get different treatment from those on lone parent benefits, and that gives people the ability to study at the same time as claiming income support. I will write to my hon. Friend if that is not correct.
Under the last Conservative Government, those who were unemployed got almost no help. They were either shovelled on to incapacity benefit or expected to take jobs as security guards at £1 an hour—or, if they were lucky, they were able to join one of those wonderful job clubs. Under the Labour Government, the world of work has been transformed. We have a national minimum wage, increased health and safety, increased employment rights, increased trade union rights—although not enough, I believe—and the £40 premium for single parents. People also have a lot of help with child care, and those who are in work are generally better off through tax credits. Will my right hon. Friend assure me, however, that the reforms that he has outlined today—which I broadly support—will be dealt with sensitively? These are very sensitive issues for people.
Points of Order
On a point of order, Mr. Speaker. I should like to raise this point of order while the Secretary of State for Work and Pensions is still in his place. Tomorrow is the third anniversary of the Buncefield disaster in my constituency, and it will also see the conclusion of the health and safety inquiry chaired by Lord Newton. I praise Lord Newton and his team for the work that they have done. However, this means that, from tomorrow, the Secretary of State for Work and Pensions will no longer be responsible for that part of my constituency that has been destroyed. Many homes there are still uninhabitable and thousands of people are unable to return to their business premises, either because they have been levelled or because they are in a dangerous condition. Mr. Speaker, has any Minister told you that they intend to come to the House, three years after the disaster, to take responsibility for the rebuilding of my constituency, following a disaster that had nothing to do with any of my constituents?
All I can say to the hon. Gentleman is that that is not a point of order, but what happened three years ago was a tragic situation. I can understand that any constituency Member of Parliament would want to highlight the problems that still exist three years on. I suggest that he applies for an Adjournment debate, to which the appropriate Minister could come to the Floor of the House to respond.
On a point of order, Mr. Speaker. Last Thursday, the Financial Secretary to the Treasury made a written statement to the House concerning the closure programme of Her Majesty’s Revenue and Customs offices. Of the Lerwick office in my constituency, it was said that it was to be retained, as the
“original analysis of staffing projections and available accommodation identified a good match.”
Since that statement was made, however, I have learned that, of the three staff employed in that office, two are now to be deployed in another Government Department, and a third—the last remaining HMRC employee in my constituency—is to be transferred to the Inverness office. If that is not a closure, Mr. Speaker, I do not know what is. What can you do to protect my constituents when Government Departments go about their business in this way, which, to say the very least, lacks the candour that we are entitled to expect?
Debate on the Address
Debate resumed (Order, 8 December).
Question again proposed,
That an humble Address be presented to Her Majesty as follows:
Most Gracious Sovereign,
We, Your Majesty’s most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament.
Foreign Affairs and Defence
I am delighted to introduce this annual debate on the Gracious Speech, not least as the amendment tabled by the Leader of the Opposition does not mention foreign affairs or, indeed, any queries or questions about or condemnations of the Government’s foreign affairs policy. I look forward to a debate that I can only assume will be more akin to a senior common room discussion than what sometimes passes for debate in the House of Commons. I hope that the House will understand that no discourtesy is intended when I leave the Chamber to spend two hours before the Foreign Affairs Committee later this afternoon, which means that I will not be able to hear all the speeches.
Every year seems like an important year in foreign policy, but 2009 promises what I think will be a unique combination of dangers and opportunities. The dangers are a global economic crisis, an unremitting terrorist threat, a closing window of opportunity to bring a two-state solution to the middle east, the threat of a nuclear-armed Iran and, in Africa, crises in Somalia, Sudan, Congo and Zimbabwe. It would be a mistake, however, to become so mired in challenges that we overlook the opportunities—not least a new US Administration who are committed to joint action on shared priorities in Afghanistan and Pakistan, on climate change and global warming, and on nuclear non-proliferation and international institutional reform.
Five foreign policy priorities will guide the Government’s work. In all of them, we depend on the bravery, intelligence and dedication of soldiers, diplomats and aid workers. Many are at risk, and 305 members of our armed forces have lost their lives in Iraq and Afghanistan. We are truly in their debt and that of their families for their patriotism, their public service and their internationalism.
I am grateful to the Secretary of State for giving way so early in his speech. He talks about soldiers, diplomats and aid workers, but there is concern among Opposition Members that there is not enough co-ordination between those three elements, particularly at ministerial level. The Secretary of State will be aware that this year has been the bloodiest ever in Afghanistan; in August there were 46 fatalities. There is a concern that we do not know who is in charge of Government strategy when it comes to Afghanistan. Is it the Prime Minister, is it the Foreign Secretary, is it the Secretary of State for International Development or is it the Secretary of State for Defence? It is time that that one person who is in charge of the overall strategy, which I understand is about to change, came here on a regular basis to give us a proper update.
It is, of course, the Prime Minister who is in overall charge—[Interruption.] It is the Prime Minister. I would never stand at this Dispatch Box and say that it is impossible for the Government to improve their co-ordination, especially in such a difficult area, but having visited Afghanistan, the hon. Gentleman knows as well as I do that on the ground, military forces, diplomats and aid workers are working very closely together. The biggest credit for that goes to them, but it does not happen by accident. For example, the new combined civil-military operation in Helmand, which I visited last month, is a demonstration of the commitment on the three Departments going together. It is also a demonstration of what we mean by a comprehensive approach, because they are working on the security, on the politics and the economics, and they are doing so with the Afghan forces, including Afghans elected to Government positions. As I said, I would never claim that there was no room for improvement, which is why the Prime Minister said last week that it is important to review our strategy, but I honestly say to the hon. Gentleman that levels of co-ordination are unmatched in the experience of people who have worked for a long time in the Foreign Office, the Ministry of Defence and the Department for International Development.
In that case, can the right hon. Gentleman explain why no Minister is directly responsible for the stabilisation unit?
It is held to account by asking all of us about it, which Opposition Members quite rightly do. We are all accountable for it and we will all answer for it. If the stabilisation unit answered to only one Secretary of State, I would be here explaining why the other Secretaries of State were not also responsible for its efforts. The hon. Member for Bournemouth, East (Mr. Ellwood) asked for co-ordination, and that is what we are trying to give him.
Let me talk at the outset about counter-terrorism, because the terrifying events in Mumbai a fortnight ago were a reminder that global interconnectedness brings not just shared economic risk, but shared security risk. People of all races and religions were targeted; British nationals were held captive; Indian communities in the UK were worried about family members’ safety. After the attacks, we dispatched a consular rapid deployment team to assist British nationals. We will continue to work with the Indian police and law enforcement agencies to investigate the crime and better secure that important country for the future.
Does the Secretary of State agree that one of the most chilling aspects of the terrorist attack was that the terrorists specifically sought out Jews in order to attack them? Does he agree that that needs to be condemned, particularly by people of Christian, Islamic and other religions?
I certainly agree with the right hon. Gentleman that the herding of staff and their family members from the Jewish centre in Mumbai into the heart of that centre and their killing was a completely atrocious event. I share with him the view that it is important that, whatever our religion, we condemn the killing of people of other religions. At the NATO Mediterranean meeting last week, it was striking to hear the French Foreign Minister explain to Arab colleagues that the two French people killed in Mumbai were both Muslim. That brought home to people the fact that at one level these were random attacks that killed people of all religions, as well as the fact that the targeting of the Jewish centre was particularly chilling. I of course share the right hon. Gentleman’s condemnation of it.
Our first focus in the battle against extremism remains Afghanistan and Pakistan. The federally administered tribal areas and the border region are a crucible of insecurity and instability. President-elect Obama has identified the region as a top priority when he assumes office on 20 January, so in 2009 we will work with our allies and with the Governments of Afghanistan and Pakistan to strengthen democratic government.
Given that there is much talk of increasing the number of troops in Afghanistan, which I visited two weeks ago, what realistic hope is there of some of our coalition partners other than America putting forward troops, particularly on the front line, and not just relying on the US and the UK?
I will certainly come on to that, but it is good news that the French and Germans have increased their numbers. It is also striking that the Polish Government have promised to increase their numbers as well. It is certainly an issue that we need to address, but I am sure that the hon. Gentleman would agree, particularly as he has been to Afghanistan, that the greatest source of increasing numbers of troops will in the end come from Afghanistan itself. That is why the training and mentoring that I am about to mention are particularly important.
In Afghanistan, foreign troops will continue to be needed to provide the space for diplomatic and civilian efforts and to face down the insurgency. Of 50,000 NATO troops on the ground, 8,100 are British forces, making us the second largest military contributor. If we want to build Afghanistan’s capacity to defend itself, which is after all why we are there, we need to focus on the training and mentoring of the Afghan national army. We have already helped to train about 65,000 members of the Afghan army. Whenever I have been to Afghanistan, it has struck me that the greatest testimony to those troops comes from our own forces who talk about going on patrol with Afghan forces and about the trust they have in them. As I said, we have already helped to train 65,000 members of the Afghan army, and over the next few years the plan is to double that figure. On the Pakistan side of the border, which I will try to emphasise on each of the four points I want to make about our strategy, we have also supported military-to-military contacts.
The second priority is to uphold the rule of law on both sides of the border. That is, by any estimate, more difficult than training the Afghan national army. Anyone who has been to Afghanistan will know that the problems in the police force outstrip even those on the army side. A strong police force and an independent judiciary, accepted by the population, are critical to building confidence in non-violent means of redress and in the Government themselves. We are supplying mentors to the EU police mission in Afghanistan who train police in criminal investigation skills. One important priority is to improve co-ordination between the European force there and the NATO attempts, under the district policing plan, to improve the quality of training, to ensure that police are trained for the challenges they will face in Afghanistan, which are at the very tough end of what policing is about.
It is also worth saying that we are working with the Government in Islamabad to extend the rule of law in Pakistan’s tribal belt. One striking feature of the Pakistan army’s efforts in the Bajaur area over the past three or four months is hearing it talk about the co-ordination with the international security assistance force on the other side of the border. That is the sort of joint operation that we need to see.
The important thing to say is that big changes are going on within the Pakistani armed forces, led by the new Chief of Army Staff, General Kayani, whom I met in Islamabad two weeks ago. The hon. Gentleman will know that there is a new head of the ISI, General Pasha. The appropriate thing to say is that reform is obviously needed in that institution. We strongly want to support that reform. It is also strongly supported by the civilian Government. It is vital that, with a new civilian Government in Islamabad, it is clear to their population and to the international community that they have control over all aspects of the state machine in Pakistan, because otherwise people will lose faith in democratic government.
On the civilian Government, is the Secretary of State having discussions with American colleagues about the use of a lot of the American aid that goes into Pakistan, which is also meant to go into the tribal areas, to ensure that it is used for rebuilding infrastructure?
Yes; my hon. Friend raises an important point, not least in the light of the Biden-Lugar Bill, sponsored by the now Vice President-elect in his previous capacity as a Senator, which proposed a tripling of American aid to Pakistan. We all know that it is not just spending aid money, but how it is spent and what it is spent on, that is vital. Certainly, an important part of our discussions will be on what is needed in Pakistan, which is, after all, a country where the military budget of its Government is three, four or five times that of the education budget—and that is before the military spending from the US is included, which totalled about $10 billion or $11 billion over the past six years. There needs to be a fundamental shift.
A serious discussion is taking place in America about it recognising India as a preferred partner, as opposed to Pakistan. Does my right hon. Friend agree that it would be a mistake for the President-elect to consider that, because we should be supporting the delicate democracy in Pakistan?
My hon. Friend is right that it is important that the United States has good relations with both India and Pakistan. The civil nuclear deal that has been agreed between India and the United States brings India within the remit of the International Atomic Energy Agency for the first time. Given the proliferation that has occurred though the A. Q. Khan network, there are particular sensitivities and difficulties about the relationship between the US and Pakistan on the nuclear file, but asserting the need for both Pakistan and India to have good relations with America—and they need to be comprehensive, not just military—is an important part of discussions.
A third part of the drive in Afghanistan and Pakistan is the need for a clear political strategy for supporting democratic leadership in both countries. Next year and 2010 will be critical for Afghanistan, with presidential elections and then parliamentary elections planned. We need to help the Government to register voters and to provide security so that people are free to cast their votes. We will continue to support the Government in Pakistan and work to cement the democratic transition in these very difficult times, not least with the multilateral Friends of Democratic Pakistan group, first convened in September.
The fourth and final aspect is development assistance to ensure that citizens on both sides of the border have access to basic services and opportunities for education and employment, because underdevelopment and lack of opportunity provide fertile ground for extremism. We have committed about £190 million to Afghanistan for 2008-09, and are doubling our assistance to Pakistan, which by 2011 will be the UK’s second largest aid programme after India, the Indian aid programme obviously declining as Indian economic wealth grows.
Today is the 60th anniversary of the universal declaration of human rights, and there is arguably no greater threat to human rights than conflict. The European continent has had the longest period of continuous peace since Roman times. However, while 2008 saw conflict averted in the Balkans, conflict returned to the Caucasus. In 2009 we need to learn the lessons: continued pre-emptive deployment of military and civilian missions in the western Balkans, combined with systematic political outreach to all the countries of the western Balkans, using the lure of European Union membership to help drive internal reform; and hard-headed engagement with Russia, standing up for the independence, sovereignty and democracy of newly independent nations on Russia’s borders, while also engaging Russia on issues of mutual interest.
Further afield, there is, unfortunately, hot conflict festering. Next year needs to be a decisive year in the Arab-Israeli conflict. I fear that unless it is, the prospect of a two-state solution will slip away. As I said in our debate yesterday, 2008 has seen close Israeli-Palestinian dialogue, a new Israel-Syria dialogue, and a fragile ceasefire in Gaza, but settlement activity is undermining the viability of a Palestinian state on 1967 borders. Meanwhile, the increased fragmentation and disunity of the Palestinians threatens to make it harder for them to implement, if not agree, a deal. When people visit and talk to ordinary citizens on both sides, as many of us have done, it is clear that they are losing faith in the peace process.
Will the Secretary of State use this opportunity to condemn the Israeli blockade of Gaza—the denial of food, water, energy and medical supplies to people there—the devastation that it is causing to people’s lives, and the bitterness that it is creating? Does he not think that Israel must be held responsible for what is collective punishment?
I am happy to repeat what I have made clear on many occasions, both publicly and privately with the Israeli Government, which is that the delivery of food, medicine and energy into the Gaza strip is essential to remedy what is a disastrous humanitarian situation. Equally, it is important to say that the rocket attacks that continue to come out of Gaza are the other side of the coin. They fuel the argument that when Israel vacates land, that land is then used to attack Israel. The misery of the Palestinians and the insecurity of Israelis are two sides of the same coin, and there are responsibilities on both sides.
It is increasingly apparent to me that the only solution in the middle east is a genuinely comprehensive solution—what I call a 23-state solution that ties in not just Israel and Palestine, but all the countries of the Arab League, building on the Arab peace initiative of 2002. The logic is simple. Only a comprehensive solution offers Israel what it really craves—stability and security in the region—and only with Arab political support will the Palestinians be willing and able to do a deal.
The Government will work hard towards a comprehensive solution over the coming year. It will mean working closely with Israel—always a beacon of democracy in the region, it is worth remembering—in the run-up to elections in February and beyond. It will also mean further concerted work with the Palestinian Authority on security and economic development. It will mean more systematic engagement with the Arab world, including Syria, which faces big choices in 2009, but has a big opportunity to contribute to regional stability. It will also mean active, high-level engagement with the new US Administration and EU partners. All these things we are committed to do.
In Iraq, 2009 will also be a year of elections. In January, Iraqis will go to the polls to elect new provincial councils. Later in the year, they will vote for a new national Government. We will continue to work to help the Iraqi Government build their capacity in the security sector, working with the Iraqi security forces and police. As the Prime Minister has said, we expect a fundamental change in our mission in Iraq in the first half of 2009 as we complete the tasks set out in his statement to the House in July: the training of the Iraqi 14th Division in Basra, transferring Basra airport to Iraqi control, pushing forward economic development, and providing the necessary support for the provincial elections to be held in January next year. That fundamental change will mean a shift from a military focus on Basra to a whole-Iraq approach that centres on close co-operation with the Iraqi people across the spectrum of politics, economics, human rights, culture and trade.
As the hon. Gentleman knows, we do support an inquiry into the origins of the Iraq war, when our troops are safely home. An hour and a half ago, very unfortunately, Members in all parts of the House had to come together to mourn the loss of a British soldier last Thursday. That shows the continuing danger that our troops face. It is important for us to have the inquiry, but it is also important for us to have the inquiry when our troops are safely home, and I assure the hon. Gentleman that that is our intention.
On a recent visit to Iraq, a number of us observed the pride taken by those serving on our behalf in the work that they were doing in rebuilding the area surrounding Basra and training the security forces and army. They made very clear their belief that they had an important job to do, and that they were doing that important job and doing it proudly. They also made it clear that they did not want to see their work undone by a political decision to pull them out quickly before it had been completed. May we have a an assurance that the foundations that have been laid will be built upon before any quick decision is made?
Yes. Let me say, in the nicest possible way, that many Members do not feel that we have been quick, or over-hasty, in making a decision to withdraw our troops from Iraq. I think that we have shown considerable commitment to ensuring that, in the hon. Gentleman’s words, the job is properly done.
I am sure that when the hon. Gentleman was in Basra he had a chance to hear about the progress of the 14th Division. He will have observed not just the professionalism of our own people, but the fact that we are building up a professional force that is able to guard the security of Iraq. I am grateful for the kind and appropriate words that he used about the work of our own forces.
Someone just mentioned translators, but that is not the information for which the hon. Gentleman has asked. I am happy to put on record, in the Library of the House, the facts about the locally engaged staff whom we have helped with financial aid in Iraq and with resettlement in the United Kingdom. Those facts are quite contrary to some of the sensationalist newspaper reporting, and I urge Members to look at the details that I am placing in the Library before making allegations about our treatment of locally engaged staff.
As for the 4 million refugees who are in surrounding countries, I do not accept that it is our record that is abysmal. Along with the Iraqi Government, we are committed to the efforts being made to build an Iraq that is safe for all its people. I know that the Iraqi Government want the Iraqi refugees to return as soon as possible, and I know the views of the countries in which they are now. I discussed the issue when I was in Syria, where there are nearly 1 million refugees. I think it important for us to work for a safe Iraq that can welcome back its people.
May I return the Foreign Secretary to the issue of an inquiry into the war? He will know that my right hon. Friend the Member for Richmond, Yorks (Mr. Hague) has already cited historical precedents, pointing out that inquiries have taken place while our troops have been in the field. Why does the Foreign Secretary think it was appropriate for the United States Congress to undertake a thorough review and inquiry, but it is not appropriate for us to do the same?