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Commons Chamber

Volume 487: debated on Tuesday 27 January 2009

House of Commons

Tuesday 27 January 2009

The House met at half-past Two o’clock


[Mr. Speaker in the Chair]

Oral Answers to Questions


The Secretary of State was asked—

Midland Main Line

Electrification is advantageous on heavily used parts of the rail network. Electric trains are lighter, quieter and produce less carbon dioxide. In my statement to the House on 15 January, I announced that, commensurate with the timetable for procuring the new inter-city express fleet, I intended to make a decision on electrification of the midland main line north of Bedford later this year.

Last month there were four dewirements on the west coast main line, causing havoc to the service, so will the Government learn from previous electrifications and build a scheme that is of a high standard, and not on the cheap? Otherwise, when the wind blows in Derbyshire the trains will stop in Wellingborough.

I do not accept for a moment the implication of the hon. Gentleman’s remarks—that somehow the improvements to the west coast main line were done on the cheap, or that the failures that occurred over the new year period were attributable to the upgrade. Indeed, I am sure that the hon. Gentleman, who is generally a fair-minded man, will look at the evidence that demonstrates that a number of different problems arose, that they were all caused separately, and that they were not in any way related to the upgrade programme. I will certainly send him details of the investigations that resulted, but if he accepts what I have said, he will recognise that the proposals to electrify both the midland main line and the Great Western main line do not need to suffer from any particular problems of the kind that have been suggested as being associated with the upgrade of the west coast main line.

In anticipation of the decision on full electrification of the midland main line, will the Secretary of State look at ways in which Network Rail could be persuaded to reverse its current catastrophic decision to cut back on track maintenance? In the face of decisions announced by Corus, will he look at ways of bringing forward the replacement of track, to give us the basis for a genuine rail infrastructure for the 21st century?

I assure my hon. Friend that there is no basis for suggesting that there is any cut in the quality of track maintenance by Network Rail. It is something that the Government, and Network Rail, take extremely seriously, not least in the light of relatively recent tragedies. Maintaining the safety and security of the line is absolutely fundamental right across our railway network.

The chief executive of Network Rail has accused the Government of being short-sighted and betting on the wrong fuel, as the UK has only 39 per cent. of its current network electrified—the lowest proportion of any major economy in Europe. Why do the Government continue to invest pretty much all their money—notwithstanding the Secretary of State’s earlier comments—in diesel trains, which are high in pollution, when there are alternatives, such as electric trains, that would be good not only for the economy but for the environment?

If the hon. Gentleman will forgive me for saying so, that was a very odd question to ask in the light of the statement that I have made and the answer that I just gave to the hon. Member for Wellingborough (Mr. Bone). The reality is that we are looking hard at electrification, for precisely the reasons that the hon. Gentleman has just set out. To try to make a criticism out of the announcement that we have just made is, if he will forgive me for repeating the word, very odd indeed.

I welcome the Secretary of State’s commitment to electrification. Does he accept that the electrification of the midland main line will bring by far the best cost-benefits of any electrification scheme, and does he also agree that it will bring enormous benefits to the east midlands region, particularly to Leicester—and to Nottingham and stations further north?

I am grateful to my hon. Friend. I have promised myself that in future I will always refer to the Great Western line before I refer to the midland main line, but the case for both is equally strong.

It sounds as if electrification of the midland main line is going to be many years away, but my constituents in Kettering cannot wait that long for the train service that they need and deserve. Will the Secretary of State take steps to improve line speeds on the midland main line before electrification, so that Kettering’s inter-city status can be returned to the town?

The hon. Gentleman and I have discussed this across the Floor of the House before. I recall mentioning on that previous occasion that there will be an improvement in the service from Kettering, in terms not only of the journey time but of the service, including one service that actually starts in Kettering, to ensure that where there are difficulties, the hon. Gentleman’s constituents will have first choice of the seats on that train. I hope that he will join me in welcoming the improvements that the new timetable will bring for his constituents in and around Kettering.

On 15 January, the Secretary of State said to the House:

“we will analyse the value for money, affordability and financing options of the electrification proposals that Network Rail will put to me shortly.”—[Official Report, 15 January 2009; Vol. 486, c. 356.]

Will my right hon. Friend assure me that he will also consult the Committee on Climate Change, because electrification of major parts of our network is long overdue, and it will have climate change implications? Will he please consult the committee on this matter?

I had not planned to do so specifically, not least because, for all the reasons mentioned so far this afternoon, electrification is generally reckoned to have positive climate change benefits. The proposed electrification would reduce the amount of carbon emitted, and, while it is true that only about 1 per cent. of carbon generated by public transport is emitted by railways in the first place, that small contribution would nevertheless be an improvement.

Regulated Rail Fares

2. What the average percentage change in the price of regulated rail fares has been since 1997. (250987)

A comprehensive fares index is published by the Office of Rail Regulation in the “National Rail Trends” yearbook, and is available on the ORR website. Until 2008, regulated fares were below accumulated inflation. The average increase in regulated fares on 2 January was 6 per cent.

I note the Minister’s reluctance to put a specific figure on the increase. According to research that we have conducted, since 1997 regulated fares have increased by a staggering 43 per cent.—way above inflation—while unregulated fares have increased by an even higher rate. As we know, just this month the Government allowed an inflation-busting 6 per cent. increase in regulated fares. Does the Minister not think it is about time the Government committed themselves to a freeze in regulated fares to help hard-pressed commuters and other rail travellers?

That would obviously bring into question the funding required by train operating companies, thus involving another funding commitment. We must make a decision on the basis of the priorities. The hon. Gentleman referred to an “inflation-busting” increase, but that increase was linked to the RPI in July plus 1 per cent., which is the working cap that we have imposed on operating companies. At the end of the day, we must decide whether to continue to invest in high-speed equipment, new rolling stock and associated requirements to improve reliability, or to give subsidies to private companies.

While my constituents are concerned about the fare increases that they face, Southeastern Trains has also announced a number of job losses. When I arrive at the station each day to catch my train, the barriers are invariably open. People are worried about money being frittered away as a result of a lack of enforcement in the rail service. I mentioned the problem to Southeastern Trains, but the situation has not improved since I did so. We need to ensure that train operating companies are operating efficiently, and that job losses do not result in a reduction in service.

My noble Friend the Minister of State has raised those issues with Southeastern Trains, and will continue to monitor the position. I entirely agree that job reductions should not lead to any loss of reliability, punctuality and safety, which are core concerns for us.

Not only are my constituents suffering as a result of increased fares, but Southeastern Trains has reduced the number of carriages on many trains, which has led to serious overcrowding. What discussions has the Minister had with Southeastern about that reduced level of service, and about when my constituents can expect to be able to travel in comfort and safety?

As the hon. Lady will know, operating companies—including Southeastern—take account of the need to put rolling stock to the best possible use, and changes in timetables have involved adjustments to achieve that. We continue to monitor the changes introduced recently in the network.

My hon. Friend is aware not only that our fares are among the highest in Europe, but that public subsidy for the rail industry has tripled or quadrupled in the last 15 years. The costs of track renewals and maintenance have risen by four and five times. Is that not something to do with the catastrophic failure of privatisation, and should we not bring the whole industry back into public ownership?

I thank my hon. Friend for his suggestion. In a recent Adjournment debate in the House on rail fare increases, it appeared that Opposition Members had forgotten exactly where we were vis-à-vis the number of operating companies that we have, and our requirements in relation to private companies. Substantial investment has gone into the rail system, which is why we have record levels of punctuality and reliability—and why, of course, we have had a 50 per cent. increase in passengers using the rail system, which is good news.

Does the Minister not understand how angered rail passengers are by an increase in fares that is way above inflation, at a time of deepening recession? He seems to be a little complacent about that. Is not one of the reasons for the increase his Department’s policy of extracting premiums from train companies to operate concessions, forcing an unfair ticket tax on passengers? When will he give a fair deal to passengers and remove the unfair ticket tax? How does forcing up rail fares help to tackle climate change?

No increase in prices, for whatever reason, is welcomed, and we recognise the clear pressures on train travellers. But, invariably, as some fares have reduced because of the capping system that we have put in place, some have gone up. If we were to introduce a freeze, we would then need to spend more public funds on those rail companies. That would be another subsidy taking money away from rolling stock improvements, increased main line electrification programmes and schemes such as the £8.8 billion west coast main line. We must recognise the requirements, and that there are only two places that the money can come from—the taxpayer or the fare payer. It is question of getting the balance right between the two.

My hon. Friend will agree that a downside of people paying more for their tickets on the Manchester to Blackpool line is that the passengers at Adlington have seen a reduction in service. They were not consulted, although Greater Manchester passenger authority was. People who know the country recognise that Adlington, in my constituency, is in Lancashire. Why have people there not been consulted? Why are we not getting value for the price increases, to ensure there is no reduction in service? Will my hon. Friend personally look into the matter?

I am always willing to listen to right hon. and hon. Members and to look into matters of concern. Passenger Focus is very much at the heart of giving a stronger voice to passengers.

I have already said yes to the request. Passenger Focus is there to help represent the concerns of passengers across the board.

Ports (Rating System)

3. What discussions he has had with the Secretary of State for Communities and Local Government since December 2008 on the effects on the operation of ports of recent changes to the rating system and the backdating of rates due. (250988)

I have discussed this on several occasions with the Minister for Local Government, the Parliamentary Secretary to the Treasury and other ministerial colleagues. Officials in the Department for Transport have also had discussions on the matter with officials in the Department for Communities and Local Government and other Departments.

I am glad that the Minister takes this seriously. In ports around the country, operators are threatened with closure and workers are having their jobs threatened by a retrospective £33 million extra impost. Will he talk to the operators and the ports about whether the Government will adopt the Treasury Committee’s idea of bringing in the new rating system and values in 2010, rather than backdating them so many years to 2003?

I cannot give an undertaking to meet the businesses, on the basis that I am the Minister responsible for shipping and I meet the port authorities; indeed, I have a routine meeting with UK Major Ports scheduled for tomorrow morning. I know that colleagues in the Department for Communities and Local Government, the Treasury, and the Department for Business, Enterprise and Regulatory Reform have been engaging with the business community in ports. A fast-tracking system was put in place to allow challenges and appeals to take place, and the Government announced that we would put in place the opportunity for interest-free payments to be made over the next eight years to ease the pressure on businesses and ports.

Shipping is badly affected by the global economic downturn. Will my hon. Friend press the Treasury to withdraw the backdated bills for businesses in ports, to prevent those businesses from being pushed into bankruptcy at this very difficult time?

I am not in a position to ask the Treasury to withdraw the requirement on businesses in ports to pay their fair and equal sum of rates to local authorities. What we have done, however, is spoken with, and made representations to, ministerial colleagues and, as I explained to the hon. Member for Worthing, West (Peter Bottomley) a moment ago, we have agreed with them a mechanism to allow such businesses to challenge and appeal where they feel that they have not been dealt with fairly—and, where the rateable value is appropriate, we have tried to make sure that there is a fair and equitable way for them to pay over a longer term.

Since Christmas, on the Mersey, Thomas Nichols Brown has gone bust and Stanton Grove is tottering under a £2 million rates bill, and on the Humber, DFDS is sacking staff. The Minister has acknowledged how difficult the trading environment is. When will he tell his right hon. Friend the Secretary of State for Communities and Local Government that a large part of this money has gone back as an unexpected windfall to port employers, and that it is quite wrong to pretend that the contractual arrangements between port employers, who were warned in advance about this situation, and their tenants is purely a private commercial matter?

I am advised that UK Major Ports and the British Ports Association refute the suggestion that money has gone to them and that they are in some way obliged to pay the money back to businesses in ports. They say categorically that that is not the case, and they have demonstrated that in discussions I have had with them. This matter is still live: there will be another Adjournment debate tomorrow morning—a 90-minute debate in Westminster Hall—which I am sure that the hon. Gentleman and my hon. Friends are looking forward to. This matter is still under review, therefore, but the Government have listened to representations, and we have put in place mechanisms to try to do whatever we can to assist businesses in ports, and we certainly recognise the important role shipping plays in the UK economy.

West Coast Main Line

4. What recent estimate he has made of the cost to the economy of disruption on the west coast main line over the new year period; and if he will make a statement. (250989)

Network Rail has apologised to passengers and businesses for the disruption on the west coast main line over the new year period, which was the result of separate incidents. Disruption on the railway does have economic consequences, which is why we are committing record levels of investment to increase capacity and resilience. The economic impact of the improved west coast main line is a very positive one, cutting journey times and allowing 45 per cent. more long-distance trains out of Euston.

I thank the Secretary of State for his answer. In his latest newsletter, Tony Collins, chief executive of Virgin Trains, says of the delay in the implementation of the new timetable:

“we are disappointed with the current situation. We will continue to work with Network Rail”.

Of the disruption over the new year, he says:

“Setting aside the tragic plane crash in Staffordshire, the bad days have largely related to overhead line equipment failures.”

Does the Secretary of State understand that members of the Lichfield commuters club—and, indeed, other commuters up and down the west coast main line—feel that with increased fares they should be getting increased service? Where does the buck stop? When will the Secretary of State—

I congratulate the hon. Gentleman on his question. I am told that he chairs “a small but influential group of rail users”. I trust that that small group consists of more than one member, but—

Even better. It appears that the hon. Gentleman’s “small group” is a very small one indeed. Nevertheless, I would be delighted to meet him to discuss rail services in Lichfield, and I agree that it is important that reliable services are maintained from Lichfield, and also along other parts of the west coast main line. That is precisely why we committed so much funding to its improvement, and why we continue to monitor the developments. We hope—indeed, we expect—that his constituents will have a safe reliable journey along that line.

My right hon. Friend said earlier that it was not the quality of the upgrade that was the problem, but is it not a fact that the real problem, not just on the west coast main line but throughout the country, is the poor quality of maintenance on our railways? This is because there is a skills shortage, from project management to technicians. What are the Government going to do to improve the skills on the railways?

I made it clear earlier that we will not, in any way, allow compromises to be made on safety—and that applies specifically to maintaining our railway network. It is vital that passengers and staff on the railways should have complete confidence in the equipment that they use. My hon. Friend is right to emphasise the importance of maintaining and improving skill levels, and that is why the Government are committed to an extensive programme of apprenticeships to ensure that we have the necessary skills for the future, not only on the west coast main line but across our rail network.

The refurbishment of the west coast main line should have been cause for great celebration, but in focusing almost solely on reducing long-distance journey times, it has been an unmitigated disaster for intermediate towns such as Milton Keynes and Rugby. I welcome the fact that we are trying to get people off aeroplanes, but will taking an extra five minutes simply to stop in Milton Keynes really stop people taking the train?

I do not accept that this was solely about long-distance journey times, because it was also about increasing the capacity on the line: some 45 per cent. more services can travel on the line as a result of the capacity improvements. That is fundamental to passengers up and down the line; it means that many more direct services from different destinations can be organised, alongside the stopping trains that travel up and down the west coast main line. It is about both improving journey times and increasing the capacity on the line.

My right hon. Friend is right to emphasise the fact that the Government have played their role in the upgrade of the west coast main line. However, as my hon. Friend the Member for Carlisle (Mr. Martlew) points out, Network Rail has let the travelling public down badly through poor maintenance and the disruption to services. Will my right hon. Friend examine the quality of Network Rail’s senior management? Perhaps he does not wish to comment on that in the House today, but will he take a view as to whether the incentives that they regard as essential ought to be coupled with disincentives when they get things so badly wrong?

I have regular meetings with Network Rail’s senior management, and I assure my hon. Friend, as I assure the House, that safety, reliability and maintenance are matters that are pursued on a regular basis. We will not allow them to slide.

Is not the real reason why it takes so long for the west coast main line to recover from disruptive incidents the fact that when Labour created Network Rail, Ministers left it accountable to nobody—not to the regulator, not to the train operators and certainly not to the passenger? Is it not time to reform Network Rail so that its management have to be accountable to a more effective structure than the toothless membership that they themselves appoint?

I find the hon. Lady’s remarks curious, given the sad history of Railtrack, for which her party, in government, was solely responsible. My predecessor created Network Rail to deal with the complete failure of Railtrack, over which she and her Government presided.

Will the Secretary of State also agree that we can increase resilience on the west coast route and reduce the impact of disruptive incidents by building a new high-speed line from London to Manchester? Will he back our promise to do that? Why did his Department’s 30-year strategy for the railways contain no place for high-speed rail? Why does the high-speed rail proposal that he put forward when he made his Heathrow announcement consist of little more than warm words and a distant aspiration for a line that might get as far as Birmingham, but no further north?

As the hon. Lady might one day eventually find out, being in government and taking decisions involves rather more than scribbling on the back of an envelope—which was pretty much what the Conservative party’s proposals for a high-speed network consisted of. I have been writing on similar envelopes for a very long time—since I was a small child. The reality is that developing a high-speed rail network, which is what we set out, requires a great deal of detailed work, and that work is under way. We have formed a company, which has an influential non-executive chair. That is the kind of work that is necessary; it is not about scribbling on the back of envelopes.

My constituents depend significantly on the west coast main line, accessing what is generally a fast and reasonable service at Tamworth and Nuneaton. But when they arrive in Euston, they get off the train to find a tired and tatty shopping centre that masquerades as a rail hub. When are we going to do something about that? Surely a more impressive Euston might be able to help with the other problems occurring further up the line. [Interruption.]

There appear to be different opinions about the quality of Euston station, but I assure my hon. Friend that there are detailed plans in hand for refurbishing it. I hope that he will be pleased with the results.

Rail Fares

5. What recent representations he has received in relation to fare increases for rail passengers on rail services operated by First Capital Connect and East Midlands Trains. (250991)

According to Andrew Long of the Bedford commuters association, the pain of the recent fare increases, which were well above inflation, has been compounded by the reduction in service by East Midland Trains through Bedford at peak times. That throws much more pressure on to the already overcrowded First Capital Connect trains. When can my constituents expect a better service, or are the Government relying on the recession to make trains more comfortable by thinning out the number of commuters?

The hon. Gentleman should be well aware that there have been increases in capacity to trains serving places such as Kettering, there are faster journey times to Sheffield, and there have been improvements for Bedford. At the moment most of the peak trains consist of eight cars, and he will be aware that we will be able to strengthen the service still further when the first phase of the Thameslink programme is completed by 2011.

Like many passengers, my constituents accept that sometimes fares will increase, but they want an improved service as a consequence. Will my hon. Friend ensure that the capital refurbishment of Loughborough station— the lengthening of the platform, disability access and the regeneration of the surrounding area—is part of the package that East Midlands Trains has to put together alongside the increase in fares?

I will certainly take on board the points made by my hon. Friend, and accessibility and reliability requirements are indeed part and parcel of the franchise agreement.

What representations has the Minister received on behalf of customers of Northern Rail about the recent inflation-busting increase of 6 per cent.? We have some of the most overcrowded trains in the country coming into Leeds, and it is not acceptable to have fare increases without any promise that the overcrowding will be dealt with.

The underlying intention and main thrust of the Government’s investment programme of some £10 billion is to meet those immediate requirements for increased capacity between now and 2014. That is why we have invested in additional carriages and cars to increase the number available. We have also invested in programmes to lengthen platforms to accommodate longer trains, so that we can meet the requirements of the hon. Gentleman’s constituents and others who experience congestion and demand on the rail network.

Does the Minister think that those who use East Midlands Trains on a Sunday get a good service for the money that they pay?

I accept that an improved service at weekends is required, but that will inevitably be the case when there is a major programme of investment to improve the infrastructure of the rail network. The best time for it to be carried out is at weekends—but I appreciate the inconvenience that it causes to the travelling public.

Driving Test

6. What assessment he has made of the effect of the introduction of the new multi-purpose test centres on the accessibility of driving test facilities to members of the public; and if he will make a statement. (250992)

The introduction of the new motorcycle test has allowed the Driving Standards Agency to refresh its estate for car and motorcycle tests. Car and motorcycle tests will be delivered from new multipurpose test centres—MPTCs. These are all Disability Discrimination Act-compliant, and offer the public improved facilities such as car parking and toilets. We plan some 60 of these centres, and 39 are already operational. In areas without an MPTC, car tests will be delivered from existing centres.

I note the Minister’s response and thank him for it, but will he explain to learner drivers who are already struggling to meet the costs of learning to drive why the Government increased the cost of the motorcycle test before the new test was implemented?

Very simply, the DSA has to raise money from fees to ensure that it stays even as a trading account. Over the past four years there has been a deficit. The expenditure on the new MPTCs has been spent, is being spent and will continue to be spent, and that money has to come from somewhere. It is appropriate that the user should pay.

Who is going to take responsibility for the botched and chaotic introduction of the new motorcycle test, which is due to come in on 27 April, seven months late? Many young riders will be deterred from taking the test because of the distance that they might have to travel or the fact that in some cases the test will be split in two. Will the Minister answer my hon. Friend’s question about how he has the barefaced cheek to introduce the higher fee from October even though the new test will not be introduced until this April?

I think that I responded to the final element of the question: the money is being spent on the new centres and the DSA has to balance its books. As for who takes responsibility for the delay, ultimately, I do. The decision was taken on the basis of the number of test centres that were available. I did not think that there were enough centres to meet the accessibility criteria that the DSA had set itself in terms of the distance that individuals would have to travel to take their tests. The delay has allowed additional test centres to be completed, and it has allowed temporary test centres to be identified. The coverage will be far greater when the new test regime is introduced later this year.

Topical Questions

On 15 January, I set out to the House a series of major announcements on transport infrastructure. That included confirmation of the Government’s support for a third runway at Heathrow airport, plans for increasing capacity on some of Britain’s busiest roads and the creation of a new company, High Speed 2, to develop the case for new high-speed rail services between London and Scotland. In recent weeks, I have opened the new third platform at Manchester Airport railway station and the new green station at East Midlands Parkway. Both projects will improve journeys for thousands of commuters, reduce congestion on our roads and bring significant benefits to business, as will the newly widened section of the M1 south of Luton, which I officially opened last Friday. Last week, the Under-Secretary of State for Transport, my hon. Friend the Member for Poplar and Canning Town (Jim Fitzpatrick), announced new measures to crack down on uninsured drivers by reducing the additional costs and safety risks that they cause. The new measures will help to protect the law- abiding majority.

I thank the Secretary of State for that answer. Constituents have raised with me the safety of our airports following the miraculous events in New York. Will the Secretary of State reassure me about the safety of our airports, in particular London City airport? Apropos of that, has he had any further thoughts about opening a new airport in the middle of the Thames estuary?

If I may qualify my hon. Friend’s remarks to some extent, those events in New York were not miraculous. They were the result of remarkable skills displayed by the aircrew, and we should all pay tribute to them.

My hon. Friend is right, in that all airports must have regard to the risk of bird strike, and each airport is required to have a control programme. That has always been taken extremely seriously, and I am sure that with a little more thought, not least in the light of the history of proposals for airports in the Thames estuary, the Mayor of London might think again about the environmental risks, and the risks of bird strike to aircraft, of siting an aerodrome in that place.

T3. We have regular reports of drivers being led astray by their satnav devices down wholly unsuitable roads and lanes. Indeed, in my constituency there is a low bridge in Templecombe that seems to be hit almost every other week by a heavy goods vehicle, normally driven by a foreign driver who has been told to go down that road by his satnav. Some time ago, we were told that there would be a Government review of satnav devices. Has that now been completed, and are the Government prepared to introduce a route hierarchy into satnav structures, to ensure that heavy lorries do not use roads that simply cannot take them? (251009)

Here is a short answer, Mr. Speaker: the companies that produce the technology are still working on improving satnav performance. Work is also being undertaken to produce a satnav programme for heavy goods vehicles. HGV satnav is under review, because at the start and end of journeys such systems take drivers to the major routes via roads that may not be suitable for heavy vehicles.

T2. My right hon. Friend will be aware of the fury over the quality of train services that has existed in Northampton since the new timetable was introduced. What assurances can he give my constituents about improvements to the service in the short term? In the longer term, what prospect is there that his strategic rail review and new high-speed rail network will lead to more and faster train services to London, Birmingham and the north? (251007)

I was pleased to have a very useful meeting recently with my hon. Friend, at which she put her case on behalf of her constituents in Northampton with her usual determined vigour. I was left in no doubt about the importance of the required improvements that she suggested, and I shall certainly take the matter up with the franchise holder. As for the wider question of capacity, my hon. Friend is right to say that the Government’s programme of enhancing capacity on our rail network will allow for relief on crowded parts of the existing network. They are crowded because of their success, with passenger numbers now equivalent to their levels in 1946. I am grateful to her, and assure her that I shall take her suggestions forward.

T5. Last year, 12 airlines failed and thousands of passengers were left stranded abroad. Unfortunately, more airlines will fail this year. People who book through the Association of British Travel Agents, if the operator has an air travel operator’s licence, will be protected and repatriated. However, people who book directly with the airline are left stranded abroad. When will the Secretary of State stop dithering and bring in a consumer protection scheme that will cover all airline passengers? (251011)

I can advise the hon. Gentleman that we are not dithering over this. The most recent crash, of the airline Excel, affected 85,000 people, and an investigation is being held into the lessons to be learned from it. People were successfully returned to this country in an operation carried out by the Civil Aviation Authority and others, and we will be making recommendations in due course. The Secretary of State and I have had a series of meetings with a variety of interested parties, and work is well under way.

T4. The users of the First Great Western franchise have had to endure cancellations and late-running trains for far too long. Despite the entreaties that we have heard from the midlands today, will the Secretary of State assure the House that plans for the electrification of the Great Western line will be given equal priority? Can he give us some idea of when those plans will be brought forward? (251010)

I am grateful to my hon. Friend. I shall continue with my self-imposed injunction always to mention the Great Western first. I assure her that the economic case for the electrification of that line is strong, and that we shall be looking at it in detail over the course of this year before we make a further announcement.

T6. The “cycle train” at St. Matthew’s primary school in Bishopriggs involves a group of children who cycle to school and back each day, under the supervision of adults. Not only does that reduce the number of car journeys, but the children arrive at school alert and energised. However, the idea of children cycling on pavements remains a grey area in legal terms, so will the Minister look again at how the problem can be addressed? We need to balance pedestrian safety with clearer guidance to encourage young children to cycle more. (251012)

Interestingly, my right hon. Friend the Secretary of State suggests that I should join in with what the schoolchildren are doing. [Interruption.] I shall decline that opportunity—but the hon. Member for East Dunbartonshire (Jo Swinson) raises an important point. We very much wish to encourage cycling for a host of reasons, not least of which is the need to reduce congestion and the number of car journeys, and to meet the requirements of healthy living. We are investing some £140 million in promoting cycling, and we are training an additional half a million young people between the ages of six and 11 in the Bikeability and national standards process. That will help to give children confidence in using roads and cycle lanes—and I am always willing to discuss how we can take forward work with schools to make children’s cycle journeys safer.

T7. My hon. Friend will be aware of the big issue of concessionary travel, and Chorley borough council’s claims that the Government are short-changing it by not giving it enough money. In fact, the treasurer stated to the editor of the local paper that the council is £250,000 short. I do not believe that he has got the figure right; in fact, I think that he is struggling with his sums. Will the Minister meet the council and me to discuss the issue, as I do not believe that the situation is as bad as the council portrays it? (251013)

The simple answer is yes. I am happy to meet any Members and their delegations. Chorley had a 33 per cent. increase over and above outturn last year—some £280,000—

A huge amount, to help to meet the cost of the Government giving 11 million people the freedom to travel the length and breadth of England.

As I am sure the Secretary of State knows, the A38 between Marsh Mills and Ivybridge in Devon was closed yesterday for six hours. It is the third time that has happened since Christmas, and it causes problems to the local economy. I have on several occasions pointed out that that is a fast and dangerous piece of dual carriageway. When will the Department for Transport do something about the road? Will it be before there are more fatal collisions on that stretch?

I was not aware that the road was closed yesterday. For investment in roads, the process involving the priority of meeting the requirements is kept under review through the regional funding allocation process. None the less, I will certainly look into the issues that the hon. Gentleman has raised.

Women and Equality

The Minister for Women and Equality was asked—

Equal Pay

A key to helping women bring equal pay actions is transparency. Once the equality Bill and its related policy package are in place, employers will not be able to rely on keeping their pay structure secret. We will ban secrecy clauses in employment contracts, so that women can identify unequal pay and seek redress. Women often have different employment patterns from men, but their input into the economy is essential, especially at this time. Women are equal and they will be paid equally.

I thank the Minister for her answer. Of course she will be well aware of the obstacles that prevent women from taking up equal pay cases. In particular, she will know of the range of technical defences available to employers, which often mean that equal pay cases take many years. She will also be aware that the trade unions are calling for class actions as a way of making it easier for women to bring equal pay cases. Is that something that she is considering? What else is she thinking of doing to make it easier for women to bring equal pay cases quickly?

My hon. Friend is to be congratulated; when she was a lawyer for Unison, she won what was, I think, the biggest equal pay case in the UK. We intend to clarify and simplify the law, as far as is practical, in the new Bill, in particular as regards the way in which the burden of proof operates, and how technical questions of general material factors are dealt with. The Civil Justice Council has just reported, and it advocates representative actions that would fulfil the same purpose as the class actions that my hon. Friend champions. The Government Equalities Office will consider how representative actions might apply to equal pay and discrimination cases in employment tribunals, and how they might feed into broader work in the Ministry of Justice, because the CJC is advocating representative actions in all civil cases. We think that representative actions may well have helpful application in equal pay and discrimination cases, but of course we will consult on any proposals for change.

It is pretty widely accepted that the voluntary approach to managing the financial services sector has been an abysmal failure, yet although the Minister just said that women will get equal pay, there is no proposition to bring in mandatory pay awards; there are only to be voluntary ones. What reassurance can the Minister give us that that will be any more successful, and will not end in equal failure?

The hon. Lady refers specifically to the financial sector. She will be aware that the Equality and Human Rights Commission is conducting an inquiry, which it announced recently, into inequities in pay in that sector, so we can expect greater transparency there very soon. We think that mandatory pay audits are probably too broad and draconian. Sometimes pay audits are very effective, but sometimes they are cumbersome processes that do not always come up with the goods that we would wish them to. Sometimes they are a process rather than an outcome. We prefer different approaches that rely on voluntariness, but let us make no mistake: in the end, if transparency and voluntary measures do not work, we will take stronger measures to ensure equal pay for women.

As my hon. and learned Friend is aware, the single status agreement in local authorities and Agenda for Change in health authorities were meant to eradicate the problems of unequal pay in both services. Sadly, with the increase in no win, no fee lawyers, many such negotiations have stalled because people are suing not only their local health authorities or local authorities but the trade unions. Will my hon. and learned Friend use her good offices to resolve the problem?

My hon. Friend is right and points to a significant issue. In a way, he supports my last answer, in the sense that those were total pay orders and they still have not got away from tribunal actions. The Ministry of Justice is looking into the role of no win, no fee lawyers in what is still regarded, slightly oddly perhaps, as a non-contentious area, as employment tribunals are. I can, at the very least, say to my hon. Friend that there are many eyes looking at the problem, with a real intention of solving it.

Because there are many things that lie behind unequal pay for women, we are acting across the board to tackle it, particularly by supporting women who are going out to work as well as caring for families with young children or older relatives, and by strengthening the law to tackle discrimination.

May I say how intriguing it is to see that the Conservative Front-Bench team for women and equality consists of 75 per cent. men and 25 per cent. women—but perhaps it is a good sign that the men in the Tory party are applying to join the honorary sisterhood.

The most recent Government statistics show that women are losing their jobs at twice the rate of men in this recession. Beyond exposing illegal discrimination, what are the Minister’s plans to address the problem, which could further entrench the gender pay gap that women still have to endure in this country?

We are well aware of concerns across the board about job loss during the recession. Because women are employed disproportionately in retail and in financial services, we have to look at the effect of the recession specifically on women. We have to look at the effect of the recession on women because women are still the main managers of the household budget. That is one of the reasons why we will make a focus not only of the work that we do through the National Economic Council and across Government Departments, but of the work on the issues that will be raised in the G20 when it is hosted by this country in April. Everybody is affected by the recession, but women are affected differently, so we need to focus on that.

I thank the right hon. and learned Lady for her characteristically generous welcome to me.

In the other place on Friday, on the Second Reading of our Equal Pay and Flexible Working Bill, the noble Lady Vadera said that the Bill was unnecessary because the Government are to introduce an equalities Bill, which will contain measures on equal pay. Can the Minister confirm that her equality Bill will contain all the measures that are in our Equal Pay and Flexible Working Bill?

In our manifesto, we committed to bring forward a new law to strengthen the laws on equal pay that previous Labour Governments had brought into force, and we have consulted since then. It is disappointing that the Conservative party did not put forward proposals for consultation. In the Bill, we will strengthen enforcement and toughen the law. The Opposition should table proposals, if they want to, when we introduce the Bill, or simply support our equality Bill when we introduce it in April.

Can my right hon. and learned Friend explain to the House how changes to public sector procurement practices could help to narrow the gender pay gap?

Procurement is important for helping to narrow the gender pay gap in the public sector. As well as public authorities having a duty to narrow the pay gap as one of their existing public sector duties, procurement is a public function. They therefore have a responsibility, when they procure goods or services and pay for them under a contract, to take the opportunity to ensure that those with whom they are contracting are making efforts to narrow the pay gap. At present it is not very clear how they can do that. We are working with the Equality and Human Rights Commission to make sure that public authorities are able to use their procurement power, which applies to a third of the private sector, to ensure that that is another place where we can take action to narrow the pay gap.

Female Entrepreneurs

3. When she next expects to meet representatives of small business groups to discuss measures to increase the number of female entrepreneurs. (250978)

My right hon. and learned Friend the Minister for Women and Equality meets business representatives, including those representing small businesses, from time to time, as do I. The Government’s enterprise strategy, which was published in March last year, includes a package of support for women setting up and growing businesses. Support for women entrepreneurs and employees in the present global circumstances is a priority, and, as my right hon. and learned Friend has said, we are exploring the scope for an international meeting on the matter in London around the time of the G20 in April.

Does the Minister agree that during these incredibly tough economic times what women entrepreneurs want above all else is a sensible regulatory regime? Will she confirm that it is still her Government’s policy to resist the EU agency workers directive and any moves to remove the UK opt-out from the EU working time directive?

Now that the agency workers directive has been agreed, the Government are moving ahead with plans to introduce the necessary legislation. I reassure the hon. Gentleman that there will be detailed consultation on the UK implementation of the directive in the near future. I am perfectly happy to meet him and anybody he cares to bring with him to discuss any concerns in that respect.

One of the difficulties that female entrepreneurs face is varying patterns of employment, which can have knock-on effects into retirement in terms of national insurance stamps. What steps can the Government take to make sure that female entrepreneurs and other female workers have full national insurance stamps at retirement?

The Government have a good record on trying to make sure that women get fair pensions and do not face poverty in old age simply because of their caring responsibilities. Although women entrepreneurs have led a small percentage of UK enterprises thus far, that number is increasing, which indicates that self-employment is becoming increasingly attractive to women.

Corston Report

4. What discussions she has had with the Secretary of State for Justice on steps to implement the recommendations on women’s prisons contained in the Corston report. (250979)

As champion for women in the criminal justice system and as a Minister in the Department, I regularly talk to my right hon. Friend the Secretary of State for Justice. Last December, I issued a written ministerial statement to Parliament reporting the substantial progress in delivering the Government’s response to the Corston recommendations and wider work on female offenders. That includes a commitment to provide additional resources to divert women from custody. We are also piloting a women’s conditional caution with Together Women centres, which presents a chance for diversion at an early stage from custody. The Secretary of State for Justice and I recently visited the Together Women project in north Liverpool, and I know that he was impressed by what he saw.

Will my hon. Friend say whether progress has been made in tailoring community support services better to address women’s needs on release from prison? In particular, are voluntary organisations, such as the excellent Open Gate project in my constituency, being used to provide specialist services to women?

I can reassure my hon. Friend in that respect. The Open Gate project, which she has mentioned, does good work with women before and after their release from Low Newton prison in her constituency. It is a fine example of the kind of multidisciplinary, wraparound support that women leaving custody often need to prevent them from sinking back into a cycle of reoffending, which can be avoided with a little bit of help and support. I anticipate that any resources that we announce in due course will be focused on boosting that kind of help.

Shared Parental Leave

5. What recent representations she has received on shared parental leave; and if she will make a statement. (250980)

In recent months, I have not received any particular representations on shared parental leave. However, I can confirm that the Government intend to extend the right to request flexible working to parents of children aged up to 16 from April this year. That demonstrates the Government’s continuing commitment to supporting parents in balancing their work and family responsibilities.

A recent Netmums survey found that 28 per cent. of dads would like to share the child care equally with their partners, although only 5 per cent. managed to do so. Surely we will achieve proper equality for men and women as parents only when the state stops prescribing that it must be mothers who stay at home to look after the children and lets families themselves decide how to split the parental leave.

The hon. Lady forgot to compliment the Government on our record on producing and increasing just that flexibility. The Government have extended paid maternity leave, introduced paid paternity leave, given parental leave to mothers and fathers and introduced the right for mothers and fathers to request flexible working. That, in addition to £25 billion of investment in child care, is surely something on which she should have complimented the Government.

Domestic Sexual Abuse

6. What steps she plans to take to encourage women who are experiencing sexual abuse in their own homes to seek help; and if she will make a statement. (250981)

Sexual abuse is almost always present in domestic violence, although that is not widely appreciated. It plays a role in why women are often slow to seek help. We are making real progress in encouraging agencies involved in health and education to identify vulnerable victims earlier and ensure that they access the support services that they need.

I thank my hon. and learned Friend for her answer, and I commend her for the work that she has done. Would she like to visit Glasgow to see what we are doing to make sure that women who deserve help get it? Our success with convictions is increasing all the time, and women are getting pleas now rather than having to go through the courts. Is it not important that all women, no matter where they come from in the United Kingdom, are treated fairly? Should we not all use best practices such as those used in Glasgow?

My hon. Friend is right to say that zero tolerance started in Scotland, so there is a good deal to celebrate. I have visited Glasgow many times, and I would be very glad to go again. The city has a system of specialist domestic violence courts similar to the ones that we have here. They have proved very successful in increasing the conviction rates when complaints of domestic violence are made, largely because complainants are befriended and supported so that they sustain their complaint and are not frightened off. That sends out a powerful message to deter such offending in the first place.

Automotive Industry

With permission, Mr. Speaker, I shall repeat a statement made by my noble Friend the Secretary of State for Business, Enterprise and Regulatory Reform. I begin by extending a warm welcome to the right hon. and learned Member for Rushcliffe (Mr. Clarke), who has returned to the Opposition Front Bench.

I want to make a statement on the Government’s plans to help the British automotive industry to weather the downturn in the global economy. The automotive industry—with its nearly 1 million employees, from manufacturing to retailing, and its £10 billion in added value to the economy—is in the front line of the downturn, with its output falling faster and further than any other sector’s since the summer.

We need to counter that to prevent an irreversible loss of capacity, skills and technology. The health of the automotive industry is vital to the strength of manufacturing in Britain and is at the heart of many of our regional economies. The industry and its supply chain will benefit from the measures that the Government have already taken to boost the economy. Those include the VAT cut, which saves consumers hundreds of pounds when buying a vehicle, and Government guarantees that secure £21 billion in new and existing credit lines and lending for businesses, many of them in the automotive industry supply chain. However, I recognise that we need to do more. Today’s measures will give a specific boost to the industry, providing real help and laying the foundations of its reinvention for a low-carbon future.

The industry is not a lame duck, and this is no bail-out. The industry has been transformed over the past decade. Productivity has risen, catching up and overtaking that of both France and Sweden. In Britain today, we have some of the world’s most productive car plants. For the future, Britain needs an economy with less financial engineering and more real engineering. The car industry can and should be a vibrant part of that future. The steps that we are taking today will help companies to speed their way to becoming greener, more innovative and more productive. This is the route to securing jobs for the long term as we build a more balanced economy for Britain’s future.

The world’s car industry is at a turning point. In Britain, we need to be at the leading edge of the development of low-carbon vehicles and green manufacturing. This offers a major business opportunity for us. However, this greening of industry needs investment in plant, research and development. Today I can announce that to back that investment, we will provide loan guarantees to Britain’s automotive manufacturers and large suppliers. First, we will offer guarantees to unlock loans of up to £1.3 billion from the European Investment Bank. Secondly, we will offer guarantees to support up to a further £1 billion of lending, or loans where appropriate, to cover worthwhile investments that are not eligible for EIB support or that will bring special value to Britain. Applications will be assessed by us on a case-by-case basis. There is no blank cheque on offer; there are no operating subsidies. We are committed to ensuring that anything backed by the scheme offers value for taxpayers’ money, enables us to green Britain’s economic recovery, delivers significant innovation in processes or technologies for the long term, and supports jobs and skills in Britain.

To support these aims, the Government will build on their programmes that are currently supporting the automotive industry. To further strengthen the sector’s skills, we are increasing funding for the training of all employees. We have developed a package to tailor the Government’s Train to Gain programme to meet the automotive industry’s specific needs. If there is the demand from the industry, my right hon. Friend the Secretary of State for Innovation, Universities and Skills will boost the funding to support new training to £100 million from its present £65 million. This offers real help to people, including workers in small and medium-sized enterprises in the automotive supply chain. The £50 million economic challenge investment fund that is being announced separately today by the Higher Education Funding Council also creates new opportunities for automotive employers looking to tap into academic expertise in improving business performance.

Earlier this month, my right hon. Friend the Transport Secretary announced the provision of £250 million to support consumers switching to ultra-low-carbon cars, but we want the car industry in Britain to meet that demand for low-carbon cars. So alongside our loan guarantees for the greening of the industry, the next element of today’s announcement is that I am inviting the regional development agencies to work with the Technology Strategy Board to bring forward a further step change—[Interruption]—in our programmes for research and development into cleaner engines, lighter cars, plug-in hybrids and components for electric vehicles. [Interruption.]

Order. Hon. Members must listen to the Minister. He is putting a statement before the House, which is something that Back Benchers often call for—so please listen.

Thank you, Mr. Speaker.

This investment will build on the £110 million of support for research and development that was announced last September.

We are looking at steps to improve car company financing arms’ access to additional funding. The finance arms play an important role in providing the credit that keeps the industry functioning. The Secretary of State has asked the new Trade and Investment Minister, Mervyn Davies, to draw up a plan for improving their access to finance—a task to which he will bring considerable experience and expertise.

Taken together, today’s announcements will provide our leading automotive companies, their workers and suppliers with a significant boost. It will also ensure that the downturn does not derail the investment in innovation and change that is needed to make Britain a world leader in the development and manufacture of low-carbon vehicles. This is both an economic objective and an environmental imperative.

The automotive industry knows that it must change to succeed in this new world. It has to be cleaner and greener. The Government know that this is an important national objective—a key to building a competitive and balanced economy. Within the resources agreed in the pre-Budget report and the provision made then for such contingencies, we are determined to counter the credit crunch, counter the recession, create a level playing field for the industry and build Britain’s low-carbon industrial future. As a Government, we will take whatever action it is possible and appropriate for us to take. I commend this statement to the House.

May I begin by thanking the Minister for welcoming me to my new position? I think I have debated matters upstairs in Committee with him twice in the past six months, so I am used to his courtesy and competence, and I look forward to our exchanges.

I am grateful to the Minister for his courtesy in repeating to this House the statement made a few moments ago by the Secretary of State in the upper House. I actually think it is a constitutional outrage that it is being done in that way, and that it is a very poor way of accounting to the House of Commons, but at least we have been given the details of the package, such as it is.

May I say that I am slightly disappointed? I thought that the Secretary of State, whom I am shadowing, would produce some new ideas and some dynamite. He has been trailing a massive programme of support for the automotive industry, but unfortunately the Minister has had the task of producing pretty small beer. Is it not the case that the Secretary of State is not producing a bail-out because the Treasury has finally won an argument inside the Government and explained to him that it cannot afford the kind of support for the industry that, it seemed to me, his Department was trailing over the weekend?

Does the Minister realise that this package is part of the Government being behind the curve and too late, and not responding to events that are deteriorating by the week before they produce any package at all? Does he recall that back on 16 October, he stated that the Government “stands ready to assist” the car industry? By November, we were advocating a loan guarantee scheme for the finance arms of car companies. [Interruption.] So was the hon. Member for Ellesmere Port and Neston (Andrew Miller).

The key problem was obviously that demand had fallen off a cliff, no one was buying a car, and the people who wanted a car and could afford the hire purchase could not get the credit arrangements to buy it. It is part of the credit crisis, the credit crunch, in this country that should be the main object of our intentions at the moment. The Secretary of State said that the Government were already working on that, but here we are months later, and during that time sales of cars in this country have dropped by half while the Government dithered. And what do they produce on this key subject of how to help those consumers who can afford it to get credit, so that they can buy a car? We are delighted to discover that the Government say, “We are looking at steps to improve car company financing arms’ access to additional funding.” The new Trade and Investment Minister, Mervyn Davies, is to set up a task force to consider that. Will the Minister ask the new Minister to do something to improve the Government’s competence, their ability to keep up with events and their ability to produce programmes that work? May I advise the new Minister not to involve the Prime Minister in any preparations? We have all lost faith in his competence in the delivery of anything.

To the rest of the statement I think the car industry will have listened in vain. The Minister made a great deal, in his few sentences, of the money from the European Investment Bank, which I think was first announced back in September last year, and which is already being expended by other European countries.

The other matter in the statement is the loan guarantees for green technology and so on. Again, they are well intentioned, but the Government are not giving details. We will have to explore whether they produce detailed answers on how they are going to allocate them. They say that they will have to be satisfied and mention all the provisos that are in place, but again, experience shows that these packages are usually not in place for weeks and weeks after the Government have announced them. They are well intentioned, but they are not well financed—they are loan guarantees. At the end of the statement, somebody has insisted on including “this is all within the resources announced in the pre-Budget report.” The Treasury—or somebody—has noticed what we have been saying: that the wave of panic-stricken announcements has pledged the taxpayers’ credit for tens of billions of pounds. Someone has said to the Department for Business, Enterprise and Regulatory Reform, “We can’t afford anything but modest loan guarantees, with all these provisos about how to give them out.”

This is a vital industry, of particular importance to the industrial midlands, but important throughout the country. I suspect that one of the problems with the loan guarantee scheme is that, in the past 12 years of the Government’s activities, there has been such a decline in our manufacturing base that 80 per cent. of any sales money now goes to cars that are made abroad and imported. In the past 12 years, our trade deficit in motors has more than doubled, so packages for the car industry are relevant.

I understand that a car summit will take place tomorrow. Given that a Commons Minister must be there, perhaps this Minister may even be allowed be attend. I urge him, when he gets there and faces Tata and other multinational giants, which have strong balance sheets, to ask them what they will bring to the party and to try to clarify what on earth the Government can do that is targeted properly at the automotive industry now. As he rightly says, the industry is suffering worse than almost any other at a time of catastrophic decline, which the Government are plainly unable to answer or measure up to with proposals and schemes.

I think I am going to enjoy debating with the right hon. and learned Gentleman downstairs as much as I enjoyed debating with him upstairs. Once we get beyond his synthetic anger about our having a Secretary of State in the House of Lords—the right hon. and learned Gentleman was in the Cabinet when Secretaries of State sat in the House of Lords—perhaps we can make some progress.

I also hope that we can make progress on debating the real issues. I do not want to play party political point-scoring games about who first thought of a working capital guarantee scheme to help with company credit. It has been known for a long time that that was a problem for the industry.

The right hon. and learned Gentleman quoted me, but he should also quote the pre-Budget report, and the announcements about setting up the working capital scheme and the enterprise finance guarantee. Both measures give significant support to industry as a whole, not only the automotive industry, and respond to some of the key issues that companies have presented to us, day in, day out. They want access to credit. The enterprise finance guarantee provides loans now for small companies with a turnover of under £25 million. They can go to their local banks and discuss the position with them. From 1 March, we hope that the working capital scheme will be available, too, providing credit that is needed for new and existing credit lines.

Perhaps the right hon. and learned Gentleman misread the statement, but we said that we had tasked Mervyn Davies to work to find a solution; we did not say that we had set up a taskforce. [Interruption.] The right hon. and learned Gentleman asks me from a sedentary position whether I can explain the distinction. There is a great difference between asking somebody to do something and setting up a taskforce. We have asked Mervyn to do the job. If the right hon. and learned Gentleman paid a bit more attention to detail when reading the statement, we would all be the better for it.

What we are announcing today is support that will guarantee the loans that the EIB is going to be issuing—very shortly, we hope—to some of our major car manufacturing companies. Under EIB rules, there has to be a guarantee for funding above £200 million, and we are saying today that we will make that guarantee available. We have also stated clearly that we are making available guarantees for up to £1 billion more in lending to companies with a turnover of above £25 million in the automotive supply chain. I believe that that will be widely welcomed by companies in the automotive sector.

We did not hear any constructive suggestions from the right hon. and learned Gentleman. I know that he is new to speaking from the Opposition Front Bench, but in addition to opposing what we say, he needs to come up with some of the characteristic policy interventions that I think have been the hallmark of his political life. We heard nothing positive from him today, however. We believe it right that there should be a fiscal stimulus, including a VAT cut. The package of measures that we are announcing today is possible only because we are putting a fiscal stimulus into the UK economy. I thought that the right hon. and learned Gentleman believed in that; now, I suppose that he does not.

I hope that he and I will be able to have constructive debates on these matters in the future; I am sure that there is the potential to do so. Meanwhile, I would have thought that he would wish, on reflection, to welcome the support that we are putting in place for the automotive industry.

May I reassure my hon. Friend that there will be a warm welcome on this side of the House for his statement today, particularly from those Members who have interests in cars, vans and trucks in their constituencies? May I press him a little further, to ensure that there will also be a positive welcome from the industry for what he said about the £16 billion EIB funding that will be available over four years for the greening of the industry, as he put it? Am I right in saying that that Government guarantee will be made available to those companies that do not enjoy a single-A rating—I think that that applies to the whole of the British motor and truck industry at the moment—and that we will be able to go further than the £200 million, access to which would otherwise be restricted, with a full Government guarantee? That could be a major influence in getting the funding that we need.

My hon. Friend is a long-standing expert on these matters, and he is absolutely right. Under the EIB’s rules, loan applications in excess of £200 million have to be guaranteed if companies do not have the requisite credit rating. A number of companies in our automotive industry fall into that category at the moment, but they need this guarantee, and our proposals will help to unlock up to £1.3 billion of funding from the EIB. That will be welcomed by the industry. The Government have pushed for green research and development to be supported further through the EIB, and we continue to do so. Again, we believe it right to take positive action, and to have an active industrial policy to support our companies through difficult times. That is what we are doing today.

I thank the Minister for his usual courtesy in supplying an advance copy of the statement. I also welcome the right hon. and learned Member for Rushcliffe (Mr. Clarke) to his duties. I rather suspect that I shall enjoy his interventions a little more than the Minister will.

It is worth repeating that at the heart of this recession is the financial crisis, and that restoring confidence in the financial system remains the single most important task if there is to be any improvement in the economy. Does the Minister accept that, given the trends in the economy and unemployment, it is clear that there will be a significant and serious increase in unemployment in the year ahead? In that situation, the Government cannot undertake a series of piecemeal bail-outs. They can, and should, adopt a strategic approach based on clear principles, to ensure that we can take advantage of the recovery when it comes. A fundamental principle within that approach must be long-term value for the taxpayer. Provided it is based on considered strategy and informed by clear principles, it is sensible to look at strategic industries, such as the automotive industry, which includes both cars and commercial vehicles, and to assess how best to preserve their core competence for the future.

The Minister is right to highlight the potential of green technology and the part that the automotive industry can play in it. Indeed, we have an opportunity for a real step change towards achieving those goals, but how will the measures announced in the statement deliver them? The core of the package is the European Investment Bank loans and non-EIB loan guarantees, much of which have been announced already. What is effectively new and what have been the barriers to using what has already been announced? On the detail, how will these proposals be administered, who will undertake the due diligence, what will be the estimate of costs to the industry and the taxpayer, and how will this help the component supply chain?

This statement provides a number of worthy crumbs of comfort for the automotive industry, but as it has been announced today, it is neither strategic, nor comprehensive, nor the panacea it was trailed to be. I thus have grave concerns about whether it will work.

The hon. Gentleman is right to say that the first priority is to stabilise the financial system. That is exactly what the Government did when we recapitalised the banks and made our announcements last Monday. I do not think anyone could seriously disagree with the proposition that a major banking crisis would have a devastating effect on all our economies. It is also right to have an activist industrial policy that is set within a clear framework. First, we ensure the stability of the financial system; then we ensure that the economy gets the stimulus it needs during these difficult times; then we get credit flowing in the economy, set out a clear policy framework for taking action rather than doing nothing, while at the same time rebalancing the public finances over the medium term. That is exactly what we are doing. We need to look into where there is a case for Government intervention to ensure that we put in place the right sort of bridges to the future that will get us through the difficult economic times we face at the moment.

The hon. Member for Caithness, Sutherland and Easter Ross (John Thurso) asked what was new in all this. The fact that we are guaranteeing the EIB loans so that they apply above the £200 million level is new, and it is important that we are doing this. As I say, it unlocks round about £1.3 billion of lending through the EIB. Also new is the fact that we are supporting up to £1 billion of loans through the guarantees that we are providing. That will support a number of companies in the automotive supply chain. As for mechanisms, we look into these on a case-by-case basis. It will be for companies with a turnover of more than £25 million; below that level, they can go through the enterprise finance guarantee scheme. We will also be looking at companies that are investing in green R and D, plant and capital equipment. We believe that those are the right sort of policy responses.

Again, I characterise our position, which is taking measured and appropriate policy responses—[Interruption.] Unlike the hon. Member for Caithness, Sutherland and Easter Ross and his party, Conservative Members do not seem to want to do anything—or if they say they do, they do not want to will the means to do so, because they are against the fiscal stimulus that is so needed in our economy today.

I welcome the work being done jointly by Ministers in the Department for Innovation, Universities and Skills, the Department for Transport and the Department for Business, Enterprise and Regulatory Reform. It is the collective impact of their efforts around the car industry that we should examine. The greening work and the work of the European Investment Bank is all-important, but as the right hon. and learned Member for Rushcliffe (Mr. Clarke) said, the issues around finance arms have been pressed for some time. I remember first pressing the Minister on this some time ago.

After tomorrow’s meeting of the Society of Motor Manufacturers and Traders, there will undoubtedly have to be rapid movement to put that mechanism in place. Will my hon. Friend ensure that he and the new Minister, Mervyn Davies, meet key Labour Members with direct interests in this process, to ensure that it is turned into a reality as soon as possible?

I am always happy to meet my hon. Friend. There is a significant and complex issue to be grappled with, but we want to see progress. I think that Mervyn Davies will be an excellent man to take lead responsibility for ensuring that we can make that progress, and I hope we can do it quickly. Even if we do ensure that credit is available to the car financing arms, however, there is a question to be asked—whether people still want new cars, sales of which fell dramatically in November and December.

We need to restore overall public confidence if people are to want to buy cars in the future, even if they are to buy them through cheap finance deals. That is why the wider measures we are taking to boost the economy are so important. Restoring public confidence is one of our vital tasks, and I should be happy to discuss that with my hon. Friend, as well as the specific issues relating to car financing arms.

This should have been an important statement, and it should have been made to the House by a member of the Cabinet, not a Parliamentary Under-Secretary of State, no matter how decent and able he is as an individual. I say that this should have been an important statement—

Order. I will not allow this. It is within the rules of the House for the Minister concerned to come to the House. It is up to the hon. Member for Mid-Worcestershire (Peter Luff), who is Chairman of the Business and Enterprise Committee and whom I have called, to question the statement. The question of who delivers the statement is the business of the House: it is for the House to decide, and the rules of the House are quite clear. This is within the rules.

While I am on my feet, let me also say that I want brief questions.

My Committee has made its views clear, and I shall let our report speak for itself. However, this should have been an important statement, and it is not. It falls well short of the industry’s expectations.

There are many issues on which I should like to press the Minister, but I want to press him on one issue in particular, the one raised by the hon. Member for Ellesmere Port and Neston (Andrew Miller). When will the car company financing arms’ access to additional funding be improved? The Minister was told three months ago that the matter was urgent, but nothing has happened. When will action be taken?

I have just made a wider point about the need for confidence in the economy, the measures that we have taken in terms of the fiscal stimulus, and the measures that we will continue to take to help us to get through this difficult economic time. Those are the key measures that are required. We need people to have confidence in their prospects, so that they want to buy cars in the future. Of course we will continue to hold discussions with the car financing arms, because we recognise that a real issue is involved. Mervyn Davies and I will be happy to meet them, and to try to make progress as a matter of urgency.

The car industry and its work force at Nissan in my constituency and throughout the United Kingdom have had to face the consequences of a dramatic downturn. I want to ask two questions. First, while I realise that the Minister cannot name a time, may I urge him to ensure with the utmost speed that Mervyn Davies presents specific proposals on car financing? Secondly, will the Minister commit himself to working with his European counterparts to ensure that there is co-ordinated action to try to help the car industry? Given that 76 per cent. of the cars produced in my constituency are exported to Europe and the rest of the world, European and wider, global co-ordination is essential to help the industry.

My hon. Friend is a long-standing campaigner on these issues, and he has been pressing me and other Ministers both on car financing and on wider support for the industry. He has heard what I have said about wanting to make progress with the car financing arms, but he is right to refer to the vital need for European co-operation. We have a car industry that is integrated not just in the United Kingdom but in Europe, and, some would argue, globally as well. Engines made here are exported and put into cars manufactured in Germany, France and other countries; equally, components from the UK are outsourced to Europe. We must continue to engage in dialogue with our European partners, and take concerted action at EU level to support our industry during this difficult time.

Can the Minister explain briefly the practical differences between the over-£25 million turnover and under-£25 million turnover schemes? Many companies in my constituency make components for the automotive industry but do not do so exclusively. Are they eligible? Will the schemes also cover those who contribute towards military vehicles and those who make trailers?

When the banks and Government are looking at these things in the normal way, we would not expect a company’s turnover to be 100 per cent. with the automotive industry. It is the case nowadays that many companies in the automotive supply chain will supply the automotive sector but might also supply aerospace, defence and other industrial sectors. We need to take a pragmatic approach to that. On turnover levels, the enterprise finance guarantee is for companies with a turnover of up to £25 million. We will guarantee loans by up to 75 per cent., up to a value of £1 million. The scheme that we are announcing today will operate on a case-by-case basis, but it will be principally for companies with a turnover of above £25 million. We will be looking, probably, to have a minimum level of £5 million for loans and possibly a maximum of £50 million, because above that, one can apply to the European Investment Bank. We have a staircase of finance to help different companies at different stages of their development, which we believe is appropriate.

I pay tribute to the efforts that my hon. Friend personally has made on this issue. Coming from the west midlands as he does, he knows that the automotive industry, and companies such as Jaguar Land Rover in particular, are part of the glue that binds together our regional economy and on which the skill base and so many jobs depend. I welcome the lines of credit and loan guarantees that he has announced today, particularly for low-carbon technology, but if they are going to work, I emphasise the importance of their going into effect quickly, particularly if they are going to link to institutions such as the European Investment bank.

My hon. Friend is a longstanding champion of the automotive industry and I thank him for his kind words. I do not think that one can be born in the black country without having a passion for manufacturing and engineering. We tend to be born with engineering oil under our fingernails and have swarf for a pillow. He is absolutely right to point to the central importance of the manufacturing sector to the UK economy and I thank him for his welcome for the credit lines in the working credit scheme and for the measures that we announced today, which are providing real help for businesses. That is the vital thing now—to help businesses through the next 12 months by providing real and practical help and to make sure that we can all signpost businesses in our constituencies that have difficulties so that where it is sensible to provide help, that help is available.

Surely the purpose of Government intervention in the car industry at this time has to be to defend jobs through increasing sales. Laudable as they may be, I fail to see how any of the measures announced today will lead to a single additional car being sold. Why are the Government not considering, for example, the generous time-limited incentives through rebates and so on—possibly linked with a car scrappage scheme—that are being introduced in Germany in order to get money flowing again through the supply chain by getting people to bring forward their car purchases and getting them into car showrooms?

I agree with the hon. Gentleman that it is important to increase demand. We all want to see greater demand in the economy, which is why boosting demand through a fiscal stimulus is the right thing to do. He mentioned scrappage schemes, and he will be aware that the German scrappage scheme is pretty contentious. It has not been introduced and there is some debate about whether the Lander want to approve some of it. In my view scrappage schemes look expensive and would be best done at a European level, rather than in individual member states. In many ways, at their best they probably underpin the second-hand market rather than encourage people to buy new cars. It is not as simple as a lot of people think when they are discussing these issues.

Does my hon. Friend see any role at all for a Government wage subsidy scheme for the automotive industry? ThyssenKrupp in my constituency in good times employs 1,000 people, making car bodies for a range of manufacturers. It says to me that its plants in Germany are currently helped by an 80 per cent. wage subsidy from the Government there, so both companies and Government share the cost of the recession but they also keep a skilled work force together ready for the good times. Is there a role for such a scheme here?

What the Government have done so far is look at what measures we can provide to help companies with training during the downturn, and at what we can do to help unblock credit lines where there are problems with them. We have to evaluate what is the sensible thing to do when spending taxpayers’ money. We will look at some of these issues, but we must consider very carefully whether the policy mentioned is the most appropriate action compared with other policies available to us at present.

What steps is the Minister taking in the automotive industry to ensure that credit risk insurance is readily available?

When we made our statements on the working credit scheme and the enterprise finance guarantee, we said we were still working on the issue of trade credit insurance. I recognise that it is an important policy area. Companies in some sectors are saying to us that they are having credit lines withdrawn and that that is affecting their business model. The Secretary of State has said he hopes to be able to make a further announcement on that issue shortly, but I cannot give any definitive time scale.

Can my hon. Friend confirm that the proposals he has announced today also apply to the commercial vehicles industry, and in particular to Leyland Trucks in my constituency? I urge him to work as hard as possible to get the financing arms in place, as that is crucial to bringing through more orders in the truck industry. I also ask him to work with colleagues in the Treasury and the commercial vehicles sector to look at ways in which we can encourage haulage companies to bring orders through early, and to be in a position at the Budget to make announcements on the tax system that will allow that to happen.

My hon. Friend makes a very good point. The automotive sector does, of course, encompass the commercial vehicles sector. As he will be aware, just as we have seen a dramatic drop in new car sales, we have also seen a dramatic drop in sales of new vans and lorries. That is an equally significant problem, and I can confirm to my hon. Friend that it is our intention that companies such as the one he mentioned should be eligible for the loans to which I have referred.

May I gently put it to the Minister that it was not synthetic anger that he heard from this side of the House, but deep, deep concern that this Government have dithered while car sales have dived, and that they have done nothing for three months? Does he not realise that the only way we will increase car sales in the longer term is by reducing production in the short term, which will improve residual values and allow people to afford to buy a new car?

The simple fact is that car sales have dropped almost all over the world: they are down significantly in the United States; they are down in Spain; they are down slightly less in France; and they are down in Germany. This is an economic problem that we are facing right across Europe. It is a problem that, as we have all said, originated in the United States, and certainly in its automotive sector there are major problems with new vehicle sales.

What we have to do as a Government is try to assess what are the most effective and appropriate measures that we can take. The measures that we have taken to support industry in general, such as the working credit scheme, the enterprise finance guarantee and the fiscal stimulus, are all sensible and appropriate steps for the Government to take. We have gone a step further today, specifically in respect of the automotive industry. I believe that, again, it is right to do so, because that industry is encountering some dramatic problems. We should not pretend that this is just a UK problem—it is a European and a global one.

Following on from the point made by my hon. Friend the Member for South Ribble (Mr. Borrow), I point out that the Minister failed to mention the van and truck industry and the shadow Secretary of State failed to mention the crisis in that industry. There is a way to assist the van, truck and car industry: if tax breaks could be put in, it would help fleet purchases. Without that, there is no incentive for the trucks, cars and vans to be bought in the volume that we need to see going through the production line. Will the Minister examine that issue? The other way forward is through procurement by the Government. I would have thought that Ministers on the Front Bench should consider what car they are riding around in and make sure it is British-built and we can give support though the Warwick agreement, so that we have a truck, car and van industry that we can be proud of and that will last this country into the next century.

We are happy to look at all constructive suggestions about what more we can do to help the van and truck industry during these difficult times. My hon. Friend mentions procurement, which I sometimes think we ask to do everything. We want to see green procurement, and we want procurement to achieve a number of other objectives too. He is right to say that we need to be thinking about what cars, vans and other equipment the Government want to purchase in future. On the market for low-carbon vehicles for the future, I strongly believe that it is strategically important for the UK to make some medium to long-term decisions about its purchasing intentions, in addition to investing in research and development and new technology, so that we can have a home-grown, low-carbon green industry. That is what we are working towards.

The Minister will be aware that the commercial vehicle market is being hit harder than the car market, and that Ford in Southampton has had a particular problem. It assures me that although people want to buy vehicles—that contrasts with the Minister’s indecision on this—the finance is crucial. When will Mervyn Davies finish his report? How many jobs does the Minister expect to be lost in the meantime?

That was a rather churlish response from the hon. Lady. She referred to Ford in Southampton, and I must tell her that a number of discussions on the situation have taken place between Ford and the Government. We are well aware that the industry, be it in terms of vans, trucks or cars, is going through a terribly difficult time at the moment. Members of the House need to recognise that there are some things that the Government can sensibly do and others that would not be an appropriate use of taxpayers’ money. The response that we have announced today, which builds on the other measures that we have taken, provides a significant boost to the automotive sector at this difficult time, and I would like to think that hon. Members would welcome it.

May I suggest to the Minister that when the Government meet the car manufacturers tomorrow he should bear in mind that Jaguar Land Rover is at the forefront of developments on environmentally friendly cars? I visited the plant yesterday, and I was very impressed. Will he also bear in mind that thousands of jobs in Coventry and in the west midlands are at stake, and that a lot will rest on the outcome of tomorrow’s meeting? May I stress once again to him that lots of people in Coventry fear for their jobs if Jaguar Land Rover goes, and that goes for the suppliers too?

Jaguar Land Rover is an important car company for the United Kingdom. It has a significant research and development programme running into many hundreds of millions of pounds. As my hon. Friend will be aware, because he takes a close interest in these matters, it has applied to the European Investment Bank for significant funding for green R and D in the future. Jaguar Land Rover is taking exactly the right sort of steps that we would want to see on reducing carbon. Its products are at the high-range end of the market, but its new vehicles are, increasingly, far more green than their predecessors. In the first half of 2008, the company was making significant profits, and I have no reason to believe that it will not do so in the future. We need to look at what support we can provide through the measures that I have announced today to help Jaguar Land Rover access the EIB funding that is available. Of course, we will continue to have regular dialogue with the company, too.

There has been a severe slump in car sales at Bentley Motors, the largest employer in my constituency, and it is only thanks to the company acting responsibly that it has avoided making compulsory redundancies. However, it is on the cusp of having to make some very difficult choices. Discussions that I have had with representatives from Bentley have made it clear that, despite representations to the Government, they are still struggling to access finance and credit. Like other hon. Members, I urge the Minister to ensure that the company has access to finance and credit now, rather than in the months to come, before more jobs are put at risk.

Bentley is a great brand, but I know that the company is having difficulties, because as with other companies in the automotive industry, people are not buying its cars. That is one of the reasons why it has had to make some of the decisions that it has made recently to cease production for a period. There are challenges facing Bentley, just as there are challenges facing all our major car manufacturers in the UK at the moment. All that the Government can do is look at what sort of sensible measures we can put in place to help the industry, and the working credit scheme will help many companies in the supply chain, especially as the cessation of production by some companies creates enormous problems for a lean, integrated, just-in-time supply chain. We will continue to work with the industry on tackling the problems that it faces and providing solutions where it is sensible to do so.

My hon. Friend will be aware of the importance of the industry in my west midlands constituency, which has many design and component companies. They have told me that two things are essential at this stage. The first is support for credit lines, and the second is encouragement to adopt green technology, so I think that they will welcome the statement as right on the button in terms of what they have told me is necessary. However, I have noticed that the money will be accessed via application, and the companies have also told me that the application process is sometimes very complicated, tortuous and involved. Can my hon. Friend ensure that the application process is as simple and as streamlined as possible?

My hon. Friend is right to stress the importance of the automotive industry to his constituency, and I am well aware of it. He is also right to say that what companies want is access to support as quickly as possible, and we are endeavouring to achieve that. We need to look at the issue on a case-by-case basis and there are certain due diligence steps that we will need to take because taxpayers’ money is involved; the whole House would expect us to be responsible with it. Having said that, we need to move as speedily as we can in all these areas, including access to the working capital scheme, on which we are working actively with the banks at the moment.

Access to credit and loans is not working in the way that the Government would like. In my constituency, I have a small specialist company that distributes bearings and supports the bearing industry. It cannot access any funding under the current schemes and I doubt that it will be big enough to access funding under the scheme proposed by the Government. However, that company is a key component of the aerospace and automotive industries. Will the Minister meet my constituent who runs this company—he would happily take on three or four extra people if he could access funds—to discuss the problems facing small and medium businesses?

In the first instance, if the hon. Lady e-mails me with the details I can get some officials to look at that matter right away. We will see how we go from there, but if it is appropriate to have a meeting I will be more than happy to do so.

General support schemes for industry can do a range of things, but they do not green industry by one jot. Will the Minister reconsider the German scrappage scheme? My understanding is that the €2,500 subsidy is offered specifically to those who are the owners of older high-carbon vehicles when they trade in those vehicles in exchange for new low-carbon vehicles. Will he consider using demand to make the same green shifts in the UK and to tie improved access to finance to precisely the same green demand agenda?

As I said, I do not think the German scrappage scheme is necessarily quite as straightforward as it might seem from reading about it in the newspapers. It is a lot more complicated. We continue to monitor the situation with the German scheme and the French scheme, too, which I understand is not without its problems. I remain to be convinced that the schemes are an effective use of public money. I will always keep my mind open and we need to consider the evidence on such schemes, but my judgment is that there are better ways to support industry and to achieve our environmental objectives at this point in time than going ahead with the scrappage scheme. We will continue to review these matters.

I have listened to the statement twice and I am none the wiser as to how many new cars the money will help to sell. Would the Minister like to tell us?

I have been at pains to stress that the measures we are announcing, which will provide guarantees that will support £2.3 billion-worth of lending to the automotive sector, will help to ensure that we give the companies that are supported a bridge to the future to enable them to get through the difficult times that we are in and to support the development of cleaner, greener cars. That is what we can do. The sensible thing to do is to help companies through the short term to ensure that they are best placed for the future when the economic upturn comes.

I particularly welcome the training and greening initiatives that my hon. Friend has outlined, which appear to be in stark contrast to the do nothing or “lay workers off” policies of the Opposition. The provisions will be of particular use to IBC Vans in my constituency, a company that is very highly productive but where workers are facing a 30-hour week from February. May I press the Minister further on the issue of tax incentives for businesses to purchase fleet vehicles, as I think that they would benefit small and medium-sized enterprises, IBC Vans and white van man?

My hon. Friend is absolutely right to point out the importance of the green and training components of the packages that we are announcing. I want to support white van man, too. I want to ensure that white van man has the confidence in his business to say that he wants to buy a new white van because he can see the business opportunities in the future. Restoring that confidence is vital. There is an important point to be made about the fleet market, and we are open to discussions about whether more can be done in that policy space. As I said, my hon. Friend is right to point to the green and training aspects of the package, which will both be welcomed.

It is difficult to overemphasise what a parlous financial state many car dealerships find themselves in. One in my constituency reports sales of new cars dropping from more than 30 a month to fewer than 10 a month. If those businesses fail, all the other measures will count for nothing. I urge Mervyn Davies to get on and do his work as quickly as possible but also to investigate other ways to support those businesses, such as relief from business rates. They have to be paid every month regardless of the level of business, which is causing the businesses great distress.

I have heard what the hon. Gentleman has said. As I have said, we want Mervyn Davies to be actively engaged and to deal with the matter with the urgency that is required. The hon. Gentleman asked specifically about the dealership network, in which many small businesses operate. He will be aware of the business support scheme operated by Her Majesty’s Revenue and Customs for companies with particular difficulties. There are more than half a million people in the dealer network at the moment. Some of them are tied to big companies but some are small and independent, and we must ensure that they are aware of the range of support on offer. I sometimes think that when we come to the House to announce new initiatives, we need to do more to communicate the vast range of initiatives that are already available out there. We are looking to do more in that area as well.

I welcome the measures taken by the Government, but I want to stress that their success or otherwise will depend ultimately on how much of the money is distributed. What measures are being taken to ensure that small companies that wish to access the loans know how to do so and where to go? Will the Minister ensure that the institutions disbursing the loans know what is a reasonable basis for their disbursement? Finally, what role does he see the regional development agencies playing in bringing consistency to the process?

My hon. Friend makes a very good point. The RDAs, with Business Link as their agent, have a primary responsibility in promoting a wide range of Government services through the Business Link brand. He will be aware of the Solutions for Business programme, which provides a range of different Government support in addition to the measures such as the enterprise finance guarantee scheme that I have mentioned already today. We must make sure that we have the most effective communication channels out there. Companies are facing challenges, but sources of funding are available that are either backed or directly funded by the Government. We will see whether there is more that we can do to make sure that MPs have the information that they need, because I am acutely conscious that lots of MPs are being approached all the time by companies that are having difficulties. They need to signpost those companies in the right direction.

Welfare Reform Bill

Second Reading

I beg to move, That the Bill be now read a Second time.

I should like to start by welcoming the right hon. Member for Maidenhead (Mrs. May) to her new post. I also welcome the hon. Member for Northavon (Steve Webb) back to his old post, although we are no less happy to see him for all that. I know that we will disagree on many things, but also that their scrutiny will improve this important Bill. I look forward to working with both of them, where we agree.

In the debates ahead of us, we shall hear much jargon. We will hear talk of contribution conditions, taper rates and conditionality, but it is important that we start by remembering what the Bill is about. It is about changing lives—of the people who have been stuck on incapacity benefit for too long and of the lone parents who could work if they knew about the support available to them. The Bill is also about giving disabled people control over the public services that they receive, instead of their being controlled by the bureaucracy.

This Bill is based on the simple idea that people will be given more support and, in return, more responsibility. That is not the Government’s idea, nor the Opposition’s. It was expressed in the Beveridge report—indeed, it is one of his three founding principles.

In his report, Beveridge said:

“social security must be achieved by co-operation between the State and the individual…The State in organising security should not stifle incentive, opportunity”

or responsibility.

The Bill is intended to renew the partnership between the state and the individual by ensuring that virtually everyone on benefits is preparing for work, so that support is matched with responsibility. We will support people, but in return they must support themselves. Some people have asked why we are taking measures now. The answer is simple: it is because it would be wrong to abandon people. If we gave up on welfare reform now, we would be condemning people who find it harder to get back into work to not being able to do so. That is precisely the mistake made in the recessions of the ’80s and ’90s, when conditionality and investment were cut, and unemployment rose more than it need have done.

Governments have a choice: we can either invest millions now in helping people back into work, or we can waste billions in the future when we cannot get people back into work because it has become too difficult. We have a choice between an ambitious welfare state that lifts people out of dependency and a passive one that traps them there.

I thank my right hon. Friend for giving way so early in his speech. Will he assure me that we will not do what was done in the past, when unemployed people were hidden in the benefits system, and hidden away in the figures? Unemployment was actually a lot higher than the figures suggested. Will he assure me that we will tell the truth right down the line?

I can absolutely give my hon. Friend that assurance. He describes the Opposition’s policy when they were in government; they massaged the figures and shuffled millions of people on to incapacity benefit. The real crime is that those people were then trapped there, without help. [Interruption.] Well, the truth is that incapacity benefit tripled when the Opposition were in government. Frankly, I am surprised that they want to talk about that record. On top of that, they still have not learned from those mistakes. They would still cut investment in helping people back into work. The right hon. Member for Maidenhead may want to break with her predecessor’s policy right now—she is welcome to intervene if she wants to. The Conservative party’s policy is to cut £1.8 billion from Jobcentre Plus, from our private providers, and from the support in place to stop short-term unemployment—

The right hon. Lady shakes her head, but that would be the consequence of refusing to back our fiscal stimulus. The recession would be longer and deeper than it need be, and the cost to human lives and to the Treasury would be greater. That is the policy of the Opposition, and if Opposition Members want to disown the consequences, they should stand up now and do so. Obviously the right hon. Lady backs the policy of her predecessor on this issue, as on so many others.

Conservative party policy would return us to a passive welfare state—one where we fail to invest in people and fail to have the right level of conditionality. We would end up with more, rather than fewer, people dependent on benefits. That is the opposite of what we should do. We should have an active welfare state that helps people to take control of their lives.

My right hon. Friend rightly talks about the rights and responsibilities agenda. Of course, the responsibilities of claimants are enforced through sanctions, and the state’s right to co-operation is enforced similarly, but the responsibilities of the state to the claimant and the rights of the claimant tend to get diminished. Will he consider the idea of a claimant’s charter, in which those rights and responsibilities would be clearly delineated? Claimants would then know what they could expect, as well as their obligations.

I am aware that the idea has been suggested by Gingerbread, as well as by my hon. Friend, and it has a lot of promise. We want to consider how we can make sure that it is not restrictive and does not become a lawyer’s charter. As I will argue, we want to move towards a more flexible system based on personalised conditionality. If we are to do so, we need to look at how individuals can know that they will be treated fairly. Perhaps the way forward is to have a seminar, to which my hon. Friend and some of his colleagues would be invited, to discuss how that could be done. I would be happy for Conservative Members to attend, if they are interested.

I welcome the Bill, as far as it goes, and will support it, but does the Secretary of State accept that if it is to work well, people must accept it as fair? Will he therefore consider the condition of fibromyalgia, and make sure that it is properly recognised, as it is a very debilitating condition?

Of course we are happy to look at anything in our review of the work capability assessment. The hon. Gentleman may know that there is a review coming up, so he will have a chance to make that point then.

How can we have a system that is active and gives people control over their lives? I want to cover three main ways in which we can ensure that. First, we can do so by ensuring that children have a fair start in life, so that they can have a fair chance in life. That is why the Government are committed to ending child poverty and why we will enshrine that commitment in legislation this Session. It is also why we are committed to supporting families. We know that in the modern world we cannot keep all couples together, but we know that we need to look after children, whatever the relationship status of their parents.

When my right hon. Friend is considering the needs of families and children, will he look especially at the needs of families with children with disability? Sadly, that often leads to a break-up of the relationship between the parents. Also, if a lone parent is looking after a disabled child, there is huge difficulty in finding appropriate child care to enable that parent to go into work. Will my right hon. Friend look into those special issues?

I am happy to do so. Indeed, in the next few days the Government will publish the refreshed child care strategy, which looks at that issue. My hon. Friend will also know that the Government have invested significant sums in respite care for parents caring for disabled children. However, she highlights an important issue—the extra costs for child care for children who are disabled.

Child maintenance is important because it gets more money to children whose parents have divorced or separated. It has already taken 100,000 children out of poverty. If all non-resident parents paid what they owed, that number would double and another 100,000 children would be lifted out of poverty. That is why the Bill proposes some changes to strengthen the regime by which we collect money.

The people who suffer most when parents separate are mothers. Mothers are three times more likely to be in poverty after separation than their husbands. Research out this week shows that whereas mothers’ incomes fall, those of fathers often rise. That is why making sure that fathers—not always, but in particular—live up to their responsibilities is so important.

We will do that in two ways through the Bill. First, in benefit calculations we will completely disregard child maintenance payments. We believe that that is the right thing. It means that instead of the money going to the taxman, it goes to the child. In addition, it will give a real incentive to parents to make sure that they know that the money is going to their children. We therefore think it will increase payments.

There is a minority of non-resident parents who are determined to do everything they can to avoid their responsibilities. They hide their money, they become self-employed and they employ expensive accountants. One of the ways in which we believe we can hit those parents in a way that gives them an incentive to pay is by saying that we will remove their passports or driving licences if they fail to live up to their responsibilities. Of course, the point is not to take away people’s passports or driving licences. It is to make sure that they comply with their responsibilities. Where this has been tried—for example, in Australia and in the US—it has resulted in a significant increase in child maintenance payments, in particular in the few days before people are due to lose their driving licence or passport. We therefore think it is an important measure to introduce.

Will the Secretary of State reconsider something he said a moment ago? Employing expensive accountants to get right figures seems to me to be the way forward. Anyone who is self-employed does not want wrong figures. I hope the right hon. Gentleman is not implying that the accountancy profession is in league with—

It is not my intention to slur accountants in any way. However, where fathers in particular are using accountants to avoid their responsibilities, they should be ashamed. We intend to stop that.

Last year—[Interruption.] The hon. Member for Eastbourne (Mr. Waterson) is chuntering away to himself. He may want to listen to this point. Last year his party stopped such a measure going through in a Bill in the other place. The Opposition pretended to support it here but they stopped it in the other place, so I hope there will be a commitment from the right hon. Member for Maidenhead in her speech to support the measure that her party stopped in the House of Lords last year. I hope she will now commit to change her party’s policy.

Perhaps the Secretary of State ought to look at the record of the debates that took place on that issue. It was, in fact, the Government Minister who chose to amend the Government’s position on the matter.

Precisely because we were running out of time, and it was the only way of getting the Bill through because the Conservatives were opposing it. I take it that the right hon. Lady is now reversing her party’s policy. She does not deny that, so I take it that the Opposition will support the Bill here and, we hope, in the other House. I hope that is one of many U-turns that we can look forward to under her leadership of the Opposition Front-Bench team.

Fathers also have an important role to play. As well as underlining people’s responsibilities, we want to make sure that the role of fathers is properly recognised. At the moment, it is much easier for a father to register their name on a birth certificate if they are married than if they are not. There are about 45,000 births a year to unmarried couples where no father is on the birth certificate. We think that that is wrong, and we want to put that right. We want to change the system so that the default is that both the mother and the father are on a child’s birth certificate, so fathers are clear about their responsibilities from the very start but, on the other hand, are involved in their child’s life, even if the relationship with their partner has broken down.

If the mother says, for example, that she is unable to do so—which happens—or does not want to because of, for example, fear of violence, we will take the mother’s word. There is a careful balance between changing the system so that the default is that the father is registered and, on the other hand, going too far and involving the father where there is a threat to the child.

We rightly place great emphasis on children knowing who their parents are. Some of us have constituents who have no knowledge of who their father is, and there is a real danger that half-brothers and half-sisters will get together. Surely there should be a procedure whereby, while protecting the position of the mother, at some stage children can actually find out who their father is.

We are trying to strike a balance, and I think that this proposal is the right means of achieving that. If we were to go in the other direction, we might put a mother in a position where she must involve a father whom she thinks is a threat to her or her child. The balance we have struck will mean far more children being able to know who their father is. I hope that my right hon. Friend will support the proposal on that basis.

What evidence does the Secretary of State have that putting the names of the small proportion of irresponsible fathers on birth certificates will make them responsible?

This is partly about evidence and partly about the wishes of fathers. At the moment, fathers feel that it is far too complicated to register when they are not married. There are lots of examples in which fathers wanted to be involved but were unable to be. It is only fair to say that if we expect fathers to live up to their responsibilities, they should also have the right to be on the birth certificate. I am not saying that this is a magic policy that will solve all those problems, but combined with the other things that we are doing, it will help fathers to live up to their responsibilities and to be properly recognised.

Will the Secretary of State clarify the difference between, as he has said, “taking the mother’s word for it”, if she says that she does not know or that there is a threat of violence, and making the whole scheme voluntary? Simply taking the mother’s word for it is not sufficient.

As I have explained to my right hon. Friend the Member for Birkenhead (Mr. Field), we are trying to strike a balance. We think that we have struck the balance in the right place. The proposal involves working with registrars to get far more fathers registered, and registrars have plenty of experience and are at the cutting edge of practice in that area. The proposal represents the first way in which the Bill will give people greater control over their lives by making sure that families work to support our important efforts on child poverty.

The second area where we need to make a real change involves giving disabled people the right to control the services that they receive. Hon. Members on both sides of the House recognise that Britain is probably at the cutting edge in terms of the framework for disabled people. In particular, good work has taken place on giving disabled people greater control over the support that they get in the health service through individual budgets. Although that change may sound dry, it is completely transformative.

I was in Barnsley yesterday talking to people who have benefited from individual budgets. In particular, a man called Patrick spoke about how he had been stuck in residential care for years and had been unable to go out because his carers did not have time to offer that to him. He felt that he was trapped and did not have control over his life. When he and two of his friends got individual budgets, they were able to rent a house and hire carers to look after all of them. They are now saving up the time with their carers to be able to go on holiday in Spain. Their lives have been completely transformed. Geoff, another man who was there, spoke about the change in his life. It meant that he had gone from being treated as a body that needed to be cared for to a person who needed to be helped. He mentioned that he now said to the people who looked after him that they were not his carers, but his enablers and that he was their boss. That is a complete change in the power relationship for disabled people. Through the Bill we want to take that idea, which has worked particularly in health, and widen it to a much broader range of support that disabled people get. We want to include a much wider range of services for disabled people, so that they can put them together to spend as they feel fit.

Will my right hon. Friend reassure those inside and outside the House who have been campaigning for a higher mobility component in the disability living allowance for those with little or no sight? As he said during his eloquent description of the young man in Barnsley, people must not be trapped in their homes but be enabled to prepare for work by engaging again with society, being able to leave their homes safely and having equality with other similar groups.

My right hon. Friend raises an important issue on which he has been leading the charge. The Government do not have any objection to it in principle. They totally understand the case that is being made; the question at the moment is how it would be financed. We would be happy to work with my right hon. Friend and other colleagues on how to make progress on the issue. We totally recognise the strength of feeling that has been expressed on both sides of the House.

Is my right hon. Friend honestly saying that the Government cannot find £45 million in his Department’s budget or elsewhere?

There are questions about how much the cost will be, and we have worked with the Royal National Institute of Blind People on that. However, yes, the Bill is self-financing. We have made a number of simplifications and changes so that we can invest more in helping people. If we move forward with this, we will have to find the investment not only for now, but for the medium term, because a continuing commitment would be involved. However, as I say, we do not have an objection in principle.

I support direct payments, but how does the Secretary of State intend to assist people who have either no capacity or a fluctuating or partial capacity to make decisions for themselves? That can happen in a lot of conditions such as learning disabilities, mental health disorders and, sometimes, autism. How will he help roll out direct payments to that group of people? They need something more than just the basic framework.

The hon. Lady makes a good point. That is what good social care is all about. Carers and families could be appointed to act as agents or support people in making the choices. As I am sure the hon. Lady would agree, in the past few years we have seen a real shift in the decisions that we expect people—including those with learning disabilities—to take. Such issues are certainly not a bar to individual budgets or this policy. The people whom I met yesterday had mental health needs and were classified as having learning disabilities, but the smiles on their faces showed exactly how their lives had been transformed by the opportunity to make the decisions for themselves.

Will my right hon. Friend assure me and the House that the move to individual budgets can never be used as an excuse to cut budgets? A local authority might see some way of reassessing people that takes them out of its control but does not give the control back to the individual—because of lack of capacity or because there is less money.

That is an important point. I believe that the Liberal Democrat-controlled council in Aberdeen has used individual budgets for that very reason. That should not be done with this policy, which is not about changing people’s entitlement but about how they get their money and making sure that they can control it. If people are happy with the service that they are getting from the state, that is absolutely fine. However, the power should be with them so that if they are not happy, they can get the service changed or get the money themselves and use it as they can. After all, they—and not anybody else—are the experts on their own lives.

The Bill takes the powers to do that on a national basis. We will test it with trail-blazing public authorities, because it is a ground-breaking piece of legislation and we need to know exactly how it will work in practice. It introduces a fundamental change, and it will ensure that disabled people have the power to achieve what they want to in life in the same way as everybody else.

Thirdly, the Bill will give more control to people by helping them back into work. A decade ago, there was too little support for people to get back into work and too little expectation that they take it up. We started to put that right through the new deal and by merging the Benefits Agency and the Employment Service into Jobcentre Plus. We helped lone parents back into work, and we introduced pathways to work—the first time that people on incapacity benefit have had any help to get back into health and back into work.