Skip to main content

Oral Answers to Questions

Volume 487: debated on Wednesday 28 January 2009


The Secretary of State was asked—

Rural Economy

1. What assessment he has made of the contribution of the rural economy to economic performance in Wales; and if he will make a statement. (250633)

A strong rural economy is vital for Wales as a whole, particularly during the present challenging economic conditions. We and the Welsh Assembly Government are committed to supporting rural businesses with the range of packages that were announced recently, which are designed to help all businesses.

As the Minister knows, Montgomeryshire has seen shops such as Woolworths closing and businesses such as Stadco preparing to lay off scores of staff. Indeed, the number of job losses has risen by more than 60 per cent. in the last year. While the new assistance package is welcome, is the Minister aware that banks are putting such a tight squeeze on local firms that their viability is threatened? Will he meet local business representatives in Montgomeryshire to hear about the effect of reduced bank lending? Such a dialogue would undoubtedly help firms, and also the Government.

We are, of course, aware of the situation in mid-Wales, and in the hon. Gentleman’s constituency in particular. We are especially concerned about what has been happening to Stadco, where the loss of 100 jobs was announced recently. The important point is that we are essentially on the side of people who are suffering in this way, and totally understand their predicament. As Members will know, the proposals announced recently by the Government are designed to promote cash flow and to help small and medium-sized enterprises. In Wales in particular, high street banks have been turning down applications for loans, and Finance Wales has stepped in successfully to help. We are certainly aware of the problems, and we want to see the position improve.

I should be delighted to visit the hon. Gentleman’s constituency. Perhaps we can discuss an appropriate time later.

The rural and valley areas in Wales need better opportunities to embrace the knowledge economy and, to that end, the Welsh Affairs Committee is about to start an inquiry into digital inclusion in the country. Does the Minister agree that Governments at all levels should encourage the public, private and voluntary sectors to work together to overcome the current difficulties in such communities and reduce the isolation that they experience both socially and economically?

I entirely agree. It is vital that we maintain and reinforce our commitment to the development of a knowledge economy in Wales: that is the future.

Speaking as the deputy Minister for digital inclusion, I also consider it important for us to recognise that our investment in new technology and full participation must continue apace. We must not use the present economic downturn as an excuse not to proceed with that agenda; on the contrary, the downturn must be used to reinforce our commitment to its development. We must also ensure that at all times we are strongly committed to the public and private sectors working together. That, too, is the future. I commend what my hon. Friend has said, and the work of his Committee.

Does the Minister agree that enacting legislation that will require all companies, or at least private companies, to use the Welsh language in all forms of business could prove very detrimental not just to the rural economy but to the rest of the economy in Wales, at a time when, tragically, we are seeing hundreds of jobs lost?

The hon. Gentleman should choose his words carefully. I am sure that the last thing any Member would want to do is be seen to be against the Welsh language. It has developed over the past few years, and we want to ensure that it continues to develop with the consent of all the people of Wales.

As the hon. Gentleman will know, the draft Welsh language legislative competence order is due to be published next week. I hope that, as a result, there will be full discussion among all the people of Wales about what is the best way forward.

Does my hon. Friend agree that the rural economy in Wales needs to recognise the vital opportunity provided by the economic downturn, and the fact that people are holidaying in the United Kingdom, to promote our wonderful natural environment, particularly the environmental protection areas? My constituency contains the national nature reserve at Kenfig, and there are local nature reserves all along the coast. In the constituency of my hon. Friend the Member for Ogmore (Huw Irranca-Davies) is the wonderful Garw valley, one of the most beautiful spots in Wales. Does the Minister agree that environmental tourism is a real saviour?

That is a very difficult one to answer.

I entirely agree with my hon. Friend. My constituency contains the magnificent Caerphilly castle, the largest castle not just in Wales or Britain but in the whole of Europe. There are plenty of opportunities for Welsh tourism, and we need to recognise that indigenous tourism is particularly important at this time. I am delighted to say that the Welsh Assembly Government have invested some £2.2 million in the United Kingdom campaign to extol the virtues of Welsh tourism.

Does the Minister agree that one significant boost to the rural economy of west Wales at this time would come from the construction of the new gas-fired power station at Pembroke, in the constituency of the hon. Member for Carmarthen, West and South Pembrokeshire (Nick Ainger)? The project has taken four years to reach this point. It has passed its environmental consents, and merely awaits a decision from the Minister’s colleague the Energy Minister. Will he speak to the Energy Minister and unlock this important project? The United Kingdom needs the generating capacity, and my constituents need the jobs.

The hon. Gentleman is entirely right: this is an important project. We are mindful of that; discussions have taken place with my hon. Friend the Member for Carmarthen, West and South Pembrokeshire (Nick Ainger), who represents the constituency where the new installation will be based, and I am sure that, across all Departments, we are absolutely committed to ensuring matters are expedited as quickly as possible, but also in a proper manner.

Market towns are a key component of the local rural economy across Wales, and they have maintained a range of quality independent retailers, which make them attractive not only to the people who live there, but to tourists and visitors. Town centres with closed shops and pubs are very unattractive, however. As our thoughts turn towards the spring and Easter holidays, will the Minister intervene with his colleagues in the Assembly—and, indeed, in Westminster—to find ways of reducing the burden on these businesses, particularly in respect of business rates? The Government come forward with new initiatives day by day, but will the Minister now stand up for the retailers and shopkeepers of rural Wales?

Indeed, we stand full square behind small enterprises generally, and in particular retail businesses. The business rates issue has been looked at, and the Government nationally and in Wales are doing everything possible to help. We can be absolutely certain of one thing: we will do everything possible to help people get through this difficult period. I must say, however, that I am impressed in all sectors of the Welsh economy, including the one the hon. Gentleman refers to, by the determination and commitment of the people of Wales. It is very important that we reinforce the determination to get out of this economic downturn as quickly as possible, and I hope the hon. Gentleman will work closely with us to achieve that.

Does the Minister recognise that small and medium-sized enterprises in Wales are vital for employment throughout Wales, and in particular in rural areas? Will he join me in congratulating the Welsh Assembly Government on their £290 million flexible support package for business, the £7 million rates relief package for smaller businesses and the £115 million investment fund? Does he not agree that the Assembly Government have been very proactive at a time when such action is required?

Yes, I agree. I am pleased that the hon. Gentleman has listed some of the initiatives that have been introduced, and it is important to recognise that, in the critical area of the development of our economy, we are seeing good practical examples of the Government here in Westminster and the Welsh Assembly Government working together and pulling together in the interests of the people of Wales. There are other initiatives as well as those that the hon. Gentleman has mentioned. I also believe we have led the way in the United Kingdom in holding economic summits. There have been three very successful economic summits, and another one in north Wales is planned shortly. That reinforces the partnership that has been established not just between Cardiff and London, but between all the main players in Wales.

Small Businesses

2. When he next expects to meet representatives of small business organisations in Wales to discuss the regulatory burden on them. (250634)

My right hon. Friend the Secretary of State and I met the Wales CBI only last week, and I recently held a meeting with the Federation of Small Businesses to listen to its specific concerns. In March I shall be participating in the FSB’s national conference.

I thank the Minister for that reply. Ministers keep telling the House how much they are doing to support small firms, but why did Ministers not do more to resist the job-destroying EU agency workers directive, which was vehemently opposed by every single small business organisation?

The Government are certainly doing everything they can to help small businesses—there is no doubt about that. However, it is important to recognise that we are talking specifically about Wales, and we can point to initiatives that have been taken by the Welsh Assembly Government, such as the ProAct and ReAct programmes. We can also allude to the fact that significant sums of European money have gone into these initiatives. They are helping small businesses and the people who are directly affected by the economic downturn, so I think it is very important that, unlike Opposition Members, we take a balanced view of the European Union. I believe that, on balance, our membership of the EU is positive and helpful, and many thousands of people in Wales would testify to that fact.

My hon. Friend will be aware that one of the problems that small businesses face is getting large-scale procurement contracts from local government and, in my constituency, from the Ministry of Defence. This problem has come up at a number of meetings hosted by the Wales Office. Can he assure me that in these difficult times, and through the economic summits that we have had in Wales, we will be able to relax the rules or even explain them better to local businesses, so that they can have the opportunity to get the contracts and get the work locally?

I entirely agree with the point that my hon. Friend makes, because this issue has to be addressed. I am pleased to say that there will be a meeting on Monday to discuss precisely that point of procurement and how government at all levels can do whatever they can to help. We are also pressing strongly for the next economic summit in Wales, to which I referred, to address the issue specifically. As far as Anglesey is concerned, we will do everything possible to help sustain jobs; I am aware of the excellent work that he is doing on Anglesey Aluminium, and we stand full square behind him on that issue as well.

I am sure that empty property business rates have been a significant feature of the Minister’s discussions with the Federation of Small Businesses and others. Although we welcome the increase to £15,000 for relief, that is not enough for many of our constituents. One of my constituents faces a bill on empty properties of £30,000 a year, and that is very much compounded by the unhelpful attitude of the banks. Will the Minister continue to advance the case for raising that threshold further in his discussions with the Welsh Assembly Government and, consequently, the UK Treasury?

I am glad that the hon. Gentleman recognises that we have already taken action on business rates—I think it has been warmly welcomed by those people directly affected. We will take the necessary action and we will keep the situation under review. We have given an explicit commitment to doing whatever is necessary to ensure that we all move forward together as quickly as possible through this economic downturn. All those issues that he has raised will be carefully examined—this is a moving brief.

Major job losses in Wales, such as those at Corus, understandably make the headlines, but the Minister must know that the consequential impact on small businesses can be just as catastrophic, if not more so, for families and individuals. Can he explain why, despite all his summits, he and the Welsh Assembly Government are not helping businesses more directly by bringing in our proposals, such as those for a six-month VAT holiday, a cut in corporation tax and a cut in payroll taxes for companies with fewer than five employees?

Forgive me for smiling, but it is important for Labour Members, at least, to recognise that a tremendous effort has been made. The Wales Office recently published a document that itemises all the efforts that have been made and all the initiatives that have been taken by the central Government, in co-operation with the Wales Office, and by the Welsh Assembly Government. I would be more than delighted to ensure that the hon. Lady has a copy, so that she is able to avail herself of all the information that it contains. It clearly sets out the umpteen initiatives that have been taken, which have been well appreciated and, most importantly, are having a direct positive effect to help businesses in these difficult times.

I am not smiling, and I happen to have had a copy of that list, for which I am very grateful. Forgive me if I am sceptical about the Minister’s warm words, his summits and his lists. How can businesses rely on a Labour-Plaid Welsh Assembly Government who during this dreadful recession have taken decisions to cut further education budgets that would retrain workers; to hand back to Europe, because of their own bad planning, £77 million of aid for the poorest regions; and to inflict an above-inflation rise of almost 5 per cent. on business rates from April this year? The Minister may be smiling but business in Wales is not. How will such moves help small businesses or, indeed, any business in Wales?

The hon. Lady’s jokes are in bad taste and her mock humour is inappropriate. Over the past few months we have seen a strong partnership between the Welsh Assembly Government and central Government. European funds have been effectively accessed as far as the ProAct and ReAct schemes are concerned. Those programmes are in place and they have had a direct effect.

The hon. Lady might not like it, but the Welsh Assembly Government have led the way in helping small and medium-sized enterprises. Europe is playing a critical role and the best action that the Welsh Assembly Government could do is to reinforce that partnership with the European Union to ensure that money comes through the structural funds and through the European Investment Bank. The single most important thing that the hon. Lady could do is listen to her shadow Business Secretary on VAT, for example. He recognises the importance of the VAT reduction and the importance of Europe. It is a pity that the rest of his colleagues do not do the same.

All Wales Convention

3. What recent discussions he has had with the chair of the All Wales Convention on the work of the convention. (250635)

I have been following the convention’s work with great interest and I have met Sir Emyr Jones Parry on a number of occasions.

When families across Wales are concerned about their future does my right hon. Friend think that anybody gives a fig about the All Wales Convention? It is wasting £1 million of taxpayers’ money, calling shambolic meetings, showing videos that give a distorted picture of Wales and pandering to those who think that the big issue of the day is independence. Would it not be better spending its time talking to the Corus workers?

I am grateful to my right hon. Friend for his robust comments on the work of the convention. I think that the convention is doing a proper job in trying to find out what the people of Wales would think about extra powers for the Assembly. I agree with him that it is more important to concentrate these days on the effects of the economic downturn on the people of Wales than on constitutional issues, but I do not undervalue the work of the convention.

On constitutional issues, does my right hon. Friend have any plans to slash the number of Welsh MPs before any further devolution settlement and to gag them when it comes to speaking on UK parliamentary issues? If he does not have such plans, does he know anybody who does?

I think I do. The Government have no plans to reduce the number of Welsh Members of Parliament or the effectiveness of the Welsh representatives in the House of Commons. The Government have no plans to gag us in any way whatsoever. However, I was surprised at the Conservative Front Benchers when they decided some weeks ago to suggest that we might reduce the number of Welsh Members of Parliament. They then changed their minds, for which I am very grateful.

Will my right hon. Friend ensure that the chairman of the convention is aware of the success of the legislative competence order process in ensuring that, where it is appropriate, additional responsibilities and powers are provided to the National Assembly for Wales? Given the amount of disinformation that we see from the press and media in Wales and from some who seem to want to pretend that the process is not successful, is it not important that the convention should ensure that people understand that the process is successful?

Yes, it is. It would be useful for my right hon. Friend to meet Sir Emyr to put those points to him. The process has improved over the past months and will improve even more.

Employment (South Wales)

The levels of employment show the continued effect that the global economic slow-down is having on the Welsh labour market. Although that problem requires a global solution, we are doing everything we can, in partnership with the Welsh Assembly Government, to help minimise the effects on Welsh families and on our economy.

I thank my right hon. Friend for his reply. Is he aware that 330 jobs are likely to be lost from Cardiff Gate and from my constituency if the International Baccalaureate continues with its plan to move to a mainland European city such as Amsterdam? Is he aware that one of the reasons given for that is that Cardiff and south Wales do not have an international mindset? Is that not extraordinary when we consider that the first full IB school was Atlantic college at St. Donats in south Wales?

Yes, I very much agree with my hon. Friend, who rightly points out that the International Baccalaureate was started in Atlantic college, and that, far from being a parochial place, Cardiff is very much an international centre. I fully support her early-day motion. I have written to the director-general in Geneva about keeping the 300 jobs in Cardiff and I hope that her campaign is successful.

The hon. Member for Vale of Glamorgan (John Smith) has claimed many times that hundreds of jobs will come to Wales as a result of the defence training review programme, but the programme has rising costs and increasing delays. Indeed, in his desperation, the hon. Gentleman visited the Prime Minister this week, even though the latter has given no assurance that the defence training review will go ahead in Wales. Do we not need an early statement from the Secretary of State giving us the truth about the project and its rising costs?

I have had no indication at all that there will be any change of plan concerning that huge investment in Wales. The Government are committed to it and I am sure that, when the time comes, there will be a proper statement to this House of Commons.

Does my right hon. Friend agree that employment levels in south Wales will be greatly improved by the 5,000 jobs brought to the area by the defence technical academy? Does he also agree that it is about time that Opposition Members stopped knocking the project and began pulling together to ensure that it is brought in on time and within budget?

That is what we all like to hear. My hon. Friend has been a great champion of the project. When those jobs come to Wales, it will be as a result of the biggest single Government investment in Wales ever.

Since January 2008, 11,000 jobs have been lost in Welsh retail and services. That is more than in any other sector, and thousands more jobs are at risk because of the unreasonable conditions being imposed on small businesses by banks. For example, a business in my constituency is being charged 10 per cent. interest above the base rate on a loan of only £4,000, plus significant amounts in fees. Does the Secretary of State share my concern that, if that continues, more Welsh businesses will be driven into the ground, with significant numbers of redundancies? What extra help can he offer to businesses in those circumstances?

Thank you, Mr. Speaker. The hon. Lady is absolutely right. Banks should be lending, particularly to small businesses, and the initiatives taken by the Government are designed to help them do so. She will be aware that Wales is especially fortunate, as we have the Welsh Assembly Government’s initiatives and the schemes of the UK Government that help businesses in a very special way. However, I will make sure that the points that she has properly raised here in the House of Commons are raised at next week’s economic summit in north Wales.

My right hon. Friend will be aware that Corus has announced the closure of Coated Metals in Pontarddulais in my constituency—a blow to the community and to the workers. However, all the workers have also worked at some time in Port Talbot, so will he urge Corus management to show flexibility and use a combination of voluntary redundancies and inter-plant redeployment to minimise the damage?

Yes, I will. I had a conversation recently with the chief executive of Corus and the general secretary of Community, the steel industry’s main trade union. The points that my hon. Friend has made are very valid, and I shall raise them again with them.

Given the increasing numbers of job losses in south Wales, which of course include the 1,000 jobs lost at Corus this week, does the Secretary of State acknowledge the fundamental importance of maintaining flexibility in the labour market? Can he therefore confirm that the Government will continue to fight to maintain the British opt-out from the working time directive, notwithstanding the decision of Labour MEPs to support its abolition last months?

Yes, I think that there should be as much flexibility as possible. That has helped us in the past, and I hope that it will do so in the future as well.

Manufacturing Industry

5. What recent discussions he has had with the First Minister on prospects for manufacturing industry in Wales. My right hon. Friend has regular meetings with the First Minister, and hardly a day passes when the economic situation and manufacturing is not discussed. (250637)

Does the Minister agree that manufacturing industry is the only source of non-inflationary, sustainable economic growth? Bearing in mind that the Secretary of State for Wales said that manufacturing

“will play an important role in bringing us out of recession”—[Official Report, 26 November 2008; Vol. 483, c. 710.]

what are the current Government and the First Minister in Wales doing to help manufacturing industry at this time?

The short answer is a heck of a lot. The hon. Gentleman is correct in saying that manufacturing is still important in Wales—it is—and the last available figures show that some 13 per cent. of the work force were employed in that sector. That is why we have seen central Government and the Welsh Assembly Government being so proactive to ensure that policies are in place not only to help manufacturing but, importantly, to plan for the future. It is absolutely vital to give the greatest possible assistance and investment regarding skills and training, so that when the upturn comes, we are well placed to ensure that we take the maximum benefit of it.

My hon. Friend will be well aware of the £1 billion investment being made and, I hope, announced very shortly in my constituency to build a gas-fired power station. During its construction phase, it will employ 2,000 people. Will he agree to meet me and Alstom—the main contractor—to ensure that we maximise the number of local Welsh people who are employed during the construction phase?

My hon. Friend is correct in stressing the importance of that utility initiative in his constituency, and I give a commitment that we in central Government will do everything possible, in partnership with the Welsh Assembly Government, to ensure that the processes to bring that about are fulfilled as quickly as possible. Specifically, I very much hope that I will be able to come down to his constituency in the very near future, and that is one of the facilities that we can visit and discuss.

Prime Minister

The Prime Minister was asked—


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

What we know from previous recessions is that the people who suffer most are those who have the least. So may I urge my right hon. Friend to ensure, in his forthcoming meetings and discussions with world leaders, that tackling the waste of poverty at home and abroad is now a top priority?

I applaud the work that my right hon. Friend does as chairman of the all-party committee on poverty and international development. It is precisely because of the dangers and risks to people who are poor and unemployed that we are taking the action that we are taking—raising the pension and pension credits, raising child benefit and child tax credits, helping the unemployed and making sure that small businesses have the finance that they need. That is part of the plan that we are introducing now that is being adopted in many countries of the world to help those who are poor and unemployed. To protect savers by capitalising the banks, to ensure real help to families and businesses now, and at the same time to extend lending to small businesses and homeowners—that is the plan that will ensure recovery not just nationally but, when it is adopted, internationally.

In the last week we have discovered that Britain is facing the deepest recession in a generation. We have had the worst manufacturing figures since 1975, and this morning the Institute for Fiscal Studies said that the country’s debt burden will take a whole generation to pay off. How deeply will the economy have to contract before the Prime Minister finally admits that there is indeed an economic bust?

May I quote from the IFS “Green Budget”? [Hon. Members: “No!”] They do not like it. It says:

“Our central forecast is that the UK will avoid deep and prolonged recession thanks to the enormous monetary and substantial fiscal stimuli already agreed.”

If we had taken the right hon. Gentleman’s advice and done nothing, it would have been a deeper recession.

The Prime Minister seems to be denying now that a recession is taking place. Extraordinarily complacent! I asked a very specific question about his definition of a economic bust—and I have discovered that he was asked that question before, in front of the Treasury Committee, and for once in his life he actually answered it. I have the transcript; let me read it to him. He referred to reductions in GDP of 1.5 per cent. He was asked by my hon. Friend the Member for Chichester (Mr. Tyrie):

“So that is the minimum definition of a ‘bust’?”

And the Prime Minister replied, “Yes.” Now we know that the economy shrank by 1.5 per cent. in the last quarter alone, will he finally admit something that every economist, every business and every family in the country knows to be true—that, even on his own definition, he did not abolish boom and bust?

This is a recession that is facing every country and continent in the world, and everybody except the Conservative party agrees that it is not a unique United Kingdom phenomenon; it is something that has got to be dealt with internationally. The right hon. Gentleman mentioned the Institute for Fiscal Studies; it also said:

“In current circumstances, the cost of doing nothing…is larger than the cost of acting”.

That is the rebuttal of the Conservative policy of doing nothing.

Does the Prime Minister not understand the damage that he does to himself, and to his credibility, when he says things that are self-evidently nonsense? It is self-evidently nonsense to say that about the Opposition. Our jobs plan has been copied in his jobs plan. Our loan guarantees have been copied in his loan guarantees. When he says these things about the Opposition, he does not damage us; he damages himself. That is why his poll ratings are going back to Michael Foot levels. Let me ask him one more time. Even one of his own advisers said this week:

“It’s against Gordon’s nature to do a mea culpa but at some stage we’ve got to find the words”.

Why does he not find the words now? You didn’t abolish boom and bust, did you?

Order. The Leader of the Opposition knows the rules of the House, and he knows how to phrase a question. [Interruption.] Order.

I have said that this is a deep recession. I have also said the truth—that it is hitting every country in the world. I think that the Leader of the Opposition would recognise that we were the first to act to deal with the recapitalisation of the banks and to stop savers losing their money. He supported that until last week, when he walked away from that position. We were also the first to recognise that there needed to be a fiscal stimulus. He will see today that countries that he often quotes, such as Canada, are now announcing a big fiscal stimulus. He will also see that it is right to extend lending. That is the way forward. We can play his game of student politics as long as he wants to play it, but what the country is interested in is whether we will take the action that is necessary to get us out of the difficulties. We are taking the action. His policies would cut public investment at a time when we need it: in other words, he would do nothing to help.

Only one of us was a student politician—and he has never grown out of it. What is interesting about today is that in answer to the first question the Prime Minister denied that this was a deep recession, and in answer to the third question he said that it was a deep recession. I suppose that with this Prime Minister, that is progress. He talks about the global recession, and I want to ask him about that. In the same evidence to the Treasury Committee, he actually gave a definition of boom and bust. Let me read out what he said. [Interruption.] It will end when he admits that he did not abolish it; that is when it will end. What he said was:

“what I mean”—[Interruption.]

They probably wanted a definition; here it is:

“what I mean by ‘boom bust’…is running a policy where you allow the economy to grow too fast and then it sinks far further than it has in other countries, even when there is a world downturn”.

Is that not exactly what is happening right now? Yes, of course there is a world downturn, but our economy is sinking further and faster than the rest, so even on the Prime Minister’s own definition, is it not true that he led us into boom and bust?

America went into recession more than a year ago. The euro area went into recession more than six months ago. This is a deep world recession, and I would explain to the Leader of the Opposition that past recessions in Britain have been caused by high inflation. They have been caused, as they were in the early ’80s and the early ’90s, by the Government allowing inflation to get out of control and interest rates having to rise. He should know: he was in the Treasury in the early ’90s. This recession is not caused by high inflation; if anything, inflation is going to be near zero this year. This recession is not caused by high interest rates. This recession is a result of a global financial crisis. If he does not recognise that, he will not begin to be able to discuss or decide on the answers. I suspect that it is because he does not understand that that the Conservative policy is doing nothing.

We have had all the Prime Minister’s economic understanding—and that is what led us into the mess that we are in now. The fact is that he let debt get out of control. He keeps saying that this recession all came from America. It was not America that gave us the biggest Budget deficit in the world. It was not America that made us the most indebted country in the world. It was not some American who designed our regulatory system that failed; it was him. If he will not retract something stupid that he said in the past, let me ask him about something crass and insensitive that he said this week. He said that thousands of people losing their jobs, homes and businesses was simply down to the

“birth pangs of a new global order”.

Would not anyone hearing that conclude that the Prime Minister cares more about his global grandstanding than about other people’s jobs?

If the Conservative party is not prepared to accept that this is a global recession that requires global action, it will get nowhere. Our public debt is lower than that of America, France, Germany and Japan. He should not be going around the country saying the opposite of what is true. At the same time, the measures that we are taking to deal with this global recession are measures that other countries are now taking, following us. The one thing that other countries are not doing is following the Conservative policy of doing nothing, which is not only the wrong thing, but a disastrous course for this country.

I do not know where the Prime Minister gets his figures from. This year he is going to borrow 8 per cent. of GDP. That is the same amount as a Labour Chancellor borrowed and ended up back at the International Monetary Fund. Those are the figures; that is the truth. In the past three months alone, 4,000 businesses went bust, more than 11,000 homes were repossessed and almost a quarter of a million people lost their jobs, but the message from the Prime Minister seems to be, “Don’t worry, you’re just the birth pangs of a new global economic era.” Today we are told that the debt that he is building up will take a generation to pay off. What we have had from the Prime Minister is denial about the past—continuing today—failure in the present and debt for the future. Should those not be the death throes of a failed premiership?

Order. Members will not shout anyone down in the Chamber. It is wrong to do that—[Interruption.] Order. Do not start defying the Chair.

This is a global recession, not just a UK recession, and the answer, as the IFS said today—the right hon. Gentleman quotes the IFS—is not to do nothing, but to take all the action that is necessary. I see no one else around the world supporting his proposal to do nothing. Indeed, the shadow shadow Chancellor has been giving interviews explaining what should be done. Does he support the VAT measure? Yes, he did. Does he support the fiscal stimulus? Yes, he did. Does he support our policy of helping children without the married couple’s allowance? Yes, he did. Does he support European co-operation to deal with the downturn? Yes, he does. He, at least, has the semblance of a policy. The Leader of the Opposition would do absolutely nothing.

Is the Prime Minister aware that Jaguar Land Rover welcomed the measures that he announced yesterday, particularly on green technology? Is he also aware that there will still be some anxiety in Coventry and the west midlands until people see the final outcome of yesterday’s package?

My hon. Friend has been a great supporter of the car industry and its development in his own city and round the country. I believe that the car industry is a sector with a strong future. That is why we want to unlock loans of up to £1.3 billion, guaranteed for low-carbon initiatives in cars. That is also why we are giving loans and guarantees of up to £1 billion for lower carbon initiatives for non-European Investment Bank projects. That is why we are discussing training grants, which would be in addition to short-time working, so that we can help people in jobs to keep their jobs. We will do everything we can to help the car industry. This is the difference. We know that in times like these we must act to help—but I am not sure that the Conservatives support us in this.

Does the Prime Minister think it is right that some Members of the upper House can use their status as non-domicile non-residents to get out of paying their full taxes here in this country?

In that case, will he—[Interruption.] Hang on. Millions of ordinary British taxpayers are filing their tax returns this week. They are the ones who deserve a tax break, not the super-rich. So will the Prime Minister support our private Member’s Bill to force peers, who make the laws of this country, to pay their full taxes in this country?

Where I would disagree with the right hon. Gentleman is to say that we are helping ordinary taxpayers in this country. We are raising personal allowances so that people will pay less tax; they will rise again in April as a result of the decisions in the pre-Budget report. We have cut VAT—and, if I may say so, the Institute for Fiscal Studies says today that that is a far more effective stimulus than critics are saying. Of course, we are also raising pensions and child benefit. Yes, we should take action against tax havens, but, yes also, we are helping ordinary taxpayers in this country.

Q2. In the current global economic instability, will the Prime Minister intervene rapidly to ensure that women workers who fear job losses get help to keep their jobs, learn new skills and keep the family income coming in? (251626)

My hon. Friend is absolutely right. The success of recent years has been that a large number of women who previously never had the chance of getting into work, partly because there was no child care and partly because there was no training, have had the chance to get into work. As people have to look at new job opportunities—and there are half a million vacancies—we want to help them, particularly those who have training needs and those who need child care help, into the jobs that are available. That was very much part of the package that my right hon. Friend the Secretary of State for Work and Pensions introduced a few weeks ago. We will keep the new deal, we will make it more flexible and we will spend the £500 million that my right hon. Friend allocated so that we can help women and men to get the jobs that they need.

Q3. Why, according to the International Monetary Fund, the OECD and the European Union, is Britain heading for a longer and deeper recession than any of its competitors? (251627)

I have just cited the Institute for Fiscal Studies, which said—[Interruption.] They do not like hearing a statement—[Interruption.] First of all, our Institute for Fiscal Studies said that we would avoid a longer and deeper recession by means of the fiscal stimulus that we are taking. That is exactly the same view as has been expressed by the International Monetary Fund. I am afraid that the Conservatives are living in a dream world if they believe, one, that this is purely a British problem, and two, that the answer to it is doing nothing. They have to go back to the drawing board and think again.

My right hon. Friend the Prime Minister is aware of the tragic humanitarian crisis in Gaza. Does he share the anger of thousands of my constituents and millions of people across Britain at the BBC decision to refuse to air the Disasters Emergency Committee Gaza appeal? Does he agree with me that the corporation’s decision has damaged the reputation of the BBC both at home and abroad?

It is not for us to interfere with the independence of the BBC and Sky, which made the decisions about whether they would broadcast the appeal on Gaza. But what I can say is this: we are making the appeal as widely known as we can through our own information services. At the same time, we have put £28 million into helping with humanitarian aid in Gaza. The situation that has been found is one where children have to be flown to hospital, where unexploded bombs have to be dealt with and where humanitarian aid and food has to be provided immediately. I think it would be the wish of all people in this House for this to be done as speedily as possible.

Order. The hon. Gentleman must withdraw that remark. It is not a proper thing to say. Try to rephrase the question in another way.

I withdraw that remark, Mr. Speaker.

This week, Labour peers stand accused of selling the law of the land for cash. Does the Prime Minister still claim, like his predecessor, that Labour is whiter than white?

Baroness Royall, the Leader of the House of Lords, has taken immediate action to deal with the problem. All of us are deeply concerned. These are serious allegations, which have to be dealt with. That is why we immediately set up the committee on privileges to look at how a proper code of conduct could be introduced; that is why we investigated the interests, which is happening under Baroness Prashar; and that is why Lady Royall said this morning:

“If the current allegations are proven, we may need as well to consider emergency sanctions”.

Those are the steps that we are taking. I hope that it is true of all parties in the House that we wish to root out any mistakes that have been made, and ensure that they do not happen again.

Given the announcement this week of devastating job losses at Corus, over 500 of which are in my constituency in Llanwern, will the Prime Minister meet, as a matter of urgency, a group of MPs from the all-party steel and metal related industries group to consider what support can be given to this crucial part of our manufacturing base—and, crucially, to the steelworkers who have stuck with Corus through thick and thin and who now need our help?

We have talked to Corus, and we have said that whether it is through the Department for Business, Enterprise and Regulatory Reform, the regional development agencies in Wales and in other parts of the country, or Jobcentre Plus, we will do everything we can. Steel is absolutely crucial to the manufacturing future of this country. We know from Tata, the owners of Corus, that it wishes to keep the steel plants moving forwards. Following the jobs summit, we are already working with Corus to look at what could be done to help with training costs for the future. I assure my hon. Friend that I will be very happy to meet her all-party group of MPs.

Q5. Does the Prime Minister agree that there can never be an equivalence between terrorists, on the one hand, and the innocent victims of terror, on the other? Does he therefore acknowledge the deep hurt and offence that has been caused by the obnoxious proposal in the Eames-Bradley report published today on the past in Northern Ireland, which suggests a £12,000 payment to all relatives of everyone killed, regardless of their status—which effectively does away with the distinction between murderers and those whom they went out to murder and kill? Will he reject any definition of victimhood which elevates terrorists to the same status as those whom they targeted for murder and violence? (251630)

There can be no justification for terrorist violence, and there will be no justification ever given for it. The issues raised in the report published today by Bishop Eames and Mr. Bradley are very serious indeed, and I understand why one of their recommendations has evoked such controversy in Northern Ireland. The Government will consider the report with great care, and we will reply in due course. I believe that some of the recommendations will be acceptable to all parties, such as settling outstanding cases, pushing forward with reconciliation, and having a reconciliation fund that will help different groups to come together so that we can get away from the incidents of the past. I will never forget the thousands of innocent victims in Northern Ireland. I know that the hon. Gentleman speaks for the whole community in Northern Ireland when he says that we must respect the fact that innocent people lost their lives, and that that should never be forgotten.

Does the Prime Minister recall that in the 1980s this country was the world leader in the development of clean coal technology via the fluidised bed plant at Grimethorpe colliery in my constituency? That was until the Thatcher Government pulled the plug on the funding. We now have another opportunity to lead the world, but this time in the development of carbon capture and storage. Will the Prime Minister reassure the House that, in contrast to what the Tories did with clean coal technology, this Government will not let the country down on that important issue?

My hon. Friend is absolutely right. History will show that we did need coal, and we did need the new coal technologies. I am sorry that in the ’80s the clean coal technology projects were abandoned in that way. However, we are now looking at carbon capture and storage. He is absolutely right that this is a transformational technique for dealing with carbon emissions. We will make an announcement in due course and try to persuade our European colleagues, who have set up a fund for the purposes of sponsoring carbon capture and storage, that Britain deserves to have one of the first demonstration plants.

Q6. Which of these should concern the Prime Minister the most: powerful criticism of the south-west regional spatial strategy by hon. Members of all parties; the fantasy economic growth rate of 3.2 per cent. per annum that it is using; the green light that it has given developers to neglect the social urban and village housing that we actually need and head straight for treasured local countryside and green belt, damaging everything—[Interruption.] (251631)

Order. The hon. Gentleman must ask a question. [Interruption.] Well, perhaps the Prime Minister can try to answer it now.

May I say that in the hon. Gentleman’s constituency, even after the recent rises in unemployment, long-term unemployment is still 75 per cent. down on what it was in 1997? We will of course look at what he says about the strategy and all the facts that he brings to bear on it, but no Government have done more to support industry and public investment in the region, and we will continue to do so.

Q7. The Corus job losses are a bitter blow, and all our efforts must now be dedicated to helping the steelworkers and their families. But even in this difficult time, should not our message be that Britain is the right place to invest and the right place to grow a business, and that the British people are worth backing? Despite the doom-mongers opposite, our society is not broken and we are determined to come through this economic downturn successfully. (251632)

Yes. Those who talk Britain down will regret doing so, because we are a resilient and determined society. We know that we can come through these difficulties, and we know also that we have the industries that are the basis for future growth. I believe that the British people will come together around the plan that will take us through this downturn.

In 1997 the Prime Minister said that he “relished” the prospect of abolishing the “unaccountable and unelectable” Members of the House of Lords. Why is it that after 12 years of a Labour Government we still have an unelected Chamber, double standards on financial disclosure and no way of removing peers who break the law?

We have put forward our proposals for the reform of the House of Lords. They were in a paper that was issued a few months ago. In that paper there is also the proposal on sanctions for Members of the House of Lords who commit criminal offences. Baroness Royall has today put forward proposals for new codes of conduct and for new rules that include the ability to expel Members of the House of Lords from their duties if they are guilty of an offence, and she has said that in the cases that we now know about, she is prepared to bring forward emergency sanctions to deal with those issues. I believe that when a problem is identified, we are taking the action necessary.

Q8. What assurances can the Prime Minister give my constituents that Government-funded construction projects such as the Biddulph health centre in my constituency will go ahead as soon as possible? These projects will give a much-needed boost to the construction industry and, in the case of Biddulph, ensure that my constituents have a really important health centre for their health needs. (251633)

I believe that that is a £10 million project that will help my hon. Friend’s constituents and bring better health care in her constituency. The important thing that the Health Secretary is making absolutely clear is that these health projects are moving forward. We are not cutting investment in them, they are moving ahead, and all the health service investment that we want to see happen has been budgeted for and will go forward. It cannot be said that a party that wants to cut public expenditure and public investment has any answers to the problems of our country.

Q9. One way to stimulate the economy in the north and south, tackle pollution and reduce the demand for increased airport capacity would be to invest in a national high-speed rail link. Why, after 12 years of this Labour Government, are we still waiting? (251634)

The hon. Gentleman will know that when the Secretary of State for Transport announced the proposals on Heathrow, he also announced our proposals to set up a company to pursue a high-speed rail link, and that is exactly what we intend to do. We are prepared to make a commitment to that project, and all the work that is now starting is designed around getting high-speed rail links moving forward.

Q11. What are the implications of the economic downturn for the private finance initiative, and will my right hon. Friend consider investigating the PFI contract with the Norfolk and Norwich hospital to see whether it might be a good deal to buy it out at this stage? (251636)

The Treasury is looking at PFI issues that arise from the loss of lending capacity in the economy, but the Health Secretary assures me that the project that my hon. Friend mentioned will go ahead.

Q10. If all our problems come from America and the rest of the world, why is the pound falling so sharply against the dollar and the euro? (251635)

If I could just say—[Hon. Members: “Answer!”] The experience of targeting the pound and the exchange rate has not been particularly beneficial for this country. Targeting the Deutschmark and the exchange rate mechanism, and then membership of the ERM, did not work. So we are not targeting the pound, but inflation. That is the Bank of England’s role, and I believe that it is best way to bring about a recovery in the economy. I caution the hon. Gentleman and his party against any policies that would target sterling.

Q12. My right hon. Friend will be aware of proposals in the Welfare Reform Bill to oblige drug addicts to accept treatment and rehabilitation in order to receive their full benefits. What can he do to persuade the Scottish National party Administration in Holyrood that that policy is both popular and the right thing to do? (251637)

I would urge all councils to engage with the Department for Work and Pensions on those issues. The policy recognises that just keeping drug addicts on benefits is not the answer to their problems. They need the treatment that is necessary and the support for that. That is exactly why we have changed the policy to make it possible for people to get the treatment and to give them support while they are doing that. That is the right policy for the future of this country, whatever the Scottish National party says.

What is the sterling value of an ounce of gold today, and what was it when the Prime Minister started selling our gold reserves in July 1999?

It was right to diversify our portfolio. [Hon. Members: “Answer.”] One thing we did was buy euros, and the hon. Gentleman will be sad to hear that the value of euros is up in our portfolio.