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Commons Chamber

Volume 487: debated on Wednesday 28 January 2009

House of Commons

Wednesday 28 January 2009

The House met at half-past Eleven o’clock

Prayers

[Mr. Speaker in the Chair]

Oral Answers to Questions

Wales

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—

Engagements

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.

Opposition Day

[2nd Allotted Day]

Heathrow (Third Runway)

I beg to move,

That this House urges the Government to rethink its plans for a third runway at Heathrow Airport and to give full consideration to alternative solutions; regrets the Government’s heavy reliance on data supplied by BAA in assessing the case for expansion and notes the likely forthcoming break-up of BAA’s ownership of three of 5 London’s airports following the investigation by the Competition Commission; believes that the consultation paper Adding Capacity at Heathrow Airport was deeply flawed, as it paid insufficient regard to the costs of air and noise pollution in the surrounding areas and the commitment to curb carbon dioxide emissions to tackle climate change; regrets the fact that provisions to improve high-speed rail lines from 10 Heathrow to major cities have not been fully explored, along with the potential of other UK airports to handle more long-haul flights; and urges the Government to initiate a consultation on a new national planning policy statement on the theme of airports and high-speed rail.

I welcome the support of the Liberal Democrats for the motion, which is lifted verbatim from early-day motion 2344, tabled last year by the hon. Member for Selby (Mr. Grogan), with cross-party backing. The issue is of grave importance, and rightly spans party boundaries.

Let me first explode a myth peddled by the Secretary of State. To oppose a third runway is not to oppose flying. We recognise the importance of aviation and the benefits of flying for our economic competitiveness and for holidaymakers. We applaud the work of the budget airlines in bringing air travel within the reach of a wide range of people, for whom it would have been a distant aspiration less than a generation ago.

However, there comes a time when stuffing thousands and thousands more flights and millions and millions more passengers into the same overcrowded corner of the south-east of England starts to impose an unacceptable cost on our environment and our quality of life. We believe that Heathrow needs to be better, not bigger. That is why we and so many others oppose the Government’s plans to build a third runway.

I regret that the hon. Lady’s party has chosen to make a political football out of a cross-party early-day motion. Will she tell us whether the Conservatives would consider a proposal for a new airport for London and the south-east in the Thames estuary, and whether they oppose the expansion of regional airports?

We are not making a political football out of Heathrow. We are giving the House the opportunity to vote on the issue, which the Government would not give us. In response to pressure from both sides of the House, we thought that it was right that hon. Members, particularly those whose constituents are directly affected by this important decision, should have the right to vote on this matter. On the Thames estuary, that is not an option that we are looking at, at the moment. I shall come in due course to the subject of regional airports, but we acknowledge the possibilities and benefits that could come from the proportionate and carefully considered expansion of regional airports.

The hon. Lady will appreciate that many people are concerned about the impact on climate change of the expansion of air transport anywhere. Can she explain to the House the difference between the impact of expanding flights at Heathrow and that of doing so elsewhere?

The difference between Heathrow and so many other airports is that its flight paths cover an incredibly densely populated part of the south of England. The environmental problems associated with Heathrow expansion, as I shall explain, are dramatically wider than just climate change. Yes, climate change is a concern for many of our constituents, and for all Members of the House, but with Heathrow, we have to take into account the fact that nitrogen dioxide pollution is already a serious problem. The Environment Agency has warned that a third runway would increase the risk of serious illness and early death. Those are environmental considerations that we cannot, and should not, ignore around Heathrow.

Does not my hon. Friend think it amazing that the Government have not given us an opportunity to vote on this issue, given that their own Environment Agency has said that the expansion of Heathrow is environmentally unacceptable, and given that the Government have set up a Committee on Climate Change and are supposed to be keen on dealing with emissions? In the light of all that, does she not agree that this democratic Parliament should have the last word and a proper vote on the matter in Government time?

Absolutely. It is regrettable that the Government have refused to give us the vote that we need on this issue in their own time. It is also regrettable that they are proposing that the ultimate decision on the issue will be made by an unelected, unaccountable quango.

Does the hon. Lady think that it makes environmental sense for aircraft to spend half an hour flying from Manchester to London, and then to spend another three quarters of an hour circling London because there are not enough runways to land on?

That is one of the reasons why we are providing a viable alternative to a third runway—namely, a top-class, high-speed rail link between Leeds and Manchester and London.

I have taken a lot of interventions, and I shall take more later in my speech, but I want to make some progress now.

I want to look at four key problems: air pollution, road congestion, aircraft noise and carbon emissions. I shall then look at the economic issues, and finally at the alternative ways to make Heathrow a better airport.

Not at the moment.

I shall start with air pollution. A massive increase in flights at Heathrow would intensify a serious problem with nitrogen dioxide pollution at an airport that is already in breach of the EU pollution limits that are due to become legally binding from next year. The damage to health caused by nitrogen dioxide is well established and, as I have already said, the Environment Agency has warned that proceeding with a third runway would lead to an increased risk of serious illness and early death in a densely populated area around the airport. It is therefore a matter of grave concern that the Government are now seeking a derogation from the air quality directive, despite their promise that they would not let their expansion plans undermine their efforts to comply with it.

For the benefit of the House and the country, will the hon. Lady set out the criteria by which she would judge any decision on airport expansion in air quality terms? Does she stand by the terms of the EU air quality directive?

I am calling on the Government not to try to wriggle out of the obligations that they have undertaken under the air quality directive; they signed up to it. I am afraid that this is one environmental precondition that the Government will find it impossible to wish away.

No, I have already answered. That precondition could yet provide a legal bar to building runway 3. Of course, a major contributory factor in the nitrogen dioxide problem is surface traffic generated by passengers travelling to the airport, which takes me to the second major problem with the third runway—road congestion.

The plan set out in the congestion consultation document envisaged an increase in passenger numbers at Heathrow to 122 million a year—nearly double current levels. On the Government’s own figures, that would mean that passenger-related car journeys at Heathrow climbed to 53.4 million. Road congestion around Heathrow, as anyone who has travelled there will know, is already a major problem, and the Government’s plans will only make a bad situation worse—not just for people living around the airport, but for those attempting to use the M4 and the M25 for longer journeys. Neither the consultation document nor the Secretary of State’s recent announcements contain any of the convincing proposals for a major shift out of the car on to public transport that are needed to deal with the congestion or the air quality problem. Indeed, paragraph 56 of the document “Decisions following consultation” states:

“The Department is clear that a detailed surface access strategy is not a prerequisite for a policy decision and would be a matter for the airport operator as part of a planning application in due course.”

According to the Department for Transport, that is BAA’s problem, not its problem.

Again, may I give the hon. Lady the opportunity to set out on behalf of her party to the House and the country what criteria on road congestion she would use in order to determine these issues and related matters affecting other airports?

I have answered that question already. Actually, we have set out plans to build a new Heathrow rail hub, close to the airport, enabling many people to get the train directly from their home town to the airport; connecting Heathrow directly to the main Great Western main line; and enabling people living in cities as far apart as Bristol, Exeter, Cardiff and Swansea to get a train directly from their home town to the airport. That is an effective strategy to reduce congestion and nitrogen oxide emissions, in the absence of the Government’s having proposed any effective strategy at all. Let us look at the record. BAA has yet to—

No.

BAA has yet to meet the Government’s 40 per cent. target for public transport use, which it was supposed to achieve eight years ago. The proportion of people using public transport to access Heathrow has actually fallen in the last couple of years, and the company has downgraded its own targets on the issue. BAA has talked about Airtrack for years, but there is no guarantee that the scheme will go ahead, and London councils of all political complexions, representing all 33 of the city’s local authorities, do not believe that the Piccadilly line will be able to cope with expected uplift in passengers.

Thirdly, I turn to an even more serious problem: noise.

No.

In debates in the Chamber, hon. Members representing areas as far apart as Maidenhead and Windsor in the west and Vauxhall, Brixton and Greenwich in the east have expressed their concerns about the impact that aircraft noise from Heathrow is already having on their constituents.

Not at the moment.

According to the local authorities in question, 114 schools are already seriously impacted by Heathrow aircraft noise, affecting at least 100,000 children.

I am grateful to the hon. Lady, who is also my parliamentary neighbour. Her motion does not refer at all to mixed mode, but does refer to “alternative solutions”. Under mixed mode, her constituency and mine would probably have been affected by noise, so why does her motion not rule out mixed mode as one of the alternative solutions, as the Government have already done in their announcement, which is to the benefit of her constituents and mine when it comes to noise?

One of the reasons why mixed mode is not there is that the Government have apparently promised us that mixed mode is not going to happen. I hope that the hon. Gentleman is not suggesting that that promise is not worth the paper that it is not written on. Many people might actually agree with him on that. Obviously we welcome the Government’s retreat on mixed mode, which would have had a catastrophic impact on people’s quality of life across a huge area. As he says, it would have impacted negatively on people living in my constituency and in his. So yes, I welcome the Government’s decision to drop their plans for mixed mode, but it remains to be seen whether this promise will prove any more durable than so many others that have been subsequently abandoned when the pressure for expansion has risen again.

Not just at the moment. The simple fact remains that a new runway with a massive uplift in flights and a new flight path over a densely populated area will make an already serious noise problem at Heathrow a whole lot worse.

We all recognise that noise plays a part in these decisions; that is why, necessarily, they are difficult. Will she set out for the benefit of the House and the country what—[Interruption.] I am very sorry, but there is an important question here. The Conservative party cannot say that it rejects expansion without describing the basis upon which that decision is taken. If the party wants to be taken seriously, it has to give the criteria. Will the hon. Lady say whether or not she supports the noise criteria set out in the 2003 White Paper?

I do not think that this is a point of order, but I ask the right hon. Gentleman to give it to me.

The Secretary of State is in no position to make assertions or claims about, or to ask questions about, the basis for noise calculations. His credibility on noise is completely undermined by the documents revealed under the Freedom of Information Act 2000 by the assiduous work of my hon. Friend the Member for Putney (Justine Greening), which show his officials deliberately reverse-engineering and re-forecasting the data to try to meet the tests and get the answers that Ministers wanted.

My hon. Friend is making a very powerful case against Heathrow expansion and in favour of high-speed rail. Surely rail would be a better alternative to short-haul flights for both the environment and noise nuisance?

I completely agree with my hon. Friend, and I will respond to that point in more detail later.

The Secretary of State’s assurances on noise simply lack credibility because the Government have made every effort to duck their promises in the past. Let us take their assurance that expansion would not lead to an increase in the area covered by the 57 dB noise contour. Even setting aside the criticism of the validity of that contour—such criticism came from both the World Health Organisation and the DFT’s own research study, “Attitudes to Noise from Aviation Sources in England”, or ANASE—the Government use the 2002 base year for their calculations, a year when Concorde was still flying. The way in which the Civil Aviation Authority’s noise model operates means that the demise of Concorde allows the headroom to give the green light to major increases in flight movements by conventional planes, without exceeding the noise tests set.

Not just at the moment.

Even more controversially, as I have said, the documents obtained under the Freedom of Information Act show the DFT and BAA working closely together on a re-forecasting, and reverse-engineering the projections for future flight mix to try to meet the tests that the Government had set and get the answers that Ministers wanted. Even then, the Government are still relying on a massive leap forward in aircraft technology to enable them to reconcile their promises on noise with the increase in flights that they want to see, including the delivery of the now notorious twin-engine “green jumbo” which is not in the design portfolios of either major aircraft manufacturer, and yet is expected by the DFT to replace completely all 747s by 2030 and virtually all units of Boeing’s successor to the 747, which is not even on the market yet.

It is this history that undermines the Government’s credibility when they make more promises on ‘green slots’. When challenged, the Secretary of State was unable to give one single example of a model of plane green enough or clean enough to qualify to use the new slots, and it is a major concern that documents published alongside the statement on Heathrow contain no explanation of how the system for regulating the use of new slots will work. Most controversially of all when it comes to noise issues, The Sunday Times recently reported that figures passed to the Civil Aviation Authority by BAA predict an increase in flights between 11 pm and 7 am from about 27,300 in 2006 to 35,000 once the third runway is operating at full capacity—an increase on today’s levels of more than 25 per cent. We strongly and successfully resisted the Government’s attempts to lift the cap on night flights, which can have such a corrosive impact on quality of life. Yet again I urge the Secretary of State to guarantee the future of the ‘night cap’, and to drop his plans to review it.

Then, of course, there is the climate change impact of a third runway. With 222,000 more flights, the airport could well become the largest single source of carbon dioxide in the United Kingdom, emitting nearly 27 million tonnes every year. According to research by Greenpeace, by 2050 emissions at that level could take up around a fifth of the entire UK carbon budget under the Climate Change Act 2008. Even with the increase in flights restricted to 125,000, and even if optimistic estimates of efficiency gains are factored in, Heathrow could still consume approximately one eighth of the nation’s total carbon budget by 2050.

Can the hon. Lady assist the House by telling us what carbon dioxide emissions would result from the proportionate expansion of regional airports to which she has referred?

I shall say something about regional airports shortly, but I think the hon. Lady is wrong to dismiss their importance. They can have a significant impact on regional development, and as I have said, they can play a part in relieving pressure on capacity in the south-east.

I have answered the question.

While the Secretary of State may have placated his Cabinet colleagues, I am afraid that his proposed climate change safeguards do not stand up to scrutiny. Let us take the proposed 125,000 cap on the use of the new runway. There is no guarantee as to how long it will last. It is expressly stated to relate to the initial use of the runway, and a review is promised in 2020, but it is unlikely that a new runway—

Why should we believe that the Government will take any notice of the Committee on Climate Change, given that they are currently ignoring the Environment Agency, the Sustainable Development Commission, a huge coalition of environmental groups, Lord Smith, who is one of their own former colleagues and who chairs the Environment Agency, and their own vice-chairman for the environment, the hon. Member for Reading, West (Martin Salter)?

I strongly agree with my hon. Friend about the role that regional airports can play. I think she is aware of the two misconceptions about Conservative policy in this regard. One is that the party is opposed to aviation per se; she has already dismissed that idea, which is welcome. The other is that we would rule out any expansion of aviation capacity in the south-east. Will she now debunk that myth as well, for the benefit of the House?

My hon. Friend is right. We do not rule out the possibility of airport expansion in the south-east; nor, as he says, are we against flying.

Let us return to that 125,000 cap. As I was saying, there is no guarantee as to how long it will last. There is to be a review in 2020 anyway, and it is unlikely that a new runway will even have been built by then. In reality, the Secretary of State’s assurance about 125,000 flights takes us no further than the promises that Labour has already made, many years ago.

In a moment.

The consultation document acknowledged that the full uplift to 702,000 flights could not take place until 2030 in any case, as not even the Government, with their optimistic approach to aircraft technology, believe that there is any prospect that before then technology will deliver aircraft clean or quiet enough to comply with the promises on noise and pollution that Labour made as long ago as 2003.

On the subject of carbon, the hon. Lady said something very interesting. She said that she did not rule out aviation expansion in the south-east. She has also said this:

“We recognise that the economic arguments for expanding Heathrow are much stronger than any other airport in the south-east”.

How does she reconcile those two positions?

That last statement does not represent my view. I am happy to acknowledge that my thinking on the economic arguments relating to Heathrow has moved on. [Laughter.]

I make no secret of the fact—indeed, I said this on the “Today” programme—that I once thought that the economic arguments in favour of expansion at Heathrow were stronger than they are. Having looked at the detail, I find the economic arguments wholly unconvincing.

This has been a most illuminating exchange, I must say. The whole country will now realise that the hon. Lady is disowning a statement that she made on 22 November 2007—a statement made 15 months ago. How can we possibly trust what she is saying now?

I believe very strongly that the economic arguments in favour of Heathrow expansion are not convincing, following detailed reflection on them.

Was it not Keynes who said “When the evidence changes, I change my mind”? I congratulate the hon. Lady on having had a change of heart on this issue. I am still unsympathetic towards her view that airport expansion is possible in the south-east, but I hope she may come to review that as well.

I am grateful to the hon. Lady for the point that she has made.

Let me return again to the 125,000 cap. I am afraid that the credibility of flight caps is undermined by the long list of broken promises that has characterised the history of Heathrow, and by the fact that Labour was pushing hard to lift the flight cap that it promised to impose when it gave the go-ahead to terminal 5, years before the terminal had even opened its doors for business.

Then there is the target of reducing aviation emissions to below 2005 levels by 2050, not mentioned in the voluminous document published alongside the Secretary of State’s statement earlier this month. I am afraid that this has all the hallmarks of something cobbled together at the last minute to paper over internal divisions.

No. I have given away to the Secretary of State already. He will have his chance later.

Leaving aside the limited impact of having a target so far in the future unless demanding interim milestones are imposed, let us look at page 84 of “UK air passenger demand and carbon dioxide forecasts”, which was published alongside the Secretary of State’s statement. Table 3.7 predicts that by 2030 Heathrow will emit 23.6 million tonnes of carbon dioxide, and that the combined total for all the London airports will be 31.6 million tonnes. Yet according to the target set by the Secretary of State, in 2050 the entire industry must emit less than 37.5 million tonnes, the 2005 level. The Government’s calculations, as set out in that document, leave no room at all for regional airport expansion, which would need to be constrained below the 2005 level to avoid breaching the limit. Some regional airports might even have to close to allow for the uplift in flights in the south-east, even if we assume no emissions growth at Heathrow between 2030 and 2050.

No. I have been very generous in giving way, and I want to make some progress now.

Whereas the environmental case against the third runway is compelling, the economic case, as I have said, is unconvincing. It is astounding that the Oxford Economic Forecasting study on which the current economic case is based fails to make any attempt to deduct the costs of increased air pollution, aircraft noise and a massive increase in congestion on some of the United Kingdom’s most important roads. Nor is any attempt made to assess the carbon cost of inbound international flights. The CE Delft study for HACAN ClearSkies disputes the £120 value that OEF claims every passenger arriving in the United Kingdom contributes to the economy. It also concludes that OEF overestimates the extent of suppressed business demand for air travel at Heathrow. Indeed, the Government’s whole analysis completely ignores the huge efforts being made to reduce the need for business travel. According to a recent survey conducted for the World Wildlife Fund, 89 per cent. of the FTSE 350 companies interviewed expected to cut flights over the next 10 years.

Not at the moment.

Also worth noting is the success of initiatives such as Project Icarus, which asked companies to pledge to reduce their travel carbon footprint by 60 per cent., and which has attracted significant support from major blue chip companies.

No. I have been very generous in giving way.

In a recent poll of small businesses conducted by Continental Research, 95 per cent. said that expanding Heathrow would not provide any benefits for their business. Despite Frankfurt’s extra runways, London has captured a dominant share of financial services business over recent years, and a simplistic comparison between Heathrow and airports such as Charles de Gaulle and Schiphol completely ignores the fact that London is served by a total of five busy airports. The south-east system of airports collectively offers a wider choice of flights to more destinations than either CDG or Schiphol.

I thank the hon. Lady for giving way. Does she recognise the importance of Heathrow as our only international hub airport, and does she also recognise that it is used by businesses and that they are urging that it should run better, which means it should have more capacity so that our economy can grow in our very difficult economic circumstances?

Of course I recognise the importance of Heathrow and that business wants Heathrow to be better, but businesses are divided over the third runway issue. I hope I can assure all businesses that, as I will explain, we have concrete and credible plans to make Heathrow better by delivering a top-class high-speed rail link connecting the terminals directly with the European high-speed rail network and thereby providing a high-speed rail alternative to short-haul flights. As the hon. Lady will know, it has been demonstrated in the rest of Europe that there is a clear opportunity for high-speed rail to provide a viable alternative to short-haul flights. By providing that alternative, we would relieve overcrowding at Heathrow and make it a much better airport for both businesses and passengers.

Does my hon. Friend share my belief that the fact that this Government have failed to do anything on high-speed rail after 11 years in charge, while at the same time we have seen expanding networks in France, Germany, Italy and Spain, is a shocking indictment of their record on this issue?

Yes, and I was very concerned that when just a year or so ago the Government published their 30-year strategy for the railways, it had no place at all for high-speed rail.

Possibly later.

Both the OEF study and the Government’s entire approach are fundamentally flawed by a refusal to give serious consideration to alternative ways of dealing with the problems that passengers all too often experience at Heathrow. That is the essential thrust of early-day motion 2344 and the motion before the House this afternoon.

Not at the moment.

Much of the travel misery that so many people experience at Heathrow has more to do with poor customer service than with a shortage of runway space. The most notorious example of such poor service is the fiasco that accompanied the opening of terminal 5. Breaking up BAA’s monopoly over so much airport capacity in the south-east and allowing passengers to vote with their feet and choose an airport run by a different operator should help drive improvements in service quality across all of London’s airports.

The Government’s approach to Heathrow underestimates the potential that regional airports have to relieve pressure on capacity at airports in the south-east. Giving people a wider choice of destinations from their home airport has advantages in terms of passenger convenience and the regional balance of our economy. A switch to more direct flights from regional airports reduces emissions by cutting out the interim leg and relieves the road congestion caused by people having to drive to the south-east’s airports. Sensible and proportionate expansion of regional airports on a case-by-case basis, with full regard to local and environmental planning concerns, should be an important part of any strategy to relieve overcrowding problems at Heathrow.

In proposing a new high-speed rail line connecting Heathrow terminals directly with Birmingham, Manchester, Leeds and the channel tunnel link to Paris and Brussels, we have found a further means of relieving Heathrow’s overcrowding problems and one that does not inflict—[Interruption.] I hear comments about Scotland. I believe what we are proposing would be an excellent foundation for a high-speed network that one day would stretch across the country and up to Scotland. We have made a firm commitment to going as far as Manchester and Leeds, whereas the Government are talking only in vague terms about possibly going as far as Manchester.

I am grateful to the hon. Lady for giving way. Like her, I have a strong interest in railways. She seems to have forgotten that we do have one high-speed line—the line from London to the channel tunnel. It was designed as a private line by a former Conservative Government, but that collapsed and Government had to intervene. How would the high-speed rail link that she is proposing be financed?

We have set out detailed plans for the costings of our high-speed rail line.

In our proposal for a high-speed rail link, we believe we have found a means of relieving Heathrow’s overcrowding problems in a way that does not inflict the damage that would clearly come with runway 3. Evidence from Europe clearly shows that high-speed rail provides a viable and attractive alternative to competing flights.

The hon. Lady mentioned the high-speed rail links, which we in Scotland would be very keen to see, but I understand that at present Conservative policy is to go only as far as Leeds. Can she give us an idea of what the policy would be for extending these lines to Scotland? Given the cost estimate of £44 billion, what time scale can she give for these important links, which would cut out the need for much air travel from the central belt?

I recognise the advantages of taking a line all the way to Scotland, but we have to be realistic about what we can promise, and we have to build such systems in stages. The history of our transport system demonstrates that we cannot deliver the whole lot all in one go. It is clear that constructing, and committing to, the link that we have proposed will be a major step along the road to delivering that wider-scale network, one day including, I very much hope, a full link between Scotland and London.

The hon. Lady has conceded that under a Conservative Government there could be some expansion in the south-east. Will she tell the House the level of carbon emission she would permit before taking any such decision on expansion?

Today’s debate is about Heathrow. It is about the Government’s reckless decision to proceed with a third runway, which would significantly undermine this country’s ability to meet its target of cutting carbon emissions by 80 per cent. by 2050. No matter what they say, the Government cannot get around that problem.

Whether it is Paris-Brussels, Paris-Marseille or Madrid-Malaga, the arrival of high-speed rail as an alternative to the plane has had a dramatic downward impact on flight numbers. BAA’s own figures confirm that there were about 63,200 flights between Heathrow and Manchester, Leeds, Brussels, Paris, Amsterdam and Rotterdam in 2007—all journeys where it is realistic for high-speed rail to replace flying. Freeing up that many slots would provide space at Heathrow equivalent to about a third of the full capacity of a third runway, and more than half the 125,000 uplift that the Government now say should be the maximum permitted usage of runway 3. With the last gap in the high-speed link between Brussels and Cologne about to be plugged, which opens up easier rail travel to German destinations, and with interconnections and through-ticketing improving every day on the European high-speed network, the potential for air-to-rail switching is clearly going to increase even further in the future.

It is clear that high-speed rail is a much less carbon-intensive way to travel than flying. The climate change differential between the two forms of transport will widen with the expected decarbonisation of electricity generation.

Sorry, but no.

Furthermore, the Conservative party believes that as a nation we can no longer put off the decision to start building a high-speed rail network in this country. Our proposal on high-speed rail would bring major advantages for rail users suffering from chronic levels of overcrowding. The boost for jobs would be felt right across the country, but the impact would be particularly strong in the midlands and the north.

The Secretary of State’s apparent conversion to high-speed rail was welcome, but unlike in our proposals, there is no firm commitment, no timeline and no attempt to get a new line past Birmingham. The new rail hub that the Government are considering for Heathrow will apparently be located at Old Oak Common, but a station more than 9 miles away from the airport, at Wormwood Scrubs, simply will not yield the benefits of the innovative proposal we have backed to connect Heathrow terminals directly with the main rail network to the west and the European high-speed network. What the Secretary of State still just does not get is the fact that high-speed rail could be an alternative to a third runway, not a sweetener for it.

In conclusion, I make the following appeal to Members of all political parties. A third runway is not inevitable: there is a better way; there are credible alternatives. To all those who signed early-day motion 2344, I say that this is an important opportunity to ask the Government to listen to the millions of people who care about climate change and the dissenting voices on their own Back Benches, and to drop their plans for a third runway, which could cause such devastating damage to our environment and our quality of life in this country.

I beg to move an amendment, to leave out from “House” to the end of the Question and add:

“notes the Government’s commitment in the 2003 Aviation White Paper to limit noise impacts and to be confident both that statutory air quality limits will be met and that public transport will be improved before expansion is permitted at Heathrow; welcomes the Government’s new enforceable target to reduce UK aviation carbon dioxide emissions below 2005 levels by 2050, and the commitment that increases in capacity at Heathrow, beyond the additional 125,000 movements a year already agreed, will only be approved after a review in 2020 by the Committee on Climate Change of whether the UK is on track to meet this independently monitored target; notes that development at Heathrow will be conditional both on requirements that the size of the 57 decibel noise contour will not increase compared with 2002 and on adherence to the requirements of the European Air Quality Directive; notes the decision not to proceed with mixed mode, thereby ensuring that neighbouring residents will have predictable respite from aircraft noise; welcomes the proposal that new slots at Heathrow should be ‘green slots’ using the most efficient planes; recognises the economic and social importance of Heathrow; and welcomes proposals on ultra-low carbon vehicles and new rail links to the west of Heathrow and new high-speed services from London to the Midlands, the North and Scotland linked to Heathrow, to the benefit of the UK as a whole.”

I set out clearly in my statement on 15 January the key decisions that the Government had reached on the future of Britain’s transport infrastructure, including Heathrow. I do not intend to go over that ground again, although I want to address the main points raised by the hon. Member for Chipping Barnet (Mrs. Villiers). The fact remains—the Conservative party needs to face up to this—that despite her refusal and perhaps inability to answer some very basic questions, she has put forward a policy that lacks coherence, is founded on no clear principles and will do serious damage to Britain’s jobs and economy.

The hon. Lady simply cannot come here and tell Members that the Conservative party would not go ahead with a major project such as the expansion of Heathrow and fail to set out the basis on which that decision has been reached—without being able to set out the criteria for that decision, her argument has no credibility. As long ago as 2003, the Government set out in a White Paper clear criteria for such expansion. On each issue that she cited as one of the reasons for her decision—air pollution, road congestion, noise and climate change—I asked her, I invited her, I implored her to tell this House and the country the basis on which she has taken any decision, but she could not do it. She has not done any basic homework on the matter, and that leads to the clear conclusion—anybody witnessing the hon. Lady’s woeful performance would know that this is the case—that the Conservative party’s decision is dictated by political opportunism of the lowest kind. The Conservative party’s decision, on which she admitted that she has changed her mind, was determined by Conservative central office. It was not taken on the basis of any kind of principle; it represents the worst kind of expedient. Unless she can answer basic questions on the subject, she has no right to represent her party or the country.

I shall tell the right hon. Gentleman the basis of our decision—it was what I set out in my speech: that a third runway would inflict huge damage on the quality of life of millions of people who are already suffering because of aircraft noise and on the quality of life of many people who are already suffering direct health problems as a result of the expansion of Heathrow. We believe that it is deeply reckless and irresponsible to press ahead with a course of conduct that would be so incredibly damaging for our environment and for our quality of life. That is why we oppose a third runway at Heathrow.

Those comments would have some credibility if the hon. Lady could set out the basis on which those assertions are made. She and her Front-Bench team are desperate to get into government, to sit on the Government Benches and to take decisions such as on the third runway, but unless they can set out the basis on which their decisions are taken, whatever they say on these issues simply does not carry any weight. She cannot argue that jobs and this country’s economy should be put at risk by failing to go ahead with the project without being able to give the reasons for that decision. Unless she can set them out—I am about to give her another opportunity to do so—she has no credibility.

If there is no credibility in opposing a third runway—if there is no basis or justification for opposing it—why did 57 of the right hon. Gentleman’s own colleagues sign early-day motion 2344 and why has he lost a member of the Government only this morning over this issue?

If the hon. Lady is not worried about jobs and the economy—[Interruption.] Well, the position of the Conservative Front-Bench team—I heard some sedentary comments—appears to be that a list of environmental and other organisations will be cited as a reason for not taking a decision on the runway. If that is the policy of the Conservatives, they should articulate it, instead of blustering as the hon. Lady has done.

Let us consider the impact of the go-ahead decision on jobs and the economy of this country, because hon. Members should not simply take my word for how important this decision is for the country’s economic well-being. They should listen to David Frost, of the British Chambers of Commerce, who has said:

“This sends a strong message to the world that we are a nation open for business.”

Brendan Barber, of the TUC, has said:

“Aviation is key to the UK economy and will support the creation of many more quality jobs.”

Miles Templeman, of the Institute of Directors, has said:

“A third runway is vital to maintaining the UK’s economic competitiveness, and will put us in a good position to win business from the key markets such as India and China when the upturn comes.”

I am sorry that the right hon. and learned Member for Rushcliffe (Mr. Clarke) is not here, because I really wonder what he must think as he looks across his party—a party that was once capable of taking economically serious decisions. He is a man who sat in Conservative Cabinets with Margaret Thatcher and John Major, and who is supposed to speak up for business and jobs inside the Conservative party. He now apparently finds himself, as do the entire Conservative Front-Bench team, at odds with representatives of both employers and employees. It cannot often be said, so let me repeat that the CBI, the TUC, the Institute of Directors and Unite are all on exactly the same side of the argument—they are united in favour of the action necessary to support British jobs and the British economy. That is something that the Conservative party is giving up on.

No responsible Government can ignore the importance of Heathrow to our international connections, to the 100,000 jobs that it supports directly or indirectly and to the ability of London and the UK’s nations and regions to compete for business and commerce. Every great trading nation needs access to the growth markets of the future. Unlike any of the other UK airports, Heathrow serves destinations such as Mumbai and Beijing and it provides more frequent services to key international destinations. In these times of economic slowdown, those links become even more crucial in supporting British jobs and helping to revitalise our economy. What does it say about the Tories’ economic policy that they will today turn their backs on 100,000 jobs at Heathrow airport?

If the Secretary of State is so convinced on the rightness of his argument, why is it that when we invited him to come to our constituencies to meet the people most affected by this, the offer we received was that three people—that is all—to be nominated by an MP and from each of the affected constituencies, could come to this place to discuss the matter with Ministers and civil servants?

I would have been delighted to make such visits, but unfortunately, and unusually for me, I found my presence in such demand in so many different places that it was necessary to find a means by which such discussions could take place. I would be delighted to meet the hon. Gentleman and representatives of his community, but as I say, I could not spend the next year touring west London, much as I would have been delighted to do so.

May I deal directly with the motion? I listened carefully to the comments that the hon. Member for Chipping Barnet made, but I still do not understand how her party’s policy addresses the difficult questions that have been raised by the hon. Member for Uxbridge (Mr. Randall) and others on her own Conservative Benches. I simply do not know how she answers those questions about noise and the impact on local communities, and neither does the House nor the country. [Interruption.] It is no good Conservative Members saying that we do not know, because those answers have been set out in a detailed White Paper. I invite those hon. Members who clearly have not read it to have a look at the criteria, because if they were to do so, they would see that a process has been followed for taking the decision—a process that the hon. Lady has completely failed to set out.

I am not going to ask the right hon. Gentleman to come to meet my constituents, but will he give them comfort that the Government will not reconsider the Thames estuary airport option, which is being promoted by a number of senior Tories?

I will be dealing with that in due course, but the hon. Gentleman can take it that we will not be reconsidering that particular option.

May I, again, tempt the hon. Lady to answer some basic questions about her proposals?

I shall give way in a moment.

First, does the hon. Lady recognise that our constituents and British businesses demand that they should be able to travel by air and that there is growing demand from our constituents and from British business for such services? Her own leader, the right hon. Member for Witney (Mr. Cameron), made that point quite clearly in 2007, when he said:

“It’s unrealistic to think aviation is not going to grow. Business requires a huge amount of travel and we live in a world in which people enjoy going on holiday. As people get richer there is going to be growth in aviation”.

Does she accept that argument? She says that she does.

My right hon. Friend mentioned the decision-making process. My constituents are not particularly interested in party political knockabout; we want absolute clarity about the process that will be used to make the decision. I would welcome the opportunity to come back to the matter just to get the clarity. My understanding is that it will be dealt with by the new Infrastructure Planning Commission. If that is the case, it will require a new national policy statement. Will he explain the process of arriving at that new national policy statement given that the aviation White Paper is now six years out of date? If we could get clarity on that today, it would be incredibly helpful.