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Oral Answers to Questions

Volume 489: debated on Wednesday 18 March 2009

Scotland

The Secretary of State was asked—

Credit

I am in regular contact with Scottish banks and businesses on the economy. Since the start of the year, the Government have introduced a range of measures to help to increase liquidity and to ease credit conditions for business.

Following the announcement by RBS-NatWest on 5 February that it will make a further £250 million available for small and medium-sized enterprises in Scotland, the Secretary of State said:

“I shall be talking to other lenders in Scotland over the coming days to encourage them to follow the example being set today.”

How many has he persuaded and how much brass have they come up with?

I met the chief executive of the Lloyds group last week in Edinburgh, and the hon. Gentleman will be pleased to know that Lloyds has announced the availability of £2 billion under similar terms.

Does my right hon. Friend agree that the decision of two English local authorities to sue RBS in American courts is welcome? Will he encourage Scottish local authorities that have similar concerns to do the same? Will he assure me that the Government will be as accommodating, if necessary, to any future extradition application from America for RBS bankers as they were in the case of the NatWest three?

My hon. Friend will understand why I do not want to comment on any specific impending—or possibly impending—legal process. After centuries of success, the Scottish banks were moments from collapse. Without the intervention of the UK Government and, importantly, the UK taxpayer, the stability that we wish to return to the banks would not be possible. My hon. Friend will understand if I am not tempted to join him in speculating on the other matters that he raised.

The success of the private and public sectors is inextricably linked in the years ahead as we go through the downturn. What assessment have the Government made of their plans to take £1 billion out of the Scottish economy in cuts?

That is tired rhetoric from the Scottish National party. The Scottish Government have more money than ever and, from today onwards, they will have, over the next two years, more than £2.5 billion more. It is the first time in a spending review period that the Scottish Government have £100 billion.

The tiresome obsession with grudge is wearing thin with the people of Scotland. We are in the recession together and we will get out of it together. Scotland is stronger because of the United Kingdom, which is and will remain the most successful union of nations anywhere on the planet.

Does my right hon. Friend agree that banks are the main source of credit to business? That is why he is right to remind hon. Members of the important intervention that the Government made to stabilise the banking system. Does he agree that all the banks, not least RBS and Lloyds-HBOS, now have an obligation to do all they can to support Scottish business and business generally throughout the UK?

I agree with my right hon. Friend, and RBS and the Lloyds group have committed to lending more billions of pounds through the enterprise finance guarantee scheme. Legally binding—that is important—agreements have been made under the asset protection scheme for RBS to lend an additional £25 billion and for Lloyds to lend an additional £14 billion. As he said, it is important for the money to start to flow to Scottish businesses and Scottish mortgage holders so that we can have some return to stability. I think that he appreciates that it was important from October onwards to save the banks from collapse. Our action has helped to ensure that.

The Secretary of State knows that one of the jewels in the Scottish economy’s crown is the exports that have built up on the back of skills learned in the North sea. Does he understand that exploration in the North sea is drying up because of the banks’ failure to lend—the new model relies on bank lending? The Government could step in to ease cash flow by paying early the tax relief that they normally pay when production starts, so that the companies get better cash flow to allow them to continue to explore.

The hon. Gentleman makes an important point. My right hon. Friend the Secretary of State for Energy and Climate Change and I met representatives of Oil & Gas UK to discuss those specific matters and we will talk to them again. I am happy to raise the concerns of the oil and gas industry in Scotland with the banks—that dialogue will continue. I also agree that the export market is crucial for the Scottish economy as we try to recover. I have the honour next week of leading one of the largest ever business delegations from all sectors of the Scottish economy to China. That is also an important initiative.

Does my right hon. Friend agree that, although credit is important to business, so is the ability of Scottish business to get involved in emerging markets? For example, Aspen Solutions in Cumbernauld has won a Department for International Development contract to send IT to Sierra Leone to help to build that country’s infrastructure. What is he prepared to do to assist other such companies?

My hon. Friend is characteristically correct on that matter. I should declare an interest, because I think that Aspen Solutions provides the photocopier for my parliamentary office in East Renfrewshire. For the avoidance of doubt—[Interruption.] It is a very busy photocopier, or it certainly will be in the next few months. The point that my hon. Friend makes is entirely right. Small businesses in particular need to be able to access Government procurement and the contracts and portals that are available. In the past, small companies in particular have had to get through too much bureaucracy, which is why it is important that the UK Government and the Scottish Government find new opportunities to enable small businesses to compete for Government work.

Small Businesses

2. When he last met representatives of small businesses in Scotland to discuss their economic situation. (263299)

I have met the Federation of Small Businesses, the Scottish Chambers of Commerce, the Scottish Council for Development and Industry and the CBI Scotland to discuss the economic situation.

The feedback from many of the small businesses in my constituency, many of which are involved in tourism, shows that there is a lack of knowledge at the local bank branch level about accessing Government schemes. In his discussions with Scottish Ministers, will my right hon. Friend emphasise the importance of Scottish Business Gateway and its contractors, and ensure that people understand the Government-backed schemes that are in place and disseminate that information not just to businesses in Stirling, but to small businesses across Scotland?

My right hon. Friend raises a point about Stirling and tourism that is specific to her constituency, as she always has done in the House. She is right: we must ensure that the enormous investment in the schemes to support Scottish businesses is accessible and understood, particularly for small businesses. We are trying to encourage businesses to go to the “Real help now” website, where all the information is available. We also need to ensure that the advice through Scottish Enterprise’s networks and through UK Government and Scottish Government agencies is readily available, easily understood and deliverable, and we are working very hard on that.

Small businesses are indeed having to shoulder a big responsibility. According to excellent work by the Scottish Trades Union Congress, at the jobcentre in Stornoway in my constituency, 44 people are chasing each available vacancy, which is the highest rate in Scotland. Will the Secretary of State join the Scottish National party and the parties in Wales in the fight against Westminster’s forced £1 billion of cuts that are coming our way? Otherwise, more people will be chasing each vacancy in small businesses and other businesses all over Scotland.

In these difficult economic times, the SNP’s economic policies are indeed a fantasy; they are beyond all fiction. Scottish families in the hon. Gentleman’s constituency and mine—and, indeed, across the whole country—are finding additional ways to tighten their belts. There is only one organisation in Scotland that believes that it cannot make any efficiency savings, and that is the SNP Scottish Government. The Scottish Government have more money than ever before and they should get on with delivering it. Instead of this endless constitutional obsession, we should all be focusing on the economic recovery, not constitutional referendums.

My right hon. Friend will remember coming to a meeting with small businesses in Ayrshire at which the problems associated with the banks being able to make loans and the extra charges now being imposed were raised. With the Government owning 67 per cent. or thereabouts of some of the banks, surely the Government should be putting more pressure on those same institutions to lend the money and to reduce the charges that are now being faced, so that people can get on with their business and unemployment can be maintained at a low level in Ayrshire.

My hon. Friend makes an important point. I enjoyed my visit to Ayrshire with him and my hon. Friend the Member for Ayr, Carrick and Cumnock (Sandra Osborne). Points were made in that meeting with small businesses about the availability of credit, which is why we have taken the measures that we have. The Royal Bank of Scotland has announced that it will commit £25 billion of additional lending, while the Lloyds group has announced £14 billion of additional lending, as part of the asset protection scheme. That is legally binding, because we need to ensure that Scottish businesses—particularly small businesses, but also businesses across the whole of the UK, not just in Scotland—can access credit and trade again, as part of a future recovery. I look forward to coming to Ayr again to discuss those matters with him and his businesses.

I welcome the fact that the Secretary of State has met small business leaders and the First Minister to discuss the economic situation in Scotland. However, I am disappointed that once again post-meeting reports were characterised by the First Minister and the Secretary of State briefing against each other. When will we see the mature relationship between Westminster and Holyrood that we should expect in order to tackle an economic crisis of this scale? Perhaps the Secretary of State can make a start on this new relationship today by embracing the Chancellor’s call for humility and collective responsibility and apologising to the people of Scotland for the multitude of economic mistakes that his Government have made.

Like every Labour Member, I am always sorry when anyone loses their job, and today we are seeing some very difficult unemployment figures for Scotland and the whole of the UK. As we all know, behind those figures there are real people and real families. I am disappointed, as I am sure many Scottish families will be, that, rather than focusing on the real pressures that real families are experiencing, the hon. Gentleman again chooses to participate in the soap opera of the process of politics. People are interested in solutions, not in his soundbites. It is important that we make progress on this matter, and we will do whatever we can to support the newly unemployed, so that they do not become the long-term unemployed.

I am sure that the 1,000 additional people in the dole queues of Scotland this month, and their families, will very be interested to hear the Secretary of State’s solutions. In December, he announced that he was putting together a council of economic advisers, who would be named in January. Since then, we have heard nothing. What is the reason for that delay? Is he trying to avoid the mistakes of his predecessor, who used to vaunt the fact that Sir Fred Goodwin represented Scotland in the Chancellor’s high-level group on financial services? Does the Secretary of State think that his Government no longer need economic advice, or is it perhaps that nobody wants to be associated with his group?

I made no such announcement, then or since. The announcement that I made was about how to get those involved in academia and campaigning together with experts in poverty to ensure that the poorest could see a way through this recession, so that there would not be a generational legacy as a consequence of that, as there was after previous Tory recessions. We will not allow jobcentres to redirect people from unemployment benefit on to incapacity benefit, which is what happened in jobcentres during the previous Tory recession. That policy was wrong, immoral and unforgivable.

When the Treasury Committee visited Edinburgh two weeks ago, we found dismay among small businesses that banks were putting arrangement fees and other private charges on them, rather than interest rates. When the Secretary of State meets representatives of the banks, will he remind them that the Committee is undertaking an inquiry into the banking crisis, and that we will be monitoring their lending agreements, under which transparency and value for money for the taxpayer are going to be the key requirements?

On behalf of all hon. Members, I want to put on record the respect that exists across the country for the work that my right hon. Friend and his fellow members of the Treasury Committee do, and will continue to do, on this important issue. After seeing on television the hearings involving his Committee and the bankers, I do not think that the bankers will need me to remind them that he is determined to stay on top of this issue. Now that he has asked me to do so, however, I will of course raise the matter with the banks.

Banking

3. What recent discussions he has had with representatives of banks on the future of banking in Scotland; and if he will make a statement. (263300)

I am in regular discussions with bank representatives. I am determined that Scotland and the UK can remain world centres for financial services.

The Secretary of State has just confirmed that the Royal Bank of Scotland’s lending commitment is legally binding. Will he confirm that the astonishingly generous pension settlement of its former chief executive, Sir Fred Goodwin, is also legally binding? Will he therefore apologise for the soundbite from his Cabinet colleague who has postured on this issue but not been prepared to apologise for it?

These decisions were taken by the Royal Bank of Scotland’s board. I find it distasteful that one individual can be rewarded in such a remarkable way for failure and for the undoubted banking vandalism that has put at risk the well-being of so many families and business in Scotland and across the UK. It is important, as we try to re-stabilise the banking sector, that there should be no reward for failure. We find it extraordinarily distasteful that the Royal Bank of Scotland board made that decision.

Given the Government’s assistance to the banks and my right hon. Friend’s discussions with them, particularly those with a Scottish input, is he able to assure us that banks are indeed looking to develop a strategy to provide lending facilities for small businesses and home owners as the Government intended?

My right hon. Friend has raised this matter on a number of occasions and he will rightly continue to do so. I happily give him the commitment that we are doing everything we can in that respect. We are also trying to ensure that, where there are specific difficulties in certain business sectors or certain parts of the country, we take additional action. My right hon. Friend, as a Lanarkshire MP, will share my concern that Lanarkshire might be the epicentre of the recession in Scotland. That is why I shall shortly bring together business organisations, politicians, trade unions and others to see if we can find a way through the situation, particularly in Lanarkshire, where a proud and determined people who have come through previous recessions will need additional support now to get through the present recession.

Will the Secretary of State support the establishment of a post bank, publicly owned, operating in local communities and taking decisions about granting credit to small businesses based on local knowledge rather than a nationwide formula? I believe that that would give many viable small businesses throughout Scotland access to the credit that the larger banks are denying them.

The Government are always looking for additional ways to support small businesses in communities, and we particularly like to support the community and voluntary sectors and social enterprises. I would be happy to discuss that with the hon. Gentleman. It is important, however, to focus on some of the community facilities and support that are already in place, particularly for families rather than for businesses. I believe that we should all celebrate the remarkable success and important role of credit unions throughout Scotland. They will play an important part in the recession.

Thousands of my constituents work in the banks and financial services sector, and the vast majority certainly do not receive big bonuses and multi-million-pound pensions. Some are losing their jobs and many more are worried about their future. Does my right hon. Friend agree that Government at all levels—UK, Scottish and local—should work together to find a long-term strategy to get out of a common situation? What is he doing to get such a strategy agreed among all the players in the field?

My hon. Friend raises an important point, which I know is particularly relevant in his constituency, as it includes a large number of financial services sector workers. What has happened has, unfortunately, led to the portrayal of all those in the banking sector as greedy and in receipt of enormous bonuses. As he knows and as we all know, a large number of people working in banks in the back office or as bank tellers, for example, are on very average wages and they work very hard. Some of them may have had share options, which are now more difficult. It is important that we stop demonising all bank workers simply because of the irresponsible behaviour of a tiny minority of those who previously had leading and well paid positions in these organisations.

Does the Secretary of State agree that today’s publication of Adair Turner’s proposals for a new regulatory system for the banking sector is an illustration of the extent to which the previous regulatory system put in place by the Prime Minister failed? What does he say today to the thousands of Scots who face losing their jobs in the financial sector as a consequence of the Prime Minister’s previous failure?

The fact is that the international regulatory regime did not keep pace with a remarkable change in the global movement of finance—a fact now well acknowledged across the world. That is why we need, as part of the G20 process, a new architecture for regulation. Banking will never be and should never be the same again. As for the hon. Gentleman’s point on unemployment, we will do everything we possibly can to ameliorate the consequences of this international recession. Many Scottish families have people who have lost their jobs over the past few weeks, as has been confirmed today. As I say, we will do everything we possibly can to stop the newly unemployed becoming the long-term unemployed by giving people additional skills and retraining in order to retain their confidence and an attachment to the labour market. Of course things are more difficult. Not everyone can walk straight into a job, but we should not ignore anyone, and we should try to support people to keep their skills and confidence fresh.

Unemployment (East Lothian)

4. What assessment he has made of the level of support to long-term and recently unemployed people in East Lothian constituency. (263301)

We are giving people across Scotland real help now by offering greater support to help them to move back into employment. We have invested £1.3 billion in Jobcentre Plus services to ensure that those looking for work receive individual support, and an additional £0.5 billion to guarantee more help for people who are unemployed for six months or more.

I am sure that the whole House will now want to hear my supplementary question.

We currently have quite a good level of employment in East Lothian—over 80 per cent.—but I am concerned about the possibility that unemployment will rise both in East Lothian and in Scotland more widely. The position could be greatly improved if the banks adopted measures allowing them to enable small businesses to recover by lending them money. Constituent after constituent has said to me recently that they will have to make people unemployed because the banks will not lend to them. The arrogance of the banks beggars belief.

My hon. Friend has raised an important point to which the Secretary of State has already referred this morning: the need for banks to start lending in order to enable businesses to survive and to invest. We have introduced the necessary measures to make that possible. I am sure that she welcomed the recent announcement by the Royal Bank of Scotland of the provision of additional funds focused particularly on small and medium-sized enterprises, many of which are based in her constituency.

It is important to note that the United Kingdom still has the second lowest unemployment in the G7 area, but we are not complacent. That is why, from April, we will be providing additional help for those who are unemployed for more than six months, in the form of a £1,000 recruitment subsidy. [Interruption.]

My constituency is next to East Lothian, and it is in the same position. The problem is not just unemployment, but the fact that companies are reorganising themselves. Would my hon. Friend and my right hon. Friend the Secretary of State consider bringing the banks to Dover House, so that Members of Parliament can have a discussion with them, and put our cases to them? Why are the banks still not lending to companies that are reorganising themselves to try to get through their present difficulties?

I should be more than happy to speak to any of my colleagues about constituency issues, and about how we can help Members to ensure that local banks respond to the needs of companies in their areas. I welcome the fact that East Lothian council recently joined a local employment partnership, enabling us to work with employers in trying to deal with some of the problems.

Scottish Parliament (Financial Powers)

5. What recent discussions he has had with the Chancellor of the Exchequer on financial powers for the Scottish Parliament. (263302)

I have regular discussions with my right hon. Friend the Chancellor. Sir Kenneth Calman's commission on Scottish devolution is supported by business and trade union leaders, and by the Labour, Conservative and Liberal Democrat parties.

Does the Secretary of State agree that it is useful for Governments to be able to borrow at a time of recession—[Interruption.]

Does the Secretary of State agree that at a time of recession it is important for Governments to be able to borrow, and that the Scottish Government should have the power to borrow?

The Scottish Government have more money than ever before. The current Scottish Government have more than double the budget that the late Donald Dewar had when he was First Minister. I think it important for politicians in all parties in Scotland to find additional ways of working together through the recession. We are in it together, and we will get out of it together.

I appeal again to the Scottish National party to stop putting its obsession with the constitution before the priorities of our country, which are to do with economic recovery. Scotland will never forgive any political party that puts its interests before those of our country.

Is my right hon. Friend aware that although financial powers are important, they will take some time to produce any change, if change is coming? What we need now is action. Unemployment in Lanarkshire is higher than it is in any other region, and Lanarkshire also has the fewest job vacancies. I welcome all the initiatives that my right hon. Friend is taking there—unlike the one-trick pony who is First Minister in the SNP Administration in Scotland, who is interested only in division and in rubbing Scotland out of the United Kingdom.

My right hon. Friend campaigns tirelessly for the people and businesses of Lanarkshire, which has a proud industrial heritage, not least in mining and of course the steelworks. The people of Lanarkshire have shown their determination and resolution to rise from previous recessions. Working with him and other fellow Members, and businesses and trade unions, we are determined to do everything possible to make sure that Lanarkshire is not the epicentre of this recession in Scotland.

Prime Minister

The Prime Minister was asked—

Engagements

Before listing my engagements, I am sure the whole House will wish to join me in expressing our deepest condolences to the family and friends of those killed on operations in Afghanistan over the last week. They were Corporal Dean John, Corporal Graeme Stiff and Lance Corporal Christopher Harkett. They, and all those who have lost their lives in conflict, deserve our profound gratitude for their service not just to our country, but to the peace of the world. Their courage and sacrifice will never be forgotten.

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

I am sure that everyone in the House will wish to associate themselves with the Prime Minister’s comments.

Today’s unemployment figures are extremely disappointing and, as a former shipyard worker who experienced the indignity of three years’ unemployment in the early 1980s, I can well understand the frustration and anger that unemployment brings. May I ask my right hon. Friend not to abandon the unemployed and to make sure that the Government continue to invest in the skills and training needed to help us through these difficult times?

I am grateful to my hon. Friend. Any person who loses their job or is in fear of losing their job is a matter of personal regret for me and the whole Government. I do not regard unemployment as a statistic; I regard it as one person, a second person and a third person who needs our help. That is why we will do everything we can to help people get back into work: that is why we have announced more apprentices; that is why we have announced more help with training; that is why we have announced that from April there will be help for those who have been unemployed for six months; and that is why we have put £1.3 billion into the jobcentres—money that is necessary, so that we can help hundreds of thousands of people in the next few months get back into work.

I join the Prime Minister in paying tribute to Corporal Dean John, Corporal Graeme Stiff and Lance Corporal Christopher Harkett. The fact that more than 150 of our servicemen and women have been killed in Afghanistan is a reminder, once again, of the huge sacrifices our armed forces are making on our behalf. We praise their bravery, we honour their memory and we must look after their families.

Today, as has been said, unemployment has risen to more than 2 million people. The increase in the claimant count is the sharpest since records began. Does this not reveal that the claims repeatedly made by the Prime Minister that Britain is one of the best-placed countries in the world to withstand recession were simply nonsense?

I came into politics, and I stood for Parliament, because I wanted to help tackle unemployment and poverty, and that is why we are announcing the most comprehensive programme to help the unemployed. But I have to tell the right hon. Gentleman that unemployment is higher in France, in Germany, in Japan and in America. It is higher in most of the other countries we deal with, but we are taking urgent action to help those people in Britain who are unemployed. We are spending £1.3 billion helping our jobcentres and helping people into work. The Conservatives would not spend that money. I ask him why he would not help us deal with the problem of unemployment.

I have to say to the Prime Minister that Members in every part of this House will contrast what he said with the fact that 144 of our further education colleges—the exact organisations we need to retrain people who are unemployed—are having their building projects halted. There is this enormous gulf between what he says every week and what his Government are actually doing. Let me return to the question. People will simply not understand why the Prime Minister is so incapable of ever admitting that he got anything wrong. It is not just the unemployment figures today; the International Monetary Fund has said that the recession will be deeper and longer in Britain than in many other countries, and that Britain will be the only major economy in the world that will be in recession next year. So let me ask him again: was it not wrong to claim that Britain was one of the best-placed countries in the world to withstand recession? Admit it.

No, because the fact is that America entered recession more than a year and three months ago and the euro area entered recession in April last year, whereas we entered recession in July. We stopped ourselves going into recession for months after what had happened in America, and the action that we are taking now is designed to get us through it as quickly as possible.

Let me correct the right hon. Gentleman on FE colleges—we are going to spend £110 million this year investing in them. Let me correct him on public expenditure— we are investing £44 billion this year, in health, in education and in other capital investment projects to help us through this downturn. Let me correct him again on unemployment. Unemployment is far higher in America, in France, in Germany and in the euro area. I know that is of little comfort to people in this country, which is why we are doing everything we can to help them.

Let me correct—[Hon. Members: “More.”] Yes, there is plenty more. Let me correct the Prime Minister on the figures that he has just given to the House of Commons. He says that the recession started in July, but the economy stopped growing in April last year; we have been in recession for almost a year. [Interruption.] Yes, let me correct him on the further education colleges. He should come to my constituency of Witney, where people are in temporary classrooms because the whole building project has had to be abandoned because of his incompetent Government.

The entire country will see that the Prime Minister is in denial about the length and the depth of the recession. He likes to talk about the schemes that he has announced, so let us have a look at them. Can he confirm that not a single unemployed person has been helped by the recruitment subsidies that we called for in November and that he announced in January? Can he confirm that not a single home owner has been helped by the home owners mortgage support scheme that he announced in December? Is it not the case that those two specific schemes simply are not operating?

First of all, the right hon. Gentleman is wrong about the start date of the recession. Secondly, he is wrong about further education, because £110 million will be spent on it this year. Thirdly, he says that we are not doing anything, so I should tell him that in the last recession there was no help available for the unemployed, but we are spending £1.3 billion to help people get into work. Let us just go through the things that we are doing: 300,000 people used to be helped under Train to Gain and that will rise to 1 million; we have raised the levels of mortgage support, so that people can stay in their homes even when they lose their jobs; and, as the Secretary of State for Work and Pensions announced, in April—next month—programmes will come in that will help people who have been unemployed for six months. That was the date we set. The problem is that the right hon. Gentleman asks us to do more, but he is the only Opposition leader in history who is asking us to do more when saying he will spend less—it just does not add up.

We have just had the view from the bunker, where all these schemes are operating and where everything has been implemented, but the fact is that, on the ground, these things are not happening. We get a lecture in competence from a Government who are so incompetent that they could not even stop Fred Goodwin, or, sorry, I should say Sir Fred Goodwin—the Prime Minister knighted him for his services to the banking industry—walking off with a pension that is worth £60,000 a month. The lack of action applies not just to the housing scheme and the job scheme, because the asset-backed securities scheme is not up and running, and the working capital scheme is not working properly. Is that not why the CBI said that this Government have a total lack of a “coherent strategy”? Is that not why Shelter says that people facing repossession have been given “false hope”? Does the Prime Minister regret giving those people false hope?

That is not what we have done. We have negotiated with the building societies and banks a six-month moratorium for people who are faced with mortgage repossession. We have sent new orders to our courts that lenders cannot, as a first resort, go for repossession; they have to go through all the proper processes before they even consider that. We are helping unemployed people with their mortgages at a level that has not been done before, and next month we will bring in the protection scheme, under which we are insuring the banks and building societies against loss so that people can phase their mortgages over a longer period of time. The problem that the right hon. Gentleman has got is that everything he proposes, he will not fund. On Monday, he said there would be more cuts in public expenditure—already he has refused to support the £1.3 billion that we are spending to help the jobcentres and to help people who are unemployed. It is simply not credible to come to this House and say that he is urging us to do something when he would pay for absolutely nothing.

I do not know why the Prime Minister does not listen to his Employment Minister, who had the courage to leave the bunker for a moment this morning and say that

“there is a frustration about these schemes and the money and the credit getting through.”

If the Prime Minister had listened to us, he would have introduced a national loan guarantee scheme back in November, and it would have been operating for five months. Should not he also listen to the German Chancellor, Angela Merkel, who stood with him in Downing street and said—[Interruption.] The hon. Member for Bolsover (Mr. Skinner) should be quiet. I know that he wanted miners to join the Government: well, now he has got one—Lord Myners—[Interruption.]

Order. Miss Snelgrove, I have told you before. It is not the done thing to shout in the Chamber. You should not be doing that. Perhaps you need a wee tablet from the doctor.

They all want Lord Myners to negotiate their retirement packages: call an election and we can arrange that.

Back to the German Chancellor, who said that

“if we want to make real impact, you really must implement the package first before you talk about the next step”.

Is not that right? Are not this Government just running round, like headless chickens, with initiative after initiative that never gets implemented? Is not that combination of ineffectiveness and hyperactivity the worst combination of all?

The right hon. Gentleman opposed the German fiscal expansion. He has opposed every fiscal expansion—in the US, in Germany and in France. He is out on a limb in opposing public expenditure rising in the downturn: he wants to cut it, and he wants to cut it now.

On the right hon. Gentleman’s great £50 billion scheme, the shadow Chancellor said that it

“does not add to public expenditure.”—[Official Report, 18 December 2008; Vol. 485, c. 1228.]

However, the shadow shadow Chancellor has said that

“the taxpayer will take some of the hit.”

The Conservatives do not know whether the scheme that they are proposing will cost money or not cost money: that is how bereft they are of ideas for the economy.

The Leader of the Opposition does not understand that this is an unprecedented global banking crisis. Unprecedented means without precedent. Global means that it affects the whole of the world. The sooner that he wakes up to the fact that we need global action to deal with it, the better for our country.

I am glad that the Prime Minister is back to reading out quotations, because we now know how long a pledge from him lasts. Yesterday, he said in The Guardian:

“I personally have always said that modern politics, with its focus on who said what, when, how and why, is far too divisive for the problems that a country’s got to meet”.

What a complete phoney! [Interruption.]

Order. Let me chair the proceedings. That remark should be withdrawn—[Interruption.] Order. I will do the talking. It should be properly withdrawn.

I am happy to withdraw that remark.

The Prime Minister mentioned the Germans. Of course, they went into the recession with a surplus, not a deficit. That is why the German Finance Minister said that the VAT cut, which we opposed, will build up debt that will take a generation to pay off.

Let us be clear about what has happened today. This Government have announced the biggest rise in the dole queue since records began. That is a rise faster than under any Conservative Government or any previous Labour Government. Is it not the case that the Prime Minister has led us to this point without a hint of an apology, and the British people will never forget it?

First of all, quoting German Finance Ministers in the week when the Conservatives are walking away from the mainstream of European politics is absolutely absurd. Secondly, we are prepared to spend money to help the unemployed; we are not going to walk by on the other side, we are going to help them. However, when it comes to the Conservatives’ main proposal for spending money, let us be absolutely clear that we are spending money to help the unemployed whereas the Conservatives’ first priority is an inheritance tax cut for the 3,000 top estates in the country.

What further indication do we need of Conservative priorities than the fact that the motion for today’s debate on the economy does not even mention the word “unemployment”? That is how they feel. They are the party of the few; we are the party of the many.

Six months ago today, a constituent of mine, Claire Walker, died of cervical cancer. She was 23 years of age. Will the Prime Minister join me and Claire’s family, friends and supporters who are campaigning in London today in wholeheartedly welcoming last Friday’s announcement that there will be a full, independent and comprehensive review to consider the urgent case for the reintroduction of cervical cancer screening for young women under 25?

I appreciate everything that my hon. Friend said. Any family that is suffering because of cervical cancer—or, indeed, because of any form of cancer—has all our sympathies. We want to do everything we can to help, which is why we have introduced the vaccinations for teenagers—we have extended that programme and are ready to extend it further—and why the independent review that he mentioned will consider the case for making cervical cancer screening available to women under 25. It is our responsibility to look at all the available medical evidence about the risks as well as about the advantages of such screening. That will be done and I assure him that we take seriously the needs of anyone who is facing cancer at this time.

I would like to add my own expressions of sympathy and condolence to the family and friends of the three soldiers who tragically lost their lives in Afghanistan in the last week. With the death toll among our brave servicemen and women now at more than 150, it is right that we should pause to reflect on the immense sacrifice that they and their families have had to endure in serving this country and, of course, the people of Afghanistan.

Does the Prime Minister believe that the culture of frenzied target setting that has been introduced into the NHS by his Government had any role to play whatsoever in the horrific events that occurred at Stafford general hospital?

May I and the Health Secretary first say that we apologise to those people who have suffered as a result of the mistakes that have been made at Stafford hospital? Everybody who uses the national health service has a right, if they put their faith in the NHS at that hospital, to expect the highest standards of treatment. These were not the highest standards of treatment. They have now been investigated, and they fell far short of the standards that people expect. The first thing that we have to do is to assure the families of those who have suffered and relatives who are grieving and who want answers to their questions that there will be independent reviews, if they seek them, of their families’ case notes so that they can be assured of what has happened. That is the first thing that we will do.

The second thing that we have to look at is whether this is a generic problem or a problem at a specific hospital. I am assured by the Healthcare Commission—the chief executive has made a statement today—that there is no equivalent case in all the other NHS hospitals across the country. We should therefore focus on the individual mistakes that were made by management and deal with them. A further inquiry is going on to look at what happened between 2003 and 2005. At the same time, the Care Quality Commission is looking into what lessons we can learn in general from what happened.

When doctors at that hospital have confirmed that they were instructed by their managers to abandon seriously ill patients and to treat people with minor ailments instead in order to meet the Prime Minister’s targets, it is not enough to talk of reviews, inquiries and to blame other people. Will he scrap the mad targets that make hospitals tick boxes rather than look after the desperately ill?

Whatever happened in that hospital is unacceptable and should never be allowed to happen again. I too have looked at all the detail of the evidence in this report, which also says that nursing care standards were poor but that they were never discussed or identified as being poor, that results of patient surveys were available but were never reported to the board of management, and that, at the time of the C. difficile infection, nobody on the board or among the general public ever knew that the rate of infection had doubled. Those low standards of management in the hospital, therefore, must be dealt with by our review.

I take seriously everything that has come out of this case, but I think that it is not unreasonable in the modern age to expect a hospital to have the highest standards of care and at the same time ensure that every cancer patient is seen within two weeks. It is not unreasonable to say that hospitals should have the highest standards of care and ensure that there is a wait of only 18 weeks between a person seeing a doctor and getting an operation. It is not unreasonable to say that the highest standards of care should be pursued in accident and emergency departments and that people should not have to wait for hours before they get treatment.

We will look at all the evidence that is available. The Care Quality Commission will look at it too, but I think that we have to deal with the individual management failures in the hospital and then learn whatever lessons we can for the future of the national health service.

After these damaging revelations about Stafford hospital, there are relatives today in turmoil, wanting to know whether their loved ones’ deaths could have been prevented. I want to press the Prime Minister on what he has just said about reviews. I say that those relatives are entitled to an independent assessment to answer that question for them. Does he agree with that?

There are no excuses for what happened in Stafford hospital—no excuses at all. That is why every single relative who asks for it has a right to have the case notes reviewed independently, and to see the notes themselves. That is what will happen. Relatives will have a right, therefore, to take whatever action is necessary as a result of seeing the papers before them.

At the same time, Mr. George Alberti, who is recognised as being a very pre-eminent surgeon, is going to go to the hospital to look at the progress that has been made, and which has been reported by the Healthcare Commission already. He will ensure that, in future, patients at Stafford hospital have the assurance of the highest standards. The chief executive and the chairman of the trust have been removed. There is a new chief executive who will look at disciplinary procedures wherever they are necessary. We have got to do everything to assure people that they can have the trust that we know that everybody wants to have in the national health service and in every hospital in the country.

Q2. Is the Prime Minister still committed to robustly protecting the green belt? If so, will the Government scrap the south-west regional spatial strategy and allow local communities to develop plans to address local housing need and protect precious open spaces? (264128)

If the hon. Lady wants to talk about the future of the regions, I hope that she will join the regional Committees in the House of Commons to debate that. As for the green belt, I think that we are doing more than any Government to protect it, and that is what we will continue to do.

The proposed Mersey gateway bridge will help ease traffic congestion in my constituency and in the constituency of my hon. Friend the Member for Weaver Vale (Mr. Hall). The previous Tory Government turned down the project, which will also create more than 4,000 jobs in Cheshire and Merseyside. Will my right hon. Friend do all he can to ensure that there is no delay in the final decision approval, as this is exactly the sort of infrastructure project that will help economic recovery?

Yes. My hon. Friend has been working very hard and representing the case of his constituents on this matter, and I can assure him that we will look very carefully at what he says. I can tell him that we plan to advance public spending in the year that is coming. We plan to spend £44 billion in the year from April, and that will add to the number of jobs in every constituency.

Q3. It was announced today that another 800 jobs have been lost in the south Devon area. That will put more pressure on South Devon college, which helps to train people and get them back into work. Will the Prime Minister look urgently at the funding blockages that are preventing that outstanding college from expanding and helping some of the people who are losing their jobs? (264129)

I am grateful to the hon. Gentleman for that question, and I will look at the matter. I repeat that the investment that is to take place in further education colleges—it is a capital programme—will be £110 million this year. I can also say to him that the Train to Gain programme, in which colleges are often involved, is expanding from 300,000 people to 700,000 and then a million people, so more people will be able to take courses that will give them the necessary skills. Of course I will look at the specific issue in his constituency that he has raised.

Q4. As my right hon. Friend is aware, a prisoner recently released from Guantanamo Bay has been making very serious allegations about torture. Can he assure me and the rest of the House that the claims will be fully investigated? (264130)

I have placed a written ministerial statement in the Library this morning, and I want to update the House about what the Government are doing, so that we can deal unequivocally with the issue of our condemnation of the use of torture. We will now publish, after consultation with the Intelligence and Security Committee, the guidance to intelligence officers and service personnel on detention, and on interviews of detainees overseas. We will invite Sir Peter Gibson, who is a former Lord Justice and the current intelligence services commissioner, to monitor complaints to do with the guidance, and to report to me annually. In order to have systems that are robust, we will ask—

In order to ensure that our systems are robust, we will ask the Intelligence and Security Committee to consider any developments and relevant information since its last report. [Hon. Members: “This is a statement.”] I have faith in our security services. We must ensure that the public also have all the faith that is necessary in our security services, and we condemn absolutely the use of torture.

Order. I hear shouting. If anyone feels that there should be a statement, they should ask for an urgent question; that is the way to do it.

What the Prime Minister just said about the hospital in Stafford simply is not enough. We do need a review of the case notes, but we do not just want a Care Quality Commission review. What we need is a full public inquiry to get to the bottom of the matter. It is not enough simply to deal with the issue in the way he described. We need to know whether compensation will be payable to the victims, and we need to ensure that the people responsible who are still on the board are sacked, and not simply suspended on pay.

I know that the hon. Gentleman’s constituency is covered by the hospital as well, so let me reply to him in some detail. All disciplinary matters are being dealt with at the moment by the new chief executive, who is looking at what has happened in the hospital over these last few years in the light of the Healthcare Commission report. A Healthcare Commission report will be followed up by a review into what happened between 2003 and 2006, and an inquiry by George Alberti about whether the standards that have been raised are actually satisfactory for people in the area. At the same time, the Care Quality Commission will look at the standards of health care overall, and look at whether there is an early warning system that could be better in future for dealing with such problems. Individuals, of course, can bring what cases they wish, but I think that they will welcome the fact that the individual case notes are to be made available to them, and are to be reviewed independently.

Q5. May I add my condolences to the families of all the servicemen who have died recently in Afghanistan, including Corporal Dean John of Port Talbot in my constituency? Dean was a member of a well-respected service family. Many of our 6 million carers in this country have benefited significantly from the Government’s new national carers strategy, and we should welcome that. However, the carer’s allowance has not been improved. Will my right hon. Friend the Prime Minister agree to meet carers’ organisations, and the all-party carers group, to discuss ways of improving carers’ benefits, as recommended by the Work and Pensions Committee report last year? (264131)

The 6 million carers in our society are at the heart of the help that is necessary for people who are in need of assistance and care, and we want to do everything that we possibly can to help them. I will happily meet the delegation that my hon. Friend suggests I meet. As he knows, the national carers strategy made proposals about respite care, about training for carers, and about pensions for carers. We are also looking at the allowances that are available for carers. We want to do whatever we can to help that group of people who give their lives to help people who are in difficulty and in need. I look forward to meeting the carers’ organisations.

Q6. On Saturday my right hon. Friend the Member for North-West Hampshire (Sir George Young), my hon. Friend the Member for Basingstoke (Mrs. Miller) and I visited Basingstoke and North Hampshire hospital to see an out-of-hours medical service provided by local GPs. It is a fantastic success story called Hantsdoc. It has been rated the best health provider in Hampshire, it has nearly 100 per cent. customer satisfaction, and it is locally run and locally devised. Is this not a better model than the top-down, target-driven, Whitehall-imposed approach that seems to be, sadly, less successful elsewhere in the NHS? (264132)

It does not seem to me incompatible to have locally run health services that are of the high standard that the right hon. Gentleman has asked for and seen in his constituency, and which I have seen in many hospitals and GP-led centres in the country, and to have minimum targets which are objectives that are set and can be met for the country as a whole. I come back to this: do we want to get rid of the objective and, indeed, the guarantee that within two weeks someone suffering from cancer can be seen by a clinician? Do we really want to go backwards on that? Surely that must be a national objective which all people can support.

Q8. Many British children on the island of St. Helena are living with only one parent or without both parents, as adults of working age have to leave the island to find work elsewhere. The decision this week to put off a decision on the airport has dismayed them. Will my right hon. Friend commit to an early decision and give those families some hope that they can live together again? (264134)

I know that my hon. Friend held a debate on the matter in Westminster Hall. It is important to say that we have set up a consultation on options for access to St. Helena. That consultation will report, and then we will make the right decision.