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Volume 490: debated on Wednesday 25 March 2009

I have been asked to reply. My right hon. Friend the Prime Minister is today in New York, meeting UN Secretary-General Ban ki-Moon as part of a range of meetings to discuss the world economy, prior to the G20 meeting in London.

When I met my constituents in Highway ward on Saturday, they told me that the single biggest issue was their rising fear of burglary. Measures such as the security fund that help people to make their homes more secure are very important and necessary. Will my right hon. and learned Friend give me an assurance that the Government will do all they can, while working closely with the police, to combat that growing fear?

The Home Secretary can give that assurance, as do I. Against the background of concern about burglary, I know that my right hon. Friend the Member for Enfield, North (Joan Ryan) will reassure her constituents that there are more police on the beat and tougher penalties against those who are caught and prosecuted. I know that she supports police community support officers, and she can reassure her constituents that burglary across London has fallen by half.

Three weeks ago, I asked the right hon. and learned Lady about the Government’s failure to implement the working capital scheme, which is meant to provide loan guarantees to help businesses. She said then that the scheme was being finalised. The scheme has received state-aid clearance from the EU, and the Government said that it would be up and running from 1 March. Is it not unacceptable that it is still not up and running, and that still no loans have been guaranteed under it?

As the right hon. Gentleman said, we now have state-aid approval for that working capital scheme, and I can tell the House that, under the agreement with Lloyds and the Royal Bank of Scotland, £5 billion will now be released to business. The tax payment deferrals, which give businesses direct cash help through deferring their tax payments, have meant help for 93 businesses all around the country—[Interruption.]

Ms Harman: If the Opposition had their way, it would not even be 93 businesses, but under our programme it is 93,000 businesses. We are taking action to give direct support to businesses and to families, and to back up the economy in the face of an unprecedented global financial crisis.

More than 2 million people are now unemployed in this country, and thousands of businesses have gone under. The job recruitment scheme announced in January has been delayed until April. The mortgage support scheme is also not up and running. This is a matter of cross-party concern. The hon. Member for Coventry, North-West (Mr. Robinson)—he knows a lot about loan guarantees—said on the radio this morning:

“We have always been behind the game…As far as industry is concerned we don’t have those schemes working yet.”

Does the right hon. and learned Lady not agree with her hon. Friend, with all his Treasury experience, that the Government are still behind the game?

The right hon. Gentleman is wrong about the job recruitment scheme. We said that the extra help for people who have been unemployed for six months would come in from April this year and it is on target. There would be more unemployed if there were the cuts in capital that the Tories propose. It would be more difficult for the unemployed if there were cuts in jobcentres. The reality is that we are putting money into the economy, with a fiscal stimulus for money direct to businesses and to families, whereas the Opposition would take no action and make the recession worse and longer.

My party called for a national loan guarantee scheme all the way back in November and the Government have dithered about it ever since. They are all over the place. The Prime Minister is on his way to Chile. The Business Secretary has just arrived in Brazil. Should he not be implementing those schemes instead of unpacking his Speedos on a Latin American beach? Is it not time to get on with those things?

On the fiscal stimulus, yesterday the Governor of the Bank of England warned against another significant round of fiscal expansion when the deficit is already as big as it is. This morning, the gilt auction has apparently failed for the first time in many years. Was the Governor of the Bank of England not right to give that warning?

As far as the gilts are concerned, the head of the Debt Management Office has said it would be wrong to read anything into the result of one auction. He says that

“the amount of debt we are raising is sustainable.”

The Opposition’s proposal for a loan guarantee scheme would not have guaranteed anything to anyone because there was no money behind it. On the action we are taking in the face of an unprecedented global financial crisis, in November, in the pre-Budget report, we said we would have a fiscal stimulus to help with investment in housing, in transport and in apprenticeships. That is what the country needed. The country needed it and the Governor of the Bank of England backed it—only the Tories opposed it.

I now notice that the Government are too ashamed of the VAT cut to mention it in the list of what they did last November. Let us be absolutely clear about what the Governor of the Bank of England said yesterday:

“I think the fiscal position in the UK is not one where we could…engage in another significant round of fiscal expansion.”

For a Governor of the Bank of England to speak in that way, ahead of a Budget, is exceptional and extraordinary, especially when the Prime Minister was in the very act of proclaiming a fiscal stimulus before the European Parliament. It is a defining moment in the debate in this country about how to deal with the recession. Today, the right hon. and learned Lady speaks for the whole Government and the Chancellor is sitting alongside her. Do they agree with the Governor of the Bank of England? Yes or no?

I agree with the right hon. Gentleman that it is a defining time, because whereas we take the necessary action, the Conservatives would do nothing. It is a defining time because this weekend, they decided to press ahead with their plans for tax cuts for just 3,000 millionaires. At the same time, they preach financial rectitude.

The right hon. Gentleman said that I had missed out the VAT cut; well, I am sorry, and I will rectify that. I will mention the VAT cut, which will put £275 into the budget of every family in this country. I will also mention the help for pensioners that started in January this year. I will mention the help with extra child tax credit. The big, defining dividing line is that we want to make sure that we give help to 22 million families with tax cuts, whereas the Conservatives’ priority is to give £200,000 each in tax cuts to just 3,000 millionaires.

The question was about the Governor of the Bank of England. I know that inheritance may preoccupy the niece of the Countess of Longford, but it is no good attacking our policy, which is to reward people who have saved hard and worked hard all their life, and which, when we announced it, the Government tried to copy. Let us be very clear what the Governor of the Bank of England said:

“I think the fiscal position in the UK is not one where we could…engage in another significant round of fiscal expansion”.

The question to the Leader of the House today is whether she agrees with the Governor of the Bank of England—yes or no?

The Budget will be on 22 April. The Governor of the Bank of England agreed with us when he said that our fiscal stimulus was “perfectly reasonable and appropriate”. When it comes to fiscal measures, how can the right hon. Gentleman justify £2 billion of public money being squandered on 3,000 of the richest people in this country? That is unfairness and irresponsibility.

The CBI said this week of the British economy that

“a further significant fiscal stimulus is unaffordable”.

The ITEM Club said that

“there is really very little room for manoeuvre”.

The chief executive of the Audit Commission said that we are facing an “Armageddon scenario” because of the “scale of indebtedness”. The Governor of the Bank of England said the words that I have now read out twice to the right hon. and learned Lady—that this country cannot afford another substantial, significant fiscal stimulus. May I give her, in my last question, a third opportunity to agree with the Governor of the Bank of England? Otherwise, the nation will rightly conclude that the Government are now in open disagreement with the Bank of England, and are no longer in control of either the public finances or the policies of this country. Yes or no—does she agree with him?

This country will rightly conclude that while the Tories say that they have changed their ways, they have not. I want to make it quite clear that while we are investing—we will continue to invest—they call for cuts. When our Prime Minister is working with world leaders, they drift off to Europe’s far right. While we are giving tax cuts to millions of people, they would give tax cuts only to millionaires. They have set out their stall: it is the millionaire’s manifesto.

Is my right hon. and learned Friend aware of the predictions of a serious increase in youth unemployment this summer? Does she therefore agree with the independent member of the Monetary Policy Committee and others, who think that there should be a strong fiscal stimulus specifically targeted at ensuring that young people can get jobs this summer?

The extra investment of £2 billion in our jobcentres will particularly help young people. We have made more investment in training, and a central part of the fiscal stimulus is more investment in apprenticeships. I fully support the points that my hon. Friend makes.

Yesterday we had a very British coup d’état when the Governor of the Bank of England sent his tanks down the Mall, effectively seized control of the British economy through his command of monetary policy, and put the Government under house arrest. If the Prime Minister still thinks it is worth his while returning from a sunny exile in south America, what freedom of manoeuvre do he and the Government have in respect of taxation and public spending?

I know the hon. Gentleman understands that it is important that we work internationally as well as taking action in this country. It is important that every Government in the world support their economy so world trade can get going again. I know that he agrees with that, so I do not know why he decries the international action that the Prime Minister is taking. With reference to the Bank of England, it was this Government who made the Bank of England independent as to its interest rates.

I think this discussion is about what the Government do at home, as well as what they do abroad. Would it not be sensible for the Government to concentrate now on taxing and spending more efficiently and fairly, to withdraw the pointless cut in value added tax, using the money to focus it on targeted investment in affordable housing and public transport, and to provide a tax cut for people on low pay, paid for—fully financed—by people who are very wealthy and who, under this Government, have enjoyed extraordinary tax reliefs, allowances and tax avoidance opportunities?

The VAT cut was one of a range of measures and it is only temporary, for one year. We agree with the hon. Gentleman about the importance of investing in housing and public transport. We agree with him, too, that when it comes to bringing the public finances back into balance, it must be done fairly. Those who can afford most should contribute most. That is why we propose a new top rate of tax of 45 per cent. on income over £150,000. I hope that he will support it, even if the Tories will give support only with tax cuts for millionaires.

MRSA and C. difficile rates are falling significantly at Nottingham University Hospitals NHS Trust, Derby Hospital NHS Foundation Trust and Ilkeston community hospital, all of which serve my constituents. Is this not down to the hard work of NHS professionals, coupled with the targeted investment put in by the Government? Will my right hon. and learned Friend take the opportunity to congratulate all involved?

I will. I know that my right hon. Friend the Secretary of State for Health has led that, and has led the NHS team in making that a target so that patients in hospital know that they can be safe. That is a result not only of the extra investment, but of the hard work from cleaners through to nurses, doctors and all the teams in the hospitals. I agree with my hon. Friend.

Q2. A new European Commission report shows that despite prohibition, the illegal drugs trade is thriving, creating what United Nations drugs director, Antonio Maria Costa, calls a “staggering” criminal market, destabilising health policies and entire countries. Will the Leader of the House convey my request to meet the Prime Minister to propose a comprehensive impact assessment of current drugs policy, so that we can start tackling this crisis in an evidence-based way? (266010)

I will pass on the hon. Gentleman’s request for a meeting with the Prime Minister, who I know will agree that we need to provide all the support we can to those who have become addicted to drugs, and crack down hard on the dealers and traffickers.

Is my right hon. and learned Friend aware of Conservative Barnet council’s scheme to cut entirely the warden service for its sheltered tenants? This is causing considerable fear and anxiety among—[Interruption.]

Order. The hon. Gentleman is allowed to be heard. [Hon. Members: “Reading.”] Order. Let me decide. If he is doing anything wrong, I will decide.

The Conservative council’s plan to cut the warden service is causing considerable fear and anxiety among many elderly and vulnerable people in my constituency, who rely on the wardens not just for safety, security and reassurance, but for the small things that make life worth living—

Order. The hon. Gentleman has been here long enough to know that a supplementary should not be read. Perhaps he could put the note down and ad lib.

Will my right hon. and learned Friend raise the matter with the leadership of Barnet council? Does she agree that it is a case of same old Tories, same old cuts?

That is why we will defend public investment and public services, and make sure that the economy can be put back on the path to growth so that we can protect people in this country, such as my hon. Friend’s older constituents.

Q3. Will the Leader of the House help save 225 jobs at Polytec Holden in Bromyard? The company makes components for car manufacturers, and the Royal Bank of Scotland, which has had £45 billion of taxpayers’ money, will not lend it money to tool up. Will the right hon. and learned Lady arrange a meeting between my constituents and the noble Lord Mandelson, so that we can co-ordinate funding from a state-owned bank to a state-sponsored car industry? (266011)

I will arrange a meeting between the hon. Gentleman and his constituents and the Business Secretary. We are determined to make sure that we help those who are working hard in important British industries such as the automotive industry.

President Obama’s economic fiscal stimulus package is worth $787 billion, and more than half that is being spent at state level. In contrast, in the UK the Labour Government, supported by the Conservatives, are cutting devolved public spending by £1 billion in Scotland, by £500 million in Wales and by more than £200 million in Northern Ireland. How can that be sensible or socially just?

We are not cutting investment in Scotland and Wales—far from it. But we are saying—and I am sure that the hon. Gentleman would agree with this—that at a time when public spending is tight, we need to make sure that every single penny of it is wisely spent.

Q4. Yesterday, the Government announced their national security strategy. After the 7/7 bombings, the then Prime Minister made it clear that his highest single priority was the deportation of foreign terror suspects from this country. Can the right hon. and learned Lady tell the House how many foreign terror suspects have been deported? (266012)

My right hon. Friend the Home Secretary has said that we have excluded 150, and we are absolutely clear that we will take action to deport those who are a threat to national security. I am sure that we are all in total agreement on that point.

Suppose that the Government were to seek advice from either side of the House about the gross unfairness of bunging a few rich people tax cuts while the majority saw tax increases; that is what would happen if the Tories’ inheritance tax proposals went ahead. Would my right hon. and learned Friend prefer the advice of the shadow Business Secretary before or after he was muzzled?

The shadow shadow Chancellor gave his right hon. Friends the opportunity to find their way out of the decision that they had made, and they unwisely chose to ignore it. What are people to make of a party that opposes tax cuts for 22 million people and, instead, chooses to squander £2 billion of scarce public money on the super-rich?

Q5. The Armed Forces Pay Review Body submitted its report to the Prime Minister on 29 January. Why should our personnel serving in the field still have no idea whether they will get any pay rise by Wednesday next week? Does the delay reflect more about the Government’s attitude towards the armed forces, or is it another example of dithering incompetence? (266013)

The Government have been unswerving, and rightly so, in our commitment to our armed forces. The Minister of State for Defence will open a full day’s debate on the armed services tomorrow, and I am sure that he will address that point.

President Obama has written an article today that says that trillions of dollars have been lost in the world economy, banks have stopped lending and tens of millions of people will lose their jobs. Will I get an undertaking that the Prime Minister will work with President Obama to ensure that the message goes out that people and their futures matter in the economy and that this Government will ensure that employment is at the top of the G20 agenda?

My right hon. Friend’s passion and commitment on this issue shows that he takes the view that we do—that the action that we are taking on the economy is to protect people who otherwise face the threat of losing their jobs or their homes. As for the fiscal stimulus that we have undertaken, this country needs it, and all other countries are now looking to do it: only the Tories oppose it.

Q6. Can the right hon. and learned Lady ask the Prime Minister to reassure my constituents that when he recently met the President of the United States, he picked up some tips about getting back ill-gotten bonuses from overpaid bankers? Can she set out for the House the start date for doing so, or, if not, at least the Prime Minister’s timetable for beginning to think about it, or if all else fails, his aspirations for a miracle? (266014)

The Prime Minister has made it absolutely clear that there should be no reward for failure and that he does not want banks taking risks with other people’s money. The Financial Services Authority, under Lord Turner, has issued a report on tightening up financial regulation and remuneration policy. We are working internationally on this as part of the G20 agenda. As far as Sir Fred Goodwin is concerned, UK Financial Investments Ltd. is on to it.

Does the right hon. and learned Lady understand that there is considerable anger in Northern Ireland today about the fact that a number of suspects being questioned in relation to the terrorist murders of two young soldiers in my constituency of South Antrim and of police officer Stephen Carroll have been released by order of the court because of technicalities? Will she and the Government assure my constituents that everything will be done to ensure that justice is done and that evil men are taken off the streets of Northern Ireland?

I can absolutely assure the hon. Gentleman that that is the situation. We want to ensure that those who have committed this atrocious crime are brought to justice. We support the police and the prosecuting authorities in their work, and we support the peace process.

Will my right hon. and learned Friend support the establishment of a national centre for asbestos-related diseases, which would be a virtual centre committed to finding better treatments and a cure?

We support the work to carry out research on finding the causes and cures of work-related diseases. I pay tribute to my hon. Friend for the work that he has done in the House of Commons over many years to bring to the House’s attention the tragedy of people simply going to work and being made ill by their work. We have put £12 billion extra into our science budget, part of which is for research that will find the treatments and cures that he has asked for.

Q8. Now that the Information Commissioner has ruled that the Government have been wrong, on several counts, to refuse my request for a list of possible sites for the new Titan prisons, will they now abandon their policy of choosing sites without consulting local residents and publish that list of sites so that local people and stakeholders can have their say? Otherwise, all the rhetoric from the Prime Minister saying that he wants greater transparency in politics will be seen to be nothing more than hot air. (266016)

The Justice Secretary assures me that there will always be consultation when such developments are being considered. If the hon. Gentleman has a particular concern about his constituency, I am sure that he can meet one of the ministerial team to discuss it.

Wakefield metropolitan district council has set up an innovative mortgage assistance scheme which, in the first six months of its operation, has prevented 11 families from becoming homeless. Does my right hon. and learned Friend agree that more councils should adopt that sort of scheme to show that local government is on people’s side during the recession rather than telling them that they are on their own?

It is very important that we do not leave people to sink or swim and do not say that the recession should take its course, and that we step in to help people who fear that the loss of their job or a fall in their income might cause the loss of their home. That is why we have put extra investment into the social security budget to enable people to claim help with their mortgage interest after 13 weeks instead of 39 weeks; it is estimated that that has already helped 10,000 people. I am glad to hear that my hon. Friend’s local council is working to that effect as well.

Q9. For every pound spent by Governments around the world on conflict prevention, about £2,000 is spent on military and defence budgets. Can the right hon. and learned Lady give any assurance to the parliamentarians from around the world meeting in London this week to discuss conflict prevention that there will be a greater UK Government commitment to conflict prevention and, in the short-term, to bringing about a resolution in Sri Lanka? (266017)

The hon. Gentleman is right to draw the attention of the House to the situation in Sri Lanka, which remains grave. The Government are committed to supporting a range of conflict prevention, stabilisation and peacekeeping activity, focusing on countries where the risk of impact of conflict is greatest. We have had an unprecedented increase in our international development budget, part of which was to deal with conflict resolution. Conflict resolution involves international action—not just this country working alone, but with other countries around the world.

Q10. Some 150 jobs will be lost at the Manchester Evening News and other Greater Manchester Weekly Newspapers as all the local newspaper offices are closed, and great titles such as the Tameside Advertiser and Stockport Express are consolidated in central Manchester. Does my right hon. and learned Friend agree that local newspapers are the lifeblood of local democracy, and will she join the Greater Manchester MPs in calling on the Guardian Media Group to think again? (266018)

I absolutely agree with my hon. Friend. It is certainly the Government’s position that local and regional newspapers, radio and television are important and, as he says, part of the lifeblood of this country. That is why Lord Carter and the Secretary of State for Culture, Media and Sport are working on this important issue, which was raised in a debate in this House last Thursday.

Q11. South Thames college in Wandsworth was advised by the Learning and Skills Council to submit its redevelopment programme in two halves. The first half of that project is complete, but the second half now hangs in the balance. If it is not finished, the students’ learning environment will be severely disrupted. Does the Leader of the House agree that it is madness to put such projects on hold, and can she assure South Thames college that it can finish the project that it started? (266019)

This Government support better further education and more investment in colleges—[Hon. Members: “We all do.”]—in my constituency as well as hers. Opposition Members say, “We all do.” Actually, no. Their policy is to cut funding for it by £600 million. I am sorry, the hon. Lady might not remember this because she was not in the House at the time, but when we came into Government, does she know how much money was in the further education college budget? Precisely zero pounds, and we have increased it by £1 billion. She can leave it to us: we will invest in further education. But if her party got into government, that would be the end of it.