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Commons Chamber

Volume 496: debated on Tuesday 14 July 2009

House of Commons

Tuesday 14 July 2009

The House met at half-past Two o’clock


[Mr. Speaker in the Chair]

Business before questions

Canterbury City Council Bill

Motion made, That the Bill be now read the Third time.


Bill to be read the Third time on Thursday 15 October.

Nottingham City Council Bill

Motion made, That the Bill be now read the Third time.

Oral Answers to Questions


The Chancellor of the Exchequer was asked—

Public Sector Pay

1. When he last met the chief executive of the Audit Commission to discuss levels of public sector pay. (286189)

At a time of private sector pay freezes and public sector pay restraint, is it right that the leaders of our quangos are getting pay increases of up to 20 per cent. or more?

The principle that must guide the rewards that go to leaders of quangos has to be very clear: they must be rewarded only on the basis of their performance on behalf of the public. However, the hon. Gentleman is right to allude to the necessity for public service leaders, no matter what part of the public sector they work in, whether it be the BBC or any other non-departmental public body, to set an example and to show restraint. That is why we have limited pay awards for senior civil servants, judges, senior NHS managers and NDPB chief executives in this financial year to just 1½ per cent.

Does the Minister agree that there are substantial numbers of public sector workers who are low paid and do not deserve to have their pay frozen, and that although there is a need for pay restraint, it ought to be applied to those at the top of the public sector and, indeed, to those at the top of the private sector?

My hon. Friend has an excellent point. It is incumbent on the leaders of public services, at such times, to show restraint and to set an example. However, I agree that over the past 10 years it has been important to give some above-average pay increases to front-line staff in particular, such as nurses, fire service workers and the police. If we look back at the average pay rises throughout the private and public sectors, we find that they basically come out about the same. However, within that overall improvement in public sector pay, we are proud to have achieved particular rewards for nurses, teachers and police, because, let’s face it, for many years they were under-rewarded.

The Minister says that he is in favour of quango-boss pay restraint, yet we are seeing figures of 22 per cent. at the Centre for Environment, Fisheries and Aquaculture Science, 17 per cent. at the National Treatment Agency for Substance Misuse and 16 per cent. at the UK Hydrographic Office. The Chancellor told The Sunday Times that

“a pain-free way of cutting public spending would be to freeze public sector pay”.

So which is it? Is he in favour of a pay freeze or huge rises for quango bosses?

The argument is the argument that I made to the hon. Member for Broxbourne (Mr. Walker). There cannot be any automatic entitlement to bonuses or, indeed, to high pay. Any bonuses to people in the public sector can be awarded only on the basis of the performance that they have delivered for the public. Of course, on quangos there are wider questions—not just about pay, but about the number of quangos that we have in this country—and that is why I have asked for a cross-government look at the number that we have. What I will certainly not be doing, unlike the Opposition, is bringing forward plans for another 17 of them.

Bank Lending (Small and Medium Businesses)

2. What recent representations he has received on the level of bank lending to small and medium-sized businesses; and if he will make a statement. (286190)

6. What recent representations he has received on the level of bank lending to small and medium-sized businesses; and if he will make a statement. (286195)

The Bank of England’s latest credit conditions survey suggested that there has been a second consecutive increase in the availability of corporate credit, in the second quarter of this year; and it expects a further easing in the following quarter.

My constituency has seen some of the largest increases in unemployment in the country, so it is vital that the banks support viable businesses and maintain jobs. Will my right hon. Friend do all that he can again to encourage banks to lend to viable businesses? There is an inconsistency among the banks which has been brought to my attention by a number of constituents.

My hon. Friend raises an understandable concern. We do have lending agreements with those banks in which we have substantial shareholdings, the Royal Bank of Scotland and Lloyds Banking Group. Those agreements will this year see RBS lend £25 billion and Lloyds lend £14 billion. In some cases, instructions do not appear to have worked their way down to regional and local levels to ensure that high-level agreements have been translated into available lending for companies and individuals. I am meeting representatives of the banks shortly to discuss that matter further, but they must ensure that the people who are responsible for making those decisions make them in the way that we want; that, in many cases, they renew their acquaintance with some of the businesses with which they deal; and that they get back to some good old-fashioned banking.

This has been going on for quite a long time; the banks’ slowness to help small businesses has often been raised in the House. My right hon. Friend said that he is to meet representatives of the banks shortly. However, what effective measures can he take, because small businesses are suffering, they are impatient, and people’s jobs are at stake?

I agree with my hon. Friend. It is important, particularly if we are going to see a recovery, to ensure that credit starts flowing, especially to the small and medium-sized enterprises sector, which employs so many people in this country. As I said a moment ago, it is important that the banks honour their commitments. In addition to the commitments that I referred to, Barclays and HSBC have also given undertakings to lend additional money during the course of the next year. It is very important that we see that through.

Can the Chancellor confirm that lending to business under the small firms loan guarantee scheme and the enterprise finance guarantee scheme was only £178 million in the year just finished—less than half the original target—and that despite the taxpayer billions and all the Government’s promises, new lending to business is still falling in this financial year? Why?

At the beginning of this year, the take-up of lending was slower than we expected, not only on the supply side, on the part of banks, for the reasons that I mentioned, but because, as the hon. Gentleman will know, we saw a very substantial downturn in the economy at the end of last year and the beginning of this year. The result has been that the rate of lending has not been as high as we would have liked. However, all the mechanisms are now in place—certainly the funding is in place—and it is now important to ensure that lending takes place and gets put into the economy as quickly as possible.

In the Treasury Committee’s current inquiry into mortgage lending, the anecdotal evidence coming in to us indicates that credit scoring is tightening almost by the week. The Home Builders Federation has said that lenders are looking for any reason to refuse a loan. In his most recent appearance before the Committee, the Governor of the Bank of England said that lending to business is falling and lending to households is flat. When the Chancellor meets the banks, will he reinforce the point that they have not only economic but social obligations to ensure that this lending does indeed take place?

As my right hon. Friend knows, there is a balance to be struck in this regard. About a year ago in Treasury Question Time, Members on both sides of the House expressed concern about irresponsible lending. Inevitably, there has been some retrenchment on the part of lenders to ensure that when they lend money the borrower can maintain the repayments, which is obviously very important. The general point that my right hon. Friend makes has been made on both sides of the House. It is absolutely imperative, in this country and in others, that the banks see through the obligations that they have entered into. We need to get credit going again because that will be the thing that helps to drive the recovery. I will certainly be raising these matters when I meet the banks shortly.

The Chancellor says that lending in the economy is lower than he expected. Perhaps that is something to do with the fact that half his schemes are not working. When he launched the asset-backed securities guarantee scheme, he said that it would

“increase confidence and capacity to lend, and…support the recovery”.

Can he tell us how many major banks have made use of that scheme?

We are still in discussions with the banks to ensure that that facility is there, but it has to be seen in the context of a range of other measures that we have introduced to help to stabilise the banks and to get lending going again. The hon. Gentleman would be on much stronger ground if he reminded the House that he opposes every single one of these measures because he is against any sort of stimulus in the economy at all.

I remind the Chancellor that almost a year ago we proposed a national loan guarantee scheme, which would have solved many of these problems. The answer to my question is zero—not a zero per cent. rise, but simply zero. Indeed, the Communities and Local Government Committee has today produced a report saying that although the asset-backed securities guarantee scheme is

“one of the most of the important of the weapons…for tackling the effects of the credit crunch…it is not working”,

and the Labour Chair of the Committee says that

“it is doomed to fail”.

The Chancellor talks about context. That scheme has no take-up, the trade credit insurance scheme has helped just 13 firms, and the mortgage rescue scheme for homeowners has helped just six families since it was launched. Do not this Prime Minister and his Cabinet increasingly resemble a deluded emperor looking at Potemkin villages—schemes that were announced only in a press release and do not actually exist on the ground? Will the Chancellor go back to the drawing board, look again at the asset-back securities guarantee scheme, redesign it, re-price it, and get it working so that he can deliver, to coin a phrase, real help now?

The hon. Gentleman refers to his national loan scheme, which is all very well except that at one and the same time, he was saying that he would not provide any funding to ensure that it was actually in place. Then the shadow Business Secretary had to admit that if the Opposition had such a scheme, the taxpayer would be hit for it despite the fact that the Conservative party is against spending money on these things.

We are putting in place a range of measures to help businesses, for example on the time to pay and on enabling small businesses to carry back losses over three years, and the scheme to help the car industry—the scrappage scheme. A range of measures are being taken. I also have to say to the hon. Gentleman that a range of measures is in place to stabilise the banking system and ensure that it functions properly. All those things are in place. Some of them will take time to work their way through, but every one of them has one thing in common: they are opposed by the Conservative party. I welcome the Opposition’s concern about them, but for the sake of completeness they should point out to people that they are against every single one of those measures to help our economy.

I have a medium-sized company in my constituency that distributes white goods to shops. Recently it has had to lay off a number of its work force because of the difficulty of acquiring trade credit insurance. May I ask my right hon. Friend what good news he may have for firms such as that, which are having such difficulties?

The Department for Business, Innovation and Skills has put in place measures to help with trade credit insurance, and it is examining the matter carefully to ensure that we can improve the availability of trade credit. That is very important not just for small firms but for large ones as well, and we are pursuing the matter because it is necessary to get it going.

Bingo (Taxation)

3. What recent discussions he has had with bingo operators on the effects on them of the taxation regime for bingo clubs. (286192)

We have had continued dialogue with the bingo industry both before and since the Budget on the impact of the tax regime. I last met the industry just two weeks ago, and that dialogue will of course continue.

I thank the Minister for her answer. She and the whole House understand the social importance of bingo to our communities, and that the business of bingo is a caring and a good business. Will the Government keep the taxation of bingo under review in future Budgets, to ensure that it is taxed fairly given its social function?

The hon. Gentleman is an advocate for all his constituents who have written to him. I know from letters that I have received that many hon. Members have received correspondence from their constituents about the importance of bingo. Of course we will continue the dialogue with the industry, and these things are always kept under review in the pre-Budget report and the Budget.

May I suggest that my hon. Friend consult other Ministers about which forms of gambling are most dangerous and which are most innocent, and then consider taxing gambling according to the danger of addictive tendencies? That would be not only fair but helpful to those who suffer from compulsive gambling.

We have not had a policy of taxing gambling in accordance with how addictive or dangerous it is. That does not mean to say that we would not consider that in future. We have to take into account a lot of considerations as we look at different rates of duty, particularly for the bingo industry. The changes that we made in the Budget were designed to simplify the regime.

I do not wish to go down in history as Miss Killjoy, and I certainly do not think that is my function or what I am doing in this instance.

In a response on this very issue that I received from one of my hon. Friend’s ministerial colleagues, dated 30 April, it was pointed out to me that over the past six years, taxation on bingo had fallen from 35 per cent. to 22 per cent. That is good news, but given that bingo clubs are still closing, would it not be better to consider lowering the tax even further? After all, it is better to get taxation at 20 per cent. from a thriving bingo club than to close clubs down at 22 per cent.

As I said in answer to previous questions, we are of course in ongoing dialogue with the industry about the impact of what has been done. My hon. Friend is quite right to say that as recently as 2003 the effective tax rate was 35 per cent. We will continue to look at the matter and, as I have said, we recognise the importance of bingo to many of our constituents, as evidenced by the correspondence that we have received.


No, we have no plans to rescind IR35. It remains important that people with personal service companies should not gain an unfair tax advantage over direct employees.

That is a disappointing reply because IR35 blurs the distinction between freelancers and employees for their tax liability. Although fraudulent employment should be tackled, why punish genuine freelancers when enterprises are needed to generate wealth for the United Kingdom economy, and when there is no evidence that IR35 raises any money for the Exchequer?

I would turn the question back on the hon. Lady. Why should somebody who is effectively in an employment relationship with an employer, but with a personal service company, have a tax advantage over a direct employee? I vividly remember the heated debate after IR35 was announced more or less exactly 10 years ago, but it has operated satisfactorily since then. The key point is that people who are in employment should be taxed as employees. IR35 has therefore addressed a potential unfairness.

Kaupthing Singer and Friedlander Isle of Man

5. If he will hold discussions with the Isle of Man Government on reimbursement of the legal costs of UK depositors of Kaupthing Singer and Friedlander Isle of Man bank arising from the scheme of arrangement against the bank administered by the Isle of Man authorities. (286194)

Kaupthing Singer and Friedlander Isle of Man is a subsidiary not of KSF in the UK, but of the Icelandic parent company. Oversight of KSF Isle of Man is the responsibility of the Isle of Man’s Financial Supervision Commission. Arrangements for depositors in KSF Isle of Man, including for the reimbursement of legal costs, are a matter for Manx insolvency law and the Isle of Man Government.

Is not my hon. Friend passing the buck? People in my constituency and throughout the United Kingdom invested in the Derbyshire building society, thinking that their savings were safe. They have lost most of their savings and they are still waiting for any recompense. The legal costs will haemorrhage away what hope they have of ever getting anything. They are UK citizens who have lost their life savings, and I believe that we should do something to help them.

It is my understanding that investors in the Derbyshire were clearly informed when their savings were transferred to KSF Isle of Man. It is a fact that KSF Isle of Man is regulated by the Manx authorities, in the same way as other jurisdictions have their own regulators. It is not possible for the UK Government to intervene in those circumstances. I am more than happy to discuss the issue with my hon. Friend in more detail, if he wishes. I recognise the concern of savers in his constituency and others.

The Government moved early to protect savers with Northern Rock and other large financial institutions in the United Kingdom. Do not savers with smaller institutions, such as the Derbyshire and the Presbyterian mutual society in Northern Ireland, deserve the same protection?

As the hon. Gentleman knows, following discussions with some of the party leaders in the Northern Ireland Administration, the Government have announced that we will conduct a review of the Presbyterian mutual society and the situation facing savers. I understand that that review has just started and is due to report in the autumn. The hon. Gentleman will also know about the general issue of regulating industrial and provident societies and credit unions in Northern Ireland. A report was published on that matter on 8 July, to which I refer him.

Alcohol Duties (Employment)

7. What assessment he has made of the effect on levels of employment in the pub and hospitality industry of the changes in alcohol duties announced in the 2009 Budget. (286197)

Many factors affect the level of employment in the hospitality and pub industry. No separate assessment has been made of the effects of the changes in alcohol duty.

I thank the Exchequer Secretary for her reply. Let me tell her that 5,000 jobs are estimated to have gone since the 2 per cent. rise was introduced. May I bring it to her attention and to that of the Government that the Royal Bank of Scotland owns 1,000 tied pubs, with some tenants facing unreasonable rents and beer prices, forcing them out of work and on to the dole queue? How does she feel about that, given that RBS is part Government owned? Will she and the Government support calls for RBS to sell those pubs to tenants at fair market prices?

I am sure that the hon. Gentleman is aware that the Government do not control the management of RBS, so we leave that issue to them.

I have been in correspondence with my right hon. Friend the Chancellor. One of the things that has come up is the fact that the tariffs on beer are exactly the same whether it be prepacked or draught beer. It is European legislation that is stopping us from recognising the difference. Surely as a Government we can go to our Labour MEPs—and, indeed, to Governments across Europe—and get rid of that tariff, because that is what is closing a number of pubs at the present time.

I thank my hon. Friend for his question. He will be aware that there will be a review of the alcohol directives in 2010. When the new Commission is in place, a work programme will be published on what areas it will look at. We will work closely with the Commission to ensure that what comes out of the review is best for the UK industry.

Comprehensive Spending Review

Departmental budgets are set until April 2011. As I said in the Budget statement, the current economic uncertainty means that it would not make any sense to try to set departmental budgets now for every year to 2014. However, as I said in the Budget, we will return to that issue at the pre-Budget report and then again in the Budget.

Given the economic difficulty and the background, can the Chancellor tell us whether there is any difference in principle between setting the overall expenditure envelope and setting the departmental total?

There is quite a big difference I would have thought, but the hon. Gentleman has helped to draw attention to the fact that in the Budget I had two principal aims. One was to ensure that we continued to support the economy now, by ensuring that we maintain spending at its present levels, as we intended from 2007. The second aim was to ensure that we halve the deficit over a five-year period. Both those things were important: it is important to support the economy now, but it was also important that we set out a clear sense of direction, so that we can get borrowing down. That was the strategy that we set out, and it remains our policy.

There is clearly much uncertainty, but does the Chancellor accept the estimate of the OECD, which is that we now have a structural deficit on the budget of around 7 per cent. of GDP, which the public spending review will have to incorporate? As he agrees with us, I think, that it would be foolish and counter-productive to resort to fiscal tightening in a recession, how many years does he think it would take thereafter to eliminate that structural deficit?

First, my forecasts have not changed since I set them out in April in the Budget; and as the hon. Gentleman knows, we will update our forecasts at the pre-Budget report. He is quite right too to identify the fact that there is still quite a lot of uncertainty. Although there have been some encouraging signs in this country and other parts of the world that we are on course to recovery, the problems in world trade are affecting exports. Although oil prices have come down over the past few days, the fact that they have risen poses another threat that we will have to deal with. However, as for making further forecasts or further judgments on what else we can do on spending, that is something to which I said I would return at the pre-Budget report and the Budget next year.

I would like to conduct an intragovernmental sight test. The Schools Secretary has claimed to be able to see the spending on schools and hospitals rising in real terms after 2011. If the Chancellor focuses carefully, can he see that too, or is his vision of the future altogether blurrier?

I think that I have made our position absolutely clear as far as spending beyond 2011 is concerned. However, if the hon. Gentleman wants to play at sight games, perhaps he could explain why one moment we get the Conservatives promising tax cuts and another moment we are told that they are off for six years. One moment we are told that the Conservatives want to spend more; then we are told that they want to cut more. The hon. Gentleman ought to attend to some of his own difficulties before he addresses anything else.

The Chancellor just said that it was his priority to halve the scale of the public deficit. How can that possibly be realistic, and how can he be taken seriously, if he defers indefinitely the comprehensive spending review that must be the essential building block for delivering the policy that he has just told us from the Dispatch Box is a priority?

I do think that it is important that we reduce the deficit, which is why I have set out plans to reduce it by half over a five-year period. That is a reasonable period of time, given where we are at the moment. I said in reply to the hon. Member for New Forest, West (Mr. Swayne) that, at this stage, it would not make any sense to set out detailed departmental totals in the midst of what are still pretty uncertain conditions. I said that we would come back to that at the PBR and the Budget, and that remains our position.

River Forth Crossing (UK Government Assistance)

9. What recent discussions he has had with the Scottish Executive on UK Government assistance for the construction of a new crossing over the River Forth. (286199)

My right hon. Friends the former Chief Secretary to the Treasury and the Secretary of State for Scotland met the Scottish Finance Minister in March to discuss financing for a new Forth bridge.

I warmly welcome the acceptance that the UK Government should help the Scottish Government to fund this vital new crossing, but when will the Government come forward with real new money to help to pay for the bridge? Will they also consider speedily bringing in new borrowing powers for the Scottish Government, so that they can spread the cost over a number of years, as has been proposed by the Calman commission?

I am glad to recognise the importance of the second Forth crossing, and to support the importance of its construction. Funding, however, is a devolved decision, and this is a matter for the Scottish Executive to determine. My right hon. Friends offered flexibility to help within the economic framework applying to the UK as a whole, and I hope that that flexibility will allow the project to proceed.

Can my right hon. Friend assure me that the Government will hold firm on this? Scotland already gets shedloads of extra money under the Barnett formula. It is entitled to raise its own taxes, and this Government should stand firm against this bridge, for which Scotland wants even more money.

My hon. Friend makes a forceful point. Let me simply say that this is an important project, but it needs to be carried out within the economic framework applying to the UK as a whole. My right hon. Friend the Chancellor has just set out some of the Government’s constraints and objectives in relation to the public finances over the next five years, and this decision needs to be made within that context.

Equitable Life

10. What reports he has received of the progress made by Sir John Chadwick in the formulation of his advice on an Equitable Life ex gratia payment scheme. (286200)

11. What reports he has received of the progress made by Sir John Chadwick in the formulation of his advice on an Equitable Life ex gratia payment scheme. (286201)

Sir John provides regular updates to the Government on progress. He has now established his office and appointed key members and the actuarial advisers Towers Perrin. On 16 June, Sir John issued a document setting out his proposed approach and requesting that representations be made to him by this Friday.

I thank the Minister for his answer. While the ex gratia scheme fails to meet the needs and expectations of the victims of maladministration by the Government over Equitable Life, it should still be speedily and efficiently introduced. To that end, will he tell us what time requirement has been placed on Sir John to bring in the scheme? Does he also understand that it is more than appropriate for Sir John to meet the concerned MPs and members of all-party groups who want to lobby him on this issue?

That is a fair comment. I spoke to Sir John Chadwick about this question this morning, and his office has confirmed that he would be very happy to continue to receive representations from Members of this House. The question of the speed of his conclusions is also an important one, but I would like him to balance speed with coming to the right conclusions. He will obviously have to go through an enormous amount of information about policyholders, which will have to be thoroughly analysed before any conclusions can be drawn about the right ex gratia scheme to correct this injustice. Sir John told me this morning that it will be much easier for him to pin down what the next stages will be after this Friday, when all the representations have been received. He hopes to publish a further document pointing out the next steps in August.

I appreciate what the Minister says about ensuring that we get the right scheme, but nine years after this saga started, and with 15 policyholders dying every day, how much longer does he think it is reasonable for people to wait?

I would just like to underline my previous answer and to say that speed is of the essence now. It is vital that justice be delivered to the policyholders of Equitable Life. At the same time, however, I appreciate the enormous burden that has been placed on Sir John to get to grips with understanding where there have been losses and the scale of those losses, and where hardship has been caused and the dimensions of that hardship. The hon. Lady will appreciate that those considerations are all vital if Sir John is to establish an ex gratia scheme that will correct this injustice that has so incensed Members of the House.

We hear what my right hon. Friend has to say, but the truth is that there is not a constituency in the country that has not been touched by the plight of Equitable Life policyholders. The time has now come to show compassion and that the Government care. Let us get on with it; let us pay out the cheques and have done with it once and for all.

That urgency is shared by me and by Sir John Chadwick, but my hon. Friend would agree that we do not want an ex gratia scheme that does not correct the injustices, which have been accepted by the Government and widely acknowledged on both sides of the House. My hon. Friend would also accept that Sir John has an enormous amount of information to go through, and I would rather that he proceeded with urgency but produced an ex gratia scheme that is right.

A pensioner couple came to see me in my constituency on Friday. They have suffered greatly because of the collapse of Equitable Life. They have been living on an overdraft, and the bank has pulled the plug on it. The fact that the couple hoped to get something from the ex gratia scheme cut no ice with that bank. There are people who are in deep financial difficulty, and I urge the Government to get a move on and get some money into their pockets.

It is now a year since the ombudsman produced her report and it is six months since the Government produced their response. Does the Minister not appreciate just how angry policyholders are that they still do not know how much they may receive or when they may receive it? Is it not time for the Government to give a clear deadline for when policyholders can expect to receive some payments in recognition of the losses they suffered as a result of the Government’s maladministration of the regulation of Equitable Life?

That anger is shared on both sides of the House, which is why I urge all Members to make representations to Sir John by this Friday. We have had a couple of good debates over the past few months, and it is important to keep up the momentum behind Sir John’s work. That is why he proposed such a short timetable for receiving representations about where injustices and hardship have been caused, and why I am glad that he will produce a document setting out his next steps in August. All Members want a speedy resolution now.

Comprehensive Spending Review

As my right hon. Friend the Chancellor has said, departmental budgets are set until April 2011. We are less than half way through the current spending review and current economic uncertainty makes it unrealistic to set departmental budgets now, all the way through to 2014. My right hon. Friend will have more to say about that in the pre-Budget report and the Budget.

I listened to what the Minister said, but I do not think it will or can wash with the House. The British economy is obviously in a terrible state and the only people who do not realise it are the Government. The Institute for Fiscal Studies has said that departmental spending will fall between 2011 and 2014. Will the Minister now admit that?

As I have said to the House, we will set out departmental budgets at the next spending review. There is a good deal of uncertainty, including about the kind of things that the IFS is forecasting at the moment, and it would be rash to set out detailed projections and commitments at this stage. That is why my right hon. Friend the Chancellor will come back to it later this year or in the Budget next year.

Is not the truth that this has nothing to do with economic rashness and everything to do with political rashness? Is not the real reason why we do not have a comprehensive spending review that the Government know that they would have absolutely no chance at a general election if they had to reveal the scale of the cuts required to repair the mess in which they have put this country?

No, that is certainly not the case. There is an unprecedented worldwide downturn, which we are dealing with—and dealing with very effectively—but that causes uncertainty. For that reason, it is not right to set out public spending forecasts all the way to 2014. I would be interested to know from Conservative Members whether, as the shadow International Development Secretary said yesterday—

Order. I am very grateful to the right hon. Gentleman for his thoughts on that matter, but he need not take them any further.

Counter-recessionary Policies

13. What recent assessment he has made of the effectiveness of his Department’s policies to counter the effects on the UK economy of the global recession. (286203)

The Government have taken decisive action to support the UK economy, and we continue to monitor a range of indicators as part of our overall assessment of the state of the economy. As we said in the 2009 Budget, we expect growth to return by the end of the year, and it is forecast that the economy will pick up progressively throughout 2010 and 2011 as the macro-economic stimulus builds and credit conditions ease.

At the G20 summit in London in March, many other countries took a lead from Britain in adopting fiscal stimulus packages. When the NATO Parliamentary Assembly’s economics committee met the International Monetary Fund recently, it expressed the belief that such packages were reducing the size of the downturn in the global economy by some 7 per cent. What assessment have the Government made of their effect in the UK and in other countries?

My hon. Friend is right to make the basic point that you cannot cut your way out of a recession. The Government have taken concerted action domestically, but we have also worked very effectively internationally to ensure a co-ordinated fiscal stimulus, and I think it absolutely right for such action to be taken. It is, we believe, starting to have some effect. As the Chancellor said, there is a lot of anxiety out there, but we stand by our forecasts. One of the key things that distinguish us from the Opposition is that we, as a Government, are taking real action in launching programmes and providing real support for people and businesses—measures that have been opposed by the Conservative party.

While the more cautious entrepreneurs wait to see whether the second shoe of the global crisis is still to fall, does the Treasury understand that early publication of a sound comprehensive financial review would do much to reassure them and bring investment back into the market?

We have set an overall direction that is very clear and was announced in the Budget. As the hon. Gentleman will know from the evidence of previous recessions, many entrepreneurs who have taken bold actions at such times have grown world-scale businesses as a result. We believe that this is a good time for UK companies to invest in their growth prospects. We want to invest in building Britain’s future, and that is what the Budget has been all about.

Net Contribution to the EU

As the hon. Gentleman knows, the Government’s latest forecast of UK net contributions to the European Community budget was published in table C9 on page 238 of the 2009 Budget Red Book. I can tell him, however, that the forecast is for a net contribution of £6.5 billion in 2010-11.

I am grateful to the Minister for his reply, but he forgot to mention that the UK’s contribution is £3.5 billion—117 per cent.—more than it was last year. We could buy 70 more Chinook helicopters for that. Does the Minister believe that the British people would rather see billions of pounds given to European farmers or spent on extra helicopters to support the brave servicemen and women who are fighting in Afghanistan?

As the hon. Gentleman well knows, our contributions to the EC budget have been set as a result of negotiations. He will be aware of the negotiations that took place in 2005. Only recently, he had an exchange with the Prime Minister in which the Prime Minister made clear our belief that it is right for us to share the burden of membership of the European Union with the new accession countries so that every part of the European Union can look forward to prosperity in the future. As the hon. Gentleman knows very well, that remains our position.

Does the Minister accept, at a time of recession, the importance of spending as much of our money as possible in the United Kingdom rather than feeding the bottomless pit of the EU?

It is easy to engage in Euro-bashing, but the simple fact is that the UK Government have been trying to recognise the contributions that we are required to make to the European Community budget, while at the same time ensuring that we negotiate hard, which we were doing on Friday in Brussels and we will continue to do until we agree the budget in November this year for 2010. At the same time, we ensure rigorous value for money, and the UK will continue to press strongly on that, as we always do.

Personal Debt

The Bank of England collects and publishes statistics on the level of personal debt in the economy, and according to its latest statistics, total personal debt was £1.46 trillion in May 2009.

Against that worrying background, my local citizens advice bureau really welcomes debt relief orders but is very concerned about the availability of intermediaries. Is the hon. Lady aware of those concerns, and what action is she taking?

We are obviously in discussion with all organisations that give debt advice, including the CAB, and I am sure we will continue to have discussions on the point that the hon. Lady raises.

Topical Questions

Does the Chancellor think that a 50p rate of income tax would slow the economy’s return to growth?

As I said in the Budget, it is necessary for us to raise revenues and I think it fair to look to people who have the broadest shoulders to take some of that burden. Other countries will face exactly the same problems over the next few months and years, and I believe that the measures I have announced as a whole in the Budget and the pre-Budget report will help to support our economy and help it to grow.

T3. Is my hon. Friend aware of the level of concern about the high charges for mortgage arrears being charged by some providers—for example, up to £150 by a debt counsellor, and up to 2 per cent. in standing monthly charges? Will he talk to the Financial Services Authority and see whether some controls or standards can be set to keep down the very high charges that are affecting a number of my constituents? (286216)

We do of course recognise the worries that many households have about meeting mortgage payments, keeping their home and falling into negative equity. We will explore any avenue that will help people in that situation.

T2. If all taxpayer liabilities against RBS and Lloyds are taken into account, the current loss is more like £20 billion, rather than the £11 billion claimed by United Kingdom Financial Investments Ltd. In that context, can the Chancellor of the Exchequer give the House an assurance that there will be no early sale of these assets—before the general election, say? (286215)

Yesterday, the UKFI was simply recording the book price of the shares for RBS and Lloyds, which are actually worth a bit more than in February, but as the shares are not being sold today, it is not a real loss. I can tell the House that it is our policy to return these shares to the private sector, but we will only do that when it is the right thing to do for the taxpayer, for financial stability, and for the wider economy. All those conditions were clearly set out in both the UKFI annual report yesterday, and in the White Paper that I published last week on the regulation of financial markets. We will enter into a sale only when we judge that the time is right: in other words, we are in no hurry to do so.

T4. Is the Governor now satisfied that the Bank of England has the necessary powers to fulfil its statutory responsibility to protect the stability of the financial system? (286217)

As my hon. Friend knows, I set out the Government’s proposals last week both to strengthen the powers available to the FSA and to build on the additional powers that we gave to the Bank of England under the Banking Act 2009, which was passed earlier this year. We will continue to consider, with the Governor and the FSA, what additional powers might be necessary, but the measures I announced last week, which are broadly in line with what other Governments and countries are doing in different parts of the world, will make it easier in future to ensure that we act on warning signs if things start to go wrong. That is very important.

T5. While the Chancellor and his colleagues are responsible for some bank assets, is there not an opportunity to use them to provide guarantees or loans for the infrastructure that we need for the green and renewable energy products and plant that the Prime Minister and the rest of the Government keep telling us that we need? Is not now the time to use this asset at this moment of environmental crisis? (286219)

The hon. Gentleman will no doubt recall that in the Budget I set out proposals significantly to increase the amount of money that we are spending to improve environmental and energy efficiency. He will no doubt also be aware that the Secretary of State for Energy and Climate Change will publish a White Paper tomorrow, which contains significant proposals that will go a long way to ensuring that we meet our obligations. We have already done more than most other countries in relation to our Kyoto obligations, and we will continue to do everything that we can to ensure that we have secure energy supplies that are much cleaner and greener in the future.

I wish to return to the subject of the bingo industry. Will my hon. Friend the Exchequer Secretary seek an early meeting with the Bingo Association to clarify the point that she made on Report, when she said that she was still waiting for information fromthe association about its figures? She also said that the industry had accepted the taxation regime that the Government introduced in the Budget. I am sure that she meant to say that it had accepted the calculations. Will she seek an urgent meeting to clarify that information to the industry?

As I clarified earlier, dialogue with the bingo industry is definitely ongoing. The last meeting I had was two weeks ago, at which the industry presented some data, but they were not complete. We have agreed that the industry will bring more data forward.

T6. The Chancellor will be aware that the current comprehensive spending review gave a further £2 billion for PFI initiatives in waste disposal management options to enable the UK to meet its EU landfill directive obligations and recycling targets. Does the Minister acknowledge that none of those PFI projects has gone forward because the banks need more details and more reassurance, so the landfill targets will not be delivered within the prescribed time limit? (286224)

This is the kind of infrastructure project that we keep under constant review. It is also closely watched by regional Ministers through the work that I do with the Minister for Regional Economic Development and Co-ordination. We will look into the schemes that the hon. Lady highlights, and if they are being held up through a lack of information, we will make sure that steps are taken to accelerate these projects and get delays out of the way.

Last time I looked, the objectives of the Audit Commission were to drive efficiency and effectiveness in local public services, but last week its chief executive dismissed critics of public sector cuts as “shroud-wavers”. Will the Minister have a quiet word with Mr. Bundred, put him back in his box and explain that one of the roles of the public sector is to help to sustain the economy during a time of recession?

That is an argument that the chief executive and chairman of the Audit Commission would recognise. Indeed, fruitful conversations take place day to day and week to week between Ministers and the commission about how we can strengthen the role of local authorities in delivering what is a broad package of help, put in place and financed by this Government to ensure that this recession does not cut for long or deeply.

T7. With rising repossessions and 500,000 more families on local authority housing registers, what assessment have the Government made of the effectiveness of their policy to intervene to protect those in the most desperate housing need? (286225)

As the House will know, a wide range of measures is in place to ensure that we minimise the number of people who lose their home during this recession. I know that the Council of Mortgage Lenders has already revised down at least once the number of repossessions that it anticipates this year, and it acknowledges that it is the rapid action taken by the Government, and the range of help that has been put in place, that will help to deliver that lower number. Obviously, every repossession is a tragedy for the family concerned: we want to ensure that we act to keep such repossessions to an absolute minimum.

Will my right hon. Friend reassure health service workers that the recommendations of the pay review body will be honoured in full?

T8. Why does the Chancellor of the Exchequer think that the First Secretary told the nation that there would be no comprehensive spending review before the general election? (286227)

I listened very carefully to all the interviews given by my right hon. Friend during the course of that day and I entirely agree with much of what he said.

I urge my right hon. Friend the Chancellor to continue with his present economic policy, remembering the chaos brought about by the Lady Thatcher Government through the cuts that they introduced in the immediate post-1979 period. Looking to the future, will he resist the idea that he should commit to an overview of the future years, given that the Conservatives are simply looking for legitimacy for the planned cuts that they wish to announce?

My hon. Friend is quite right. Under the Conservatives, there would be cuts now followed by more cuts later. He is also right to say that they are looking for cover for what they have always wanted to do and for what they have always done.

Given that the Calman commission in Scotland and, last week, the Holtham commission in Wales have now produced their reports on the Barnett formula, will the Government publish their factual paper on the formula, which was first promised in January 2008?

As the House will know, another place is looking in some depth at the whole question of the Barnett formula and how it should operate in the years to come. We will look very closely at what emerges from the Holtham commission, too. The next real bit of news will be the report from the ad hoc committee that was set up in another place.

It is right for our Government to have a commitment to gaining the same sort of benefit for Britain from the new technologies to limit carbon emissions as we gained from manufacturing in the industrial revolution. My right hon. Friend the Chancellor, in replying to the hon. Member for North Southwark and Bermondsey (Simon Hughes), said that he had introduced measures in the Budget. Has he any estimate of the number of jobs that might result from these measures to develop new low-carbon technologies?

I believe that there will be thousands of jobs created in the future through new green technology. That is all the more reason why we should resist calls to start cutting public spending now when public spending can be used to help our industries to compete in the future. That is another clear dividing line between the two sides in this House. We believe that Government have the power to influence things and to ensure that we can be at the forefront of these new industries, which will create thousands of jobs in the future.

Given the parlous state of the public finances and the need to borrow so extensively internationally, does the right hon. Gentleman not understand that the failure to bring forward a comprehensive spending review will make it even more difficult and uncertain to borrow from the capital markets?

No, I do not. If the hon. Gentleman looks at the international commentary and studies into our economy, he will see that most of them believe that what we do and what we are doing is exactly right and is in contrast to the policies that he and his fellow Conservatives advocate, which is to do nothing. I do not believe that that is a sensible thing to do at a time like this.

Will the Chancellor take this opportunity to amplify that which he uttered on television a few days ago about adequate funding for our armed forces in the Afghanistan conflict? Will he make it abundantly clear at the Dispatch Box now what funding is immediately available to our armed forces and what will be available in a reasonably immediate time scale—perhaps until the end of the year—so that there is no misunderstanding or ambiguity among all who are involved and all who are interested? Will he take this opportunity?

It is very important that we support our troops on the front line in Afghanistan and elsewhere. I can tell the House that in the year 2006-07, we spent £700 million on urgent operational requirements. That rose to £1.5 billion in 2007-08 and £2.6 billion in 2008-09. This year, we expect to spend more than £3 billion in support of our troops. Our commitment to our troops is essential, especially at this time when so many people are facing dangers—we have been reminded over the past few days of the tremendous sacrifice that has been made by so many people, not just for Afghanistan but for this country, too.

On Sunday, a constituent aged over 80 came to see me. He said that he was now receiving his 25p pension supplement, which he saw as a gross insult. It does not even buy a pint of milk. When is the Chancellor going to sort that out?

I know that the hon. Gentleman is not the only Member of this House to have had constituents raise the question of the 25p age addition. However, I am quite sure that he took the opportunity to point out that his constituent received the increased winter fuel payment—something that his constituent would not have received had there been a Conservative Government.

With this being the final opportunity for the Chancellor to address the House before it resumes in October, will he rise at the Dispatch Box and apologise to the House and the British people for presiding over the precipitate decline in our public finances? It is the worst fall of any OECD country, and his is the worst record of any Chancellor, ever.

The hon. Gentleman is talking nonsense, and I suspect that he knows it. Like every country in the world, we are facing the severest downturn for well in excess of 60 years. The difference between this side of the House and his side is that, faced with that, we took action to support our economy and stabilise the banking system. We then made sure that we put money into the economy to help us get through this. Most other countries believe that that is the right thing to do. It is only the Conservative party in this country that has made it clear that, far from supporting families and businesses, it would make cuts this year, next year and the year after.

Can the Chancellor confirm that there will be extra resources for constituencies such as mine, where the number of children seeking primary school places exceeds the number of places available?

My right hon. Friend the Secretary of State for Children, Schools and Families has made it clear already that there will be a guarantee in place from this September. He keeps what schools require under review, so that we can ensure that we maintain our commitment to the children of this country.

Care and Support (Reform)

With permission, Mr. Speaker, I should like to make a statement on the care and support Green Paper “Shaping the Future of Care Together”.

Last year, the country celebrated the 60th anniversary of the national health service, an idea that emerged from the post-war consensus on the need for a fairer approach to health care. Today, as the NHS has improved health and life expectancy, a new challenge has emerged and is becoming more urgent.

The challenge can be summarised in three simple but striking facts. First, male life expectancy is now 78 years, compared to just 66 in 1948. Secondly, there are now more over-65s than under-18s and, thirdly, whereas there were eight working adults per retired person in the 1940s, today there are just four. By 2050, that figure will fall to just two. So the debate that we face as a country is how to provide support, dignity and independence for all, in a care system that is fair, dependable and universal. Today’s Green Paper starts that debate.

Half of all men and two thirds of women will develop care needs after the age of 65. In many cases, their needs are met informally by the silent army of carers and family members who work so tirelessly, often under great pressure, behind closed doors. I want to start by paying tribute to their huge contribution to our society, and stressing that everything that we are proposing today must build on the solid bedrock of support that they provide.

The challenge that we face is that many more people are now developing more serious needs that demand specialist care over the long term. A typical 65-year-old can expect to need care costing £30,000 throughout their life, but that average masks a huge range. For about a fifth of people, the figure is less than a £1,000; for another fifth, it is in excess of £50,000, and for those with complex, long-term needs—such as those with dementia—the costs can rise above £200,000. So the time has come to meet this difficult challenge, and to see whether we can establish a broad consensus about the best way forward.

A country is defined by how it cares for its older people, and we need to acknowledge that as a society we can do better. We need a care system that people can rely on, that does not penalise people for their prudence and that ends the cruel lottery of older people facing financial hardship because they happen to get dementia, for example, rather than cancer. We must also address the inconsistencies—the fact that two people with the same needs living in different parts of the country can have very different experiences of care.

So today we propose a new national care service, which would correct the flaws of the present system and establish core principles on which to base this new system. Those principles are universality, simplicity, prevention and fairness. On the first, universality, people have told us that they want a universal system that offers everyone a basic package of care and support. Under the national care service, people will get the reassurance and confidence of a universal system, with the security to plan for the future, and the certainty that, whatever happens, they will get help with their care needs. For the first time, everyone, regardless of their bank balance, would get some help to pay for their basic care; everyone would get the same entitlement wherever they live in the country; and everyone would get advice and information to help them to find the care that is right for them.

Secondly, we need a system that is much simpler for people to understand and use. A new standardised national assessment would mean that wherever people lived they could be confident that they would be treated the same way, and if they moved their entitlement would not change.

It is also time to say clearly that it is unacceptable and unfair for people to be denied any help to find the right services simply because they are over the current £23,000 threshold. Under a national care service, that practice will stop. Everyone will get information and advice, giving a clear point of entry into the care system and ongoing support to find the services that they need.

People also tell us that their experience is compromised by the fractured nature of care and support. A national care service must therefore build on the progress already made to break down boundaries between health, housing and care services so that people get the seamless, wraparound support that they need. In particular, it is time to make health and social care more equal partners, so that they can work together to put prevention at the heart of everything we do. We are therefore proposing a new entitlement to six weeks’ reablement support for any older person leaving hospital with care needs as well as better co-ordination between housing and care, building on initiatives such as supported living, extra care housing, telecare and adaptations to homes or workplaces.

In this pursuit of higher-quality services, we must do more to improve the social care work force, raising their status as a profession, investing in front-line staff and sending out a clear message from this House today that we as a society place a value on what they do on behalf of us all.

Finally, there is the challenge of fairness. We need to create a system that is equitable for people of all generations and all backgrounds, and that shares out the risk and responsibility for care more evenly. Over the past 12 months, the Government have explored the full continuum of funding options—from completely private to completely state-funded. We rejected, on the one hand, a system in which everyone is responsible for paying for their own care, and on the other a 100 per cent. tax-funded system in which people of all ages contribute to the cost of the care service. In our judgment, the former would leave those on the lowest incomes stranded and those with high needs facing huge costs. The latter would saddle younger people with the lion’s share of costs for older people’s care, via higher taxes.

Instead, we are putting forward three options for consultation. The first is a partnership model in which both the state and the individual share responsibility for funding care. Everyone would get a set proportion—either a third or a quarter—of their basic care costs paid for by the state. They would then have to pay the remainder themselves. To fund this new entitlement, we will consult on plans to bring other benefits, for example attendance allowance, into social care funding. We would do this in a way that guaranteed that anybody currently receiving an affected benefit would continue to receive an equivalent level of support. There would also be a progressive element to the partnership model. The less well-off would have a higher proportion paid for, while those on the lowest incomes would continue to get all their care for free.

The second option, a voluntary insurance model, is an extension of the first. People would get the same minimum proportion of basic care paid for through the national care service, but they could then choose to take out insurance against the cost of the remaining care, through either a state-backed insurance programme or a partnership between the state and private companies. Thirdly and finally, there is the comprehensive model. Under that model, everyone over retirement age would pay into a state insurance scheme, and would then get the full cost of their basic care met by the state. However, that would mean everyone over 65 making a contribution to the system, even though they may not ultimately receive any care.

At this stage, we are talking about the principle, rather than the detail, of those models, but to give the House a sense of the likely costs, and working with a £30,000 figure for the average cost of a person’s care today, the partnership model would see someone paying between £20,000 and £22,500, although obviously some would pay a lot more and others a lot less. Under the insurance model, indicative figures suggest that people would pay a lump sum of between £20,000 and £25,000 for their cover. Under the comprehensive model, the figure could be somewhere between £17,000 and £20,000.

Under the insurance and comprehensive options, people could choose how to meet the costs. They could do so by paying a lump sum on retirement, by deferring their state pension, by paying in instalments during retirement, or by paying from their estate after death. In the longer term, we could develop a system whereby people who are still working could make regular contributions, so that they could pay their contributions on retirement.

These are radical and serious proposals. I recognise that many people care deeply about the issues that the debate raises, and we need a dignified discussion to do justice to their concerns. Such is the significance of the issues to every single person in the country that we would move forward only if a broad consensus were to develop around one or two of the options.

In conclusion, it is important that we do not flinch from this debate. A failure to act would mean a future of increasing pressure on services, a decline in the quality of care that we can offer the most vulnerable, and ever greater costs on the most unfortunate. That is not a prospect that I—or, I am sure, other hon. Members—wish to contemplate. I commend the statement to the House.

I am grateful to the Secretary of State for making a copy of the Green Paper available to me an hour ago. Of course, there has been the usual ration of leaks; in this instance, they were mostly kites flown in advance. Ministers dithered for months on publishing the document. They seemed to spend most of the time between the planned spring publication and mid-July trying to get any of their kites to fly.

The Secretary of State has been wandering around the television studios this morning telling us that the standards of adult social care have gone down and down. He tells us how cruel the lottery of support for the elderly is. He tells us how unfair it is that people are forced to sell their homes to fund their long-term care. Which Government does he think has been in charge for the past 12 years? Which Government promised 12 years ago to stop people being forced to sell their homes to fund their long-term care? Which Government rejected the findings of their own royal commission? Which Government sidelined the King’s Fund review? Which Government kicked the issue into the long grass in their 2007 spending review? Frankly, we do not need simply to start another debate. One debate always seems to roll into another with this Government. We need a decision, and we need serious, costed proposals to be the basis for that decision.

May I ask the Secretary of State where exactly he proposes that the funds should come from for the increased Government contribution to the costs of long-term care? If he is promising to provide a universal minimum care component, he must know how he will pay for it, so I have a simple question: what would be the additional cost to the taxpayer of having either a quarter or a third of basic care costs paid for by the state? I can see no evidence in the Green Paper of that crucial number. However, if Members look up page 108 of the Green Paper, when they can, they will find the following sentence:

“For example, everyone might have a quarter or a third of their care costs paid for by the state.”

There is a footnote to that sentence, and in this Green Paper, as in most Government documents, the footnote is the most important bit. That footnote says:

“For the purposes of modelling the options, we have made assumptions about the level of funding that the state would put in, but these do not reflect a decision about central government investment in care and support.”

In truth, the Government have not even published their assumptions about state funding.

When the Secretary of State comes to pay for the scheme, is he proposing to do so by cutting disability benefits? Can he confirm that he is proposing to scrap new entitlements to attendance allowance and other benefits to pay for the Government’s contribution to social care? With reference to his voluntary insurance model, if the effective premium is some £20,00-plus per person, what is the Government’s estimate of the likely take-up? By what means would the Government ensure that the risk pool is large enough to make the scheme effective? How can he avoid people opting into the system only if they are more likely to need care?

On the third option, the so-called comprehensive model, the Secretary of State surely means not comprehensive, but compulsory. Does he have any view as between voluntary and compulsory insurance? Is he in favour of compulsory or voluntary insurance?

I am sure the right hon. Gentleman will agree that we need national standards—some consistency of assessment. We have long argued for that, and of course there needs to be central Government support, but we do not need a nationalised social care service. It is surely a retrograde step to remove local government from the equation.

The Secretary of State spoke about the need for a consensus. If the Government were serious about that, they would long ago have consulted on costed options. All we have today is another document, long on options and short on costs and conclusions, published in the hope that it will see the Government through to an election, when it will no longer be their problem. That is not good enough.

Help the Aged has told us:

“The social care system is broken and . . . millions of older people are failed each year.”

Four years ago we made it clear that there needs to be a partnership approach. We made it clear that we need a system whereby people can be sure that their care needs are supported, a system that raises the quality of care provided in people’s homes as well as in residential and nursing care, reverses the decline in productivity in the social care sector, and ends the scandal of people being forced to sell their home or lose their lifetime savings simply because they are unfortunate enough to need long-term care. We will build a system that guarantees our older citizens the care and dignity they deserve.

I cannot be alone in finding the tone in which the hon. Gentleman introduced his comments disappointing. Older people watching the debate today will want not the usual slanging match, but a better and more serious debate about the serious proposals that we have put forward. They will also think that the Green Paper we issued today and the options in it deserve a hearing.

The hon. Gentleman says that that is not good enough, and suggests that nothing has happened. The Government have increased funding for social care by 40 per cent. It is fair to ask whether that would have happened if the Opposition had been in government. We have not been doing nothing. We have been investing in social care, and it is this Government who have put forward proposals to give people more control over that budget, giving them direct payments so that they can build and buy the kind of services that they want to live their life. That came from the Government, so it is not true that nothing has been happening.

The hon. Gentleman mentioned the royal commission. [Interruption.] He will recall that the royal commission failed to find a consensus about the way forward, contrary to what he said. The royal commission came up with a majority and a minority report. That, in itself, identifies how hard it is to take these issues forward. [Interruption.] There are no easy answers, and the subject should not be the stuff of straightforward tit-for-tat slanging matches in the House. We deserve a better debate about social care.

The hon. Gentleman asked me about additional costs—[Interruption.]

Order. There is far too much chuntering from a sedentary position from those on the Opposition Front Bench. The hon. Member for Eddisbury (Mr. O'Brien) will have ample opportunity over a period to express his views from the Front Bench at the Dispatch Box, but he should not do it by sedentary chuntering.

The hon. Member for South Cambridgeshire (Mr. Lansley) asked me about additional cost to the taxpayer. The foundation of our proposals is the idea that our existing investment to help people to deal with the costs of care can be better spent by combining investment in social care with disability benefits, particularly attendance allowance. That is at the heart of our proposals today.

The hon. Gentleman also asked about the estimated take-up of the voluntary option, and there is a figure, albeit only indicative, of about 20 per cent. The trade-off with a voluntary option is that because fewer people may enter the scheme, the cost would be higher; on the other hand, under any comprehensive or compulsory option, people would not have the choice but the cost might well be lower. He asked whether I favour a comprehensive or compulsory option, and I believe that the option deserves a fair hearing. However, this is a Green Paper; we are putting forward three broad options for the country to debate, and it would be wrong to force the pace of that debate. I said very clearly at the end of my statement, if he was listening, that a broad consensus would need to develop in the country around one of those options before any one of them could be taken forward.

I was disappointed to hear the hon. Gentleman rule out, so early in this debate, the notion of a national care service, or of moving towards more national standards and entitlements in care. If he reads the Green Paper, he will see that we do not propose to remove the role of local government; we say that it would continue to have a crucial role to play in delivering such national entitlement to people in all parts of the country. However, he has leapt up with knee-jerk responses to the Green Paper. He has not come to the House with a considered response to the serious issues that it raises. It is the product of three years’ work among a number of Departments, and it deserves a better hearing than the one that he has given it this afternoon.

I thank the Secretary of State for early sight of the statement and the Green Paper. The truth is, however, that it comes 12 years too late. It is this Government’s shameful legacy that they will leave office having failed to reform a system that the Secretary of State himself has described as a cruel lottery. The former Prime Minister said that he did not want

“a country where the only way pensioners can get long term care is by selling their home”.

Yet 12 years on, nothing has changed; in fact, it has got much worse. Many elderly people have been left with inadequate care as criteria for care have been tightened and charges increased. Now we have a set of ideas that cannot be implemented this side of a general election, and the real risk is that the issue will disappear again into the long grass.

There are principles in this Green Paper which we welcome. The Liberal Democrats have called for a universal entitlement, a focus on prevention and the availability of advice and support. We support the idea of an entitlement to six weeks of reablement following discharge from hospital, and we absolutely support the importance of giving carers and care workers much more respect and the dignity that they deserve. We pay tribute to their work in very difficult circumstances.

On the voluntary option, will the Secretary of State publish the assumptions about take-up to which he referred? Does he accept that with both the voluntary insurance model and the comprehensive model, there is bound to be a short-term funding shortfall? Will he rule out any increase in national insurance or council tax to pay for it? Will he publish all the costing documents? If we are to build a consensus, that is surely necessary. What happens to the current generation of retired people—those who are well over retirement age? Will they be able to make a payment into a voluntary scheme? And what about people with existing care needs? What about their circumstances?

Given the risk that the issue could be pushed into the long grass, and given that no one will have any confidence in a Conservative Government facing up to these real challenges, will the Secretary of State establish without delay a cross-party commission, in the style of Lord Turner’s pension commission, to achieve consensus and, crucially, to commit any incoming Government to urgent reform? Surely we owe it to those with care needs to stop the talking and act now.

In response to the hon. Gentleman’s final point, we are publishing these proposals today because we do not want this debate to go into the long grass.

Picking up on the welcome spirit of some of the hon. Gentleman’s remarks, I take it that he may be interested in working with us on some of these options to see whether we can build a consensus around them. I welcome his support for some of the principles and specifics, such as reablement care and the importance of the social care workforce. We do not spend enough time in this House talking about the importance of the social care workforce and how we can invest in their professional development and recognise the huge contribution that they make. They do some of the least glamorous work in our society, and yet all our families depend on them, including mine over many years. They provide services that are crucial to our families, and we thank them for it.

I reject the hon. Gentleman’s main allegation—if I may put it that way—that this is all 12 years too late. This Government have been investing in improving social care over the past decade; it is not true that we just sat back and have done nothing. We have put some £520 million into Putting People First, the scheme to give more personal control over social care funding. We were the first Government to bring in a national carers strategy, which had a whole range of measures to help carers, recognising the invaluable work that they do for the country. More recently, we published a dementia strategy, with £150 million attached to its introduction. All that is underpinned by a 44 per cent. increase in social care funding from this Labour Government. I do not think people would believe that a Conservative Government would have put anything like that level of funding into social care.

The hon. Gentleman said that I acknowledged that the current system was not good enough. I say that absolutely explicitly. I do not believe that we are doing as well as we might by older people, and I was hoping that collectively we may work to develop a consensus on proposals to do better. Conservative Front Benchers have already ruled that out, but I hope that at least we and the hon. Member for North Norfolk (Norman Lamb) can work together to address it.

On some of the specifics that the hon. Gentleman raised, the estimated take-up of voluntary options will be in the impact assessment published alongside the Green Paper. Obviously, the figures that we gave are broad, but they give an indication based on international experience.

We have ruled out increasing national insurance contributions because we felt that it would not be fair to the working-age population of today to put all the costs of care on to them. We think that a fairer approach is the partnership that underpins all three options that we have put forward.

The hon. Gentleman asked whether we would continue to deal with the existing care needs of people already in retirement. I can assure him that if we were to bring forward a White Paper with more detailed proposals, it would reflect the fact that some people would already be past the age of 65; that would have to be borne in mind.

I warmly welcome the substance of my right hon. Friend’s statement and the spirit in which he made it. As the Government take forward the debate on the three funding options that they have put forward, can he assure me that they will also continue to build on the excellent work that has been done with personal budgets and direct payments so that people receiving help with their care needs will continue to get as much choice and control as possible over the way those services are given to them?

I thank my right hon. Friend for her comments. I pay tribute to her for the work that she did when I served as her deputy in the Department of Health to introduce direct payments, which were controversial at the time but are now widely regarded as the right way to give people control and choice over the care services that they receive. I want to give her the clear assurance that any development of a national care service will take as its foundation that vision of social care, where the individual is empowered and able to bring in services to support them in living independently and having the best quality of life that they possibly can in retirement.

Order. A further 24 Members are seeking to catch my eye. As ever, I would like to accommodate as many as I can, but I am looking to each hon. or right hon. Member to ask one brief supplementary question, and of course to the Secretary of State to provide us with a pithy reply.

May I invite the Secretary of State to respond to his own challenge to rise above the party political ding-dong and recognise that if we are going to address this issue seriously, we first have to ask whether any additional Government funding is available for any of the solutions that are canvassed at the end of the Green Paper? It is the absence of additional Government funding that has prevented the emergence of consensus at earlier stages. Did he say—I think I heard him say this to my hon. Friend the Member for South Cambridgeshire (Mr. Lansley)—that no additional funding would be available from any source for any of the funding options?

I can explain to the right hon. Gentleman that I said clearly in answer to his colleague that we would better spend the existing resources that we put into supporting people with care needs. There is no commitment to additional funding, but what we are saying is that the additional funding could be brought into the system through the range of proposals that we have put forward. The right hon. Gentleman is somebody for whom I have great respect in this area, and is a predecessor of mine in this job, so I hope that he will give the proposals that we have put forward today a hearing. I believe that they deserve a fair hearing, and as I have said, we would do a great service by older people if we could reach consensus throughout the House.

Does my right hon. Friend agree that the army of family and informal voluntary carers to whom he paid tribute at the beginning of his statement require not only support but an enhancement of the number of people encouraged to give time, energy and commitment, including in retirement, to keeping glued civil society together? Will he therefore consider issuing at the point of retirement a pack containing details of how those going into retirement and remaining healthy can get in touch with voluntary and statutory organisations that could help them to use their time and talent to the betterment of others?

I certainly recognise from my own family experience, as I am sure other hon. Members do from theirs, the intolerable pressures that carers and families face at times in trying to meet the care needs of loved ones and relatives. I say again that we are all indebted to the efforts of carers up and down the country, and that any visions for the reform of care and support must be based on the idea that families and communities continue to look after one another. A basic concept of neighbourliness and obligation to one another is the bedrock on which any system must be based.

My right hon. Friend’s suggestion is good, but we will also need to draw on the support of the voluntary and charitable bodies in the sector that provide wonderful support to older people. I will explore the proposals that he has made with that in mind.

The Secretary of State referred to the wish to see a system that “ends the cruel lottery of older people facing financial hardship” because they happen to get dementia rather than cancer, for example. I applaud that sentiment, but he must know that one of the main reasons for that distinction is that those who have dementia are considered to have social care needs, not health care needs. In all the possible options that he has set out, extra finance will be required from a person who needs dementia care. Will he look again at that distinction?

First, I pay tribute to the hon. Gentleman, who I know takes great interest in the matter and has done very good work. I recognise the basic problem that he identifies, which is that some people with dementia get some help with the costs of their health care needs but not those of their social care needs. That is essentially the point that we are addressing in the Green Paper. We want to integrate services around those individuals and, as I have said, make health and social care more equal partners in providing support for an individual. None of us can really feel comfortable with the notion that those who develop the very highest care needs through dementia or Alzheimer’s continue to pay £200,000 or more to meet their care needs in later life.

I very much welcome the clarity and certainty that the Secretary of State today offers care services users. Will he ensure that the debate on the options for payment also covers the sorts of services that should be available as part of the universal option so that individuals know who is paying for their care and what it entails? Above all, they should be in control of their care and managing their own budgets.

My hon. Friend makes an important point. I pay tribute to her as chair of the all-party group on social care and for her work on the subject down the years. She congratulates us on the clarity of the options. It would have been easier to pick up on some of the points that Opposition Members made and produce a timid and bland Green Paper, which was high on analysis and short on concrete options. With the Minister of State for Care Services, we have decided not to do that, but to put some serious options on the table, with all the risk that that entails. Very serious proposals for reform are not without risk, but if politicians are not prepared to take it, we will continue the drift and the delay, and we will not address the issues in the long term. If we are to build consensus for one of those options, there needs to be clarity about what people get for what they put in. My hon. Friend the Member for Blackpool, North and Fleetwood (Mrs. Humble) will see that the Green Paper spells out a clear vision for prevention, reablement and giving people the maximum ability to lead a full and independent life for as longas possible.

Much in the Secretary of State’s statement can be welcomed, particularly the sentence, “It is time to make health and social care more equal partners.” Does the right hon. Gentleman accept that, in the past 12 years, the national health service has had a much more generous deal than social care and that, in many parts of the country, social care services departments are under real pressure? Does he also accept that, whatever the option chosen, we need a step change in support for social care simply to meet the needs of demography?

I thank the right hon. Gentleman for his comments, but that is the logic of our proposals. However, unlike the national health service, the basis for funding social care will have to come not from taxation but from a partnership between the state and the individual, and the new resources will come from one of the three options that are proposed. I am grateful that he picked up on the sentence that he cited—I carefully inserted the notion of health and social care as more equal partners. It is not possible to say that they are equal partners today. Alongside the debate, we need to focus seriously on improving quality, and the calling of social care as a profession. I very much hope that someone with the right hon. Gentleman’s authority will add to that debate.

I wonder whether my right hon. Friend feels that the options that he has given this afternoon, which I appreciate, will help some of my constituents in care homes, who are being cared for by people with little knowledge of how to care for elderly people? Many of those carers have no or very little English, possibly because they are paid the basic minimum wage and because some—only some—care home owners are interested only in profit making rather than caring.

My hon. Friend makes a powerful point. It is important to send out a message from today’s statement that we want a debate about social care and its status, and to take it more seriously. We could do that if we could bring in more resources for providing services for older and disabled people. My hon. Friend makes an important point. I said in my statement, and I repeat, that carers do some of the most important work, on which we all depend, yet the message that they get from society in terms of what they are paid may not always reflect that.

Many people outside the House who have followed for many years the issue of how we pay for long-term care will experience a terrible sense of déjà vu about the statement. Will the Secretary of State please “not flinch”, as he said himself, and set out the timetable that he intends to follow for making decisions about the public expenditure implications of the proposals and, more important, for introducing his plans at the Dispatch Box?

If the hon. Gentleman will forgive me, I do not think that he can claim déjà vu because we have not previously had a Green Paper that puts serious Government proposals for care on the table. We had a royal commission, but as I said to the shadow Health Secretary, it did not identify consensus on a way forward. What I have announced today is new territory. We want a serious debate, and the hon. Member for Sutton and Cheam (Mr. Burstow) can help us build consensus. It is right that, if we can reach consensus about the debate, the subject should become a serious issue of consideration at the next general election so that the public can choose the party that has the best solution to the serious and long-term challenges.

May I associate myself with the remarks of my right hon. Friend the Member for Sheffield, Brightside (Mr. Blunkett) about family members? Taking that on board, will my right hon. Friend the Secretary of State consider a fourth option for family members, by using either tax relief or grants to support the building of granny annexes, in order to allow family members to keep the capital gain, to save the Government money and to create a far more caring culture in our country?

That is a very good point, but it is already the case that people can use personal budgets to help to offset the costs of family members as my hon. Friend describes. However, I encourage him to work up his ideas. Given that we have tabled three serious options, I am not ruling out others. As I said to my right hon. Friend, it is very important that we recognise, encourage and incentivise the role of the family community in this debate.

Care of the elderly is sometimes the hidden and often the unrecognised industry in my constituency and hundreds of others, but it cannot be delivered without a vigorous private care home sector. Will the Secretary of State recognise that the Government have their role to play in ensuring that they do not load costs on to that sector—for example, through the minimum wage or holiday entitlement—knowing that, in the decade of public expenditure austerity that we are about to enter, they have no hope whatever of recovering those costs from local authorities?

I am troubled by the right hon. Gentleman’s remarks. If he is saying that the minimum wage or the standards that we introduced in care homes in the Care Standards Act 2000 have not helped to improve the quality of care, I would take issue with that very strongly. If he is also saying that care staff should not have basic entitlements to holiday, how will being run off their feet, not getting a proper break and not being properly paid enable them to give better quality care to older people? I find the logic of his question completely wrong, but I do accept that the private care sector has a huge role to play in delivering the vision that we have set out in the Green Paper.

I very much welcome my right hon. Friend’s announcement about the national care service and, in particular, the fact that he has been so explicit about the thorny issue of costs. Indeed, one of my predecessors, Jim Griffiths, would have been proud of this reform, which is the equivalent of his type of reform. However, the announcement obviously covers reserved matters and devolved issues. What talks has my right hon. Friend had with Welsh Assembly and Scottish parliament Ministers about how the reforms will work out in Wales and Scotland?

I am grateful for the generous welcome that my hon. Friend has given the Green Paper. Obviously any reform of benefits would have implications for the devolved Administrations. My hon. Friend the Minister for Care Services has had discussions with counterparts in the Welsh Assembly and we will continue to do that. However, the proposal in today’s announcement is for England. The national care service would apply in England only, although we would encourage the Welsh Assembly to go down a similar route if it wanted to.

The Secretary of State has been very courageous with his proposals, particularly in suggesting that social care will be funded in future partly by the state and partly by private insurance. He also suggested a link with health. Does he see the future expansion of the national health service being partly funded by private insurance?

I am grateful for the hon. Gentleman’s generous comments. I know that he has proposed some fundamental options about the privatisation of the national health service. That is not something that I would ever contemplate in this role, although we are saying that the funding of care and support should be on a different basis from the funding of the national health service.

Given that this has been a growing issue for hundreds of thousands of families for at least 25 years, and given also that we should acknowledge the cross-governmental failure to grasp the nettle of long-term costs, will the Secretary of State agree to be at least as bold as William Beveridge was in 1942, when he looked at the risks facing early post-war society in a radical way and came up with ambitious programmes that, by and large, have stood the test of time?

I must pay tribute to the huge experience and authority that my right hon. Friend brings to these matters, and to his long experience of social care in this country. If he reads the Green Paper, he will find the same boldness in this debate. The issues are similar, in that we are asking people to consider whether a system of mutual support is better than the status quo. The debates that were in play during the creation of the welfare state are very much alive now and at the heart of this debate. How far we go will obviously depend on how much support each option attracts in the country, and I hope that my right hon. Friend will join us in ensuring that the debate is a vigorous one.

There are more than 6 million carers out there, including family and friends, and 1 million of them look after more than one person. Fortunately, we have in our constituencies organisations such as Crossroads, which look after the carers and recognise that they have health needs themselves. What more can be done to support those who care for the carers?

The hon. Gentleman is right, and Crossroads is a wonderful example; I know the organisation well. Of course there is always more that we can do. The carers strategy was an innovation, and it has recently been updated and comes with a significant investment alongside it. We can never be complacent about what we do to help carers. However, my basic argument today is that if we can improve the services that older people receive, we can relieve the pressure on the carers and enable them to do more.

I warmly welcome and support my right hon. Friend’s statement today, but I would say to him that this area of policy is seen by all as being incredibly complex. It is invariably individual in nature, and its complexity can leave families with the most crippling problems. Will he assure the House that everyone’s contributions to the consultation—including those of organisations representing the elderly and of families who care for the elderly—will be listened to? Will the consultation be publicised as much as possible, so that we can hear what all our people are saying?

My hon. Friend raises an important point. A positive development alongside the publication of the Green Paper will be the formation of a care alliance involving 31 national organisations representing the whole breadth of opinion in this area. We need to empower them to take the debate out to their members. My hon. Friend is also right to say that the lack of simplicity in the current system diminishes people’s understanding of the issues. We need a much clearer system in which people get more help to understand what is available to them, regardless of their background or their needs. Any proposals for reform must have that consideration very much at their heart.

I am sure that the Secretary of State appreciates the fact that, across the United Kingdom, many people are concerned about growing old and feel vulnerable when they consider what care is going to be available for them. It is certainly unacceptable to force them to sell their homes to pay for their care. Speaking of national care services, is it not imperative to hold meetings as soon as possible between the Department of Health and the devolved Administrations, Northern Ireland included?

Of course, and we will continue our discussions with Michael McGimpsey and others in Northern Ireland. Perhaps we can learn from the system in Northern Ireland, which has always had much closer integration between health and social care. The hon. Gentleman is right to say that we want a system that will prevent people from having to sell their homes; that is a basic unfairness that we want to end. The current average cost of care is £30,000, and each of the three options that we have put forward today comes in at less than that amount. That is why we feel that they are doable and that they could possibly be made attractive to people. However, it is important that we have the broadest possible debate, not just in England but across the UK, about the choices that we all face in an ageing society.

Blackpool has above-average numbers of older people and care homes, and my constituents will be grateful for the breadth of vision and the sensitivity that my right hon. Friend has demonstrated today—compared with what has been rather sour waffle from the Opposition Benches, I am sorry to say. He has talked about the need to strengthen the role of social care staff. Will he tell us what opportunities there will be in the consultation to look at issues such as greater skills for social care staff and greater flexibility for them to visit people in the given time? At the moment, for example, travel time is not included in their working hours.

On my hon. Friend’s first point, the investment in the work force is vital and the social care skill set is crucial. We have already begun work on that in the Department. Again, we want to take any new resources in the system to develop what we are doing further. On his point about the tone and nature of the debate, I think that on this particular issue we have to do better across the House than we usually do and ensure that we do not reduce the debate to a simplistic slanging match. It is important to give these issues the serious airing and hearing they deserve. We will do a greater service to older people by identifying a way forward between us that, if not ideal for everybody, at least provides a workable compromise that will make things better than they are today.

The right hon. Gentleman is absolutely right to bring these bold options before us for the longer term and to have a genuine debate, which is long overdue. Does he accept that we urgently need, right now, to look at how social services assess care and ensure that frail people, perhaps those who have suffered a stroke, are not charged for what should be viewed as health care rather than social care? That needs to be looked at for the people who are currently in care, too.

I understand the hon. Gentleman’s concern. We have been revising the guidance to local authorities. As pressure has grown on local social services down the years, they have focused more and more on people with the highest needs, leaving lots of other people who desperately need help unable to access it. In revising the guidelines, we have put more investment—an extra £500 million—into the system. Any measures in the interim would be only preparatory to the major debate we are initiating today.

The Tories oppose the national health service, so it is not surprising that they oppose the national care service. The current lottery of life, under which one in three who develop a severe condition lose everything and the rest keep their wealth intact, is unfair and should not be tolerated in a civilised society. I favour an approach of solidarity. Should we not go out and advocate the comprehensive approach, which also seems to be the lowest-cost option, and develop a groundswell of public opinion behind that option so that no future Government can ignore it?

The challenge here—my hon. Friend puts it very well—is not just about what I put in and what I get out. We all have to look at our own extended families and recognise that across them there will be a range of care needs and that we have a mutual obligation to each other within our families and to others who, as she says, can face the calamitous cost of care if they develop the most serious needs. I note her support for the comprehensive option. If she would like to go out and bang the drum for the comprehensive option, she is absolutely entitled to do so and there is a very respectable argument in favour of it. People will need illustrations of how it could be made manageable. We have set out in the Green Paper various options on how people might pay either for the comprehensive or the voluntary option—by deferring the state pension, paying through retirement or paying after death. Those are the issues to be debated. If my hon. Friend is offering to join the debate, I wholeheartedly welcome it.

Does my right hon. Friend agree that we in the House have a duty to get out there and consult people? Will he ensure that he and his team are available to receive representations from our constituents so that we know that the consultation will be full and that we will be able to stand by it?

For any MP who would like it, we would endeavour to set up a local forum in which these issues could be properly debated with informed speakers so that we can have a quality debate at the local level, too. We want to give people the depth of information for which they are looking. These are difficult issues and it is not always easy to take them on. In my view, however, MPs can play a crucial role in informing their constituents and helping them to make a choice about what they think is the right way forward not just for Crawley, but for the country as a whole.

How will my right hon. Friend’s proposals help older people in Northumberland, where the leading Liberal Democrat-controlled council has set a policy of closing all old people’s care centres and sacking all the workers in them?

I cannot say that these proposals will help in the short term, but that is not what we want to see in the future. Under any of the options that we are presenting, there will be a basic national entitlement. One of the unfairnesses of the system is that some councils withdraw money from social services in order to spend it on other priorities. That can leave some of the most vulnerable people in society with unmet needs, which should not please any of us.

The mark of a civilised society is how well we look after the sick, old and vulnerable. This Government have done much to look after the sick. People can now obtain operations when they need them rather than having to die waiting for them, so they have a chance to grow old.

I welcome the statement, which is long overdue. I appreciate the reasons for that—the Government had a lot to deal with when the national health service was left in crisis—but we must now move as quickly as possible. This is a priority for many of my constituents, and for people all over the country. Can the Secretary of State assure me that the consultation will be genuine and the strategy will be introduced quickly?

I think that the Government have put the national health service back on its feet, and that people can take confidence from that and believe that we can build a fair national care service. I take my hon. Friend’s point about the need for speed. As she said, the statement is long overdue, and I accept that people have waited a long time for our proposals. However, I can assure her that we do not intend to back off or flinch. We want to ensure that there is a good debate, leading to a White Paper before the general election. It is about time that these issues were seen as a serious matter of choice and subject for debate, as I hope that they will be during any forthcoming general election campaign.

The royal commission recommended free long-term care for everyone, paid for out of progressive taxation. I supported that view absolutely at the time, and I support it absolutely now. Moreover, opinion polling at the time showed massive public support for it—up to 80 per cent.—and I am sure that the position is the same now. I tabled two early-day motions calling for free long-term care, which were signed by more than 100 Members, mostly Labour. I can tell my right hon. Friend that I shall continue to campaign on that basis, and that I hope he will accept it as an additional option.

I welcome my hon. Friend’s contribution to the debate. Nothing rules out his campaigning for that particular option, but we have ruled it out because we do not feel that it would be fair between the generations to ask the working-age population today to continue to provide all the costs. We think that a partnership approach is fairer to all, given that many people of working age face considerable pressures in relation to housing and all the costs of bringing up families. We feel that our proposals represent a fairer spread of the burden across the whole population, but of course my hon. Friend is entitled to argue for a different approach in his constituency.

On Friday I spoke to an elder constituent who was contemplating suicide as her savings ran out. This morning I received a thank-you card from her which read: “I now feel there is light at the end of the tunnel. When I start getting anxious again I shall remember your words ‘Eat your house.’” The good thing about today’s statement is that it gives older people a better option than eating their house, and gives others a better option than using it to pay for care for the elderly. Will the Secretary of State ensure that those anxious people are informed at every stage about how he conducts the debate, rather than its taking the form of an air war, as it is already doing in the Chamber?

I strongly agree with my hon. Friend. People do become anxious about these issues. That is why I said at the outset that I hoped we could manage a better debate than we normally manage, because such an important issue deserves it.

Perhaps my hon. Friend can relay this to her constituent. Both the voluntary and the comprehensive option would provide people with a pathway to protect their assets, savings and houses in retirement. That may indeed give light at the end of the tunnel, not just for my hon. Friend’s constituent but for many other people who genuinely feel anxious and seek peace of mind in their later years.

I return to the point made by the right hon. Member for Skipton and Ripon (Mr. Curry). Staff are the key to delivering this service. If we go back to what happened in the 1990s, when compulsory competitive tendering and privatised care homes were introduced and training and other budgets were cut, we will be unable either to recruit or to retain quality staff. The one way to make sure that the system falls apart is to follow the programme that the Conservative party followed 20 years ago.

It was quite astonishing that one of the Conservatives’ proposals as a way of helping with social care was to end the minimum wage in care homes and the existing terms and conditions of social care staff. In more recent days, the shadow Health Secretary has been proposing the abandonment of national pay structures in the health service, so I think we know where they stand on these matters. Investing in and respecting the work force, and understanding how a motivated and well-rewarded work force provide a quality service to the public, has got to be at the heart of any proposals for change.

I congratulate my right hon. Friend on introducing this long overdue Green Paper, and on his obvious commitment to the subject in his presentation and answering of questions today. May I put it to him that one part of his statement is not negotiable—is not an option? He talks about improving the quality and status of care staff, and without that, we will have a framework, not a system that delivers a national care service.

I thank my hon. Friend for his generous comments. Through him, I pay tribute to the good people of Knowsley, who have led the way in this area down the years. The Minister for Care Services was in Knowsley just last week looking at the fantastic work done by health and social care staff in integrating services. They genuinely—I know we say this a lot, but in this case I mean it—offer a model for others to follow. I am happy to endorse what my hon. Friend the Member for Knowsley, South (Mr. O'Hara) says: without investment in the staff, we do not have the basis of a national care service. We can learn from how we have offered a better career progression for staff in the national health service, and transfer some of those principles to improving the social care work force. That is not to say that today we do not respect what they do; we do, but I do not believe they get the recognition for what they provide in all our communities and to all our families.

Bill Presented

Government of Cornwall Bill

Presentation and First Reading (Standing Order No. 57)

Dan Rogerson, supported by Matthew Taylor, Mr. Colin Breed, Andrew George, Julia Goldsworthy, Willie Rennie, Andrew Mackinlay, Hywel Williams and Mr. Angus MacNeil, presented a Bill to establish and make provision about the Cornish Assembly; to transfer functions and powers to the Assembly; and for connected purposes.

Bill read the First time; to be read a Second time on Friday 16 October, and to be printed (Bill 132).

Criminal Injuries Compensation Scheme (Review)

Motion for leave to introduce a Bill (Standing Order No. 23)

I beg to move,

That leave be given to bring in a Bill to establish a Commission to review the operation of the Criminal Injuries Compensation Scheme and to make proposals for amendments to the scheme.

I rise to introduce a Bill to review the criminal injuries compensation scheme. It is a very small Bill about a very big issue: the impact of the 7/7 bombings on a number of our constituents. Its co-sponsors have constituents whose bodies were cruelly torn asunder by the bombs that were placed on 7/7. One of my own constituents, Andy Brown, whom I will discuss in a moment, wishes me to make the point that despite the incredible work of our security forces, we ought to work on the assumption that perhaps one day, the bombers will get through again and the victims of 7/7 will be joined by others of our constituents who will be equally badly mauled by the bombs of evil men who only wish us harm.

It is clear that this House does not have the power to re-create the bodies of those constituents into the form they took during the moments before the bombs went off; nor do we have the power to touch them and heal their emotions. What we can do, of course, is to put them back into the financial position they were in before these evil men set off the bombs. In other words, we can fully compensate them for the financial losses that they have incurred as a result of the 7/7 bombings.

Currently, our constituents qualify under the criminal injuries compensation scheme, which has a cap of £250,000. To many of us, that probably sounds like a huge sum of money, but when I met my constituent who was partly blown asunder by the bombers, I asked him about the financial costs of trying to repair his life. I did not immediately visit him in hospital, because I thought that the last thing he would want to see was his MP, but I have since come to value his friendship and that of his wife, Jan. I pay tribute to the way in which he has valiantly surmounted the horrors that have been inflicted on him. I asked Andy and his wife what sum they needed to put them back into the position they were in before the bombs went off. I asked about their housing needs, and whether Andy’s career would be affected, despite all the efforts that he has made to regain it. I asked about the cost to Jan, who is about to launch her own career as a teacher, and the effect on the couple’s pension position. It was quickly clear that the bill was way beyond the £250,000 maximum payable under the criminal injuries compensation scheme.

The Bill therefore seeks the permission of the House to establish a review, to report to the Justice Secretary by the end of the year, of how we can reform the criminal injuries compensation scheme to remove the cap for those victims of terrorism who are subjects of this country, whether the terrorist outrage occurs here or abroad. One would hope that the review would also suggest how we might pay for that small extension, in global terms, of the scheme. I hope that the review would take the line that my right hon. Friend the Member for Croydon, North (Malcolm Wicks) suggested on community care, rather delphically—that these are risks that all of us might wish to insure against. We should do so collectively, and share the costs, because that makes them very small, but they are very important for some of our constituents.

All the hon. Members who are sponsoring the Bill have constituents who were physically affected by the bombers’ actions on 7/7. An early-day motion is being tabled today so that other hon. Members from both sides of the House who wish to support the Bill can request the Justice Secretary not to wait for Royal Assent but to set the review in hand now, so that it may report before Christmas, so that after that date we can have a criminal injuries compensation scheme that fully meets the extra financial costs suffered by those people who were physically so impaired by the evil actions of the bombers on 7/7.

Question put and agreed to.


That Mr. Frank Field, Mr. Ian Taylor, Susan Kramer, Dr. Tony Wright, David Tredinnick, Mr. Andrew Dismore, Mr. Jeffrey M. Donaldson, Sandra Gidley, Kate Hoey, Mark Fisher, Mr. Nicholas Soames and Lynne Featherstone present the Bill.

Mr. Frank Field accordingly presented the Bill.

Bill read the First time; to be read a Second time on 16 October 2009 and to be printed (Bill 133).

Borders, Citizenship and Immigration Bill [Lords]

[Relevant Documents: The Ninth Report from the Joint Committee on Human Rights of Session 2008-09, Legislative Scrutiny: Borders, Citizenship and Immigration Bill, HC 375, and the Seventeenth Report from the Committee, Government replies to the Second, Fourth, Eighth, Ninth and Twelfth Reports of Session 2008-09, HC 592.]

Consideration of Bill, as amended in the Public Bill Committee.

New Clause 2

Short-term holding facilities

‘In section 147 of the Immigration and Asylum Act 1999 (c. 33) (removal centres and detained persons: interpretation), in the definition of “short-term holding facility”—

(a) after “used” insert “—(a)”, and

(b) at the end insert “, or

(b) for the detention of—

(i) detained persons for a period of not more than seven days or for such other period as may be prescribed, and

(ii) persons other than detained persons for any period.”’.—(Mr. Woolas.)

Brought up, and read the First time.

With this it will be convenient to discuss the following: Amendment (a) thereto, after ‘detention’, insert

‘by an immigration officer, general customs official or Customs revenue official’.

Amendment (b), thereto, leave out ‘for any period’ and insert

‘for not longer than six hours’.

Amendment 9, in clause 3, page 3, line 35, leave out paragraphs (a) and (b) and insert—

‘(a) any officer transferred to the UK Border Agency from HM Revenue and Customs, or

(b) any UK Border Agency employee recruited for that specific purpose,’.

Amendment 18, page 3, line 36, at end insert—

‘(ba) a police officer’.

Amendment 10, page 3, line 43, leave out subsection (3).

Amendment 11, in clause 11, page 8, line 4, leave out paragraph (a) and insert—

‘(a) any officer transferred to the UK Border Agency from HM Revenue and Customs, or’.

Amendment 12, in clause 12, page 9, line 10, leave out ‘or for a specified period,’.

Amendment 13, page 9, line 11, leave out from ‘withdrawn’ to end of line 12.

Government amendment 15.

Amendment 20, in clause 25, page 19, line 29, at end insert—

‘(1A) The designation of short-term holding facilities must be renewed every six months.’.

Amendment 21, in clause 28, page 22, line 27, at end insert—

‘(10A) The Chief Inspector of the UK Border Agency may delegate his responsibility to inspect facilities to Her Majesty’s Inspectors of Constabulary.’.

Amendment 3, in clause 30, page 24, line 9, at end insert—

‘(2B) Regulations made under subsection (1) or (2A) may make provision conferring functions on the Independent Police Complaints Commission in respect of the exercise of immigration and customs functions and the provision of services pursuant to arrangements relating to the discharge of those functions whether in the UK or overseas.’.

Government amendment 16.

May I report back to the House on the deliberations of the Committee? I believe that we had comprehensive scrutiny, that we have improved the Bill even further and that, on the major matters, we have achieved consensus. There are, however, some outstanding issues. I shall deal first with the group of Government and non-Government amendments that deal with part 1, which are included in the first group on the selection list. The House will want to pay tribute later in the debate to Lord Kingsland, who has sadly been taken from us. His premature death this weekend was a terrible blow to all those who loved him and to this House and the other place. In the debate on citizenship and part 2 of the Bill, we will see even more of that. The Home Office is profoundly shocked by his death. He worked with officials in the Home Office for many years and he is a great loss.

This is a large group of amendments, so let me deal immediately with Government new clause 2, which goes with Government amendments 15 and 16, and describe their purpose and effect. The Liberal Democrat spokespersons, the hon. Members for Carshalton and Wallington (Tom Brake) and for Rochdale (Paul Rowen), are in their place and they helped the Committee, as did the hon. Gentlemen who speak for the official Opposition, the hon. Members for Ashford (Damian Green) and for Reigate (Mr. Blunt). They were both on the Committee and will wish to speak about their proposals.

Since we last discussed the Bill on the Floor of the House of Commons, the Government have published a document that is very important—“Building Britain’s Future”. In the section on immigration, they pledge that we will move to a points system for citizenship so that we break the link between people coming here to work and their automatically becoming citizens. My hon. Friend the Member for Mid-Sussex (Mr. Soames) and I chair the all-party group on balanced migration and we have been pushing for that. Does the Bill bring us up to date with the latest Government development?

The Bill provides a beautiful tapestry on which the next proposals will be embroidered. There is a beautiful and symmetric logic to what we are doing, as I shall explain. I am sure that the hon. Member for Mid-Sussex (Mr. Soames) and my right hon. Friend the Member for Birkenhead (Mr. Field) will welcome the proposals. My right hon. Friend the Member for Redditch (Jacqui Smith), the then Home Secretary, made it clear on Second Reading that she thought that should the Bill be accepted by the House—it has cross-party support—it would provide a platform from which to move forward to the next stage of reform, which would be a points-based system for citizenship building on the points-based system for temporary migrancy for economic reasons. Indeed, the document “Building Britain’s Future” to which my right hon. Friend referred makes it clear that our intention is to bring forward ideas for consultation on that point, precisely to address the proposed lack of a link between temporary and permanent migrancy, but it is important that we get this Bill first. Its citizenship element, although not the border functions set out in part 1, is a platform on which those proposals can be built.

I thank the Minister for that. Given his tapestry analogy, will he take a message back to the Home Office? If what he wants is not delivered, will he remind them that there are many hon. Members with long needles? We do want to aim them not at him but at other forces.

My immediate thought is that we should not take the analogy any further. The Government are committed to that strategy, and we are working on the proposals. They do not lie within the scope of this Bill, but my right hon. Friend is right to point out that they have a strong relationship.

I turn now to new clause 2, which deals with short-term holding facilities. Government amendment 15 is consequential to it and removes clause 25 to make way for the new clause. Government amendment 16 makes the changes to the schedule that will be necessary if the House accepts the earlier amendments.

The purpose of the existing clause 25 that was inserted in the other place was to provide greater flexibility in the use of short-term holding facilities, and thus to maximise the use of these finite detention resources. In short, it was a management tool to secure greater flexibility and therefore the greater efficiency for the taxpayer that is always at the front of our concerns.

Short-term holding facilities fall into two categories—the residential facilities at Dover, Manchester, Harwich and Colnbrook near Heathrow, and the holding rooms at most ports and certain UK Border Agency offices. All are subject to a statutory maximum stay of seven days. At present, short-term holding facilities may be used to hold only individuals who have been detained for immigration purposes under UKBA’s administrative powers of detention, and those who have been detained under section 2 of the UK Borders Act 2007, pending the arrival of a police officer.

By modifying the definition of short-term holding facilities, we are removing that constraint so as to allow other categories of persons to be held in those facilities. As a consequence, short-term holding facilities will be able to hold a range of individuals, subject to the prescribed periods of detention and protections relevant in each case. That could include individuals arrested in connection with immigration or customs offences, individuals detained under section 2 of the UK Borders Act 2007 as liable to arrest and pending the arrival of a police officer or, as now, individuals detained in detention under the Immigration and Asylum Act 1999.