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Commons Chamber

Volume 502: debated on Monday 7 December 2009

House of Commons

Monday 7 December 2009

The House met at half-past Two o’clock


[Mr. Speaker in the Chair]

Oral Answers to Questions

Work and Pensions

The Secretary of State was asked—

Youth Unemployment

1. What assessment she has made of the causes of the change in the level of youth unemployment in the last 12 months. (304061)

Young people have been particularly heavily affected by the impact of the global financial crisis and the recession. Many employers have chosen to delay new recruitment, which is why the £5 billion investment that we have put in place to help the unemployed includes a £1 billion future jobs fund as well as extra training and support for young people across the country.

I thank the Secretary of State for her reply. She will be aware that many people who are not graduates also need help and support in finding employment. What measures are the Government taking to ensure that those without degrees are given as much help and support as those who have left university?

The hon. Gentleman makes an important point because we need to help young people, whatever their circumstances or their level of qualifications, to be able to get into work as rapidly as possible. Currently, more than half of young people are managing to leave the claimant count new jobseeker’s allowance within three months, so a lot of people are getting help. As well as support for graduates, particularly through internships, we are providing additional help for young people through additional training places, the September guarantee, and the young person’s guarantee that no young person should become long-term unemployed. The future jobs fund is also providing youth jobs in the hon. Gentleman’s constituency, and I hope that his party will change its policy and support it, as it is making a difference to young people.

Will the Secretary of State place in the Library information on the breakdown by educational qualification of those who are young and unemployed? That would show just how important the Government’s education reforms are in supporting a safe move from school into work.

I am certainly happy to make sure that that information is available. My right hon. Friend is right that those with lower qualifications and skills are at higher risk not just of unemployment generally but of becoming long-term unemployed. That is why it is important not only to raise the education-leaving age so that more young people stay on in education, but to provide the guarantee that young people do not end up stuck on the dole for the long term. The £5 billion investment to support that is also important.

In the last Department for Work and Pensions questions on 19 October, as reported in Hansard at column 620, I effectively asked the Government to adopt our proposal to give the young unemployed specialist help through welfare-to-work providers after six months. The Secretary of State dismissed this, but yesterday in The Sunday Telegraph, it was reported that the Government were going to change the young person’s guarantee so that in future it will kick in at six months. That is not enough, but will the Secretary of State now admit that she got it wrong and we got it right?

Let us be clear of the consequence of the programme we have already put in place. Youth unemployment figures for the right hon. Lady’s constituency show 2,200 young people on the dole at the moment compared with 4,300 in December 1992—half the level it was in the early 1990s. I would also point out that the investment we have put in place not only provides support at six months but provides it from day one of unemployment—from the very beginning when young people lose their job and need to find work. We are investing to deliver the young person’s guarantee with £5 billion of additional investment. Her party opposes that and she also opposes the young person’s guarantee that we want to bring forward. She has opposed it because she cannot support the investment to guarantee jobs and training for young people.

The Secretary of State is always keen to contrast the performance of the last Conservative Government and this Labour Government with selective figures, so I will give her a contrast. In the last five years of the last Conservative Government, youth unemployment fell by 251,000. In the five years of this Labour Government before the recession began, youth unemployment rose by 129,000. We will give earlier help through welfare-to-work providers and create hundreds of thousands of new apprenticeships, training places, places at further education colleges and work pairings. Is not the clear contrast the one between a Conservative party that has policies to help young people and a Labour Government who have let them down?

What utter and complete nonsense! The right hon. Lady will not guarantee young people a job or training or real-work opportunities for young people right now, and she will not fund the additional investment of £5 billion to help young people right now. As long as Conservative Members oppose the £5 billion investment, they cannot back our young person’s guarantee and the extra help. I have to say to her again that the 18 to 24-year-olds claimant count is 462,000 right now; in the early ’90s it was 784,000; in the mid-80s it was 980,000. This investment helps young people through the recession rather than abandoning them like the Conservatives did time and again in previous recessions and want to do again now because they want to cut the investment and support that is aimed at giving those young people a chance.

May I bring to the attention of my right hon. Friend the report from my constituency, “Northampton Young People and the Recession”? Will she say how she is going to meet one of the challenges mentioned in it—providing targeted help for young people who have quite complex needs and making sure that they get support with social issues as well as training to get them back into the job market as quickly as possible?

My hon. Friend is right. People, especially those with complex needs, need individual support to deal with particular circumstances. She will know that the future jobs fund is providing real job opportunities for young people. The Conservatives have said that they would abolish it, but I know that it is already making a difference in her part of the world. We want to expand on that to provide additional help for, in particular, those with the greatest needs, who might otherwise be at the greatest risk of long-term unemployment.

Winter Fuel Payments

This winter, older people will again receive the higher levels of winter fuel payment: £250, and £400 for the over-80s. We are also maintaining the cold weather payment at last year’s higher rate this winter.

Given that, of all the initiatives introduced by the Government, the winter fuel payment is probably the most universally popular with the over-60s, what does my right hon. Friend think of Members who have described that assistance as a gimmick and believe that it should be abolished?

There are pensioners across the country who certainly do not regard extra cash in their pockets at the time when they need it most as a gimmick. They regard it as a lifeline that helps them to pay their fuel bills in the winter. In 1997-98, about £60 million a year was spent on helping pensioners with fuel bills; now we spend about £2.7 billion a year. I think that that represents a justifiable increase in investment in helping people to get through the winter months.

Workplace Pension Saving

Our reforms to workplace pension saving, including automatic enrolment and the introduction of the personal accounts scheme, will result in between 5 million and 9 million people newly saving, or saving more, for their retirement.

The Minister will be well aware of Conservative criticism of the Government’s appalling record on pensions and the savings culture, but she may not be aware of the comments of the chief executive of the National Association of Pension Funds, who said the other day:

“"The Government can no longer sit on its hands. It must take bold and positive action to help support employer-sponsored pensions.”

Even at this late hour, can the Minister get a grip on the issue, do something about it, and reverse the culture towards pensions that has prevailed in this country for far too long?

The Government are determined to support the provision of good private sector schemes. That is why we are in the middle of putting into effect the Turner commission’s proposals, which will ensure that between 5 million and 9 million people who do not currently have an opportunity to save begin to do so. We know of the hon. Gentleman’s views on the stresses on defined benefit final salary schemes so perhaps he will explain why the Conservatives want to reduce pension saving in the public sector.

What evidence have the Government that tax relief on pension contributions, particularly for higher-rate taxpayers, has any effect on savings for pensions? If the Government have such evidence, will they please send it to me?

I have seen no such evidence, although I have heard plenty of assertions since my right hon. Friend the Chancellor decided to reduce the tax relief available to those who earn more than £150,000 a year. As for the distribution of tax relief accorded to pensions savings, I do not know whether my hon. Friend is aware that 230,000 of the best-off people in the country currently receive £6.1 billion, or 25 per cent. of all that tax relief.

The Minister will know that the Personal Accounts Delivery Authority is now reduced to just two potential bidders to provide the massive IT system for personal accounts and that it will have personal data on millions of employees who have never been pensioned before. Is she concerned about that and, in particular, would she be concerned if one or both of those bidders held those sensitive data offshore?

I would certainly not be concerned about the fact that the competitive dialogue being led by the authority has now reduced the number of potential bidders from four to two. One would expect that as part of a dialogue. Clearly we must be careful about the way in which personal data are held, and it is certainly true that the security of personal data is very important in this context. I assure the hon. Gentleman that those concerns are being taken into account adequately in continuing discussions between the Personal Accounts Delivery Authority and the potential bidders who are still left in the competition.

Workplace pensions are extremely important for employers and employees, but will the Minister also have discussions with the trade unions to encourage them to play a positive role in encouraging such schemes?

I regularly see stakeholders on all sides of the pensions issue, including trade unions, as well as suppliers and stakeholders in the pensions industry itself. The trade unions have long played an important role, such as by providing trustees to ensure that pension funds are properly and adequately looked after and administered. I intend, of course, to continue seeing representatives of all sides of the pensions industry. It is important that employees as well as employers have the confidence that the pensions they are putting aside are being properly administered. That is why it is also important that, for the first time ever, we have the Pension Protection Fund, which ensures that, in the event of private sector insolvency, there are protections for those who have paid into, and invested in, private pension funds.

But can the Minister confirm that 100,000 pension schemes have been wound up since 1997 and that the number of active members has halved from 5.1 million in 1995 to 2.6 million according to the latest Office for National Statistics figures published very recently? Is it any wonder that a survey conducted by the Minister’s own Department showed that 51 per cent. of people do not trust the Government to act in their best interests on pensions?

It is important to understand that the decline in final salary or defined benefit schemes, which the hon. Gentleman refers to, has been going on since the 1960s, when I was at school, so it was rather a long time ago. There is no magic bullet in preserving defined benefit schemes. Perhaps he will also acknowledge his party’s role in the creation of personal pensions and the mis-selling scandals of the 1980s, which also destroyed confidence in pension-saving schemes.

Disability Benefits

4. What plans the Government have for the future of disability living allowance and other disability benefits. (304065)

11. What plans the Government have for the future of disability living allowance and other disability benefits. (304072)

The “Shaping the future of care together” Green Paper set out our vision for a new national care service. There may be a case for bringing together some disability benefits and the adult social care system into a single system, as a better way of providing support to older and disabled people. The Department keeps all our benefits under review.

Many folk in Clacton who have disabilities and whose need is genuine have contacted me to say they are very concerned that they could lose their allowances. Can the Minister guarantee that the deficit will not be fixed on the back of vulnerable people in Clacton who genuinely need these allowances?

I welcome the hon. Gentleman’s interest in disability benefits. We are, of course, concerned about pensioner disability benefits—both attendance allowance and disability living allowance. As the hon. Gentleman will know, about 1.7 million extra people are going to need social care by 2026, so we do need a new system, but I can assure him that those people who are receiving the affected benefits at the time of reform of the care service nationally will continue to receive the same level of cash support.

I represent the most centenarians in the country, and a huge number of senior citizens in my constituency are greatly concerned about any changes to their allowances. Will the Minister put their minds at rest by saying that the changes to, or even abolition of, the attendance allowance, as referred to in the Green Paper, will not mean that 2.5 million pensioners will be £3,500 a year worse off?

I have given an assurance about the arrangements for existing claimants if we introduce a national care service. Many of the hon. Gentleman’s constituents are currently living to 100, and he will be aware that that number will quadruple in 20 years’ time—and I hope he is among them, and that you are, too, Mr. Speaker. The Wanless report identified that, because of the ageing population profile in this country, we will need an additional £6 billion, so we do need a new system. I have assured the House that existing claimants will continue to receive the same cash levels as before, but I think that everyone recognises that we need a new system, and that is why we are determined to bring forward this debate.

The Government have a good record as far as disabled people are concerned, but does my hon. Friend recognise the genuine anxiety among many disabled people about the Green Paper? It is necessary to reassure them that no one who is genuinely disabled will lose out as a result.

My hon. Friend will have heard the scaremongering from certain quarters. I think that we all accept that, with the ageing population, we need a system that is fit for purpose. With increasing age comes increasing cost, and there is a demand for more quality, too. Grappling with these competing demands necessitates that we should come up with a new system. If we do not, the current system will buckle and fall. I hope that my hon. Friend will take the assurance from me that existing claimants will continue to receive the same cash level of support if we introduce a national care service.

May I draw the Minister’s attention to a problem that is affecting some of my constituents who are in receipt of disability and other benefits? If they report any change in circumstance, there seems to be a very long time lag before their new benefit is agreed. In the meantime—and these people are on very low incomes—they are left with no income at all. Will the Minister look into this?

I am grateful to my hon. Friend for bringing to our attention the concerns of her constituents in Milton Keynes. If she provides me with the details of those constituents who have experienced a delay, I shall certainly look into the matter.

It is no good the Minister pretending that this is all Conservative scaremongering, because 34 Labour Members have signed early-day motion 1 and they, along with all the disability organisations, oppose taking away attendance allowance and disability living allowance and folding them into the social care system. The simple question for the Minister is this: the Secretary of State herself, in evidence to the Select Committee, said that older people valued attendance allowance and disability living allowance and the independence and control that they gave them, so how do they benefit if those benefits are taken away and, at best, they are not even given back to them in an individual budget or, at worst, if they lose that independence and control? How do they benefit?

The hon. Gentleman is approaching this from a one-dimensional perspective. I have set out that we have an ageing population and that there will be additional costs in order for us to deliver on a required new system. It took the hon. Gentleman and his colleagues about four months to read this paper before we got a scaremongering response. I have said to his hon. Friends and other hon. Members that existing claimants will have their cash-related income protected as regards attendance allowance and DLA. We need to put in place a system that is fit for the future. We will have a national care system in the same way that we have a national health service, and that is opposed completely by the Opposition.

Jobseeker’s Allowance

5. What the percentage change has been in the number of jobseeker’s allowance claimants in (a) Wellingborough constituency and (b) England between 1997 and the latest period for which figures are available. (304066)

From October 1997 to the end of October 2009, the numbers claiming jobseeker’s allowance in England have gone up by 163,277 and in Wellingborough by 1,578. This is a change of 14.1 per cent. and 105.1 per cent. respectively. In the same period, employment has risen by 2,685,200 in England and by 11,700 in Wellingborough.

In 1997, Tony Blair said that things could only get better. In Wellingborough, unemployment has more than doubled since 1997. How could Tony Blair have got it so wrong?

Things have certainly got better for those 11,700 people who, thanks to the policies of this Government, are now in work and who would not have been in work before. Things have got better for the 137 people net who came off jobseeker’s allowance last month in the hon. Gentleman’s constituency. I do not hear him celebrating the fact that the figures are now starting to come down in his constituency. All in all, the management of the economy that we have seen over the past year through this recession is in stark contrast to that when his party was in power, when unemployment was deemed a price worth paying. We have now seen unemployment figures that are 400,000 less than those predicted at the time of the Budget in April.

In Leicestershire and Northamptonshire, including in Wellingborough, those who have been on jobseeker’s allowance for 12 months are referred by the local jobcentre to a private sector organisation, the offices of which I visited last week to discuss its approach. How confident is the Minister that the training and support that those outsourced contracts provide will be appropriate to those who seek to find work in a very difficult market?

My hon. Friend is right to point out that, however good the providers are, we also need to ensure that we have policies in place to create work for people to move into. Those providers are paid on the basis of results—for those whom they successfully get into work—and that is a strong incentive for them properly to match the support that is needed with the individuals. The biggest threat comes from the policies that have been put forward by the shadow Chancellor, which The Economist has said would lead to a doubling of unemployment to 5 million.

Was not the pledge of Labour in 1997 to get 250,000 under-25s off benefits and into work? Is it not the case that today there are 300,000 more under-25s out of work than there were in 1997, and that that figure has been rising for many years? Was it not higher before the recession took hold than it was in 1997? Is there not a problem of structural youth unemployment today, and do we not need some fresh thinking rather than the failed policies of the Government?

I am afraid that that is more rubbish from the Conservative party. The pledge on the famous pledge cards in 1997 was about long-term youth unemployment and what would be delivered through the new deal. As the noble Lord Freud said a year ago, that was a huge success. We were able to tackle long-term claimant youth unemployment, which is currently an 18th of what it was in 1997. It has been slashed, thanks to the imaginative ideas of the Government. The problems that we have now are in relation to short-term levels of unemployment.

Youth Unemployment

6. What steps her Department is taking to reduce unemployment among young people; and if she will make a statement. (304067)

12. What steps the Government are taking to reduce the level of youth unemployment; and if she will make a statement. (304073)

We have launched a number of targeted initiatives to tackle youth unemployment, as hon. Members have been hearing. From next month, the young person’s guarantee will ensure that all 18 to 24-year-olds on jobseeker’s allowance will be guaranteed either the offer of work, work-focused training or meaningful activity. They will then be required to take up one of those opportunities. The future jobs fund will create 150,000 jobs. About 95,000 jobs have already been approved and some have already started, but the Government cannot prevent youth unemployment on our own. That is why we have launched Backing Young Britain, and I am delighted to report that, as a result, more than 330 employers are already pledging new opportunities for young people.

What measures within the future jobs fund and other initiatives within the Department are focused specifically on disabled young people, the vast majority of whom want to experience the same job opportunities and job satisfaction as has been the experience of their peers?

My right hon. Friend is well known in the House as a champion for disabled people. The future jobs fund is designed to help all young people and, with my hon. Friend the Minister with responsibility for disabled people, the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Chatham and Aylesford (Jonathan Shaw), I am looking to secure good access to all future jobs fund opportunities for young disabled people. Among the future jobs fund bids, First Movement in the east midlands will offer creative arts and outreach activities for people with disabilities, and, in Scotland, the Royal National Institute of Blind People has proposed a number of jobs, including positions such as facilities officers, conferences officers and an admin director.

Programmes such as the young person’s guarantee are to be welcomed, and I am sure that they will do a lot of good. However, does my hon. Friend realise—I do not know what was in the press yesterday, but as far as I am concerned this is the case with the rules today—that there are daft rules? There is a 39-week eligibility wait before one can qualify for that scheme, which means that about a third of young unemployed people in the north-east will not qualify at all. Will the Minister look into this issue and scrap the rule to make sure that all young people get their rights from day one?

Given that my hon. Friend comes from the part of the world that he does, which has been hard hit by the recession, I naturally listen carefully to his encouragements. Of course, we continue to consider the point at which people become eligible for increasing levels of support, according to the risks that they have of becoming long-term unemployed. We will have more to say about that in the next few days.

I am sure that the Minister recognises the anger and frustration of young people and families who find themselves unemployed at this time. Why have the numbers been rising steadily, even before the credit crunch? Does he understand and accept that unemployment when one is young has a long-term, scarring effect, from which people often do not recover?

We know only too well, from our memories of the recessions of the 1980s and 1990s, when the Government of the day thought that unemployment was a price worth paying, about the scarring effect of unemployment, especially on young people. It can damage their self-confidence for the rest of their working lives. That is why we have put such a focus on preventing long-term youth unemployment through the £5 billion investment—opposed by the hon. Gentleman and his party—which has been successful, as I have already said in answers today. That is why, if we consider the international position, we see that our youth unemployment is below the European average and that of countries such as France, Italy and Spain.

Local Housing Allowance

7. What recent assessment she has made of the effectiveness of the rules governing local housing allowance. (304068)

We are taking forward a review of the first two years of the operation of local housing allowance. In many respects, it is effective, but we will shortly consult on the reform of housing benefit. Our aim is a system that is fair to customers, landlords and the taxpayer.

Does the Under-Secretary agree that more private rented accommodation might become available if tenants could opt to have their LHA paid directly to the landlord? The landlord would thus be guaranteed to receive the rent and tenants would not be at risk of accumulating unmanageable debt.

I am afraid that we have no independent evidence to support the hon. Lady’s proposition. Indeed, the number of people living in the private rented sector has increased by 200,000 since November 2008.

The local housing allowance was designed to give people an incentive to shop around; if they could get a rent for below the going rate, they could keep the difference. However, the Under-Secretary knows that the Government plan to scrap that. In those circumstances, why would landlords offer rents below local housing allowance level? Will not they simply put up rents as a result? Is not that a direct transfer from the taxpayer to landlords?

At the moment, we are considering the consultation responses to our proposals about the £15 excess. We will respond to that in due course. I am afraid that I do not accept the hon. Gentleman’s proposition. We believe that the freedom that we have given tenants enables them to shop around. It also gives them more choice, enables them to manage their benefit payments and open bank accounts, and improves their financial inclusion generally.

But why do the Government persist in refusing tenants’ request to have their local housing allowance paid directly to their landlords? That is what tenants want. There is much evidence to show that money goes straight to loan sharks or drug dealers. The policy also reduces the supply of social homes to local housing allowance tenants. When will the Government give tenants the choice for which they are asking?

As I have said, the evidence is unclear. The feedback that we have had from local authorities generally is that most tenants manage their benefit payments and do not get into increasing arrears. Choice is only one aspect of the local housing allowance; responsibility is a key principle. I would have thought that the hon. Gentleman would accept that principle.

Pensioner Poverty

Through targeted support and additional funding, we have got 900,000 pensioners out of the relative poverty in which they were living in 1997. However, there are still 2 million pensioners in relative poverty, which we define as 60 per cent. or below of median household income.

Does the Minister acknowledge that a reason for that is the complexity and delay involved in applying for benefits, particularly pension credit, for which the form is 18-pages long and the guidance is 19 pages? Does she not accept that, for many people, that is simply a deterrent, which means that they do not claim benefits? Is that not the Government’s intention? If it is not, surely they could find a better way of ensuring that people who are entitled to benefits get them.

First things first: I am proud to be part of the first Government ever to end the link between poverty and old age. A report published by the Joseph Rowntree Foundation on 3 December revealed that there has been a historic reversal in the fortunes of pensioners over state pension age, who are now at the lowest risk of being in poverty than any other age group. I do very important work with the Pensions Service in attempting to encourage pension credit recipients to claim, and that service makes 13,000 visits a week to the homes of vulnerable pensioners to take them through the claim form. People can claim for pension credit, housing benefit and council tax benefit in the same phone call, and the hon. Gentleman’s own local authority—Aberdeenshire—is one of 203 local authorities working in partnership with the Department for Work and Pensions to improve the take-up of pension credit, and we believe that we are succeeding.

Jobseeker’s Allowance

9. How many jobseeker’s allowance claimants there were in (a) the UK, (b) Wales and (c) Clwyd, West constituency on the most recent date for which figures are available. (304070)

In October 2009, there were 1,582,555 jobseeker’s allowance claimants in the UK, 78,234 in Wales, and 1,603 in the Clwyd, West parliamentary constituency. Employment levels have risen since 1997 by 121,200 in Wales and 6,700 in Clwyd, West.

Almost half of the last quarterly increase in unemployment across the UK was attributable to job losses in Wales, which was particularly hard-hit by the downturn. I know that the Minister’s Department works closely with the Welsh Assembly Government in the delivery of their ProAct programme, so can he explain why in the 12 months to October this year, not a penny was spent under that programme in the county of Conwy, which includes my constituency, where there has been a 50 per cent. increase in unemployment?

The hon. Gentleman is right that I regularly meet Ministers from the Welsh Assembly Government. Over the summer, we were pleased that Wales appeared to buck the trend and be moving in a positive direction. Some people put that down to the effectiveness of ProAct and ReAct. I cannot give him a detailed answer on spending in his part of the world, but I can tell him that in the past year, employment has risen in his constituency, inactivity has fallen and the number of people claiming jobseeker’s allowance fell in the past month.

Gloucester Works Project

This is a good-quality project, providing support to unemployed people and businesses in Gloucester, and bringing together the public and private sectors to ensure that local communities benefit from regeneration. During the first phase of the Quays development, the project has delivered 236 jobs for local people, 67 per cent. of whom had previously been unemployed or facing redundancy. I was very pleased to see this for myself when I visited the project in October to meet people who have secured jobs thanks both to the investment Government are making and to the tireless work of their excellent local Member of Parliament.

I am grateful to my right hon. Friend, who will be aware that Gloucester Works has contributed to a reduction in unemployment in the city of Gloucester in four of the past six months. The project is worth something like £4 million of investment from the Government, so does he share my concern that that funding would not continue should the Opposition ever come to power?

I share my hon. Friend’s concern, because the funding has come from two organisations about which the Opposition are sceptical—the regional development agency and the European Union. As I have said, the project has delivered 236 jobs that would not be delivered if the Opposition’s policies had their way.

Local Housing Allowance

To return to where we were on Question 7, would the Minister be surprised to hear that, despite a private landlord contacting Scarborough borough council to inform it that three months’ rent that had been paid to a tenant had not been passed on, and that, before eviction proceedings could take place, the tenant absconded, the council said that it had no alternative but to pay the subsequent payment to the tenant, although they had left the property with three months of arrears?

The hon. Gentleman has told this story, but the overall picture is quite different. In total, across the whole country, there are a million people receiving local housing allowance. It is, on average, £110 a week, and they use that to pay their rent.

I am sure the Minister saw the story in the newspapers last week of a family in west London who were receiving some £180,000 worth of benefits, most of which formed their housing allowance. The hon. Lady previously had plans to cap the very large sums of rent that were paid to families. Can she explain how such an extraordinary state of affairs came about?

We have already acted to cap those high levels of benefit by capping the local housing allowance to the five-bedroom rate. We will shortly be consulting on reform of housing benefit to make it fairer and support access to reasonably priced accommodation. The hon. Lady makes a fair point. Nobody expects housing benefit to pay for a small number of people to live in extremely expensive accommodation, but I point out to her that fewer than 100 households across the whole country receive housing benefit of more than £1,000 a week.


16. What recent steps she has taken to reduce the level of unemployment; and if she will make a statement. . (304077)

We are taking decisive steps to reduce the level of unemployment, as we have been discussing. Since November 2008, the Government have made available £5 billion to provide more support to jobseekers prior to redundancy, when they are newly unemployed, and at the six and 12-month points of their claim.

My right hon. Friend rightly describes what has been put in place when people are unemployed. Would it not make sense to support people while they are in the workplace? Perhaps we ought to introduce something similar to the ProAct scheme. In that way we will be subsidising people to keep their jobs, rather than retraining them at the jobcentre afterwards.

Thanks to the extra £5 billion that we are spending, one of the areas of investment has been in the rapid response service, which goes into workplaces and works with those immediately facing redundancy, before they start their claim for jobseeker’s allowance, reskilling them so that they can go straight into a different sort of job. In respect of ProAct and whether we should have some kind of wage subsidy scheme, in England we have chosen not to go down that road because of other schemes that are in place. We have heard some debate today about its effectiveness or otherwise in Wales.

Can the Minister tell me why, when in 1997 youth unemployment in the Vale of York and across the country was going down dramatically, we now have record levels of youth unemployment in the Vale of York, as well as those 18 to 24-year-olds not in employment or training?

This may come as a surprise to the hon. Lady, but there has been a global recession. Thanks to that, unemployment has risen, which normally happens during recessions. It has happened during every previous recession, but the measures that have been taken—the £5 billion that we have invested—have lessened the impact of unemployment. We have done considerably better during the present recession than in previous ones.

Will my right hon. Friend urge our right hon. Friend the Chancellor not to cut public spending in the areas of public services and construction in particular, which are labour intensive and should make a considerable contribution to future employment?

Naturally, we are deep in discussions with my right hon. Friend the Chancellor of the Exchequer, but it is beyond my pay grade to comment at this point on the outcome of those discussions.

Private Pension Schemes

17. When she next expects to meet representatives of occupational pension campaign groups to discuss private pension schemes that have been wound up. (304078)

My predecessors and I have frequently met representatives of occupational pension campaign groups and trade unions, and I will continue to do so.

The Minister will know that I represent a number of constituents who are in occupational pension schemes that have failed. That has caused substantial concern and grief. Can she confirm that the financial assistance scheme will pay out the 90 per cent. as promised, without conditions? Can she also confirm that there will be full protection for widows and partners of deceased members of schemes?

I am aware that the hon. Gentleman represents areas where there are pensioners in several schemes that have entered the financial assistance scheme because he has been in correspondence with me about that, and I have been more than happy to correspond with him in reply. I can confirm the promise that we issued when we introduced the financial assistance scheme: that members would get 90 per cent. of expected pension, subject to the cap, revalued from the date of wind-up. This is not the pension that they could have expected to retire on if they had continued paying all the way to retirement, but the rights that they had accrued to date.

Disability Living Allowance/Attendance Allowance

18. What plans the Government have for the future of disability living allowance and attendance allowance. (304079)

I refer the hon. Gentleman to the reply that I gave earlier to the hon. Members for Harwich (Mr. Carswell) and for Southend, West (Mr. Amess)

The Minister did, indeed, reply to Question 4, and his response centred on the rising elderly population and on the escalating costs. He rested his case on false accusations of scaremongering, but I have with me a number of letters from real people, showing the vulnerability that they feel in the light of the threatened withdrawal of attendance allowance and disability living allowance. Why do the Government so blatantly discriminate against the over-65s on disability living allowance?

The arrangements for disability living allowance have been in place for many years, and they precede this Government’s entry into office, as I am sure the hon. Gentleman is aware, and as I am sure he will tell the people who have written to him. We need to set out a new care system. People want a system that ends the postcode lottery: they want a system whereby, if they move from one town to another, they do not have to battle to receive such services. In my earlier reply, I said that an existent pensioner claimant who is in receipt of attendance allowance or disability living allowance will get the same cash total under the new system. In order to reassure the people who have written to him, I hope that the hon. Gentleman will tell them that, and not repeat the scaremongering that we have heard from those on the Opposition Front Bench.

Topical Questions

Today, the Secretary of State for Health and I announced a number of publications on mental health conditions and employment. Because of the devastating impact that mental health can have on people and their families, we know that it also costs the economy between £30 billion and £40 billion in lost production, sick pay, NHS treatment and unemployment. We want to do more not only to help people—and their families—who have mental health conditions, but to improve their employment chances, because that is good for the economy, as well as for such individuals and their families. Later this week, the Department will publish its back to work White Paper, with extra help for young people and others who are struggling to find work.

But does the Secretary of State recall the parable of the 10 wise and foolish virgins? Would it not have been wiser for the Government to have prevented the £3 billion worth of benefit fraud and overpayment each year, rather than to set up yet another taskforce, which is foolishly 12 years’ too late?

The hon. Lady will realise that the Government have done a huge amount of work to reduce fraud and overpayments. The progress that we have made has been hugely important, but we want to go further, so it is right that we look both throughout the government and in the private sector at how we can go further and build on the very considerable progress that has already been made.

A constituent of mine, who was successfully helped back into work by the new deal for lone parents, found herself within 3p of losing her carer’s allowance when the minimum wage went up in October. What work is the Department doing to synchronise minimum wage rises with the earnings threshold for carer’s allowance?

My hon. Friend makes an important point, and we are looking at what more can be done to help carers who are often very keen to work, even if they are able to do so for only a limited number of hours, so that they can combine such work with their caring responsibilities. That is one of the issues that we have looked at as part of the back to work White Paper—how we do more to support carers and parents who need more flexible work. I am happy to talk further to my hon. Friend about that issue and the concerns of her constituent.

May I tell the Secretary of State of a constituent who came to see me on Saturday morning? His partner died on 8 September, and he is having tremendous problems getting the child benefit and tax credits that should be paid over to him. He is in desperate straits, and so are his children—obviously suffering the terrible loss of their mother. If I give the Secretary of State’s office the details, will she ensure that the situation is sorted out by Christmas?

I can say that I will look into this immediately. If the right hon. Gentleman gives me the details today, I will get my office on to it straight away. It is important that people are provided with rapid support at a very difficult time. We are trying to work right across government so that, particularly in cases of bereavement, it is possible for people to tell not only our Department but any other area of government, just once, about what has happened so that all areas of government concerned can work together to provide that support rapidly. I am very sorry to hear of the hon. Gentleman’s constituent’s case.

T2. This morning, together with my right hon. Friend the Secretary of State for Children, Schools and Families, I had the pleasure of attending a youth impact project run by Charlton Athletic community trust in partnership with CARE—the Charlton Athletic race equality project. The project works with NEETs—people not in education, employment or training—and it has had a high success rate. We heard some very moving stories from young people who had been through the project. The funding for this successful project comes to an end in March, and it is looking for funding to take the project forward. May I urge the Secretary of State to enter into negotiations with such projects in order to get secure funding? (304087)

I am very encouraged to hear the stories of how successful Charlton Athletic is being in engaging with young people in my hon. Friend’s constituency. Last week, I was at Stamford Bridge to take part in the launch of the premier league Into Work initiative, which is trying to do similar things. It might be worth Charlton’s linking up with the premier league and Richard Scudamore on that work.

I am happy to discuss funding with my hon. Friend to see whether there is any more that we can do.

T5. Given the exchanges that we have had on Questions 4, 11 and 18, and the Government’s attempts to suggest that nobody who is on existing benefits will suffer, can the Minister give the equivalent promise that those in future need will have equivalent benefits in cash? (304090)

The hon. Gentleman knows that we have a Green Paper, on which we are consulting, to provide—[Interruption.] To answer the sedentary question, the problem is that we have an ageing population with increasing demands, and we need to find solutions in order to meet those demands. We have a Green Paper, which we are consulting on, and we are listening carefully to what people have to say. We need to ensure that those who are most vulnerable—those in the greatest need—[Interruption] If the right hon. Member for Maidenhead (Mrs. May) would listen, I repeat that those in the greatest need require support and care, but all she is doing is scaremongering about elderly people in a vulnerable situation. We will come forward with a national care service that will be popular and will meet the needs of future generations, whereas the Conservatives have a blank sheet of paper and can offer nothing other than—

T7. The future jobs fund has the potential to provide 134 new jobs in my area after the Conservative-controlled local authority submitting bids to the fund. However, can the Minister help me with a dilemma—namely, how does the position of my local authority square with the position of the Conservative party? (304092)

My hon. Friend knows that the future jobs fund is creating jobs in the Dumfries and Galloway council area in gardening, community development and customer services. I take on board his comments in welcoming it. As for how it squares with the policy of the Conservative party centrally, it does not. The Conservatives opposed the investment, and the borrowing that financed it, which has been spent on the future jobs fund. Without that investment put in by this Labour Government, my hon. Friend would not have those 91 jobs in his constituency.

T6. Does the Secretary of State agree with the Joseph Rowntree Foundation that poverty, unemployment and repossessions started to rise as early as 2004? (304091)

The hon. Gentleman will be aware that as a result of the support that we have put in, particularly for those who are at risk of losing their mortgages, the number of repossessions has in fact been considerably lower than people expected at the beginning of the recession. That has helped a lot of families who had lost their jobs and were at risk of losing their homes to stay in their homes and to get additional support, whether from their local council, from the Government, or from their mortgage company. That has been helpful, and it means that we have not been turning our backs on people as the hon. Gentleman’s party did in the early ’90s.

T8. Despite resistance from the official Opposition, the Access to Work scheme has proven extremely successful in either getting disabled people back to work or getting them the benefits that they are entitled to. However, there remains a problem for people with autism in trying to get back into work or get their benefits. Will my right hon. Friend the Secretary of State meet representatives from the National Autistic Society to explore whether the difficulties can be solved? (304093)

I thank my hon. Friend for his question and for his commitment to working with people with autism and all disabilities. We seek to provide more opportunities to get into work, and disabled people have seen employment levels rise by about 10 per cent. in recent years, assisted by Access to Work, for which we are doubling the resources to about £138 million, helping about 34,000 people. However, we do need to do more to help people with autism, and I will be pleased to meet him and representatives of the NAS to discuss how we might make Access to Work more flexible and tailor-make it for people such as he refers to.

T9. Despite promises of action back in October, Ministers have continued happily to pay for a family of Afghans to live in a seven-bedroom, £1 million townhouse in west London. Will they now offer the same right to homeless ex-British soldiers living on the streets of London? (304094)

As I said in answer to an earlier question, the number of people being paid exceptionally high levels of local housing allowance, which I agree are not acceptable, is very small indeed. We will bring forward proposals to tackle the problem in our consultation document on housing benefit, but the hon. Gentleman sheds no light whatever on the matter by suggesting that it is somehow to do with immigration.

On 1 November 2008, the Child Maintenance and Enforcement Commission took over the Child Support Agency, which had a woeful record of using its enforcement powers. Can the Minister tell me, if not today then later, how many driving licences were removed in each of the past five years? Was that power ever used?

I am sorry, but I cannot give my hon. Friend that information immediately. I will have to write to him. As he knows, that is an additional power that we are using to get more non-paying, non-resident parents to pay the maintenance that they owe their children.

T10. I sat down at the weekend to help a constituent fill out an application for disability living allowance, and I was appalled at the length and complexity of the form. Have Ministers ever tried filling one out for themselves? If so, what suggestions do they have for making the process far less lengthy and complex? (304095)

I am grateful to the hon. Gentleman for his question. He will appreciate the competing demands in any benefit form. On one hand we must get the right information, and on the other we want to ensure that there is no fraud and mitigate against appeals, which we want to reduce. We have recently revised the DLA form for children, which has been welcomed by a number of children’s organisations. We keep all benefits under review and work in partnership with a range of organisations that advise us, but I am sure that the hon. Gentleman and his constituent understand those competing demands.

In a few moments we will hear more about smarter government. The Department is leading the Government’s “Tell us once” programme, which reduces the number of times individuals have to contact Government to tell them about changes that have affected them. How is it going?

The “Tell us once” initiative has been very effective, bringing together a number of agencies. For example, there has been some excellent work on bereavement in particular, especially children’s bereavement, by St. Guy’s and St. Thomas’s hospital and Lambeth council. We want that successful initiative, which reduces bureaucracy and eases people’s pain, to be expanded, and I hope that my hon. Friend will be satisfied with the responses on it that come forward.

Will the Secretary of State be able to offer any Christmas cheer to those of my pensioner constituents who are victims of Equitable Life?

The hon. Gentleman will know that Judge Chadwick is currently reviewing the circumstances of many people who were affected by Equitable Life, and that there are a lot of problems for a lot of pensioners who have been badly affected. The Government have said that additional support should be given, and we are waiting for Judge Chadwick’s response.

NHS IT Programme

(Urgent Question): To ask the Secretary of State for Health what plans he has for the future of the NHS IT programme, and if he will make a statement.

I want to begin by challenging the myth put around by the hon. Gentleman that the NHS IT programme has been a waste. The programme has changed the way in which the Government pay for IT by creating a contract whereby we pay for what we get from suppliers only when it is fully delivered. Indeed, we have been praised by the National Audit Office for creating such a contract.

The national programme comprises a number of key elements that are already essential to the delivery of front-line services. For instance, digital X-rays and scans, which facilitate faster safer care, are in place in 100 per cent. of hospital trusts; electronic prescriptions are now the norm in general practitioner systems; choose and book—the electronic booking service—provides choice and convenience for patients; GP2GP—the electronic transfer of health records between GP practices—will in time support our policy of abolishing practice boundaries, giving patients more choice; and we also have the summary care record, whereby key information from the patient’s GP record, including current prescriptions and reactions to medicines, can be made readily available.

To put it simply, the programme is a key part of delivering modern, safe, joined-up health care. It is supporting the ongoing reform of the NHS by giving choice and convenience to patients. The NHS could not function without it. However, in the current climate it is right to look again at efficiencies and value for money on all big projects, and at the Chancellor of the Exchequer’s request—and that is what the Minister of State, Department of Health, my right hon. and learned Friend the Member for North Warwickshire (Mr. O'Brien) and I have been doing across my Department.

As part of that, I have looked closely at options for savings on the NHS IT system; it was to those that the Chancellor referred yesterday. The details of those discussions with the IT companies are commercially sensitive and ongoing, but I can give the House this update. My aim in conducting this exercise has been to ensure that the elements of the IT programme that can deliver most benefit to patients and front-line staff are taken forward, while cancelling certain additions to the system where it makes sense to do so.

Let me be absolutely clear: we have no intention whatsoever of cancelling the programme overall, not least because it is already making the NHS safer, more efficient and more convenient for patients. However, we are discussing with our suppliers potential reductions to the scope of the systems and the cost savings that could be generated. In addition, we are looking seriously into the internal savings that can be made from the costs of running the programme. In the light of that work, I can confirm to the House that we are working towards achieving a reduction of £600 million in the lifetime costs of the programme.

That means that we will now pare back the programme to the core elements that have been identified as critical by clinicians. Our aim is to give trusts more flexibility and choice of IT systems, within a framework provided by existing contracts, to keep the benefits of a national approach. Specifically, that could include the IT systems that clinicians have told us are most important to them, such as electronic prescribing; enabling local innovation to take place by linking national systems with those provided by local service providers; and allowing the NHS to design IT systems to fit its local needs.

The programme has already provided benefits, and we believe that this approach will accelerate the delivery of benefits to front-line services and patients across the NHS.

Oh dear, Mr. Speaker. Rarely have we seen a more abject example of the Government’s incompetence. They took central control of NHS IT— £7.5 billion in central contracts and £5 billion in associated costs on top of that. Seven years on, they are over budget and under-delivered. The electronic patient record is four years late at the very best—if it will ever happen. Everyone told them that big IT projects had to be user led, but that one was not. We told them that the system should be decentralised, with local procurement and patient control over health records, but they did not listen. Now the Chancellor of the Exchequer says it has to stop. The Secretary of State is clearly not in charge. The Government got it wrong and the Treasury is now belatedly putting a stop to the continuing disaster.

Let me ask the Secretary of State some questions. Will he now stop the centralised care record system and allow local procurement of care record systems to national standards? Will he allow general practitioners and hospital trusts to be purchasers of their own IT hardware and software from open sources of supply? Will he now be open about the contractual situation with the three local service providers, and about whether, as we suspect, it would now be possible to abandon the existing contracts without penalties—in either direction—because the costs of fulfilling the contracts to the companies exceed the value of the contracts to them? That could deliver up to £4 billion, unspent under those contracts, for support for front-line IT and other services in the NHS.

Will the Secretary of State now have the grace to acknowledge the Government’s failure, the billions of pounds spent without delivery, the spiralling opportunity costs of delays, the confusion and frustrations over IT and choose and book, but—worst of all—the resulting lack of IT innovation in our hospitals, when it has the potential to be of such benefit to patients in managing their care and minimising errors in treatment? Will the Secretary of State just admit that they got it hopelessly wrong?

Let me begin with a phrase that the hon. Gentleman used towards the end of his contribution, about the “lack of IT innovation” in hospitals. I do not know how many he has visited recently, but I do not understand how he can make such a comment on the Floor of the House. The step change in the quality of images available to clinicians is evident to anybody who looks at the NHS today, and because people all around the hospital can view clear images, that has been a real benefit for patient safety across the NHS. I simply do not believe that there has been no innovation or improvement in services. Indeed, clinicians—not Ministers—have today spoken in favour of the changes brought about by the national programme for IT across the NHS—[Interruption.]

Mr. O’Brien, you have developed a bad habit of chuntering away from a sedentary position on the Opposition Front Bench, in evident disapproval of the answer from the Minister. The question has been asked: the answer must be heard.

Before I was so rudely interrupted, I was saying that it is clinicians who have come out today to say that they value the improvements that the national programme for IT has brought. The hon. Gentleman would do well to listen to those voices before he comes here and makes sweeping statements suggesting that that programme has brought no benefit to patients.

The hon. Gentleman said that the programme was over budget and under-delivered. In my statement I mentioned the views of the National Audit Office, and I hope that he will acknowledge that the programme has been praised by the NAO. Its 2006 report said:

“The Office of Government Commerce considered there to be many good features in the procurement process for wider application to government IT procurement. These included elements of contract innovation, which it has built on to develop its good practice guidance.”

It is simply not true to say that this programme is flawed and has not delivered benefits: it has delivered considerable benefits to the NHS and has improved the way in which the NHS contracts for IT. We get what we pay for, and the NHS has learned the lessons of IT failures in the past.

The hon. Gentleman said that the programme was over budget and under-delivered: it is not, and never has been, over budget. The last NAO report confirmed that the cost of the original contracts had not changed and that the overall programme costs, including NHS costs and the costs of additional items such as payment by results and the 18 weeks, are substantially unchanged from the figure of £12.4 billion in the earlier NAO report.

The hon. Gentleman asked about the care records system. That will be a matter for local choice—[Hon. Members: “Ah!”] I said in my statement that we wanted to create a system in which acute hospitals had more choice and flexibility in relation to their IT requirements within a national system. He seems to reject the benefits of a national system across the NHS, but we do not. We believe that there are significant benefits from a national health service having a programme of IT that can link up clinicians across the system. We further believe that it is safer for patients if their records can be accessed across the system.

Let me finish with a comment on the hon. Gentleman’s plans for IT in the NHS.

Order. I do not think that we need to go into that. I know that the Secretary of State has been provoked by quite a lot of sedentary chuntering, which I have just deprecated, but may I urge him to be economical in his replies? I am keen to get Back Benchers in as well.

The Secretary of State was provoked into whistling in the dark by claiming that the programme had been a success. He quoted the NAO report, but did not the Public Accounts Committee conclude in January that the programme was, among other things, “very disappointing,” and

“not providing value for money,”

that estimates of costs were “unreliable”, and that the system had “little clinical functionality”, as well as reporting

“understandable concerns about data security”?

That does not sound to me like a system that is going well. Is this not the classic case of an IT programme that is too big, too expensive, too late and insufficiently planned? By building the system from the top down, the Government have smothered the option of local schemes with interoperability, which would, I agree, have been a better solution.

Do the enormous compensation counter-claims by suppliers of which we read represent a contingent liability against the NHS? If so, does that mean that they will be paid at the expense of front-line services? The Government’s dithering over cancellations of quite large elements of the scheme has resulted in eye-wateringly large amounts of money being sunk in a scheme that has produced nothing like the benefits claimed for it, but which has, I am afraid, used a great deal of NHS money for very little result.

The hon. Gentleman also seems to have misunderstood the very nature of the contract. It was an innovative contract that meant that the NHS paid only once it received the system and the system had been passed over and was operational. That was a step forward in how the NHS paid for IT systems.

The hon. Gentleman quoted the NAO at me, but the NAO recognised the improvement in contracting that came with the system. If he is saying that it is not right, in the current climate, for me to take a look at the system and see whether we can make savings, then quite honestly I disagree with him. It is right that we should look at the system again in the current climate and, where we can, make savings.

Let us be absolutely clear: we are being led by clinicians on this issue. They are saying to us that they value the improvements in patient safety and the reduction in errors that have come with the national IT programme. The British Medical Association issued a statement today to that effect, and I think that I would prefer to listen to the BMA than to the hon. Gentleman.

We can make savings and pare the system down to the core elements that have been identified as important by the clinical community. If I may, let me give the hon. Gentleman a specific example of those changes. We have made a big investment in GP systems. GP systems are working well across the country and have high levels of satisfaction. GPs are happy with them and they are internationally recognised. Recognising that, we have agreed that we will not now go ahead with the replacement of further enhancements to that system, because people are happy with it. It is working well, and technology makes it possible for those parts of the system to talk to other parts.

We are looking at the system again in a new financial context, but the technology also makes possible other developments that were not available to us when the programme began. It is right that we should always re-examine the system in the context of current developments.

In rejecting the siren voices from those on the Opposition Benches, who clearly know very little about computer systems, may I ask my right hon. Friend to undertake some research into the productivity gains that some of the systems have produced? As a customer of the health service over a number of years and from discussions with consultants, I can say that it is unambiguously clear that massive improvements have been made. However, they need to be studied and published, so that people understand properly the value of that incredibly sensible investment.

I could not agree more with my hon. Friend. For instance, the widespread use of the choose and book system in general practice makes it much easier for GPs to have direct access to referrals in secondary care. I would argue that that cuts out significant amounts of time in the referral process. It is also better for patients, because they can see in their GP surgery, and have explained to them, the options open to them in booking a secondary appointment. I agree entirely with my hon. Friend: there are huge productivity gains to be had for the NHS and it is right that we press on with the system.

I am left gasping by this woeful performance. The Secretary of State talked about GPs doing well, but GP Systems of Choice was the reason why they were doing well—and that system came before the national programme. It is also no accident that he referred to digital scanning. That was added to the programme in September 2004, and it is an example of something that worked; it had nothing to do with central patient records. I could go on about this for ages, but you would not let me, Mr. Speaker. Can the Secretary of State explain how the NHS could not operate without the system, as he says, while at the same time the Chancellor of the Exchequer says that it is of no value to the front line? Which is it?

I said clearly that there are elements of the scheme that can now be pared back. I also made it clear that one of those elements was the enhancement to the GP system, which is unnecessary because GPs are happy with how the system is working now. If the hon. Gentleman is saying that there have been no benefits for hospitals from the PAC—picture archiving and communications—system, I do not agree with him. There have been significant benefits for patient safety and the reduction of errors. The strong support from clinicians for the system that they now have refutes what the hon. Gentleman has just said.

In conducting the review, will the Secretary of State also look at the business service authority’s plans to outsource its IT infrastructure? In doing that, it has ignored the views of the work force about where the greatest savings could be made.

My hon. Friend raises a separate issue, and I promise to come back to him with a detailed reply. It is important in the coming period for the NHS to make savings from back-office functions. That is the right thing to do in the current climate, so that we can put every possible support into the NHS front line. I will give my hon. Friend a detailed answer on shared business services.

The history of this Government’s involvement in major IT projects has been woeful, as was confirmed by the latest Public Accounts Committee report. For future reference, will the Secretary of State explain why this major IT programme was imposed from the top, rather than being user led?

It was both. There was a clear drive to improve IT across the NHS, and I make no apology for that. To support the reform in the NHS that this Government wanted to see, we needed a better IT system that reflected a national health service, and could be interoperable across the huge NHS system. Choose and book has facilitated the policy of giving patients choice, and I have mentioned the GP2GP system in which whole patient records can be transferred electronically. That will soon support the abolition of practice boundaries, so that people can have a full choice of GP. We are supporting reform in the national health service, but we have listened at all times to the voices of the clinicians. That is why they have come out today and strongly supported the system.

A quarter of all prescriptions go to pharmacies electronically; I think that that involves about 155 million prescriptions. How will my Friend’s statement today affect the future of the electronic prescription service?

My hon. Friend is right to focus on the potential benefit of electronic prescribing. In my view, it could be further developed. He cites a figure for electronic transfer between GP surgeries and pharmacies, and I think that there is scope for further progress so that we could move to a paperless system for prescriptions. I will give him an update in due course, but this is an important area that is working. As I said in my statement, where the system is working, we will press on and ensure that we derive full benefits for the NHS front line.

If there is any further delay in the summary care record, will the Secretary of State look at the work being done by Coventry university and the City university, London? They are producing a most exciting, cheap, simple, personalised smartcard with an extendable memory stick, which could solve most of the problems of the summary care record.

I can give the hon. Gentleman an assurance that I will take a look at that particular system. As I said to the hon. Member for Somerton and Frome (Mr. Heath) a few moments ago, as we hear of good practice around the system and as developments in technology make it possible for new developments to be considered, it is always right for us to reflect on them to see whether we can improve the system. Knowing the hon. Gentleman as I do, I suspect that that initiative has the strong endorsement of clinicians and has been led by clinicians, so I give him the assurance that I will take a further look at it.

Of the NHS IT programme, the Secretary of State said earlier today in the House that the Government would “only pay once it has been received and is operational”. As a measure of the proportion of the NHS IT programme that is operational, will the Secretary of State tell the House what percentage of the cost has been paid by the NHS so far?

I have a precise figure, but it is not in front of me right now. I can tell my hon. Friend, from memory, that I believe that about 40 to 50 per cent. has been paid out so far. While the overall contract value has not changed, with this contract we pay only as we receive the benefits. I will come back to my hon. Friend with the precise figures. As of today, however, we are making clear our intention to make £600 million savings from the overall contract value, which will be achieved by paring back elements of the system that we do not believe are any longer necessary.

Will the Secretary of State please say what the effects of the proposed cuts will be on the interoperability of the English and Welsh NHS IT systems? This has already been a cause of concern to, among others, the BMA in Wales.

I am afraid that I will have to reply later to the hon. Gentleman about whether the changes that we are announcing today will have any impact on hospital administration in Wales, but I give him an assurance that I will come back to him on that subject.

We all listened with interest to the Secretary of State’s excuses, and with some disbelief to his comments. However, can he advise us whether the taxpayer is likely to face any contractual penalties after his statement today?

We have relationships with the commercial sector here, and as I said in my statement, some are commercially sensitive. We want to deliver a successful system, while also recognising that the companies involved have contractual commitments. We are working through those issues; that is why I gave a broad update on the discussions. I am sure that the hon. Gentleman would accept that I cannot go into much more detail. Let me make one further point: this is about delivering a system that is affordable, but also does a good job. We are not going to do it on the cheap, as the hon. Member for South Cambridgeshire (Mr. Lansley) suggests. I fear that the proposal to hand over the job to Google or Microsoft, or whoever else the Opposition have in mind, would simply not do a secure job for the NHS. If the hon. Gentleman wanted to do things on the cheap, I think that he would pay the price later.

It is absolutely unbelievable that the Secretary of State can come to this House without knowledge of the contingent liability to the NHS resulting from the cancellation of the contracts. Will he please say now what the contingent liability is, and stop dodging the question?

That is not what I said; perhaps the hon. Gentleman was not listening or paying attention. We have a contractual commitment and, as I said to his hon. Friend the Member for Bexleyheath and Crayford (Mr. Evennett) a moment ago, the discussions are commercially sensitive. I am afraid that I am not going to go into those details on the Floor of the House today, although if I can provide the hon. Gentleman with any further details through correspondence, I will do so.

Smarter Government

With permission, Mr. Speaker, I would like to make a statement on “Putting the Frontline First: smarter government”, a Command Paper that I am presenting to Parliament today.

This Government are very proud of Britain’s public services and Britain’s public servants: our doctors and nurses, who treat 1 million people every 36 hours; our police teams, who have brought down crime by a third; the teachers and support staff in our schools, who have helped record numbers of young people get record exam results this year; our job centre staff, who have helped 2 million people move off unemployment since last November; and, of course, our armed forces, serving with such distinction in Afghanistan and around the world.

We always knew that with the right backing, Britain’s public servants could transform the quality and standards of public service in this country, and over the last decade they have—not by some happy accident, but by the work of careful design and determined investment. NHS investment has doubled, education investment is up by 60 per cent. and investment in public order and safety is up by 50 per cent. All that was achieved while over-delivering by 20 per cent. on our Gershon review savings of £26.5 billion in the three years to 2008.

Thanks to that effort, we have reached a point at which the investment gap that we inherited in 1997 has been fixed. We have not only reached but exceeded international averages for spending on education and health. We are at a turning point. In the decade ahead we can capitalise on the great strengths that we have created, and set out a new way of driving standards in public services up, while we drive the deficit down.

I am laying before the House today a Command Paper showing how the Government will set about that task in the years to come. It draws together more than 12 months’ work from literally thousands of people across public life, the private sector, charities and voluntary groups. I particularly thank Sir Michael Bichard, Sir Tim Berners-Lee and Nigel Shadbolt, Martha Lane-Fox, our efficiency advisers Gerry Grimstone, Lord Carter of Coles, Martin Read and Martin Jay, and those from across the third sector who have advanced the relationship between Government and civic society.

Today’s Command Paper summarises what we have learned from that work, but our starting point is a relentless focus on standards. We are ambitious for Britain’s future: we know that we can do well in the years to come. However, we know that if Britain’s families are to do well in the future, they will need first-class public services to support them. We will make first-class standards in public services not a privilege for the few but the right of all, by setting out—in health, education, policing and, in time, social care—new entitlements to high-quality public services, backed where appropriate by the force of law.

To help citizens to hold local services to account, we will revolutionise the free availability of comparative information on police efficiency, hospital costs, and Government and local authority spending. We will ensure that services, where they can, fit in with the demands of modern life by putting more services online, and we will redouble our efforts to persuade more people to use the internet. Today I can announce the provision of a further £30 million with the aim of getting 1 million more people online by 2012. We will free public data created using taxpayers’ money, including Ordnance Survey mapping and boundary information. We will make it easier for civic society to contribute to public life by pressing ahead with a new social investment bank, and by testing social impact bonds.

Our second principle will be to free up the front line to innovate and collaborate by cutting back on ring-fenced budgets and national targets. I am therefore setting out today 10 steps that I, with the Secretary of State for Communities and Local Government, have drawn up to provide local councils with a range of trading, joint-venture and regulatory flexibilities. I believe that if we set in place strong rights to high standards and free up the front line to innovate, we can cut overhead costs at the centre.

We are already on track to deliver £30 billion of savings between 2008 and 2011, but today I am setting out steps to save £12 billion more, and in the pre-Budget report we will set out further difficult choices that will have to be made if we are to halve our deficit over four years.

First, we will reduce the costs of the senior civil service. I am announcing today that we will reduce senior civil service costs by 20 per cent. by 2012-13, and seek to move 10 per cent. of civil service posts that are currently in London and the south-east to other parts of the country in the medium term.

Secondly, Bill Cockburn, chair of the Senior Salaries Pay Review Body, will review senior pay across the whole of the public sector, reporting to Government in time for next year’s Budget. In the meantime, I will personally review all proposals for salary offers above £150,000 set by Government.

Thirdly, we are publishing today plans drawn up by all Secretaries of State to increase the administrative efficiency for which they are accountable in human resources, IT, collaborative procurement and asset management. I am also publishing benchmarking information for all central Government Departments and major agencies, showing exactly where we will focus to deliver £9 billion of efficiency savings over the next few years. I am also today setting a goal of saving £1.3 billion by putting services online, halving the consultancy bill and reducing our marketing spend by a quarter.

Fourthly, I am announcing today the first results of a comprehensive review of arm’s-length bodies, which will report by the time of the 2010 Budget. We will save £500 million a year from changes introduced by the review, and as an interim step we will abolish or rationalise 123 arm’s-length bodies, subject to the necessary consultation and legislation.

Finally, I believe that, as part of this new future, the Government must either sell or transfer to different owners the things they no longer need to own. I am therefore publishing today an asset portfolio listing the state-owned assets that Government can commercialise over the medium term. It includes options for the future sale of the Tote, the student loan book, the Dartford crossing and the high-speed rail link, and potential alternative forms of ownership of British Waterways agreed by myself and the Secretary of State for Environment, Food and Rural Affairs. Our policy will also include a new approach for testing where publicly owned assets should be transferred for use by the third sector.

The Government believe this country is both richer and fairer for the strength of our public services. We will never compromise on high standards, but neither will we ever compromise in our search for value for money. Today’s Command Paper sets a new path for the future that draws on the strengths created through a decade’s work, and I commend it to the House.

I am grateful to the Chief Secretary for letting me have a copy of his statement in advance—not that it, or the Prime Minister’s speech this morning, tells us anything much that we have not heard before. The paper is a series of reheated announcements that underline Labour’s failure over 12 years to get to grips with public service reform and to cut the waste and inefficiency that have been allowed to multiply.

We were told that all services would be available online, but Tony Blair pledged in 2000 that all services would be available online by 2005, and they were not. The Government tell us they will roll out a “tell us once” service for births and deaths, but they have already told us about “tell us once” three times. There is also the reannouncement of the sale of the Tote: that is a 1997 manifesto commitment that has been reannounced several times since, most recently about six weeks ago at that Dispatch Box. The story is the same for crime mapping, ring-fencing, NHS tariffs, e-auctions, and so on and so on. In addition to the reheated announcements, there is the usual sprinkling of stolen policies: the quango cull that the Leader of the Opposition announced in July this year, and the high-level sign-off for top public sector salaries.

There are also the pledges to undo some of the damage the Government themselves have done during their 12 years in office. The Prime Minister said in this morning’s speech that the Government will cut marketing and communications spend by 25 per cent.—after more than quadrupling it since 1997. Since 2000, they have poured billions of pounds of taxpayers’ money into unreformed public services, borrowing and spending like it was Monopoly money, and talking about efficiency but never delivering it.

That has happened not because the Government do not understand—the Prime Minister said in a speech to the Institute of Directors in 2001:

“The efficiency we seek in the private sector we demand in the public sector…Government at every level—national, regional and local—must raise its game.”

It is also not because they did not have good advice—tens of thousands of man-hours spent on reviews and report writing have identified tens of billions of pounds-worth of potential efficiencies. But the Government have not been able to translate that into real cashable savings. Gershon identified £21.5 billion-worth of savings, and while the Chief Secretary has just claimed some fantasy figure for delivered Gershon savings, the National Audit Office says the Government only delivered £3.5 billion in real, hard cashable saving. That is less than 0.1 per cent. of total public spending over the period in question.

Today, Sir Peter Gershon has joined our public services advisory board, along with Mr. Bernard Gray, the author of the defence procurement report whose conclusions were so damning that the Prime Minister tried to suppress it, and Dr. Martin Read, whom the Chief Secretary has just mentioned and who chaired the Government operational efficiency review. They will advise us as we develop our agenda for a truly radical, bottom-up reform of public service delivery, based on the principles of transparency, alignment of incentives, freedoms to innovate and support for change. They will help us to deliver a genuine culture change in Government and public services by ensuring that efficiency gain and productivity improvement become a central part of the day-to-day business of our public sector, not some alien imposition visited upon it whenever an election is approaching.

The truth is that our front-line public services can be protected for future generations only by genuine reforms—reforms that will close the productivity gap and ensure that those services are affordable for future generations. For 12 years, Labour has demonstrated that it can talk about efficiency but it cannot deliver. The Government’s record speaks for itself. Between 1997 and 2007, according to the Office for National Statistics, public sector productivity fell by 3.4 per cent. while private service sector productivity grew by more than 20 per cent. That is a measure of the scale of Labour’s failure on public sector efficiency. When the Government have failed so comprehensively for 12 years, why should anybody believe that they will succeed with this mishmash of reheated announcements and stolen clothes in the dying months of their rule?

The Government are ducking the hard questions. The Chancellor is talking about reducing spending while the Prime Minister is making new spending pledges at his party conference and the Schools Secretary and the Transport Secretary are telling us that their budgets will not be cut. Will the Chief Secretary confirm today that there will not be a departmental spending review before the Budget in the spring? Is that what the Chancellor of the Exchequer was telling us yesterday?

As the Chief Secretary has adopted a raft of our policy proposals, let us see whether he will match some of our pledges. Will he, for example, match our pledge to cut by one third the administrative cost of Whitehall bureaucracy and quangos during the lifetime of the next Parliament, saving £3 billion a year for the front line? Will he cap the biggest Whitehall pensions, as we have pledged to do, so that the taxpayer will not contribute any further to pensions that are already worth £50,000 or more? Will he give some clear purpose to these efficiency savings by matching our pledge to deliver real-terms spending increases year on year to the national health service, protecting our most important public service?

The Prime Minister said in his speech this morning that

“there will be no hiding place for Ministers or civil servants who fail to drive increasing efficiencies”.

Let me tell him that there is no hiding place for a Prime Minister who has not only failed to deliver value for money in public spending, but been the roadblock to real reform for a decade. Today’s offering is too little and, for the Prime Minister and his Government, it is too late.

May I say for future reference that the response from the Opposition Front-Bench spokesman was longer than the statement itself, and we really do not want that to happen again?

I shall be brief in my reply, Mr. Speaker. That was an extraordinary response. The hon. Member for Runnymede and Weybridge (Mr. Hammond) claims that there has been no reform in public services. Crime down by a third is reform. He says that there is no reform, but exam results are 50 per cent. better for our young people. That is real reform. He says that there is no public service reform, but getting people in to hospital in four and half weeks instead of 18 months is real reform that the public care about.

The hon. Gentleman prayed in aid the NAO. The truth is that when the NAO considered the Gershon savings, it said:

“Projects across the Programme are making”


“improvements to the efficiency of public services.”

It went on to say that all of the £26.5 billion savings met the most robust category in its conclusions. The hon. Gentleman went on to talk about productivity and tried to pray in aid some contributions from the ONS. Of course, the ONS said:

“These are experimental statistics and work continues to develop the measures.”

I know that there is a taste for experimentation among some people on the hon. Gentleman’s team. I hope, however, that it does not extend to the selective use of statistics.

The hon. Gentleman talks about our matching his plan to save £3 billion from Whitehall. We are saying that we will save £12 billion, not only from Whitehall but from the wider public sector, over the next three to four years. Of course, there are a few proposals that I have examined in drawing up these efficiency plans today. I could, for example, have set out proposals to scrap ID cards, which I was told by some quarters would save £2 billion. In fact, on closer inspection, it turns out that that would save no more than £50 million to £100 million. I was told that abolishing regional development agencies would save “a huge amount.” It turns out on closer inspection that it would save merely £180 million. I was told that capping public service pensions at £50,000 would save hundreds of millions of pounds. In fact, it turns out that it would save but a small fraction of that. I was told that taking child credits away from families who earn more than £150,000 would save £400 million a year, but it turns out that it would save only £45 million a year. I was told that bringing forward changes to the retirement age could save £13 billion a year, but it would make no impact whatever on the deficit in the next Parliament.

The truth is that every one of those proposals was put forward by the Conservatives, but it turns out that none of them was worth the paper it was written on. No wonder the hon. Member for Runnymede and Weybridge has had to hire a group of Government advisers to answer an SOS—stand up our savings—from the shadow Chancellor, and no wonder he told us this morning that the front line would suffer under the Conservatives, because he has nothing else to pay for the £10 billion-worth of tax cuts that he has promised to people who are rich enough not to need them.

Much of the statement is uncontroversial and, indeed, blindingly obvious. Let me start with the efficiency savings. Is not there a basic problem with announced efficiency savings in Government? If they knew that there was inefficiency, why had not they dealt with it already? To what extent is this new?

Let me pick up on a particular item to clarify what the Government are doing. They say that they are cutting the consultancy budget by 50 per cent., but 50 per cent. of how much? What is their consultancy budget? There are estimates that it could be in the order of £20 billion. We discovered on Friday that they are paying more than £100 million a year for consultants who are advising on the bail-out of the banks alone, so what is the consultancy budget that is now being cut by half?

The Chief Secretary said that he is personally going to vet pay of more than £150,000 a year. He is going to be a very busy man. How many people in the public sector are paid more than £150,000 a year, whose salary he will vet personally? Are we talking about GPs and dentists, heads of quangos and the dozens of people in the BBC who are paid more than the Prime Minister? Whom does he mean and how many of them are there? Are we talking about hundreds or thousands of people?

The Chief Secretary also suggested that he will save lots of money by reducing the number of targets for, and the amount of, monitoring of local government. That is admirable, but I understand that the Government currently spend £1 billion to £1.5 billion on various audit bodies, notably the Audit Commission, in overseeing local government. How much of that budget will be saved and how many officials who are employed in overseeing local government will no longer be required? If he is genuine about restoring autonomy to local government, why does not he consider ideas such as giving them significantly greater freedom over the business rate system?

Let me make a specific point. The Chief Secretary says that the Government are to give away, free of charge, data from the Met Office and the Ordnance Survey. That sounds straightforward, but those organisations survive by selling data, so if they have to give their data away for free, how will they function as organisations, especially now that the Government plan to privatise them? How can the Government privatise organisations that do not have any income?

I am grateful for the hon. Gentleman’s welcome for at least some of these measures. I think that there is a direction of travel in some of the reforms that Liberal Democrat Members will welcome, not least the move towards greater freedom and flexibility for local authorities. When he has had time to study the report in some depth, I think that he will welcome some of the flexibilities that we have talked about. On Wednesday, my right hon. Friend the Chancellor will announce further measures, which attempt to bring a degree more freedom from the regime of inspection and performance setting that has helped to drive up service standards over the past 10 years. We will be able to retire some of that regime in the years to come, and there will be significant savings as a result. It is right that many of the relevant reductions in targets should wait until the next comprehensive spending review, so that the plans that are drawn up reflect the resources that are provided.

The hon. Gentleman asked some specific questions that I will try to answer. First, he asked about consultancy bills. My goal is to save about £512 million from the consultancy bill by 2011-12, by reducing it by 50 per cent. He asked about pay, and I reiterate that we have asked Bill Cockburn, the chair of the Senior Salaries Review Body, to draw up proposals on how to bring greater transparency to the system of setting senior sector pay and how to make sure that value-for-money bodies such as the Audit Commission and others are given a greater role in scrutinising those offers. The simple answer is that I believe that too many people are paid more than £150,000, and my goal is to exert downward pressure. That is partly why I say that we should cut the costs of, for example, the senior civil service by 20 per cent. in the next couple of years.

On data, we must get the balance right. Organisations such as Ordnance Survey can make a great deal of money by supporting specialist engineering and mapping companies with high-quality data. Ordnance Survey runs one of the best—if not the best—mapping services in the world. When there are opportunities to make available information such as low-resolution maps or boundary data, the public should be able to get hold of it free of charge.

Does the Chief Secretary agree that some of the biggest public expenditure is on late intervention and is the cost of failure—of prisons, magistrates courts, welfare benefits and so on? Does he therefore accept my welcome to the green shoots in the Green Paper, including the social investment wholesale bank—perhaps we can tidy up the names—and the social impact bonds? Those constitute early intervention and are cheaper and much more efficient because they ensure that society benefits from the consequences of success, rather than suffering those of failure.

May I put on the record my personal thanks to my hon. Friend for his work in not only championing new approaches to early intervention, but bringing pressure to bear on finding innovative forms of social finance? Social impact bonds appear in today’s Command Paper partly because of his work in lobbying for such change. In my authority of Birmingham, we have found that investment in early years can produce savings later in life. I think that Birmingham city council found that for every pound invested in early years, something like £4 could be saved in the criminal justice system later. Sometimes, different agencies from those responsible for early intervention reap the rewards of such intervention. Social impact bonds are a new way of bringing some of the incentives back into line. It is therefore right to test them out.

The Prime Minister said this morning that in health, schools, policing and social services, there had been

“excessive salaries and unjustified bonuses”.

Why were they allowed?

The hon. Gentleman knows that in the British administration a great deal of flexibility is given to, for example, local authorities. That is why it is right to look hard now at not only what constitutes the right level of pay for senior executives in different parts of the public sector, but the legislative changes that may be required to enable Ministers, when necessary, to exert downward pressure. I do not think that such legislative power is currently available in some parts of our public life, such as universities, further education colleges or local councils, but we have asked Bill Cockburn and his advisers to tell us a little more about that.

I am delighted that my right hon. Friend is looking to scrap or rationalise 123 quangos for starters—not before time. One chief executive of a quango told me that he was on £1,000 a day. That is disgraceful when there are public sector workers at the bottom who are paid £10,000 a year. We need to protect them and keep them in work to keep the economy going, and we need to ensure that we get rid of some of the fat cats.

There are obviously some complicated parts of public administration in this country. For example, the health service is a big and important organisation, which spends somewhere north of £90 billion a year. We want first-class people running such organisations. However, in such times, it is incumbent on senior leaders in public life to show leadership on pay. The Government have therefore said to the pay review bodies that we expect a pay freeze for the senior civil service, and pay awards of no more than zero to 1 per cent. for civil servants more generally.

The Chief Secretary has talked about reducing senior civil service costs by 20 per cent. by 2012-13. What has he planned for redundancy costs? Will redundancy be voluntary or involuntary?

Obviously, we hope to achieve most of our cost savings through voluntary redundancy, natural wastage and so on, but I certainly cannot stand here today and rule out the possibility of compulsory redundancy. The hon. Lady will know that we introduced reforms last week to the compensation arrangements available to civil servants, which are projected to save something like half a billion pounds over the next couple of years.

The Chief Secretary will remember—and you will, too, Mr. Speaker—that about six weeks ago, I asked him about this crackpot proposal to privatise the Thurrock-Dartford crossing. I asked how it was going to be done and what his brief said, and he held up a blank sheet of paper. He will understand why I am irritated. What is the answer to my question of six weeks ago, and how is he going to do it, bearing in mind that tolling is only allowed under the European directive as a mechanism against congestion? It is not a cash register for the Treasury. How does he propose to sell this and offer the purchaser some return? I just do not understand it; it is crackpot—daft.

The answer is that there is no European or other legal impediment to the proposal that we have introduced for the future of the Dartford crossing. My hon. Friend will know that it remains within the Government’s power to regulate tolls on the crossing.

Will the Chief Secretary do me a very great favour? Will he read an account of Britain after 12 years of Labour rule written in plain, simple English, shorn of the jargon with which his statement was laden? It is “Bog-Standard Britain” by Mr. Quentin Letts.

Will my right hon. Friend reflect on the exchange that took place earlier today about disability living allowance, and look at this as an opportunity to re-examine business processes and why we do things in a particular way? There are lots of areas in which we can make significant productivity gains by making delivery more customer-focused. DLA is a classic example, but the relationship between, for example the Department for Work and Pensions and housing benefit is another, and there are many others in which a more customer-focused approach would benefit not only the customer but the Treasury, too.

My hon. Friend is right and, as I said, I am particularly grateful to Sir Michael Bichard and public servants across 65 local authorities and a number of constabularies and primary care trusts who are looking at how we can bring together the administrative services run by central and local government to eradicate exactly the kind of inefficiency to which my hon. Friend points. We will have more to say about how we take those findings forward in the Budget next year.

I thank the Minister, both for the statement and for giving us early sight of it. Some of the measures are sensible, not least the ending of ring-fencing for council budgets. The Scottish Government have already done that. At its heart, though, this is £12 billion of additional cuts, some beginning next year, over and above the 10 years of austerity promised by Lord Mandelson. Given that even the CBI has argued that additional fiscal tightening should not take place until 2011-12, lest it risk a fragile recovery, what steps has the Minister taken to ensure that the cuts in the document do not lead to the weakening of recovery from recession?

If we want to grow our economy in the years to come, we have to make sure that we have strong public services in this country that stand behind families who want to get on in life. The hon. Gentleman knows that if we want to raise standards in public services at the same time as halving our deficit, we must make sure that our economy grows and that we make the right decisions on public spending and on tax. That is a presentation that my right hon. Friend the Chancellor will make to the House on Wednesday, but the hon. Gentleman will surely admit that if we want to raise standards and investment in front-line services, it is right to look for inefficiencies that we can cut at the centre of government, and today’s plan sets out a way to do that.

I am very pleased that my right hon. Friend has decided to keep standards at the top of his agenda and to axe many of the targets and inspectorates that maintain those standards, but can he elaborate on how he expects consumers of monopoly suppliers who know no other standards to raise those standards? What role does he see for professional external scrutinisers in maintaining or raising standards?

There are two ways in which we can exert greater popular pressure to push up standards in front-line services. The first thing that we can do is set out a range of guarantees to high-quality public services. That means, for example, the right to see a cancer specialist within two weeks if a specialist is worried that a patient has cancer, the right to a good local police team and the right to one-to-one tuition for a child who is falling behind at school. With those rights in place, it is much easier to judge whether public services are delivering for consumers. That is why, in today’s Command Paper, we have set out steps to free up the kind of comparative information that allows people to see how services in their area are doing compared with others, and whether they are performing in a more efficient way than others.

Neither in the statement nor in the earlier urgent question has the Minister made it clear how much he will save on the NHS supercomputer. The NAO says that the Government have spent £3.6 billion already. Can he confirm that that figure from the NAO is accurate?

I would need to check the date of the figure that was published by the NAO. The basic point is that, at a time when we are trying to drive standards up and the deficit down, in some parts of Government we will have to make difficult decisions about whether programmes that are in place are contributing enough to front-line care or whether they can be put off. There will often be difficult decisions. The decisions that we have set out in the Command Paper are difficult but doable.

Will not the smarter state end up looking very stupid if we outsource, sell off or transfer to the private sector and then are ripped off down the line? Are there any functions from which the Government intend to withdraw entirely? Does my right hon. Friend worry, as I do, about the morale of those working in a public sector that is constantly denigrated and told that it is useless?

I do not have quite the same apoplectic vision of public service reform as my hon. Friend. Sometimes there are efficiencies to be had through outsourcing certain services, particularly in finance, IT and so on. I make no apology for that. The prospectus that we set out this afternoon will be enthusiastically received by front-line public servants, not least because of its promise of greater freedom to innovate and do things in a different way locally.

I do not know whether the Chief Secretary has been watching too much of “Bargain Hunt”, but it is clear that the Government are keen on selling off the family silver. His listed a raft of things that would be sold off, but he did not mention Urenco. Will that still be sold off?

I welcome my right hon. Friend’s statement, but I urge him to go a little further in respect of quangos. He suggests saving only £500 million by abolishing or rationalising 123 of them. May I ask him to give me an early Christmas present—less quango for Marris?

I think I can promise that. The final report from the review of arm’s length bodies will be published at the Budget next year. The 123 arm’s length bodies that I set out this afternoon are merely an interim step.

Point of Order

On a point of order, Mr. Speaker. During his remarks in response to me earlier, the Chief Secretary referred to the Opposition hiring certain former Government advisers to advise them. Would the right hon. Gentleman like to take this opportunity to make it clear that he understands that no money is changing hands in any of these transactions, and that anyone who has made the decision to advise the Opposition has done so because he believes that that is in the best interests of this country?

The Chief Secretary may offer a brief reply if he wishes, but he is not under any obligation.

I am happy to offer the clarification that that is my understanding. I spoke to Dr. Read last night and he made that point to me very clearly.

Energy Bill

Second Reading

I beg to move, That the Bill be now read a Second time.

Today is an appropriate day to discuss the Energy Bill—at the opening of the Copenhagen conference and before the ministerial meetings that will take place in its second week. Those talks are an essential part of the context of the Bill that we are debating, and in the past two weeks we have seen signs of progress from China, India and the United States. They have all put targets on the table, and we are determined to use our influence to get the best agreement that we can, consistent with the science. We are determined also to show the maximum ambition in our own plans, and that explains the Bill that we have brought before the House.

Given recent events, I should also like to say that we are here to debate a Bill that is driven in large part by the science of climate change. It is important to take this opportunity to restate briefly the case on the science, because it underlies today’s debate. The science is not from politicians, but from scientists: the Intergovernmental Panel on Climate Change, whose work is based on 4,000 experts; the national academies of science of the G8 developed countries and the five leading developing countries; and, here at home, the Met Office, the Natural Environment Research Council and the Royal Society. All those organisations are clear that the science is unambiguous—that climate change is real and man-made.

Of course the science is not static, but we must not somehow suggest that robust and near universally accepted science is merely of equal validity to the views of a very small minority of people, many of whom are not scientists. Importantly, one chain of e-mails does not undo decades of climate science, and particular responsibility lies with Members of this House and, indeed, of the other place not to seek to sow doubt or to replace the view of the science with their prejudices.

Does the Minister share my concern that the media—some of the tabloid press, in particular—choose deliberately to misrepresent the science just to sell a few more papers?

I actually think that, by and large, members of the press, including the tabloid press, have during this year embraced the idea of climate change and the need to tackle it. However, the hon. Gentleman makes an important point: in this process, we rely partly on the press to make clear the burden of evidence and views and where they lie, and, indeed, the balance of views and where they lie. Anything that the press can do to help us to make that case is very important, because we are debating difficult decisions—and nobody should be under any illusion that they are not difficult. If people come away with the impression that the science is somehow not settled, or that there is an easy way out, we will face difficulties.

Does my right hon. Friend accept that the validity of the arguments and the scientific case for the existence of climate change is completely undermined by people such as Lord Lawson and the Conservative MEP Richard Helmer; and, that the Conservatives must do more to ensure that they align themselves with our policies and the policies that the British public want?

The truth is that we need as much of a consensus as we can get on these issues—from all parts of the House. That is very important, and that is why I emphasise the importance of us all showing responsibility, rather than setting ourselves up as scientists and somehow substituting for the views of the science. It is important that politicians act on the basis of the science, and that is what we seek to do.

The right hon. Gentleman talks about acting on the evidence of the science, but he knows that in the case of Heathrow airport, involving an important decision that will affect the environment, the only costed emissions were those of outgoing flights, not of incoming ones. How can he be serious about taking good decisions if his own Department does not get its maths right?

The hon. Lady has a long history of campaigning on this issue. I agree with her about the need to make decisions such as that on the third runway at Heathrow in the proper context. That is why we are the first Government in the world to say that we will stabilise aviation emissions at 2050 levels. Indeed, there will soon be a report from the independent Committee on Climate Change on that precise point.

The Select Committee on Science and Technology was in absolutely no doubt about the validity and strength of the case that climate change is happening and that it is the result of man’s activity since the industrial revolution. Even if some of the science can be questioned, the consequences for the planet and mankind are so dire that the precautionary principle should be observed, and I congratulate the Government on taking that line.

The hon. Gentleman is completely right. The precautionary principle was emphasised by the hon. Member for Bexhill and Battle (Gregory Barker) in a debate that we had a few weeks ago. It is right that we should follow the precautionary principle in this process; in a way, that is an important part of the argument. However, in emphasising the precautionary principle we must not give a sense—I know that the hon. Member for Castle Point (Bob Spink) is not doing this—that the science is not settled and that we would be better off being cautious. The science is clear and overwhelming, and the precautionary principle adds extra weight to that.

Whether one believes that emissions of carbon dioxide into the atmosphere produce climate change is a big argument, but does my right hon. Friend agree that there are two other important reasons why we should not be burning fossil fuels? First, we are acidifying the sea almost beyond the point of no return. Secondly—I speak passionately as a chemist—producing energy from carbon fuels is a very inefficient process, and we need those carbon fuels as larders of chemicals for the generations of the future, so it is a sin to burn them.

My hon. Friend speaks with great knowledge; indeed, much greater than mine. My chemistry is probably as bad as my brother’s physics in terms of his performance at school. My hon. Friend is completely right about that point and about ocean acidification, which is a serious issue that lots of oceanographers and others are very concerned about.

The Energy Secretary is clear that he is persuaded by the science and that the scientific evidence is overwhelming, which is the view of those on the Liberal Democrat Benches and on the Conservative Front Bench. Can he confirm that the logic of that is that the UK Government, this week and next, on their own and with the European Union, will go for the toughest, strongest, clearest binding agreement so that we can not only follow the precautionary principle but remember that we are going in to bat for a world where countries such as Bangladesh and the Maldives have the chance of a future, not just countries such as ours which caused the bulk of the problem in the first place?

I think I can say yes to that intervention. I agree with the hon. Gentleman that we need the toughest and most ambitious agreement possible and the shortest track to a legally binding treaty.

The right hon. Gentleman gave his maiden speech just after I gave mine; I congratulate him on his epic rise to fame on the Front Benches.

Taking up the issue of fossil fuels, we now know that nuclear capacity is running out and that we are running out of oil and gas. What have this Government done for the past 10 years? It is as though the Secretary of State is the boy scout who has turned up late for camp and finally realised that he was responsible for lighting the fire, so everybody will get very cold and angry. Have we not just had a wasted decade?

If we are talking about responsibility, I have to say that the alarmism that Opposition Front Benchers have engaged in on these issues is of no help at all. The answer to the hon. Gentleman is that we have very clear plans, as I will explain, on renewables, where we are now the leader in offshore wind, on nuclear power—opposed tooth and nail by the Opposition, whose leader said that it was a last resort—and on clean coal.

I very much agree with what the Secretary of State has said, but even if we get an agreement at Copenhagen, there is still the problem of having to explain to people what the figures actually mean. If we are talking about 80 per cent. reductions, that will mean massive changes in our economy. I am not convinced that the people of this country really understand what it means as yet.

I agree with the hon. Gentleman that, as I said at the weekend, there is a mountain to climb and a huge amount to do to explain to people the scale of the changes that we are making, such as 10,000 wind turbines between now and 2020, more nuclear power stations and the clean coal technology that I have talked about—and that is just in the energy sector. Those are big changes, and I will not pretend that they are not.

The central response to the challenge of the science must be for the Government to understand their role in making the low-carbon transition happen. The truth underlying the Bill is that markets left to their own devices do not put a price on carbon emissions and will not bring forward the investment and industrial policy that we need, nor will they provide the right energy mix for the future. Our low-carbon transition plan, which was published in the summer and widely welcomed, sets out sector by sector what needs to change to meet our commitment to a 34 per cent. reduction by 2020. I believe that we are the first country in the world to do that. It builds on the fact, which Opposition Members often forget, that we are one of the few countries to have met and exceeded our Kyoto targets, with greenhouse gas emissions 21 per cent. below 1990 levels.

Previous legislation, including the Climate Change Act 2008, provides us with many of the powers that we need. In the Bill, which is relatively short because of the length of the Session, we provide for legislation on three particular matters that are central to the task that we face. First, to clean up our energy supplies, it legislates for a levy to provide unprecedented investment in clean coal. Secondly, to improve the deal for consumers, it strengthens the power of the regulator and ensures that it must be proactive for the consumer. Thirdly, to deliver fairness, we are introducing compulsory cut-price energy for the most vulnerable customers.

Does my right hon. Friend agree that carbon capture and storage is important for the UK, because it will give flexibility to the energy mix, but even more important for the world? Exporting post-combustion technology will allow the bolt-on application that will help to reduce ca