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Oral Answers to Questions

Volume 514: debated on Wednesday 21 July 2010

Scotland

The Secretary of State was asked—

Scottish Economy

I have had productive discussions with CBI Scotland and others on the Scottish economy, as has my right hon. Friend the Under-Secretary, and I plan to meet them again in the near future. Our plan to cut the record budget deficit that this Government inherited is the key to ensuring a sustained economic recovery.

In the years to come, it must be the private sector that creates the growth and jobs in Scotland; it is not realistic to have an ever-increasing public sector there. Does the Secretary of State agree that for my constituents in Skipton and Ripon to be funding an ever-expanding Scottish state is an unfair situation?

Across the United Kingdom we inherited a huge deficit in the public finances, which we have to tackle. If we do not, it will not be in just the private sector but the public sector where difficulties will arise.

Recent economic indicators show that the recession in Scotland has been shorter and shallower than in the rest of the UK, but the recovery is fragile. Does the Secretary of State therefore agree that the case for proper financial responsibility in Scotland to help drive economic growth makes sense?

I quite accept the underlying figures that the hon. Gentleman refers to, and the situation in Scotland and in the whole of the UK is indeed challenging. However, as far as future financial accountability and other issues in Scotland are concerned, we believe that the Calman proposals, which we will bring forward in this House, offer the best way forward.

Professor Andrew Hughes Hallett, who advised the Calman commission, says that proper fiscal responsibility could significantly add to Scotland’s GDP. Is the Secretary of State looking closely at the proposals for growth and not just at a funding mechanism, which will not achieve that?

I am sorry but I do not accept the hon. Gentleman’s proposition, and nor should he ignore the others who sat with Professor Hughes Hallett on the Calman commission expert group. They have recently again made it plain that they believe these are the most appropriate powers to give to Scotland at this time.

In my right hon. Friend’s discussions with the CBI, did he recognise that it is very important to build on the success stories in Scotland in order further to advance the Scottish economy? To that end, with the north-east of Scotland providing so much revenue to the Treasury, will he ensure that all levels of government realise how important it is that there be no barriers to investment there, and that companies locating there benefit both the region and the UK?

My hon. Friend is absolutely right about that, and in getting private sector-led recovery in this country, businesses such as those in the energy sector in the north-east will be absolutely critical. I take on board all the observations he makes.

The right hon. Gentleman is having meetings with the CBI, but does he understand that the Government’s cancelling the third runway at Heathrow will have a remarkable effect on Scotland’s air transport system? What is he going to do about that?

We fundamentally disagree with the proposal for the third runway, as the hon. Gentleman understands; we do not believe that it is appropriate either economically or environmentally. The important point is that, by ensuring that we work with the private sector across the whole of government—be it our proposals in the Budget to reduce corporation tax, or the many others to do with banking reform—we believe that we will create the right conditions for the private sector and the transport sector to recover and have a sustainable future.

Scottish employers know that the future jobs fund helps people back into work. The Secretary of State for Scotland claims that it is unsustainable, but he will not publish a shred of evidence to back up his assertion. Employers, the unemployed and even Liberal Democrats in his own constituency support the future jobs fund. As unemployment continues to rise across Scotland, I ask the Secretary of State this specific question: will he now agree to lobby the Chancellor to maintain the future jobs fund in Scotland?

We had this exchange during the last Scottish questions, and the right hon. Gentleman has repeated the phrase that I used then. If I may, I will repeat the point I made then. The future jobs fund was not sustainable in the form it was in. May I remind him, as I did then, that places are still available under that scheme, which will run through to March next year? Some 11,000 places have been funded, but they were temporary, short-term jobs. We believe that a new system of supporting the unemployed is the best way forward.

So, the Secretary of State will not publish a shred of the evidence behind his assertion, and today he has confirmed that he will not even listen to Scotland and meet the Chancellor in order to maintain the future jobs fund and help the unemployed in Scotland. Does he not share the sense of anger across Scotland about the policy immorality of a gang of millionaire politicians cutting support to the most vulnerable people across Scotland? The only surprise for many people in Scotland is that he, as a Liberal Democrat, is going along with it. But perhaps Scotland should not be surprised, because he is fast developing a reputation not as Scotland’s man in the Cabinet, but as the Tories’ salesman in Scotland.

The immorality would be for us to do nothing about the legacy left behind by the right hon. Gentleman’s Government, which is undermining the public sector and any prospect of a private sector recovery.

Constituencies

2. What recent discussions he has had with the Deputy Prime Minister on the implementation in Scotland of proposals to equalise the size of constituencies; and if he will make a statement. (8912)

By equalising the size of constituencies across the UK, we will ensure that people’s votes carry the same weight. We have proposed the two exceptions of Orkney and Shetland and the Western Isles to take account of their special geographic circumstances. The Bill that we will introduce will also provide for an upper limit on the geographical size of a constituency.

In Scotland, there are urban seats that have an electorate of between 50,000 and 80,000; that disparity cannot be justified by extreme geography. Does the Secretary of State agree that it is disappointing that the previous Government had so little regard for the fundamental principle that every vote should have equal value? [Interruption.]

Order. First, some questions are too long, and secondly, at this early stage, the atmosphere is far too raucous. Right hon. and hon. Members need to calm down.

Yes, we have a few traditions to maintain. I agree with my hon. Friend the Member for Weaver Vale (Graham Evans) on the basic principle that votes should have equal weight across the country, wherever they are cast.

Members of the House understand the unique geographical factors that affect island communities, but does the Secretary of State accept that it would be grossly unfair to Scotland’s great cities if their constituency numbers were artificially inflated as a result of that fact, to make up the difference, so that the Government can reach an arbitrary number plucked out by Conservative party central office? Surely the issue should be determined solely by the independent Boundary Commission, not the Conservative party that he seeks to support?

The hon. Lady is trying to advance the very strange principle that across the country there should be different weights for votes, depending on where they are cast. We have to ensure that when we redraw the boundaries, we equalise out those votes to give them equal weight. If people need to register to vote, let us get on with ensuring that they do; there is a responsibility on all of us, and on local authorities, to ensure that that happens.

Future Jobs Fund

3. What recent discussions he has had with the Secretary of State for Work and Pensions on the effects on levels of employment in Scotland of ending the future jobs fund. (8913)

All existing future jobs fund commitments will be honoured, and there are still places available. Next year, we will bring forward our Work programme, which will introduce better targeted and more effective support for young people and the unemployed.

Until the recent worldwide economic downturn, youth unemployment in my constituency was all but eradicated. The future jobs fund created 11,000 jobs, and was projected to create another 20,000. What strategy does the Under-Secretary have on youth unemployment, or are the Government just hoping for a visit from the fairy job mother?

The future jobs fund creates temporary, short-term posts, and the grants do not include any incentives to move people into permanent jobs. Our investment will move young people into sustainable employment, rather than creating temporary changes to unemployment.

It is clear that the future jobs fund was not an effective use of resources. It was aimed at making temporary changes to unemployment figures, rather than moving people into sustainable, permanent jobs.

Commission on Scottish Devolution

4. What recent assessment he has made of the recommendations of the final report of the Commission on Scottish Devolution. (8914)

5. What the proposed timetable is for implementation of the Calman commission’s recommendations. (8915)

As I outlined in response to questions from hon. Members on 16 June, I have asked officials to work for the autumn introduction of a Bill to take forward legislative proposals, with non-legislative recommendations taken forward under a similar time scale.

I thank the right hon. Gentleman for that reply. He knows, or at least I hope he does, that one of the considerations in moving to a Scottish income tax, as proposed in a recommendation by the Calman commission, was whether Her Majesty’s Revenue and Customs systems would be able to collect it. They currently cannot; how does that fact correspond with the comments that the Chancellor made yesterday about tax simplification?

As I have set out, we intend to engage fully with the different sectors in Scotland that will be affected by the changes. As the hon. Gentleman will be aware, we are heavily engaged with the Treasury and HMRC to work our way through the changes that will come as a consequence of Calman, which I believe his party still supports.

Does the Secretary of State agree with the leader of the Liberal Democrats in the Scottish Parliament, Tavish Scott, when he says:

“Politicians should not be able to take easy spending decisions without the responsibility of accounting for this money. Blaming Westminster should not be a get-out clause”?

Does the Secretary of State agree that the devolution settlement in Scotland depends on having free and fair elections to the Scottish Parliament? Does he not see that the integrity of those elections is in danger of being undermined by the Government’s deciding to hold a referendum on the alternative vote on the same day as elections to the Scottish Parliament?

I regret having to disagree with my hon. Friend. We propose a referendum on the change to the voting system for this place on the same day as an election to the Scottish Parliament. We believe that that is entirely sensible. It will reduce cost, it will be more practical and it is on the same way of voting as in elections to the Scottish Parliament, so we will be able to cope with that without too much difficulty.

West Lothian Question

My hon. Friend will be aware that the coalition agreement specifically commits this Government to establishing a commission to look at the West Lothian question. We will bring forward proposals in the autumn.

The biggest threat to the United Kingdom comes not from Scotland but from the resentment that people in England feel at the current constitutional settlement. My right hon. Friend and I both stood on a manifesto promise that we would stop Scottish MPs voting on matters in this House that related only to England. When will that happen?

As I said in my answer, a commission is to be established. This coalition Government, unlike the previous Government, are determined to deal with the issue.

Can the Under-Secretary justify to his constituents the fact that he will not take part in such debates and such votes when he knows only too well that his constituents depend on health service provision in Cumbria and further education support from Cumbria? Is it not right that he takes an interest in what is happening this side of the border?

I can assure the hon. Gentleman that I will be taking an interest in the resolution of the West Lothian question. The hon. Gentleman agreed with Lord Derry Irving when he said that the only answer to the West Lothian question was not to ask it.

Devolution Settlement

7. What recent discussions he has had with the First Minister on the relationship between the Government and the Scottish Executive under the devolution settlement. (8917)

I am regularly in contact with Ministers from the Scottish Government, including the First Minister, on a range of matters.

I am delighted that the Prime Minister visited the Scottish Parliament on the third day of the new Government, unlike his predecessor who never visited there, but will the right hon. Gentleman have a word with the Prime Minister to encourage him to visit the Scottish Parliament again to have further discussions with the First Minister about the relationship between the Government and the Scottish Executive to see whether the new miracle cure for prostate cancer can be made available throughout England?

I absolutely agree that my right hon. Friend the Prime Minister took an important step when he visited the Scottish Parliament to meet the First Minister at such short notice after the coalition was formed. I understand the anguish, not just in Lockerbie and Scotland generally but across the world, about what happened in the course of the release of the Lockerbie bomber, but I believe that the medical decision was taken in good faith.

Given what the Secretary of State has said, will he press all relevant UK Government Departments to release all papers relating to both the negotiation of the prisoner transfer agreement between the UK and Libya and the concurrent commercial contract between BP and Libya?

The Prime Minister in his discussions with the President of the United States and other senior American politicians has put forward the proposal that the Cabinet Secretary will review the papers that exist, and we believe that that is a very important step forward, and one that, hopefully, will find support across the House.

Computer Games Industry

8. What discussions he has had with the Chancellor of the Exchequer on tax relief for the computer games industry in Scotland; and if he will make a statement. (8918)

My right hon. Friend is meeting the hon. Gentleman and representatives from the industry next week to discuss how best to stimulate further growth and expansion in this important sector.

We are actually meeting tomorrow, not next week. How can the Government justify a £110 million tax break for the film industry, but not allow a £50 million tax break for Dundee and the games industry?

I am glad that the Government are dealing with the issues that the hon. Gentleman raises with even more urgency. As he knows, the major package of reforms to business taxation in the Budget is designed to make the UK the most competitive tax regime in the G20 and that will substantially help the video games industry.

Future Jobs Fund

9. What recent discussions he has had with the Secretary of State for Work and Pensions on the effects on Scotland of ending the future jobs fund. (8919)

I am disappointed that yet again the Minister has failed to address the substance of this question. I have listened to his colleagues rubbishing these jobs, calling them artificial and unsustainable. Frankly, I am not surprised that a Cabinet packed with millionaires who went to exclusive private schools and elitist universities cannot see the need for such a scheme and how valuable it is to have paid employment on the CVs of these young unemployed people. Will he press his colleagues to re-examine the decision to scrap the future jobs fund?

When I had the opportunity to visit the Clydebank jobcentre in the hon. Lady’s constituency, I found that the people there—who are on the front line in helping the unemployed into work—welcomed the Government’s measures to replace the myriad schemes introduced by the previous Government with a single Work programme.

VAT Increase

10. What recent discussions he has had with the Chancellor of the Exchequer on the effect on households in Scotland of the proposed increase in the rate of value added tax. (8920)

The VAT rise is part of a fair and progressive Budget. Difficult decisions are necessary to tackle the record deficit that this Government have inherited, but the richest will pay more than the poorest.

Given that every independent analysis says that VAT rises are not progressive but regressive, did the Minister examine the impact of the rise on any aspect of Scottish industry and, in particular, the tourism industry in my constituency, which is a large employer and very relevant to household incomes? Did the Government look at the impact of the increase in VAT on anything?

The right hon. Lady makes a good point about the tourism industry and she will know that many jobs in that industry are low paid. The decision to raise the income tax personal allowance for under-65s by £1,000 in 2011-12 will benefit 2 million basic rate income tax payers in Scotland, including many working in the tourism industry.

Scottish Economy

I have had productive discussions with CBI Scotland and others on the Scottish economy, as has my right hon. Friend the Under-Secretary, and I plan to meet them again in the near future.

Bearing in mind that trade and industry is a reserved matter while economic development is devolved—and that both are vital in addressing the key challenge of economic growth—how will the Secretary of State use his role to work effectively to stimulate private enterprise and job creation in Scotland?

Given the legacy that we were left by the Labour Government, it is essential that we tackle the deficit so that we can tackle interest rates and do not pay the cost in jobs. As far as the private sector is concerned, the measures introduced by my right hon. Friend the Chancellor in the Budget, which we passed in the Third Reading of the Finance Bill last night, will see corporation tax lowered over the course of this Parliament, and include others to boost the private sector.

Given the delicate state of the Scottish economy and the fears about the recovery, does the Secretary of State accept that the proposed massive cuts in public spending—including the huge job losses and the taking of so much money out of the economy—risk a double-dip recession?

If we do not get rid of the historic deficit inherited by the Government—at £155 billion, the largest in peacetime history—we will pay the price in lost jobs for years and years to come. It is essential that we tackle that and take on board the other measures set out in the Budget to ensure we get a good private sector-led recovery, which will fund future public services.

Does my right hon. Friend agree that it was wrong of the Scottish Parliament to release al-Megrahi supposedly on compassionate grounds, and that this matter should be looked into given that he committed a horrendous crime?

The decision to release al-Megrahi was a decision for the Scottish Government—it was entirely theirs, and they answer for that decision—but we, as a Government, have made plain what we felt about it. However, there have been inquiries in the House and the Scottish Parliament, and I do not believe that, at this stage, a public inquiry would be appropriate.

Is the Secretary of State aware of research by Oxford Economics that states that 2.3 million jobs in the private sector will be lost because of the Government’s public sector cuts? Can he explain the devastation that that will cause in Glasgow, which it predicts will be the second-hardest hit city? What does he plan to do for jobs in Glasgow, not only in the public sector but in the private sector? Will the number of jobs go up or down in Glasgow because of his Government?

Across the country we want rising levels of employment and to ensure that, through a private sector-led recovery, we will have a sustainable economy going forward. Were we just to keep going as the hon. Lady’s colleagues in the previous Labour Government did, we would be in very deep trouble indeed.

A1 Upgrade

12. What discussions he has had with ministerial colleagues and the Scottish Executive on upgrading the A1 in Scotland. (8922)

The provision of road transport in Scotland is a devolved matter. Transport Scotland is responsible for the management and maintenance of the trunk road network in Scotland, including the A1.

For 13 years we have had an A1 that is largely single-laned, holding back economic development in south-east Scotland and Northumberland. Will its upgrade be considered in the comprehensive spending review?

I advise my hon. Friend that the Scottish Government have no proposals for any major schemes on the A1 trunk road in Scotland, but I will speak to colleagues in the Department for Transport about the need to liaise on cross-border routes. [Interruption.]

Order. There are far too many private conversations taking place in the Chamber, and the decibel level is far too high. I wish to hear the hon. Member for Dunfermline and West Fife (Thomas Docherty).

Strategic Defence and Security Review

13. If he will take steps to ensure that account is taken in the strategic defence and security review of the implications for the Scottish economy of that review. (8923)

Maintaining a strong Scottish economy is one of my top priorities, and I have, and will continue to have, regular conversations with my right hon. Friends the Secretary of State for Defence and the Chancellor of the Exchequer on the implications for Scotland of the strategic defence and security review.

Thousands of highly prized, highly skilled and highly paid jobs in manufacturing and engineering are dependent on the aircraft carriers going ahead. Back in Fife, all political parties, including the Liberal Democrats and Conservatives, support the building of the second aircraft carrier. The Secretary of State’s former special adviser said that scrapping the second aircraft carrier would be crazy. Will the Secretary of State therefore come to Fife and meet the management and work force at Babcock during the summer recess, so that they can present their case—

I join the hon. Gentleman in paying tribute to the skills and expertise of the engineering sector, not just in defence but in so many other parts of the Scottish and UK economies. I fully understand the concerns that he is raising, and many of these issues are being considered as part of the strategic defence review. He might also be aware that I am planning to visit Babcock in the next few weeks.

Does the Secretary of State want to go down in history as the man who presided over the closure of the Clyde shipyards, or will he defend the two aircraft carriers?

The hon. Gentleman, particularly in his distinguished new role as Chair of the Scottish Affairs Committee, is a strong campaigner on these issues. As he knows, I intend to visit with him the shipyards and other defence installations in Glasgow in the near future.

Advocate-General

Since 1 May, the Advocate-General and his predecessor have received 716 minutes notifying them of devolution issues. In the same period, the Advocate-General has continued monitoring 41 devolution cases, has been represented in court in three, and is currently involved as intervenor in two cases.

Will the Minister share with the House whether or not the Advocate-General has given a view on the timing of a referendum on independence, as proposed by the Scottish Government?

As far as I am aware, the Scottish Government appear to have abandoned their proposal for a referendum on independence, especially after 80% of voters in Scotland at the recent general election voted for parties that support the Union.

Prime Minister

The Prime Minister was asked—

Engagements

I have been asked to reply. My right hon. Friend the Prime Minister is visiting the United States for meetings with President Obama and briefings on Afghanistan.

I am sure that the whole House will wish to join me in paying tribute to Marine Jonathan Crookes, from 40 Commando Royal Marines, and Senior Aircraftman Kinikki Griffiths, from the RAF Regiment, both of whom died on Friday; and to Sergeant David Monkhouse, from the Royal Dragoon Guards, and Staff Sergeant Brett Linley, from 11 Explosive Ordnance Disposal Regiment, the Royal Logistic Corps, both of whom died on Saturday. They were, of course, men of great courage and selflessness who died in the service of our country, and their sacrifice will not be forgotten. I am sure that I speak on behalf of the whole House when I say that we also send our deepest condolences to their families and friends, whose own courage and dignity, like that of so many others who have lost loved ones in Afghanistan, are truly inspiring.

I am sure that the whole House will join me in sending our deepest sympathy and condolences to the families and friends of our brave service personnel who have died in the course of their duties while in action in Afghanistan.

It is now a fortnight since the people of Gateshead were told of the axing of the Building Schools for the Future programme, which affects five local schools in the borough of Gateshead. This deeply concerns both communities, which have lost much needed investment, and Liberal Democrat councillors in some of those areas, who now fear losing their seats. Will the Deputy Prime Minister agree to meet the borough’s MPs to discuss a way forward for those schools, which have had much needed investment wrenched from their grasp by this Government’s action?

Of course I understand the hon. Gentleman’s concern about schooling in his constituency, but we should be under no illusions. The Building Schools for the Future programme would have had to be cut even if Labour were still in power. It was the Labour Government who cut capital investment by 50% but did not deign to tell people what that would mean. Building Schools for the Future was a programme that was not effectively run: it took three years after it had begun before the first brick was laid. Of course we will look at new ways of ensuring that capital investment continues to flow into existing schools and new schools—particularly primary schools, which were excluded from the Building Schools for the Future programme—and of course we will meet with him.

May I express my gratitude for the Prime Minister raising the case of my constituent Gary McKinnon with the US President? Give the mutual commitment to find a way through and seek an appropriate solution, are there now real grounds for optimism that there is light at the end of a tortuous tunnel for Gary McKinnon?

I have long been associated with this case, and I would like to pay tribute to my hon. Friend for all the work that he has done on behalf of Gary McKinnon. No one doubts the gravity of the offences that Gary McKinnon is alleged to have committed. That is beyond question; the simple question is whether he should, in the circumstances, be tried here or extradited to the United States. The Prime Minister and the President of the United States indicated yesterday that they have had a discussion about Gary McKinnon and that, notwithstanding the gravity of the alleged crimes, they hope to find a way forward.

I join the right hon. Gentleman in paying tribute to the British servicemen who have been killed in Afghanistan in recent days: Marine Jonathan Crookes, from 40 Commando Royal Marines, and Senior Aircraftman Kinikki Griffiths, from the RAF Regiment, who both died on Friday; and Sergeant David Monkhouse, from the Royal Dragoon Guards, and Staff Sergeant Brett Linley, from 11 Explosive Ordnance Disposal Regiment, the Royal Logistic Corps, who both died on Saturday. These were very brave men who lost their lives in the service of their country—our country. We salute their courage, and we will always honour their memory and sacrifice, which they have made for us. I also join very much with the right hon. Gentleman in sending our deep condolences to the families, comrades and friends of these brave service personnel.

We welcome the Kabul conference, which the Foreign Secretary has attended, and hope that it does indeed lead to positive improvements in the lives of the people of Afghanistan. The Prime Minister has said that he wants to see United Kingdom combat troops withdrawn by 2014. Could I ask the Deputy Prime Minister whether that commitment is unconditional, or will it depend on the circumstances on the ground at the time?

First, I welcome the right hon. Gentleman to the Dispatch Box. I look forward to answering his questions. This is the first time a Liberal leader has been in this position since the 1920s. Given the right hon. Gentleman’s great longevity in politics, that was probably around the time he first joined a Labour shadow Cabinet.

As to the right hon. Gentleman’s question about our engagement in Afghanistan, the Prime Minister has been clear, and we have been clear as a coalition Government, that we do not wish to see British troops in a combat role in Afghanistan by 2015—not 2014, as the right hon. Member for Blackburn (Mr Straw) suggested. That is consistent, of course, with the timetable for the Afghan forces assuming responsibility for security by 2014, as agreed in the Kabul conference yesterday. No timetable can be chiselled in stone, but we are absolutely determined, given how long we have been in Afghanistan and given that we are six months into an 18-month military strategy and embarking on a new political strategy, to be out of a combat role by 2015.

I am grateful to the right hon. Gentleman for his welcome of my appearance, probably my one and only appearance, here in this capacity—[Hon. Members: “Ah!”] Well, there we are. I am also grateful to the right hon. Gentleman for his answer, from which I take it that he was saying—in my view, wisely—that this commitment is indeed a conditional one.

The right hon. Gentleman told this House on 22 June that the Government had denied a loan to Sheffield Forgemasters because the owners

“did not want to dilute their own shareholding in the company.”—[Official Report, 22 June 2010; Vol. 512, c. 148.]

But we now know that, in private, the right hon. Gentleman admitted to the chief executive of the company:

“You… made clear to me your own willingness to dilute your equity share”.

Yesterday, my right hon. Friend the shadow Business Secretary asked you about this, Mr Speaker, and you ruled that

“if a Minister makes a factual error in a statement to the House, it is preferable… that he or she should correct that error in the House.”—[Official Report, 20 July 2010; Vol. 514, c. 186.]

Will the right hon. Gentleman now correct that error?

First, lest there be any confusion on the vital issue of Afghanistan, which I hope will continue to enjoy cross-party support, let me be absolutely clear that we will see our troops withdrawn from a combat role in Afghanistan by 2015. We are determined to see that happen.

On Sheffield Forgemasters, the right hon. Gentleman knows that the problem was simply one of affordability. Lord Mandelson was writing out cheques to companies like Forgemasters, which he knew would bounce, all the while writing in his memoirs:

“We were deep in a pit of debt and still digging.”

That was what was wrong. It was wrong to pretend that there could be Government assistance for a great company like Sheffield Forgemasters when, as the former Chief Secretary to the Treasury said, there was “no money left”. [Interruption.]

I find it surprising that the Deputy Prime Minister, who has preached the importance of open, transparent and honest politics, cannot bring himself to correct the record of something that was plainly wrong. The explanation that he is now offering is not the one that he offered previously. That explanation was about the dilution of the company’s shareholding—the same explanation that the Prime Minister offered the House. The Prime Minister told the House on 7 July:

“The question is whether it is an appropriate use of taxpayers’ money to give it to a business that could raise that money by diluting its shareholding.”—[Official Report, 7 July 2010; Vol. 513, c. 369.]

Now that it is clear that the basis on which the Deputy Prime Minister and the Prime Minister made the decision to refuse the loan was simply wrong, will he reconsider that decision?

That was not a question—it was a sort of dissertation. [Interruption.] The right hon. Gentleman talks about openness and transparency. It would have been more transparent if Lord Mandelson and his Government had admitted that there was no money. [Interruption.] Hon. Members should not take it from me; the position was summed up rather well in Sheffield Forgemasters—[Interruption.]

Order. I must appeal for calm. I can see Members ranting at the tops of their voices at the Deputy Prime Minister. It is wrong, and it must stop. Whatever the feeling, it must stop. The public detest it and so do I.

If the right hon. Gentleman thinks that is a lot of noise, he should try it from the Bench I formerly occupied—it is even worse.

Let me cite what a worker on the shop floor of Sheffield Forgemasters said in Sheffield’s The Star only last week. He said that on a visit by Lord Mandelson to Sheffield Forgemasters:

“I asked Lord Mandelson, if the country was near to bankruptcy, where would the money come from? He turned away to speak to my gaffer. I asked again and he said very”—

Order. I am sorry to interrupt the Deputy Prime Minister, but that is very discursive and not relevant to the precise responsibility of a member of the Government. [Interruption.] Order. I do not require any guidance. We will leave it there.

Let us consider affordability—not the reason that the Deputy Prime Minister and the Prime Minister gave originally, but affordability. The Deputy Prime Minister says that he is concerned about affordability, but we are talking about a loan, not a grant, to help Sheffield Forgemasters build Britain’s future in low-carbon manufacturing. He is not prepared to make that loan, but why is he prepared to acquiesce in spending £550 million a year on so-called tax breaks for marriage—a policy that he described as “patronising drivel”?

The right hon. Gentleman is living in complete denial. When we came to government, we discovered that the structural deficit was £12 billion worse than he had led us to believe. His Government had announced £50 billion of cuts without having the decency to tell the British people what they would do about that. We now discover from Lord Mandelson’s infinitely helpful memoirs that the Chancellor had planned to increase VAT, lower tax for people on low pay and cut corporation tax. Does that sound familiar? Yes, it does. We had to do it; they did not have the courage to do it.

I note that the right hon. Gentleman did not say a word about his acquiescence in spending half a billion pounds a year on marriage tax breaks, which he has criticised. No wonder that his noble and new-found Friend Lord Ashcroft says today—[Interruption.]

Order. I want to hear what the noble Lord has been saying. Let us hear it. There is far too much noise.

Lord Ashcroft says today,

“even in the Liberal Democrat-held seats, less than a quarter of voters thought the Lib Dems were having a significant impact on the Government’s agenda.”

First, the Deputy Prime Minister blamed the cancellation of the loan on Sheffied Forgemasters’ unwillingness to dilute the shareholding, then he said that it was unaffordable. Last week he told the Yorkshire Post that the company did not need a loan after all. [Interruption.] I am not surprised that hon. Members are baying, because there has been one excuse after another. He said—[Interruption.]

Order. Members are beside themselves. I am quite worried about their health. They really do need to calm down. [Interruption.] Order. Let me simply say to the right hon. Member for Blackburn (Mr Straw) that I want some time to be left for Back Benchers.

The Deputy Prime Minister said to the Yorkshire Post:

“Forgemasters can find the money for expansion elsewhere”.

Now that we know that it cannot find the money—as it said yesterday—has not the whole edifice of the Deputy Prime Minister’s argument been demolished? Why on earth will he not reconsider this ludicrous decision?

Thank heavens this is the last occasion on which the right hon. Gentleman will be at the Dispatch Box in this capacity. It seems to me that he needs to go away and practise a bit more.

The right hon. Gentleman talks about impact. Let me just ask him this. Why did his Government do nothing to sort out the banks which were not prepared to offer a decent loan to Forgemasters at reasonable rates? We imposed the levy; his Government did not. Why did pensioners have to wait until this coalition Government came to power for the restoration of the earnings link, which he failed to restore for 13 years? Why did his party scrap the 10p tax rate, whereas we have taken 800,000 people on low pay out of the tax system altogether? That is more progress in 10 weeks than he managed in 13 years.

Order. I think that the right hon. Gentleman has had his allotted span. [Hon. Members: “No.”] I apologise. It felt like it. I call Jack Straw.

With apologies to the hon. Member for Devizes (Claire Perry), Mr Speaker.

Just over a month before the election, the Deputy Prime Minister warned about the dangers of policies of the kind that he is now following. He said:

“just imagine the reaction of my constituents in South West Sheffield.”

People like that are going to ask, “Who are these people who are telling us that they are suddenly going to take our jobs away? Who are these people?” Well, now we know who these people are. Are they not the Liberal Democrats—the people who are giving power to the Conservatives without any influence over the policies that they used to oppose?

The right hon. Gentleman may bellow as much as he likes. I am happy to account for everything that we are doing in this coalition Government—a coalition Government who have brought together two parties, working in the national interest, to sort out the mess that he left behind. We may have to wait for his memoirs, but perhaps one day he will account for his role in the most disastrous decision of all: the illegal invasion of Iraq.

Order. The House really must start to behave itself. We have made slow progress—[Interruption.] Order. That progress must get faster from now on, with short questions and short answers. I call Claire Perry.

Thank you, Mr Speaker. Third time lucky.

Can the Deputy Prime Minister tell us what the coalition Government have done in 10 short weeks to preserve the civil liberties of the British people—liberties that have been so cruelly eroded by the Labour party over the past 13 years?

I agree with my hon. Friend. The authoritarian record of the Labour Government is one of the most dismal records in modern British history, featuring the illegal invasion of Iraq, the turning of our prisons into overcrowded colleges of crime, the decimation of our civil liberties, the invasion of our privacy, and the roll-out of a surveillance state without any checks or balances; and look at what we have managed—

Order. I thought that the right hon. Gentleman was going to talk about what the present Government had done, not what the last Government had done; and he is now coming to an end, I am sure.

This Government have scrapped ID cards, they will table a freedom Bill, and they have launched a counter-terrorism review to create the right balance between security and liberty.

Q2. Does the Deputy Prime Minister recall the comments of the Prime Minister on the road to the election, when he stated openly and clearly that the north-east would be hit hard? Does that mean that the hard-working people in my constituency and others, the disabled people, the young and the old must suffer as a consequence of these Budget cuts, or should they just accept the fact that they will be part of this wonderful new big society? (9849)

The hon. Gentleman is, of course, right that some regions and parts of the country are more vulnerable than others, and the north-east is an obvious example. It is a region where there has been a heavy dependence—arguably an over-reliance—on public sector jobs. One way or another, that was going to have to come to an end whoever was in government, because of the irresponsible overspending by the Labour Government. We are now putting measures in place, including the national insurance breaks for companies setting up in regions such as the north-east and the regional growth fund under which £1 billion is being precisely directed at helping those regions, to make sure that they are not disproportionately hit by the difficult fiscal contraction that we now have to introduce as a national duty because of the mess bequeathed to us by the Labour Government.

Q3. More than 250,000 older people live in sheltered retirement accommodation. Like many, two constituents of mine purchased their leases on the promise of full-time, in-house warden support at no charge. In the case of my constituents, that service has been whittled down to an off-site, visiting-by-appointment, chargeable service. Does my right hon. Friend agree that this is a shameful way to treat older people, and will he support my campaign to raise awareness of the legal redress that older people can have to secure their rights? (9850)

I am grateful for that question from my hon. Friend. She is well known for her outstanding record as a champion for older people prior to coming to the House, and I am sure all Members on both sides of the House share her concern that all older people, regardless of whether they live in their own homes, sheltered accommodation or residential care homes, can live in those settings with real dignity. That is one reason why we have just announced that there will be an independent commission to consider how we can ensure affordable and sustainable funding for care and support for all adults in England, and I hope my hon. Friend will be able to make her views and expertise available to that commission.

Indeed. The Deputy Prime Minister said:

“I am a revolutionary but I am also a pragmatist”.

When he suddenly agreed to raise VAT, was he being a revolutionary pragmatist or a pragmatic revolutionary?

No one on the Government Benches took lightly the decision to raise VAT, but did we know before we went into government that the structural deficit was £12 billion higher? Did we know that the Labour Government had announced £50 billion of cuts but not told people what that actually meant in practice? Could anyone have predicted the economic firestorm in Europe? Perhaps the hon. Gentleman can tell me why the former Chancellor advocated an increase in VAT but was blocked by the then Prime Minister. The former Chancellor knew it was the right thing to do; the rest of his party stopped him.

Q4. Does the Deputy Prime Minister agree that in addition to dealing with the worst fiscal position in peacetime history, the new coalition Government should seek to arrest the decline in social mobility, and thereby reduce the gap between rich and poor? (9851)

My hon. Friend is right to say that as well as having to deal with a fiscal crisis—which has been handed over to us by the Labour party—we are faced also with a social crisis: social mobility has gone down; inequality has gone up; the gap between rich and poor has increased; and child poverty has increased by 100,000 since 2004 alone. That is why we have taken 800,000 people out of paying tax altogether. That is why we are going to deliver a pupil premium for children from poor backgrounds wherever they live in this country. That is why we have restored the triple guarantee to pensioners. That is why we have taken measures to make Britain fairer which were not taken by Opposition Members.

Q5. My constituent, Charlie Donegan, suffers from long-term mental health problems, septicaemia, pneumonia and methicillin-resistant Staphylococcus aureus, and is a wheelchair user as a result. He receives the mobility and care components of disability living allowance at the higher rate. Can the Deputy Prime Minister explain to my constituent and to thousands of other worried members of the public like him, who rely on DLA for some small improvement to the quality of their lives, why he is now to face a medical test for a benefit that is intended to meet his non-medical needs? (9852)

This is not about taking away universal benefits; this is about making sure that those who receive DLA, such as the hon. Lady’s constituent, do so because of real need. That is why it has been proposed by Members from all parties for many, many years that one way to proceed is to have a simple medical test. I meet constituents; I meet people who say that rather than running the gamut of the vast bureaucracy that has now attached itself to DLA, they themselves would prefer a simple medical test to know whether they continue to be entitled to receive that benefit, yes or no.

Q6. As part of the political and constitutional reform process, will the Deputy Prime Minister undertake to give due consideration to the loyal subjects of Her Majesty’s overseas territories and Crown dependencies, who currently have no representation and no voice in the constitution of this country? (9853)

They are extremely well represented by my hon. Friend, who I know is a passionate advocate of our relationship with overseas territories and, of course, Crown dependencies. We will continue to work with him and others in this House to make sure that the citizens of the overseas territories are served by their own legislatures, with champions here in this House and in government, and of course we will work with the Governments of the Crown dependencies to help them develop their own wider ambitions. This applies to the Falklands or Gibraltar, although I have to confess that Gibraltar is a sensitive topic in the Clegg household.

If the intercity express programme survives the comprehensive spending review, Hitachi will build the rolling stock in my constituency, at Newton Aycliffe, creating 800 direct jobs and thousands of jobs in the supply chain. This will be the biggest investment in the north-east of England since Nissan. Will the Deputy Prime Minister ask the Transport Minister to meet me and a delegation of north-eastern business leaders and trade unionists, so that we can explain how important this project is to the region?

Of course that will be considered, as with everything else, in the comprehensive spending round. The hon. Gentleman will be aware that the previous Government cut capital investment by 50%. We are determined to maintain investment in our infrastructure—in our transport infrastructure and in our built infrastructure—is maintained, so that we do not repeat the recessions of the past and cut deep into infrastructure, which is so important to the long-term economic future of this country.

Q7. May I first congratulate my right hon. Friend on being the first Liberal to answer questions to the Prime Minister since Lloyd George? In that too-long gap, many illiberal things have happened in this country, not least under the previous Government. One of the worst has been the detention of children for immigration purposes. There are words about that in the coalition agreement and there has been a review, but what concrete action will actually be taken to end this scandal? (9854)

I strongly agree with my hon. Friend that it was simply a moral outrage that last year the Labour Government imprisoned, behind bars, 1,000 children who were innocent of any wrongdoing whatsoever. This coalition Government, like so many other things, will once again restore a sense of decency and liberty to the way in which we conduct ourselves. That is why I can confirm that the Government will make an announcement shortly about how we will deliver on our pledge to end child detention and to close the Yarl’s Wood detention centre for good.

Afghanistan

As the hon. Gentleman knows, my right hon. Friend the Prime Minister is currently in the United States and will be discussing Afghanistan with President Obama during his visit. Yesterday, as the hon. Gentleman may have seen, they reaffirmed their joint commitment to the existing strategy, reflected on the bravery and shared sacrifice of United Kingdom and United States armed forces in Afghanistan, and agreed that the importance of progress on the political track to complement the military effort was essential.

Is it not time, after nearly 10 years of British deployment in Afghanistan, that the whole strategy should be reconsidered? Last year, 1,000 Afghan people died, and 300 and more British soldiers have lost their lives in Afghanistan, as have many from other coalition forces. Opinion polls in Afghanistan show declining support for western involvement there. If British troops are going to remain there for another five years, how many more are going to die, how much deeper is the civil war going to get and how much deeper are we going to be involved in conflicts in that region? Is it not time to say that this strategy has run its course and that it is time, now, to withdraw from Afghanistan?

My right hon. Friend the Foreign Secretary will be giving a statement on Afghanistan imminently. I do not agree with the hon. Gentleman’s stance on Afghanistan, but I admire his consistency in arguing his case. It is right that the coalition Government have been crystal clear that we want our troops to come home as soon as possible. We do not want a single British serviceman or servicewoman to spend an extra day more than is necessary in Afghanistan. That is why we have been clear that we will not have soldiers in a combat role in Afghanistan in 2015. However, I agree with the hon. Gentleman that history teaches us that insurgencies cannot be defeated by military means alone. That is why we are pushing very hard for a new political strategy involving reconciliation and reintegration so that the political strategy and the military strategy are better aligned than has been the case in the past.

Engagements

Q9. My county of Herefordshire has below-average household income, but our schools are the third worst funded in the country. Does the Deputy Prime Minister share my view that it is time to rebalance public funding and give a fairer deal to our rural areas? (9856)

I certainly agree that just because poverty in rural areas is sometimes more invisible than more visible poverty in some of our inner-city areas, it does not mean that we should not make real efforts to address it. It is a matter of concern that under the previous Government a child from a poor family in an inner city area tended to get much more money allocated to their education than a child from a poor family in a rural area. That is why we are so determined to introduce a pupil premium that will provide extra resources to children from the most deprived backgrounds no matter where they live in our country.

Before I call the Foreign Secretary to give a statement, I appeal to hon. and right hon. Members whose lungs are probably exhausted now anyway to leave the Chamber quickly and quietly so that the House can hear the Foreign Secretary.