House of Commons
Monday 13 September 2010
The House met at half-past Two o’clock
[Mr Speaker in the Chair]
Oral Answers to Questions
The Secretary of State was asked—
NATO’s responsibility is to provide for the collective security of its allies against an increasingly diverse range of security challenges, both within the north Atlantic area and beyond. This is being reflected in work on the alliance’s new strategic concept, on which I look forward to further discussions with the Secretary-General and fellow NATO Defence Ministers at our next meeting in October.
There is growing concern off the coast of Somalia, where cargo ships and holiday craft are regularly challenged by pirates seeking ransom from western Governments. With 90% of EU imports arriving by sea, is NATO doing enough to ensure safe passage through the Arabian sea and the Indian ocean?
My hon. Friend is quite right. For a nation such as the United Kingdom, where 92% of all our trade is by sea, the security of the high seas is vital. We contribute in a number of ways: through the NATO mission and through the EU’s Operation Atalanta, which we command and to which we make a military contribution. It is also worth pointing out that there are contributions from other countries, which are increasingly recognising that the security of the high seas goes a lot wider than any of the alliances I have mentioned—particularly given the importance of trade—and is in fact a global security responsibility.
Britain’s contribution to NATO, after the United States and along with France, is by far the most important, because we spend a good chunk of our GDP on defence. Can the Secretary of State confirm that he is doing everything to ensure that we spend more than 2% of GDP on defence in the coming review, and that if we fall below 2%—to the level of the runtish, anaemic armies of some of our European allies—he will not stay in the Cabinet, but resign and protest against such an attack on our status as a world armed power?
We are subjected to quite a lot of humbug in the Chamber, but that takes the biscuit. This Government are committed to the security of the United Kingdom, but we will have to deal with defence expenditure in the light of the huge economic disaster that we inherited from the outgoing Labour Government, and of the fact that we have a massively overspent and overcommitted defence programme, for which the previous Government never bothered to put any money into the budget.
As my right hon. Friend the Defence Secretary made clear at the meeting of NATO Defence Ministers in June, reform of NATO is a key priority for the UK. Defence Ministers will have further discussions on reform at their next meeting in October. We also have frequent bilateral discussions with fellow NATO Ministers and the Secretary-General on the importance of both ensuring that the alliance has the right capabilities and structures to carry out its missions, and on making better use of resources by making it a leaner, more efficient and more effective organisation.
In the coming months three major developments will have a profound impact on Britain’s foreign and defence policy in the medium term: the comprehensive spending review, the strategic defence review and the NATO summit. Does my hon. Friend agree that, although it goes without saying that NATO should be effective and efficient, it must also be flexible? Will he focus on flexibility in his pursuit of the reforms that NATO needs?
May I take this opportunity from the Dispatch Box to congratulate my hon. Friend on his election as Chairman of the Select Committee on Foreign Affairs? As a result, the Committee is in very safe hands indeed, and the House should be grateful for that. He is absolutely right: we do need to be flexible, and we do need to make NATO much leaner and more able to react to circumstances as they arise. However, he is also right to point out the pressures under which we are all labouring at the moment. As my right hon. Friend the Secretary of State said, we have inherited no money in the kitty with which to defend the country.
NATO’s new draft strategic concept—to be discussed at the NATO summit—suggests that participation in missile defence is open to all allies. What conclusions has the Minister drawn regarding Britain’s involvement in new missile defence systems?
As the hon. Gentleman knows well, the strategic concept will be discussed at the Lisbon summit, but as yet the Secretary-General’s paper on it has not been seen. However, I understand that missile defence is a matter of interest, and I know that, as a former member of the Select Committee on Defence, the hon. Gentleman takes a keen interest in such matters. Indeed, when he and I were on the Committee, we both looked at missile defence. This is an important area that NATO needs to address, and I hope it will be addressed squarely in the context of the strategic concept.
My hon. Friend knows of my long-standing interest in the kingdom of Morocco. What future does he think NATO’s European Mediterranean dialogue has? In particular, what future does NATO’s relationship with Morocco have, in the light of Morocco’s participation in the Mediterranean dialogue since 1995, its assistance in the Balkans and its activities in Operation Active Endeavour? Does he agree that Morocco, as one of our oldest allies, has a strong part to play in future NATO operations?
I know that my hon. Friend takes a keen interest in Morocco; indeed, he is the chairman of the all-party parliamentary group on Morocco. He has rightly pointed out that that country is part of Operation Active Endeavour, although I understand that certain technical difficulties currently preclude it from contributing to naval shipping. I must also point out to him that Morocco is not involved in Afghanistan. However, we welcome support from wherever we can obtain it, and I hope he will be able to use his good offices to that effect.
Army Recovery Capability
The coalition Government are fully committed to supporting injured servicemen and women who have sacrificed so much for our country’s security. We are therefore proceeding with the delivery of the Army recovery capability, which was announced by the previous Administration in February this year, in partnership with Help for Heroes and the Royal British Legion. This extremely laudable initiative will make a real difference to the support that the sick and wounded receive during and after the excellent clinical care from which they already benefit. Last Wednesday, I met the future Chief of the General Staff to discuss progress with the delivery of this capability, and to consider what more can be done to support these individuals as they return to duty or make the transition to civilian life.
May I first, unusually, pay tribute to the previous Administration? The Army recovery capability represents a really positive, sensible move forward. They committed resources to it, and we shall continue to do so. Yes, at the moment, we are definitely on track for the opening times. I visited the current centre at the Erskine homes in Edinburgh three weeks ago and saw the work that has been going on there. That is improving the whole time. I should say that this is a new development, and things will evolve as we move forward.
One of the centres will be in Bulford and Tidworth, in the constituency of my hon. Friend the Member for Devizes (Claire Perry), and it will open in 2012. Does the Minister agree that, as well as looking after the injured servicemen, there are two elements that we must not lose sight of? The first is to look after their families, who often suffer greatly. The second is to find really practical ways of giving these people jobs and putting them in touch with employers, so that they can be employed for many years to come.
Yes, I agree with my hon. Friend. Families play a hugely important role in that regard. Indeed, I regularly meet members of the families federations of the Army and the other forces, and I can assure him that they let me know their views in no uncertain terms. Regarding his second point, the Army recovery capability is working on ensuring that, whatever the future of the personnel it is treating, they have a future either in the armed forces or in civilian life.
I am sure that the Minister has seen in The Sun newspaper this morning the proposal to throw out of the armed forces those who have been severely wounded on active service. I note that the Ministry of Defence and the Secretary of State are citing the introduction of manning control points as a justification for that. When I was the Minister responsible for these matters, I resisted the introduction of manning control points, and it was only after intense pressure from the head of the Army, General Sir David Richards, and the Army Board that they were introduced. What was clear, however, was that they would not be used as a way of getting rid of brave servicemen and women injured in the defence of this country—a position that was underlined when General Richards and I launched the Army recovery capability in February. At the time, General Richards said that he expected
“that no soldier who thinks it is in his interests to stay will be forced out.”
May I ask the Minister whether that has now changed? Is it now the intention of the Ministry of Defence, under pressure from the Treasury, to use manning control points to force out those injured in the line of duty? If it is, it will be a moral betrayal and run contrary to all the rhetoric—
I hate to agree with the hon. Gentleman, but I think it would be a moral outrage if we were to throw people out through manning control points after they had been injured on active service. As he will know, if people have been treated through the Army recovery capability, they will be going down an entirely different route and no manning control point will be used at the time. I counsel the hon. Gentleman against believing everything he reads in The Sun or any other newspaper.
Gulf Region Security
The security situation in the Gulf remains delicately balanced, with Iran’s nuclear ambitions, Arab-Israel relations and the risk of Yemen becoming a failed state being the most destabilising factors. We are working closely with our allies in the region as well as key partners such as the US to find a diplomatic solution to all these issues, but it is clear that they will not be resolved quickly. I welcome my right hon. Friend the Foreign Secretary’s Gulf initiative, which recognises increased engagement in the region as a key foreign policy priority. It makes it clear that there are significant economic as well as national security interests in the Gulf, and that the presence of UK forces there is vital in order to reassure our allies and act as a stabilising influence.
I certainly do share my hon. Friend’s concern, as I am sure do all Members. The Government of Iran are facing increasing economic and political pressure as a direct result of their failure to address international concerns about their nuclear programme. Alongside sanctions imposed by the UN Security Council resolutions, Iran has also faced autonomous sanctions from the EU, the US, Canada, Australia and Norway. Others will follow soon, and many major companies have decided to stop business with Iran. Iran has much to gain from taking the necessary steps to restore international confidence in its nuclear intentions and will face tougher and tougher sanctions if it fails to do so.
I thank my hon. Friend for his reply. Will he comment further on the Iran Government’s increasingly provocative approach in their military and nuclear programme and their apparent disregard for international opinion, which has been evidenced in recent times?
There is no doubt that Iran is behaving provocatively. Our policy towards Iran remains that we wish to address a broad range of concerns, of which nuclear proliferation is undoubtedly the foremost. Iran’s support for terrorism, its negative role in the wider middle east region and its record on human rights all remain matters of serious concern. We remain committed to diplomacy, dialogue and engagement, but that does not prevent us or the international community from maintaining pressure about legitimate concerns. A positive future for Iran is possible, based on its leadership recognising its obligations to its own people, neighbours and the international community. That is the future we want to see Iran turning to, in order to gain the respect it seems so greatly to crave.
Has the Minister made any assessment of when, at the current rate of uranium enrichment, there is likely to be a breakout capability? In those circumstances, how optimistic is he that sanctions will be effective in stopping the seemingly relentless drive by the Iranian regime towards having a nuclear weapon?
A whole range of time scales is being looked at, although I cannot say that anything is precisely clear in that respect. The situation is monitored very closely by the international community, ourselves included. If there is any sign of development of the sort the hon. Gentleman describes, we will undoubtedly ramp up our response accordingly.
Combat Stress (Retired Service Personnel)
5. What discussions he has had with the Secretary of State for Health on provision of facilities for retired service personnel diagnosed with combat stress. (14522)
The Ministry of Defence works closely with the Department of Health on issues relating to support for former service personnel with mental health needs, in particular through the Partnership Board, which brings together the MOD and the four UK Departments of Health.
I thank my hon. Friend for that answer. I understand that my hon. Friend the Member for South West Wiltshire (Dr Murrison) has produced a report on combat stress, and I wonder whether the Minister knows when it might be published. Both the Combat Stress charity and the Plymouth and district branch of Mind are interested, and they would like to read it sooner rather than later.
May I first pay tribute to Combat Stress—an excellent organisation—and its current chief executive Dave Hill, whom I understand is retiring shortly to Northumberland, where he lives? It does excellent work among ex-service personnel. As to the date of publication, there is an old parliamentary procedure: it will be published shortly.
It is an admirable aspiration for veterans to get priority in receiving NHS treatment. Will the Minister update us on how former veterans will be identified, and what progress he is making with the Department of Health on achieving that?
People who have served in the armed forces need to declare that they have done so, but under the previous Government much work was done to ensure that as people leave the armed forces, they are identified by GPs as former service personnel, and that is how we are progressing. The report that will be produced shortly by my hon. Friend the Member for South West Wiltshire (Dr Murrison) will deal with this issue. I pay tribute to him for his work, and thank him on behalf of the House and the Government.
Post-traumatic stress disorder is a serious condition, and the lack of diagnosis has led to significant compensation claims. Considering that in the UK health is generally devolved to the various Parliaments and Assemblies, what action is the Minister taking to ensure a consistent response and to address the issue of compensation payments?
PTSD is indeed a serious condition and should not in any way be treated lightly. It is certain that some people returning from combat do suffer from PTSD. The King’s Centre for Military Health Research, led by Professor Simon Wessely, has done a lot of work looking at the condition and what further we can do. I do not have an immediate answer to the question of how we can have settled compensation, except that under the armed forces compensation scheme each person with some form of health problem has a particular tariff, which might apply to PTSD too.
Sharing Military Equipment
On operations, we will always try to share equipment with our partners to best effect, for example with the pooling of helicopters in Afghanistan. More broadly—I imagine this might be what the hon. Lady has in mind—the strategic defence and security review is considering options for closer bilateral co-operation with key nations, but NATO will remain the cornerstone of our defence.
I thank the Secretary of State for that reply. There has been a great deal of speculation over the summer, and while there is no problem with joint procurement, the operational problems are potentially huge if we end up purchasing our Tornadoes on some sort of time-share or hire-purchase arrangement with another nation. Will he reassure the House that any decisions he makes will be driven by the operational requirements of the armed forces? Will he also bear it in mind that if one buys cheap, one often pays twice?
There are two issues. First, why would we want to get involved in further joint co-operation? Clearly, economy of scale needs to be taken into account in the difficult budgetary environment. Secondly, who would the key partners be? In looking at key partners, we certainly consider operational effectiveness and those countries that are likely to deploy and to spend on the research necessary to get the capability we would want. Clearly, for such partnerships, the two front-runners are the United States and France.
Does the Secretary of State accept that there may be circumstances in which it is more effective to share responsibilities rather than equipment? Will he tell the House whether, as a result of his meeting in Paris last week, there was any discussion of the possibility of sharing responsibility for nuclear deterrence?
We have repeatedly made it clear that we believe that having an independent nuclear deterrent is a vital part of the United Kingdom’s sovereign capability, and we intend to keep it that way. Where we can co-operate on technical matters with the French, without interfering with our sovereign capability in any way, it would make sense to do so.
On press reports about the sharing of aircraft carriers, may I say that, despite having 500 constituents who work in the upper Clyde shipyards, I have always seen the matter as a strategic, not primarily industrial, question? In that context, does the Secretary of State agree that having one aircraft carrier would be a strategic nonsense, and that not having any of our own would be a major breach of the nation’s sea-based defence posture, which goes back not just decades but centuries?
I am the first to defend, as I have regularly, the concept of sea-borne air-power projection, especially for a maritime nation such as the United Kingdom. However, the hon. Gentleman’s question is an eloquent and crafty try at tempting me into commenting on the current SDSR discussions, which I will be happy to share with the House at the appropriate time.
Defence Industrial Strategy (SMEs)
The Government are committed to enhancing the role of small and medium-sized enterprises, both as a vital part of the United Kingdom’s economy and as suppliers to the Ministry of Defence. In December we will publish a Green Paper on our defence industrial and technology policy, which will include proposals for better support for small and medium-sized enterprises. It will be followed by a White Paper. In parallel, we propose to work with industry to review the representation of small and medium-sized enterprises on the National Defence Industries Council to ensure that their voice is properly heard.
We are well aware that SMEs can suffer particular challenges as a result of excessive delays, frequent changes and complexity in the procurement process. We intend to take full account of those concerns during our development of the Green and White Papers. However, I should welcome an opportunity to discuss the issues with my hon. Friend in my office at an early date, and I look forward to seeing him with his constituents.
When the Government purchase from small and medium-sized companies, those companies’ ability to deliver must be taken into account in the procurement process. Given that the Minister has not yet signed the contract for the light protected patrol vehicle, can he assure us that in that instance, ability to deliver—and in a timely way—will be fully evaluated? The vehicle really is needed in Afghanistan without delay, and that must surely be the Minister’s priority.
I understand the right hon. Gentleman’s close personal and constituency interest in this procurement. I entirely agree with what he has said, and I can give him an absolute assurance that the ability to build the vehicle on time will be a key part of our decision. As he has pointed out, it is very important to the protection of our troops in Afghanistan.
Kabul International Conference
The importance of a co-ordinated civilian, political and military strategy was agreed by the Afghan Government and the international community at the Kabul conference. It includes a phased approach to the security-led transition of Afghan provinces from the control of the international security assistance force to that of the Afghan National Security Force, with the aim of ensuring that the Afghan forces are leading military operations across Afghanistan by the end of 2014. United Kingdom personnel are working closely with the ANSF to help it to build its capacity and capability and enable it to achieve that aim.
It is clear that one of the success stories of the Afghanistan situation is the growth and increasing competence of the Afghan security forces. Can my right hon. Friend confirm that we will hand over areas of control to Afghan forces well before 2015, and that it will be a process rather than a single event?
This is an important issue for the international community as well as the United Kingdom. It is important that, as we achieve transition in Afghanistan, we maintain the cohesion of the alliance and the international coalition as a whole. The process must therefore involve phasing out, not walking out. It is to the advantage of the entire coalition that the countries whose transition takes place in some of the easiest parts of Afghanistan find an alternative role to augment what the international coalition is doing until we are all ready to transfer fully to Afghan authority.
What I can tell the hon. Gentleman is that the total target set by the Afghan Government for the Afghan national security forces has been exceeded, that the number of recruits to the Afghan national army is more than two months ahead of schedule, and that the number of people entering the Afghan national police is increasing.
I can also tell the hon. Gentleman that there is a particularly positive trend in the Afghan national police as a result of a change of policy in Kabul. The pay for those entering the national police is now the same as the amount paid to the army, which has helped to increase recruitment. Moreover, literacy lessons are now provided for those joining the Afghan national police. In a country in which literacy levels are barely above 20%, that makes a major difference to recruitment to the security forces.
The Government take advice from a wide range of sources; we are not in Afghanistan on a unilateral basis, but as part of an international coalition. Decisions are taken jointly with those in the international community. We listen to a wide range of experience but are not always able to satisfy every opinion.
British Troops Under US Command (Helmand)
There are no British troops under US national command. The majority of British forces in Helmand, around 6,500, are assigned to the International Security Assistance Force mission, under the command of Commander Regional Command (South West), who is currently a US Marine Corps general. The remainder of UK Forces in Helmand fall under UK national command.
There are elements on the Opposition Benches and in some parts of the media who seem to suggest that coalition warfare never involves, or should not involve, one nation subordinating its troops to another. British troops have been under American command since at least 1917 and vice versa. The system has worked well. Will the Minister give the lie to the nonsense that such things actually impede our sovereignty rather than help it?
I readily agree with my hon. Friend that that must indeed be the case. I must also point out that it has been agreed that the UK will take command of Regional Command (South West) on a rotational basis in Afghanistan. More to the point, we should remember that, as part of the ISAF mission, a UK general currently commands Regional Command (South), which includes troops from the US, Canada, Australia and Romania among others. It works both ways and we are all the stronger together for it.
Strategic Defence and Security Review
We are in the final stages of the Strategic Defence and Security Review. The Department has concluded its detailed policy and capability studies and concluded the force testing process. No decisions have yet been taken by the National Security Council.
I wish my right hon. Friend well in dealing with the numerous problems left by the previous Government. Does he agree that, despite the need for greater co-operation with our allies on procurement and acquisition, we still need to maintain our own world-beating design and manufacturing base if we are to have true operational sovereignty?
It is vital for the UK clearly to identify our sovereign capability requirements and to pursue them rigorously. That is why we will publish a consultation document later in the year, asking for full consultation on the process to ensure that we have the industrial capability, skills base and regulatory framework to ensure that what my hon. Friend has outlined is made possible.
Since the last strategic defence review, more than 10,000 defence jobs have been lost in Scotland. Bases have been closed and regiments amalgamated, and there has been a mammoth defence underspend of £5.6 billion. Will the Secretary of State tell us how the Ministry of Defence will take these facts into account and ensure that consideration and fairness is given to defence spending in all the nations and regions of the UK?
The priority in the defence review is to ensure that the UK has at its disposal what it needs for its wider national security and that the industrial implications of that are taken into account. I intend to have discussions with the devolved Administrations over the coming weeks to be fully apprised of their concerns about the industrial implications of the SDSR. Ultimately, in a constrained financial environment the No. 1 procurement priority is to ensure that the armed forces have what they need when they need it at a reasonable cost to the taxpayer.
Given the highly specialised tasks involved in defending our airspace for the indefinite future, does the Secretary of State agree that it would not, in any way, compromise the integrity of the strategic defence and security review if he were to state today, in the week in which we celebrate the 70th anniversary of the climax of the battle of Britain, that he will give no time to the strategically illiterate suggestion that the Royal Air Force should be abolished and absorbed into the other two services?
May I say to the Secretary of State that the leaders of industry, as well as the trade unions, are enormously worried that adequate evaluation of the industrial ramifications is not taking place ahead of the main decisions of the SDSR? He cannot do this in sequence without taking huge risks. Will he ensure that the industrial consequences of the review are fully evaluated—or is the timetable being dictated by the Treasury?
The biggest risk that we face in our security is that we have a muddled and incoherent defence programme left over from the previous Government. Before the Labour party lectures the coalition Government about the financial implications that we face, it might want to remember that with a defence budget of some £35 billion a year, it has left behind an overspend in the equipment programme of £38 billion by 2020, with which we are going to have to deal.
The coalition Government are absolutely committed to funding equipment required for UK troops on operations. In June, the Prime Minister announced uplifts totalling £256 million for equipment for Afghanistan and, on top of that, the MOD and the Treasury continue to approve new urgent operational requirements—more than £95 million since June. I am also delighted to be able to tell the House that the latest armoured all-terrain vehicle, Warthog, arrived in Afghanistan on Friday.
I thank the Minister for his response. Given that improvised explosives devices are now the favourite weapon of the Taliban in Helmand province and are causing more of our troops to be killed and injured, will the Secretary of State tell us what he is doing to ensure that our brave soldiers have the necessary equipment to counter this deadly threat?
My hon. Friend is absolutely right to emphasise this very serious threat to our forces. We recognise fully the rapidly evolving threat of IEDs and take all possible measures to combat them. While visiting our troops in Afghanistan on 10 June, the Prime Minister announced an additional £67 million for the counter-IED campaign; this will include specialist dogs, bespoke counter-IED Mastiff vehicles, remote-controlled vehicles, and equipment to neutralise and analyse IEDs. In addition, the MOD and the Treasury continue to approve new equipment to counter the impact of IEDs through the urgent operational requirements process. Since June, an additional £50 million of new counter-IED UORs have been approved, including sophisticated detection equipment, new personal protective clothing and the new counter-IED collective training capability—it is a pretty good story.
May I ask the Minister to try to answer this question, rather than to rant in the way that the Secretary of State did in response to my previous question? Can the Minister tell us why the Government have delayed the deployment of the new Chinook helicopters ordered last December?
I understand why the right hon. Gentleman wants to make mischief on this particular issue, but he is confusing two separate issues. Commanders on the ground will always welcome enhanced helicopter capability—of course they will—and we will do what we can to deliver it. However, military commanders have confirmed that they have the helicopters they need to carry out the tasks that they have been given. Since November 2006, helicopter availability has increased considerably— by 140%—and more Chinook mark 3s will be available for deployment in the months ahead. These kinds of criticisms from those on the Labour Benches would be better made if they had not left us with this wretched £38 billion overspend.
The House will have noticed a certain role reversal just then. On helicopters in Afghanistan, may I urge my hon. Friend to look hard at the practice of the Americans, nearly half of whose combat helicopters are piloted by reservists? Such an approach would make a huge saving to the taxpayer and guarantee a large number of flying hours on the part of those operating them.
Mental Health Care
The Ministry of Defence has a wide range of measures in place to monitor and manage the mental health of serving personnel, and has been exploring with the NHS to ensure ex-service personnel get the care they require. The current strategic defence and security review will include consideration of possible enhancements to medical care, including improved mental health care. As I said in answer to an earlier question, the Prime Minister has asked my hon. Friend the Member for South West Wiltshire (Dr Murrison) to conduct an independent study of the provision of support and services to the armed forces and ex-service personnel and to make recommendations for improvement, particularly in the area of mental health.
I thank the Minister for that response. Given that he implied on the BBC’s “File on 4” in June that he does not believe people should be screened for mental health problems, will he give an assurance that the Government are still committed to a compulsory mental health check for people on discharge from the services?
If I might say so, the hon. Gentleman misquotes what I said on “File on 4”. We take mental health very seriously; for instance, as I said in answer to an earlier question, we are looking into post-traumatic stress disorder and, indeed, I will visit the King’s Centre for Military Health Research next month to discuss that matter with Professor Wessely. It is very important that we take mental health seriously, and we are looking at how we can identify mental health problems, but I am not a clinician—I am not aware whether the hon. Gentleman is—so I cannot do other than take the advice of mental health professionals who say it is very difficult to screen people correctly and accurately for mental health problems until they present themselves with those problems.
May I ask the Minister to continue to recognise the wider impact of combat stress, particularly on Army families? As my hon. Friend the Member for North Wiltshire (Mr Gray) said, and as we discussed when I went to the launch of a new charity in Tidworth, combat stress has a huge impact on the wives, children and husbands of serving armed forces members. Please will the Minister also confirm that other measures, such as our educational premium for Army children and scholarships for the children of the fallen, will survive the spending review, as they are critical to bolstering the military covenant?
My hon. Friend has put her finger on exactly the right spot: we are looking at the military covenant and how we may enhance the relationship between the Government and people of this country and the armed forces and the work they do. We are looking very closely at some of the issues my hon. Friend mentioned. As she will know, one or two of them are covered in the coalition agreement for government document and I think it highly unlikely that any Minister would dare renege on that programme for Government.
First, may I say that I agree totally with the Minister’s opposition to screening for mental health? He is right on that. Contrary to the rhetoric before the last general election, as a member of the last Labour Government I was pleased to be part of an Administration who delivered the seven mental health pilots and the partnership agreement between Combat Stress and the Ministry of Defence and who funded the research at the King’s Centre for Military Health Research. Can the Minister give an assurance that those mental health pilots will be rolled out and that he will fight hard to ensure that not only are the lessons learned but the money is there to support them?
I am glad that we are agreeing about so much today, but I am afraid that I cannot prejudge the SDSR in any way, shape or form, as that is more than my job is worth. However, I will say this: I think it highly unlikely that we will reduce the mental health services provided for our serving and ex-service personnel because, frankly, we have made commitments on that and we cannot possibly renege on them.
Cyber-security is an important element of the SDSR and has already had considerable consideration. Decisions on enhancing our capabilities will form part of the review, which we will announce to the House later this autumn.
I entirely agree with the sentiments at the end of my hon. Friend’s question. Indeed, this is a cross-governmental problem, and it is one of the matters in which there is a huge advantage from dealing with it under the National Security Council because that means we are able to consider it in a cross-governmental manner. It would be quite wrong if the enhancements to cyber-security that protected all of government were to fall only on parts of it. It therefore makes sense to look at the concept of how we approach it both on a budgetary and a functional basis.
If we are to develop an effective cyber-security policy and to think forward, we must also invest in research and development. Will the Minister give a commitment to ensuring that as part of the defence and security review there will be sufficient capacity for research and development, particularly on cyber-security?
Investing in better cyber-security will not be an “option” for the United Kingdom. What is being considered under the National Security Council as part of the SDSR is how that occurs. We will face increasing threats in cyberspace in the years ahead—the question is how we identify the weakest areas, which need to be looked at first, and how we develop the technologies so that, as the other technologies that might affect us continue to evolve, we are best protected. That will require us to look at research across the board.
Defence Export Sales (Taiwan)
Defence Ministers have had no engagement with the Secretary of State for Business, Innovation and Skills on support for defence export sales to Taiwan.
I thank the Minister for that answer. Given that a fundamental plank of our procurement policy is exportability and in light of the fact that the Secretary of State’s right hon. Friend the Secretary of State for Business, Innovation and Skills historically has a lukewarm attitude to our aerospace industry, will the Minister make it absolutely clear that there is no official or unofficial policy on the part of this Government to oppose or block arms sales to Taiwan—a friend in that part of the world and somewhere with which British industry can do business?
First, may I confirm to my hon. Friend and to the House that the Government attach the highest priority to defence exports? The procurement decisions that the Under-Secretary, my hon. Friend the Member for Mid Worcestershire (Peter Luff), will be making as Minister for procurement will be based on considering exportability as a key factor. As for Taiwan, I can confirm to my hon. Friend the Member for Wyre and Preston North (Mr Wallace) that there is, as I understand it, no reason why defence exports should not be made to Taiwan. He will understand the sensitivities involved, and that although the licensing of defence exports is primarily a matter for the Department for Business, Innovation and Skills, that Department nevertheless consults both the Ministry of Defence and the Foreign and Commonwealth Office, and that that is the right way to proceed. I take note of my hon. Friend’s invitation to explore another market where we might make some progress.
My departmental responsibilities are to ensure that our country is properly defended now and in the future, that our service personnel have the right equipment and training to allow them to succeed in their military tasks and that we honour the military covenant.
On Saturday I visited Euravia, a company that repairs and overhauls aircraft engines, which is located in Kelbrook in my constituency, for the presentation of the Queen’s award for enterprise in the international trade category. Does the Secretary of State agree that high-tech manufacturing jobs play a vital role in our economy?
It is difficult not to agree with that very important statement. I agree entirely with my hon. Friend. Of course, defence manufacturing jobs play a particularly important part in the high-tech end of manufacturing. We will bring forward a defence industrial and technology policy Green Paper later this year, which I hope will underline the importance of that issue.
In May, the Secretary of State said that
“there is no lack of clarity in the Government’s policy: we believe in a continuous, at-sea, minimum, credible, nuclear deterrent, based on the Trident missile system. I hope that that is explicit enough”.—[Official Report, 26 May 2010; Vol. 510, c. 272.]
Will the Secretary of State repeat that?
My hon. Friend is absolutely correct that Pakistan is a very important security partner if the gains that we have made in Afghanistan are to be maintained in the longer term. We must help with the technical capability of the Pakistani security forces in policing and with their wider military capabilities and we must also encourage the Pakistani Government to maintain the necessary political drive behind the process. In particular, it is vital that the Pakistani Government recognise that it is their duty to deal with the Afghan Taliban and not just with the Pakistan Taliban if we are to get security in the longer term.
T4. The Secretary of State will be aware of the recent reports on the failure of UN forces in the Democratic Republic of the Congo to prevent the horrific scale of rapes and violent attacks against women. Will he confirm what priority he and this Government will be taking in promoting UN security resolution 1325 and in tackling violence against women in conflict areas? (14545)
We take this responsibility extremely seriously. In conjunction with my right hon. Friends the Foreign Secretary and the International Development Secretary we will continue to push to ensure that the rights of women in those areas are fully protected because what we have seen in recent years, particularly the use of rape as a weapon of war, is utterly disgusting to any civilised part of the world.
T3. The bodies of five people working for the Afghan woman MP Fauzia Gailani were recently found after having been abducted by the Taliban. Their hands had been tied and they had been shot in the head. With the elections this Saturday, many candidates and their staff, especially women, fear for their safety. What are the Government doing to ensure that the integrity of the elections is not compromised by the security threat posed by the Taliban? (14544)
I entirely share my hon. Friend’s abhorrence of what has happened and I am sure that everyone in the House would condemn those appalling murders outright. We are working with the Government of Afghanistan and with international partners to ensure that female candidates and voters have an increased level of support, but the Afghan national army and national police have the lead throughout Afghanistan in providing security for the elections as they did successfully during the presidential elections last year. On the ground, ISAF forces, including UK forces in Helmand, will provide support such as ISTAR—intelligence, surveillance, target acquisition and reconnaissance—to assist the Afghans, and partnered UK-Afghan combined forces will stand ready to provide any further assistance that may be required.
Tomorrow in St John the Baptist church in Cudworth in my constituency there will be a memorial service and dedication to the memory of Captain Martin Driver of 1st Battalion the Royal Anglian Regiment, who died earlier this year. Will the Government join me in paying tribute to that truly outstanding individual and in sending condolences to his family and friends?
I have the greatest pleasure in doing so. It is always worth our remembering that we are extremely fortunate in this democratic country to have people who volunteer to put life and limb at risk for the security of their fellow citizens. We should remember the heroic sacrifices that they make at every opportunity. When there are those who, as we have seen in recent times, protest against what our armed forces do, the correct answer is not to restrict what they get to say but for more of us to get on to the streets in every possible way, including at the sort of ceremony that the hon. Gentleman mentions, to show our support for our armed forces.
T5. Last Thursday, the House debated for the first time a substantive motion on the war in Afghanistan. Fifty-one Members spoke, many more attended and the Government’s policy was supported overwhelmingly. Will the Secretary of State confirm that, in future, progress on the war will be reported to the House and that, in particular, any change in policy will be announced in the House first rather than to the media? (14546)
May I begin by reiterating what I said in that debate, which is that for the House to have more control over its time is a positive step and that for it to have chosen Afghanistan as the subject for one of its first debates was an extremely positive development? We are committed to keeping Members of the House and of the other place fully informed about what is happening in operations. There is a further briefing by General Messenger this evening in the House. On the very first occasion that I was at this Dispatch Box as the Secretary of State I said that it was our intention to keep the House updated quarterly on Afghanistan: that will be undertaken by the Prime Minister, the Foreign Secretary and me.
Will the Secretary of State confirm that his Department is having discussions with other Departments, including the Treasury, about the impact that the SDSR proposals will have, linked to the comprehensive spending review, on the skills base in places such as Plymouth? We in Plymouth, in the dockyard and the naval base, depend on those jobs; we are 309th out of 324 authorities in terms of being dependent on the public sector, so any loss of jobs or in the skills base will impact seriously on our local economy and on the Treasury.
The hon. Lady raises an important question. In the deliberations we have had in the House on the defence industry and defence capabilities, I am not sure that the skills base has always been given the priority it ought to have. That is why as part of the consultation that I outlined earlier we will be specifically looking at the skills base, because if we are to look at the contribution to the defence industry, for example, of our small and medium-sized enterprises, the skills base, as well as the regulatory and fiscal frameworks, is key. Of course, as the hon. Lady knows, I cannot pre-empt the SDSR but these things are a very important part of the Government’s wider defence industrial strategy, which we shall outline and welcome consultation on, in the months ahead.
T6. The circumstances of the death of former Ministry of Defence employee, Dr David Kelly, continue to leave many people feeling profoundly uneasy. Are those concerns shared within the Ministry of Defence and, if so, will the Minister be pushing other Departments to come up with a full, open and transparent investigation as soon as possible? (14547)
This matter is predominantly the responsibility of the Attorney-General. I am pleased that he has indicated that if any new evidence is put before him that would flesh out the concerns that have been expressed about the circumstances of Dr David Kelly’s death, he would be willing to instruct that a fresh inquest should take place.
Many former British military personnel are working in places such as Afghanistan and Iraq on UK and US Government security contracts. What steps are the Ministry of Defence and the Secretary of State taking to ensure that when former British military personnel lay their lives on the line, like their currently serving colleagues, the terms, conditions and welfare of those very brave men and women are looked into and they are looked after and taken care of?
The hon. Gentleman asks a very interesting question. Of course, people who go out to Afghanistan for commercial organisations are usually paid a great deal more than our service personnel, which is often why they have left the Army, for instance, to work for security companies. I pay tribute to their bravery in Iraq, now and in the past, and in Afghanistan, but I am not sure it is the responsibility of the Ministry of Defence to compensate them should they be injured while on a commercial contract with a commercial company.
I am delighted to be able to tell my hon. Friend that her constituency is playing a major part in ensuring that those contracts are delivering, as it were, more for less, with much greater capability compared to previous contracting arrangements, at lower cost. I congratulate her constituents in Falmouth for the part they are playing.
In adopting the so-called adaptive posture the National Security Council specifically said that because we are unable to predict the exact nature of future conflict it was essential to maintain generic and flexible defence capabilities that can adapt to the sort of threats that may emerge in the future. That of course came on top of the Foreign Secretary’s clearly stated aims that in a genuinely globalised economy where our economic interests are so widespread the United Kingdom cannot afford strategic shrinkage.
T8. The Minister has the unenviable task of running a Defence Department in a difficult financial climate. Does he agree that this makes it all the more vital that we get maximum value from our defence budget? Could we not achieve that if we bought more kit generically off the shelf, rather than through a protectionist defence industrial strategy? (14549)
Obviously, the prime duty of Ministers in the Ministry of Defence is to ensure that our troops have battle-winning military superiority, but I agree with my hon. Friend that that can often be done by buying off the shelf. Strangely, in a fast-moving technological world, that can often mean superior products with lower operational risk, which brings double benefits. As I have emphasised, there are many areas in which sovereign capability is absolutely vital, and cannot be prejudiced—for example, in cryptography.
The Secretary of State rightly mentioned the importance of skills to our armed personnel. Will he take the opportunity to reaffirm the previous Government’s commitment to the building of a new defence training college at St Athan in south Wales?
T9. I declare an interest as a serving Territorial Army officer. In considering the defence review, will my right hon. Friend bear in mind the important role of reservists in recent military conflict, and the potentially more important role that they might play in future conflicts? (14550)
My hon. Friend is absolutely right. [Hon. Members: “Gallant.”] Indeed; my hon. and gallant Friend, if hon. Members like, because he certainly is. I pay tribute to him and to my hon. Friend the Member for Milton Keynes North (Mark Lancaster), as they have both served in operational theatres, gaining invaluable experience, which they bring to the House to provide knowledge for those debates from which it may conceivably be lacking. I pay tribute to my hon. Friend the Member for New Forest West (Mr Swayne), and to the reservists. He is absolutely right: historically, for instance in both the first and second world wars, it was the Territorial Army, the yeomanry and so on who made up the bulk of our forces who defeated our enemies.
As well as being a world leader in weather forecasting, the Met Office is playing an increasingly important role in accurately monitoring climate change. What discussions has the Secretary of State had regarding its privatisation?
I have not been involved in any specific discussions so far, but we will certainly look at all the assets owned by the Ministry of Defence to determine whether they offer value for money or whether, in the current fiscal climate, we need to be able to realise the value of some of our assets.
T10. Will my right hon. Friend join me in congratulating cadet forces in the year in which they celebrate 150 years of activity in the UK? What assurances can he offer the combined cadet forces so that they can play their part in the big society following the strategic defence review? (14551)
Well, they keep digging. My hon. Friend is absolutely right about the role of the cadets, who play an important part as a bridge between society as a whole and the armed forces. They are greatly to be encouraged, and we are looking at ways in which we can make them more effective as part of the SDSR.
When the Secretary of State was in opposition, he repeatedly and convincingly made the case that delays to projects ended up costing the UK taxpayer more and put at risk our prized skills base. Will he rule out any such delay in the Trident successor programme or anything else in the strategic defence review?
I would love to be able to give just such an assurance, but as I pointed out earlier, with a defence budget of £35 billion or so a year, we inherited an overspent equipment programme of £38 billion. The Opposition may not regard that as a priority, but dealing with it is a priority for the coalition Government if we are to put our armed forces and our defence industry on a sound, stable and predictable footing for the future.
Proposed Public Expenditure Cuts
I am grateful for the opportunity to update the House on the progress of the spending review, and to remind people of the context in which we make these difficult decisions.
The previous Government left Britain with the largest budget deficit of any major economy and no credible plan to deal with it. That was a major cause of instability and uncertainty that threatened any prospect of economic recovery. It was reflected in the substantially higher market interest rates that British families and businesses were being charged compared with those for families and businesses in countries that were regarded as less exposed to sovereign credit risk. The new Government had to take urgent steps to restore stability and allay fears about our country’s ability to pay its way in the world. In the words of the previous Labour Prime Minister,
“if we fail to offer a convincing path out of debt, that...will itself plunge us into stagnation”.
Those views were echoed in the comments this weekend from the International Monetary Fund, which said that
“fiscal consolidation remains essential for strong, sustained growth over the medium run”.
That is why in the Budget I announced decisive steps to get the deficit under control. I believe that that Budget has restored stability to the British economy and provided a sound basis for a sustainable recovery. It has helped keep down the market interest rates that Britain pays on its debts, which are today more than half a percentage point lower than at the general election. In other countries, such as Spain, Portugal or Ireland, these same rates have stayed broadly flat or gone up since then.
Because of the measures that we are taking, independent forecasters are increasingly confident about the British economy. Last week the OECD predicted that the UK would see the strongest growth in the G7 this quarter and the second strongest growth next quarter. I can also tell the House that today the EU predicted that the UK will see the strongest recovery in the second half of this year of any major European economy. These, of course, are just forecasts and all this hard-won stability would be put at risk if we did not now implement the components of our Budget plan.
Let me remind the House of the measures that we took at the emergency Budget and the steps that we now have to take. We are set to tighten the public finances by a total of £113 billion by 2014-15. Of this, £29 billion will come from tax measures, including the increase in VAT, higher capital gains tax and a new permanent levy on banks. A further £11 billion will come from the welfare reforms announced at the Budget. Another £10 billion will come as a consequence of paying lower interest charges on the national debt as a result of our plan—£10 billion that those who opposed the Budget plan would have to find to pay the holders of Government debt.
That leaves £61 billion that will come from reductions to departmental expenditure plans. It is worth reminding the House that £44 billion of that £61 billion was assumed in the figures left to us by the previous Government. In other words, for all the synthetic noise and fury that we hear, £3 of every £4 that we are having to cut were cuts that the Opposition were planning to make. Unfortunately, not a single one of those pounds was allocated to a specific programme.
Our job now is to allocate those departmental budgets. That is the purpose of the spending review that is under way, and I will announce the full results to the House of Commons on 20 October. The review is informed by the largest public consultation exercise ever undertaken on public expenditure. More than 100,000 substantive ideas have been received from members of the public. Teams at the Treasury have been sifting through these ideas over the past six weeks and some are already being implemented.
We have also created a mechanism for collective discussion of spending issues across the Cabinet, which is something of an innovation, so the Prime Minister—[Interruption.] Well, there was a Cabinet Committee on life chances, on talent and on democratic renewal under the previous Government, but no permanent committee on public expenditure. The Public Expenditure Committee of the Cabinet has already met twice this month and will meet again this week.
Of course, some decisions that shape the spending review have already been taken. We will protect the budget of the NHS with real increases, we will honour the commitments on international aid that we have made to the poorest in the world, and we will protect capital investment in our economic future. We have not reduced capital spending in future years beyond the plans that we inherited, and as we take further decisions, we will strive to ensure that those support economic growth, promote reform and local control, and are fair—fair between different sections of society and between different generations.
Let me say something about welfare spending—[Interruption.]
I will heed your injunction, Mr Speaker, but the question was a very general one about an update on the public expenditure review.
I shall say something about welfare, if the Speaker will allow me. The welfare bill has risen by 45% in the past 10 years and almost £1 in £3 that the Government spend goes towards welfare. The current system is not protecting those who genuinely cannot work, nor is it helping those desperately looking for work to find a new job quickly. Close to 5 million people are on out-of-work benefits, more than half of whom have spent at least half of the past 10 years in this situation. Rather than rewarding work and supporting the vulnerable, we are wasting the lives of millions of people. That is why my right hon. Friend the Secretary of State for Work and Pensions is working with me and other Cabinet colleagues to see what we can do fundamentally to reform the welfare system so that it rewards work and supports aspiration, as well as saving the taxpayer on what someone once called the bills for social failure. When we have decisions to announce, we will bring them to the House and, of course, we will want to keep the House informed in other ways.
I have already given the Treasury Committee an unprecedented power to veto my preferred candidate to chair the independent Office for Budget Responsibility, Mr. Robert Chote, and I can tell the House today that I have asked my hon. Friends the Members for Gainsborough (Mr Leigh) and for Southport (Dr Pugh) to draw on their considerable expertise on the Public Accounts Committee in the last Parliament to advise the Government on how to improve the financial management systems that we have inherited, and in turn improve accountability to the House.
We have many difficult choices to make, but one thing is clear: one party created this mess; two parties are working hard to clear it up.
If the Chancellor wished to give a full statement to the House, he could have done so last week rather than giving a cursory one to the BBC and having to be dragged here today. I acknowledge that 75% of the cuts are Labour’s cuts, but we have not as yet had the spending review. Clearly, none of the cuts will affect the quality of life of Members of Parliament, but they will certainly affect the disadvantaged in society. We know that there will be higher food costs in the coming year, and other costs will rise. I have no time for the welfare cheats, but to try to blame this country’s financial ills on that small category of the population is unethical. It would be more ethical to act with equal determination towards those who cheat on tax, whether it be income tax, value added tax or corporation tax. There is now a whole industry of financial experts advising people on tax avoidance.
The turf war between the Chancellor’s office and that of the Secretary of State for Work and Pensions is somewhat immature. Children living below the poverty line and people on low incomes, the disadvantaged in society, do not want these fun and games, they want fairness.
The position on welfare is exactly as I set out in my Budget speech at this Dispatch Box when I said that if we could find further savings on welfare, we would be able to reduce the pressure on other Departments. That was what we were planning to do over the coming months as part of the spending review, and that is exactly what I said in the television interview to which my hon. Friend refers.
Secondly, it would be impossible to conduct a spending review without looking at the welfare bill. Whether one is looking for £61 billion of savings or £44 billion, welfare spending accounts for a third of the entire Government budget, so one has to look at the welfare budget. That is what we are doing, but we are looking to do it in a way that reforms welfare, to help those millions of people who have been trapped for a decade or more on out-of-work benefits into work, to help those with aspirations to improve their income, to make sure that work is rewarded by the benefit system, and to do that while we are protecting those who cannot work and protecting the most vulnerable in our society. I would argue that the failure on welfare reform over the last decade was one of the greatest failures of the previous Government.
Despite the lurid headlines in some newspapers, the relationship and the co-operation between the Treasury and the DWP is strong. There is a perfectly natural—[Interruption.]
It is an improvement on the situation under the previous Government, where there was absolutely no contact between the Secretary of State for Work and Pensions and the Chancellor. The two Departments are working very well. Obviously the Treasury is interested in financial management and control: that is a proper part of our function. My right hon. Friend has inspirational plans that he has worked on to reform welfare and get people working, and the two of us are working together with colleagues in the Cabinet to make that happen.
Let me finally say something about the tax gap and people who do not pay their taxes. Later this week, figures will be produced—independent figures, not produced by me—which will show the latest situation on the tax gap that we have inherited: in other words, the gap between what should be collected in tax and what is collected in tax at the moment. Judging by previous figures I have seen, I think that the House will be pretty staggered by this number. [Interruption.] Labour Members seem to forget that their people were in power for 13 years. We have inherited this situation, and we will be taking steps to reduce tax avoidance, including tax avoidance by the richest people in our society, so that everyone makes a contribution.
The shadow Chancellor and the shadow Chief Secretary are not in Westminster today, Mr Speaker, and you will be aware that I had asked a similar urgent question of the Secretary of State for Work and Pensions, so it is good that the Chancellor is replying, although very unfortunate that the Secretary of State for Work and Pensions has chosen not to come to respond.
On Thursday, the Chancellor told the BBC that the Government were cutting an additional £4 billion from out-of-work benefits. The BBC website says:
“The government is planning to reduce the annual welfare bill by a further £4bn, Chancellor George Osborne has told the BBC.”
Today, he has refused to tell the House what he told the BBC. Did the BBC correspondents just get it wrong? Did they mishear what he said? Will he now come clean and tell us what he has in fact got agreed and planned for the additional cuts that he wants to make to the welfare bills for the spending review? Will he tell us whether the Secretary of State for Work and Pensions has agreed to £4 billion of additional cuts? Will he admit that the timing of this interview had nothing to do with reaching agreement on the spending review with the Work and Pensions Secretary and everything to do with getting Andy Coulson off the BBC headlines for the day?
In June, the Chancellor wrote to the Secretary of State:
“I am pleased that you, the prime minister, and I have agreed to press ahead with reforms to the ESA as part of the spending review that deliver net savings of at least £2.5bn by 2014/15.”
His Chief Secretary said yesterday that this was not agreed; well, is it agreed or isn’t it?
The Chancellor is not being straight with the House—[Interruption.]
Order. The hon. Member for Wellingborough (Mr Bone) is normally a pretty equable fellow; he is getting a little over-excited. I must ask the right hon. Lady to withdraw that term. No Minister would be other than straight with the House. She will find another word, I feel sure.
I certainly accept your point, Mr Speaker. I am sure that no Minister would want not to be straight with the House, and I am sure that the Chancellor will be. I withdraw any suggestion that he was not, because I am sure that he will be.
Will the Chancellor confirm, therefore, that saving an additional £4 billion from getting people into work will require new jobs for 800,000 people, at a time when his own Office for Budget Responsibility says that far from creating an extra 800,000 jobs, his Budget will cut 100,000 jobs from the economy in each and every year?
The Chancellor has also said that he plans to target the workshy and those who are fit for work. Will he confirm, however, that savings from getting those who are fit for work off sickness benefits are already built into the Treasury figures, and that cutting an extra £2.5 billion from employment support allowance would hit only those who have been through the new, tougher test and who even his Ministers agree are genuinely too sick or too disabled to work? Is it not the truth that he is planning to cut the level of support for some of the most vulnerable people in society? Will he confirm that someone who is on employment support allowance, and has been through the test, is already facing a £285 cut in the value of their ESA and an average £650 cut in their housing benefit as a result of his plans?
The Chancellor claims to support jobs and to be progressive, but he is doing the opposite. The truth is that his plans hit the poorest harder than the rich, women harder than men and children and pensioners worst of all. Now he has shown that he is targeting those who are most sick and disabled in society. Is it not the truth that he has decided to hit those who he knows will find it harder to fight back? This is not progressive; it is a nasty attack, and he should withdraw it now.
First of all, I note that there has still not been a word of apology about leaving this country with the worst public finances in its history. Nor, by the way, has there been an apology for the complete failure, by the right hon. Lady and her predecessors as Secretary of State, to reform the welfare system, despite all those promises.
In the Budget speech, I made it very clear that we were looking for additional savings from welfare. If the Labour party wants to propose some ideas to make up its £44 billion part of the savings package, perhaps it will contribute to this debate. Sadly, at the moment, we have had absolutely no ideas from it. It opposed the VAT rise; the pay freeze; the in-year savings; the housing benefit reforms; the tax credit reforms; the switch to the consumer prices index for benefits; and the abolition of child trust funds. It opposed all those things. They are £33 billion worth of cuts.
Where are the Labour party’s numbers? Where are its ideas? If it wants to engage with us in a real debate about how we reform welfare, protect the most vulnerable and help people who can work into work, we will be all ears. But at the moment there is a deafening silence from the Labour party.
The right hon. Lady talks about my right hon. Friend the Secretary of State for Work and Pensions not being here. He happens to be at a conference in Europe about international labour market reforms. The shadow Chancellor is not here, and nor is a single one of the Labour party leadership contenders. That is because instead of talking about the national interest, they are courting the votes of vested interests.
I draw the hon. Gentleman’s attention to the central forecasts produced by the Office for Budget Responsibility, the Bank of England, the OECD and the European Commission. They forecast steady and sustainable growth over the coming period. I take the view—a view shared by quite a number of people who observe the British economy—that if we had not put in place, in the Budget, a credible plan to reduce the budget deficit, this country would be in an economic mess.
The Chancellor helpfully published, decile by decile, the distributional effects of a number of his measures in the Budget. But the exclusion from his analysis of a number of other measures has led to a lot of controversy about whether his Budget is progressive or regressive. Will he now commit to publishing in the comprehensive spending review a full analysis of all the measures in aggregate, decile by decile, so that we can see whether their effects will be progressive or regressive?
First, let me say to my hon. Friend that the previous Government never published any distributional impacts as part of their Budgets. We have begun that work in the Red Book. We said that we wanted to receive comments about how we could improve the work. There is a real challenge, of which my hon. Friend is well aware, given all his experience, to do with the modelling of some of the impacts. The Treasury model, which, of course, we inherited—we did not create a new Treasury model—has made it very difficult to model certain expenditure changes.
We will continue to try to provide Parliament with the best information that we can, but I do not want to promise to deliver something that I cannot actually deliver.
I welcome the Chancellor’s repeated commitment to supporting people back into work. Can he confirm that benefits savings that may be achieved will be prioritised for DWP back-to-work programmes and, in particular, that the funding needed to meet the objectives of dynamic benefits will be provided to the Secretary of State for Work and Pensions as a first call on any savings on the benefits bill?
We have a dual task. We have a welfare bill that represents a third of all Government spending; and, given that at least half the Labour party—I think—still believes in trying to reduce the deficit, we have to find savings from the welfare bill. At the same time, we are seeking a fundamental reform of welfare to encourage people into work. Bringing those two objectives together is precisely what I am working on with the Secretary of State for Work and Pensions.
I am sure that the whole House will be pleased to hear the comment about going after those who deliberately avoid paying tax—it would be interesting to know when we will hear how that will be achieved—but more importantly, the Chancellor mentioned the phrase “protection of the vulnerable” several times in his statement today. I would be interested to know how that is going to be achieved, and when he will explain to the House how the vulnerable in our society—including the very poor—will get the protection that they deserve.
Let me give my hon. Friend a specific example: disability living allowance. We were faced with a number of options, but we decided that we wanted to keep it as a universal benefit, and instead look at the criteria that allowed people to get on it and ensure that they were entitled to stay on it. We are particularly conscious of benefits on which people in vulnerable positions are dependent, but with each benefit, we are proceeding with caution, seeking as wide a consensus as possible. However, my hon. Friend has my commitment that we are doing everything that we can to protect the vulnerable during this process. I would also make a general observation: the thing that really hurts the most vulnerable in our society is when a country loses control of its public finances.
Is the Chancellor really aware that as a result of these successive sadistic statements about cuts, war pensioners are ringing Members of Parliament and people who are severely disabled are frightened to death of losing their benefits? Is it not time that he had the gall to tell the truth: that this is all about using the deficit, which we had planned for, as an opportunity to carry out the Tory ideology of cutting the power of the state?
As the hon. Gentleman is now a Blairite, I thought that I would read out what his master said recently, which is relevant to what he has just said:
“I look at those policy papers now—the work on…the use of social security budgets…and I do think how different it would have been if we had done it. If we had…not wandered into a cul-de-sac of mixed messages and indecision… But there it is. It didn’t happen, and that’s it.”
We are trying to do the things that he once promised in his election manifesto.
In his article yesterday, David Smith, the economics editor of The Sunday Times, reminded us that the structural deficit had averaged 2.7% since 2003 and that we inherited planned tax rises and expenditure cuts of £73 million. Given the positive reaction of the markets to his Budget of a few months ago, what does the Chancellor think would happen if he did not persist with these tough but very necessary measures?
The answer is simple: there would be a catastrophic loss of confidence in Britain and an increase in market interest rates, which would hit every business and family. That would lead to an increase in unemployment, which is why we are not prepared to take the prescription offered by at least some of the people standing for the leadership of the Labour party.
The Chancellor ought to read the International Monetary Fund report on that subject. The economy is slowing, business confidence and business investment are flat, and net trade is going through the floor rather than through the roof. In those circumstances, is it not folly of the first order to cut public expenditure? Is not the Chancellor threatening a double-dip recession—the very thing we do not need?
Since the election, the interest rates on gilts at two and three years—the kind of time periods that people borrow for their mortgages—have halved. Does the Chancellor think that that has anything to do with the new Government getting to grips with the nation’s finances?
I think it does have something to do with the new Government setting out their plan, and it is easy to see why. We can compare what has happened to market interest rates for the United Kingdom with market interest rates for countries such as Spain, Portugal, Ireland and Greece. At the time of the general election, it was well understood that people in the world were concerned about the record UK budget deficit, the largest in the G20. As a result of the steps that we have taken in the Budget—which we now need to see through in the spending review—we have restored stability to the economy and helped to bring down market interest rates. That would not have happened if Labour had stayed in office.
How does the Chancellor think that slashing jobs at tax offices up and down the country will help with the collection of the £120 billion that is lost every year through tax evasion and tax avoidance in this country? What other measures does he have in mind for collecting that money, which could be saved and used to prevent these enormous cuts, which are going to hit the poorest the hardest?
As I was saying in reply to my hon. Friend the Member for Colchester (Bob Russell), we are keen to ensure that the tax gap is reduced and that Her Majesty’s Revenue and Customs is an organisation that is able to collect that tax that is due to us all. Unfortunately, as has been well documented in recent days, we have inherited a whole string of problems, including 6 million people being given the wrong tax information under the previous Government. We are putting in place the measures that I believe will improve HMRC and enable it to focus on reducing that tax gap.
Over the past 13 years, Labour allowed the banking system to become completely unregulated and presided over the biggest banking crisis of our lifetime. At the time of the general election, I remember arguing in the television debates for a bank levy to be introduced in this country even if other countries did not introduce it. The then Chancellor opposed me on that. We have now introduced the levy, and I see that it has been universally accepted by the people who opposed it just a few months ago. The receipts from the levy massively outweigh any gain that comes from the lower corporation tax, and that was taken into account when I set the level of the bank levy at £2.5 billion.
Why, if the previous Government were so successful in achieving economic success, did the welfare bill rise by 47%? Is it not the case that the former Chancellor of the Exchequer and Prime Minister threw prudence to the winds? Is not getting the public finances in order the best way to stop hitting the sick and the vulnerable? Should not all Members of the House work together to champion the sick and the poor, rather than scaremongering when we do not have the details?
My right hon. Friend is absolutely right. People will remember that, in the mid-1990s, a central part of the then new Labour party’s claim to office was that it was going to reduce the bills for social failure. No doubt that was in all the election addresses that it delivered at the time. It did not do that, however; the welfare bill went up by 45%, and its former leaders are now telling us candidly that they completely failed. We are going to succeed where they failed.
I am always astonished that when Members move over to the Government side of the House, they ask for less spending on welfare than they did when they were on the Opposition side. I was visited on Friday by a severely disabled constituent who was seriously worried about her future. Why has the Chancellor promoted the legitimate debate on welfare reform by contextualising it with reference to those who abuse the system—for whom there is no support on either side of the House—thereby sowing great seeds of concern among many disabled people and their families in the UK today?
It is difficult to see how we can have a debate on out-of-work benefits and how to reform them without at least addressing the issue of some people who should perhaps be doing more to get into work. Let me stress that we are doing everything we can to make sure that the poorest and the most vulnerable are helped, while rewarding work. If the right hon. Lady or any other Labour Member wants to make a positive contribution or propose a positive plan, we will listen to it.
I do not think that strike action would help anyone at this point in time. Again, the people who suffer most when countries lose control of their public finances are often those working in the public sector, so I would hope that the trade unions, like everyone else in our society, will work together to sort out this national problem—and do so in the national interest.
The Chancellor’s emergency Budget was criticised for adversely impacting on certain groups, not least women—indeed, it is subject to litigation in the courts at the moment by the Fawcett Society. With particular regard to the extra £4 billion of cuts announced by the Chancellor to the BBC last week, has he carried out an equality impact assessment of the effects of that measure?
I thank my hon. Friend for his last remark. The state currently consumes almost half of national income and I do not think that there is a serious contender for high office on the Labour side who does not think that it needs to come down. Unfortunately, not a single proposal has been forthcoming. It is quite remarkable that this is the most contentious issue that we are debating, yet the people who aspire to lead the Labour party have absolutely nothing to say about it.
The hon. Gentleman would know, first, that we are creating the new Work programme, which we believe will help people currently looking for work to get the skills and support they need to get into work. It will be a far better system than the one we inherited. Then there is the broader debate, alluded to in a number of questions, about how we reform the out-of-work benefit system to reward work and give people a greater incentive to take on additional hours of work. That is absolutely central to the debate.
The recent independent report by the National Audit Office found that on the last Government’s cost-reduction targets for 2010-11, only one Department had achieved even 50% of that target; that of the savings reported, only 38% could be relied upon; and that one Department had the distinction of achieving even less than 5% of its cost-reduction target. What representations has my right hon. Friend had on how to make up that shortfall?
Not many, is the answer. My hon. Friend is right to draw the House’s attention to the fact that what we used to hear from the Labour Government about efficiency savings—in the press releases issued at the time of their last Budget—was all guff. Anyone who has examined whether any of the former Government’s claims stack up has found that they do not. It is another part of the Labour party’s fraudulent record.
Let me say this to the hon. Gentleman: he sat on the Government Benches year after year while the budget deficit racked up; he allowed this country to have the largest budget deficit in the developed world. We are now seeking to reduce that budget deficit. The previous Government pencilled in but never identified £44 billion of public expenditure savings. If he wants to make a serious contribution to the debate, I suggest that he propose some specific measures to deliver the plans on which he stood at the last general election.
Order. There is much pressure on time. I remind the hon. Gentleman that he must ask a Minister about the policy of the Government, not the attitude of the Opposition. We will leave it there; the Chancellor can respond briefly if he wants, but he is under no obligation.
Formula grant for local government is about £24.5 billion, made up of just over £3 billion in revenue support grant and just over £21 billion from business rates. The cut is £6 billion, which leaves about £3 billion income from business rates that is not being redistributed in formula grant. Would not a good use of that money be the protection of the poorest and most vulnerable in our communities from the ravages of the cuts being imposed by the Government? Exactly how will businesses be accountable for what that £3 billion is used for?
As well as considering reforms to the formula grant, we took some steps earlier this year, and we hope to take further steps, to increase the freedoms that local authorities have to spend the money and to have fewer ring-fenced programmes from central Government Departments. We are looking at a review of the formula grant.
If we do not put up VAT, do not cut defence expenditure—as the Labour party proposed during Defence questions—and do not cut the welfare bill, as the right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper) proposes, will the Chancellor confirm that the only way to have a sustainable budget is to slash spending on the NHS?
My hon. Friend is absolutely right. The Labour party has opposed the £13 billion VAT increase, even though we now know that the shadow Chancellor, Tony Blair and Peter Mandelson all supported that increase; and it has opposed some of the other measures to which my hon. Friend refers. There is a difference when it comes to the NHS: I believe it is the official policy of the Labour party that the NHS should not be protected from cuts and should not have a real increase in funding. I happen to disagree with that policy, and we will see what the public think about it.
The Chair of the Treasury Committee asked the Chancellor to publish new details of the distributional impact of the Budget, including the proposed cuts to housing benefit and disability living allowance. Is the Chancellor aware that the Institute for Fiscal Studies produced such an analysis last month? Is he aware that it says that
“the overall effect of the new reforms announced in the June 2010 Budget is regressive, whereas the tax and benefit reforms announced by the previous Government” —
for the same period—
In the light of that evidence, will he explain whether he still claims that his Budget and his Government are progressive?
Does the Chancellor agree that there is nothing progressive about leaving 5 million people on out-of-work benefits—a system that condemns single women in particular to a lifetime of poverty—and that there is nothing progressive about leaving the Labour party’s debts to the next generation to repay?
I can go better, and quote Lord Myners, who said:
“There is nothing progressive about a Government who consistently spend more than they can raise in taxation, and…nothing progressive that endows generations to come with the liabilities incurred by the current generation.”—[Official Report, House of Lords, 8 June 2010; Vol. 719, c. 625.]
The right hon. Gentleman says that he wishes to protect the most vulnerable. Will he intervene personally to solve the problem of a constituent of mine, who is severely epileptic, who has not received his tax credit for six weeks owing to the total inefficiency of Her Majesty’s Revenue and Customs, and who has no money whatsoever—[Interruption.] Don’t you care about this man? He has no money whatsoever, and is only able to feed his family as a result of collections from his church. The chairman of the board says that it is nothing to do with him; will the Chancellor say that it is something to do with him?
Of course I take responsibility for the tax credit system that I have inherited. We know that there are real problems with the way in which it operates, and we are trying to establish how we can reform things in general. I will, however, look urgently at the case that the right hon. Gentleman has brought to the House’s attention: if he will give me the details this afternoon, I will get on to it straight away.
Like many Members of Parliament—although, perhaps, not as much as the hon. Member for Wellingborough (Mr Bone) —I want to see cuts in our public services. I accept that they are, sadly, necessary to deal with the huge deficit that is Labour’s legacy. Does the Chancellor agree that if any party is to have credibility in criticising specific cuts, it must present a realistic alternative that does not just saddle the next generation with thousands of pounds of debt?
I entirely agree with my hon. Friend. The plethora of memoirs and interviews from people who were at the top of the Labour party until a few months ago have consistently made clear that it is not credible for the Labour party not to issue its own proposals and come up with its own ideas. As I have said, £44 billion of the cuts with which we are proceeding were pencilled in by the last Government, and they have between now and 20 October to tell us where those £44 billion of cuts would have fallen.
On Saturday I attended a conference organised by the Aberdeen branch of the Disability Advisory Group. The people there were genuinely worried about the reassessment for disability living allowance and the medicalisation that has been announced. They were completely baffled, and kept asking, “Why us?” Whoever is to blame for the economic crisis, it is certainly not disabled welfare recipients. May I now ask the Chancellor, “Why them?”?
I respect the fact that the hon. Lady is the Chair of the Select Committee on Work and Pensions, but I must tell her that the number of working-age people who claim disability living allowance has risen by more than 40% in the last decade, which is a substantial increase. When I considered reforms to the allowance, I saw that it would be possible to introduce such reforms as means-testing, but I rejected those. I said that it would be fairer to introduce an up-to-date assessment to help people to receive the benefit and ensure that they were eligible for it in future. I think that that is the fair way in which to proceed with this particular benefit, because I well understand that those who receive it are some of the most vulnerable members of our society.
Can the Chancellor tell us whether, having bankrupted the country, the last Government left any detailed financial restraint, according to Treasury officials? This reminds me of the kids—the yobs—who smash the bus shelter and then throw stones at the people who are trying to clean up the mess. It is a disgrace.
Does the Chancellor recognise that most ordinary people consider a £2.5 levy for rich bankers to be grossly unfair, given that ordinary people are paying 10 times more? He can now do better with tax-dodgers. Does he expect Lord Ashcroft to pay more on 24 October?
We were the first major economy to introduce the banking levy. We were bitterly opposed in the run-up to the election by a Government, in whom I think the right hon. Gentleman was a Minister, who told us that we should not introduce the banking levy until all the other countries had done so. We took a lead and introduced the banking levy, which will raise £2.5 billion. Since then, many other countries have followed our lead. [Interruption.] Opposition Members say it’s nothing or a pittance. If that is the case, why did they not introduce a levy? They had 13 years to do it and they did not. The only thing they did was cut capital gains tax, which we have had to increase.
Queen’s Speech (Date)
This morning, I issued a written ministerial statement to the House in relation to parliamentary Sessions. It set out that the Fixed-Term Parliaments Bill, which has its Second Reading this afternoon, proposes that parliamentary general elections will ordinarily take place on the first Thursday in May every five years. I decided that it was important to set out to the House at the earliest opportunity the Government’s proposal that, subject to the successful passage of the Bill, it would be appropriate to move over to five 12-month Sessions over a Parliament beginning and ending in the spring.
One of the benefits of this proposal is the greater certainty it brings to the parliamentary timetable. It also has the advantage of avoiding a final Session of only a few months, when—as we saw with the last Administration —Parliament is forced to consider a lame duck legislative programme of little significance.
Under this proposal, Her Majesty's Gracious Speech on the occasion of the state opening of parliament will, in future, ordinarily take place in the spring, rather than in the autumn.
In order to ensure a smooth transition, the Government have proposed that the current Session of Parliament will run until around Easter 2012. The next state opening of Parliament will therefore take place shortly afterwards. Dependent on progress on the Fixed-Term Parliaments Bill, we envisage that the House would then move to a pattern of annual state openings in the spring, consistent with the new statutory provision for general elections to be held in the spring.
Following the announcement of the proposals this morning, the Government intend to listen intently to right hon. and hon. Members’ views, particularly during the passage of the Bill, and to work with the authorities of both Houses to implement the necessary changes.
I am not able today to announce the specific date of the next Queen's Speech, as requested by the right hon. Member for Rotherham (Mr MacShane). As he well knows, the date can only be announced, as it usually is, nearer the time and only after proper consultation with the Palace. I am sure he would not want to short-circuit that process today. I intend to give the House as much notice as possible of future proposed recess dates and will issue a calendar of the future sitting days as soon as is practicable.
This is a sensible response to a Bill in the coalition Government's programme that the Opposition support. It is announced in good time and subject to parliamentary scrutiny, under the Bill that will be debated this afternoon. Today's announcement will also ensure that Parliament has adequate time in this Session to debate and scrutinise the Government’s legislative programme, which, as the House will be only too aware, was something consistently denied by the last Government. Far from being an affront to Parliament, it is one way in which this Government are empowering it.