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Volume 517: debated on Wednesday 27 October 2010

I am sure that the whole House will wish to join me in paying tribute to Corporal David Barnsdale from 33 Engineer Regiment (Explosive Ordnance Disposal), who died on 19 October. He was a brave and highly skilled member of our armed forces whose service and sacrifice must not be forgotten. Our thoughts must be with his family, his friends and his colleagues.

This morning I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall have further such meetings later today.

May I associate myself with the condolences expressed by my right hon. Friend?

Does the Prime Minister agree that yesterday’s excellent growth numbers show that the private sector is growing and will create the jobs that my constituents need? [Interruption.]

My hon. Friend is entirely right. The growth figures yesterday were twice as good as market expectation. Of course, Opposition Members do not like good news, but they should celebrate it when it comes. This was strong growth, largely driven by the private sector, and it was accompanied by the Standard & Poor’s agency saying that we should no longer be in the danger zone for our credit rating, which is welcome news. Opposition Members who are waiting for a double dip have had a bit of double depression, but I am sure that we will get lots of questions about the economy this morning.

May I start by joining the Prime Minister in paying tribute to Corporal David Barnsdale from 33 Engineer Regiment (Explosive Ordnance Disposal)? He died serving his country; we honour his memory and send the deepest of condolences to his family.

There are reports this morning that the Government are reconsidering aspects of their housing benefit reforms. Are they?

No, we are bringing forward our plans for housing benefit reform. Let me tell the right hon. Gentleman why we are doing that. Housing benefit for working-age people over the last five years has gone up by 50%. This is a budget that is completely out of control. The proposals we are bringing forward are difficult, but they need to be done, not least because we want to make sure that we protect the schools budget. We want to make sure that we protect the NHS budget. That is why we are taking difficult decisions about welfare and I hope that he will be able to tell us this morning whether he is going to support them.

I thank the Prime Minister for that answer. Let me get complete clarity from him. The Secretary of State for Work and Pensions is reported as saying that the Government are “open to suggestions” on the issue of housing benefit. Is the Prime Minister saying that all the aspects of housing benefit reform are fixed and are not going to change?

We are going forward with all the proposals that we put in the spending review and in the Budget. I am sure that we would all love some suggestions from the right hon. Gentleman.

This is Prime Minister’s questions—the clue is in the title. He is supposed to answer the questions. I have a specific question for him on one aspect of the housing benefit changes. The plan is to cut by 10% the housing benefit—the help with rent—that someone receives after they have been out of work for a year, even as they have been searching for work. Does the Prime Minister think that that is fair?

These are difficult changes, but I think that they are right. Everyone on jobseeker’s allowance is expected to work, and everyone knows that there is a problem when people claim jobseeker’s allowance and maximum housing benefit for long periods of time, which creates a serious disincentive to work. That is why we are making this change, and that is why it is right.

The key change that we are looking at is the £20,000 cap on maximum housing benefit claims. Is the right hon. Gentleman really saying—[Interruption.] I am answering the question. I know that Labour Members do not like the answer that we are sticking to our plans, but we are sticking to our plans. The point that everyone in this House must consider is whether we are happy to go on paying housing benefit of £30,000, £40,000 or £50,000. Our constituents are working hard to give benefits to other people to live in homes that they themselves cannot dream of, and I do not think that is fair.

The whole House has heard that the Prime Minister has dug himself in on the proposal to cut by 10% the help that people receive with rent after they have been out of work for a year. I ask him, because he will have obviously thought about this, what advice he would give to a family who are seeing 10% of their income from housing benefit being taken away. What advice would he give them, when they are seeing such a large cut in their income, on how they should make ends meet?

In the Work programme, we will have the best and biggest programme to help those people back into work. It will not just be the state doing it; we are going to get training companies and voluntary bodies to help those people into work. I know that the right hon. Gentleman likes figures, so let me give him the figures for London. There are 37,390 people who have been on jobseeker’s allowance for more than a year, and those people would be affected by this change—I accept that; it is difficult. Every month, there are 30,000 new vacancies in London, which makes 400,000 vacancies a year. We want to get those people back into work. What does he want to do?

The Prime Minister is about to make 500,000 people redundant as a result of the cuts announced by the Chancellor of the Exchequer. It is clear that his policy on housing benefit is a complete shambles. He has talked about London, but in London alone councils are saying that 82,000 people will lose their homes—they are already booking the bed-and-breakfast accommodation. How many people does he think will lose their homes as a result of that policy?

If we are prepared to pay—as we are—£20,000 in housing benefit, there is no reason why anyone should be left without a home. The Leader of the Opposition has talked about economic policy and cuts, and we now know from the Labour party’s own memorandum what its cuts would be. This is not the Institute for Fiscal Studies, the Government or the Conservative party; this is a Labour memorandum. It said that the cuts—[Interruption.]

Order. I apologise for interrupting the Prime Minister. Members must remain calm—if they are not serene, then they must at any rate be calm at all times. We must hear the Prime Minister.

The people responsible for making the mess should be quiet when they are told how it will be cleared up. The Labour memorandum states that the cuts implied by its spending plans would have been £44 billion in 2014-15. Those are the Labour party’s cuts, which we are having to implement. I was always told that if you have got nothing to say, it is better not to say it.

We can see the faces on the Liberal Democrat Benches. The hon. Member for Bermondsey and Old Southwark (Simon Hughes) has described that policy as “harsh and draconian”. No wonder he looks glum. Then we have glummer, the Deputy Prime Minister—it is no wonder that he is back on the fags. Is not the truth that the Prime Minister just does not get it? He is out of touch. Other people will pay the price for his cuts. Is it not time that he thought again on housing benefit?

We all had the chance to read about it in The Times this morning—the advice to the Leader of the Opposition:

“It’s important to have a cheer line that goes down well in the chamber.”

You have to have something that

“can be clipped easily by the broadcasters”,


“It is important to get to your feet looking as if you are seizing on something new.”

The right hon. Gentleman has a plan for Prime Minister’s questions, but he has no plan for the economy, no plan for the debt and no plan for the mess Labour made—absolutely nothing worth while to say. That is it.

Will the Prime Minister join me in congratulating Ocado on creating 2,000 much-needed new jobs on the edge of Tamworth? While he is at it, will he congratulate the chief executive, Tim Steiner, on making it clear that he supports the difficult decisions that the Government are making to fix our finances and promote growth—decisions that the Labour party flunked?

My hon. Friend makes a very good point. Business leaders in Britain who are going to create the jobs that will employ thousands of people in our country support what the Government are doing and they want us to follow it through. I am happy to congratulate the person running Ocado, not least because I am one of its customers.

Q2. The Prime Minister sets great store by devolving decision making to ordinary people. That already exists, of course, with the Welsh Assembly—population 3 million and devolved budget of £14.5 billion —and the Scottish Parliament, with a population of 5 million and, even after the cuts, a budget, through the block grant, of £27.3 billion. Using the formula applied to Wales, the 5.2 million people of Yorkshire would be entitled to a devolved budget of £24 billion. Can he think of one single reason why the people of Yorkshire should not determine their own priorities and, mischievously, one reason why they should not have their own white rose Parliament? (19519)

I did not know that the right hon. Gentleman, for whom I have considerable respect, was making these arguments all through the past 13 years. This is a revelation. We are saying to councils in Yorkshire and up and down the country, “We’re getting rid of the ring-fences and giving you the power to spend your money in the way that you choose.” We have got rid of the bossy, centralising, interfering approach that I am afraid he was rather part of.

Is the Prime Minister aware that more than 420 people died in Somerset last winter from causes related to cold and poor living conditions? Will he join me in supporting a local charity, the Somerset Community Foundation, which has a surviving winter appeal whereby all those who can forgo all or part of their winter fuel payment can donate the money for redistribution to those for whom it is not nearly enough?

I will certainly join the hon. Lady in congratulating the charity on the work it does. It sounds absolutely essential. I know that she will welcome, as I did, the decision by the Chancellor in the spending statement that cold weather payments would be put on the higher level permanently, not just before an election.

Q3. Yorkshire Forward, the Yorkshire regional development agency, owns assets in my constituency in Barnsley that are crucial for a major redevelopment programme in the town centre. Will the Prime Minister look urgently at ensuring that the ownership of those assets is transferred from Yorkshire Forward to the local authority so that the programme can go ahead? Could that transfer be facilitated before the body’s abolition in 2012? (19520)

The hon. Gentleman makes a good point. The transition from regional development agencies to the new local enterprise partnerships has to be handled carefully, ensuring that such assets are put to good use. So far, the proposals for local enterprise partnerships that are coming in are extremely encouraging and will lead to more of what the right hon. Member for Sheffield, Brightside and Hillsborough (Mr Blunkett) talked about—more control locally rather than in distant regions that people do not identify with.

It is claimed that the EU will need a new treaty to legitimise money going to Greece. What is the Prime Minister’s response?

The argument being put forward, particularly by the Germans, is that a new treaty clause is needed to put the eurozone on a stronger footing. Clearly, from our point of view, we are not in the euro and we are not planning to join the euro, so any treaty change would not apply to us—just as, in terms of the new rules on the stability and funding mechanism, we have always had a carve-out from them. We shall be discussing that at the European Council this week.

The greatest priority for Britain should be to fight very hard to get the EU budget under control. It is completely unacceptable, at a time when we are making tough budget decisions here, that we are seeing spending rise consistently in the European Union. I think that is wrong and I shall be doing everything I can to try to sort out the budget for next year, and also to look at the future financing of the European Union, where we want to see strict controls. That should be our priority.

Q4. The Prime Minister must realise that the British public are facing cuts in services and in their livelihoods. They do not want to see a single penny more given to the EU. In fact, they would like to see brought back some of the money that was given away, unfortunately, by our Prime Minister. Will this Prime Minister please ensure that when he goes into battle for our money, he does not—as happens to many leaders when they are involved in that bloated bureaucracy—roll over? Will he promise that if the EU demands that money, we will just say, “Sorry, we’re not paying”? (19521)

As ever, the hon. Lady talks a good deal of sense. It is worth recalling that since Margaret Thatcher won that rebate at Fontainebleau it has saved Britain £88 billion. That is what tough negotiation achieved. The European Parliament has insisted on a higher budget than the one set by the Council, so the first thing we have to do is to say that is not acceptable, and build a majority on the Council to get the budget down again. It pains me to say this to the hon. Lady, but we would be assisted if Labour MEPs did not keep voting for higher budgets, which is exactly what they did this week.

Q5. Last year, the Prime Minister saw how High Peak borough council, through a pioneering alliance with Staffordshire Moorlands, had delivered efficiency savings of almost £2.4 million over the past two years. Will he assure the House that he will strive to support councils such as High Peak, which have sought to deliver better value for money and ensure that local people benefit as a result? (19523)

My hon. Friend makes an extremely good point. My council does exactly the same thing: it shares a chief executive, and soon more of the management team, with a neighbouring council. All councils can look at that. Frankly, it is not just councils—police forces and other organisations can look at shared services to drive down costs, so that we make sure we focus on the front line. Those are some of the reforms we need, to make sure that at a time of tight budgets we keep the good services we want.

In a few weeks’ time, the Prime Minister will decide whether he will close RAF Lossiemouth, in addition to closing RAF Kinloss, which would lead to the biggest loss of jobs in Scotland since the Tories closed manufacturing industry in the 1980s. As a consequence, that would mean that Scotland would have fewer service personnel, fewer military bases, aircraft, vessels and Army battalions and less defence spending than all our independent Scandinavian neighbours of comparable size. Will the Prime Minister explain why he is concentrating defence spending in the south and cutting defence spending disproportionately in Scotland?

We are going ahead with the aircraft carriers, which are being built in Scotland. I have to say to the hon. Gentleman that if we had an independent Scotland, he would not be flying planes but flying by the seat of his pants.

Q6. Can the Prime Minister reassure the House that the Government have no plans to revive Labour’s intercept modernisation programme, whether in name or in function, and that he remains fully committed to the pledge in the coalition agreement to reverse the substantial erosion of civil liberties and to roll back state intrusion? (19524)

I would argue that we have made good progress on rolling back state intrusion in terms of getting rid of ID cards and in terms of the right to enter a person’s home. We are not considering a central Government database to store all communications information, and we shall be working with the Information Commissioner’s Office on anything we do in that area.

Ending child trust funds will close off a route for children in care to build up a modest nest egg, with which they could start their future life as adults. Will the Prime Minister ask his Treasury colleagues to work with me and others to devise an affordable alternative that will give looked after-children the prospect of an asset they can rely on?

I am very happy to ask my colleagues to work with the right hon. Gentleman because we all want to see saving encouraged, but I am afraid that when it came to the child trust fund we had to take a difficult decision, which was that that was £500 million we needed to save. My right hon. Friend the Chancellor and I sat on the Committee considering the Bill that introduced child trust funds, but we have to take some difficult decisions on spending, and that was one of them. Can we look at alternative ways of encouraging saving? Yes, we can. We are happy to work with the right hon. Gentleman.

Q7. I know the Prime Minister is aware that last week’s decision to cancel the Nimrod programme will lead to the early closure of the BAE Systems Woodford site near Macclesfield. Does my right hon. Friend agree that it is now an important priority for the Ministry of Defence to work closely with BAE to ensure that the dedicated and highly skilled staff get the best possible support for both retraining and redeployment? (19525)

My hon. Friend is entirely right. The MOD should work closely with BAE and with his constituents, who have worked extremely hard over many years to produce that equipment, to make sure there is a strong future. We have had to make difficult decisions in the defence review, and we have made the difficult decision about Nimrod, but in terms of BAE as a whole, we will be spending £17 billion with that company between now and 2015 on a range of projects, including the A400M. But my hon. Friend is right—we should make sure that we help those people to find new jobs.

Q8. Video games development is a highly skilled, low-carbon creative industry that provides more than 600 jobs in my constituency and is important for the north-west as a whole. Before the election, all three main parties pledged to introduce a video games tax relief so that we can compete internationally on a level playing field. Why have the Government reneged on that promise? (19526)

We had to make difficult decisions about tax relief—[Interruption.] Opposition Members groan. Can we think of one thing they will support to get the deficit down? I cannot think of a single thing. We have to take difficult decisions, and I am afraid that that tax relief, which was not particularly successful or well targeted, must go. Those are the difficult decisions that we have to take.

Q9. Can the Prime Minister confirm that the Government have no plans at all to build an airport in the Thames estuary, or in Medway or Kent? (19527)

The Department for Transport has no plans for a new airport in the Thames estuary or in any other part of Medway or Kent and, as my hon. Friend knows, we have scrapped the plan to build a third runway at Heathrow.

As a former PR man, does the Prime Minister agree that no matter how much Bell Pottinger tries to spin the Sri Lankan Government, the demands for an international independent war crimes tribunal intensify as more evidence of alleged assassination and civil rights abuses comes out?

The hon. Lady makes a fair point. We need to see an independent investigation of what happened. Everyone has read the papers and seen the TV footage, but we need an independent investigation to work out whether what she suggests is right.

Q10. The development of land without planning permission for use as Gypsy and Traveller sites is of concern to many communities, including the villages of Barnacle and Bulkington in my constituency, where local residents have had to put up with illegal developments on their doorstep, although they are pleased with the proposals of the coalition Government to give additional powers to local authorities to deal with the matter. Will the Prime Minister acknowledge the wish of my constituents to see those powers made available at the earliest opportunity? (19528)

As my hon. Friend probably knows, we will bring forward the localism Bill. It is important, as I have said before, that everyone obeys the law of the land, including that on planning. That should apply to Gypsies and Travellers as well. In the localism Bill we will make sure that it is worth while for local authorities to go ahead with development—they should see a benefit when houses are built, whereas at present there is so little benefit for local areas in getting businesses in and getting homes built. There should be a benefit where they make available sites for Gypsies and Travellers, but that should not be done on the basis of lawbreaking, which it all too often is at present.

In July the Education Secretary promised that Wolverhampton’s Building Schools for the Future programme would be unaffected by cuts. Can the Prime Minister confirm that the much needed refurbishment of secondary schools across the city will go ahead as planned, and not suffer devastating cuts of 40%?

I am afraid that what happened was that the previous Government set out 50% cuts—[Interruption.] I know the Opposition do not like hearing it. They set out 50% cuts in capital spending, but did not tell us where one penny piece was going to come from. That is what happened. We have had to scrap the unaffordable and badly put forward Building Schools for the Future programme, but in the spending plans for the next four years are £15 billion additional capital for school building, so there are plenty of opportunities for additional school building, and not just secondary schools, but primary schools as well. That is what we will be making available.

Q11. In my constituency, Stroud college, a further education college, has launched an engineering centre to encourage training and apprenticeships. Does the Prime Minister agree that in the light of the encouraging economic figures, such programmes should be supported by business? (19529)

My hon. Friend is absolutely right. We are making sure that money goes into FE colleges. That is essential for the skills agenda of the future, and we want to free up those colleges to have more agreements with business. In the past they were over-regulated in respect of the courses they could run and the qualifications they could offer. We want to see much greater collaboration between FE colleges so that we get the skills that we actually need.

Until 18 months before the general election, the Prime Minister supported Labour’s spending plans. At what point did he decide to rewrite history?

We realised that the spending plans were unaffordable, and we came off them. We went into the last election promising to make spending reductions. It needed to be done, and I remember sitting where the right hon. Member for Doncaster North (Edward Miliband) is, week after week, asking the former Prime Minister, “Aren’t you really saying there are going to be cuts?”, and he said, “No, no cuts. There won’t be any cuts.” Do you remember? It happened week after week. Now we have the evidence from Labour’s own memo. It was planning £44 billion in cuts, and not a word about it to anyone. That is thoroughly dishonest.

Q12. Yesterday, the international credit rating agency Standard & Poor’s said something that would make Opposition Members quite upset. It upgraded our nation’s credit outlook from negative to stable, but will the Prime Minister also heed its warning that that credit rating upgrade would be at risk if, in its own words,

“against our expectations the coalition’s commitment to fiscal consolidation faltered (19530)

That is an absolutely vital point. It was this Government’s changes that took the British economy out of the danger zone, and since the election we have seen interest rates coming down in Britain, whereas in some other countries they have been going up. Why? Because they have not taken the necessary action to get their budget and their deficit under control. What we are now seeing is businesses throughout the world recognising that this is a great country to invest in, because we are sorting out the mess that we inherited.

The Prime Minister will be aware that by 7 July the Education Secretary would have already understood the financial situation and the “state of the books”, as the Prime Minister is so keen to keep stating, so why on 7 July, in this House, did the Education Secretary say:

“One announcement that I was able to make on Monday was that Stoke-on-Trent, as a local authority that has reached financial close, will see all the schools under Building Schools for the Future rebuilt”?—[Official Report, 7 July 2010; Vol. 513, c. 490.]

Is there some confusion between the Prime Minister and the Education Secretary?

We were left a complete mess in terms of Building Schools for the Future. Here was a programme that took up three years and hundreds of millions of pounds before a single brick was laid. The cost of building those schools was twice what it should have been, so we have scrapped that programme and made available £15 billion for the next four years. That means that school building will be higher under this Government than it was under the Labour Government starting in 1997.

Q13. Figures published this week show that four fifths of economic growth is coming from the private sector. Does the Prime Minister accept that it is wrong to say that public spending is propping up economic development? Does he further recognise that more work needs to be done in supporting the private sector throughout the United Kingdom? (19531)

This is the news that the Opposition do not want to hear. Four fifths of that growth was coming from the private sector, and that is an encouraging sign that we should celebrate rather than look miserable about.

The Prime Minister talks of difficult decisions, and last week the Chancellor said that government is about choices. The Opposition agree, but we would have made different choices—

For instance, we would have chosen to tax the bankers more heavily in order to avoid the shameful attack yesterday on women and children in the form of the abolition of the child trust fund and the health in pregnancy grant. Does the Prime Minister agree with his Chancellor’s choices continually to penalise women and children in that way?

Please, Mr Speaker

Please, Mr Speaker, will you ask the Prime Minister not continually to blame the Opposition? He is in government now—

I am afraid to say that the choice the Opposition have made is not to make any choices—absolutely none at all. The hon. Lady mentions the importance of taxing the banks, but the point I would make is that we introduced a bank levy—within six months of taking office, that has been sorted out. The Opposition had 13 years. The Leader of the Opposition either sat in the Treasury, as one of the chief economic advisers, or sat in the Government, and they did absolutely nothing to introduce that bank levy. Was he arguing for it across the Cabinet table? We have no idea. It did not happen; we have done it. We are asking the banks to pay a fair amount. What we should be focusing on is getting the revenue out of banks so that they contribute to rebuilding our country after, frankly, the mess it was left in.

Earlier the Prime Minister and the Leader of the Opposition had fun and games over housing benefit cuts. This is not a laughing matter for the thousands of children who could well become homeless. I am confident that this was an unintended consequence because the cost of putting children in bed-and-breakfast accommodation is greater than housing benefit. Will the Prime Minister look at this again, please?

I completely agree with the hon. Gentleman; this is an incredibly serious issue. We have a housing benefit bill that is out of control—up 50% over the past five years for working-age adults. The key change that we are suggesting is a cap of £20,000—let me repeat that: £20,000—that a family can get for their rent. The fact is that there will be many people working in Colchester, Doncaster or west Oxfordshire who are paying their taxes and who could not dream of living in a house that cost £20,000 to rent each year. It is an issue of fairness that we tackle this budget, get it under control, and do not ask hard-working people to support benefit levels to get things they simply could not have themselves.