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Volume 521: debated on Wednesday 12 January 2011

I am sure that the whole House would wish to join me in paying tribute to Corporal Steven Dunn from 216 Parachute Signal Squadron who died on 21 December, to Warrant Officer Class 2 Charles Wood from 23 Pioneer Regiment Royal Logistic Corps who died on 28 December, and to Private Joseva Vatubua from the Argyll and Sutherland Highlanders, 5th Battalion The Royal Regiment of Scotland who died on 1 January. These were courageous and selfless servicemen who have made the ultimate sacrifice in the fight to make our country a safer place. We send our deepest condolences to their families, their friends and their colleagues.

This morning, I spoke to the Australian Prime Minister Julia Gillard to send the condolences of everyone in this House and everyone in the country for the appalling floods and the damage that has been done in Queensland, and to say that we are all thinking of her and the Australian people at this very difficult time.

In addition to my duties in the House, I shall have further such meetings later today.

I endorse the Prime Minister’s condolences to the families of the troops and the Australian people.

The Prime Minister will recall his solemn pledge at the election not to raise VAT. He will also recall his solemn pledge in the coalition document to take robust action on bankers’ bonuses. Given that he has broken his first promise and is now reneging on his second, why should we trust anything that he says again?

The reason why we have had to put up value added tax is the complete and utter mess we were left by the Government whom the right hon. Gentleman supported. I know that they are now in denial about this, but the fact is that we had one of the biggest budget deficits in the G8 and one of the worst records on debt anywhere that one could mention. We had to take action. The reason we can now discuss calmly taxes and bankers’ bonuses and we are not queuing up behind Greece and Ireland for a bail-out is the action that this Government took.

Q15. The Prime Minister will know of the good progress made in the regeneration of my constituency. The next phase is the regeneration of city centre assets currently owned by the regional development agency. Does the Prime Minister agree that, in line with our localism agenda, the best thing is to transfer those assets as soon as possible to the city council, for development for the benefit of the city, and can I highlight how much support that has within Gloucester? (32741)

I pay tribute to my hon. Friend and what he does to help drive the regeneration agenda in Gloucester. There are real opportunities now that the regional development agencies, which were unloved in so many parts of the country, are going and we are having stronger local enterprise partnerships. There is much more room for good local development, including in Gloucester.

I join the Prime Minister in paying tribute to Corporal Steven Dunn from 216 Parachute Signal Squadron, Warrant Officer Class 2 Charles Wood from 23 Pioneer Regiment Royal Logistic Corps and Private Joseva Vatubua from the Argyll and Sutherland Highlanders, 5th Battalion The Royal Regiment of Scotland. We pay tribute to them for their heroism, commitment and dedication, and our hearts go out to their families and friends. I also join the Prime Minister in sending condolences to the Australian people for the floods that are affecting them.

In opposition, the Prime Minister said:

“Where the taxpayer owns a large stake in a bank we are saying that no employee should be paid a bonus of over £2,000”.

Can the Prime Minister update us on the progress in implementing that promise?

What I would say is this—[Interruption.] It was the last Government who bailed out the banks and asked for nothing in return. That is what happened. The reason we have difficulties with Royal Bank of Scotland this year is the completely inadequate contract that was negotiated by the Government whom the right hon. Gentleman supported. What we all want to see is the banks paying more in tax, and we will see that; we want to see the banks doing more lending, and we will see that; and we want to see bonuses cut, and we will see that. Perhaps he would now make a constructive suggestion.

The country is getting fed up with the Prime Minister’s pathetic excuses on the banks. He made a clear promise: no bank bonus over £2,000; it is still on the Conservative website. It is a promise broken.

The Prime Minister cannot answer the question on bankers’ bonuses: let us try him on the bankers’ tax. Can he explain to the British people why he thinks it is fair and reasonable, at a time when he is raising taxes on everyone else, to be cutting taxes this year on the banks?

We are not, is the simple answer. I know that the shadow Chancellor cannot really do the numbers, so there is no point Wallace asking Gromit about that one. Let me give the right hon. Gentleman the figures. Last year, the banks paid £18 billion in tax; this year, they are going to be paying £20 billion in tax. Their taxes are going up.

The Prime Minister just needs to look at page 91 of the Office for Budget Responsibility book, published in November, to see that Labour’s payroll tax on the banks raised £3.5 billion in addition to the corporation tax that they pay. His banking levy is raising just £1.2 billion. In anyone’s language, that is a tax cut for the banks. Why does the Prime Minister not just admit it?

I have given the right hon. Gentleman the numbers showing that the taxes are going up from £18 billion to £20 billion—now let me explain the numbers in terms of his bank bonus tax and our bank levy. Obviously he cannot get the numbers from the man sitting next to him, so let me give him the numbers. The bank bonus tax raised a net £2.3 billion, and the author of that tax, the former Chancellor, the right hon. Member for Edinburgh South West (Mr Darling), who is sitting on the Back Benches, says that you cannot go on introducing this tax year after year, and very sensible that is too. The bank levy will raise £2.5 billion each year once it is fully up and running—[Interruption.] Yes, £2.5 billion; even the shadow Chancellor can tell the right hon. Gentleman that £2.5 billion is more than £2.3 billion. And with the magic of addition and a bank levy every year, which we supported and he opposed—they said “Don’t do it”, remember that?—we will raise £9 billion compared with his £2.3 billion. Even the shadow Chancellor can work out that 9 is bigger than 2.3.

That is as close as we get to an admission from the Prime Minister that he is cutting taxes on the banks this year. The OBR is very clear that Labour’s bank bonus tax raised £3.5 billion; he will be raising £1.2 billion from the bankers’ levy.

The Prime Minister cannot answer on bonuses and he cannot answer on taxes: now let us talk about transparency. On this, I think he should listen to the Business Secretary. We know that the Business Secretary is not a man to mess with; he told his surgery before Christmas that he had a nuclear weapon in his pocket and he was not afraid to use it, so we should listen to him. He said:

“If you keep people in the dark, you grow poisonous fungus.”

On this occasion, he was not talking about the Chancellor of the Exchequer—he was talking about the bankers. Why does the Prime Minister not listen to his Business Secretary and implement our proposal for the disclosure of all bonuses over £1 million? It is on the statute book and ready to go—why does he not just get on with it?

That was such a long question that I think it is the right hon. Gentleman who should be thinking about the television career, and he should get his brother to run the Labour party—that is probably a better way round. [Interruption.] Look, we want greater transparency, but let me put this to him: he had 13 years to put these rules in place—why did he never get round to it?

We know that the Prime Minister has no answer when he starts asking me the questions. Why does he not answer the question on transparency? Let me tell the Prime Minister, he is now in the absurd position of being more of a defender of the banks than even the banks themselves. Stephen Hester, the chief executive of the Royal Bank of Scotland, went to the Treasury Select Committee before Christmas and said,

“If the Walker Report”

—a report that the Labour Government commissioned, which made the recommendation—

“were to be implemented for the whole industry, I’m not arguing against it. I have no great problem with the issue of transparency and would have no difficulty.”

The Prime Minister has had eight months to hold the banks to account—[Interruption.] He has had eight months to hold them to account. When is he going to start?

I will take a lecture from a lot of people on how to regulate banks, but I will not take one from the Opposition, who let them get away with absolute murder. Who set up the bank regulation that completely failed? Who bailed out the banks and got nothing in return? Who agreed a Royal Bank of Scotland contract with nothing in it about bonuses for this year? By the way, the right hon. Gentleman was at the Treasury all the way through that. He was there when the previous Government knighted Fred Goodwin. [Hon. Members: “Ah!”] Yes—wait for it—they knighted him for services to banking and sent him away with a £70 million pay-off. That is why no one will ever trust Labour on banking or on the economy again.

What was the right hon. Gentleman saying when all that was going on? He was saying, “Deregulate the banks more.” He even put the Vulcan in charge of his policy on the banks—planet Redwood and planet Cameron. That is the truth; there we have it. Life in 2011 on planet Cameron: one rule for the banks, another for everybody else. Is it any wonder, as we now know, what his Ministers say in private? In the privacy of his surgery, his Health Minister said:

“I don’t want you to trust David Cameron…he has values that I don’t share.”

The Health Minister knows that the Prime Minister is out of touch, the House knows that he is out of touch and now, because of his failure on the banks, the whole country knows that he is out of touch.

I think the right hon. Gentleman knows that this just is not working. We have ended up with a shadow Chancellor who cannot count, and a Labour leader who does not count. When the right hon. Gentleman was in the Treasury, what did he do when the Government set up the regulatory system that failed? He did nothing. What did he do when they paid out £11 billion in bonuses to bankers? He did nothing. What did he do when they said that they had abolished boom and bust? He did nothing. He was the nothing man at the Treasury and he is the nothing man now that he is trying to run the Labour party.

Brixham coastguard in my constituency has helped more than 2,000 people in the past year. It is earmarked for closure. Will the Prime Minister meet a delegation from Brixham coastguard to hear about the importance of their local knowledge and skills, and to hear how we can avoid a fiasco similar to that of the regionalisation of fire services?

I am grateful for my hon. Friend’s question. I looked carefully at the time of the announcement at exactly what was proposed for the coastguard. There are proposals to try to put more people on the front line by sharing back-office services and through the way in which the coastguard is co-ordinated. I know that there are very strong local feelings, and I will arrange for her to meet the Transport Secretary to discuss the matter. What is essential is that we have really good coastguard coverage for all of our country.

Q2. The Prime Minister has just confirmed to everybody listening that he is not taking any action on bankers’ bonuses, yet at the very same time his Government are removing the mobility element of disability living allowance for thousands of people who live in residential care. Is that the influence of the Liberal Democrats, or the unfinished business of the son of Thatcher? (32728)

First, I actually said no such thing. The hon. Gentleman obviously was not listening to our interesting exchanges. Let us be clear: we want a settlement in which the banks’ taxes go up, their lending goes up and their bonuses come down. Instead of posturing and posing, we are actually doing something about it. Disability living allowance is an important issue, and our intention is very clear: there should be a similar approach for people who are in hospital and for people who are in residential care homes. That is what we intend to do, and I will make sure that it happens.

Please may I ask the Prime Minister to encourage local councils to look favourably and flexibly on community groups that wish to have roads closed to hold street parties to celebrate the forthcoming royal wedding?

I will certainly do that. I know that, outside some of the large trade unions that fund the Opposition, everyone wants to have a real celebration for the Olympics, the diamond jubilee and the royal wedding, and I think we should certainly make it easier for people to close streets and have street parties.

Q3. I also associate myself with the tributes paid to our soldiers who have recently died in the service of our country, including our own Teesside man, Warrant Officer Charlie Wood, a fine soldier and proud Boro football supporter. Our thoughts and prayers are with his family and all the families.The Prime Minister’s Business Secretary compromised himself over the BSkyB takeover bid and his Culture Secretary is a declared admirer of the Murdoch empire. Will the Prime Minister now do the right thing and order the Culture Secretary to refer the takeover bid to the Competition Commission? (32729)

The hon. Gentleman is entirely right to pay tribute to the soldier from Teesside, and he spoke about him very movingly.

On the issue of the responsibility for media mergers, there is a proper process that needs to be followed. Ministers have a quasi-judicial role in doing that, and I am confident that the arrangements that we have put in place will ensure that that happens.

As chairman of the all-party homeland security group, may I commend the Prime Minister and the Government for having a proper internal discussion about the future of control orders? Given that President Obama himself has been unable to deliver his pledge to close Guantanamo Bay, would it not be ludicrous to suggest that there is some kind of simple answer to the problem? We look forward to seeing the Prime Minister’s proposals.

I thank my hon. Friend for what he says. There are no simple answers. We face an enormously dangerous terrorist threat, and it is a threat that the British judicial system has struggled to meet. I think that all parties—including the Labour party, funnily enough—have the same goal. The reason we have all talked about reviewing control orders is that we want to ensure that the answer that we come up with is good for liberty and good for security.

I can see the shadow Home Secretary nodding, and I hope that we can reach all-party agreement on this important issue.

Q4. Does the Prime Minister think that it is fair or reasonable that a 16-year-old in the first year of their training or course should have their education maintenance allowance support withdrawn for the second year? Is that not a case of breaking our promises to those young people and letting them down? (32730)

The point about EMA is that we will be replacing it, and we want to look carefully at how best to do so, but there are two very important facts that we have to bear in mind. The first is that researchers found that 90% of recipients of EMA would be staying on at school in any event, and the second is that, again with all-party support, we are raising the participation age in education to 18. For those two reasons, I think it is right to look for a replacement that is more tailored and more targeted and that will help to ensure that those children who really need it get that extra money to stay on at school.

Q5. I know that the Prime Minister understands that there is a huge amount of support for the Arctic convoy veterans of world war two to receive a medal, but does he appreciate that in order for the remaining representatives of that incredibly brave group of men to receive that recognition in their lifetime, the time to act is now? (32731)

I do; I have considerable sympathy with what my hon. Friend says, and I have put a number of questions to the Ministry of Defence and will go on doing that. [Interruption.] Yes, we govern by consent. We have to have proper rules, but it seems to me that the important fact is that people on the Arctic convoys served under incredibly harsh conditions and were not allowed to serve for very long periods, so there is a case for saying that they have missed out. Many of them are coming to the end of their lives, and it would be good if we could do something more to recognise what they have done.

Which does the Prime Minister consider to be a worse political betrayal, a Liberal Democrat Deputy Prime Minister who promised not to introduce tuition fees and then did, or a Conservative Prime Minister who promised to introduce a fuel duty stabiliser and did not?

You can top all those with a Scottish National party that said it was going to have a referendum on independence and never did. As a predecessor of mine once said, “Frit!”

Q6. Cheshire West and Chester, my local Conservative-run council, has announced a council tax freeze while protecting essential public services. Many in the country, and indeed some in this Chamber, deny that that is possible. What message would the Prime Minister send to those who deny that it is possible for Government to deliver more for less? (32732)

I absolutely commend what my hon. Friend says. The fact is that of course we are making reductions in local government grant, although when we look at the figures, we see that what local government will get in 2013 is equivalent to what it got in 2007, so we should keep these reductions in perspective. However, I would urge every local council to look at what it can do by sharing services, sharing chief executives and trying to reduce back-office costs, and by taking the extra money that is there for a council tax freeze, so that they can deliver more for less.

Q7. With the Government cutting 20,000 front-line police officers, will the Prime Minister give me a commitment that recorded crime will not rise on his watch? (32733)

I want to see crime come down, because I want to see us get the police out on the beat. The fact is that only 11% of police officers at any one time are out on the beat. I have the figures for North Wales police, and yes, of course there are some spending reductions being made—[Hon. Members: “Answer the question!”] I am answering it. When it comes to the funding, in 2011-12 it will be the same as the funding that the police had in 2007-08, so it is perfectly possible to have effective crime fighting and to get police out on the streets in north Wales.

Q8. Given the rural nature of North Yorkshire and the impact of record prices both at the pumps and for household fuel, will the Prime Minister look again at the Chancellor’s undertaking in June to introduce a fuel stabiliser and, more especially, at a rebate for remote rural areas such as North Yorkshire? (32734)

We have looked at a rebate for rural areas, and some progress was made in the Budget on that issue. On the fair fuel stabiliser, yes, the Treasury is looking at it, because clearly there is a case for saying that if it can be shown that the Treasury benefits from extra revenue as the oil price rises, there should be a way of sharing that with the motorist who is suffering from high prices. [Interruption.] While we hear all the chuntering in the world from the Opposition, the fact is that the last four fuel duty increases were all in their Budgets.

The proposed closure of the Newport passport office will have a devastating effect on the 250 families involved and a crippling effect on the economy of Newport. Can the Prime Minister give me an assurance that no final decision will be taken until the economic assessment is published and considered?

I know how important the passport office has been to Newport and how many jobs it has provided. Obviously we want to see diverse economies right across our country. That is what the regional growth fund is there to help to achieve in areas that are threatened with public sector job reductions, but I will certainly look at the specific question that the hon. Gentleman asks and ensure that he gets an answer.

Q9. The Prime Minister will recall his visit to my constituency hospital, Chase Farm, in support of the campaign to prevent the then forced closure of the A and E and consultant-led maternity services. Does he agree that we should keep to our policy of no forced closures, particularly given the fact that our local GPs—our Enfield GPs—are opposed to them, as indeed are residents to the Barnet, Enfield and Haringey strategy? (32735)

My hon. Friend makes a very good point. Any local changes to the NHS have to meet four tests: they have to have the support of local GPs; they have to have strong public and patient engagement; they have to be backed by sound clinical evidence; and they have to provide support for patient choice. There were no tests like that under the last Government, who had all these top-down reconstructions. There are now tests, and they will be adhered to by this Government.

The Business Secretary wants to move jobs in his Department from Darlington down to Whitehall. What will the Prime Minister do to stop it?

We agree with the programme—which was started not by the last Government, but by several previous Governments—of trying to diversify and spread jobs out of Whitehall and into the regions, and we should continue with that. [Interruption.]

Q10. Great Yarmouth has been approved as one of the pathfinder schemes for GP practitioners. The local health teams are excited by the prospects that that offers. What support can the Government give to ensure that we deliver successfully on this project? (32736)

I am delighted that my hon. Friend’s constituency is taking part in the pathfinder project. Those people who say that somehow NHS reform is being introduced in one big start are completely wrong: 25% of GPs are going forward to make this work. There is huge enthusiasm among GPs to get this moving, and I think that it will show real benefits in patient choice. What I would say to everyone in this House is this. The idea that somehow there is a choice of a simple life—where we do not reform the NHS, and when we have rising drug and treatment bills and, frankly, a record in this country of not being ahead in Europe on cancer, stroke and heart outcomes—is not sensible. It is right to go ahead with this modernisation. It will be this coalition driving it forward and the Opposition just digging in and defending an unacceptable status quo.

The Prime Minister will be well aware of the proposed changes to the air-sea rescue and coastguard services, particularly of the proposed closure of the coastguard station in Bangor in Northern Ireland and the exchange of responsibilities to Scotland. Will he assure the House today that the coastguard station at Bangor will be retained and that the responsibility for air-sea rescue will remain in Northern Ireland, so that the people of Northern Ireland and those who use the seas around it will be safe and secure?

I have been lobbied extensively about air-sea rescue, including by people from all walks of life, if I may put it that way. I totally understand the need for good air-sea rescue. I think what matters is not necessarily who carries out the service, but whether they are fully qualified, whether it is a good service and whether it is value for money. That is what we have to make sure happens, as in other areas.

Q11. In reviewing anti-terrorist laws, will my right hon. Friend ensure that there is a balance between the police having the powers of detention and arrest that they need and ensuring that there is a return to the rule of law, as it is understood? (32737)

My hon. Friend is absolutely right that we should not depart from normal procedures and practices in British law and justice unless it is absolutely necessary. Every change has to be defended in that way. As I said earlier, we face a terrorist threat that is materially different from what we faced from the IRA. We face a threat where people are quite prepared to murder themselves and as many as they can on any occasion. It is difficult to meet this point by using all the existing methods. That is why control orders were put in place and that is why their replacement must be good both for our liberty and for our security. I am absolutely convinced that we will do that, and in a way that has the support of the police, the security services and all those to whom I pay tribute from this Dispatch Box today for all their work, including over the Christmas period, in keeping us safe.

Q12. This House recognises the valuable work of the armed forces in promoting and protecting democracy in some of the most dangerous parts of the world. Yet these same armed forces see that the Prime Minister in their own country is sacrificing democracy to a foreign-based media mogul—hear no evil; see no evil. Will the Prime Minister explain why? (32738)

I am afraid I did not quite get the gist of that question. The point is that media regulation is properly carried out in this country and by this Government, and it will be done in a way that is fair and transparent. That is what needs to happen; that is what will happen.

Q13. The right to strike is an important one and the hallmark of a free society, but with rights come responsibilities. Does the Prime Minister agree that any union ballot that leads to industrial action should have the majority support of those entitled to vote? (32739)

I know that a strong case is being made, not least by my colleague, the Mayor of London, for this sort of change. I am very happy to look at the arguments for it, because I want to make sure that we have a fair body of union law in this country. I think the laws put in place in the 1980s are working well. We do not currently have proposals to amend them, but I am happy to look at this argument, because I do not want to see a wave of irresponsible strikes, not least when they are not supported by a majority of people taking part.

Q14. Nye Bevan, a man of great vision and remarkable foresight, once said: “The Prime Minister has an absolute genius for putting flamboyant labels on empty luggage.” Is this Prime Minister’s so-called bonfire of the quangos one such example, because it has turned out to be a damp squib? (32740)

I do not accept that for a moment. The bonfire of the quangos is going to make sure that we rationalise all the non-governmental bodies and it will save billions of pounds in the process. It is a very sensible process of asking what should be part of Government, which should be properly accountable to this House, and what does not need to be done and therefore can be taken away. As I say, it will save billions of pounds—and a very good thing, too.

Will the Prime Minister join me in congratulating the Crawley hospital league of friends on helping to secure a new mammogram machine for that hospital? Can the Prime Minister explain other ways in which we can develop better cancer services in this country?

I am grateful for my hon. Friend’s question. I know that Members in all parts of the House support the efforts of leagues of friends in their constituencies in raising money for their hospitals and doing extraordinary things in terms of equipment and better services. This is a good moment at which to pay tribute to all who take part.

Today we are announcing a new cancer plan that aims to save another 5,000 lives every year by the end of the current Parliament. This is all about the early diagnosis that we need in the NHS, but I must tell the hon. Gentleman that we would not be able to do it if we had not, as a coalition Government, made the right decision to protect NHS spending—a decision completely opposed by the Labour party.