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Prime Minister

Volume 522: debated on Wednesday 26 January 2011

The Prime Minister was asked—


I am sure the whole House will want to join me in sending our deepest condolences to all those affected by the appalling terrorist attack in Moscow on Monday. Our thoughts should be with the families of all those killed and injured, but especially with the family of Gordon Cousland of the United Kingdom. I spoke to President Medvedev on Monday evening and offered him our complete support in ensuring that the terrorists should never be allowed to win.

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

On behalf of my colleagues, I wish to join in the tribute that the Prime Minister has paid. We would also wish to send our best wishes to a soldier from Northern Ireland who was injured in Afghanistan last week.

Every week, £600 million in fuel duty flows into the Treasury from hard-pressed motorists right across the United Kingdom. That is £600 million each week since the Prime Minister said that a fuel duty stabiliser was

“a sensible, balanced policy that protects families from big increases in the oil price.”

He has talked about a fuel duty stabiliser; he has promised it; he has answered questions on it—so when is he going to introduce it?

I do not believe in making tax changes outside a Budget, which is the proper way we do things in this country. There is a strong case for looking at this area, because I want to see a situation where, when oil prices rise, we try to help motorists and share the burden with them. The hon. Gentleman quite rightly reminded me of something I said, so perhaps I can remind him of something he said, as he stood on a manifesto that emphasised the need to “reign back public spending” and stated:

“A key priority of the next Government must be reducing debt”.

I agree with that.

I am delighted that the Government’s new enterprise allowance will be announced and will begin in my home area of Merseyside on Monday. Will not initiatives like that that spark enterprise and start businesses in some of the most deprived parts of the country?

My hon. Friend is right. I hope that Labour Members will encourage people to start up businesses and get enterprise going, as it is a private sector-led recovery that this country needs. We should also give special help to areas such as hers, which I visited recently, to try to ensure that we do everything to help growth in Merseyside and improve the prospects of the Atlantic gateway—a very exciting prospect for her area and for everyone who lives and works on Merseyside.

I join the Prime Minister in sending deepest condolences to the families of those killed in the bombing at Moscow airport. Our thoughts are particularly with the fiancée, family and friends of Gordon Cousland.

Will the Prime Minister explain to the House what, in his view, is the cause of yesterday’s disappointing growth figures?

First, they are disappointing growth figures—and they are disappointing even excluding what the Office for National Statistics says about the extreme weather. The point I would make is that this country has a very difficult economic situation for two main reasons. First, we have the biggest budget deficit in Europe, and we have to get to grips with it, which is difficult. Secondly, we had the biggest banking boom and the biggest banking bust anywhere in Europe, and we have to deal with that. As my right hon. Friend the Chancellor, the Governor of the Bank of England and I have all said, it is inevitable that, as we recover from those things, it will be choppy and it will be difficult. The worst thing to do would be to ditch our plans on the basis of one quarter’s figures.

The Prime Minister has been going around for months saying that our economy is out of the danger zone. Only a month ago, he told the House:

“It is because Britain’s economy is out of the danger zone and recovering.”—[Official Report, 15 December 2010; Vol. 520, c. 901.]

May I ask him to confirm that? He said that if we set aside the bad weather, the figures were not good. In fact, if we set aside the bad weather, growth was completely flat. There was no growth in the last quarter of 2010: no growth at all.

That is exactly what the figures show, yes.

The right hon. Gentleman asked about the danger zone. The point that I would make is this. Britain is no longer linked with countries such as Greece, Ireland and Portugal. Everyone was clear about the position before the last election. The Institute of Directors, the Confederation of British Industry and the Governor of the Bank of England all said that there was no credible plan to deal with the deficit.

If you do not deal with your debts, you will never have growth. That is the truth, and the right hon. Gentleman knows it.

The Prime Minister does not get it. If you do not have growth, you will never cut the deficit. That is what we saw in the last quarter of 2010.

As millions of families and businesses are worried about their livelihoods and see unemployment rising, inflation rising and growth stalled, what the country wants to know from the Prime Minister is whether he is going to change his strategy in any way in order to get the economy moving.

What we need to do in our country is get the deficit down, and at the same time do everything that we can to encourage growth. Let me read to the right hon. Gentleman what the head of the OECD said about the British economy, because I think that it is absolutely vital. He said:

“the UK was exceptional in terms of its needs of fiscal consolidation because the deficit had gone completely out of control.”

He also said:

“I think dealing with the deficit is the best way to prepare the ground for growth in the future. In fact, if you don't deal with the deficit you can be assured that there will not be growth because confidence will not recover.”

This man, who is entirely independent and in charge of the OECD, is giving us good advice, and I advise the right hon. Gentleman—as he has a new shadow Chancellor and can make a new start—to follow it.

The difference is that when we left office the economy was growing. Now the Prime Minister is in office, and it is not.

I have a very specific question to ask the Prime Minister. He has already made clear his decision on VAT, but he still has a choice to make about whether to go ahead with the decision to take another £20 billion out of the economy this year when the recovery is fragile. Is he telling the House and the country that he is determined to go ahead, irrespective of the figures and irrespective of what people up and down the country are feeling?

We have now heard what I think we are going to hear a lot more of: the theory that there was a golden inheritance from the Labour party. That is one of the most laughable propositions that I have ever heard put in the House of Commons.

We will not forget that we had the biggest budget deficit in the whole of Europe, and that we were spending £120 million every day just on the interest on that deficit. We inherited a situation in which, because of the regulation carried out by the right hon. Gentleman and the shadow Chancellor when they were in the Treasury, we had the biggest boom and the biggest bust in our banking system. We had a growth model that was based on uncontrollable boom in housing, uncontrollable boom in financial services, uncontrolled public spending, and uncontrolled immigration. We inherited a completely bust system from the two people who worked in the Treasury throughout the last Labour Government.

I suppose we can take it from that answer that the Prime Minister is not going to change course. He is not going to do anything to bring about growth in the economy. This is how out of touch he is. What people up and down the country are saying is that he is going too far and too fast with deficit reduction, and that that is what is inhibiting growth in this country.

The evidence shows that while cuts are being made in the public sector and while jobs are being lost in the public sector, jobs are not being created in the private sector. Why does not the Prime Minister, just for once, put his arrogance aside, and admit that he knows how to cut jobs but has absolutely no idea how he is going to create them?

The right hon. Gentleman has got to stop writing his questions before he comes to the Chamber and actually listens to the answer. He asks about changing course, and I have to say to him that he seems to have replaced a shadow Chancellor who did not understand Labour’s programme with one who does not agree with it. He asks specifically about cuts next year. Let me just remind him that it is Labour’s own plan for significant cuts in spending to start in April this year. He shakes his head, but that is his plan, which he is meant to be committed to. If he is now saying that that has all gone and Labour is just going to spend more and borrow more, he ought to tell us. As far as I can hear, his only plan is to borrow money we have not got, to spend money on things we cannot afford, and not to do the work we need to do to sort this economy out.

I am surprised that the Prime Minister is raising personnel issues this week of all weeks, because who has made the right judgment, me, who appointed the shadow Chancellor, or him, who clung on to Andy Coulson for months?

When people listen to the Prime Minister they know what the right hon. Member for Haltemprice and Howden (Mr Davis) meant when he said that the Prime Minister and Chancellor

“don’t have a sense of what a large part of the country”

feels. They are out of touch with people’s lives, they are taking a reckless gamble, and what these figures show is that for millions of people up and down the country it is hurting but it is not working.

If it was such a good decision to have the right hon. Member for Morley and Outwood (Ed Balls) as shadow Chancellor, why did the right hon. Gentleman not appoint him in the first place?

Let me just make the point that the absolute key for this country and our economy is two things: we have to deal with our deficit; and we have to help deliver growth from our private sector. I think that the right hon. Gentleman should listen to what the Governor of the Bank of England said last night in his speech. [Interruption.] Perhaps Labour Members will want to listen to the Governor of the Bank of England, who said:

“The UK economy is well-placed to return to sustained, balanced growth over the next few years”.

He said that this was partly as a result of the

“credible…path of fiscal consolidation”.

He continued:

“the right course has been set, and it is important we maintain it.”

I prefer the advice of the Governor of the Bank of England to that of the man sitting opposite.

Thank you, Mr Speaker.

Is not the lesson from the noble Baroness Thatcher that, when you have set an economic course, you should stick to it—“there is no alternative”?

My hon. Friend has a huge following in all parts of the House. The point he makes is important: it is that whatever your plans to encourage growth in the economy—we have the lowest corporate tax rate in the G7, we have abolished Labour’s jobs tax, and we are investing in science and skills, all of which are necessary—without a plan to deal with the deficit, they are nothing.

Q2. I think the Prime Minister would accept that he has had better weeks. He has lost the support of the CBI because he does not have a growth strategy; the economy has taken a highly predictable downturn; he has lost his Essex man; and I understand that there were forecasts of snow for the end of the week. Is there anyone remaining in the Government who still understands or is in touch with the concerns of ordinary people, whose jobs are under threat because of his policies? (35932)

The point I would make is that the CBI says very clearly that it is absolutely essential that we get to grips with the deficit. What it said at the time of Labour’s last Budget was that there was not a credible plan; it believes that there now is a credible plan. This is not going to be easy. The Labour party is committed to cuts from April this year. This will not be easy, but it has to be done.

Q3. The Conservative-Liberal Democrat coalition that has been running Reading borough council since last May has uncovered the fact that over the past 12 years the previous Labour administration spent £1.4 million of taxpayers’ money funding the salaries of three full-time union officials. Does the Prime Minister agree that that is an inappropriate use of taxpayers’ money and that full-time union officials should be paid for by union subscriptions? (35933)

My hon. Friend makes a very good point. It seems that in local government the Labour politicians pay the unions, whereas in national politics the unions pay for the Labour politicians. It is nice work if you can get it.

Q4. The Government have switched the indexation of benefits and public sector pensions from the retail prices index to the lower consumer prices index, but when it comes to hiking up petrol, they continue to use the higher retail prices index. In the interests of fairness, how can the Prime Minister justify using the higher indexation for petrol? Should the Government not at the very least use one or the other? (35934)

I can give the hon. Gentleman one tip. Before writing the question, it is always good to work out one’s own party’s policy. The Opposition are now committed to increasing benefits by CPI rather than RPI. His party is backing our policy and is far from opposing it.

Q5. Recent work by the Nuffield Foundation has shown that Britain has the lowest proportion of 16 to 18-year-olds studying mathematics of any of our competitor countries in the OECD. Just as bad, we have a chronic shortage of maths teachers in our schools. What action are the Government going to take on this issue? (35935)

My hon. Friend makes a very good point. The Nuffield Foundation has produced an extremely worthwhile report on how badly we are doing with maths teaching and in terms of the number of people studying maths. We will be taking a series of steps to sort this out, which will be announced by my right hon. Friend the Education Secretary. One is to expand Teach First, which is an excellent scheme to get graduates from our best universities into schools, and which, for the first time, will include primary schools. Many of them will be maths teachers. We also want to raise the bar for teachers as regards the qualifications they need to teach maths. That is vital in our country and my hon. Friend is right to highlight the issue.

Q6. Last Friday, I visited my constituent Vera Gaskin at her Livingston home. Mrs Gaskin has hepatitis C, having contracted it in 1985 through a transfusion of contaminated blood. She had been diagnosed with Hodgkin’s disease at the time. Of course, her situation is not dissimilar to that of the several thousands of people who also suffered due to the tainted blood scandal of the 1970s and 1980s. Sadly, many have passed away since. Obviously, I am aware of previous debates in the House on the matter and the statement by the Health Secretary on 10 January, but this does not bring closure to many victims and their families. Will the Prime Minister personally prioritise this matter, work with the devolved Administrations and introduce a proper compensation scheme, thus finally bringing justice to the innocent victims of this terrible tragedy? (35936)

I thank the hon. Gentleman for that question. He has had constituents come to him about this extremely difficult issue and I have had exactly the same experience in my constituency. Although previous Governments had put arrangements in place, there was a basic unfairness, particularly towards those who caught hepatitis C, because the evidence about what happens to people with AIDS and hepatitis C has changed over the years. I was pleased that my right hon. Friend the Health Secretary made the statement last week that we would increase what was being given to those suffering from hepatitis C. I am not sure that there is ever a level of payment that will bring closure for such an appalling accident, but I believe that the conditions in this country were different from those in other countries that campaigners often compare it with, such as the Republic of Ireland. I think we have the right answer.

Q7. The mobility component of disability living allowance for people in care homes is being reviewed. Whatever improvements are made, will the Prime Minister assure me that disabled people in care homes will still have access to individually tailored mobility support, and that that will be, as the coalition agreement implies, at no extra cost to them or their families? (35937)

I am grateful for my right hon. Friend’s question. The intention here is very clear: we want to ensure that the treatment of people in hospital is the same as the treatment of people in residential care homes in terms of the mobility component of DLA. That was behind the announcement we made, and that is what we want to make sure happens.

The Prime Minister may be aware that one of the Members elected to this House has decided to emigrate, and he may want to chalk that up as one of his achievements. The hon. Member for Belfast West (Mr Adams) seems to be extremely embarrassed about applying for an office for profit under the Crown although he has shown no such embarrassment in profiting from his office in this House for many years at taxpayers’ expense. When will the Prime Minister deliver on his pre-election pledge to hard-pressed taxpayers that he will abolish parliamentary money for parliamentary purposes going to those who do not fulfil their parliamentary duties?

First of all, just in case everyone has not caught up with the news, the right hon. Gentleman is quite right that the hon. Member for Belfast West has accepted an office of profit under the Crown, which is of course the only way to retire from this House. I am not sure that Gerry Adams will be delighted to be a Baron of the Manor of Northstead, but none the less, I am pleased that tradition has been maintained. On the very serious point that the right hon. Gentleman makes about allowances, in my view we should be aiming for all Members who are elected to take their seats in this House. That is what should happen and if some Members have a problem with what that entails, they ought to look at a remedy for that and should come and talk about it. That is the most important thing we could achieve.

Q8. Will the Prime Minister join me in congratulating Vaynor first school in Redditch, where I am chairman of the governors, on having recently received a good Ofsted report despite the continual lack of fairer funding from the Labour party? Will he also welcome the extra funding that will be heading to Worcestershire schools, due to the pupil premium, totalling more than £3 million? (35938)

My hon. Friend makes a very good point, and I hope that everyone in the House will be able to welcome the fact, first, that the amount of spending per pupil will continue, even though we have a very tough and difficult situation in our country. Over and above that, there will be a pupil premium payment—something that the Labour party did not do in 13 years of being in power. This money will go to those from deprived backgrounds in schools all over our country, and not just in inner-city areas; as she says, her constituency will benefit. I think the whole House should celebrate that.

The former investigating officer is now on the payroll of News International and three senior editors have been identified in relation to phone hacking—is it not time that another police force took over the inquiry? You have the status to make it happen, Prime Minister. What are you afraid of?

Let me be absolutely clear: phone hacking is wrong and illegal, and it is quite right that the Director of Public Prosecutions is reviewing all the evidence, which should be followed wherever it leads. I do not think it is necessarily fair to say that the police have not been active—after all, there have been prosecutions, convictions, and indeed imprisonments—but the law is quite clear and the prosecuting authorities should follow it wherever it leads.

Q9. Tomorrow is Holocaust memorial day—the anniversary of the day on which Auschwitz was liberated. Will my right hon. Friend join me in paying tribute to the Holocaust Education Trust and its work to ensure that the lessons of the holocaust are not forgotten? (35939)

I know that my hon. Friend speaks for the whole House when he raises the brilliant work that the Holocaust Education Trust does. I think this is a good time to pay tribute to the, sadly very few, holocaust survivors left. I had the huge privilege of meeting one, Trude Levi, yesterday in No. 10 Downing street. To hear the story of what those people went through, what they escaped, and in many cases what they had to go through even after they escaped, is truly humbling. We must never forget—not just because of what happened in Europe in the holocaust, but because too often there is genocide in our world today; we need to be permanently reminded of that fact.

Q10. The Prime Minister, the Chancellor and the majority of the Cabinet grew up in secure worlds of economic wealth and privilege. Does the Prime Minister agree that today’s young people face economic uncertainty and high youth unemployment? Is youth unemployment a price worth paying? (35940)

It never is—but youth unemployment has been a structural problem in our country for years. Under the previous Government, when the economy grew for many years, youth unemployment was worse at the end of that growth than it was at the beginning. Then, of course, it rocketed during the recession. We need a serious examination of how we can reduce the number of people who are not in education, not in employment and not in training. Rather than trading slogans across the House, it would be better to work out why the number has gone up in good times and in bad.

Q11. Unlike the NHS or my local council, a Sue Ryder hospice in my constituency, Manorlands, is not able to reclaim the VAT that it has paid. May I ask the Prime Minister to examine the issue and try to create a level playing field for health care charities? (35941)

I know this is an issue that many hon. Members care about deeply. We should all pay tribute to the hospice movement and what it does, working with our health service. It is important that we do everything we can to cut red tape and allow charities to thrive. Charities can and do reclaim some of their VAT, but in considering a bigger exemption such as my hon. Friend speaks about, we have to look at the consequences both for the state sector and the private sector, and their relationship with the voluntary sector, before we can take such a step.

Will the Prime Minister join me in welcoming the visit of the Prime Minister of Bangladesh to the United Kingdom and to Parliament? Apparently, a few years ago, when she came to Prime Minister’s questions, she was so impressed that she decided to institute it in Bangladesh. I am not sure whether she has changed her mind since. Can he give the House an assurance that he will continue to build on the strong bilateral links between Britain and Bangladesh?

I thank the right hon. Gentleman for his question. The Prime Minister is very welcome to Britain and also welcome to be watching our deliberations today. As the right hon. Gentleman says, whether she will go away feeling proud and excited by what the mother of Parliaments does on Wednesday at 12 o’clock is another question. She has already had a very good meeting with my right hon. Friend the Deputy Prime Minister. Relations between Britain and Bangladesh are good, and we need to expand them still further.

Q12. My constituents, Ben Oldroyd and Matthew Carr, are autistic and have Asperger’s syndrome. They have asked for my help because they want to visit schools in the Selby district to speak to pupils and staff and give them their experience of living with autism and the challenges that they face with that condition. They have already received praise from the head of Brayton high school. Does my right hon. Friend agree that such an initiative could be extremely good news for schools and the teaching profession? (35942)

I thank my hon. Friend for his question, which raises an important point. We made good steps during the last Parliament, with the Autism Bill promoted by the now Secretary of State for Wales, my right hon. Friend the Member for Chesham and Amersham (Mrs Gillan), but there is a huge amount that can be done by people themselves to get a greater understanding of autism and Asperger’s, not least because there is such a huge spectrum and such a big difference between the children suffering from those conditions. I am sure the work to which my hon. Friend refers is extremely worth while.

Last week the Prime Minister said something that I agree with: he said that we needed to do something about loan-sharking, so will he join me next week in supporting the motion to cut the cost of credit and support the poorest consumers in Britain with protection from those companies?

At the risk of building on what is clearly a blossoming friendship already, I will look carefully at what the hon. Lady says. On the issue of controlling loan sharks, one part should be encouraging credit unions. There is all-party support for that. Sometimes we have to be careful as we regulate that we do not drive out responsible operators and bring in loan sharks, so we must get the balance right. I will look carefully at what the hon. Lady is saying and perhaps get back to her.

Q13. Last week the Public Accounts Committee found that the previous Labour Government had pushed through private finance initiative deals without offering any alternative, and often regardless of expense or value for money. The result has cost the taxpayer billions of pounds too much. Does the Prime Minister share my view that there should now be a full investigation of why and how that happened? (35943)

I thank my hon. Friend for his question. The Public Accounts Committee can do a lot of that work by unveiling some of the appalling decisions that were made, which were just about off-balance-sheet accounting, rather than good value for money. I see the shadow Chancellor nodding, but he was in the Treasury when all that happened. As in so many cases, what we will find is that the mistakes that we now have to pay for are the responsibility of Gordon Brown’s two henchmen sitting on the Opposition Front Bench.

Q14. The Prime Minister used to talk rather a lot about fairness, but he has not done so well on performance, so here is a test for him. The banks have walked away from the talks on bankers’ bonuses. What will he do about it? (35944)

The talks are ongoing, and I will tell the right hon. Gentleman what I want. I want the banks to pay more in tax, and they will pay more in tax, up from £18 billion last year to £20 billion next year. He says they have walked away; they have not. These talks are ongoing, and I want to see the taxes go up, the bonuses come down, but vitally, the lending increase. I am confident that we will achieve all those three goals.

I know that the Prime Minister regards Blackpool as a special place, as indeed he should. Does he agree that it is about time that Blackpool’s unique status as the first working-class seaside resort should be recognised with UNESCO world heritage status?

My hon. Friend makes a powerful case for his constituency. I have a warm feeling whenever I think of Blackpool, because of the many conferences that I have attended there and the time that I have spent there. I understand, as I know he does, the pressures that it faces because of changing patterns of tourism and development, and the Government are committed to helping Blackpool to map out a strong future. It is also wonderful to see Blackpool in the premier league where they belong.

Q15. With the economy shrinking by 5% and inflation rising, having followed Ireland on the path of cutting too fast and too deep, are we not now in danger of following Ireland further down that slippery slope? (35945)

I am sorry to tell the hon. Lady that the 5% reduction was under her Government, not this Government. If the former shadow Chancellor’s primer has gone missing, perhaps she could get hold of a copy. When we came to office in May, the idea that there was some acceptable plan to reduce the deficit is a complete fiction. Let me just give her this one figure. If we went ahead with the plan of halving the deficit in four years, in four years’ time our deficit would be bigger than Portugal’s is now. Does anybody think that that is a credible path back to growth and confidence? It is not.

One of the most important strands in the Government’s growth strategy has been the creation of 75,000 additional apprenticeships. Does the Prime Minister agree that the forthcoming national apprenticeship week and the Gloucestershire apprenticeship fair represent a great opportunity to get young constituents to earn while they learn, especially in the manufacturing sectors, which are growing faster now than at any time under the previous Government?

My hon. Friend makes an excellent point. In the spending review, we had to take difficult decisions, particularly on welfare and pay, but as a result we are able to expand the number of apprenticeships to a record level, an extra 75,000. Yes, the growth figures are disappointing, but manufacturing and exports are up, and we are starting to rebalance the economy away from the unsustainable booms that we had under the Labour Government.

Order. Before the right hon. Member for Rotherham (Mr MacShane) asks his urgent question, I appeal to hon. and right hon. Members who are leaving the Chamber to do so quickly and quietly, so that those who are interested in the next business can attend properly to it. A quiet and speedy exit is required.