House of Commons
Wednesday 9 March 2011
The House met at half-past Eleven o’clock
[Mr Speaker in the Chair]
Oral Answers to Questions
The Secretary of State was asked—
Higher Education Funding
1. What recent discussions he has had with ministerial colleagues and Ministers in the Scottish Executive on funding for higher education institutions in Scotland. 
I have regular discussions with ministerial colleagues on matters related to higher education in Scotland. Funding for higher education in Scotland is largely a devolved matter, and my hon. Friend may be aware that the Scottish Government concluded the consultation on its Green Paper on the future of higher education funding on 1 March.
In our United Kingdom, is it right that students from England studying in Scotland can be discriminated against in favour of students from Scotland or from other countries in the European Union?
My hon. Friend will know, as I have stated, that higher education is devolved, and it is for the Scottish Government to decide how to determine the funding of students from both Scotland and England. The fact that £75 million is being spent funding students from the European Union in Scotland will be the subject of considerable discussion at the forthcoming Scottish Parliament elections.
Not long ago, the Secretary of State unwittingly told The Daily Telegraph that
“tuition fees are the biggest, ugliest, most horrific thing”,
and that breaking his word on the issue is
“the worst crime a politician can commit”.
Does the Minister agree with him?
I agree with Sir Andrew Cubie, who commented on the Scottish Government’s proposals on higher education, and said that their response was “too late” and that they had had the opportunity to lead the way on higher education in the United Kingdom, but chose to follow.
The Minister chose not to answer the question. Returning to the comments of the Secretary of State, at the same time, he said that accepting tuition fees of £9,000 was a “car crash” and “a train wreck”. Will the Minister confirm that, because the issue is devolved, Scotland does not have to follow the hare-brained policy of the Liberal Democrats and Conservatives in government in England by introducing a car crash of a policy in Scotland?
My concern for students in Scotland stems from the failure of the Scottish National party Government to address the issue of higher education funding in Scotland. As the hon. Gentleman will know, a funding gap of up to £260 million in higher education in Scotland has been identified as a result of the SNP’s governance. By my definition, that is a car crash.
The aspect of the reform of higher education funding in England that I most applaud is the fact that, for the first time, part-time students will receive the same treatment as full-time students. Will my right hon. Friend do all he can to persuade the Scottish Government to do all they can to support part-time students in Scotland?
My hon. Friend identifies a positive and progressive aspect of the Government’s higher education policy as it applies to England, and it is a policy that deserves to be introduced in Scotland.
Fuel Duty Derogation
2. What recent discussions he has had with the Chancellor of the Exchequer on the implementation of a fuel duty derogation for rural areas. 
I have regular discussions with the Chancellor of the Exchequer on a wide range of issues. The Government have already announced that they intend to introduce a pilot scheme that will deliver a discount on petrol and diesel in rural areas, including the inner and outer Hebrides, the Northern Isles, the islands in the Clyde, and the Isles of Scilly.
Through the rural fuel derogation we must ensure that there is transparency in fuel distribution in the highlands and islands. Nine months ago, there was 8p difference between Stornoway and Inverness; now there is 18p difference in the price of a litre of fuel. Will the Secretary of State make sure that the Office of Fair Trading looks at issues surrounding fuel distribution, so that any savings from a rural fuel derogation are passed on to families, businesses and the community in the islands?
I welcome the hon. Gentleman’s implicit recognition of the importance of the derogation, which we are seeking and on which my right hon. Friends in the Treasury will make formal submissions in the near future. As for distribution issues, the hon. Gentleman is right to highlight the complexities of the price of fuel across the country. He knows that better than most people, and I am happy to meet him to discuss the issue further.
I greatly welcome the introduction of the fuel duty discount pilot scheme on the islands, and I also welcome its extension to the Isle of Bute. While we wait for permission from the EU, however, urgent action is needed to stop the price of fuel going up even further. Will the Secretary of State speak to the Chancellor and tell him that he must cancel the 4p fuel tax rise that Labour planned for this year’s Budget?
My hon. Friend will be the first to acknowledge that the fuel duty increases over the past year reflect the previous Government’s plans to increase duty by 1p per litre over the retail prices index this year and for years to come, and, as we have already discussed, the derogation is now being sought. The Chancellor and the Chief Secretary to the Treasury will have heard my hon. Friend’s strong representations on behalf of his communities, and I recognise how serious an issue petrol and diesel prices are throughout the country.
Research and Development Tax Credits
3. How many small businesses in Scotland (a) applied for and (b) received research and development tax credits in the latest period for which figures are available? 
In the financial year 2008-09, figures for the United Kingdom show that there were 350 claims for research and development tax credits from small and medium-sized businesses, and that the total amount of relief awarded was £15 million. Figures for Scotland are not currently held centrally.
Well, there we are: once again, a question not answered. The right hon. Gentleman probably does not even know that there is no R and D specialist unit in Scotland to help small businesses get tax credits—but there is one in Wales and six in England. Does he think that that is fair?
What I am aware of is that Her Majesty’s Revenue and Customs R and D tax and credits unit held a workshop in Glasgow on 9 February, and it was well attended by businesses from the Glasgow area.
Do the Government intend to abolish the intellectual property restrictions on R and D tax credits, which would make it much easier for companies in Scotland in the biotechnology and micro-electronics industries to benefit?
The Government do indeed intend to abolish that restriction, and I believe that it will have the benefits that my hon. Friend outlines.
4. What assessment he has made of recent trends in levels of employment in Scotland. 
8. What assessment he has made of recent trends in levels of employment in Scotland. 
Although the final quarter of 2010 saw falling unemployment and rising employment in Scotland, helping people into work remains a key priority for this Government.
Gross domestic product in the economy has contracted by 0.6%, confidence is being shattered by the increase in VAT, unemployment is rising, with the full effect of public sector job losses to come, and employers all over my constituency are really concerned that the banks are getting away scot-free while they are being hit the hardest. Does the Secretary of State have any plans at all for growth in order to get jobs back into the Scottish economy?
In a compendium of issues, the hon. Gentleman forgets to mention the role that his own Government played in the management of the economy up until last May. Our overriding priority is to get a path to sustainable growth, and that means stabilising the economy, which is what the deficit reduction plan is about, and ensuring that we support businesses by reducing tax, maintaining interest rates lower than they would otherwise have been and helping businesses to access finance. We have a real programme of action, unlike the previous Government.
Rising unemployment is a great concern in my constituency of Dundee West. In fairness to the Secretary of State, he did visit Dundee to see for himself the importance of the computer games industry to the city, but does he continue to support the Government’s stance of not implementing a tax break, which both the Lib Dems and the Tories claimed to support prior to the general election? If so, what plans does he have for job creation in my city of Dundee?
As I have said previously to the hon. Gentleman, our visit together to Abertay university was very worth while, and he makes a strong case for the computer games industry. Taxation is clearly a matter for the Chancellor, and the Budget is coming along soon, but, as I said in answer to his hon. Friend the Member for Edinburgh South (Ian Murray) a moment ago, the overriding thing, which will help the computer games industry and everybody else, is to get us back on a sustainable path to growth. That is our overwhelming priority.
My right hon. Friend will know that marine renewable energy offers tremendous employment prospects in Scotland. Is he aware of the proposal by Department for Energy and Climate Change Ministers to create renewable energy parks; and will he use all his powers to ensure that the first such park is in Caithness, where all the ingredients already exist?
Caithness could not hope for a finer advocate of its cause, and my hon. Friend has spoken with me on many occasions. The importance of renewables to the far north of Scotland—indeed, the whole of Scotland—is second to none, particularly in the context of the rundown of Dounreay, something that I know is close to his heart and on which he works very carefully.
In December I highlighted to the House that in Campbelltown 13 claimants were chasing every available job. Unfortunately the situation today is far worse: the Scottish Trades Union Congress reports that currently 27 jobseeker’s allowance claimants are chasing every advertised vacancy in north Ayrshire. The Secretary of State says that he is concerned about high unemployment in Scotland, so can he tell the House when he last visited north Ayrshire and spoke directly to those people who are struggling to find work?
I have carried out a range of visits around Scotland and will continue to do so; I am very happy to take up the hon. Lady’s suggestion. However, may I gently remind her that unemployment was rising under her Government when she was in the Scotland Office? She should not look so pleased about the situation as it is now.
Yet again, the Secretary of State fails to tell us what his alternative is. Thousands of our young people have been worst hit. This Government claim that their Work programme will be much better, but officials are saying that there will be 250,000 fewer places next year than the number who entered Government schemes this year. Can he therefore confirm what percentage of 18 to 24-year-olds currently unemployed in Scotland will be allowed to participate in the new Work programme, and whether it will be less than in the current year?
The hon. Lady is right to highlight the issue of youth unemployment, which is a key priority for the Government. Again, it is something that rose significantly throughout her time in office, and it needs to be tackled very seriously. We have already introduced elements of the Get Britain Working programme, the work clubs and the Working Together programme, and the Work programme will come along in the summer. We look forward to debating that further with her.
5. When he expects next to discuss with ministerial colleagues trends in the level of youth unemployment in Scotland. 
The Government are determined to deal with the long-term legacy of youth unemployment, and this is a key priority in my discussions with ministerial colleagues. Our Get Britain Working measures and the new Work programme will provide the best possible support for young people struggling to find employment.
I thank the Secretary of State for that answer. He will be aware, however, that levels of unemployment among the 18-to-24 age group have soared over the past few months. As a result, in north Ayrshire in particular, we have the highest levels of youth unemployment. What is he going to do about that?
First, I commend the hon. Gentleman for his consistent campaigning on this issue, which is a very significant one in his part of the world. However, I think that he would also acknowledge the point that I made to the hon. Member for Glasgow North (Ann McKechin) a moment ago—that youth unemployment has been a serious problem for a long period. I discussed the issue with the Work and Pensions Secretary only last night. As I have said to the hon. Gentleman previously, I look forward to convening a meeting in his constituency where we will discuss all these issues with the relevant individuals and organisations from across Scotland. I look forward to his being part of that event.
I think the whole House shares the concern that the Secretary of State seems to indicate that he has, but can he share with the House the number of young unemployed people to whom he has spoken this year?
I have spoken to many young unemployed people across Scotland, not just this year but over the whole course of my time as a Member of Parliament, and not just in my own constituency but elsewhere too. They all want to see a sustainable route out of the difficulties that the country is in. This is not only about the Work programme measures that I have already mentioned but about getting the country back on its feet and tackling the deficit, making sure that we have a sustainable way to growth by focusing on bank lending, keeping interest rates low, and providing support by cutting taxes, be they corporation tax or national insurance. All those measures will help.
Welfare Reform Bill
6. What assessment he has made of the likely effect on families in Scotland of the changes to benefits proposed by the Secretary of State for Work and Pensions. 
7. What discussions he had with the Secretary of State for Work and Pensions prior to the publication of the Welfare Reform Bill on the likely effect on Scotland of the measures in that Bill. 
10. When he last met anti-poverty campaigners in Scotland to discuss the potential effect in Scotland of the measures in the Welfare Reform Bill. 
The Secretary of State for Scotland and I are in regular contact with ministerial colleagues in the Department for Work and Pensions. We also meet regularly organisations in Scotland with an interest in welfare and combating poverty.
That was not an answer to the question that I asked. I cite two cases to the Under-Secretary: a family with a son born with fragile X syndrome and autism and another family with an absolutely outstanding young teacher who suffered a massive stroke. Both of them now require 24-hour residential care. Their lives will be damaged irreparably if the Government go ahead with the withdrawal of benefits for people in residential care—benefits that give them a quality of life that makes residential care not a prison sentence. Will the Secretary of State and the Scotland Office campaign with the people of Scotland against this proposal by the Government to withdraw benefits from people in residential care?
The hon. Gentleman will be aware that there was a debate this morning in Westminster Hall on that specific issue. The Government have indicated that they are listening to the concerns. The fundamental issue with disability living allowance is that it is not fit for purpose and needs change. The Government are taking those changes forward.
I have been contacted by Mr Ron Skinner, MBE, who is a non-executive director of Order of Malta Dial-a-Journey Ltd, which operates in my constituency. He expressed grave concern about the impact of the removal of mobility allowance from those in residential care. What specific discussions has the Minister had with his opposite numbers in the Department for Work and Pensions on this issue, which is causing great concern for those in residential care?
Yesterday, I met the Minister of State, Department for Work and Pensions, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling) and Lord Freud, the Minister in the House of Lords who is responsible for welfare reform, to discuss the implications of welfare reform for Scotland. The right hon. Lady raises one such issue. As was said in Westminster Hall this morning, DLA as it currently exists is not fit for purpose. It is applied randomly across care homes, not just in Scotland but across the United Kingdom, and it needs to be reformed.
Several hon. Members
Order. There are far too many private conversations taking place in the Chamber. Let us have a bit of order for Fiona O’Donnell.
Like you, Mr Speaker, I am feeling in a generous mood, so I will give the Under-Secretary of State a third chance to redeem himself. The Prime Minister’s excuse for removing the mobility component was that it addressed an anomaly between those in hospital and those in residential care. Will the Under-Secretary of State at least acknowledge that residential care homes are based on a social model, and not a medical model?
I certainly acknowledge that residential care homes are social rather than medical institutions primarily. However, as the hon. Lady will know, having been present at this morning’s debate in Westminster Hall, many care homes operate the mobility aspect of disability living allowance differently. The basis on which it is applied to a person in a home in Scotland and what it is applied for is dependent on which home they are in. I am sure she will agree that that is not acceptable.
Does the Minister agree that many families in Scotland are suffering economically and socially because of the disastrous policies not only of 13 years of Labour Government, but of four years of Scottish National party Government in Scotland? Will he undertake to work with the Secretary of State for Work and Pensions to ensure that people in Scotland who are in real need, especially those with disabilities, benefit under his Government’s policies?
I agree with my Friend’s analysis. Like many people in Scotland, I recognise that the Welfare Reform Bill provides a once-in-a-generation opportunity to radically overhaul the benefits and welfare system.
Can the Minister indicate to the House how many low-paid Scots will be lifted out of income tax, and how many families in Scotland will benefit from the reform to tax credits that has been announced?
I will seek out that information for my hon. Friend and write to him.
The changes announced last week to social fund crisis loans will cut the level and availability of loans for essential items such as beds and cookers. Does the Minister agree that that will push vulnerable people on lower incomes towards high-cost lending and into the arms of loan sharks, exacerbating problems that Scotland already has?
I do not agree with the hon. Lady’s analysis. I am surprised to hear again from the Scottish National party that it does not welcome the devolution of elements of the social fund to the Scottish Parliament.
Green Investment Bank
9. What recent discussions he has had with the Secretary of State for Business, Innovation and Skills on the operation of the green investment bank in Scotland. 
I have regular discussions with the Secretary of State for Business, Innovation and Skills on a wide range of issues, including the operation of the green investment bank. The green investment bank will support economic growth in all parts of the country and help us to meet our environmental objectives.
Like the north-east, Scotland has great wind resources, and we are looking forward to getting a return on all that wind. Does the Secretary of State agree that the delays to and downgrading of the green investment bank are preventing us from making the best of that asset?
First, as somebody whose constituency is not that far from Newcastle, I agree with the hon. Lady that we should appreciate all its wonderful characteristics, including its weather patterns. I agree that around the whole coast of the UK, we have much that we can exploit for renewable energy. On the specifics of the announcement on the green investment bank, we are taking the matter forward aggressively and she will hear further information announced very soon.
Does the Secretary of State agree that the green investment bank could open up tremendous potential for rebalancing the economy and creating a great many new jobs? For that to happen, it needs financial experience, research and development experience in the academic institutions and renewable energy experience, all of which are available in abundance in Scotland, and particularly in Edinburgh. It would therefore be a perfect location for the institution.
I commend my hon. Friend for his efforts to locate the green investment bank in Edinburgh. I welcomed the opportunity to meet him and the hon. Member for Edinburgh North and Leith (Mark Lazarowicz) recently to discuss that very issue. I and other Ministers look forward to hearing further details on the proposal in the near future.
When I asked the Secretary of State about the green investment bank in October, he said that he would make the best possible case for its location in Scotland, yet his Department has been forced to concede under freedom of information that he has had no correspondence with Department of Energy and Climate Change Ministers on the issue and that there are no notes of meetings with them about it. How is he actually pressing the case rather than just dealing in rhetoric?
I am aware of the hon. Gentleman’s commitment to freedom of information, and I am delighted to say that, as he knows from his time in the Scotland Office, those are not the only ways in which Ministers meet. I have had many conversations with the Secretaries of State for Energy and Climate Change and for Business, Innovation and Skills, the Deputy Prime Minister and others on the issue. Like the hon. Gentleman, I hope that my colleagues will support the case for the bank coming to Scotland.
Several hon. Members
Order. There is still far too much noise in the Chamber. It is very unfair on people asking questions and Ministers answering them.
Value Added Tax
11. What discussions he has had with the Chancellor of the Exchequer on the effect on the economy in Scotland of the increase in the standard rate of value added tax. 
The Secretary of State and I have regular discussions with the Chancellor of the Exchequer on a range of issues. The VAT rise is a tough but necessary step towards Britain’s economic recovery.
Is the Minister aware of the sense of outrage throughout Scotland that on this Government’s watch, the increase in VAT means that low and middle-income families now pay a higher rate of tax on purchases and earnings than the banks are to pay on their profits? How can that possibly be fair, and why do the Government continue to insist that those with the least should pay the most?
I am aware of the sense of outrage, not just in Scotland but throughout the UK, at the state of the economy that the last Labour Government left us with, which has required such measures to be taken.
Does the Minister not accept that the recent increase in VAT, particularly on fuel such as petrol and diesel, is having a more dramatic effect on the economy in rural areas? Does he not think that his Government should address that?
The hon. Lady would be much more credible on that point if she had spoken out against her Government’s rises in duty. The issue of fuel prices in rural areas is serious, and it is already clear that my right hon. Friend the Chancellor has heard the concerns.
West Lothian Question
12. What discussions he has had with the Deputy Prime Minister on the establishment of a commission to examine the West Lothian Question. 
The Secretary of State and I have regular discussions with the Deputy Prime Minister on various issues, including those concerning the constitution. The Government remain committed to establishing a commission this year to consider the West Lothian question.
The Deputy Prime Minister told us that the commission would be established by the end of 2010, then the Parliamentary Secretary, Cabinet Office, my hon. Friend the Member for Forest of Dean (Mr Harper), told us that it would be established in the new year. Does the Minister know on what date in 2011 the commission will be established?
I am not able to give my hon. Friend an exact date, but as she will know, it is a commitment of the coalition Government to proceed with the commission, and I am sure announcements will be made shortly.
Private Sector Employment
13. What recent discussions he has had with the First Minister on support for private sector employment in Scotland. 
In my recent discussions with the First Minister, we spoke about a range of issues, including economic policies. Returning the United Kingdom to sustainable economic growth is the Government’s overriding priority. We are doing everything we can to create the conditions that enable UK businesses to be successful and create more jobs.
If the Scottish economy is to be rebalanced, the future clearly lies with employment in the private sector. Can the Minister therefore give some indication of how much Scottish businesses will save from the Government’s changes to the employers’ national insurance threshold and rate, and of how many businesses will benefit from the payment holiday for new businesses?
My hon. Friend is right to point to the importance of reducing the tax burden, and we are determined to do that. We estimate that the national insurance reductions will bring a benefit of £280 million to businesses in Scotland, or the equivalent of helping 59,000 jobs.
The Prime Minister was asked—
Q1. If he will list his official engagements for Wednesday 9 March. 
I am sure the whole House will wish to join me in paying tribute to Lance Corporal Liam Tasker from the Royal Army Veterinary Corps, who died on Tuesday 1 March. The whole country has been touched by the story of this true hero, who selflessly worked with his search dog, Theo, to locate improvised explosive devices, weapons and bomb-making equipment to save many, many lives. He will not be forgotten, and our deepest condolences should be with his family, his friends and his colleagues.
This morning I had meetings with ministerial colleagues and others, and in addition to my duties in this House, I shall have further such meetings later today.
I am sure the whole House will join me in passing on their condolences to the family and friends of our fallen service personnel.
The Prime Minister will be aware that today is no-smoking day. Will he join me in congratulating the organisers of the “Making Smoking History” lantern parade which takes place this evening in Wrekenton, a part of my constituency that is particularly blighted by that addiction? Will he also comment on British Lung Foundation research that shows that more than half of children surveyed across the UK have been exposed to cigarette smoke in cars, and that 86% of children want adults—
Order. We have got the drift.
The hon. Gentleman makes a good point with great passion. I certainly support no-smoking day, and unlike in some previous years, I hope to meet its requirements in full this year. His point about smoking in front of children and babies and smoking in cars is a good one. Whatever people have done in the past, the facts show that they really should change their behaviour. I am not sure whether it is possible to legislate in that area—we need a change in attitudes, which he is helping to lead with the British Lung Foundation and others.
Yesterday was international women’s day, and today great trade figures and export growth were announced. Does the Prime Minister agree that we would have even better figures if we managed to get more women on the boards of companies across the UK?
My hon. Friend is right to draw attention to today’s trade figures, which show a big increase in exports, which is exactly the sort of rebalancing that our economy needs. It is absolutely right that we need to get more women involved in the work force and at board level. In addition, in terms of entrepreneurialism, if we had the same rate of women setting up small businesses as America, we would have tens of thousands of extra businesses creating wealth and jobs.
I start by paying tribute to Lance Corporal Liam Tasker from the Royal Army Veterinary Corps. He was doing a job that put him in such danger, and he showed extraordinary bravery and courage. We remember him, and we pass on deep condolences to his family and friends.
Can the Prime Minister tell us who authorised the mission in Benghazi last weekend?
The Foreign Secretary set out the position absolutely in full in the House on Monday, but let me say clearly that I take full responsibility for everything that my Government do.
I am grateful to the Prime Minister for saying that, and I want to support him on Libya wherever I can, but there is increasing concern about the Government’s competence on the issue. We have had the flights fiasco, talk of Colonel Gaddafi heading to Venezuela when he was not, overblown briefing about potential military action, and the setback last weekend. Does the Prime Minister think that it is just a problem with the Foreign Secretary, or is it a wider problem in his Government?
I am not sure that I particularly want to take a lecture from Labour about dealing with Gaddafi and Libya. The first thing that we should have from the Labour party when it comes to Libya, Gaddafi and the release of Megrahi is an apology, which we still have not had. When it comes to this Government’s conduct, we have led the way in getting a tough UN resolution on Libya, getting Libya thrown out of the Human Rights Council and making sure that the world is preparing for every eventuality, including a no-fly zone.
Everybody will have heard the deafening silence about the performance of the Foreign Secretary. There is an issue of competence at the heart of this Government, and I want to turn to another example of incompetence. Does the Prime Minister think that people will notice the loss of 12,000 front-line police officers?
First, the right hon. Gentleman raises the issue of the Foreign Secretary. Let me tell him: I think we have an excellent Foreign Secretary. When it comes to it, there is only one person around here I can remember knifing a Foreign Secretary, and I think I am looking at him. [Interruption.] Right, I think we have dealt with that.
We want to see police on the streets fighting crime, not stuck behind their desks fighting paper. That is what we want to achieve. Let me say to the right hon. Gentleman that whoever was standing here right now would have to be reducing the Home Office budget and the policing budget. Labour was committed to a £1.3 billion cut. The question is not “Are you reducing the budget?”; the question is “What are you doing to cut the paperwork, freeze the pay, deal with the allowances and make sure the police are on the streets?”
The more that the right hon. Gentleman brings my relatives into this argument, the more that we know he is losing the argument. I have a second cousin in Belgium he will be going after next, I am sure.
On the question of crime, the Prime Minister says that he wants to improve front-line policing, but the West Midlands is losing 1,000 officers, Bedfordshire has scaled back gun licence checks, and now we hear that companies that have been burgled are to be sent fingerprint kits in the post. I know that he believes in the big society, but solving your own crimes is a bit ridiculous, even by his standards. You have to ask, Mr Speaker: does the Prime Minister actually have a clue what is going on out there?
I think the leader of the Labour party is getting a little bit touchy about this issue.
The point that I would make is that if we listen to what chief constables are saying about what they want to do—[Interruption.] Here is the chief constable of Thames Valley:
“what I haven’t done at all is reduce the number of officers who do the patrol functions, so the officers you see out in vehicles, on foot, in uniform, on bicycles. We haven’t cut those numbers at all.”
Listen to the chief superintendent in Surrey, who says:
“We are determined to increase our frontline capability by recruiting…extra”
police constables. The fact is that all the leadership of the police is engaged in the exercise of keeping costs under control to make sure that we get more officers on the beat. Whether we have to divert them to protect the right hon. Gentleman’s relatives, I do not know, but they are going to be on the beat.
Ten months, and so out of touch with people up and down this country. The Prime Minister talks about police officers; in case he had not noticed, it is the Association of Chief Police Officers that says that 12,000 front-line police officers are going to be lost. Why are they being lost? It is because he chose to go beyond the recommendation by Her Majesty’s inspectorate of constabulary of 12% cuts. If he had made 12% cuts, the savings could have been found from the back office, but he went too far and too fast, and insisted on 20% cuts in policing.
The right hon. Gentleman is wrong. The Association of Chief Police Officers is not talking about front-line officers, so he is simply wrong about that. Let me remind him what his home affairs spokesman said at the time of the election, when asked
“Can you guarantee if you form…the next government that police numbers won’t fall?
Alan Johnson: No”.
That was the position, and this is what he said after the election:
“if Labour had won the general election, the Home Office budget would have been cut and the police would have had to make savings”.
What we see today, once again, is jumping on a bandwagon and total opportunism. The right hon. Gentleman has no plans to reform welfare, no plans to reform the NHS and nothing useful to say about policing.
We know that the Government are out of touch, and now we know that they are incompetent as well: incompetent on Libya and incompetent on policing. The Prime Minister may act like he was born to rule, but the truth is that he is not very good at it.
The usual pre-scripted questions that he dreamt up earlier. The question is: has he got a reform plan for the NHS? [Hon. Members: “No!”] Has he got a police reform plan? [Hon. Members: “No!”] Has he got a plan to cut the deficit? [Hon. Members: “No!”] It is no wonder that the former Foreign Secretary has just said that
“the…Left is losing elections on an unprecedented scale because it has lost control of the political agenda…it is also losing key arguments”—
and it has a
“deficit in ideas”.
That is what he said, and he is absolutely right.
Will my right hon. Friend join me in congratulating the people of Suffolk, who, in less than a year, have raised more than £3 million to build a new children’s hospice through the Treehouse appeal? This is an example of the community coming together to support a local project that will really make a difference. It is also supported by BBC Suffolk, the Evening Star and the East Anglian Daily Times.
My hon. Friend is absolutely right. I know that Members right across the House back the hospice movement, with its hospices for adults and for children. The Government have put extra money into hospices, but that is a great example of the big society, where people come together and make sure that there is real provision to look after those who need it most.
Q2. The coastguard stations, our maritime insurance policy, have been treated badly by the Maritime and Coastguard Agency, which has started threatening to close stations without carrying out any risk assessment whatever. The proposed savings were not even highlighted in the comprehensive spending review, and they will be very small compared with the huge risks involved. Will the Prime Minister ensure that our coasts, islands and mariners are protected by saving our stations? As the campaign says: SOS! 
I will look at this issue carefully, because it is being raised by Members across the House. What I would say, however, is that this is not about the UK’s front-line rescue capability. The key changes are about how the coastguard service co-ordinates services and rescue missions, so the aim of the consultation is to get the resources on the front line, to those people who are actually carrying out the rescues and to those in the voluntary sector who are helping. That is what the consultation is about, and I would urge the hon. Gentleman to engage in the process.
Q3. The alternative vote system is unfair, expensive and discredited. Even members of the support team for the yes side do not really want it. What is the Prime Minister going to do to ensure that we defeat this system, because it can produce distorted outcomes? 
I thank my hon. Friend for his question. I will be campaigning hard for a no vote in the referendum. I think that it is a relatively simple argument to make. We have a system that is simple, clear and easy to explain. The alternative vote is used in only three countries. They are Australia, Fiji and Papua New Guinea—and Fiji is beginning to change its mind. There are clear arguments, and it is a referendum, so people in the coalition will be able to make those different arguments.
At Prime Minister’s questions on 27 October, the Prime Minister agreed that Ministers would work with me and with our leading children’s charities on an affordable alternative to the child trust fund for looked-after children. I can confirm that, since then, the Financial Secretary to the Treasury and the Children’s Minister have both worked constructively with us on that issue. However, the time has come to turn good intentions into action. Today, Barnardo’s and Action for Children have published a report that sets out a compelling case for a new system of savings accounts for children in care. I know that the Prime Minister wants to do more for such children. Will he read the report, then write to me to confirm that provision for such a system will be made in the Budget?
I will certainly read the pamphlet, if the right hon. Gentleman will leave me a copy. We are looking at whether we could replace funds, particularly for children in care, with some form of child ISA, and I hope that my right hon. Friend the Chancellor will have something more to say about that in the Budget.
Q4. The coalition Government’s principal objective is to cut the eye-watering deficit that we inherited from the previous Government, yet we want to support people on low and middle incomes. [Interruption.] Can the Prime Minister confirm how many people will see their incomes—[Interruption.] 
Order. I apologise for having to interrupt. Members must be heard when asking their questions, and the Prime Minister heard in answering them. It is a very simple principle. I think that the hon. Gentleman has completed his question, and we are grateful to him.
The truth is that Labour Members do not like being reminded of the massive deficit and the huge mess that they left this Government to clear up. My hon. Friend makes a good point—that in spite of difficult decisions, we will lift the tax threshold for income tax payers in April this year, and 880,000 people will be removed from income tax altogether. That is a major step forward, a big help with the cost of living, and will be welcome to families up and down the country.
Many parents in my constituency are worried sick because a number of school bus services are being withdrawn, with no guarantee of an equivalent replacement—meaning that timetables, routes and fares will be at the discretion of commercial operators. What is the Prime Minister doing to ensure that families are not subject to big fare hikes just to get their children to school?
What we are doing—it was one of the difficult decisions we took in the spending round—is to make sure that the per pupil funding in place is not going down; it is being maintained. That meant taking difficult decisions elsewhere in the Budget, but we took that decision for the good of the country’s schoolchildren.
Q5. Do the Prime Minister and the Chancellor recognise the severe impact of exceptionally high petrol and diesel prices on rural communities in England such as Northumberland, where prices tend to be 5p to 10p a litre higher than in the cities, where people have long distances to travel to work and where public transport is very limited? May we hope for some relief in the Budget? 
My right hon. Friend makes an important point. The argument has been made about high fuel costs, and we are listening to it very carefully. He will have to wait for the Budget. I know that prices for heating oil are also a big issue in rural areas like the ones that he and, indeed, I represent. We have asked the Office of Fair Trading to look at it, but I make the additional point that we have maintained the cold weather payments at £25, which has meant that something like £430 million has been spent this winter on helping people with their heating bills.
However serious the situation in Libya—no doubt Gaddafi is now using arms sold to him by British companies—will the Prime Minister give an assurance to the House today that no military action will be taken regarding Libya without direct authorisation from the United Nations Security Council?
What I discussed last night with President Obama is making sure that we plan for every eventuality, including planning for a no-fly zone. If that becomes necessary, everyone would want it to have the widest possible backing, which is why we are currently drafting a UN Security Council resolution. I think that is absolutely the right thing to do.
Q7. It is no secret that council tax doubled under the last Government. In my constituency, both local councils—Selby district and Harrogate borough council—are freezing council tax this year. Will the Prime Minister tell me and the House how many other councils have chosen similarly to help hard-pressed council tax payers? 
I am delighted to say that a huge number of councils have done that. I think it was right to announce a freeze in council tax, which will bring real help to households across the country, saving the average family up to £72 a year at a time when they face difficulties with the cost of living. That compares, as my hon. Friend said, with a doubling of council tax under the last Government. As to whether they have learned any lessons from that, I have to say that Labour’s shadow Local Government Minister, the hon. Member for Derby North (Chris Williamson) attacked this freeze as
“nothing more than a gimmick”.—[Official Report, 17 January 2011; Vol. 521, c. 531.]
Yet it is bringing relief to hard-pressed families up and down our country and it is absolutely the right policy.
Is the Prime Minister aware of a commitment in the programme for government of the coalition Government who are taking office in Dublin today to move to an opt-out system for organ donation? As well as whatever consideration his Government might give to that proposal, will the Prime Minister undertake to work with all other Administrations in these islands through the British-Irish Council to increase the number of organ donors and to improve networks for sourcing and sharing donor organs and transplant services for people who need that life-saving and life-changing treatment?
I will certainly agree to do that. It is important that we try to increase the amount of organs available for donation. In the last Parliament, there was a debate about whether we should move formally to an opt-out system, and there are difficulties with that, but there is a huge gap between where we are now and a formal opt-out system, in encouraging patients and talking to them about what can be done. I am sure that we can make steps forward, and my right hon. Friend the Health Secretary will do that.
Q8. Mr Speaker, 373,000 Daily Express readers want it, 80% of Conservative Members support it, the Deputy Prime Minister would love it, and my wife demands it. The British people, Conservative supporters, the leader of the Liberal party and especially Mrs Bone cannot all be wrong. Prime Minister: may we have a referendum on whether the United Kingdom should remain in the European Union? 
I wish that my wife were as easy to please. I was worried about where that question was going.
I am afraid that I must disappoint my hon. Friend and Mrs Bone. I think that we are better off inside the EU but making changes to it, in the way that we are setting out.
Q9. There are 1.5 million individuals throughout the United Kingdom who suffer from involuntary tranquilliser addiction, which is not a misuse of drugs by the individual but prescription addiction. It has horrendous side-effects. Can the Prime Minister ensure that special withdrawal programmes are set up across the country to give those people their lives back? I understand that the Government are reviewing the situation, but the reviews keep being put back. These people are victims of the system, and they are suffering all the time. 
The hon. Gentleman has raised this matter with me before. He speaks very powerfully on behalf of people who have that addiction, which is an extreme problem in our country.
We published a drugs strategy which set out an ambition to reduce drug use, including the use of prescription and over-the-counter medicines. That should include programmes to help people to withdraw from and come off those drugs. However, as I have said to the hon. Gentleman before, I think that we must deal with the problem at source. That is part of the purpose of our health reforms, which is to ensure that the national health service is genuinely concerned with the health of the whole person rather than being a national drugs service in which there can sometimes be too much prescribing of drugs.
The German company Storck UK, which owns and makes Bendicks chocolates in my constituency, has announced that it is consulting on plans that could involve production being moved to Germany. In the area that I represent, 115 jobs depend on that factory. Will the Prime Minister ask one of his Ministers in the relevant Department to meet me and representatives from the company as soon as possible to establish whether we can help?
I will certainly do that. My hon. Friend is right to speak up for his constituency and for that business. Through the growth review—we will confirm this in the Budget—we are taking steps to ensure that this country is the best place in Europe in which to do business. We have set out plans for the lowest rate of corporation tax anywhere in the G7, but we will also take further steps to ensure that we encourage companies to stay here, come here and invest here.
Q10. The Prime Minister is beefing up his office to help sell the Government’s unpopular and wasteful £2 billion reorganisation of the NHS. Does it concern him that Baroness Williams of Crosby feels that she is“under no obligation to support policies outside the agreement”?The Prime Minister’s Back Benchers do not want this; no one wants it. Is it not possible for the Prime Minister to halt— 
Order. We have got the drift, but we must have an answer.
The questions drafted by Labour Members have got a bit longer. I think that those in the Labour Whips Office need to go to remedial writing school.
If the hon. Gentleman was asking a question about the NHS—as I think he was—and asking who supports the NHS reforms, let me say this. I think that one of the greatest proponents of the NHS reforms is Labour’s shadow Health Secretary, the right hon. Member for Wentworth and Dearne (John Healey), who has said:
“The general aims of reform are sound—greater role for clinicians in commissioning care, more involvement of patients, less bureaucracy and greater priority on improving health outcomes—and are common ground between patients, health professions and political parties.”
If life gets too tough for the right hon. Gentleman on the Opposition Front Bench, there is always plenty of room over here.
Q11. This month, soldiers from 3 Mercian (Staffords), including many from my constituency, are being deployed to Afghanistan, and our thoughts and prayers are with them. Will the Prime Minister ensure that if our brave soldiers are injured while serving our country, they will receive compensation that recognises their sacrifice? 
My hon. Friend makes a very important point. The bravery of our servicemen and women, who are often deploying to Afghanistan for the third or fourth time now, should be uppermost in our thoughts. I think the whole House can unite on that, and on the results of the review of the armed forces compensation scheme carried out by Admiral Boyce. That will lead to significant increases in the value of awards—on average in excess of 25% to all lump sum payments, except for the top award which was recently doubled to £570,000. We are also trebling the maximum award for mental illness to £140,000. We can never compensate people for their injuries in battle, either physical or mental, but we can, as a generous, tolerant, warm and welcoming nation to our armed forces, do so much more, and I am glad that we are doing this.
Q12. Does the Prime Minister appreciate that the 1,500 women in Newport who are now going to have to work for up to two years longer because the Government have accelerated the introduction of the increase in the state pension age feel very angry that they are not being given long enough to plan properly for a delayed retirement? 
I know this is a difficult reform, but as well as dealing with the short-term problems of our deficit and making spending reductions across Government programmes—which, frankly, any Government would have to do right now—it is also right to try to make some long-term changes to reduce the long-term costs of our pension system, and as life expectancy is increasing, I think it is right to ask people to retire later. This is a difficult and long-term decision, but I think the arguments for it are absolutely right.
Will my right hon. Friend join me in welcoming the good news on jobs announced this morning by KPMG: that February saw the fastest rate of permanent positions being filled for 10 months and that those jobs came from the private sector?
My hon. Friend is right to draw attention to that as well as the trade figures. We are engaged in a very difficult operation to rebalance the economy, which for too long was dependent on government, housing, finance and, frankly, on immigration as well. We need an economy that is based more on manufacturing, technology, exports, enterprise and small business. It is going to be difficult, but there are good signs that the private sector economy is growing, and growing well.
Q13. Last year, Newcastle citizens advice bureau dealt with more than 26,000 cases, supported by 75 volunteers, yet its budget has been slashed and there is no clarity from Lib Dem Newcastle city council on funding from the end of this month. How can this shambolic situation possibly contribute towards the big society? 
The Government have made sure that the national funding for the CAB debt service has been maintained, and that is a vital part of it. I urge all local councils, whoever controls them—I have had this conversation with my own council—to make sure we do as much as we can to support CABs, which do such a vital job in our communities.
I am sure all Members agree that one of the most important jobs we perform every year is to represent people who have lost their lives in war on Remembrance Sunday. It is certainly something I do with great pride in my constituency. With that in mind, does the Prime Minister think a £50 fine is an appropriate punishment for those who burn poppies and chant during the silence?
My hon. Friend will have spoken for many people in their reaction to that court case. It is difficult unless we are sitting in the court and making that decision ourselves, but many of us look at such cases and feel that as a country we should be making a stronger statement that that sort of behaviour is completely out of order and has no place in a tolerant society.
Q14. May I take the Prime Minister back to the question on AV, and ask him to look at early-day motion 1550 tabled yesterday, which challenges the funding from the Electoral Reform Society? As, like me, he is a firm supporter of first past the post, will he look at that and write to me afterwards to tell me that there will be an investigation? 
I have to admit that I have not got round to early-day motion 1550, but it sounds as if I should. We have been looking for all these years for something for the hon. Gentleman and I to agree about, and it is a delight to have this issue. I think some people will be surprised to find that what they thought was an organisation running elections is funding a campaign, but in the interests of coalition unity, I will leave it at that.
I recently met a number of manufacturing businesses in Cradley Heath in my constituency. Does the Prime Minister agree that the Government must do all they can to support manufacturing, particularly in areas such as the black country, to drive private sector jobs growth?
My hon. Friend is absolutely right. As I have said, we need a rebalancing of the economy whereby we see more technology, more aerospace, more manufacturing and a greater emphasis on such things. We are seeing recent figures showing good strong growth—up to 5% a year—in manufacturing output and even stronger figures for manufacturing export. What the Government can do to encourage that is ensure that we are delivering what manufacturing businesses want: less regulation, lower taxes and a real boost in apprenticeships, which this Government are providing—an extra 75,000 apprenticeships over and above what Labour planned.
Q15. Does the Prime Minister agree that the bankers do a bad job in lending to small businesses and the real economy and that the police do a good job in helping to cut crime? Can he explain, therefore, why he is cutting police pay while letting the bankers walk away with millions? 
What we are doing is introducing a £2.5 billion levy on the banks each and every year, which will raise more in every year than Labour’s bonus tax raised in one year. We are getting money out of the banks into the Treasury. We are seeing the bonus pools come down and bank lending go up. None of those things happened under the last Government.
The law courts have agreed with Basildon council that the illegal Dale Farm Travellers’ site should be cleared, but because the previous Government stopped the council taking action, the site has mushroomed in size. Would the Prime Minister meet me to discuss the case to ensure that justice is done?
My hon. Friend has persistently raised this case and this issue in the Commons. I know he speaks for many people about the sense of unfairness that one law applies to everybody else and, on too many occasions, another law applies to Travellers. What I will do is arrange a meeting between him and the Secretary of State for Communities and Local Government so that they can look at what more can be done to ensure that we have real, genuine fairness for all communities in our country.
Points of Order
On a point of order, Mr Speaker. On yesterday’s Order Paper, a debate was scheduled on coastguards, one of two debates that I had planned to speak in—
Order. Before the hon. Gentleman completes his point of order, may I appeal to hon. and right hon. Members who are leaving the Chamber to do so quickly and quietly so that we can proceed with subsequent business, including the point of order.
On yesterday’s Order Paper a debate was scheduled on coastguards, one of two debates that I planned to speak in tomorrow. Today, it is not on the Order Paper. I found out about the change yesterday in a series of Chinese whispers and I was livid, Mr Speaker. I have not heard of a debate being changed at 48 hours’ notice. Coastguards are dismayed that the bread-and butter-issue of jobs is being overlooked in this House. Coastguards have been badly treated by the Committee, which is an alleged Back-Bench Committee, made up of Conservative, Liberal and Labour Members who have utterly dismayed me in their treatment of the coastguards. The name “Back-bench Committee” is utterly wrong. It has made this change on a whim, Mr Speaker—
Order. I have got the point. First, on a point of fact, people can raise points of order and with those points of order I will deal, but we are not referring to the work of an alleged Back-Bench Committee. The Backbench Business Committee is established, it is functioning in an orderly way and it is chaired extremely assiduously and conscientiously. I will not have aspersions cast on the work of the Committee. I will not have that in this Chamber.
On the point of order, let me simply say to the hon. Gentleman that I am grateful to him for giving me notice and I understand his extremely strong feeling on this matter on behalf of his constituents and on behalf of others as well. I understand that the coastguards debate is now scheduled for a three-hour debate on Thursday 24 March—
That is too late.
Order. The leader of the Scottish National party must not chunter at the Chair from a sedentary position in that way. It is very uncharacteristic of him and quite unnecessary. That three-hour debate will take place in Westminster Hall. As the House knows—the hon. Member for Na h-Eileanan an Iar (Mr MacNeil), who is an experienced Member, can certainly not claim to be unaware of this—the order of business is not determined by the Chair. The hon. Gentleman is free to raise the matter with the Backbench Business Committee if he wishes. The Chair of the Committee is in her place, and although I will not have a whole series of exchanges on this—that would not be right—if the hon. Member for North East Derbyshire (Natascha Engel), who chairs the Committee, wishes to respond to the point of order and to offer explanation or clarification to the House, she is perfectly welcome to do so.
Further to that point of order, Mr Speaker. I thank the hon. Member for Na h-Eileanan an Iar (Mr MacNeil) for giving me notice of his intention to raise his point of order. I do not want to go into the difficulties of scheduling business, but I want to say that the Committee absolutely emphatically recognises the importance of the coastguards debate. Far from cancelling it, we rescheduled it in order to protect the full three hours of debate that it so clearly deserves. However, the notice given was very short, and I apologise for that, and I deeply regret any inconvenience that this rescheduling has caused to any Member of the House. Parliamentary business changes at a moment’s notice, but I do regret any inconvenience caused to the hon. Gentleman.
Several hon. Members
Order. I see other members of the Backbench Business Committee bidding to catch my eye. I just said that I am not going to have a protracted exchange on this; that would not be right or a proper use of the time of the House. I think I can say, and will command general assent for this proposition, that we have had a very clear and gracious response from the Chair of the Backbench Business Committee. Other Members may agree with it or they may disagree with it; such is the stuff of democracy. But a point of order was very properly raised by the hon. Gentleman; I have responded to it; the hon. Lady has said her piece. It is not a continuing debate. The position is clear, and that is the end of the matter.
If, on an unrelated point of order, Mr Jim Shannon wishes—
Order. I have made the position very clear. It is no good the hon. Gentleman shaking his head. He asked his question, in order, he raised the point of order and I have responded to it. There has been a further come-back on the point of order. I think most Members of the House would accept that the matter has been properly aired in the Chamber this afternoon.
On an unrelated point of order, Mr Jim Shannon.
On a point of order, Mr Speaker. First, I thank the hon. Member for North East Derbyshire (Natascha Engel) for her response; I understand that. On the procedure, given that the coastguards issue was to be debated, and that it was on the annunciator at 10 am this morning, is it in order for the business listed in Tuesday’s Order Paper—
Order. I am sorry; I do not wish to be unkind. The hon. Gentleman is an extremely assiduous new Member. I very clearly said, “On an unrelated point of order.” We are not continuing this exchange. So, nice try, but I am afraid it is not in order. I shall take any unrelated points of order.
On a point of order, Mr Speaker. On Channel 4 news yesterday evening, the Secretary of State for Energy and Climate Change described 50 kW as “an enormous amount of power. That’s the equivalent of 1,500 domestic roofs.” That is just plain wrong, and either this is startling incompetence by the Government or they have based their review of solar feed-in tariffs on a completely false premise. The review is already causing uncertainty; these comments make it worse. I wonder, Mr Speaker, whether you can use your good offices to ensure that the Secretary of State clarifies the Government’s position to this House and to the public as quickly as possible.
As the hon. Lady knows—and as far as I am concerned, this is very fortunate—the content of ministerial statements or answers is not a matter for the Chair. If a Minister has made an incorrect statement, there is a procedure for setting the record straight, and that will be well known to all Members on the Treasury Bench. Meanwhile, the hon. Lady has put her concerns and her interpretation of the facts very clearly on the record, and that statement and interpretation will have been heard by Ministers.
On a point of order, Mr Speaker. There is a matter that is causing great concern within the country, but on which the Government are silent in this House: the alleged conduct of certain official representatives of this country who are cultivating friendships with some of the emergent tyrannies in the world, including Azerbaijan. Should we not also be debating in this House whether we choose our trade representatives on the principle of inheritance?
There is every opportunity for the hon. Gentleman to raise this matter at business questions tomorrow, and he may well choose to do so. I have got a feeling that he will be hot-footing it to the salon, as the Leader of the House describes it, of the hon. Member for North East Derbyshire, who chairs the Backbench Business Committee, because I think the hon. Gentleman will probably be pursuing a debate on this matter in that Committee’s time.
On a point of order, Mr Speaker. Yesterday, I apologised to the House and I wish to make a further apology. Yesterday, I apologised for suggesting that the reason why the Liberals had come sixth was because the nationalists and the—
Order. The hon. Gentleman must resume his seat. I listened very carefully to what he said yesterday. He is very dexterous in his use of parliamentary language and he has a great sense of humour, but what he must not do—I say this in all seriousness—is abuse the point of order procedure to make apologies that transpire to be nothing of the kind and are really carefully crafted partisan points which suit his book. I cannot believe that he would ordinarily want to do that, but I think he was planning to do it today and I cannot allow him to continue with it.
On a point of order, Mr Speaker. On two occasions during Prime Minister’s Question Time—both this week and in previous weeks—the Prime Minister has asserted that money that is going to be released by reform of the coastguard service will be redirected into front-line rescue missions. However, this is actually done by charitable organisations such as the Royal National Lifeboat Institution, and it is unclear as to how the transfer will take place. Would it be in order to request that the Minister responsible provide either a written or an oral statement to the House to clarify the link between the two?
The decision on whether to make a statement is a matter for the Government, as is the form that the statement takes. Otherwise, my earlier remarks about the procedure for correcting ministerial inaccuracies apply to the hon. Lady’s point of order.
If there are no further points of order, we will move on to the ten-minute rule motion, for which the hon. Member for Cheltenham (Martin Horwood) has been patiently waiting.
Tied Public Houses (Code of Practice)
Motion for leave to bring in a Bill (Standing Order No. 23)
I beg to move,
That leave be given to bring in a Bill to require the Secretary of State to introduce a statutory code of practice to require certain pub owning companies to provide their tied lessees with a guest beer option and the option to become free of tie accompanied by an open market rent review; and for connected purposes.
I should straight away express my appreciation for the support that this Bill has received from hon. Members on the Liberal Democrat, Labour and Conservative Benches; the hon. Member for Na h-Eileanan an Iar (Mr MacNeil); the right hon. Member for Dwyfor Meirionnydd (Mr Llwyd); the hon. Member for Brighton, Pavilion (Caroline Lucas); the Campaign for Real Ale; the Federation of Small Businesses; and the all-party Save the Pub group. I am grateful for all their support.
In bringing the subject of beer and pubs before this House, I stand in a fine Cheltenham tradition: my Liberal Democrat predecessor, Nigel Jones, now Lord Jones of Cheltenham, was chair of the all-party group on beer; his Conservative predecessor, Sir Charles Irving, was himself a licensee; and the longest-serving Member for Cheltenham, another Conservative, the right hon. Sir James Agg-Gardner, was a local brewer. In 1848, the very first MP for Cheltenham, a great Liberal, the hon. Craven Berkeley, risked the wrath of the religious lobby in the town by trying to delete the fixed opening hours for pubs on Sundays from the Sale of Beer Bill. All of them shared an appreciation of the very special and much-loved role that pubs play in our national life. As Lord Jones has said,
“a pub does not just sell beer. It is a social centre, providing meals and snacks, raising money for local charities and diversifying offerings all the time.”—[Official Report, House of Lords, 11 December 2008; Vol. 706, c. 559.]
He might have added that pubs are places where national sports are watched in good company and local sports teams are formed—indeed, hugely popular skittles leagues operate almost nowhere else.
The pub is the hub scheme, another one of those inspired initiatives for which His Royal Highness the Prince of Wales gets insufficient credit, has shown that, imaginatively used, pubs can provide a location for community shops, post offices and even youth centres. Of course, perhaps most importantly of all, they provide a social drinking environment, open to families and pensioners, and to new drinkers and old regulars. Pubs are personal enough to exert peer group pressure on those who might be tempted to drink irresponsibly and people who really have had too much are refused another in them, as they should be everywhere.
The British pub is a unique institution—it is a product of history that would be very difficult to recreate if we ever lost it. But we are losing our pubs, at the rate of as many as 40 a week; we are losing thousands a year. The list of lost pubs in Cheltenham includes the Greyhound, the Cat and Fiddle, the Bass House, the Duke of York and four others since just 2007. Whole communities, such as Whaddon in my constituency, are now without any local pub. Even where the pub does not close, many publicans are finding it harder and harder to make ends meet, and many go bust only to be replaced by a rapid succession of new tenants or lessees.
The reasons given for the decline are many, and I acknowledge that they are not restricted to the tied public houses which are the subject of this Bill. Such reasons include everything from happy hours to economic downturn, supermarkets and lifestyle changes.
In 2004, the Federation of Small Businesses was so concerned about a particular issue that it asked the then Select Committee on Trade and Industry to investigate. That issue was the profoundly unequal relationship between tenant and lessee landlords and the big new pub companies, or pubcos. At the heart of this relationship is the tie—a strange addition to the normal landlord and tenant business relationship that applies to short-term tenants and long-term lessees. In what should be a relationship of mutual benefit, tenants and lessees have to pay a premium of 40% or more on the open-market rate for beer. I have seen invoices side by side for the same quantity of the same beer to support this contention. Those tenants and lessees also have to pay rent based not on the normal calculations of square footage but on the rather obscure and highly subjective judgment of the pub company of estimated earnings of a reasonably efficient operator. In other words, the pub company calculates the maximum amount it can extract from the business and charges it. In return, publicans get apparently valuable business and marketing support from the pubco.
That first Select Committee inquiry rang alarm bells about the state of the industry but was pretty gentle on the tie itself, weighing up the benefits and costs for publicans. Self-regulation appeared to be the name of the game and the Committee shied away from recommending a legally binding code of practice, although it did say that
“Government should not hesitate to impose a statutory code”
if matters did not improve. The follow-up report in 2008 by the Select Committee on Business and Enterprise was much more damning and included its own commissioned research into the state of lessees’ businesses. The research found that 78% of lessees were dissatisfied with the tie, that 67% were earning less than £15,000 a year and that 50% were earning less than that even when their pubs were turning over more than £500,000 a year. The majority believed that the tie with the pubco did not add value to their business. The Committee concluded:
“The imbalance of bargaining power persists”
between pubco and publican. It went on:
“The arrangements for assessing rents remain opaque…Rental assessment should be the basis for negotiation, but incumbent lessees often risk loss of their home as well as their business if they cannot reach agreement.”
This time, the Committee concluded that it had
“no confidence that the advantages of the tie outweigh its drawbacks.”
Another follow-up report by Select Committee on Business, Innovation and Skills in the following year reviewed the new British Beer and Pub Association framework code of practice and concluded that it represented only “modest progress” and that the issues surrounding the tie had not been resolved. The Committee suggested a deadline of June 2011 for self-regulation to give way to statutory regulation. Its message to the pubco industry was clear:
“If it fails to deliver on its promises by June 2011, it should be in no doubt what the reaction will be.”
Well, June 2011 is not far away and I can tell the House that new FSB research still paints a gloomy picture. According to its preliminary findings, 91% of its tied pub members do not think the tie allows them to make a fair profit. More than 85% believe it prevents them from competing effectively in the marketplace and the same number would like to be free of the tie. One FSB member told researchers:
“Enterprise Inns are happy for any tenant to fail. They would sell a pub and land for top market value and only then reinvest in other property to suit. They are, after all, property and land developers”.
That might be harsh but there is a serious breakdown in the relationship between the pubcos and their tenants and lessees, whose businesses continue to fail at an alarming rate while we continue to lose pubs at the heart of many communities.
A quick glance at the latest BBPA framework code of practice and the codes of practice used by the two leading pubcos, Enterprise Inns and Punch Taverns, highlight the inequality of the situation. Potential tenants and lessees are given a terrifying list of responsibilities. They are urged to engage solicitors, get structural surveys, talk to the police, environmental health and other appropriate authorities, check if a Highways Act licence is in place, engage their own qualified accountants and stocktakers, apply for their own gaming licences, obtain an asbestos survey, a full electrical report and a gas safety certificate, and so on—all at their own expense. The pubco helpfully offers training in food safety, health and hygiene, drug awareness, first aid and door management, along with repairs, maintenance and insurance—but also at the publicans’ expense. Indeed, publicans are not allowed to get insurance from anywhere else.
The real support that the pubco provides, outside the rather opaque area of the rent, is in marketing and advice on the product mix, legal compliance and cash-flow and financial management. That is helpfully explained in one of the codes of practice: it is given face to face, typically for one and half hours, once every 12 weeks. That adds up to less than one working day of face-to-face business support a year, in exchange for which the pubco could extract between £15,000 and £20,000 of value from lessees’ businesses.
It is difficult to escape the conclusion that unless Parliament steps in, we will see those pubcos manage even more traditional British pubs into oblivion. The Bill does not ban or abolish the tie, but it does aim to replace the codes of practice with a statutory one, as recommended by the Select Committee, and almost in time for its deadline, along with a guest beer option and the option for lessees to relinquish the tie in a process that is fair and transparent to both parties. My illustrious and sociable predecessors would be proud of us if we saved the pub that they all enjoyed, and future generations will thank us if we help to save the traditional British pub for them to enjoy as well. I hope the Bill will help us to do just that, and I commend it to the House.
Question put and agreed to.
That Martin Horwood, Greg Mulholland, Tony Cunningham, Neil Carmichael, Mr Angus Brendan MacNeil, Mr Elfyn Llwyd, Caroline Lucas, Stephen Metcalfe, Lisa Nandy, Lorely Burt, Stephen Williams and Jackie Doyle-Price present the Bill.
Martin Horwood accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 10 June, and to be printed (Bill 160).
Welfare Reform Bill
[Relevant documents: The oral evidence taken on 26 January and 9 February 2011 by the Work and Pensions Committee on the White Paper on Universal Credit, and the written evidence received, HC 743.]
I have selected the amendment in the name of the Leader of the Opposition.
I beg to move, That the Bill be now read a Second time.
The Bill before us today covers a number of areas, but I hope that it sets a new course for the welfare state. I believe it will enable us to reach out to some of the groups of people who have become detached from the rest of society—trapped, too often, in a permanent state of worklessness and dependency. For the sake of the House, I will go through the relevant clauses of the Bill. I am sure that colleagues on both sides of the House will want to intervene. I hope they will recognise that we shall get to most of the clauses that they want to discuss, but I will take interventions as and when they come.
The problem is that although from 1992 to 2008 this country saw some 63 consecutive quarters of growth, and 4 million more people were in employment by the end of that period, before the recession had even started we still had some 4 million-plus people on out-of-work benefits. The question is: where did all those jobs go? Under the previous Government, over half of the jobs created went to foreign nationals. This is not an immigration point; it is a point about supply and demand. There were a group of people in this country completely unable, it appears, to take advantage of that long period of growth and job creation. In essence, the key point about the Welfare Reform Bill is that it is intended to help that group.
I am grateful to the right hon. Gentleman for giving way so early. I wondered whether, at the outset, he would like to comment on the reports in today’s Telegraph that the cancer charities are warning that his proposals for employment and support allowance will penalise those who do not recover soon enough. How could anyone think that that is a fair approach, in a Bill like this?
I think the report was in The Guardian. I do not know whether it is in The Daily Telegraph.
The Telegraph too—you’re famous.
I read The Guardian; he reads the Telegraph. What can I say? Times really are changing.
I have read the report, and I think that a number of elements in it are simply not altogether correct. I say that rather carefully because the point about the cancer aspect is that, as the hon. Gentleman knows, we inherited from the previous Government a process of reform and change to the employment and support allowance, which included the work capability assessment. We supported that, with the previous Government, because it was the right thing to do—to look at the 1.5 million people on incapacity benefit and check them over. We did not inherit any real allowance for cancer sufferers. It is important to make this clear. The Employment Minister, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling), immediately accepted the internal reviews, but went further. He asked Professor Harrington to conduct a review of what we did regarding cancer patients and others, and the hon. Gentleman, being a generous individual, will know that we then incorporated a big change, so that a person in cancer treatment—chemotherapy—who is between treatments will go straight on to the support element. Thus the contributory aspect will not affect them, because while they are on the support element they will continue to be supported when they are out of work.
One second. Would the hon. Lady forgive me? I have been asked to answer a question and I shall try to answer it. We have already made some very substantial change to support people in cancer treatment. The concerns of Macmillan and others relate to oral chemotherapy. I understand that. We have already asked Professor Harrington, in his second review, to undertake to give some advice on that. We have a slight problem with that from the start, because it is a fairly new form of treatment and a limited number of people are on it. So far, much of the medical evidence suggests that it does not affect people in the way that intravenous chemotherapy does; it is not as debilitating. We remain open to that evidence.
Although there is no provision for oral chemotherapy right now, my right hon. Friend the Employment Minister has made it clear that Professor Harrington will review the subject and take evidence, and we have asked the cancer groups to offer up their thoughts and advice, in addition to the medical fraternity. We will take account of what Professor Harrington says. As the hon. Member for Birmingham, Selly Oak (Steve McCabe) knows, last time we adopted all the recommendations in the professor’s report in their totality. So we are not in the business of trying to harm or affect cancer patients; quite the contrary. We made some very serious changes to what we inherited from the previous Government—I would like to think that they would have done the same—and we will continue to do so. I hope that answers the hon. Gentleman’s question. If he will let me get on with the rest of the Bill, I will.
Will the right hon. Gentleman give way on that point?
I would like to make a bit of progress, if the hon. Lady does not mind. I think I have been pretty generous on that aspect. I will return to it.
The key is that I hope the Bill in general—we shall get to the more specific elements later—represents a whole new concept: a contract with people who are in need of support. For those who are able to work, work should pay, and for the most vulnerable in society we will continue to provide the support that that they need. I think it is our duty to do so. We can debate the levels of that support, but it is our duty none the less.
The Bill says to the taxpayer, “Your hard-earned money must be spent responsibly.” We sometimes forget, in our debates on welfare, that the taxpayer is also a player in this, because taxpayers—many of them on low and marginal incomes—are constantly being asked to pay in taxes towards support for others. That is fair, but we have a responsibility to ensure that taxpayers too are properly supported. I shall now outline some of the principles of the Bill, and then I will try to get through the various clauses.
Will the right hon. Gentleman give way?
Forgive me; I want to make progress before I take more interventions, but I certainly will not shy away from interventions.
I note the comments by my opposite number, the right hon. Member for Birmingham, Hodge Hill (Mr Byrne), that his party agrees with more than
“three quarters of the principled and burden-sharing”
changes that the Government are making. Obviously, in his interventions he will make clear what he does not agree with. I have read his amendment and there will be some questions about some of that; I am sure we will get to that in a minute.
I intend to take the House through the Bill stage by stage. Let me start with universal credit. I shall begin with an overview, and then consider some of its detailed aspects. The universal credit obviously sits at the heart of this welfare reform. I do not think I would want to embark on this process if that were not the case. I believe it is a commitment to the public that work will always and must always be made to pay, particularly critically for that group of people who are probably the most affected—the bottom two deciles of society—who have too often found it really difficult to establish that work does pay.
I am pleased to say that those principles seem to have received support from a number of stakeholders, including Citizens Advice and the Institute for Fiscal Studies. The IFS said that by and large the measure was a progressive change. We anticipate that the universal credit will make some 2.7 million households better off. Over 1 million households will be better off by more than £25 a week—clearly, those will be down in the bottom deciles—and 85% of that increase will go to households in the bottom 40% of the income distribution.
We have agreed a package of transitional protection which will ensure that there are no cash losers as a direct result of the migration to universal credit, where circumstances remain the same. The universal credit should also start making inroads into the couple penalty. Members on both sides of the House agree that that is necessary. I know that the right hon. Member for Birkenhead (Mr Field), who is in his place, has made great play of that over the years, and many of us have agreed with him.
I am listening with great interest to my right hon. Friend’s speech. Can he give me some further detail on how the benefit cap will be introduced?
I was coming to that, but I shall touch on it now; I may make some further comments later. The principle is that people who are unemployed and on benefits should not be receiving more than average earnings. It is a matter of fairness, so that those who are working hard and paying their taxes do not feel that someone else will benefit more by not playing a full part in society. We recognise that there must be transitional arrangements. We will work intensively with the families affected once the cap comes in. We will help them move into work, to change their circumstances so that they are not affected. We will make sure that families who need transitional support will receive it. We will make more detailed statements about that later.
The idea is that we should encourage people back into work, and most of all that people who are in work and paying their taxes should feel that it is fair that while they earn and they work hard, others realise that the best way to increase their income is through work, not through benefits. That is a great principle.
According to the right hon. Gentleman’s Department, 70% of those affected by the benefit cap live in social housing. The Housing Minister is building only unaffordable housing, because of the rent levels set. Is not the cap just a crude piece of social engineering, forcing people not to live in expensive areas, such as the constituency that I represent? Is it not directed at vulnerable people and the poorest in society, making it possible for them to live only where the Secretary of State chooses for them to live?
With respect to the hon. Gentleman, it is not about where I choose for them to live. As with everybody else, it is about where their income and their ability to earn allow them to live. There are many people in London, for example, who work hard and who commute well over an hour to get to jobs because they cannot afford to live in parts of central London. We may argue that the cost of living in London is too high. One of the arguments that I would make is that the way that the previous Government’s local housing allowance was set drove up rents in both the private and the social housing sector. The hon. Gentleman should consider that what we are doing is reasonable. What we are trying to do is not to damage people, but to get them in locations where they can afford both to live and to work. I will return to that.
Several hon. Members
I shall make a little more progress.
May I confirm that we shall move from the universal credit making inroads into the couple penalty to a subject on which I am sure many right hon. and hon. Members will want to speak—child care costs in universal credit? I can confirm that support for child care costs will be provided by an additional element paid as part of the universal credit award. We will invest at least the same amount of money in child care as in the current system, and we will aim to provide some support for those making their first moves into work, so that the support available is not restricted to those working more than 16 hours.
This is an important point. Although there is a debate about it, we must remember that working tax credit gives that child care support to those in the relevant band. Universal credit will allow claimants to adjust their hours of work to suit their child care responsibilities. It will allow people to set their hours of work more in line with their caring responsibilities. It will cover all the hours that people are planning to work. We will be much more flexible, and we intend to work closely with relevant groups to take further advice about the rates that we will set. By the time the Bill reaches its Committee stage, we will be able to be more specific.
Can the right hon. Gentleman confirm that as a result of that further consideration, there will be no circumstances in which, as a result of child care costs, a parent could be faced with a marginal deduction rate of more than 100%, as some models prepared for us by Family Action have suggested?
That is not our intention, and it is why we were are proceeding carefully and consulting about our proposals. The purpose is to maintain incentives to go to work. Universal credit is designed to encourage lone parents to go to work, but it recognises their need to meet their child care responsibilities. We can debate the various elements, but the principle is that the measure should be more than helpful to them. We will move on to the finer detail as we get to Committee stage.
As we increase support to make work pay, it is right to ensure that claimants do everything they reasonably can to find or prepare for work. As the House knows, we will tailor conditionality to individual circumstances, and require all claimants to accept what I call a claimant commitment. From the outset they will be asked to sign up to the idea that we will provide them with the necessary support and access to universal credit, but we will also expect them to recognise that the sanctions regime is applicable. It is easy to understand. If they do not comply with that as they go further through the process, they are likely to encounter that sanctions regime at key moments.
The toughest sanctions will apply to those who are expected to be seeking work but fail to meet important conditions. They should understand that if they keep on crossing a series of lines, they will invoke the sanctions regime. The problem at present is that the regime is often confusing. I have visited jobcentres a number of times—and I see on the Opposition Benches one of the Members who used to be a Minister in the Department. As he knows, if one talks to jobcentre staff, they will say that the problem is that when claimants reach the point where they are about to hit sanctions, it comes as a big surprise to many of them that sanctions will be imposed and that the situation is real and serious.
By letting claimants know much earlier and by introducing a regime that is easy to understand, with a simple tripwire process, they will know from the word go. That should disincentivise people from taking the wrong turns. Benefits will be taken away for three months after a first failure, six months after a second, and three years after a third. That will apply to those at the top level—in other words, those who are fully able to search actively for work and to take it. There are, however, other categories. The same conditions would not apply to lone parents, for example.
The rate of worklessness and the availability of jobs vary from area to area. What account will the sanctions regime take of that variation?
The sanctions regime is about work being available. If work is not available, people cannot be expected to take jobs, so I give the hon. Gentleman the assurance that no one will be told that they are on sanctions if there is no work available. The sanctions apply only if a job is available, the claimant has been offered it and for one reason or another has not taken it, or if they are not complying with the details of what they are meant to be doing to seek work. That is only fair. People who pay their taxes want to know that everybody out there is seeking work. If they are seeking work sanctions should hardly ever apply, and in most cases they will not apply.
The right hon. Gentleman is making a thoughtful speech, and I know him to be a thoughtful and caring politician. I will give careful consideration to much of the Bill and I will not vote against Second Reading. Is it not spoilt, however, by what is happening to the mobility component of disability living allowance? I visited a residential home in Huddersfield, in Edgerton, only last week. The Bill will destroy the lives of most of those people, 60% of whom are in wheelchairs.
I thank the right hon. Gentleman—although I am not sure: is he a right hon. Gentleman? [Interruption.] An hon. Gentleman—okay. That is something that his party should do—it is not for me—given his record of service.
Yes, I accept that there were issues. In fact, when we looked at the decisions taken at the time of the spending review, I reviewed the matter, after discussing it with the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Basingstoke (Maria Miller), who is the Minister responsible for these matters. We visited lots of care homes—my hon. Friend went out to see people and talk to them—and we realised that there was a lot of chaos out there about what should be given to people in care homes, what care homes themselves provide, and what local authorities believe it is their statutory responsibility to provide. Some of them say that they do not have any such responsibility to provide mobility services, but others say that they do, and provide access to such services.
We have therefore changed the provisions in the Bill, as the hon. Member for Huddersfield (Mr Sheerman) has probably noticed. That will be incorporated in the review of disability living allowance. Our objective is to get rid of the overlaps, genuinely to find out what can be provided at local level, and to figure out what the amount should be to support someone in a care home, bearing in mind that mobility needs in a care home are likely to be variable, and different from the needs of someone living in the community completely independently. Adjustments will be necessary, but my hon. Friend and I give the hon. Gentleman and the House an undertaking that we are going to try to figure out what the right answer is. We will work out a set of figures, and how they can be applied. That is the purpose of the review; I guarantee that.
Reflecting on what the Secretary of State has just said, does he recall that on several occasions, the Prime Minister has been given the opportunity to say that he has listened to the evidence and accepts that there is virtually no support for withdrawing the mobility component of disability living allowance for people living in residential accommodation? To what extent does the Secretary of State’s position differ from the position taken again and again by the Prime Minister?
We are as one. I say that immediately, before I explain the position.
The reality, for the Prime Minister and for me, is that when we understand that certain facts are slightly different from what we thought they might have been, we always modify what we are doing to make sure that the effect of what we are trying to do is reasonable and produces the best results. All I can say to the right hon. Gentleman is that the Bill is not the same as the one that he would have seen some weeks ago. We are not knocking out the mobility component from care homes, and we have included it in the review of what mobility provisions are necessary and required for people in care homes. That is the real principle behind the measure. My previous comments were about finding the overlaps, and how we made sure that they did not cost people money in one area, but found those costs in other areas. That is the main point of the review, and I have asked my hon. Friend the Under-Secretary to make sure that that is the case. The Bill covers that, and I hope that most people will see that it is quite reasonable to try to recognise what that figure is.
Several hon. Members
I shall try to make progress, if hon. Members do not mind, because I have given way quite a lot on that subject.
Before the introduction of the universal credit we will introduce many of the changes to conditionality and sanctions that I discussed. Claimants, I hope, on that principle will accept the claimant commitment, as they will be subject to tougher regimes that are fair and reasonable. Turning to other benefit changes, we are making changes to the income support regime for lone parents before the introduction of universal credit. Lone parents who can work will be expected to claim jobseeker’s allowance when their youngest child reaches the age of five. We want as many people as possible to get help to engage with the labour market, and we know that about 80% of all lone parents are working or would like to work.
There will continue to be safeguards to allow parents to fit their job-search requirements with their caring responsibilities and child care availability. There are other relevant changes, too, and I accept that there have been concerns about them. I would be interested to learn the Opposition’s position on that. We are making changes to contributory employment and support allowance, time-limiting receipt to one year for those in the work-related activity group. There will be no change for those in the support group, as we have made clear, and people claiming income-related employment and support allowance will be unaffected.
I note the comments that have been made by the right hon. Member for Birmingham, Hodge Hill, who accepted, in his speech to the Institute for Public Policy Research, that time-limiting ESA is the right thing to do, but disagreed about the period—in this case, a year, whereas he was talking about two years. However, that is not clear in the amendment to the motion, so I wonder whether he could clarify the position. The amendment opposes the limit altogether, rather than the number of years. I would happy to accept an intervention from the right hon. Gentleman if he wished to clarify the position. [Interruption.] He will cover it in his speech—very good. I hope that we will understand that, as principles and practicalities need to come together.
I would point out to the right hon. Gentleman and to everyone else that the one-year limit is twice as long as that currently in place for jobseeker’s allowance. There has been discussion of people undergoing cancer treatment and others. That is best dealt with under the ESA regime and reviews, so that we can decide which groups are relevant, and which not, as we have done with some cancer patients undergoing chemotherapy. They have been taken out of that provision because they are in the support group. Professor Harrington’s review is the best way of doing that. We have established the principle of receipt for a year, and the rest is about the details of the conditions that best apply, and that can be dealt with in the Harrington review.
That best reflects the different nature of ESA and the different needs of those who claim it. However, we simply cannot pay those benefits indefinitely. I wonder whether that would have been the previous Government’s position if they had undertaken further reviews. For limited contributions under ESA, it would have been feasible for someone to receive ESA for their rest of their life. That was one of the big issues that we had to tackle.
I will give way to the hon. Lady, because she has been persistent.
I thank the Secretary of State for giving way. ESA is not given indefinitely, because there are constant assessments and reassessments. I have constituents who have been reassessed twice in the past two years and who are due for another assessment. It is not true that someone who receives contributory ESA will receive it for ever without assessment. The assessment process should cover that, without an arbitrary cut-off date.
I remind the hon. Lady that in the support group, the contributory element does not apply. It applies to people with finances that take them above the line. The income-based measure continues—that is not the issue. The issue is whether we think that people who have contributed for a certain time have the right to contribution-based benefit, regardless of their income, for a period of time. That is the debate. The income-based measure is exactly the same—it is not going to change, so that meets the hon. Lady’s concerns.
I think that I have dealt with that.
There are other changes, including the consumer prices index uprating, in the Bill. We must get to grips with the housing benefit system, which ran out of control under the previous Government. I have a deep suspicion that they knew that before they called the election, and I sense that there were big differences about whether they would do something about this. Over the past 10 years, overall spending on housing benefit has almost doubled from £11 billion to £21 billion, which is a huge increase. I accept some of the arguments about the reasons for that—the fact, for example, that house building fell to a record low, and more and more people had to be moved into the social rented sector—but the reality under the local housing allowance regime was that we lost control of spending. We have therefore introduced a number of changes to the local housing allowance, including a move to annual uprating in line with CPI. Restricting uprating should enable us to keep downward pressure on rents. Only if an increase in local market rents exceeds the annual rate of CPI will the restriction apply. That will also be an important step towards the integration of housing support with the universal credit.
We accept that those changes will not be easy for some people, which is why we want to provide a great deal of transitional protection. Essentially, we have put up a total of about £190 million to smooth the transition to those measures for those who are most likely to be deeply affected. That includes £130 million in discretionary housing payments, £50 million to assist people with housing advice and removal costs and £10 million for homelessness prevention, particularly in London. That, coupled with the other changes that we have already made through regulations, where we are looking at making direct payments to those who are able to lower their rents and at delaying the point at which the measure comes in by some nine months, was a product of listening to people’s main concerns and trying to ensure that what we bring in is doable and manageable by councils.
On the right hon. Gentleman’s point about housing benefits, what discussions has his Department had with housing associations and their lenders about the disaggregation of housing benefit under the universal credit and the direct payment to housing associations? They are deeply worried that, without that direct payment capacity across the piece, arrears will rise and lenders will become more nervous.
We have had, and continue to have, those discussions, and I understand the concern. There is a debate, on both sides of the argument, about whether we basically continue with the principle that we should pay people and deal with certain elements of what they receive because they are not capable of doing so themselves, or whether we try to get people to the point where they are capable of managing their own money more and more. I recognise from the hon. Lady’s intervention that, on this matter, there is no absolute, but there is at least a debate on both sides, and that is simply where we are at the moment—trying to discuss the issue with those who feel that they would be most affected.
Was it not a moral catastrophe and economic madness when, under the previous Labour Government, registered social landlords had no incentive to tackle welfare dependency, because their main funding stream was housing benefit? Under this Bill, registered providers will have an opportunity to tackle welfare dependency among their tenants.
What we want from the Bill is to encourage people to get involved in the process—to help people to use it as part of the incentive of trying to make the right decisions about taking work and providing for their families.
Will the right hon. Gentleman consider the example of a married couple who are at work and have five children from previous marriages, but then lose their jobs because, for instance, they work for the local council? Because they have five children, they would get almost £500 of personal allowance and £200 of housing benefit, taking them over the £500 cap. Rationally, they might choose, because of the £500 cap, to split up their family so that there are three children and two children in two houses, each with £250 of personal allowance and £200 of housing benefit, making a global total of £900, when it would have been £700. Surely his policies of breaking up families and making demands for more and more social housing, alongside making people unemployed, do not add up to fairness or competence.
I understand the hon. Gentleman’s point and can, I hope, assure him that as the Bill progresses, and as he will see as we reach Committee, our objective is to recognise that unemployment, for those who fall unemployed, is probably a temporary condition. He will understand that point more as we get into the detail, but trying to find some way of protecting such people through that process is critical to us, as the vast majority will be back in work within a set period: 90% of people will be back in work within a year. Most people will get through that process, and it is for us to ensure that the transition is met and dealt with, but I think that he will be very happy in due course to hear what we propose.
Will my right hon. Friend give way?
I am going to make a little progress, because I am conscious that we have a limit. Mr Speaker is looking at me benignly, but he might not look so benignly shortly.
It is time for fundamental reform of the social fund, which is poorly targeted and open to abuse. Some 17,000 people have received 10 or more crisis loans in the past 12 months, and we have already taken steps to limit the number of crisis loans for living expenses to three in a 12-month period. Those are important steps, because the fund has been somewhat out of control and is complex. The Bill will then pave the way for local authorities in England to deliver a system of assistance that should replace the community care grants and some crisis loan provision. This is a complex area, and many will know more about it than I do, but the key point is that we are trying—
Will the right hon. Gentleman give way?
In a second. I think that the hon. Member for Bolton South East (Yasmin Qureshi) was slightly before the hon. Lady.
The key thing that we are trying to do is to give local authorities an element of control over some of the process, including in particular what I call the crisis loans short-term element—the hiatus moment in the payments,—and some of the community care grants. The point is that, when the fund became only distantly linked to the Department, the telephone concept behind it allowed people to push up the number of claims, because they were not seen or understood, so their cases were not properly known and it was very difficult to decide whether they were true or false. Local areas will be far better able to recognise who such people are, what conditions they are in and what circumstances apply to them. Therefore, localising the process will be very important. Of course, huge swathes of it will remain centralised, but we feel that those two elements in particular will most respond to localisation.
I understand the Minister’s explanation of the social fund, but a linked point is that thousands of young children currently receive a free school meal, the only hot meal that most of them get, and that some people also receive free prescriptions. Can the Secretary of State assure us that those who receive free prescriptions and free school meals will continue to do so?
That is exactly what we plan to do, but, because of the universal credit, we will have to be a little more specific, and we will be so in Committee. We are still looking at the best approach to take, but that is exactly what we plan to do. We do not want—the purpose is not—to disadvantage anybody who receives such support, but, because of the way the universal credit works, we will have to think through carefully how we achieve that. The principle behind the measure will remain that we want to support those who are in difficulty and receive support as it stands.
Will the Secretary of State give way?
I think that the hon. Member for Banff and Buchan (Dr Whiteford) was before the hon. Gentleman, and he has had a shot.
Returning to crisis loans, my greatest concern is that people who go for them will not be able to buy essential items such as cookers and beds. That will push them straight into the arms of loan sharks and other high-cost lenders, and that issue has been overlooked. I also question the view that the increase in the uptake of such loans has not been down to the recession and the hardship that people have faced.
The answer to the hon. Lady’s question is that budgeting loans will still be available for those cases. On the second question that she raises about crisis loans being down to the recession, the trend of upward claiming was on track and had started long before the recession.
With the telephones.
My hon. Friend has made that point to me again and again. The key problem resulted from the changes that were made to dislocate much of the process from people—face to face—who knew what was going on in their communities. I think—I hope—this Bill will change that, because local communities will now be able to determine how best to deliver that critical service, and they will be closer, I hope, to people who need it. That is the principle behind it, and I hope the House recognises that.
The remaining discretionary elements of the social fund, as I indicated earlier, will stay in the wider benefit system, and we will introduce payments on account to replace alignment payments and the interim payments of benefit when crisis loans are abolished, a point that my hon. Friend the Minister has also made on several occasions. We will extend the provision of budgeting loans so that they are available to help people, as I said to the hon. Lady just now.
On disability living allowance, the personal independence payment and the changes to and reforms of them, I believe—and the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Basingstoke, in her consultations, has by and large obtained widespread agreement—that we need to start reforming disability living allowance. I think most people accept that the system we inherited does not deliver for some of those in genuine need, particularly given its confusing nature. Disabled people often tell us that the claims process is incredibly complicated and decisions are not consistent. We need to sort that out.
Many people—a significant number—still wrongly believe that DLA is an out-of-work benefit, so, as people said on several occasions during the consultation, “Being in receipt of DLA is a reason why you wouldn’t want to be getting involved with work; you might lose your DLA.” Such confusion is absurd, because that is not the case, so we need to sort the issue out, and I hope people recognise that it is important.
About 50% of those currently receiving DLA did not have to provide any additional evidence to support their original claim, and more than two thirds of current recipients have an indefinite award. That means basically that no one is ever going to see them again, yet their condition may change; it may worsen or it may get better. That is why we propose to replace DLA with a new system—the personal independence payment, or PIP. This benefit will be awarded on the basis of a more objective assessment of individual need; that assessment is vital. The money will continue to be paid to people in and out of work, and it will not be means-tested. I want to be clear that we do not intend to take away the mobility of people in residential care. As I explained earlier, this is about overlapping payments. The review will cover all that. The key thing is reform.
There is a great deal of uncertainty about how children might be affected by the reforms to DLA. Is the Secretary of State proposing further consultation? Is there any information that he can give about future processes regarding children?
We are consulting on that. However, this is going to be done later on, so we will have plenty of time to hear many more representations concerning children before we make any decisions. My hon. Friend the Under-Secretary is already talking to various groups about this particular issue.
In relation to the indefinite awards, there is already a system in Northern Ireland whereby people have periodic checks, and I am sure that Northern Ireland is no different from the rest of the United Kingdom. If there is already a system of regular checks in place, why change that?
Because it does not apply to everybody; it is very patchy. The honest truth is that no award we make should say to people, as has happened too often in the past: “You are in receipt of a particular benefit and we don’t want ever to see you again.” If the hon. Gentleman is arguing, as I think he is, that it is right to see people, surely we should be arguing that it is right to see them all to ensure that when their condition changes, that is met. That is surely fair both to them and to the taxpayer.
Despite the right hon. Gentleman’s assurances, I ask him to look again clause 83(2), which says:
“The condition is that the person is an in-patient of a hospital or similar institution, or a resident of a care home, in circumstances in which any of the costs of any qualifying services provided for the person are borne out of public or local funds by virtue of a specified enactment.”
That is absolutely clear, but, with great respect, it is not what he is telling us.
I am afraid that I do not agree with the right hon. Gentleman, because that is exactly what I was saying. The provisions gives us the opportunity to do just that; it does not specify what we do, but it tells us that this is what we are going to be doing. We are looking at all this because, in our view, we need to come forward with an amount that is relevant to the mobility that is necessary for people in care homes.
The Secretary of State is playing with words. The hon. Member for Strangford (Jim Shannon) is right. Although reference is made to an indefinite award, these awards have always been liable to review. If someone has an irrecoverable disability such as permanent blindness, what is the value in regular reviews to assess whether they are still entitled to DLA or the PIP?
As I said to the hon. Member for Strangford (Jim Shannon), it is assumed straight away that this is a terribly intrusive process, but in reality what goes on is patchy. For many people, their condition may well have worsened. Do we simply want to say that we should not speak to them or see them, and that it is therefore left up to the vagaries of the system? It is not built into the system that they will be seen.
Wait a minute. The right hon. Lady has made a point and I am trying to respond to it. As this is not built into the present system, it is left to decision making, which can be very ad hoc, about who someone sees and when they see them. All I am saying is that if we believe it is right to see people, we may then be seeing somebody whose condition has worsened, and surely that is an advantage.
I am going to press on, because I think that I have dealt with the right hon. Lady’s point. She may not agree with me, but I think that this is the right position for us to take.
This is an extremely important point. Is the Secretary of State saying that someone who is deaf-blind will be recalled for regular checks under the regime that he is aspiring to put in place—yes or no?
The detail of how that works will be looked at during the passage of the Bill. My point is that built into this should be the requirement that it is necessary to see people. There is the question of who and what conditions we can look at specifically, but it should be right that it is bound into the system that we are going to look at people. In some cases, it may be entirely self-evident that the individual’s condition has not changed and there is not much to be done; in other cases, an assessment may be required because their condition has changed quite fundamentally. I do not understand why the need to see somebody who may be in receipt of a benefit should be such an issue for people. It should not be worrying; it is part of a process. [Interruption.] Before right hon. and hon. Members object to that change, they need to ask themselves what they would say to those people whose conditions have changed for the worse and who are confused and never make it back to make a proper claim. This is a debate that we can and will have.
I think, with respect to the right hon. Gentleman, that I have dealt with this point, and I am going to make some progress. [Interruption.] Oh, go on then.
I am genuinely trying to be helpful to the Secretary of State. He says that his Bill is incomplete and that he has not been able to furnish the House with full details on how the powers that he seeks from us will be put into practice. Will he consider exempting people with certain kinds of conditions from the need to go back to go through check after check?
I say to the right hon. Gentleman, despite his best intentions, that the mess that the previous Government got into over incapacity benefit—[Interruption.] It is all very well for Labour Members to sit in opposition and pretend that nothing went wrong under the previous Government. We are picking up an incapacity benefit system in which they left people parked, never seen by anybody for years and years. All we are putting into the Bill is the requirement that people be seen to check on their condition. That has to be in their interests, and it is not in any way a problem that it should happen. Of course, if the right hon. Gentleman wants to try to make amendments as the Bill goes through Committee, we will always be happy to debate those and listen to him. My point is simply this: it is right to see people, and wrong to leave them parked for ever on set benefits. Seeing them is more humane than inhumane, and that balance is the way that we should go.
As we introduce our new welfare system, we will have to take steps to clamp down on benefit fraud, as Opposition Members know. The system that we have is inefficient and too often ineffective. Despite significant overlaps between benefit and tax credit frauds, fraudsters are subject to different treatment in their cases as they are handled by different groups—DWP, Her Majesty’s Revenue and Customs or even a local authority. The mess and overlap is enormous. The Bill introduces powers enabling a new single fraud investigation service to investigate and prosecute all cases of benefit and tax credit fraud. I hope that the House supports that process. We will ensure that anyone found committing lower-level fraud will face a tough minimum fine as an alternative to prosecution. For all other fraudsters, we will seek prosecution whenever we can. We need to ensure that fraudsters get the message that repeated criminal behaviour will not be tolerated, so those found to have committed fraud may face losing their benefit for certain periods; I have already dealt with the detail of the timings.
I simply say to the House, because this was raised in the Select Committee, that I am absolutely clear that not every problem with overpayment or difficulties with those payments was down to fraud. I fully accept that with the complexity of the system, officials made mistakes and that we were often too ready to badge people as fraudsters when in fact they were not necessarily fraudsters but caught up in a system that left them confused and perhaps not making the right or necessary level of statements to the authorities. This process is about separating those people out. A recent trial of a changed reconsideration process at Jobcentre Plus led to a fall of some 15% in the number of appeals being heard. The general view is that process will be sustainable and will work.
We are also changing child maintenance. Much of the current system is designed to drive people into acrimonious disputes during family breakdown. We should all agree that we want to take the heat out of such situations, as far as we can. That is why we are reforming the system and introducing a gateway to the statutory scheme so that parents consider making their own arrangements. We will offer parents a calculation-only service to make it easier for them to make their own arrangements. Of course, if they choose to take matters further, they can.
We are introducing measures to allow non-resident parents to pay through Maintenance Direct when the case is within a statutory scheme. That will provide further flexibility for parents. We need to keep the burden of the cost of collection under control. In 2009-10, the cost of collecting every pound was more than 40p. However, should the non-resident parent fail to pay in full or on time, we will move the case swiftly into the collection service and take enforcement action where necessary.
Why was it necessary to introduce provisions in the Bill before the consultation process has concluded? The consultation process on this matter is due to conclude on 3 April. Because the conditions have been published in the Bill, rather than being legislated on later, many people feel that the Government’s mind is set in stone.
The measures in the Bill set the framework for the details. We will obviously work through the details in time for the Committee stage. It is reasonable to do that. The Bill does not set out the detailed prescriptions, as is right. I do not agree that the process is wrong.
In conclusion, the Bill is not just about balancing budgets, although that is part of the process. It is also about transforming lives and moving people—hopefully—from the entrapment and tyranny of doubt and dependency, to some kind of opportunity, enterprise and change to their lives that they can make themselves, through assistance and support. Surely it is our duty together to ensure that no one is written off, discarded or left behind. I believe that that is what the Bill will achieve. Notwithstanding criticisms and individual issues, I hope that the House will recognise that the purpose of the Bill is positive, and that it will transform the lives that we seek to transform.
I beg to move an amendment, to leave out from “That” to the end of the Question and add:
“this House, whilst affirming its belief in the principle of simplifying the benefits system and good work incentives, declines to give a Second Reading to the Welfare Reform Bill because the proposal of the Universal Credit as it stands creates uncertainty for thousands of people in the United Kingdom; because the Bill fails to clarify what level of childcare support will be available for parents following the abolition of the tax credit system; because the Bill penalises savers who will be barred from the Universal Credit; because the Bill disadvantages people suffering from cancer or mental illness due to the withdrawal of contributory Employment Support Allowance; because the Bill contains no safeguards to mothers in receipt of childcare support; because it proposes to withdraw the mobility component of Disability Living Allowance from people in residential care and fails to provide sufficient safeguards for future and necessary reform; because it provides no safeguards for those losing Housing Benefit or appropriate checks on the Secretary of State’s powers; because it fails to clarify how Council Tax Benefit will be incorporated in the Universal Credit system; because it fails to determine how recipients of free school meals and beneficiaries of Social Fund loans will be treated; and because the proposals act as a disincentive for the self-employed who wish to start up a business; and is strongly of the opinion that the publication of such a Bill should have been preceded by both fuller consultation and pre-legislative scrutiny of a draft Bill.”
I start with a word of thanks to the Secretary of State for meeting me and my right hon. Friend the Member for East Ham (Stephen Timms) a week or so ago to discuss the Bill. As I said to him then, we genuinely want to approach the vital question of welfare reform in a spirit of national consensus. We believe that if we can forge such a consensus it will be good for our country, it will reduce the deficit and, crucially, as he said before he sat down, it will be good for the fight against poverty in this country. We have been forced to table the amendment to oppose the Bill because it fails such fundamental tests that we believe the Government should go away and bring back a better Bill that will deliver genuine and lasting welfare reform.
We could begin to forge that national consensus by drawing the right lessons from the past 13 years. The Secretary of State presented his view, but elided one or two prominent features of the past 13 years, such as the fact that the number of people on out-of-work benefits before the depression came down by 1 million and the fact that the claimant count halved. We did not once, let alone twice, see unemployment go through the 3 million mark. We can draw important lessons for this debate from that period, the first of which is that if the Secretary of State wants welfare to work to work, we need more jobs. Labour consistently put that approach in place.
The Secretary of State said to his spring conference at the weekend—
You were listening?
I not only listened carefully, but checked the transcript because I could not believe what the Secretary of State said:
“It’s not the absence of jobs that’s the problem.”
Given that five people are chasing every vacancy in this country and that 120 Members of this House have more than 10 people chasing every vacancy in their constituencies, the absence of jobs is very much a problem at the heart of his welfare reform programme.
Does the right hon. Gentleman recall that I also said that notwithstanding the period of growth and the number of jobs created, more than half the jobs created by the Government did not go to British nationals sitting on unemployment benefit?
The employment rate under the Labour Government reached a record high and there were 64 quarters of consistent economic growth. The idea that welfare to work can work when the number of jobs is not growing is frankly laughable. There is an important lesson that we must draw from the past to get welfare reform right.
I want to move on to a second lesson before I give way.
When we brought laws to this House to set new obligations for people to work, we ensured that set alongside them were new opportunities to work. We also brought determination and care to the business of legislation. In the Bill, there is determined carelessness.
Is the right hon. Gentleman seriously saying that at a time when it is more difficult on the jobs front we should not make the effort to help people off welfare and into work? If people are capable of working, they should get help. That is what this Bill does. Should we sit on our hands and say that all is hopeless?
That was an extraordinary contribution. Of course we believe that extra help—for example, the future jobs fund, which the hon. Gentleman’s party closed down—should be given to get people back to work.
In looking at this Bill over the past few weeks, I could not but remember Lord Birkenhead’s description of Baldwin’s method of Government:
“He takes a leap in the dark, looks around, and takes another.”
That is the approach that this ramshackle Bill proposes for millions of people in our country—a leap in the dark. I hope that we can begin to sort out, as is appropriate on Second Reading, where the Government have got their principles right—some of their principles are right—and where they have got them wrong. The Secretary of State says he wants to set a new course. The problem is that we are not quite sure where it will lead.
Did my right hon. Friend notice that almost every time the Secretary of State was asked a question on free school meals, housing benefit or disability living allowance, his answer was, “I’ll get back to you.” There are no answers to those points. I have here a few of the letters from my worried constituents, just on disability living allowance. Thousands or millions of people are worried that they will not be able to make ends meet, and the Secretary of State has no answers.
The purpose of this House, when it gives new powers to the Executive, is to have at least some idea of what they will do with them. I hope that a bit of enlightenment will come from this debate, but we have not heard much yet.
I take issue with the right hon. Gentleman’s statement that the Bill is a leap in the dark. We know that 5 million people of working age could work but do not. We know from December’s labour market report by the Office for National Statistics that 1.2 million of the people who took the jobs that were created came from overseas. We need to get our 5 million countrymen who are out of work back into work. Surely that is the priority.
Will the hon. Gentleman intervene again and tell me how many of his constituents are chasing each vacancy?
Of course there are quite a few people chasing each vacancy. As the right hon. Gentleman knows, the issue is not with this Government but with the mess left by the previous Government. This Government are trying to grow the economy and make Britain great again.
I am grateful for that observation. I say gently that, with five people chasing every job in the economy, if we are serious about getting people back into work—I think that the Government do want to do the right thing—we have to do more to create more jobs. We can pass laws and put in place extra help for unemployed people, but there must also be an economic policy that creates more jobs to absorb the very deep public sector job cuts that we know are coming down the line.
Does my right hon. Friend accept that the deficit was the price paid to avoid a depression caused by the bankers, and that the best way to get rid of it is to focus on economic growth, make bankers pay their fair share and make sensible savings over time, not to make the poorest pay the most while the richest are lavished with massive bonuses, which is what the Bill is about?
I will avoid getting into an extended debate about macro-economic policy, although I would happily discuss it all afternoon, but my hon. Friend is right. Under our approach, despite the fact that we faced the worst global crash since the 1930s, unemployment did not go beyond 3 million, as it did not once but twice under the Conservative Administration.
We are listening to the right hon. Gentleman with great interest, but is he not ashamed that although his party was in power for 13 years it failed to make work pay and that the UK now has one of the EU’s highest rates of children living in workless households? Is that not a disgrace?
I would do no more than encourage the hon. Gentleman to look at the analysis of his noble Friend Lord Freud, who examined our work to get people back to work and remarked on how fast the number of people on out-of-work benefits had fallen. He examined the number of children lifted out of poverty and said that our record was truly remarkable.
I fear that the right hon. Gentleman is going through the motions. He was a gifted and talented Chief Secretary to the Treasury, and I do not think he truly believes what he is saying. Will he at least concede that people who are no friends of the Conservative party, such as the Scottish TUC, have said that worklessness was exacerbated by the decision to import millions of low-skilled, low-wage workers from eastern Europe, which drove down wages and conditions and made it much more difficult for indigenous British workers to secure jobs and get off welfare dependency?
I do not think I should veer into a debate about immigration this afternoon, because you, Mr Deputy Speaker, would quickly call me to order. I would, however, make the point that, after consistent economic growth, employment went up, the number of people on out-of-work benefits came down and the number of people lifted out of poverty, including pensioners and children, was at a record high. The Government can learn something from that record.
Of course, that has to be put alongside the right legislation to encourage people back to work, which is where I fear the Bill will fall short, for a very simple reason. It fails the basic tests of whether it fosters ambition and whether it reinforces and consolidates our obligations to each other. Fostering ambition and nurturing compassion are the basic tests of welfare reform, and I am afraid the Bill fails both.
I oppose the Bill, and given any opportunity I will vote against it.
As my hon. Friend the Member for Hammersmith (Mr Slaughter) said, the Government’s response to every representation that has been made by external organisations or today in the House has been, “These matters will be dealt with in regulations”. Attached to the Bill is a quantity of regulations that we have not seen before with a Bill of such stature. May I suggest that my right hon. Friend link up with the Secretary of State to discuss the procedure to be followed after Committee and before Report, so that the bulk of the regulations are published in time for us and others to consider them before our final debates on the Bill?
That is an extremely sensible proposal, and perhaps the Minister of State, the right hon. Member for Epsom and Ewell (Chris Grayling), will reflect on it in his winding-up speech. It is important for the other place to be involved in discussions, too, to ensure that the Bill leaves this House in better shape.
May I align myself with what my hon. Friend the Member for Hayes and Harlington (John McDonnell) just said?
Will my right hon. Friend put on record the fact that words that we used to use in the Chamber—equality and non-discrimination—must exist for people in the work force with disabilities and from ethnic minorities at a time when there are few vacancies? I think in particular of Haringey Phoenix Group, which represents blind people, whose representatives came to see me in my constituency.
That is a challenge that I know well, representing the constituency that I do. I will say a little more later about the challenges and the reforms that are needed on disability living allowance.
There are some principles in the Bill that we support. The principle of universal credit builds on the changes that we made to ensure that work pays, and we welcome some of the proposed reforms to the claimant commitment. We certainly welcome tougher and tougher measures on fraud, but the basic truth, which many hon. Members have rehearsed this afternoon, is that the Bill is not a pamphlet. It is not about theory; it is about practice. It is therefore important that we consider whether it will foster ambition and strengthen compassion in a number of important areas. I start with child care, with which the Secretary of State started.
For millions of families in this country, and especially for women, the truth is that extra help with child care is needed if they are to get back to work. Many families in our country receiving a combination of housing benefit, council tax benefit and child tax credit have up to 97% of their child care costs supported. The Secretary of State said today that he wants that budget to be frozen, which at least shows some progress, but he also confirmed that the number of people who will have a claim on that budget will grow. That of course means that some people will get less help with their child care than before. What we have not learned this afternoon is what that will really mean for people.
My hon. Friend the Member for Stockton North (Alex Cunningham) asked the Secretary of State a very straight question on 9 February: had he decided which child care option he would propose? “Not exactly, no,” said the Secretary of State.
“Can you give us a clue?”,
my hon. Friend persisted, gamely.
“I will give you a clue when we are a bit closer to the finalised detail”,
said the Secretary of State. Now, the right hon. Gentleman is asking for powers to end child tax credit. I am not sure how much more finality one could want, but there are still no answers other than the comment that the Government are still consulting. We hear rumours that for some people the cover for their child care costs will be reduced to 70%—a gigantic new bill for many families that could prevent people from getting back to work. Helen Dent, chief executive of Family Action, has said:
“The possible reduction in help with childcare costs could mean that many parents might end up being worse off under universal credit”.
I say today, on behalf of the 486,000 families who get child care help from the Government, that they need to know more.
I absolutely agree with my right hon. Friend, but is there not a further black hole in the Government’s proposals, which is the failure to acknowledge regional variations? The cost of child care in London, for example, is massively higher than it might be in another metropolitan area of the country. The Bill reflects that lack of definition and flexibility and a complete ignoring of regional variations.
My hon. Friend is right, and I am afraid it gets worse. The Secretary of State has made much of his effort to reduce the disincentive to work, which we genuinely welcome, but, like me, he will have noticed that earnings are now growing at about half the rate of prices. He will also doubtless have noticed that once people begin to earn £43,400, they will lose their child benefit, which is worth several thousand pounds a year. That all puts pressure on second earners to go out to work, so the question must therefore be what marginal deduction rates will confront those second earners. The answer is not easy to find, but it is buried away in paragraph 69 of the impact assessment. Having read it, I am not surprised that the Government did not put it up in spotlights, because it states that twice as many earners will see their marginal deduction rates go up than will see them go down. Who is most likely to be hit? It will be couples with children, whose median deduction rates will go up.
That is what we do know, but what is worse is what we do not know. We do not know what will happen to those entitled to free school meals; what will happen to free prescriptions; which working families will be exempt from the benefits cap; or how unearned income such as widow’s benefit or child maintenance will be treated. We do not know about sick pay or maternity pay, and we have no idea how on earth council tax benefit will work. As the House knows, the council tax benefit system is going local, but the rules on universal credit are to remain national. The Secretary of State for Communities and Local Government, who likes to be straightforward with the House, boldly asserted on 17 February that he was in charge of drawing up the new rules on council tax benefit, but surely the final word must come from the Work and Pensions Secretary. Once again, there is total confusion. The questions for families are stacking up, and there are no answers to any of them. That is the story for families.
Would my right hon. Friend care to comment on reports in today’s papers that representatives of 30 cancer charities have written to the Secretary of State expressing concern about people who are recovering from cancer? Specifically, they are likely to lose their employment and support allowance after a year, but 75% of them or not in a position to return to work after a year.
That is deeply concerning, and I will dwell on it in a moment.
The right hon. Gentleman makes a persuasive case on the detail—clearly a lot of it remains to be found, but this is a confusing and complex matter. Will he admit that the current system is unsustainably complicated? There are 8,600 pages of guidance on benefits administration at the DWP and 2,000 pages for local government, and there are 30 different benefits to administer. Change is required. If we have a framework and consult widely, we will have a better system.
The Opposition want welfare reform that sticks. When so many details are unclear, the danger is that the Bill will unravel progressively as it comes into effect.
We have discussed whether the Bill passes the test of fostering ambition for families and have shown that a great number of questions remain unanswered. Let us now consider savers. All hon. Members want to nurture the ambition to save. The amount that people must save for a deposit for a house is heaven knows how much, but now that tuition fees have been trebled, more families have to save harder to get their young people into college. One might have thought, therefore, that the Government would provide more incentives to foster the ambition to save, but the noble Lord Freud told the House of Lords that
“the £16,000 savings threshold would extend to all households eligible for universal credit.”—[Official Report, House of Lords, 15 December 2010; Vol. 723, c. WA204.]
There we have it. The Government are so keen to foster the ambition to save that once someone has £16,000 in the bank—the price of two and a half years at university—their tax and in-work benefits are taken away.
Will the right hon. Gentleman give way?
I will give way in a moment, but first I want to tell the House what James Browne of the Institute for Fiscal Studies said:
“This is a much harsher treatment of capital than we have in the tax credit system.”
Will the Secretary of State tell us how that measure rewards savers?
May I remind the right hon. Gentleman that his system became completely absurd, because it allowed people with huge savings and income to claim benefits? The previous Government’s system supported not the bottom two or three deciles but people further up the income scale. That is one reason so few people from the bottom income deciles got back into work, and why poverty was so high.
Does the Secretary of State accept that, on current figures, taking away the in-work benefits of people who have £16,000 in the bank would mean 400,000 families with children losing benefits? Surely that is not a good way of fostering the ambition to save.
The right hon. Gentleman’s figures are incorrect. When universal credit comes in, the figure is more than likely to be no higher than about 100,000—[Interruption.] Wait a minute. I know where the right hon. Gentleman gets his figures from. Those 100,000, of course, will be transitionally protected, so they will not lose.
The Secretary of State can say that only because he is taking tax credits from so many families over the next two or three years. He has not given a guarantee for future savers. What will happen to their incentive to save under his new system?
Will the right hon. Gentleman give way, because he needs to answer my question?
The Secretary of State needs to answer my question. The Minister of State told my right hon. Friend the Member for East Ham that getting rid of the savings cap would cost only £70 million. Will the Secretary of State therefore look again? He must recognise, as I do, that he is currently not fostering the ambition to save for hundreds of thousands of people.
I completely disagree with the right hon. Gentleman on that, but I want to challenge him to give an answer to taxpayers, who ask whether the welfare system is about supporting people who are most in need, or whether it is about casting money wider and wider to people who can support themselves in particular periods. How much more money does he really want to spend?
I am afraid that the Secretary of State has still not provided an answer to my question—he still cannot tell us how he will encourage people to save. Tuition fees have trebled, and people in my constituency are asking, “How on earth do we encourage our young people to go to college, and how on earth can we afford to get our young people into university?”—[Interruption.] I know the Secretary of State does not have those challenges to face, but thousands of people in our constituencies need to save to get their kids to university. The regime that he is proposing will strip in-work benefits from them, kicking the ladder away from aspiration in our country.
Surely the right hon. Gentleman must recognise that tuition fees are not payable until such time as people come out of university and earn a salary of £21,000 or more. His argument is a red herring.
I do not know what the hon. Lady’s constituents are saying to her, but many in my constituency live in fear of debt—they want not to burden their children with debt, but for them to get a first-class education, so that they can contribute to the future of our country.
The wider point that is emerging is that we do not know enough about how the Bill affects families and savers, but there is also a question over how it will affect the self-employed. Over the last few weeks, we have heard a great deal of pitch-rolling from the Chancellor and the Prime Minister, who are now worried about the damage that their last Budget did to our economy. All of us hope that the Chancellor can upgrade his growth forecast at the forthcoming Budget after doing so well over the last year, and the Prime Minister is now promising that his next Budget will be the most pro-growth Budget in the universe. He told his spring conference:
“At its beating heart this is still a party of start-ups, go-getters, risk-takers…We’re the party of practical men and women, people with a passion and a mission to build a business and see it grow...We are the party of enterprise.”
No doubt, then, the Bill is part of that plan—no doubt the Bill will make it simpler, easier and more encouraging for people in this country to start a business and to make that entrepreneurial leap. Well, my hon. Friend the Member for Stretford and Urmston (Kate Green) asked the Secretary of State about the self-employed on 9 February. To be fair to him, I think he recognises the problem. Surveying the position of the self-employed, he told her that
“we are conscious that that area is the slight blip in the system.”
This is what the blips in the system at the Federation of Small Businesses told me yesterday. Mike Cherry, the FSB national policy chairman, said:
“We are concerned that the Government has assumed that entrepreneurs with a new business will be paying themselves…and will therefore lose all benefits under the Universal Credit system…A measure such as this simply creates yet another barrier towards self-employment which is particularly unhelpful at a time when we are relying on the small business sector to grow the economy”.
So much for the party of enterprise.
I will give way to the hon. Gentleman.
Considering that the right hon. Gentleman agrees that it is absolutely right and proper to support families, does he concede that the Labour party got that wrong because couples were paid to live apart?
I do not know whether the hon. Gentleman was in the Chamber when my hon. Friend the Member for Swansea West (Geraint Davies) spoke of the disincentives for families to stay together under the new regime, but if he wants to pretend that the Bill ends the couple penalty in the welfare system once and for all, perfectly and immaculately, I look forward to him setting out his argument.
I think the Secretary of State wanted to say a word about the encouragement that he will provide for small businesses.
The right hon. Gentleman raises the issue of the self-employed. I made this point to him privately and I will now make it publicly: they will fall within the universal credit. The point that I was referring to was how complicated and counter-intuitive the current systems have become, as he knows very well. We are seeking the best way to ensure that the right reporting structures are in place for those people, who will be inside the universal credit.
Perhaps the Secretary of State can tell the House this afternoon when those proposals will be ready for us to look at. [Interruption.] “In time for Committee,” he says from a sedentary position. We all look forward to seeing that.
It is now clear that for the self-employed, savers and families, this Bill at the very best poses more questions than it answers. The other question that the House has to ask the Secretary of State this afternoon is not about how we foster ambition, but about how we nurture compassion. How do we strengthen and reinforce our obligations to each other? That is something that we will hear a lot more about, when we talk about the reform of disability living allowance. What we know about the detailed reforms is not good. I welcome what the Secretary of State has said about the mobility component of DLA. I think that he has confirmed that he is withdrawing the proposal to cut £135 million from the mobility component of DLA. If that is true, it is welcome, because we are talking about a measure that the chief executive of Scope pronounced as “callous” and an
“assault on the most vulnerable”.
The rationale presented by the Minister of State has this morning been taken apart by 39 charities. I am afraid that I have to agree with the words of those campaigners who have said that
“many of these people”
—those in residential care—
“will be prevented from enjoying the freedom of movement that is taken for granted by people who are not disabled.”
Those are, of course, the words of the motion at the Liberal Democrats’ spring conference this weekend. I hope that together we may be able to prevail and get this measure dead and buried.
On the crucial issue of the mobility component for people in residential accommodation, when my right hon. Friend put his question to the Secretary of State, I understood the Minister of State to be indicating dissent. Will my right hon. Friend give the Minister another opportunity to clarify this important issue?
I am grateful for my right hon. Friend’s suggestion. The Secretary of State has £135 million scored against the saving. I now invite him to intervene and say whether that saving is off the table, or whether the measure is going forward.
The right hon. Gentleman knows very well, because we had this conversation privately. As I assured him, and as I assure him now, what we have done is roll the proposal into the personal independence plan. We are reviewing what is necessary. I said to him then, as I have said to the right hon. Member for Coatbridge, Chryston and Bellshill (Mr Clarke), that what we are looking for is the amount necessary for people who are in residential care. That is the commitment that I have given. That is the exact fact, that is how it remains, and all other things will fit around that.
The argument that the Secretary of State has rehearsed this afternoon is that the Bill will give him the flexibility either to withdraw or to reform the proposal, but what he has not set out for the House is whether he will reduce the savings target of £135 million that has been scored by the Chancellor against the measure.
I have just given an answer.
I therefore look forward to the Government reflecting on this debate and perhaps giving slightly more clarity when the Minister winds up.
More alarming for many people is the lack of any safeguards on what the Government have in mind for the future of DLA, especially as we know that the Chancellor is determined to take £1 billion off the bill and then ask what kind of reform will be necessary to deliver his sums. Not for him the subtleties of asking what kind of reform might make sense. This is what the Multiple Sclerosis Society had to say about the measure: “We share serious concerns”—[Interruption.] It is incredible that when such organisations present their arguments, those on the Government Front Bench would rather talk among themselves than listen to what they have to say. This is what the Multiple Sclerosis Society said:
“We share serious concerns with a large number of other disability organisations that the Bill in its current form could lead to those most in need losing out on the support they rely on”.
The Secretary of State’s own equality assessment says that 13% of disabled households could be entitled to less help under the new system. He has simply not provided assurances on that point. When my hon. Friend the Member for Stretford and Urmston asked him about that, he said:
“I am sorry to be cagey about this. It is simply because this will become very clear when we publish the Bill.”
Well, here is the Bill, but where are the answers to the question?
I am interested in what the right hon. Gentleman is saying. He is going on about the review and the issues around disability living allowance, but I notice that the Opposition make no mention of that in their amendment. I notice also that both he and his leader have said that they support the reforms to disability living allowance, so perhaps he would like to make it clear: is he in support of them or not?
Everybody is in support of reforming disability living allowance, but we have not said that £1 billion should come off the bill and that we should then work out what kind of reform would deliver those numbers. The Secretary of State must realise that this is why millions of people up and down the country are so alarmed about the reform proposals being put in place. Now he—or, indeed, his Minister—has a chance to say that he will listen to campaign groups that are worried about the proposals, that he will listen to amendments and that he will try to put in place safeguards to ensure that DLA reform is done in the right way. Yes, we should reform DLA, but we should not abolish it.
Would not one key reform be to ensure that those claiming the allowance are seen, to check that they are still in need of it? Some 140,000 people have not been seen by the Department for Work and Pensions in the last 20 years, going back to 1992. Surely that is unacceptable.
There is a strong case for reform of DLA. The lobby groups agree with that, as do we, but we do not agree with the way the Government have approached the issue. First, we had an announcement by the Chancellor of the Exchequer that DLA would be cut £1 billion, then we got a consultation, which has only just finished, and while all that was happening a Bill was published with no detail or safeguards dealing with how that reform would be conducted. The Secretary of State must realise that that is a serious concern for millions of people up and down this country.
That alarm is simply magnified by the proposals to set a one-year limit for those who can receive contributory employment and support allowance. I, too, think that there is a case for time limits—there is a good case for considering two years, for example—but this morning 30 cancer charities have written to the Secretary of State urging him to think again on that measure. His own Department’s statistics, they say, show that 75% of cancer patients still need ESA after a year. Their message is blunt:
“this proposal, rather than creating an incentive to work, will lead to many cancer patients losing their ESA simply because they have not recovered quickly enough.”
If this indifference is not addressed in Committee, the Secretary of State will have single-handedly dismantled any notion that compassionate conservatism is truly a reality. This simply cannot be right, and it needs to be looked at again.
I support the crucial points that my right hon. Friend is making, but has he noted that the impact assessment on the proposed changes to DLA makes no mention of the impact on carers? There clearly will be a consequential impact on carers, depending on what benefits the people for whom they care receive and which rates of the daily living component or the mobility component will entitle carers to claim carers allowances. There is no mention of that whatever. Is my right hon. Friend aware of whether the Government have even made an estimate of the number of carers affected, and if so, why it has not been published?
I am not aware of those estimates, and I hope that we will have a long and important debate about carers this afternoon and in Committee.
Several hon. Members
I will give way in a moment.
My final point is about the small question of whether the Bill will actually save any money in and of itself. The Bill would save money if it got people back to work, but it will not create a single job. By the time we get to Royal Assent, there will still be five people chasing every job in this country, and for 120 of us, there will still be 10 people chasing every job in our constituencies. The only way that this Government are going to save money through welfare reform is by cutting the benefits of working families. Indeed, once we take out the shift to a lower form of uprating, we see that half the benefit cuts hit working families, starting with 10 raids on the family budget, taking out £1.5 billion from this April. Two thirds of that bill would not be necessary if unemployment were not as high—in fact, if it where down it would have been under Labour. Nowhere is that muddle about whether the Bill saves money more confusing than when it comes to the housing measures.
Several hon. Members
I will give way in a moment, but I want to make this point first.
Clause 68 puts into the Secretary of State’s hands unprecedented powers to do whatever he wants with people’s rents. Normally, we would object to that kind of sweeping power because we would not know what a Minister was going to do with it. This time, however, we object because we know exactly what the Secretary of State is going to do. He has proposed a housing benefit cap, which he says will save money, but the Mayor of London has now said that the measure will cost more money because homelessness costs will rocket.
The Secretary of State says that his measures will bring rents down, but the Secretary of State for Communities and Local Government is putting rents up in the social housing sector to 80% of market value. The House of Commons Library says that that could cost up to £200 million. One half of the Conservative party does not know what the other half is doing, and taxpayers are picking up the tab. In fact, it was left to the Pensions Minister to tell the House on 3 February that, on his estimate, the housing bill would go up by £1 billion over the course of this Parliament. So how is this Bill going to save money on housing benefit?
Before I ask my question, I need to draw the House’s attention to the entry in the Register of Members’ Financial Interests for my right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford), with whom I have an indirect interest: he is my partner. Now I can get on with my question.
My right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne) has mentioned the increase in costs resulting from the impact of rents going up to 80% of market value. The Localism Bill contains measures designed to put homeless people straight into the private rented sector. That will put further pressure on that sector, which is already being squeezed, and push rents up. There is no evidence that rents will come down. Does he agree that the Government’s left hand does not know what the right hand is doing?
That is the evidence from the Mayor of London and the Secretary of State for Communities and Local Government.
At the last election, the Labour party manifesto contained a pledge to reform housing benefit to ensure that the people claiming it would not live in the kind of homes that ordinary working families could not afford. We believe in that policy. Is the right hon. Gentleman now renouncing it?
Not at all. The point that we are making is about the way in which this reform has been adopted and steamrollered through, and about the lack of consultation between the Department for Communities and Local Government and the Department for Work and Pensions. This has been so mismanaged that many people—the Mayor of London, Shelter, the Secretary of State for Communities and Local Government—are now saying that the cost of housing benefit could go up. Surely that is not the DWP’s intention. We need a bit more detail about a policy that might actually deliver the necessary savings on housing benefit.
I was recently talking to some constituents in Acton, and I discovered that these proposals for changes to housing benefit are among the most popular proposals that the Government have introduced. My constituents like the idea that it pays to work, and that those on benefit will not be able to afford better houses than those in low-paid work can afford. They also wonder why it has taken so long for any Government to introduce a measure that is simply fair, regardless of the money it might save. They wonder why the Labour Government never did anything about this when they had the chance to do so.
I am sure that the hon. Lady will have set out, with equal eloquence, the view of the Mayor of London that the measures might actually cost more taxpayers’ money than they will save.
Will the right hon. Gentleman give way?
I will take a couple more interventions in a moment.
I want to put on record my thanks to the scores of charities and campaign groups that have helped to brief us and offered to work with us to draw up amendments to improve the Bill in Committee. I am even more grateful to them for their commitment to mobilise their millions of members to help the Government understand why the Bill needs urgent reform. If the Government persist with the illusion that the Bill is immaculate, perfect and beyond improvement, and if they decline to hear the voices of those millions of members of charities and campaign groups that have worked with us, we will have no alternative but to vote against it on Third Reading.
In today’s debate, we will hear a lot of statistics; we will also hear about this record and that proposal. I just hope that the House will remember that behind every statistic is a person—one of our constituents. They are people like my constituent, Colin Hulme, who wrote to me at the end of last week. Mr Hulme suffers from Chiari malformation, a condition that affects about one in 1,000 people. It hit him in 2007, and he had to give up his job as an IT consultant and move home. He is a very brave man. He told me that his disability living allowance means that
“at least I can pay my household bills, my kids will have food on the table and clothes for school. More importantly, it means my wife can provide the care that I need.”
His view is that the Bill is about
“cutting costs and shifting responsibilities rather than improving the lives of sick and disabled people.”
It is a worry for him, and I think that the whole House will acknowledge that that worry is shared by millions of people up and down the country today.
My real point to the Secretary of State in this debate about principles is this: in the debate ahead, let us together put aside the politics of fear and division, and let us have the politics of hope—people’s hope for a job, the hope that they can get the help that they need, and the hope that they can get on and move up in work. That is what welfare reform should be about. That is the instinct expressed in our amendment, and I hope that the House will back it this afternoon.
Several hon. Members
Order. A lot of Members wish to participate in the debate, and we have introduced a six-minute time limit on Back-Bench speeches, with the usual amount of injury time for up to two interventions. Clearly, however, Members do not have to take interventions, and if they do not, that will allow more people to speak.
I welcome this opportunity to support the Bill, which will bring about probably the biggest change in the welfare state for 60 years. I disagree with the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) on certain points. The Bill is about helping people into work and establishing big principles for the future, and it really is not good enough to make a speech saying, “We want to help people into work,” but then to deny the means to do that. He is saying that the Bill should not go ahead. He is saying that the details—which should be debated, I agree with him on that—are sufficient to allow him to deny this major Bill a Second Reading. Well, he is wrong about that. He has issues that he rightly wants to discuss in Committee, and he has the support of numerous groups throughout the country that want those points of detail to be considered. Yes, he is right about that, but, my goodness, he is wrong to say that the Bill, which does such important things, should not go ahead.
Let us consider the idea of the universal credit. We will finally be able to say that a person will always be better off in work. That is a big principle; that is important. I venture to suggest that the right hon. Gentleman agrees with that in his heart of hearts, yet he is saying that we should not introduce those measures. I notice that he is not prepared to listen to this—
I am listening.
At the moment, it takes 45 minutes in a jobcentre to work out whether someone will be better off in work or not. The Bill will change that at a stroke. People will know that they will always be better off in work. That is an important principle.
My second point involves helping people to get into work, giving them support through the “black box” approach. This is something that Labour agrees with; the right hon. Gentleman actually trialled it when he was in government, and it worked. It is recognised internationally—