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Oral Answers to Questions

Volume 527: debated on Wednesday 27 April 2011

Cabinet Office

The Minister for the Cabinet Office was asked—

Small and Medium-sized Enterprises

1. What steps he is taking to increase access to Government contracts for small and medium-sized enterprises. (52583)

6. What steps he is taking to increase access to Government contracts for small and medium-sized enterprises. (52588)

7. What steps he is taking to increase access to Government contracts for small and medium-sized enterprises. (52589)

8. What steps he is taking to increase access to Government contracts for small and medium-sized enterprises. (52590)

On 11 February, the Prime Minister and I announced a package of measures, including launching our Contracts Finder website, eliminating burdensome and unnecessary pre-qualification requirements from the procurement process, and introducing new ways to allow small and medium-sized enterprises to challenge contract procedures when they operate in a way that makes life difficult for them. In addition, from the end of April, all Departments will be required to publish a set of specific, targeted actions to increase their business with SMEs.

Will the Minister set out what steps he is taking to increase access to public contracts for smaller, grass-roots charities as well? Does he agree that for the big society to work properly, we need to build the little society too?

My hon. Friend makes the point very well. All the measures that we are taking to enable small and medium-sized businesses to participate more fully in Government contracts will, of course, apply to the voluntary and charitable sector as well. Indeed, it is estimated that 35% to 40% of the value of the contracts recently awarded under the Department for Work and Pensions Work programme will go to organisations from the voluntary and charitable sector. We believe that that will be worth in excess of £100 million a year.

Will the Minister take this opportunity to name and shame those Government Departments that are doing well in opening up to small businesses and those that are currently doing less well?

I certainly do not want to shame the ones that are doing well. We have found a number of examples of procurement processes that are not meeting the new requirements. For example, Durham police recently issued an invitation to tender for a £50,000 leadership training contract. The pre-qualification questionnaire alone was 38 pages long and contained a request for 163 separate items of information plus a security vetting form. That is unacceptable, because it causes many smaller businesses to lose the will to live, and they simply do not apply.

I am the former owner of a small business supplying products to the public sector. When applying to be added to a new tender list, I was often frustrated by the amount of red tape required. Will the Minister confirm that in future fewer company policies and statements will need to be provided to participate in the tendering process?

We want to strip away all that nonsense. Under the last Government, there were 6,000 pages of guidance for some kinds of procurements. It is not surprising that smaller businesses just did not bother to apply; they knew that they were going to be excluded. There were turnover requirements and requirements for a track record of doing exactly that kind of work. The truth is that that is very bad for small businesses and we want to make things much better.

During a recent meeting, small and medium-sized enterprises in Hastings raised with me the difficulties not just of the paperwork, but of getting the capital requirements in this climate for procurement contracts with the Government. Will the Minister reassure us that that aspect will also be considered, as we try to make it easier for small and medium-sized enterprises to engage with the Government?

My hon. Friend makes a good point. We are concerned that the working capital requirements should be proportionate and sensible and that the turnover requirements should be proportionate to the needs of the contract. All ridiculous requirements such as those that existed under the old regime—for example, always requiring three years of audited accounts, which automatically excluded huge numbers of new and innovative businesses—will be swept away.

Does the Minister accept the macro-problem? In south Yorkshire, a large number of private sector enterprises depend in whole or in part on public sector contracts. So much demand is being taken out of the economy, because of the deficit reduction plans, that such businesses face serious challenges. Does he accept that small enterprises face a real problem because of his Government’s macro-economic policy?

I acknowledge that there is a problem—and it is one caused by the Government of whom the right hon. Gentleman was a member and supported. They left Britain with the biggest budget deficit in the developed world. I am waiting for the right hon. Gentleman to apologise for that; that would be timely.

In looking at an increased role for small and medium-sized businesses, will the Minister let the House know when his Department will publish the public services reform White Paper? It was commissioned last October to be published early in the new year. January became February, and the Prime Minister said that it was only two weeks away. Two weeks have become more than two months and there is still no sign of the White Paper. Is that the Government’s biggest pause, or have they just given up on public services?

I am thrilled that the right hon. Lady is waiting for the document with such obvious excitement, and I can assure her that it will be well worth waiting for. This Government are committed to breaking up the old public sector monopolies and providing diversity, particularly with the growth of public service mutuals. The document will be published later this summer, and I can promise her that she will be delighted with it.

Big Society Bank

2. Whether private sector organisations will be able to make applications to the big society bank. (52584)

The big society bank will provide finance for the voluntary and community sector through funds to social lenders and investors. It will provide funds only to bodies that are onward lending or investing in the voluntary and community sector, charities and community groups.

I thank the Minister for his response. In the light of that, can he please indicate how the bank will define social enterprise, as currently there is not a legal definition? How will he ensure that all social enterprises have access to funding but that no organisation that exists for private profit has such access?

Social enterprises can take a wide range of different forms, but the common feature is that they do not seek to make a profit for shareholders. I think there is a widely understood definition of voluntary and community sector groups, and the big society bank will be organised in such a way that it can identify those and make sure that the funds that it is providing to social investors and social lenders go only to those groups.

May I commend the intellectual ideas behind the whole concept of the big society? May I also commend to my right hon. Friend an article by Tim Montgomerie that appeared on ConservativeHome earlier this week entitled, “Conservatives can win the poverty debate but not if the Big Society is our message”? Is the big society more accurately described as a label for a collection of policies rather than a policy itself?

I hope that the Minister will answer with particular reference to private sector applications and the big society bank.

I am grateful for that guidance, Mr Speaker.

My hon. Friend is right to point out that the big society is an idea with a very wide application. The big society bank is a fund that will have a very wide application, because we believe it is extremely important that it should be able to foster all sorts of voluntary and community enterprise which, in one way or another, enormously support the alleviation of poverty—the subject of the article to which he refers.

The idea of such a bank to help to develop the centre of civil society is a good one, but effective government requires a mix of big ideas and getting the details right. In this connection, has the Minister seen today’s report by the National Endowment for Science, Technology and the Arts, which suggests that if the big society bank lends purely on commercial terms, it will be

“failing to support those that it is set up to support”?

What can he say to ensure that the lofty rhetoric of the big society bank does not founder on the rock of inadequate administrative detail?

The hon. Gentleman is of course right to say that the big society bank could not operate as it is intended to operate if it were lending, or investing, on purely commercial terms. It will have what is often described as a double bottom line: it will seek to achieve the highest possible social returns alongside reasonable financial returns. Indeed, part of the point of the big society bank is to show that there is no conflict between achieving high social returns and achieving modest but reasonable financial returns.

Big Society

I am delighted to assure the hon. Lady that the Cabinet Office receives many representations on the big society from a wide range of individuals and organisations, not least many colleagues on both sides of the House who have accepted our invitation to bring in representatives from their local voluntary and community organisations.

I do not know whether the Minister ever gets representations from voluntary sector organisations that fold. The organisation that I used to work for folded a few weeks ago. Will he admit that that is because the cuts are too deep and too fast, and the transitional fund is too little and too late?

I am obviously sorry to hear about the fate of the organisation that the hon. Lady used to work for. She will know that in reality the sector cannot be immune from the necessary cuts in public expenditure, and I do not think it would have been immune under a Labour Government. The Government have tried to give the sector maximum support through this difficult period. The transition fund—£100 million of taxpayers’ money; serious money in this context—is there to help organisations that are in a hole.

Yesterday, Ed Cox, the director of the Institute for Public Policy Research North, said:

“Our research shows that the Big Society will not be fair to the North without changes to government support for philanthropy and charitable giving. Good will is beginning to wear thin as people in the voluntary and community sector try to deal with budget cuts, and organisations in the North cannot turn to big corporate or high value donors to make up the gap”.

What is the Minister doing to ensure that the big society does not usher in further unfairness and exacerbate the north-south divide?

I understand the hon. Lady’s point. I refer her to the geographical spread of successful applications to the transition fund, with which we are pleased. She mentioned the need for further incentives for giving in this country. I refer her to what was an extremely helpful Budget in that context, which had a major initiative to encourage giving through inheritance tax and a substantial reform of gift aid to make it easier for smaller charities to receive it on smaller donations. The Government are working extremely hard to make this difficult period of transition as easy as possible for charities.

Public Expenditure Reductions

4. What recent estimate he has made of the number of charities and voluntary sector organisations that will be affected by reductions in public expenditure in the next 12 months. (52586)

9. What recent estimate he has made of the likely change in the number of jobs in the voluntary sector as a result of reductions in public expenditure in the next 12 months. (52591)

Unfortunately, the sector cannot be immune from cuts, for reasons that have been explained. That would have been exactly the same under a Labour Government. We are trying to help the sector to manage a difficult transition, while shaping what we believe are significant opportunities for the sector, not least in terms of more public service delivery.

Since the late 1980s, Wallsend people’s centre has helped hundreds of unemployed and disadvantaged people in North Tyneside to gain the necessary skills to get to work. In the past year, it has lost more than £450,000 through cuts to Government grants. Four experienced support workers will now lose their jobs. Will the Minister meet me to discuss the communication he has received from the people’s centre about its plight, to which he has not yet replied?

Again, I am sorry to hear that that organisation is in difficulty. I am more than happy to meet representatives from the community to discuss it. The transition fund has been made available to help organisations in difficulty. I point out to the hon. Lady that many of the funding decisions and cuts are local decisions, and that many councils across the country are taking a positive approach by maintaining or even increasing spending on the local voluntary and community sector.

Cutting charities reduces our ability to help one another and undermines the structures of neighbourliness that form our big society. That is the opinion of the chair of the Charity Commission, who knows about these things. Is not the Government’s big society a big confidence trick?

Absolutely not. The hon. Gentleman has been around enough to know that the size of the deficit means that the sector, which receives almost £13 billion a year of taxpayers’ money, cannot be immune from the reduction in public spending, and that it would not have been immune, as the Opposition have admitted, under the ghastly scenario of a Labour Government. We have to be realistic about that. We are trying to minimise the short-term damage through initiatives such as the transition fund, and to create the building blocks for a better future for the sector, not least through more incentives for giving and more opportunities for it to deliver public services.

Big Society Bank

The first payments will be made in the next few months. The exact timing and amounts will be decided by the Reclaim Fund once it has assessed the amounts that it has received from the banks and the amounts that are likely to be reclaimed from depositors.

We hear constantly from businesses and social enterprises that high street banks are unwilling to back innovative or new ventures. How will the Government ensure that the big society bank is different and that it assesses applications in such a way that it does not exclude start-ups and innovative organisations in favour of only the established players in the social enterprise and charities sector?

My hon. Friend is absolutely right to draw attention to that issue. The whole point about the big society bank, as I tried to indicate to the hon. Member for Hemsworth (Jon Trickett) a moment or two ago, is that it will be entirely different from a commercial bank. It will be set up precisely to achieve social return as much as commercial return. The other vital point is that it will operate through social lenders and investors already in the marketplace, so it should be able to reach out to the smallest community and voluntary groups and not just be restricted to the large groups that also play an important role.

Is the latest estimate of money to be raised from dormant bank accounts still £400 million, and what progress has been made in securing an additional £200 million from the UK’s largest banks?

Yes, the estimated amount to be raised from dormant accounts remains at £400 million. The Reclaim Fund will now assess the exact amount that it can release in the first year, and the current estimate is somewhere between £60 million and £100 million. Then there are, of course, the negotiations that my right hon. Friend the Minister for the Cabinet Office and Paymaster General is having with the four main lending banks that were party to the Merlin agreement about another £200 million of funding. Altogether, there should be a considerable amount of funding coming through this year and in following years.

The NESTA report referred to earlier by my hon. Friend the Member for Hemsworth (Jon Trickett) stated that the big society bank

“should not expect to achieve commercial returns on all its investments”.

By far the majority of demand for capital is for soft capital and patient capital. Why, after two months of intense talks between the banks and the Treasury, do we still not have an agreement? The banks are saying that they want commercial returns. Will the Minister confirm today that the big society bank will not be about commercial returns for the banks but about genuine support for social and community enterprises?

The right hon. Lady is confusing two levels of lending and investment. There is the question of what the big society bank demands of the investments that it makes, and as I have said, that will be both a social return and a modest financial return, but not the type of commercial return that one might make with a hedge fund or in another such way. Then there is the relationship between the big society bank and the main commercial banks that are party to the Merlin agreement. My right hon. Friend the Minister for the Cabinet Office and Paymaster General is currently discussing the exact terms on which that investment will be made. It will have to be compatible with social objectives and the social returns that the big society bank is intended to make.

Public Sector Mutuals

In August last year, we launched a pathfinder programme of 21 groups of public sector workers setting up mutuals with the help of mentors. In addition, millions of public sector employees will be given rights to provide public services as mutuals, such as those recently announced in the national health service. That will free up public sector workers to innovate and provide better and more efficient services. We have committed to funding a £10 million support programme to help such new organisations get off the ground. [Interruption.]

Order. I am bound to say that it is very difficult even for me to hear what the Minister is saying. As a consequence, I feel sorely under-nourished. The situation is unsatisfactory.

Given the evidence that productivity and efficiency increase dramatically when staff are given a role in shaping services, is not the scaremongering about the proposals on mutuals unhelpful to users, taxpayers and the staff concerned?

Anyone who visits the pathfinder mutuals, talks to the staff—now co-owners—of those organisations and sees the excitement with which they are pursuing their new vocation will give up on the scaremongering. This is a profoundly important movement that should command support from throughout the House.

Topical Questions

I have overall responsibility for the work of the Cabinet Office, while the Deputy Prime Minister has specific responsibility for the Government’s programme of political and constitutional reform.

Last week on the doorstep in Wellingborough, the hot issue was the responsibility of the Cabinet Office for implementing constitutional reform. Why is it that, under the alternative vote, British National party votes and Socialist Workers party votes in my constituency would be counted twice, but Tory votes would be counted only once?

My hon. Friend makes a powerful point. That is no doubt why, I gather, rather more than half of Labour MPs now support first past the post.

T3. Staff at My Civil Service Pension are concerned that plans to turn the organisation into a mutual are a step towards privatisation. The Minister said in a meeting with union representatives in March that he would not act without the broad consent of the work force. Will he tell us how he has consulted those staff and whether he yet has that consent? (52600)

We are moving down the path of freeing up My Civil Service Pension so that it can administer in the most efficient way civil service pensions to the 1.5 million members who are dependent on them. We are exploring different ways in which that might be configured, but crucially, employees will have a meaningful stake in that entity going forward.

T2. Fifty business leaders have got together to offer free mentoring advice to small and new business start-ups in my constituency. Will the big society Minister meet me to see how we can roll out that initiative beyond north Yorkshire? (52599)

The short answer is yes. More than ever, the country needs to get behind its entrepreneurs. My hon. Friend’s local initiative sounds like an excellent one, and I would be delighted to meet him—[Interruption.]

Order. There is far too much noise and far too many private conversations are taking place in the Chamber.

T5. Which Cabinet Office conferencing, translation and interpreting services have not been put out to tender for small businesses to win, and why not? (52602)

T4. When can the House expect the Public Bodies Bill? What will be in the Bill, and can we revert to the normal practice, whereby such controversial Bills begin in this House and not in the other place? (52601)

The Public Bodies Bill is obviously very important—it is an opportunity to improve radically the accountability of decisions and to make significant savings from the vast number of quangos that proliferated under the previous Administration. My hon. Friend will know that the Bill is passing through the Lords, with Third Reading expected on 9 May. Obviously, it is for the House authorities to determine the programming for debate in the House, but we expect the Bill to enter Committee after the Whitsun recess.

T7. A recent survey of charity leaders by the National Council for Voluntary Organisations suggested that charities are not happy, because they feel that the rhetoric that was sold to them before and after the election bears no resemblance to the money that they need to ensure that they deliver the services that are required. Forget about all the waffle, will the Minister tell us exactly how he will fund those charities and how he will ensure that they do things for people? (52604)

There is obviously understandable concern in the sector about the impact of reductions in public expenditure, but in my experience, charities are increasingly alive to the opportunity to deliver more public services—they are delighted by the announcements in the Budget to increase giving and by the progress that the Government have made in setting up the big society bank.

T6. Will my hon. Friend the Minister please update the House on the progress of the national citizen service? Will he join me in congratulating the Lincolnshire and Rutland Education Business Partnership, which I have met on a number of occasions, on the invaluable work that it is carrying out to pilot and promote the national citizen service? (52603)

The national citizen service provides a fantastic opportunity for young people from different backgrounds to work together to make a positive difference to their communities. I am delighted that we are offering 11,000 places this summer in many locations throughout the country. I am also delighted that that scheme is coming to Lincoln, and that my hon. Friend is taking such an active interest in such positive opportunities for young people in his constituency.

VAT issues are obviously a matter for the Treasury, and I would refer that question to Treasury Ministers. As the hon. Gentleman knows—he is a former Minister—that is a long-standing issue for the sector. He will also be aware of a number of initiatives to look at how we can make the VAT regime more helpful.

T9. Will the Minister relax regulations on investments by foundations and trusts to empower them fully to support innovations such as social impact bonds? (52606)

My hon. Friend will know that this Government are totally committed to helping to develop the social investment market, so making it easier for social entrepreneurs to access capital. The big society bank is our major player in that area, but we are looking at a range of ideas. He will also be aware that the Charity Commission is reviewing its guidance to foundations, which have a critical role to play in that context.

T10. Why is the public sector mutual fund late in going out to tender, and when will it be ready to accept bids? (52607)

We will announce details in due course. It would have been easy to go ahead and just flash money around, but there is not much money thanks to the legacy of the Government whom the hon. Gentleman supported. We need to ensure that the money is husbanded and spent wisely, for example by providing advice for groups of public sector workers, of whom there are very many who want to form mutuals, and by ensuring that the advice is made available to as many as possible.

In his discussions about public sector contracts for small business, will my right hon. Friend talk to the Ministry of Defence about its habit of bundling together contracts for multiple services, which means that an expert calibration firm in my constituency cannot offer the specialised service unless it also offers paperclips and toilet rolls?

My right hon. Friend makes a good point, and I will take it up. It is exactly how contracts are bundled up and procurements are undertaken that has squeezed out so many really effective small businesses from the Government market. That is exactly what we now want to change.

Prime Minister

The Prime Minister was asked—


I know that the whole House will wish to join me in paying tribute to Colour Sergeant Alan Cameron from 1st Battalion Scots Guards, who died on Thursday 31 March as a result of injuries he suffered while serving in Afghanistan last April, and Captain Lisa Head from 11 Explosive Ordnance Disposal Regiment, Royal Logistic Corps, who died on Tuesday 19 April. Colour Sergeant Cameron was an inspirational figure to his regiment, providing support to injured colleagues and their families even while he was being treated in hospital for his own injuries. Captain Head demonstrated great bravery in her work making safe improvised explosive devices to protect both her colleagues and the local population. They will not be forgotten, and our wishes and best condolences should be with their families and friends.

I am sure that the whole House will also want to join me in sending our condolences to the families, friends and colleagues of Police Constable Ronan Kerr. Those who murdered him must not be allowed to deter the wishes of the overwhelming majority of people who want a peaceful and shared future for Northern Ireland.

On a happier note, people across the country—and, indeed, the world—are getting excited about the events on Friday, and I am sure that the whole House would wish to join me in sending our best wishes to Prince William and Catherine Middleton ahead of their wedding this Friday, and to wish them a long and happy life together.

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

I would like to associate myself with the Prime Minister’s comments and condolences to those people who have lost their lives in Afghanistan. I also welcome the Irish Rangers and the Irish Guards back home after their tour of duty in Afghanistan.

On Easter Monday, dissident republicans held a commemorative parade in Londonderry and threw down the gauntlet to all the law-abiding citizens in Northern Ireland. The murderous thugs that are dissident republicans threatened to kill Police Service of Northern Ireland officers, both Roman Catholic and Protestant; they threatened the churches, both Protestant and Roman Catholic; they threatened politicians, both Unionists and nationalist; and they threatened Members of the Northern Ireland Assembly and MPs in this House. Can the Prime Minister assure the House that this attack on the democratic process will be met forcefully, and that those republican terrorists must be brought to justice?

I can give that assurance. I am sure that everyone in the House and the country would agree that scenes of people dressed in balaclavas in Londonderry are completely unacceptable. We have funded the PSNI appropriately. It is now properly devolved and working well, and I urge it to do everything it can to hunt down these people. Above all, the words that should ring in our ears are those of the mother of PC Ronan Kerr, who said she hoped that this would not prevent more Roman Catholics from joining the PSNI and doing a great job policing Northern Ireland.

Does the Prime Minister recognise that lending to business by banks was down £3.4 billion last month in March, and that the construction industry was down in productive terms by 4.7%? Does he see a connection, and if so, what will he do about it?

My hon. Friend is right about the figures today and that what is happening in the construction industry is disappointing. We need to get Britain building again, which is why we are introducing the new homes bonus. However, what is encouraging in the figures is that the British economy is growing once again, manufacturing is up, exports are up, and we are seeing a rebalancing of the economy so that we are not over-reliant on private consumption. That is good news. We also have an agreement with the banks that they must increase their lending to businesses large and small. That needs to happen.

I join the Prime Minister in paying tribute to Colour Sergeant Alan Cameron and Captain Lisa Head. Both demonstrated enormous courage and bravery, and our thoughts are with their families and friends. I also pay tribute to Police Constable Ronan Kerr, who was senselessly murdered simply for doing his job. We should all be encouraged by the expressions of outrage that we have seen across all communities in Northern Ireland in response to this act.

I also join the Prime Minister in sending best wishes to Prince William and Catherine Middleton on their happy day on Friday. I am sure that I speak for the Prime Minister, the Deputy Prime Minister and myself when I say that we will all do our best to be suitably attired for the occasion.

On the economy, does the Prime Minister think that it is a mark of success or failure that the economy has flatlined over the last six months?

It is clearly a success that the economy is growing. The figures out this morning show the economy growing in the first quarter of the year. They show manufacturing and exports up, and we have 400,000 more people in work in the private sector than we had a year ago. However, the right hon. Gentleman predicted a double dip. He said that we were going to get two quarters of negative growth, so when he gets to his feet, perhaps it is time to apologise for talking the economy down.

What world is the right hon. Gentleman living in? What extraordinary complacency. His hon. Friend the Member for Northampton South (Mr Binley) asked what was happening to small business lending. What terrible complacency from this Prime Minister. Six months ago, what did he tell us? He told us that we were out of the danger zone. Since then there has been no growth at all in the British economy. Yesterday the Chancellor was reported to have told the Cabinet that the economy was on track, but it is not even forecast to meet the Office for Budget Responsibility’s figures published last month by the Chancellor. Is it not the case that it is his cuts that are too far and too fast, and that are squeezing living standards, undermining consumer confidence and holding back growth in our economy?

The right hon. Gentleman was desperate for the economy to shrink today. He had written his questions and come to the House; the only problem was that the economy was growing, not shrinking. He and the shadow Chancellor said that there would be a double-dip recession. They had talked the economy down. Now that the economy is growing, why can they not find it in themselves to welcome the growth in the economy? We should be talking up the fact that manufacturing is increasing and we are exporting more, with 390,000 more people in private sector jobs than a year ago. These are welcome developments.

The right hon. Gentleman talks about the danger zone. I will tell him what the danger zone is: it is countries such as Portugal, Greece and Ireland, which did not deal with their debts, and as a result have interest rates rocketing and real problems. We have debts, tragically, because of what we inherited and a deficit the same size as Greece’s, but we have interest rates like Germany’s. It is time for the right hon. Gentleman to admit that he was wrong about the deficit and wrong about the economy.

It is not me who is talking down the economy; it is the Prime Minister’s austerity rhetoric that has led to the lowest levels of consumer confidence in history in this country. He has been Prime Minister for a year. He cannot blame the Greeks, he cannot blame the Bank of England, he cannot blame the last Government—he cannot even blame the snow. Why does he not admit that we have had six months of no growth because of his decisions, his Chancellor’s decisions and his Government’s decisions?

The economy has grown by 1.8% over the last year, but let me tell the right hon. Gentleman this. I did a little research, and all the time that he was in the Cabinet, there was not a single quarter when the economy grew more than 0.5%—not one. That is his great record. Let me tell him something about the need to make public spending cuts. We are now in a new financial year—the year in which the Darling plan was going to start the process of cutting the deficit by half. For every £8 that we are proposing to cut this year, Labour would be cutting £7. Have we heard a single sensible proposal for making any cuts, or have we just heard blatant opportunism and talking the economy down? I think we know.

Will the Prime Minister join me in condemning the appalling, disgraceful, untruthful and misleading leaflet that is being distributed by the Yes to Fairer Votes campaign, which is being chaired by the Electoral Reform Society? The leaflet seeks to diminish Parliament and therefore damage democracy, which, given the content of the leaflet, can be the only objective of the Electoral Reform Society.

What matters, in the week that we have left before we vote in this vital referendum, is that we get back to the real arguments about competing electoral systems. I am very clear that first past the post is simple, fair and effective and that it has worked for our country. I have to say that it is not often that I like to look out on a sea of red badges, but today it looks quite good.

Order. This is very discourteous and it is very unfair. It is unfair on the Prime Minister and it is unfair on me. I want to hear the answer.

Let me draw a little contrast between what the Health Secretary is delivering here—real-terms increases in health spending—and what is happening in Wales. The Labour-led Administration in Wales are cutting the NHS in real terms. Everyone in Wales needs to know that if they get another Labour-dominated Assembly, they will get cuts in the NHS, whereas in England we will see increases in the NHS because of the magnificent work of my right hon. Friend.

Q3. People have been shocked at the scale and extent of the phone hacking allegations against some of our most popular newspapers. In order to uncover the truth, will the Prime Minister instigate a full judicial inquiry and, in particular, look at the relationship between the Metropolitan police and News International? (52610)

What is absolutely clear is that phone hacking is not only unacceptable but against the law. It is illegal; it is a criminal offence, and I would urge the police and the prosecuting authorities to follow the evidence wherever it leads. That must happen first, and we must not let anything get in the way of criminal investigations.

Will the Prime Minister explain why, if there is a genuine pause in the enactment of the Health and Social Care Bill, the inception of cluster primary care trusts that are preceding the GP consortia, including the Greater Manchester cluster PCT, has been brought forward from 1 June to 3 May? Is not this pause nothing more than window dressing? It is political manoeuvring before next week’s elections.

No, I think the hon. Lady is wrong. This is a genuine exercise in trying to ensure that we get the very best out of these reforms. We are looking specifically at areas such as public accountability, choice and competition, education and training, and the patient involvement aspects of the reforms. Of course we have to go ahead with driving out the bureaucracy and additional costs from the NHS. We inherited from Labour, I think rightly, a £20 billion efficiency programme, and we have got to take that through, but there is a genuine opportunity to make these reforms better still.

Q4. Suffolk is among the worst-served areas of the country for broadband, and the commonly cited final third of premises beyond the reach of commercial broadband deployment is more like a final two thirds in that area. Given that nearly one fifth of all Suffolk premises receive a speed of less than 2 megabytes per second, does the Prime Minister agree that investment in broadband in Suffolk is essential to boost our economic recovery? (52611)

My hon. Friend is absolutely right. We must put this investment in. We are spending, I think, £530 million investing in broadband. Particularly in rural areas, broadband is going to be absolutely vital in driving the creation of the small businesses and growing businesses that will be so important to keep the growth of employment in our country.

Can the Prime Minister tell us why 98.7% of nurses have no confidence in his health reorganisation?

Inevitably, when you make changes in public services, it is a challenge taking people with you. But that is the whole point of pausing the reforms and then trying to get them going again with greater support from doctors and nurses. What we are finding is that 90% of the country is covered by GP fundholding practices that want to see these reforms succeed. I would say to the right hon. Gentleman that if he wants to make some constructive suggestions, why not have a try?

Dearie me, that wasn’t a very good answer, was it? I asked the Prime Minister why 98.7% of nurses have no confidence in his policy. It is because it is a bad policy, a policy nobody voted for. It is a policy that was not in the Prime Minister’s manifesto, it was not in the Deputy Prime Minister’s manifesto either at the general election, and it was not even in the coalition agreement. Perhaps one of the reasons why nurses have no confidence in his policy is that two years ago, he went to the Royal College of Nursing and said there would be no more pointless, top-down reorganisations.

Next question: why is it that hospital waiting times fell year on year under the last Labour Government, but have risen month on month under this Government?

That is simply not the case. If we look at out-patient waiting times, we find that they fell in the last month, so the right hon. Gentleman is simply wrong about that, as he usually is. I have had the opportunity to study his representations about the reforms, and I have had a good look at them. He says that we are introducing EU competition policy for the first time; we are not. He says we are allowing GPs to charge; we are not. He says that patients will be left without services; they will not. Why does he not realise that instead of frightening people, he ought to make a constructive contribution.

Another totally hopeless answer! I asked about waiting times. The Department of Health figures are these: waiting times are 20% up for those waiting more than 18 weeks, and A and E waits are at a record level compared to six years ago. One of the reasons why waiting times have gone up is that the right hon. Gentleman is diverting billions of pounds from patient care into this costly reorganisation. Let me make this suggestion: just for once, why does he not listen to the doctors, the patients and the nurses and scrap his reorganisation?

The right hon. Gentleman asks me to listen to doctors, so here is one doctor I am definitely going to listen to. I hope Opposition Members will remember Howard Stoate, who was the Member of Parliament for Dartford. He is no longer an MP because he lost the election—because of the Conservative candidate, I am afraid. He is now a GP—[Interruption.] Calm down, dear. Listen to the doctor. Howard Stoate, GP, says:

“My… discussions with fellow GPs… reveal overwhelming enthusiasm for the”—

[Interruption.] I said calm down. Calm down, dear—and I will say it to the shadow Chancellor, if he likes. [Interruption.]

Order. Let us briefly have the answer and move on to Back Benchers, whose rights I am interested in protecting. I want a brief answer from the Prime Minister.

This is a very brief quote from a Labour MP who is now a GP. He said:

“My… discussions with fellow GPs… reveal overwhelming enthusiasm for the chance to help shape services for the patients they see daily”.

That is what Labour MPs, now acting as GPs, think of the reforms. That is what is happening.

Order. There is far too much noise in the Chamber. [Interruption.] Order. It makes a very bad impression on the public as a whole, and others are waiting to contribute. I think the Prime Minister has finished.

During the recess, a number of European issues have arisen: the Portuguese bail-out, the increase in the European budget and proposals for corporation tax at the European level. Will the Prime Minister re-coin a phrase and simply say to all those matters, “No, no, no”?

My hon. Friend makes an important point about the European budget. The idea of a 5% increase at a time when member states are having to make reductions in difficult public spending programmes at home is completely unacceptable, and we will make sure it does not happen.

Q5. On the proposal to build the largest wind farm in England in my constituency with 45 wind turbines 100 metres or more high, just less than a mile away from two big conurbations and on beautiful landscape in the area, can the Prime Minister tell us what influence my constituents will have under the Localism Bill on the planning decision concerning this massive intrusion on the landscape? Will he ask the relevant planning Minister to meet me and a delegation of constituents to discuss it further? (52612)

I am happy to arrange that meeting. I think it important for local people to have a greater say in planning decisions, and that is what we are enabling them to do. However, I also believe that when wind farms go ahead, local people should see a greater benefit in terms of the finance that goes into the area, and our plans will achieve that as well.

In 2007, the Labour Government implemented the Medical Training Application Service, or MTAS. Junior doctors will remember what a disaster it was. That large-scale, disruptive and untested system had disastrous consequences for junior doctors in training. Is the Prime Minister aware that there are concerns that the current proposals to reorganise medical training and work force planning could have similar unforeseen consequences?

I must say to my hon. Friend that she is a lot better at getting them to shut up than I am. I think that she is a future Speaker in the making.

I can absolutely guarantee to my hon. Friend that we will not make the mistake that the last Government made in respect of medical training. They created an utter shambles.

Q6. Eddie Kay from Maghull received excellent treatment when he was in hospital recently, and I am glad to say that he is recovering well. However, while he was in hospital his operation was cancelled four times, and he was also told of bed closures and nursing redundancies on his ward. Does not Mr Kay’s experience show that the Prime Minister was wrong to claim that he would not cut the NHS? (52613)

Of course things go wrong in our national health service, which is one of the reasons why I think that we need to reform and modernise it. The fact is, however, that at the last election only one party said that it would increase the NHS in real terms, and that is exactly what we are doing. If the hon. Gentleman is worried about NHS cuts, he should have words with his colleagues in Wales who are proposing to cut the national health service—not in cash terms, but in real terms—and he should help us to put a stop to that.

Q14. Across the country, 2 million families are on waiting lists for social housing. Nearly 1 million homes lie empty, and the average age of a first-time buyer is 37. Does the Prime Minister acknowledge that there is a housing crisis in Britain, and will the Government publish a strategy to tackle it? (52621)

We do acknowledge the very difficult situation that we inherited. House building was at a 60 or 70-year low. We need to introduce ways of ensuring that local communities see more houses built. The old top-down system did not work, but I believe that the new homes bonus and the incentives that we are giving local authorities will mean that extra housing goes ahead.

Q7. Rather than losing his rag because he is losing the argument, will the Prime Minister explain why waiting times have been rising in my constituency and across the country? (52614)

The hon. Gentleman is simply wrong about waiting times. I quoted the figures. Waiting times have been broadly stable over the last couple of years—that is a fact.

The key point that I would make to the hon. Gentleman, who is meant to be a moderniser, is that if he wants to see waiting times come down and stay down, the best answer is a system that involves greater choice, and enables patients to choose where they are treated and establish how quickly they can be treated. The hon. Gentleman used to be a moderniser; there is still time to get on board.

Q15. I am engaged in a consultation with my constituents in east Cheshire on an issue that is of great concern to them: the commercialisation and sexualisation of childhood. As a parent, does my right hon. Friend agree with my constituents that action needs to be taken to find real solutions to this challenging issue, and to give every child the childhood that it deserves? (52622)

I completely agree with my hon. Friend. As a parent of three little ones, I know that it is incredibly worrying to see what is becoming available in some shops and other places. We are, effectively, asking our children to grow up too early. I think that there is a lot more that we can do, which is why we have asked the chief executive of the Mothers’ Union to conduct an independent review of this vital area. We are looking at a range of specific issues including television, video and other pressures that are put on people, and we expect the report to be published in a few weeks’ time.

Q8. The Prime Minister has described hospices as one of the great successes of the big society, so why, as a result of his Government’s increases in VAT and cuts in gift aid, is Nightingale House hospice in my constituency paying an extra £20,000 to his friend the Chancellor of the Exchequer this year? Will he give it the money back? (52615)

The point I would make to the hon. Gentleman is that the hospice movement is a fantastic example of the big society and we should see it expand, and my right hon. Friend the Chancellor has increased gift aid so that more people can give more money more effectively. As the hon. Gentleman is another Welsh Member of Parliament, let me put this point to him: why is he supporting an NHS cut in Wales that will hit not just hospices but hospitals, GPs and community services? That is what is coming out of this Question Time. Labour is cutting the NHS; you cannot trust Labour with our national health service.

Q9. The whole House will be aware that younger women drivers face a massive hike in their insurance premiums next year as a direct result of a European Court judgment. In that context, does my right hon. Friend share my disappointment that this judgment has been warmly welcomed by London’s Labour MEP Mary Honeyball, who has indicated that she considers it to be admirable and the price of equality? (52616)

Well, I have to say to my hon. Friend that that shows that some of the loony left is still alive and well in our country. [Interruption.] I think you’ll find it’s over there. Frankly, insurance premiums ought to reflect risk, and my hon. Friend is, as ever, displaying common sense, whereas the European Court did not.

Q10. It is now almost 12 months since the Prime Minister visited the West Cumberland hospital in my constituency in the wake of the shooting atrocities that took place there. It is, I believe, a matter of profound regret to Members on both sides of the House that the Government have chosen to do nothing on gun laws in the intervening period, but while the Prime Minister was at the hospital he also visited the accident and emergency clinicians and other clinical service providers, who are now facing the prospect of their services being removed as a result of GP commissioning. Will he do them and my constituents a favour by removing GP commissioning from the Health and Social Care Bill? (52617)

First, I well remember visiting the hospital in the hon. Gentleman’s constituency. It is a fantastic hospital and it did brilliant work during those incredibly tragic times about which he spoke. I can absolutely reassure him that he does not need to worry about the future of the West Cumberland hospital. I understand that he has met the Minister of State, Department of Health, my right hon. Friend the Member for Chelmsford (Mr Burns), to discuss the concerns, and they are in agreement that issues need to be resolved swiftly. The Department of Health is working closely with the local NHS to produce proposals to redevelop the hospital. That is what is going to happen: investment will be going into the NHS because of the commitments we have made, whereas, sadly, I am afraid that the hon. Gentleman’s party—[Interruption.] Luckily, he is not in Wales, where Labour is cutting the NHS, but I suspect it would do the same in England as well.

Q11. My right hon. Friend the Prime Minister will be aware that this country lost 1.7 million manufacturing jobs under the last Labour Government. Will he explain what plans the Government have to make sure this decline is reversed? (52618)

We have already seen over the last year an increase in manufacturing output and in manufacturing exports. I was up in Bedford last week at the GM plant, which is massively expanding. It is creating more jobs and bringing £150 million of offshore contracts back into the UK. We are backing that with low tax rates, deregulation and more apprenticeships. This is a Government who are pro-enterprise, pro-jobs and pro-manufacturing and who are going to dig us out of the mess the last lot left.

Q12. Does not the nightmare of Fukushima mean that the planned renaissance of nuclear power will be stillborn? Should not the Prime Minister be planning for a future that will be free of the cost, fear and anxiety of nuclear power, and rich in renewables that are British, that are green, and that are inexhaustible and safe? (52619)

Of course we have to learn the lessons from Fukushima but, as I have said before, that is a different reactor design in a different part of the world with different pressures. The British nuclear industry has a good safety record, but, clearly, it has to go on proving that, and doing so in the light of the new evidence, such as it is, that comes out of Japan. That is what must happen, and the head of the nuclear inspectorate will do exactly that.

The Prime Minister is a vociferous opponent of the alternative vote system and reserves special disdain for the idea that someone might win after coming second in an early round. Will he therefore stand aside in favour of the right hon. Member for Haltemprice and Howden (Mr Davis), who beat him to the post in 2005?

I seem to remember that my leadership contest ended up with the two of us touring the country and it was a popular vote. I am pleased to say that, unlike in some parties around here, the person who won actually won.

Q13. Given that our recovery has, in effect, stalled since he became Prime Minister, does the right hon. Gentleman stand by what he said to this House after his first Budget last June, which was that unemployment will fall “every year” in this Parliament? (52620)

I was quoting the Office for Budget Responsibility, but the fact is that 390,000 more people are in private sector jobs than there were a year ago. I would have thought with the economy growing, with exports up, with manufacturing up and with more people in work, the right hon. Gentleman should be welcoming that, instead of joining the doom-mongers on his Front Bench, who can only talk the economy down.

Will the Prime Minister join me in calling for an independent international review following the UN report into the crimes committed by the Sri Lankan Government against the Tamil people?

My hon. Friend raises an important point. There are still unanswered questions from that period, and I will look closely at what he says and write to him.

The service of our armed forces in Afghanistan and elsewhere deserves to be recognised at the highest level and all the time, as the Prime Minister has often said. Why on earth, therefore, have the Royal Irish Regiment and the Irish Guards been denied a homecoming parade in Belfast? Will the Prime Minister intervene and talk to colleagues to ensure that this process of recognition for our troops and appreciation by the citizens of Northern Ireland can rightly take place as soon as possible?

First, let me thank the right hon. Gentleman for raising this issue, because the bravery of the Royal Irish Regiment and the Irish Guards in Afghanistan has been outstanding and, sadly, both regiments have suffered loss of life during their recent deployments. As I understand it, a number of homecoming events will be taking place across Northern Ireland. We are discussing with Belfast city council and others how we can give recognition to their tremendous bravery. No decision has yet been made and I will make sure he is fully involved in those discussions. It is also worth noting that because they are actually stationed in north Shropshire, they have already had a very successful homecoming parade in Market Drayton, and I am sure that they will have many others besides.

Will the Prime Minister join me in congratulating Crawley borough council on freezing its council tax this year? Can he say how many other local authorities across the country have frozen their council tax, against the advice of the Labour party, which described that policy as a “gimmick”?

I am pleased to announce that in spite of the fact that Labour dismissed it as a “gimmick” and that the leader of the Labour party said that councils ought to be able to charge more, every single council in the country has given their hard-pressed council tax payers a council tax freeze. We all remember what happened over the last 10 years when council tax doubled. It was the tax of choice of the Labour party, taking money out of people’s pockets. We are freezing that council tax to give people a break, and they deserve it.

Order. We must now move on and we come to the ten-minute rule motion. I ask right hon. and hon. Members leaving the Chamber to do so quickly and quietly, extending the same courtesy to the hon. Member for Wigan (Lisa Nandy) as they would wish to be extended to them in such circumstances.