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Prime Minister

Volume 534: debated on Wednesday 2 November 2011

The Prime Minister was asked—


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.

With the average 60-year-old living 10 years longer than in the 1970s, public sector pension reform is essential. Will the Prime Minister ensure that reform is fair for my constituents, both in terms of taxpayers and public sector workers?

My hon. Friend makes an important point, and the Chief Secretary to the Treasury will be making a full statement to the House. It seems to me to be absolutely vital that we do something that is fair to both taxpayers and public sector workers. The cost of our public sector pensions system is up by a third in the last decade. It is not fair to go on as we are, but the new arrangements must be fair to people who work hard in the public sector and on whom we all rely. I can tell the House that low and middle-income earners will actually get more from their public sector pensions, everyone will keep what they have built up so far, anyone within 10 years of retirement will see no change to their pension arrangements and, at the end of all this, people in the public sector will still get far better pensions than people in the private sector. I really think it is time that the Labour party was clear that it does not support strikes later this month.

Does the Prime Minister believe that growth of 0.5% over the last year and unemployment at a 17-year high point to the success or failure of his economic plan?

Obviously, everybody wants the British economy to grow faster—that is what everybody wants. Yesterday’s figure of 0.5% was better than many people expected and is it not noticeable that the right hon. Gentleman cannot even bring himself to welcome news like that? The key issue we all have to address is this: there is a global storm in the world economy today and it is in our interests to help others to confront that global storm, but we must also keep the British economy safe. We will not keep it safe if we add to our deficit, add to our debt and put interest rates at risk.

First the right hon. Gentleman blamed the Labour Government, then he blamed Europe, and yesterday he apparently blamed his Cabinet colleagues for the lack of growth in our economy. The truth about this Prime Minister is that when things go wrong it is never anything to do with him.

Let me ask about another of his flagship policies, the business growth fund, which was launched nine months ago with the banks. Can he tell us the number of businesses the fund has invested in?

First, the problem with pre-scripted questions is that the right hon. Gentleman does not listen to the first answer. I did not actually in my first answer blame the last Labour Government, but if he would like me to do so I can start right now, because it was the last Labour Government who left us the record debts and the record deficit, and it is this Government who are having to deal with that.

The right hon. Gentleman asks about the business growth fund. This is one of the schemes to ensure that banks are lending, alongside the Merlin scheme, which is actually seeing an increase in lending to small businesses. That is the record we can be proud of—and something he did not achieve.

We all know by now with this Prime Minister that when he blusters like that at the Dispatch Box he is either too embarrassed to answer or he does not know the answer, so let me help him. The business growth fund was announced nine months ago, it has five offices and 50 staff. How many investments? A grand total of two. It is becoming a pattern with this Prime Minister: fanfare announcement then radio silence. He said in March:

“I’m going to watch those banks like a hawk and make sure they deliver”.

So what is he going to do to get the business growth fund moving?

These are the banks the right hon. Gentleman completely failed to regulate year after year—[Interruption.] Yes, yes, and these—[Interruption.]

Order. The House is getting—[Interruption.] Order. Mr Ronnie Campbell, calm yourself. The House is getting far too excited. It is only six minutes past—[Interruption.] Order. Let me say it at the outset: both the Prime Minister and the Leader of the Opposition must be heard. It is called democracy and free expression.

Let me just give the right hon. Gentleman the figures for what has happened under the bank lending schemes of this Government. We have £190 billion of new credit this year, up from £179 billion last year. That is a huge increase. There is £76 billion for small and medium-sized enterprises, up 15% on last year. We are seeing more bank lending under this Government, but we are seeing also the bank levy, so people in the banks are helping to pay to deal with the deficit that his Government created.

A totally hopeless answer. One of his own schemes, the business growth fund—they trumpeted the announcements, and they have not got a clue what is happening to their own scheme.

Businesses are struggling, but one group in our economy is doing very well, indeed. Over the past year, when many people have seen their wages frozen, directors’ pay has risen by 49%. The Prime Minister expressed concern about that last Friday, but the public want to know: what is he going to do about it?

Let me tell you exactly what we are doing about it, and will do about it. It is this Government who introduced the bank levy—more raised in one year than the bonus tax that the previous Government created; it is this Government who have increased the fees that non-doms have to pay; it is this Government who have had an agreement with Switzerland and Liechtenstein to get hold of people who put money overseas; and it is this Government who have actually seen lower bank bonuses. But, where I agree with the right hon. Gentleman is that I think the Archbishop of Canterbury speaks, frankly, for the whole country when he says that it is unacceptable in a time of difficulty when people at the top of our society are not showing signs of responsibility. It is this Government who are consulting on proper measures to make sure we get transparency in terms of boardroom pay, proper accountability and more power for shareholders. All those things we are doing, and I have to ask the right hon. Gentleman, if he is so keen on this agenda, what did he do for the past 13 years?

I will tell you what we did, Mr Speaker. We introduced the 50p rate of income tax that the Prime Minister and his Chancellor want to abolish, but I am glad that we agree that something needs to be done about top pay. Now, last—[Interruption.] Conservative Members should just calm down. Follow the Prime Minister’s advice: just calm down. Last March, his fair pay review, which he set up, recommended that the Government require by January 2012—so January next year—that every top company publish how much the highest earners get paid compared with the average earner. That type of transparency is the least we should expect. Can he confirm that this will happen from January 2012? Yes or no?

What the right hon. Gentleman will know is that unlike the previous Government, who did absolutely nothing, we are consulting on a whole series of steps to bring responsibility to the boardroom. I have to say that we are a little wary about accepting lectures from a party that told us it was intensely relaxed about everyone getting filthy rich—a party that had a capital gains tax system so that people in the City paid less tax than their cleaner. I know he has forgotten all these things but we remember them and we have done something about it.

Another report to Government; another failure to act. The truth is that the Prime Minister has sat on Will Hutton’s review for the past nine months and has done nothing about it. That is why the recommendation is not going to be implemented. That is the truth about this Prime Minister: he says we are all in it together but he lets the top 1% get away with it while the other 99% see their living standards squeezed and lose their jobs. That is why people are increasingly saying that this is a Prime Minister who is totally out of touch with their lives.

I have to say that in the week when the Labour party has hired a former tax exile to run their election campaign, the right hon. Gentleman has got a bit of nerve to come and lecture us on that. Labour had 13 years to regulate the banks but did nothing. It had 13 years to deal with bank bonuses but did nothing. Now it is in opposition, its message to business is, “Give us some money—you can run our election.”

Q2. Cable theft has cost the rail industry £43 million in the past three years and Gurkhas have even been drafted in to patrol the network. Meanwhile, homes and churches are having their lead and copper pilfered and, in the past month, one churchyard in Huddersfield has had 169 memorial plaques stolen for their metal. Will the Prime Minister join me in saying that now is the time to legislate to stop those stolen metals going to merchants? (77736)

My hon. Friend makes an extremely important point. The theft of metal, particularly from war memorials, is an absolutely sickening and disgusting crime. We are working with the Association of Chief Police Officers to put in place an action plan to deal with this, which will involve looking again at the whole regulation of scrap metal dealers. We are determined to do that to put a stop to this appalling crime.

People in my constituency and right across the country are desperately worried about the increasing cost of gas, electricity and home heating oil and about how they are going to keep their home warm this winter. What more can the Prime Minister tell the country he is going to do to help people in that situation? In particular, will he reverse the cuts to winter fuel allowance that hit senior citizens? Surely, it is not good enough simply to say that he is following the Opposition’s plans—he has done so many things differently from the Opposition, so why does he not do something different on the winter fuel allowance?

On the winter fuel allowance we have kept the plans that were set out by the previous Government and I think that is the right thing to do. On the cold weather payments, we have taken the increase that was meant for one year and maintained it, so if there is a particularly cold winter, people will be getting that help. The other step we are taking is making sure that energy companies give people proper information about the lowest tariffs they can get and that we have proper reform of the energy market—something that the Labour party has now suddenly started to talk about but did absolutely nothing about in government.

Q3. Public sector pension reform should be achieved through negotiation and compromise. Does the Prime Minister agree that it is wholly irresponsible and downright destructive for senior politicians of any political party to support strike action while negotiations are ongoing? (77737)

I think my hon. Friend is entirely right. It is a very fair offer to hard-working public servants to say, “This is a strong set of pension reforms that will give you pensions that are still better than anything available in the private sector.” Frankly, to have a Labour Front-Bench team who are silent on this issue, with their education spokesman actually encouraging teachers to strike, is the height of irresponsibility.

Q4. My constituents Alan and Linda Eastwood have a son who has been serving in our nation’s armed forces in Afghanistan. In common with the Royal British Legion, Mr and Mrs Eastwood regard the Prime Minister’s decision to abolish the post of chief coroner as a betrayal. Will the Prime Minister tell us why he thinks he is right on this issue and the Royal British Legion is wrong? (77738)

This is a very important issue, and I have had discussions with the Royal British Legion about it, as has my right hon. and learned Friend the Lord Chancellor. The point about it is that the current proposal for the office of chief coroner to be established would involve something like £10 million of spending, and we think the money would be better spent on improving all coroners’ services across the country. We are listening very carefully to the concerns expressed in both Houses of Parliament about this issue, but what really matters is: are we going to improve the performance of our coroners? That is what service families want; that is what I want; and that is what we will deliver.

Q5. Public sector workers in my constituency work extremely hard to deliver essential public services, and I know that my right hon. Friend agrees that we value those services tremendously. Will he reassure those workers and confirm that the Government’s reforms—very necessary reforms that they are—will ensure that those services are sustainable and remain among the very best? (77739)

I will certainly do that. My hon. Friend makes an important point. The cost of supporting public sector pensions has gone up by one third in the last decade, and we are now spending something like £32 billion. They are a major item of public spending, and obviously we are taking taxes off people, including those in the private sector who have less good pensions, to pay for that pension provision.

I believe that our scheme is fair. For example, a teacher retiring on a salary of £37,000 after a full career would retire on a pension of £25,000 in future. That is more than the £19,000 that they would currently get. This is a fair set of changes. The less well-off are really protected, and the low paid in the public sector will not have to pay the increased contributions. Frankly, I think the whole House of Commons should get behind them instead of playing with strike action like the Labour party.

When the Prime Minister goes to the G20 meeting over the next couple of days, will he try to persuade his colleagues of the urgency of coming up with some detail on the eurozone settlement reached last week? It is not at all clear how on earth Greece will get out of its difficulties, even if the referendum passes. European banks will need shoring up well before next summer, and as for the new rescue fund, which may be needed sooner than we think, it does not actually exist. Will he accept that the G20 now needs to show the same urgency and sense of purpose that it showed two years ago when it met in London? Otherwise, far from getting ahead of events, Governments will be condemned to being dragged along in their wake.

The right hon. Gentleman is absolutely right in what he says about the urgency of the G20 meeting, and the necessity of its agenda. I think some progress was made at the European Council meeting a week ago when, for the first time, it accepted a proper write-down of Greek debt, which must be part of the solution, and a proper recapitalisation of Europe’s banks done to a credible test, rather than the incredible test we have had in months gone by.

The final element that the right hon. Gentleman rightly refers to—and which needs to have more detail and substance added—is to make sure there is a proper firewall to stop contagion in the eurozone. The need has become even greater. Frankly, of course we cannot involve ourselves in Greek domestic politics, but it has become even more urgent to put meat on the bones of these plans to show that we are removing one of the key obstacles to global growth, which is the failure to agree a proper plan to deal with problems in the eurozone.

Q6. According to the Government’s own projections, Britain’s population is set to increase from 62 million today to 70 million by 2027, with two thirds of that increase being driven by immigration. Will the Prime Minister give a commitment to stem that increase by breaking the almost automatic link between foreign nationals who come to work here subsequently being granted citizenship? (77740)

We are committed to doing exactly that, and my hon. Friend is right to raise this issue. I think that proper immigration control and welfare reform are two sides of the same coin, and this Government are committed to controlling immigration properly, but also to putting British people back to work. The two work together.

Today, we have announced that, in terms of the illegal immigration that comes through the student route, more than 450 colleges will no longer be able to sponsor new international students, because they were not properly established to do that. Those colleges could have brought in more than 11,000 students to the UK to study each year. That is just one example of how this Government are living up to their promise to get a grip on immigration.

Q7. Does the Prime Minister agree with the vast majority of people that smoking should be banned in vehicles when children are present, and will he encourage the Government to adopt the contents of my ten-minute rule Bill, which aims to put an end to it? (77741)

I do think the smoking ban is right. I have to admit, as a former smoker, and someone who believes strongly in liberties and who did not support it at the time, that the smoking ban has worked, and I think it is successful. I am much more nervous about going into what people do inside a vehicle. I will look carefully at what the hon. Gentleman says, but we have to have a serious think before we take that step.

The Prime Minister will be aware of Citigroup’s report, issued yesterday, on green energy investment in Scotland. Does he agree that this report very ably demonstrates that the benefits of green energy in the UK are unlocked only by combining Scotland’s renewable potential with the large-scale investment made possible by the UK; and does he agree that a drawn-out independence referendum is a serious distraction from that?

My hon. Friend makes an important point. In fact, a major financial institution warned yesterday of the dangers of investing in Scotland while there is this uncertainty about the future of the constitution under way. I think it is very important that we keep our United Kingdom together and we stress that when it comes to vital industries like green technology, the combination of a green investment bank sponsored by the United Kingdom Government and the many natural advantages that there are in Scotland can make this a great industry for people in Scotland—but we will do that only if we keep our country together.

Q8. Just after the election, the Prime Minister said that his Government would be the greenest ever. Does he still take that statement seriously? If he does, will he personally intervene to sort out the appalling chaos that is resulting from the slashing, in six weeks’ time, of feed-in tariffs for solar PV, leading to substantial job losses, chaos in the solar PV industry, and devastation for hundreds of community renewables projects? (77742)

It is this Government who set aside £3 billion for a green investment bank, much talked about in the past but never done. It is this Government who have put in place a carbon price floor—one of the first Governments anywhere in the world to do so. It is we who put aside £1 billion for carbon capture and storage. So this is a very green Government living up to our promises—absolutely right.

Q9. Will the Prime Minister join me in congratulating the pupils and staff at Whitchurch high school, a foundation-status comprehensive school in my constituency? It is the former school of Sam Warburton, the outstanding Welsh rugby captain; Gareth Bale, the impressive footballer at Spurs and Wales; and Geraint Thomas, the gold medallist. It will be receiving the award for state school of the year for sports— (77743)

I have to say that that is a very impressive list of sports personalities who have attended this school; I do not know what they put in the water, but I think we would probably all like to have some. I certainly join my hon. Friend in congratulating such an excellent school.

In the past four years, six children and two adults have been killed in dog attacks, and some 6,000 postal workers are attacked each year. There is cross-party agreement that we need to tighten up the law in this area. Will the Prime Minister take a personal interest and make sure that legislation is brought forward as soon as possible?

The hon. Lady makes an important point. Legislative attempts at this in the past have not always been successful and have not always captured the breeds that need to be captured, so I will certainly take a personal interest, and perhaps I can write to the hon. Lady and set out what the Government intend to do.

Q10. Following the Prime Minister’s answers a moment ago, and given the huge anger about the pay for the top 100 directors, can he give me a personal assurance that he is committed to the transfer of power over pay from the boardroom to the shareholders of our companies? (77744)

I do want to see that happen. The answer to this is much more transparency about the levels of pay, much more accountability, and strengthening the hand of shareholders. There is something else we need to do, which is to make sure that non-executive directors on boards are not the usual sort of rotating list of men patting each other’s backs and increasing the level of remuneration. I want to see more women in Britain’s boardrooms, which I think would have a thoroughly good influence.

The Prime Minister has described his Work programme as the biggest back-to-work programme since the 1930s, but he knows that it does not create jobs—it merely links people to vacancies. In Tottenham, there are 6,500 people unemployed, 28,000 people on out-of-work benefits, and only 150 vacancies. What is his Work programme going to do about that?

As the right hon. Gentleman says, the Work programme plays a key role in helping to prepare people for work. That is absolutely vital. It also brings employers in, so that they can offer jobs to those people. I have looked specifically at the issue of Tottenham, because I know from when I visited his constituency with him that, yes of course, there is a shortage of vacancies in the borough of Tottenham itself, but we have to encourage people who live in London to be prepared to travel more widely to look for work. That is absolutely vital, and part of the Work programme should be aimed at addressing exactly that.

Rural fire services attend more primary fires and more road traffic accidents than do those in urban areas, yet they receive less funding. This is typical of rural services across the piece, with residents paying more and receiving less. Will the Prime Minister meet me and a group of other MPs from across the House who represent rural areas, to discuss getting a fairer deal for those in rural areas, particularly the rural poor?

I am very happy to meet my hon. Friend. It is important that we have a fair deal for rural areas. There are obviously very big differences, particularly in the use of retained firefighters, but I am happy to meet him to discuss the issue.

Q12. The Prime Minister knows, thanks to the Leader of the Opposition, that in nine months, the Government’s business growth fund has invested in precisely two companies. At a time when the economy is flatlining, is that good enough? (77746)

What this Government have done is cut corporation tax for every business in the country. We have introduced enterprise zones to help employment, and increased the number of apprenticeships by 250,000 over the life of this Parliament. The Opposition criticise the regional growth fund, but there was no regional growth fund under Labour. That is the point. Let me just remind them that we inherited an economy with the biggest budget deficit in Europe, and it is this Government who are helping our economy through the international storms to ensure that we remain safe in the UK.

This week is national adoption week. Does my right hon. Friend agree that we must continue to do all that we can to support children in the care system, and to encourage prospective adoptive parents to come forward?

My hon. Friend makes an extremely important point. In national adoption week, we really need more parents to come forward as potential adopters and potential foster carers, because there is a huge build-up of children in the care system who will not get that help unless people come forward. It is also important that the Government pledge that we will make the process of adoption and fostering simpler. It has become too bureaucratic and difficult, and the result is that it is putting people off. I am absolutely determined that we crack this. It is a matter of national shame that, while there are 3,660 children under the age of one in the care system, there were only 60 adoptions last year. We are now publishing information on every single council, so that people can see how we are doing in terms of driving this vital agenda.

Q13. This week, yet another military academic has called for the reopening of the defence review, and a leading military think-tank has said: “Britain is now cutting military equipment that might prove vital in future.”Will the Prime Minister finally listen to the voices of the defence community and reopen his deeply flawed defence review? (77747)

We had no defence review for 10 years, and now the Opposition want two in one go. That is absolutely typical of the opportunism of the Labour party. This is a day, as hostilities in Libya are coming to an end, on which we should be praising our armed services and all that they have done.

Q14. Schools in rural Northumberland were largely ignored by the previous Government. With the schools budget rising from £35 billion to £39 billion in 2015, will the Prime Minister welcome the finance bid put forward by Prudhoe community high school in my constituency? (77748)

I will certainly welcome that bid. It is important to note that, because we are protecting the per-pupil funding, even at a difficult time for the economy and public spending, the education budget will be rising and not falling—[Interruption.] As ever, the shadow Chancellor is wrong, even when he is sitting down. He talks even more rubbish when he stands up. I digress. As well as the extra investment in the schools budget, there is also the opportunity for free schools, which I think are going to be a major reform in our country, to bring in more good school places. Perhaps when a future shadow Chancellor attends one of those schools, he will learn a few manners. [Interruption.]

Order. Some people are going to burst they are getting so excited, which is a bit of a shame—and a bit of a problem for them.

Will the Prime Minister listen to both the campaigners outside Parliament today and the 80,000 people who have written to him in recent weeks, and commit to becoming a leading advocate for the introduction of a Robin Hood tax at the G20 summit later this week? Will he ensure that the revenue is earmarked to tackle sustainable development and the growing climate crisis?

As the hon. Lady knows, there is widespread support for the principles behind such a tax, but it must be adopted on a global basis. Let me say this as quite an important warning to those who are pushing so hard for such a tax: we must be careful that we do not allow other countries, including some European countries, to use a campaign for the tax, which they know is unlikely to be adopted in the short term, as an excuse for getting out of their aid commitments. The House and the country can be proud of the fact that we are meeting our aid commitments. Do not let others use the tax as a way getting out of things that they promised.

Q15. The world population passed 7 billion this week. That is an awful lot of mouths to feed. In addition, the UN predicts that over the next 40 years, world demand for food will increase by 70%. That ought to be good news for farmers, but sadly, since 1990, Britain’s capacity to feed itself has fallen by a fifth. Does the Prime Minister agree that that is a disastrous situation, and will he urgently introduce a credible strategy to grow Britain’s farming industry to feed us all in future? (77749)

My hon. Friend makes an important point. It is true that we have seen our food security decline and our food production severely challenged over the past 10 years. It is important to remember that farmers are businesses. They need things done like other businesses do on deregulation, predictable income and all those things. This Government are committed to making that happen, which will benefit particularly people in my hon. Friend’s constituency.

On 13 September 2010 at the Select Committee on Communities and Local Government, when asked whether success for this Government will mean building more homes per year than were being built prior to the recession, the Minister for Housing and Local Government replied:

“Yes. Building more homes is the gold standard upon which we shall be judged.”

In which year or years of this Parliament does the Prime Minister expect that gold standard to be achieved?

What we have said is that we are going to expand the building of homes for social rent by increasing and reintroducing the right to buy, which the previous Government so scandalously ran down. That will help. We will also make available Government land, so that builders can get on and build without having to buy that land. They will have to pay only when they have actually delivered the house. We want to see an extra 200,000 homes built in that way, which will give us a far better record than that of the Government whom the hon. Gentleman represented.

Notwithstanding the increasingly maniacal gesticulations of the shadow Chancellor, is it not remarkable that in the middle of the world’s biggest crisis, Britain is able to borrow at lower rates of interest than almost any other country in the world?

As ever, it takes the Father of the House to bring the wisdom to the table, which is that if we did not have a proper plan for getting on top of our debts and our deficit, we would not have 2.5% interest rates, which are the greatest stimulus our economy could have. Instead, we would have interest rates like those of the Greeks, the Spanish and the Italians, and our economy would be hit. Do you know how you get interest rates like that? You get them if you adopt the plans of the Labour party. Its plan is for an extra £87 billion of borrowing over this Parliament. You do not solve a debt crisis by adding to your debts—[Interruption.] The shadow Chancellor can go on making his rather questionable salutes, but it is time for him to take a primer.

Order. I appeal to right hon. and hon. Members who are leaving the Chamber, who unaccountably do not wish to remain for the statement, to do so quickly and quietly, so that the rest of us can listen attentively to the Chief Secretary.