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Oral Answers to Questions

Volume 537: debated on Wednesday 7 December 2011

International Development

The Secretary of State was asked—

St Helena

A contract has now been signed for the design, construction and operation of the new airport in St Helena. We expect it to open towards the end of 2015, in time for the 200th anniversary of Napoleon’s exile to the island.

I thank my right hon. Friend for that excellent news. I also thank my hon. Friend the Member for Milton Keynes North (Mark Lancaster), whose visit to the island helped to pave the way. Does the Secretary of State agree that the islanders will rejoice at this decision by the coalition Government, which contrasts with the failure of the last Labour Government who, at the last moment, cancelled the contract?

My hon. Friend is right to say that this is the right decision. It underlines our commitment to the overseas territories—they are British. He is also right to tease the Opposition about the fact that they dilly-dallied over this decision for nearly 13 years.

I welcome the decision to go ahead with the airport, which I argued for long and hard, as the Secretary of State is aware. What does the decision to go ahead with the airport, which will ensure that the people of St Helena can stand on their own two feet, mean for the ship and for the continuing contact that is needed with the island? Will that be able to continue until 2015 and will extra repairs be needed?

I acknowledge that the hon. Lady played a strenuous and forceful part in the decision today. She argued strongly for the airport when she was in government. The ship will be able to continue until the airport is largely able to take over its necessary role. She is right to underline the importance of this decision in getting the island off aid and off the British taxpayers’ books, and looking after itself.


The Department for International Development’s bilateral programme in Moldova came to a planned end in March 2011. Moldova has made progress in reducing poverty since it gained independence in 1991. It benefits from significant support from the international community. DFID continues to monitor development progress in Moldova through UK representation on the European neighbourhood programme management committee.

On a visit to Moldova a while ago, we had the opportunity to go to Transnistria and to see the courage of the women working with non-governmental organisations to combat the scourge of people trafficking, which has implications for us and for the whole of Europe. What can the Minister tell us about the approach of the British Government, and will he do more to help those non-governmental organisations?

I pay tribute to the right hon. Gentleman’s continued interest and support through the all-party parliamentary group for Moldova. Although there are now formal talks to seek to resolve the protracted Transnistrian conflict, he is right to draw the House’s attention to the continuing concern about trafficked women. He will know that across Government there is a series of initiatives focusing not only on identifying and supporting such women, but on stopping the sources of those who peddle this heinous practice.

Will the Minister commend the work of the Westminster Foundation for Democracy in Moldova, both on a party-to-party basis and in parliamentary strengthening, particularly in the run-up to the presidential election on 16 December? Is not good governance the fastest way to tackle poverty?

My hon. Friend is right to demonstrate, through the work of the Westminster Foundation for Democracy in Moldova, how important good governance is in alleviating poverty and in creating the conditions that all countries need to have the greatest possible opportunity for wealth creation and security. Of course, we all look forward to the Moldovan Parliament being able to elect a President soon, which will allow the Parliament to focus on the reform agenda that is necessary to bring Moldova closer to the EU. I am happy to pay tribute to the work of the WFD.

Global Health Fund

3. What recent assessment he has made of the work of the global fund on HIV/AIDS, tuberculosis and malaria in developing countries. (85119)

The multilateral aid review assessed the global fund as providing very good value for money, but also concluded that it could do more to maximise its potential and impact in developing countries. We are working closely with it to ensure that that happens.

In view of the current concern about the global fund, will the Secretary of State clarify the UK’s current and future financial commitment to the organisation?

We have made it clear that we are willing, subject to the improvements that we have set out, to spend up to £1 billion by 2015. We are currently spending about £128 million a year on achieving very specific results under the global fund, and I am considering whether additional funding would be warranted. I shall make that decision on the basis of value for money for the British taxpayer.

Many of the 2,000 a day who die of malaria are children. Will the Secretary of State and his Department take a particular interest and show particular determination in tackling childhood mortality, particularly in developing countries? Will he extend that to rotavirus and the other conditions that kill so many children?

My hon. Friend is absolutely right. It is a scandal that 25,000 children will die today, needlessly, of diseases that we have the power to prevent. Tackling child mortality is absolutely at the heart of the policies being pursued by the Government.

My answer is yes. We will be working in the most difficult countries. The aim of the review currently being undertaken under the chairmanship of an excellent British official, Simon Bland of the global fund, is to ensure that over the next four years we save 10 million lives and prevent something like 180 million new AIDS, malaria and TB infections.

Given that more than two thirds of TB and malaria programmes and more than half of all antiretroviral drugs are delivered through the global fund, what does the Secretary of State say about the crisis in the talks on that programme and its cancellation until 2014? What interim measures can be put in place?

It is true that the 11th round has been converted into a new funding approach, but we will sign grants between now and 2013 of something like $10 billion, so long as we can ensure that our priorities of securing lower prices and good value for money, focusing on the poorest and most vulnerable and considering the longer-term sustainability of programmes, are met.

Given that the global fund contributes half of spending on HIV/AIDS, 80% of spending on malaria and 75% of spending on TB, what steps has the Secretary of State taken to ensure that all international donors play their part? Does he see any possibility that the global fund will start distributing resources before 2014?

The hon. Gentleman is exactly right to focus on the importance of getting others to meet the commitments that Britain is meeting. I can tell him that I spend a lot of my time ensuring that that happens. We will disburse something like $10 billion before 2014 and, as I have said, we are looking to secure funding after that date so that these programmes continue and are sustainable.

Tax Evasion

The Department for International Development and Her Majesty’s Revenue and Customs support developing country tax authorities in a range of reform and capacity-building projects to help them to collect the tax that they are owed. We particularly wish to promote developing countries’ participation in international exchange of tax information, which is a powerful weapon against tax evasion.

Developing countries lose more money through tax dodgers than they receive in aid. Will the Minister explain exactly what was said at the G20 summit to get the issue moved up the agenda?

The hon. Lady is absolutely right to say it is vital that we address uncollected tax, particularly in certain countries that have been identified. We are encouraging international partners to join in that, and our own Treasury has been very much in the lead. The G20 has agreed to the multilateral convention on mutual assistance in tax matters, and that is what it is now focusing on in trying to get an exchange of tax information, which will help us to support countries in collecting the tax that they are owed.


British development in Bangladesh promotes resilience to national disasters, gets girls into school, tackles maternal mortality and helps the Government to raise their own revenue through support for fair and transparent taxation. I plan to visit Bangladesh shortly to ensure that British taxpayers’ money is well spent.

Having seen some of that work that the Secretary of State’s Department is doing in Bangladesh, may I first congratulate him on it? More specifically, what help does he think his Department could provide, perhaps alongside other Departments, to ease the political logjam that seems to bedevil Bangladeshi society from top to bottom?

My hon. Friend has seen for himself why the issue he raises is so important. A key part of our work is helping ordinary people to hold their political leaders to account, which we do through strengthening accountability and the Government’s ability to raise taxes, and through strengthening local media. I have recently given a significant accountability grant to the BBC World Service Trust to do just that.

Climate change is having a serious impact on food security and production in Bangladesh—the production of rice and wheat is forecast to fall by around a third by 2050. What additional resources or funding will be made available to help some of the poorest in the world, given the effect of climate change on their food production?

The hon. Gentleman is entirely accurate about the effects of climate change on very vulnerable people in Bangladesh, where only a fairly small rise in the water level could wipe out hundreds of thousands of homes. We are directly involved in protecting 15 million vulnerable people from those effects of climate change, and we will continue—through, for example, the development of scuba rice, which grows in very difficult circumstances—to target malnutrition.

Climate Change Projects

6. What steps he plans to take to assess the value for money of aid expenditure on climate change projects. (85122)

Value for money is a process, not a one-off event. The value for money of climate change projects is assessed during design and appraisal, during implementation and, for a sample of completed projects, through evaluation.

It is vital at this time that we get absolute value for every penny we spend, but the Minister will be aware that 70% of CO2 emissions come from developed countries, whereas the World Bank estimates that 80% of the damage will be suffered by the developing world. After the Durban climate change conference, what steps will be taken to ensure that new and additional clauses are not dropped from climate change financing?

The hon. Gentleman is absolutely right to imply that the effects of climate change have a continually damaging effect on the poorest people of the world. Therefore, we hope that the discussions that have taken place in Durban will produce the success and the architecture that are required. However, there have been some announcements, particularly as part of Fast Start, to help people from developing countries around the world to adapt to the effects of climate change. That will be through the UN adaptation fund or the least-developed countries fund, and will be particularly for climate resilience programmes in both Ethiopia and Kenya. There is therefore a significant focus on the poorest.

With the Durban climate change conference coming to a close this week, will the Minister tell the House what impact he and his Department have had on shaping Britain’s negotiating position, and whether the Government will live up to the commitment to help to fund the additional $100 billion needed for climate finance for developing countries?

I thank the hon. Lady for drawing attention to that key aspect, but in focusing totally on results and achieving the genuinely transformational climate change effects that we want, this Government have absolutely stood by our promise to meet the requirements to fulfil the international climate fund— the responsibility is split between the Department for International Development, the Department of Energy and Climate Change, and the Department for Environment, Food and Rural Affairs. There has been a series of announcements. We are now two thirds of the way through the Fast Start commitment, so the answer is yes, our commitments are in place.

Equatorial Guinea

7. What estimate his Department has made of the number of people living in poverty in Equatorial Guinea. (85123)

Although Equatorial Guinea has one of the highest per capita incomes in Africa, nearly 70% of the population live in deep poverty. Most of that per capita income goes to the President and his family and cronies.

I declare an interest. My visit to Equatorial Guinea in the summer was paid for by the Equatorial Guinea Government.

The Secretary of State is quite right to say that one family control the wealth of Equatorial Guinea and are amassing an unimaginably vast fortune from drilling rights and oil revenue. Will he use his good offices to press upon the Obiang family the fact that the wealth of a nation belongs to its people, and that they should be using that money to alleviate poverty, particularly among children in Equatorial Guinea?

My hon. Friend makes a very good point. She has been there and so is in a good position to speak out about what she has seen. I should say to her that we do not have any bilateral links with Equatorial Guinea, but she is right: it is a disgrace that its high level of oil wealth is stolen for the corrupt and personal use of an unaccountable and self-serving elite.

The Secretary of State rightly draws attention to the risk of corruption in Equatorial Guinea. Is it not the kind of country that could benefit from the legislation that is currently being proposed at European level to make extractive companies publish what they pay in developing countries along the lines of the Dodd-Frank Act in the United States?

My hon. Friend makes a very good point, although he, like me, will be sceptical about our ability to persuade a country to do that. We have, however, raised the issue of Equatorial Guinea’s abusive human rights with the Human Rights Council in Geneva, in particular the lack of an independent judiciary, the use of torture and the death penalty and the constraints on the media.

Horn of Africa

8. What recent assessment he has made of the humanitarian situation in the horn of Africa; and if he will make a statement. (85124)

In spite of significant British-led support, the position in the horn of Africa remains extremely difficult. The coming of the rains has brought some improvement, not least because of British-funded vaccination programmes for more than 916,000 children. I am gravely concerned by recent reports that al-Shabab has ordered 16 humanitarian organisations to cease operations in Somalia.

I thank the Secretary of State for that response. Does he agree that quite often the conflict, particularly in countries such as Somalia, is the root of the problem, and what can he do to remedy that?

My hon. Friend rightly points to the fact that the Government are focusing on countries that are mired in fragility and conflict. It is one of the reasons why the Prime Minister has decided that Britain should host a conference on Somalia to try to ensure that we tackle the causes of state failure as well as the symptoms of it.

It is clear that there are a large number of difficulties, including the disposition of forces in Somalia, which hinders the distribution of aid. The biggest hindrance of all is the work of al-Shabab, which has kicked out 16 aid agencies. We are now very reliant on the International Committee of the Red Cross and two British non-governmental organisations, Save the Children and Oxfam, for getting relief through to an enormous number of very malnourished children who are in danger of dying as a result of this famine.

Sri Lanka

About 7,500 displaced people remain in camps in Sri Lanka, out of about 300,000 at the end of the conflict in 2009. British humanitarian aid for displaced people in Sri Lanka ended in March 2011, except for demining work which will continue until 2013.

I thank the Minister for his response. May I ask him to intervene on behalf of the refugees who are still left in the Menik Farm refugee camp to ensure that they are allowed to return to their homes rather than to a 600-acre plot of newly cleared jungle?

I greatly appreciate the importance of that issue. The work being done through the conflict prevention pool to help to bring peace in Sri Lanka includes assisting with police reforms and strengthening Sri Lanka’s diasporic communities—some of which are in my hon. Friend’s constituency—to drive economic development and reconciliation to help former combatants to integrate back into their communities, which are precisely the things that my right hon. Friend is looking for. We also supported the EU position over the removal of what is called the GSP-plus as a means to press the Sri Lankan Government to meet their human rights obligations.

Topical Questions

I attended last week’s high-level forum on aid effectiveness in Busan. The United Kingdom was instrumental in securing an international agreement that, for the first time, includes new providers of development co-operation such as China and Brazil. I have also recently visited Burma for talks with the Government and with Aung San Suu Kyi. It appears that the political tectonic plates in Burma are shifting.

The Secretary of State will I am sure be aware that 2013 is the bicentenary of the birth of David Livingstone, from Blantyre in my constituency. Will he undertake to work with the Scotland Office and other Departments of the UK Government to ensure that they contribute to the celebrations and commemoration of the work of David Livingstone in 2013?

The hon. Gentleman raises the important issue of development in Malawi, which is challenged by the failure of the Government there to recognise the importance of taking the necessary steps to support very vulnerable people. The Scottish Government are doing a good job of supporting what is happening in Malawi. We are now working in an environment where Britain no longer gives the Government there direct budget support, but ensures that our support gets through by other mechanisms.

T6. Given the Department’s focus on giving aid to countries that are considered fragile, will my right hon. Friend update the House on the current estimates for fraud and corruption losses this year, and confirm that resources are being reallocated to tackle those, so that aid gets to those most in need? (85137)

My hon. Friend makes the most important point: the Department for International Development has zero tolerance of corruption. The independent watchdog reported last week that although there was no evidence of corruption in this year’s programme, it was necessary to take new measures when we work in very difficult areas. I have instructed the civil service to implement all the independent watchdog’s recommendations, lock, stock and barrel. [Interruption.]

Order. The House really must come to order. The Secretary of State is having some difficulty being heard, and that should not be the case.

Last week the Chancellor announced that, partially as a result of the Government’s failed economic plan, DFID will have over £1 billion less to spend than previously planned. The Secretary of State has rightly focused on transparency and predictability of funding. In that spirit, will he make it clear which budgets that £1 billion will be taken from? In that context, will he reassure the House that he continues to enjoy the support of his party in pressing ahead with legislation to enshrine the 0.7% target in law?

Even for a Labour spokesman, the hon. Gentleman has a neck the length of a giraffe’s. Let me make it clear to him that the Chancellor of the Exchequer took action last week to ensure that we did not exceed the Government’s 0.7% promise. Personally, I am enormously proud to be a member of a Government who, in spite of the difficult economic circumstances that we face, have stuck by their commitments to the poorest of the world.

T7. My right hon. Friend will be aware of the excellent work done in Africa by Concern Universal, which is based in Hereford. Can he outline the measures taken to improve resilience against humanitarian disaster in Malawi? (85138)

My hon. Friend again identifies the difficulties of operating in Malawi when Britain has stopped giving direct budget support. However, we are finding other mechanisms, particularly to address food security issues, and in the last 10 days we have approved additional funding for fertiliser to ensure that the next harvest has the best possible chance of succeeding.

T2. Although the famine in the horn of Africa is obviously the top priority there, future drought management is equally important. Will the Secretary of State tell us what aid his Department is giving to address this issue? (85133)

The hon. Gentleman identifies the importance of having a wide set of measures to tackle famine and drought. We have given strong support to the Food and Agriculture Organisation to support livestock, and we are actively looking at ways to ensure that the crops do not fail next year. All the measures that we take are designed to boost resilience. It is an interesting fact that, as a result of the changes made in Ethiopia, the prevalence of malnutrition in that country has dropped by 50% in the last 10 years.

T9. In these times of austerity and hardship for so many of my constituents in Lincoln, how can my right hon. Friend justify his reported desire to legislate to force successive Governments to continue funding projects in 27 other countries, including India? (85140)

My hon. Friend will be aware that the coalition Government looked at our bilateral programmes and reduced by 16 the number of countries in which we have country-to-country programmes precisely to ensure that we champion value for money. For example, on the first day we stopped aid to China and Russia. His constituents can be reassured that we are focusing on results and ensuring that every pound of taxpayers’ hard-earned money delivers 100p of results on the ground.

T3. Following the postponement of the election results in the Democratic Republic of the Congo, does the Secretary of State feel that the UK and the international community could have done more to ensure better oversight of those elections, and does he support the call for election results to be published polling district by polling district? (85134)

We have had 89% of the votes counted. We are pressing the Electoral Commission to publish the results on a polling station by polling station basis so that any necessary appeals by those taking part can take place. Britain spent more than £30 million ensuring that registration and other things went ahead before the election. We must wait to see what the commission says about the credibility of these elections shortly. [Interruption.]

Order. Let us have a bit of order for the former Chairman of the International Development Select Committee, Mr Tony Baldry.

My right hon. Friend is the first UK Minister to have visited Burma for a very long time. Will he please take this opportunity to update the House on the outcome of that visit, particularly on his discussions with Aung San Suu Kyi?

It does appear that the political tectonic plates are moving in Burma. The Government of Burma have made it clear that they are committed to releasing the political prisoners—in particular, Min Ko Naing, one of the leaders of the students of 1988—and also committed to the 48 by-elections proceeding. Aung San Suu Kyi and her party have said that they will stand in those elections. We await credible elections with fair and open results.

Prime Minister

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.

The British people want to see two things from this week’s European summit: first, a resolute and uncompromising defence of Britain’s national interests; and, secondly, an end to the disastrous crisis of the euro—a currency that the Labour party still want us to join. Will the Prime Minister do Britain proud on Friday and show some bulldog spirit in Brussels?

I can guarantee to my hon. Friend that that is exactly what I will do. The British national interest means absolutely that we need to help resolve this crisis in the eurozone. It is freezing the British economy, just as it is freezing economies right across Europe. Resolving this crisis is about jobs, growth, business and investment right here in the UK. At the same time we must seek safeguards for Britain. That is the right thing to do. I can absolutely guarantee that as long as I am here there is absolutely no prospect of us joining the euro—something on which the Leader of the Opposition takes a different view.

Six weeks ago the Prime Minister said that

“the idea of some limited treaty change in the future might give us”

the opportunity

“to repatriate powers back to Britain”.

At the European summit, what powers will he be arguing to repatriate?

As I explained, we will have the key aim of helping to resolve the eurozone crisis, and we believe that means European eurozone countries coming together and doing more things together. If they choose to do that through a treaty at 27 in which we are involved, we will insist on some safeguards for Britain—and, yes, that means making sure we are stronger and better able to do things in the UK to protect our own national interests. Obviously, the more countries in the eurozone ask for, the more we will ask for in return, but we will judge that on the basis of what matters most to Britain.

The more the Prime Minister talked, the more confusing his position became, quite frankly. Let me remind him that on the eve of the biggest post-war rebellion against a Prime Minister on Europe, he was telling his Back Benchers that the opportunity of treaty change would mean in the future the repatriation of powers. That was his position six weeks ago. Today he writes a 1,000-word article in The Times, but there is not one mention of the phrase “repatriation of powers”. Why does the Prime Minister think it is in the national interest to tell his Back Benchers one thing to quell a rebellion on Europe, and to tell his European partners another thing?

I do not resile from a single word that I said in that debate. Let me tell the right hon. Gentleman what we want to do, specifically and particularly in the area of financial services, in which this country has a massive national interest. Let me remind him that it represents 10% of GDP, 3% of our trade surplus, and 7% of UK employment. I want to ensure that we have more power and control here in the UK to determine these matters, in complete contrast to the Labour Government, who gave away power after power. They gave up our power and they made us join the bail-out fund; we have had to get out of the bail-out fund. They gave up our rebate and received nothing in return; we managed to freeze the European budget. There is one party—one Government—that defends Britain’s interest, and another that always surrenders it.

Order. Let me say to the usual, predictable noisy tendency what I said to those on the other side a moment ago. People must be heard, and that is what will happen, however long it takes.

I think the short answer is that six weeks ago the Prime Minister was promising his Back Benchers a handbagging for Europe, but now he is reduced to hand wringing. That is the reality of this Prime Minister. The problem for Britain is that at the most important European summit for a generation, which matters hugely to families and businesses up and down the country, he is simply left on the sidelines. Is not the truth that we have a Prime Minister who is caught between his promises in opposition and the reality of government? That is why Britain is losing out in Europe.

I am afraid that even the best-scripted joke about handbags will not save the right hon. Gentleman’s leadership. He talks about being isolated. Let me explain to him where we would be if we adopted Labour’s policies. If we adopted your spending and your deficit policies, and if we were in the euro, I would not be going to Brussels to fight for Britain; I would be going to Brussels to get a bail-out. By implementing the proposals that it is advancing, Labour would put Britain in such a bad position that the tax changes would be written not by the shadow Chancellor, but by the German Chancellor.

There is a wide spectrum of views on Europe throughout the House. [Interruption.] One can sense that even from the response to my remark. Will the Prime Minister take to the European Council the straightforward message that the one thing most likely to unite the House of Commons would be the perception of a calculated assault from Brussels—not even in its own interests—on the well-being of the UK financial services industry, and on the 1.3 million people in all our constituencies who work in it?

My hon. Friend is entirely right. Of course we want to see a greater rebalancing of our economy and more jobs in manufacturing, aerospace and technology; however, the economy that we inherited is very dependent on financial services. I think we should celebrate the fact that it is a world-class industry, not just for Britain but for Europe—but it is absolutely vital for us to safeguard it. We are currently seeing it under continued regulatory attack from Brussels. I think that there will be an opportunity, particularly if there is a treaty at 27, to ensure that there are some safeguards—not just for the industry, but to give us greater power and control in terms of regulation here in the House of Commons. I think that that is in the interests of the entire country, and it is something that I will be fighting for on Friday.

Q2. Does the Prime Minister agree that the recent escalation of industrial action in the public sector—which, incidentally, was not a “damp squib” in my part of the world—was a result of genuine anger about the sheer unfairness of Government action to deal with pension contributions, which is making people on low and middle incomes pay for the horrendous mistakes made at the top? (85103)

I am afraid that the hon. Lady is plain wrong, because the lowest-paid workers are not being asked to contribute more to their pensions. On fairness, let me make one point: under our offer, a primary school teacher earning £32,000 a year could receive a pension worth £20,000 a year, but private sector workers, who, let us remember, are the people putting their money into these pensions, would have to pay 38% of their salary—almost half—to get an equivalent pension. Of course there is an issue of fairness, and we must play fair by public sector workers, but we must also be fair to private sector workers, who are putting their money into these pensions.

Does my right hon. Friend agree that it is time for this country to lead Europe into the hope and potential of a new post-bureaucratic age?

I think that there are opportunities for Britain in Europe, and we should start from the premise that it is in Britain’s interest to be in the single market. We are a trading nation, so we need those markets open, and to be able to determine the rules of those markets. As Europe changes, of course there will be opportunities, but the first priority at the end of this week must be to ensure that the eurozone crisis, which is having such a bad effect on our economy, is resolved. At the same time, however, we should be very clear about the British national interest: safeguarding the single markets and the financial services, and looking out for the interests of UK plc.

Q3. Will the Prime Minister be having his usual Christmas bash with Rebekah Brooks and Jeremy Clarkson? If so, will they be talking about just how out of touch they all are with British public opinion? (85104)

I seem to remember that the annual sleepover was with the former Labour Prime Minister. I shall be having a quiet family Christmas.

May I offer the Prime Minister my full support as he promises to stand up for the British national interest at the EU summit on Friday? Is it not the case, however, that Europe and the eurozone will be saved not by bail-out after bail-out of the eurozone but by making Europe more competitive, reducing its high unit costs and cutting regulation and red tape on business?

My hon. Friend is entirely right. I understand why leading members of the eurozone, such as the Germans, want tougher fiscal rules on budget deficits for eurozone members, but it is right to point out that the heart of the crisis was caused by current account deficits in some countries and large current account surpluses in others. Unless we solve the competitiveness problem at the heart of the euro crisis, the crisis will keep recurring. Our argument throughout has been that not only do we need tough rules on budget deficits and to see euro institutions, including the European Central Bank, acting in concert and acting strongly, but that we need to resolve the competitiveness problem at the heart of the single currency to deal with the crisis. I shall continue to make those points on Thursday and Friday.

Will the Prime Minister confirm that according to the Institute for Fiscal Studies, next year the poorest third of families will lose three times as much as the richest third, as a result of his economic policy?

No, the right hon. Gentleman’s figures are wrong. If we take all the things that the Government have done—that is the right way to measure this—we find that the top 10% will see losses nearly 10 times greater than the bottom 10% will. I believe that that is fair. One point that has not been properly understood, but which is important, is that the richest 10% in our country will experience the biggest reduction in income, not only in cash terms but proportionately. So we are being fair. It is incredibly difficult to deal with the debts and the deficit that he and his party left behind, but we are determined to do it fairly.

The Prime Minister is simply wrong again. The figures are there, and the poorest third are losing far more than the richest third. He used to say, “I’m not going to balance the budget on the backs of the poor.” [Hon. Members: “He’s not!”] No, that is right: he is not balancing the budget—there is £158 billion more of borrowing—but he is hitting the poor. To give him credit, though, there is one group for which he is easing the pain; this has not got the publicity that it deserves. He is delaying for one year the tax on private jets, at the same time as hitting the poorest families in this country. Will he confirm that a working mother earning £300 a week is seeing rising VAT, her tax credits cut, child benefit frozen and her maternity grant cut?

The right hon. Gentleman had 13 years in which to tax private jets—and now former Labour leaders are jetting around in them! In two years we will have taxed them. He quotes the Institute for Fiscal Studies. Let me remind him of what it said about Labour’s plans. It said that Labour’s policies would lead to

“even higher debt levels over this Parliament”—[Interruption.]

Labour Members do not like to hear their own policies being taken apart. [Interruption.] Calm down. [Interruption.]

Order. What I simply say to everybody is that I want to get down the Order Paper. If the Prime Minister wants to give a brief answer, let us hear it.

Let me just explain what the IFS said. It said that the right hon. Gentleman’s plans implied

“even higher debt levels over this Parliament than those we will in fact see.”

That is the truth of it. If we want the stimulus we are giving the economy through low interest rates, we have to stick to the plans we have set out. There is not a party in Europe, apart from the Moldovan communists, that backs his plans.

Now I have heard everything. The Prime Minister is talking about a stimulus, but he does not understand: he is cutting too far and too fast. That is why we have problems in our economy. Of course he does not want to tell us what the IFS says about his plans; he is the Prime Minister, after all. It says:

“New tax and benefit measures are, on average, a takeaway from lower-income families with children”.

The figures speak for themselves. His changes are hitting women twice as hard as men. Is not the truth that he is the first Prime Minister in modern times to say, “It’s the women and children first”?

The right hon. Gentleman’s soundbites get weaker and weaker as his leadership gets weaker and weaker; that is the truth of it. If we look at what we have done in lifting 1.1 million people out of tax, it is mostly women who benefit. If we look at the increase in the pension—£5.35 starting next April—that will benefit mostly women. If we consider the issue of public sector pensions, we are helping the lowest-paid in the public sector, and that will help women. Yes, we are giving the economy a stimulus by keeping our interest rates low. We have interest rates at 2%, while they are at 5% in Italy, 5% in Spain and 30% in Greece. If we followed his advice we would have interest rates rocketing, businesses going bust and more people out of work. That is what Labour offers, and that is why it will never be trusted on our economy again.

Small and medium-sized enterprises in my constituency are still having grave difficulty in accessing reasonable finance. A major contributory factor in that is lack of competition. Will the Government consider breaking up the nationalised banks to create more competition on the high street?

I do think we have opportunities to increase competition on the high street, and obviously, as we look to return the state banks to the private sector we will have further opportunities. We have already managed to take one important step forward by getting Northern Rock back out there lending to businesses and households, properly established in the north-east of England.

Our history of repatriating powers from the European Union is not a happy one. May I therefore suggest a fundamental renegotiation of our relationship with the EU based on free trade, growth and competitiveness, which other countries enjoy, not on political union and dead-weight regulation? This EU summit is a defining moment—a once-in-a-lifetime opportunity. Will the Prime Minister seize the moment?

I am a little more optimistic than my hon. Friend. On the bail-out power that the last Government gave away, we are returning it to the United Kingdom via the European stability mechanism treaty, so we have returned a power. More recently, we have just won an exemption from all EU legislation to make sure that from January 2012 micro-enterprises will not face any new EU regulation at all.

In answer to the question of whether we will go in there and fight for British interests on Thursday and Friday—yes, absolutely we will. But let us be clear: there is the option of a treaty at 27, where we have the ability to say yes or no and as a result get a price for that, but there is also always the possibility that the eurozone members at 17 will go ahead and form a treaty of their own. Again, we have some leverage in that situation, because they need the use of EU institutions, but we should recognise exactly what our leverage is and make the most of it.

Q5. Last year the Prime Minister’s manifesto promised to repatriate legal rights, criminal justice, and employment and social legislation. His article in The Times this morning is silent on all those issues, and the Justice Secretary has said that this agenda is not realistic anyway. Does the Prime Minister regret leading his party up the garden path and forcing himself into a choice between ditching his manifesto and potentially vetoing a treaty that may be essential to avoid huge damage to the UK economy? (85106)

What I regret is that the Labour party gave away so many powers. It is going to take a while to get some of them back, but we are making progress. When the right hon. Gentleman was in government there were repeated increases in the EU budget, whereas this year we have achieved an EU budget freeze. When he was in government he gave away the bail-out power and we had to pour billions of pounds into other countries. We have got that power back, and I believe that with strong negotiation, standing up for Britain, we can help to clear up the mess that Labour left us.

Over the past decade and a half there has been an explosion of personal debt levels in this country, yet we allow our young people to leave school without the proper skills to make informed decisions. Next week the all-party group on financial education for young people will report on where we feel this can fit into the curriculum. Will the Prime Minister read that report and meet a small group of MPs to discuss how we can ensure that young people are more financially literate in the future?

I shall be very happy to meet my hon. Friend, who knows a great deal about this, having been a supply teacher for many years in the constituency that he now represents.

He was a permanent teacher as well; excuse me. Financial education is important for our young people, and I look forward to seeing the report of his all-party group.

Q6. The Prime Minister once said that he wanted to lead the most family-friendly Government ever, so is it not a disgrace that of nearly £19 billion of cuts that his Government have announced so far, more than £13 billion have fallen on women? (85107)

What I say to the hon. Lady is that it was this Government who introduced 15 hours of free nursery care for three and four-year-olds—something that the Labour party never managed to do in government —and despite the appalling mess that we were left, in this autumn statement we put in an extra £380 million to double the number of disadvantaged two-year-olds whose parents will get free nursery care. That is real progress and real help for families—something Labour never delivered.

What would the Prime Minister say to a council such as Redcar and Cleveland borough council, which is considering rejecting Government funding for a council tax freeze next year, and instead charging my hard-pressed constituents 3.5% more?

I very much hope that all councils will take up the offer of a council tax freeze, because in this year of all years, when people face economic hardship, it is important that we help where we can. That is why we have cut the petrol tax. That is why we have allowed the council tax freeze to go ahead. So my advice to people in the hon. Gentleman’s constituency would be to support parties that back a council tax freeze.

Q7. Since the Education Act 1944, successive Governments have supported subsidised travel for students who live 3 miles or more from the faith school of their choice. Some local authorities are beginning to cut back on that financial support, and I do not think any Member in this House wants to see that happen. Can the Prime Minister encourage local authorities to embrace the spirit of the 1944 Act on this particular issue? (85108)

The hon. Gentleman asks a very important question. I support school choice—parents having the ability to choose between schools—and I also support faith schools. Indeed, I have chosen a faith school for my own children. So I will look very carefully at what he says and at what local authorities are doing, discuss it with the Education Secretary and see what we can do to enhance not only choice, but the faith-based education that many of our constituents choose.

Does the Prime Minister agree that in exchange for supporting the euro countries in dealing with their crisis, we should be seeking changes in the law of immigration, employment and fishing rights, in order to support our economy?

As I have said, if they choose a treaty at 27, that treaty requires our consent. We should therefore think of what are the things most in our national interests; I have talked about keeping the single market open and the importance of financial services. Clearly, the more that eurozone countries want to do in a treaty of 27, and the more changes they want to make, the greater ability we will have to ask for sensible things that make sense for Britain. I am very keen that we should exercise the leverage we have to do a good deal for Britain, and that is exactly what I will be doing in Brussels this Thursday and Friday.

Q8. The Prime Minister promised:“I’ll cut the deficit, not the NHS”.Why are his Government closing the accident and emergency and maternity services at King George hospital, Ilford, cutting front-line NHS staff and borrowing £158 billion extra? Should he not have said, “I’ll cut the NHS, not the deficit”? (85109)

The hon. Gentleman is just wrong, because the deficit is coming down and NHS spending is going up throughout this Parliament. I note that his own party’s health spokesman says that it is “irresponsible” to increase spending on the NHS. We do not think it is irresponsible; we think it is the right thing to do. As the hon. Gentleman knows, the Health Secretary has set out the criteria for all local changes, including those in the hon. Gentleman’s constituency. There has to be proper public and patient engagement, sound clinical evidence, support from GP commissioners and proper support for patient choice.

The Prime Minister has taken a strong interest in the incredible work of the Oxford parent infant project in helping families that are struggling to form a strong attachment with their babies. Two months ago I started a new sister charity in Northamptonshire. Given the Prime Minister’s interest in strengthening families, will he commit to looking again at the incredible work that can be done in early intervention, which saves a fortune in the criminal and care services later on?

My hon. Friend is entirely right. I know about OXPIP and I am delighted that she is expanding the project into her own constituency. All the evidence shows that the more we can do to help children and their parents between the ages of nought and two—the key time at which so much disadvantage, which can have such a bad impact later on in life, can set in—the better. That is why her work, and that of Members across the House, in prioritising early intervention is so important for our country.

Q9. The Prime Minister was asked by his constituent Phillip Hall, who runs his own construction company, to cut VAT on home repairs and improvements. Cutting VAT on home improvements has the support of more than 50 business organisations, including the Federation of Small Businesses. Will the Prime Minister support that cut in VAT, which would help jobs, growth and business? (85110)

The hon. Gentleman’s problem is that the Opposition have a huge list of extra spending and tax cuts that they want, but as we have heard again today in Question Time, they oppose every single spending reduction we are making and every single fundamental reform to get better value for money. One can only conclude that spending would go up, borrowing would rocket, interest rates would increase and the economy would be left in very dire straits.

Why is my right hon. Friend supporting a policy of fiscal unification for the eurozone states that, if it happens, will undoubtedly lead to the creation of a dangerously undemocratic single Government for those countries?

The point that I would make to my hon. Friend is that I do not want Britain to join the euro—I think Britain is better off outside the euro—but the countries that have chosen to join the euro have to make that system work. In order to do that, they need not just stronger fiscal rules, which is clear, but greater competitiveness. It is for them to decide how to go ahead and do those things. We should maintain Britain’s position outside the euro, and ensure that we safeguard our interests at the same time. That is exactly what I will be doing in Brussels.

Q10. Ten thousand service personnel will have heard of their real-terms cut in pay while serving on the front line in Afghanistan. What does the Prime Minister think that disgraceful cut will do for the morale of those who are risking their lives for us? (85111)

What we have done is double the operational allowance that people in Afghanistan receive. They are extremely brave people and we should be doing right by them; that is why we doubled that allowance. We have also increased the council tax disregard and made sure that the pupil premium is available not just to children on free school meals but to all service families’ children. We have put the military covenant into the law of our land and we will go on defending, promoting and protecting our brilliant armed services personnel and their families.

Q11. The Nun Wood wind farm application spans three local authorities, each of which independently assessed it against their local plans and rejected it. Subsequently a distant, unelected planning inspector overruled them and even moved his decision forward by three months so that it could be made the day before the Localism Bill got Royal Assent. The Prime Minister will understand my constituents’ anger. Will he look into what appears to be a blatant slap in the face for localism? (85112)

My hon. Friend makes an important point. As he knows, as a result of the changes we are making it will not be possible in future to overrule such decisions so as to meet a regional target, because we have now got rid of those regional targets. We are giving much more authority and many more decision-making powers to those local bodies. Our planning reforms will ensure that local people and their councils decide what people need, and how to meet that need.

Is the Prime Minister worried that the scandal of mis-selling in this country has just got a lot worse, given the previous broken guarantees to the public? He is now rejecting a vote on the latest European changes. He has mis-sold the issue to the public at large. Will he give a guarantee to the House that there will be an opportunity for the British people to deliver their verdict on the changes that are happening in Europe?

What this Government have given is something that no previous Government have done in this country. We have passed a law that means that if ever this Government, any future Government, or any future House of Commons, try to pass powers from Westminster to Brussels they will have to ask the British people in a referendum first. That means that there would have to have been a referendum on the Lisbon, Amsterdam and Nice treaties, and other treaties. People feel betrayed by what happened under the previous Government, but that cannot happen again.

Q12. Small and medium-sized enterprises are the engine of the economy in my constituency and will play a very important part in our economic recovery. Will the Prime Minister acknowledge that a key factor in achieving growth, as well as in resolving the eurozone crisis, is to take action in Britain’s interests to tackle and reduce the huge regulatory burdens on small companies, so many of which come from Europe? (85113)

My hon. Friend makes an important point. We have to start here, in our own backyard as it were, and stop the gold-plating and over-regulation that has happened in the past. That is why we have the red tape challenge, with every rule being put up on the internet so that people can show how little we need to keep. That is why we have the one-in, one-out rule that applies to every Minister: no one can introduce a regulation without getting rid of a regulation. We have just achieved a major breakthrough in Europe: micro-businesses employing fewer than 10 people will not be subject to European regulation from 2012 onwards. That is a big breakthrough, and it is something that has not happened before in Europe. It shows that if we make the arguments for growth, jobs and enterprise, we can win them.

Q13. The Prime Minister has today refused to accept that women and children will bear the brunt of his failed economic policy. No wonder he continues to turn women off. Will he accept the Treasury’s own figures showing that 100,000 more children will be living in poverty as a result of his policies? (85114)

How on earth does it advantage women and children to pile them up with debt after debt that they will then have to pay back? We have been standing here for 33 minutes and all we have heard from Opposition Members is proposals for tax reductions and spending increases, about reforms they would not go ahead with, and about scrapping the changes to public sector pensions. They would take those women and children whom we are concerned about, pile them high with debt and let them live under that burden for the rest of their days.

May I hark back a month to 7 November, when, as is recorded at column 28 of that day’s Hansard, I put three suggestions to my right hon. Friend for containing the euro crisis, with which he appeared to agree? None of them, as he will have noticed, has been acted upon by the European Central Bank, so may I now express to him my belief that the alternative policy of a fiscal union will, as my hon. Friend the Member for New Forest East (Dr Lewis) has just said, pose a great threat to the liberty of Europe, because it would inevitably make Germany still more dominant? Can the Germans be persuaded to study the reason for the Boston tea party? “No taxation without representation” is the bastion of freedom.

As ever, the Father of the House speaks with great knowledge, wisdom and foresight. The reason why he and I do not want to join the single currency is that we would not be prepared to put up with a supra-national power that would tell us what our debt, our deficit and everything else should be. That is why we do not want to join. If the countries of the eurozone want to make their system work, it is clear to me that fiscal rules are one thing that they may need, but that will not be enough without proper competitiveness, and—this is the third point that my right hon. Friend made—the full-hearted intervention and support of the institutions of the eurozone, including the European Central Bank. But it is a decision that those eurozone countries have to make themselves.