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Oral Answers to Questions

Volume 543: debated on Wednesday 18 April 2012

Scotland

The Secretary of State was asked—

Scotland Bill

On 21 March, I tabled a written ministerial statement to confirm that agreement had been reached with the Scottish Government on the Scotland Bill. The Scottish Government have tabled a legislative consent memorandum recommending that the Scottish Parliament support the Bill, and Members of the Scottish Parliament will vote later today.

The new Scotland Bill will pass significant powers to the Scottish Parliament, including those relating to tax. Among the representations that the Secretary of State has received, has there been a request from the First Minister to work jointly with him to highlight and promote those new powers, to show that we can maximise devolution while maintaining the integrity and strength of the partnership of the United Kingdom?

The right hon. Lady will not be surprised to hear that I have not received a representation on that particular subject. I agree with her that the Scotland Bill is a significant piece of legislation; it represents the most significant transfer of financial powers from London to Edinburgh since 1707. After the agreement on the legislative consent memorandum and, I hope, their lordships’ approval of the Bill’s Third Reading, we must quickly get on with its implementation in the right way, to show that devolution works, and works well for Scotland.

The Scottish Government and the majority of Members of the Scottish Parliament believe that the Scotland Bill could have been significantly improved, through the inclusion of job-creating powers among others, but that has not happened. Will the Secretary of State take this opportunity to confirm that the UK Government have agreed to safeguards ensuring that the Scottish Parliament will need to be satisfied that funding arrangements will not be detrimental?

I have a very different view of the future of Scotland from that of the right hon. Gentleman; I want to see Scotland continue to be a strong part of the United Kingdom. On his specific question, I am pleased that the Scottish Government have now accepted the Scotland Bill. We have worked carefully together to ensure that we have the right measures in place to implement it carefully for all the people of Scotland.

Will the Secretary of State acknowledge that, in the wake of the historic Scottish National party victory last year, every single political party is now miraculously in favour of more powers being devolved than are currently contained in the Scotland Bill? Which further powers does he want to see being exercised in Scotland?

Once again, we are seeing fantastic diversionary tactics from the right hon. Gentleman. He never talks about independence. Why not? Because his party cannot answer the fundamental questions about it. I am delighted that he wants to work with us, and I can tell him that devolution has always worked on the basis that we promote ideas, reach consensus and implement them. The debate on devolution will continue, but we must resolve the issue of independence. Why does he not want to get on with that debate?

Budget (Ministerial Meetings)

2. How many meetings he had with the Chancellor of the Exchequer in the two weeks preceding his financial statement of 21 March 2012 on the effect of the Budget on Scotland. (102887)

I have regular meetings with senior Cabinet Ministers, including my right hon. Friend the Chancellor of the Exchequer, in which a wide range of issues are discussed. This includes the period in the run-up to Budget 2012.

I thank the Secretary of State for his answer, although I have my doubts about whether he did have any such meetings. Anyway, there are more families losing their tax credits and more pensioners set to be affected by the granny tax in Glasgow than there are millionaires who will be affected by the mansion tax in the whole of Great Britain. Is that what he calls the Liberal Democrats speaking up for Scotland?

The hon. Gentleman just cannot get the Labour party off the hook of the mess that it left the economy in at the end of the last Parliament. We are having to sort out the biggest deficit in peacetime history and get ourselves on the path to sustainable growth. We have had to take some tough decisions, but I am proud of the fact that, because of the measures in the Budget, more Scots will be taken out of income tax altogether and pensioners will receive the biggest cash increase in their pensions that they have ever had, in contrast to the insult of the Labour party’s 75p increase.

Did my right hon. Friend or the Chancellor receive any Budget representations from the Scottish Government about the financial consequences of Scotland separating from NATO?

In the discussions that the Scottish Secretary had in the run-up to the Budget, did he make a case for re-profiling capital investment for funding shovel-ready projects, which would be the most effective thing we could do to build gross domestic product growth, or did he simply roll over, have his tummy tickled and accept the tax cut for millionaires?

The hon. Gentleman should reflect carefully on the case he is trying to make. Perhaps, in a rare moment of generosity, he would welcome the fact that since the spending review, we have announced £1 billion of further spending allocations to the Scottish Government. We are continuing to create the conditions for sustainable growth to support businesses, and in Dundee there are now enterprise zones that get 100% capital allowances. I had hoped that the hon. Gentleman would welcome that.

In Argyll and Bute the high price of fuel is doing damage to businesses and people’s incomes, because of the long distances people by necessity have to travel. Will the Secretary of State please have a word with the Chancellor and encourage him to cancel, if the price of fuel remains high, the August fuel duty increase?

My hon. Friend is a consistent campaigner on this issue, and I am always happy to have discussions with him about it. I hope that he, like me, would recognise that as a result of the measures we have taken, we have provided a cut of 10p on fuel relative to what Labour was proposing, and provided support to remote rural communities in Scotland as well.

Will the Secretary of State tell us the last time he ate a hot bridie? Did he discuss with the Chancellor the impact of taxation on hot bridies, and does he recognise that his Front-Bench colleague looks as if he has eaten a lot of hot bridies recently?

I would have thought that the hon. Gentleman was above such personal attacks. My own preference is for fish and chips. He will know that there are plenty of places in Galashiels and elsewhere where a fine fish supper can be had. We have had to take tough decisions, but have made sure that everything is fair on that particular front.

Does my right hon. Friend agree that in difficult economic times it is vital for the Government to help people on low incomes by cutting their taxes and taking the lowest paid out of tax, which is in stark contrast to the last Labour Government, who doubled the 10p tax rate, hitting the lowest paid the hardest?

My hon. Friend is entirely right. Our priority in difficult times must be to give help to people on low and middle incomes—the earners who need the most support. Because of that, more than 160,000 Scots will be out of income tax altogether, and millions more will pay less tax. That is the right way to approach this.

May I begin with a quote?

“The simple equation is that we think the priority is to help those on the lowest incomes. Clearly that is going to have to be paid for and we think it is fair that those who have the broadest shoulders should be the ones to contribute to that.”

Can the Secretary of State tell us which Cabinet member said that about the recent Budget?

The important point is that in the very difficult economic circumstances that we inherited from the hon. Lady’s Government, we must fix the deficit, get the economy on the right track and in doing so make decisions that help the lowest paid and middle-income earners. That is what we are doing by taking people out of tax altogether and by ensuring that we reduce the tax burden on others.

I am surprised that the Secretary of State did not even recognise a quote from himself. He should know that the Resolution Foundation has confirmed that cuts to tax credits will dwarf any gains from an increase in personal tax allowances—so he needs to stop using that argument. Will he tell us why he has changed his position since he last spoke to the Evening Standard, when more than 400,000 Scottish pensioners are going to be hit by the granny tax and more than 84,000 families in Scotland will have lost all their tax credits, while at the same time his Budget has given 16,000 of the richest Scots a massive tax cut? Will the Secretary of State finally admit that this Budget has hit Scotland hard and has done more for millionaires than for hard-working families? When will he stop being a Tory front man and stand up for working people in Scotland?

The last Labour Secretary of State, who has now joined the hon. Lady on the Front Bench, said that Labour had to be credible on the economy and on the financial regime, but it is not being credible in the proposals it is making. I stand by my comments. My intention and that of my colleagues with this Budget is to ensure that we provide support to the lowest and middle-income earners and that those on the highest earnings pay their way. Through the abolition of tax reliefs, we will ensure that they do.

Funding Formula

3. What discussions he has had with the Chancellor of the Exchequer on the funding formula for Scotland. (102888)

The Government are aware of the concerns that have been expressed about the current system of devolution funding, whereby changes to the block grant are calculated according to the Barnett formula. Owing to the unprecedented deficit that we inherited, our immediate priority is to reduce the deficit, and we have no plans to change the present arrangements before the public finances have been stabilised.

Given that the Government have no plans to replace the current formula with a formula based on need, and given the requirement for clarity so that the people of Scotland know what proportion of the national debt they will inherit before they vote, does my hon. Friend agree that the Barnett multiplier would provide a good solution?

I believe that we need to move on from the discussion of issues of process relating to the referendum, and engage in a substantive debate on the issues that would affect Scotland if it became independent. Having, it would appear, campaigned relentlessly for independence, the SNP now seems to want to delay the question and the issues for as long as possible.

Does the Minister agree that the high price of fuel is creating major problems in Scotland, and that, at a stroke, cutting VAT, which is perhaps the unfairest tax in the country, would help Scottish families, who are suffering greatly as a result of the Budget.

Order. I hope that the answer will refer to the funding formula for Scotland, as the question should have done.

The funding formula for Scotland is calculated on the basis of a basket of taxes raised by the United Kingdom Government. Scots would be much worse off if fuel duty were 10p higher, as it would have been if Labour were in power.

Does my hon. Friend agree that it is vital to maintain the Union in the interests of both England and Scotland, but that the funding formula should be fair to both countries?

I agree absolutely with my hon. Friend’s sentiments, but as he and many other Members are aware, this Government inherited the worst deficit in peacetime history from the Labour Government, and stabilising our nation’s finances must be the focus of their efforts.

My question relates directly to the question from the hon. Member for Bexleyheath and Crayford (Mr Evennett) and the Minister’s answer to it. Does the Minister agree that the Scotland Bill will increase the amount of revenue gathered in Scotland to about a third of its spend, and will thus decrease dependency on a block grant?

I agree that the Scotland Bill represents a radical, historic and significant change to Scotland’s financing. More than a third of spending by the Scottish Parliament will result from funding from taxes that it determines and raises. That is a major step forward in terms of devolution and accountability, and should be welcomed by all Members.

Referendum Consultation

4. What assessment his Department has made of the responses to its consultation on the proposed referendum on independence for Scotland. (102889)

8. What assessment his Department has made of the responses to its consultation on the proposed referendum on independence for Scotland. (102893)

The Government published their response on 4 April. The responses to the consultation gave strong endorsement to a referendum involving a single, clear question on independence, overseen by the Electoral Commission, using the same franchise as that used to elect the Members of the Scottish Parliament, and held sooner rather than later.

Does my right hon. Friend agree with the consensus established by the responses to the consultation, which is that people do not want to wait 1,000 days to exercise their votes in a referendum?

This is a fundamentally important decision, the most important that we as Scots will make in our lifetimes, and the longer it is delayed, the greater the uncertainty will be. The sooner we can get on with resolving the process and the question, the better.

Do the responses of the consultation reflect my view that there should be a simple “yes or no” question in any referendum if we are to secure a decisive outcome for Scotland?

My hon. Friend is entirely right. We must not muddle the issue of independence with a separate debate on the future of devolution. Today we mark another important milestone in the development of the Scotland Bill. What we want after its enactment—assuming that we receive their lordships’ support—is a clear decision on the future of our country, and for it to stay in the United Kingdom.

Does the Secretary of State wish to take this opportunity to thank the Labour party for providing his meagre consultation with more than a quarter of the responses? I suppose that that adds a new meaning to the term “Labour block vote”. Can he tell us how many other responses he received from the Labour website with a slightly amended text, and why the Labour party is doing all the groundwork for his Tory-led Government’s consultation?

It should hardly be a surprise to the hon. Gentleman that political parties want to take part in consultations. This is an intensely political process. Even this morning, there was a pre-prepared script on the Scottish National party website inviting people to respond to the SNP’s consultation, so SNP Members should be a wee bit careful about the argument they are trying to make.

Some 70% of respondents to the UK consultation felt that 2014 was too long to wait to decide Scotland’s constitutional future. Businesses and financial institutions in my constituency have made it clear that this state of limbo is damaging the economy in Scotland. Has the Secretary of State received similar representations from businesses elsewhere in Scotland?

The hon. Lady is entirely right to draw this issue to the attention of the House and to highlight that across Scotland and the UK, businesses, like individuals, want answers. We need to resolve this hugely important issue sooner rather than later, so we do not lose out on investment in jobs and we understand our future within the UK.

Age-related Personal Allowances

5. How many people in Scotland will be affected by the Chancellor of the Exchequer’s proposal to withdraw the additional personal allowance for people over 65 years of age. (102890)

9. How many pensioners in Scotland will be affected by the Chancellor of the Exchequer’s decision on age-related personal allowances. (102894)

10. How many pensioners in Scotland will be affected by the Chancellor of the Exchequer’s decision on age-related personal allowances. (102895)

13. How many pensioners in Scotland will be affected by the Chancellor of the Exchequer’s decision on age-related personal allowances. (102898)

Will the Government not admit that the figures do not reveal the fact that this is an attack on people who have put away money for their retirement? The amount involved is up to £30,000 a year. This is an attack on middle-class people. There is also an attack on single people, who will lose income through being hit by the bedroom tax. People cannot be elderly and they cannot be single—and it would appear they cannot be hungry either, as there is a tax on fish and chips.

It will not surprise the hon. Gentleman that I do not accept his analysis. He and others who scaremonger on this issue fail to point out that more than half of those in Scotland aged over 65 will not pay any tax at all.

Is the Minister not ashamed of his Government’s decision to reduce tax for the wealthiest Scots while at the same time penalising pensioners with a tax grab, whereby they will lose up to £322 per annum?

I know that the hon. Gentleman was not a Member of this Parliament for most of the 13 years of the last Labour Government, but most of his colleagues from Scotland were, and I did not hear them calling at that time for an increase in the higher rate of income tax. He is wrong to say that there will be losers in relation to the age-related allowances; there will be no cash losers.

If, as the Government say, this measure is about fairness and simplification, why did they not wait until the full £10,000 personal allowance was in place before imposing this stealth tax on pensioners?

I acknowledge that the hon. Lady is well known for speaking up both for the low-paid and for those on the minimum wage. That is why I would have thought that she would have welcomed the fact that the Government are raising the personal allowance to £10,000 during this course of this Parliament. [Interruption.]

Order. There are a lot of noisy private conversations taking place in the Chamber. I would like to hear the questions and the answers.

What does it say about the priorities of this Government that they impose a granny tax on 367,000 Scots while giving a tax cut to the wealthiest 14,000 Scots?

What the hon. Gentleman and his colleagues fail to acknowledge is that this Government have delivered the largest pension rise in the last 30 years, whereas the last Government, which his party led, introduced a pension rise of 75p, so we are not going to take any lectures from Labour on the treatment of pensioners in Scotland.

Just how out of touch are this Government if they think that it is right or fair that almost 400,000 Scottish pensioners should pay on average £83 a year more in tax from next April just so that 16,000 top-rate taxpayers receive a tax cut of £10,000 a year on average? People retiring next April will face an annual tax hike of £322 a year because of the granny tax and the ending of the savings credit in 2017, on top of higher VAT and cuts in winter fuel allowance introduced by this Chancellor. With a record in government like that, surely it is no surprise to the Minister that Tory election strategists are gloomy about winning any seats at all in Scotland at the next general election.

What I think is fair is that half of pensioners over 65 in Scotland will not pay any tax at all; that those earning less than £10,000 will, by the end of this Parliament, be subject to a personal allowance of £10,000; and that this Government have delivered the largest increase in the pension—£270 compared with the 75p offered by the previous Government.

Those pension increases will, of course, be wiped out by this tax grab. People living on modest pension incomes have already paid a very high price for the financial crisis. They have lost the value of their savings and investments, and they are having to face inflation and extremely low interest rates. How can the Minister justify this tax grab on pensioners while taxes are being cut for millionaires?

I am afraid that I am not going to accept any lectures on economics from the hon. Lady. She is offering pensioners in Scotland the prospect of breaking up the United Kingdom, with no certainty as to where pension funding would come from.

Independence (Currency)

6. What assessment his Department has made of the implications for the currency used in Scotland of a vote in favour of independence for Scotland. (102891)

We are confident that people in Scotland will continue to support the United Kingdom in any referendum. It is the Scottish Government who are proposing independence and they must answer for the implications of their proposals, including on currency matters.

Is it not the case that the weight of legal opinion suggests that an independent Scotland would become an European Union accession state and would therefore be obliged to join the euro?

The Scottish National party is changing its position on what currency it wishes to adopt and how it would go about this. There is no doubt that the SNP needs to answer some hard questions on this matter and resolve, for us all, what an independent Scotland would look like. I think that Scotland is better off in the UK.

The Secretary of State will be aware that a separate Scotland would have to create its own currency, join a weaker euro or make its biggest business partner its biggest business competitor, with the Bank of England setting its interest rates, its spending limits and its borrowing limits. Does this not show the incoherence of the SNP’s economic policies?

The hon. Gentleman is entirely right to point out that even in its best moments, when it tries to offer us some detail, the SNP does not resolve what a monetary union with the rest of the UK might look like, how it would deal with the fiscal rules and the regulatory environment or whether the Bank of England would be the lender of last resort. I think that Scotland deserves some answers on those points.

Does the Secretary of State acknowledge that if an independent Scotland were to use the pound sterling, that would require conditions that cannot be known now? Indeed, that is one of a growing number of issues that are unknown and unknowable, and it shows how uncertain Scotland’s future would be if it left the United Kingdom.

My right hon. Friend is entirely right that when given the opportunity, the SNP ducks giving the answers to all these hard questions, because it does not have those answers.

Fuel Poverty

7. What steps are being taken by the Government and the Office of Fair Trading to tackle fuel poverty in Scotland. (102892)

The Secretary of State chaired the first ever annual summit in Scotland on fuel poverty, bringing together the heads of the big six energy companies and Scottish consumer groups. That led to suppliers providing information to improve the application of key policies in Scotland, such as the warm home discount scheme. I am convening a follow-up meeting soon to review progress.

Does the Minister agree that the problem of a lack of competition in the availability and provision of heating oil in the Scottish border region needs addressing urgently?

I represent a large rural constituency in the Scottish borders, so I certainly share my hon. Friend’s concerns, although I understand that in his constituency there are some innovative initiatives whereby communities are coming together to purchase heating oil and are therefore able to negotiate better prices with suppliers.

As well as pressing the Office of Fair Trading, will the Minister press his own Cabinet colleagues to look at providing practical help, for example by bringing forward the pensioners’ winter fuel allowance for off-grid consumers to allow them to fill up their tanks before winter hits, when prices tend to be lower?

The off-grid issue is of concern in rural Scotland, as elsewhere, and I would be happy to meet the hon. Gentleman to discuss his concerns.

Devo-Max

Devo-max is a term used by the Scottish Government with no clear definition. This Government are focused on delivering the Scotland Bill, which will represent the largest transfer of fiscal powers to Scotland since the Act of Union in 1707.

Does the Secretary of State agree that devo-max is a wonderful idea for Scotland and will he therefore discuss with some of his Cabinet colleagues extending that wonderful idea to the regions and localities of England?

It is always dangerous for a Scot to enter into the constitutional debate in England but there is a lively debate to be had. The important thing today is that we acknowledge the important next steps we are taking in Scotland through the real proposals in the Scotland Bill which are due to get the consent of the Scottish Parliament and, I hope, their lordships next week. That will put us on track for the biggest development in devolution since 1998.

Prime Minister

The Prime Minister was asked—

Engagements

I am sure the whole House will wish to join me in paying tribute to those servicemen who have fallen since we last met for Prime Minister’s Question Time—Captain Rupert Bowers from 2nd Battalion the Mercian Regiment, Sergeant Luke Taylor from the Royal Marines, Lance Corporal Michael Foley from the Adjutant General’s Corps, and Corporal Jack Stanley from the Queen’s Royal Hussars who died on Sunday 8 April from wounds sustained in Afghanistan in February. We are indebted to their courage and their selfless service and at this difficult time we send our heartfelt condolences to the families, friends and colleagues of these men, who have made the ultimate sacrifice for our country. They will not be forgotten.

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

I, too, would want to offer my condolences to the families of those who have lost their lives in conflict in recent days.

In Northern Ireland, party political donations are not subject to the same publication rules as those in the rest of the UK. However, my party has delivered on our commitment to publish the relevant information on a voluntary basis. Will the Prime Minister commit to bringing the Northern Ireland publication rules into line with the rest of the UK, and further will he demonstrate his commitment to openness and transparency by following our lead and publishing voluntarily lists of donors to the Conservative party in Northern Ireland?

I am very happy—we publish those donor lists and quite rightly so. As the hon. Lady knows, the previous Government passed legislation with specific treatment for Northern Ireland for reasons that I think are quite well known to the House. As far as possible, we want Northern Ireland political parties to show the same approach as in the rest of the UK. If parties choose to publish that information on a voluntary basis, that is very welcome, so I very much welcome what her party has done, leading by example.

Following the unlawful killing of my constituent David Gray as a result of his out-of-hours GP’s inability to speak English, I welcome today’s announcement of a consultation on strengthening the controls on foreign doctors. Does my right hon. Friend agree that GPs working in England should be able to speak English and that the legitimate desire for freedom of movement within the EU is not an excuse for compromising patient safety?

My hon. Friend is entirely right, and today’s announcement makes it clear that doctors should not be operating in the NHS in our country unless they can speak English. Under the proposals, senior doctors will need to assess whether doctors have the necessary language skills to be able to communicate effectively with patients. If they cannot do that, they cannot practise.

Let me join the Prime Minister in paying tribute to Captain Rupert Bowers from 2nd Battalion the Mercian Regiment, Sergeant Luke Taylor from the Royal Marines, Lance Corporal Michael Foley from the Adjutant General’s Corps and Corporal Jack Stanley from the Queen’s Royal Hussars. I join him in saying that they showed the most enormous courage and bravery and that all of our thoughts are with their family and friends.

Will the Prime Minister confirm that the cut in the 50p tax rate on which we will be voting tonight will be worth at least £40,000 a year to Britain’s millionaires?

The cut in the 50p tax rate is going to be paid five times over by the richest people in our country. I notice that the right hon. Gentleman does not ask about unemployment. Every month when unemployment has risen he has leapt to the Dispatch Box to leap on the bad news, but today we see unemployment fall by 35,000 and employment go up by 53,000 but no welcome from him. Does that not show all his priorities? Will he now welcome the increase in people employed in our country?

Only this Prime Minister could think it was a cause for celebration that more than 1 million young people in this country are still out of work. It is no wonder people think he is out of touch. The House will have noted that he could not deny that Britain’s 14,000 millionaires are getting a £40,000 cut in their income tax. As for the figures produced for the Budget, today even the Treasury Committee says they are bogus. Millionaires are winners from this Budget, but what about everyone else? Will he confirm that by freezing the personal tax allowance year on year on year, 4.4 million pensioners will lose as much as £320 a year?

The Budget is about cutting taxes for 24 million working people, taking 2 million people out of tax, freezing council tax and cutting corporation tax so that we are competitive with the rest of the world. For pensioners, this month we have increased the basic state pension by £5.30 a week, far more than Labour ever would have done. If the right hon. Gentleman is concerned about the 45p top rate of tax, perhaps he could explain why the amendment he will be asking everyone to vote for at 4 o’clock this afternoon would get rid of the 45p top rate of tax and leave us with a 40p top rate? He has not had much to do over the last month—some of us have been quite busy. He has had almost nothing to do, but even what he has to do he is completely incompetent at.

The Prime Minister is talking rubbish as always. He points to the increase in the basic state pension. Only this Prime Minister could try to con Britain’s pensioners by taking the credit for high inflation. Everybody will have noticed that he did not deny that Britain’s pensioners are seeing a tax increase year on year. It is not just pensioners he is trying to con; it is families with children. Will he confirm that, according to the Institute for Fiscal Studies, as a result of all his tax changes from this April families with children will be more than £500 a year worse off?

I notice the right hon. Gentleman has moved off the top rate of tax because he does not want to talk about it. He has to withdraw his amendment, because if he is successful he will give us a 40p tax rate. The other reason he does not want to talk about the top rate of tax is that he cannot convince Labour’s candidate for Mayor of London to pay his taxes.

When it comes to pensioners, what we have done is increase the basic state pension; we have kept all the pensioner benefits, and the freeze in age-related allowances means there will be no cash losses. Compare that with Labour’s pathetic 75p increase proposals. We remember what Labour’s Budgets did. Will he stand up and condemn Labour’s candidate for Mayor of London who will not pay his taxes?

The Prime Minister is very excited today. In case he has forgotten, it is Prime Minister’s questions. The clue is in the name. I ask the questions and he is supposed to answer them.

No answer on pensioners, no answer on families—what about charities? The Prime Minister’s big idea was the big society, but since the Budget—[Interruption.] I do not know why he is taking advice from the part-time Chancellor sitting next to him—I wonder which job he is doing today. Since the Budget, the Government have managed to insult people who give to charity and he has insulted the charities themselves by implying that they are bogus. The Prime Minister claimed that he worked on the Budget line by line. Did he know that when he signed off the Budget it represented a hit of as much as £500 million on Britain’s charities?

Those figures are completely wrong. First, we heard absolutely no defence of Ken Livingstone—not a word. This is all about making sure that the richest people in our country pay their taxes. Last year there were over 300 people earning over £1 million who paid a rate of tax of 10%. I do not think that is good enough, and we have a Labour candidate for Mayor of London who is paying less tax on his earnings than the person who cleans his office. I think that is disgraceful. Why will the right hon. Gentleman not condemn it?

Order. The usual level of orchestration from the usual suspects on the Government Back Benches. Be quiet, Mr Burns. It will be better for your health. You are the Minister for Health. Get better.

What a desperate Prime Minister, who cannot even justify his own Budget. If he wants to talk about the Mayor of London, we have a candidate for Mayor of London who will cut tube fares, who will make rents fairer, who will bring back the education maintenance allowance. What has the Prime Minister got? A candidate for Mayor of London who is out of touch and was arguing for the cut in the 50p tax rate.

On charities, the reality is that the Prime Minister is not making the rich worse off. He is making charities worse off. Over the past month we have seen the charity tax shambles, the churches tax shambles, the caravan tax shambles and the pasty tax shambles, so we are all keen to hear the Prime Minister’s view on why he thinks, four weeks on from the Budget, even people within Downing street are calling it an omnishambles Budget.

We have a Mayor of London who pays his taxes. Nothing from the right hon. Gentleman about unemployment, nothing about the rich needing to pay their taxes, nothing about Ken Livingstone’s responsibilities. The right hon. Gentleman asks about the Budget. This Budget cut taxes for 24 million people. This Budget cut corporation tax. This Budget made Britain competitive. He talks about my last month—I accept that it was a tough month. Let us have a look at his last month. He lost the Bradford West by-election. That was a great success! He has given one person a job opportunity—George Galloway. The right hon. Gentleman lost the Bradford West by-election, he showed complete weakness when it came to the Unite trade union and the fuel strike, and he has a candidate for Mayor of London who will not pay his taxes. That is his last month—as ever, completely hopeless.

The Prime Minister talks about the fuel strike. I will not take any lectures on industrial relations from a Government and a Prime Minister who caused panic at the pumps. That is the reality. When he gets to his feet, let him apologise for the gross irresponsibility, for the Cabinet Minister who caused that panic at the pumps, and for himself. [Interruption.] The Prime Minister should calm down. This Budget comprehensively fails the test of fairness and it spectacularly fails the test of competence. We have a Prime Minister who is unfair, out of touch and incompetent. Never mind “We’re all in it together”; when will he get a grip on his Government?

The right hon. Gentleman will not take any lectures on the fuel strike because he is in the pockets of the people who called the fuel strike. That’s right. They vote for his policies, they sponsor his Members of Parliament, they got him elected. Absolutely irresponsible—that is what we have heard once again from the right hon. Gentleman. Not good enough to run the Opposition, not good enough to run the country.

Has my right hon. Friend noted that Standard & Poor’s, the rating agency that downgraded both the US and France, affirmed a stable outlook on the UK’s triple A rating on Friday and said:

“We could lower the ratings if we came to the conclusion that the pace and extent of fiscal consolidation was slowing beyond what we currently expect”—

in other words, if the discredited policies of the Opposition were adopted?

My hon. Friend makes the important point that in this week of all weeks we are getting yet more reminders from other countries in Europe of the importance of getting on top of deficits and debts and of having a proper plan to deliver that. That is what needs to happen. What Standard & Poor’s has done is welcome, and we also need to keep our interest rates low to ensure that we deliver the growth our economy needs. It is absolutely extraordinary that the shadow Leader of the House of Commons has gone on television today calling for higher interest rates. I do not think the Leader of the Opposition focused on that—he had better go and look at the transcript.

2. In January, the First Minister of Northern Ireland requested that the Prime Minister meet the families of 10 innocent workmen murdered in the Kingsmills massacre of 1976. I know that the Prime Minister has met other families and that he desires to be balanced in his approach. Will he assure me that he will meet the families of those innocent victims? (102686)

The Kingsmills massacre was an appalling event in Northern Ireland’s history. I am well aware of that and my sympathies are with the families. I will arrange for the families a meeting with the Northern Ireland Secretary and, if it is possible for me to attend, of course I will do that as well.

The Prime Minister will be aware that no VAT is chargeable on caviar, yet the Government propose to charge VAT on the Cornish pasty. Can he tell me why that is fair?

I understand that feelings in Cornwall run high on this matter, but let me explain that what I think is unfair is that the same products that are subject to VAT when sold in a fish and chip shop can be sold in supermarkets without being subject to VAT. I do not think that that is fair and that is why it is right for us to redraw the boundaries.

3. While the Prime Minister entertains millionaire party donors with cosy kitchen suppers at his Downing street flat, thousands of ordinary people are queuing at food banks because they cannot afford to feed their families. What do those people who are worst hit by the Government’s cuts and the biggest rise in food prices since August 2010 have to do to get a quiet word in the Prime Minister’s ear? Is there any chance he could invite some of them round for supper? (102687)

What this Government have done is introduce the biggest increase in the child tax credits that go to the poorest families in our country. In April 2011, there was a £255 increase—the largest ever—and there is a further increase this year of £135. Added to that, we have taken 2 million of the poorest people out of income tax altogether, and one of the things that would hit families hardest is an increase in interest rates, which is now the official policy of the official Opposition.

Given that 1,200 jobs at Group Lotus in south Norfolk might be at risk following the company’s recent change of ownership, will the Prime Minister put all possible pressure on the Malaysian Government to ensure that DRB-HICOM permits the sale of the business only to buyers who wish to see it continue as a going concern in Norfolk?

I raised this issue with the Malaysian Prime Minister and with the new Malaysian owners of Lotus’s parent company. Lotus makes a key contribution to the UK automotive sector. The sector is doing well and I want to see Lotus succeed and to have a secure future. We are in contact with the company, monitoring the situation very closely and ensuring that it knows about the regional growth fund money that is available.

4. This flawed Budget makes 230,000 additional pensioners pay tax and will bring 500,000 extra parents into the self-assessment regime because of tax on their child benefit, yet this week we have heard that 10,000 members of staff will be cut from HMRC. Is not the Chancellor so incompetent that he will not have the staff to deliver his own budget plans? (102688)

We have increased staffing at HMRC to ensure that we crack down on the sort of tax avoidance that is shown, to put it frankly, by the hon. Lady’s candidate for the Mayor of London. That is what it has come to and those are the measures we are taking.

5. I am sure that I speak for many across the House in expressing support for entrepreneurship and the creation of new businesses. Does my right hon. Friend agree that service companies set up by Labour politicians to disguise their hypocrisy on tax are a disgraceful betrayal of real entrepreneurs up and down the country? (102689)

My hon. Friend makes a good point. The Opposition do not want to hear it, but the fact is that the man whom they are putting forward to be Mayor of London has set up a company to funnel all this money into and is potentially paying a lower tax rate than the people who would work for him at the Greater London Assembly. It is completely disgraceful and even at this late stage I call on the Labour leader to get the Labour candidate to publish all the information so that we can see the tax that he is paying.

Does the Prime Minister agree that the specialist ACE Centre in Oxford, currently facing closure, does outstanding work unlocking the isolation of children with acute communication difficulties? Given the pressure charities are under, will he step in and pull together some bridging finance so that this outstanding centre can continue helping the children and young people who need it so much?

As the right hon. Gentleman probably knows, I do know that centre. I have visited it in the past, and I am very happy to look with him, as a fellow Oxfordshire MP, at what can be done to help the centre and the very good that it does, particularly for disabled children.

6. The Prime Minister rightly wants to crack down on tax avoidance, so what does he think about Ken Livingstone, who said that “I get loads of money, all from different sources, and I give it to an accountant and they manage it”?Is that modern socialism for you—[Interruption.] (102690)

They don’t like to hear it. I thought the Labour party wanted rich people to pay their taxes properly. That is what we have ensured through the Budget and through the extra resources for the Revenue, so why the deafening silence from the Opposition? Why not a condemnation of that appalling behaviour?

Does the Prime Minister share my concern at the actions of the Northern Ireland Attorney-General in using an outdated and discredited law, of disrespecting the court, to invoke contempt proceedings against the former Northern Ireland Secretary, my right hon. Friend the Member for Neath (Mr Hain), for comments in his memoirs? Should not respect for the independence of the judiciary be balanced with the rights of individuals to fair comment on that judiciary?

I do have a great deal of sympathy with what the right hon. Gentleman says. Parliamentary privilege, obviously and quite rightly, allows hon. Members to express their views in Parliament. In terms of what is said outside Parliament, let me just say this: there are occasions, as we all know, when judges make critical remarks about politicians; and there are occasions when politicians make critical remarks about judges. To me, that is part of life in a modern democracy, and we ought to keep these things, as far as possible, out of the courtroom.

7. I, like the Prime Minister, welcome the strides towards democracy being made in Burma, and I welcome also his efforts to achieve a controlled suspension of sanctions. With a decision on his proposals due next week, will he ensure that measures to monitor human rights in Burma are included in the discussion? (102691)

My hon. Friend is entirely right. While it is clear that the Burmese regime is making some steps towards greater freedom and democracy, we should be extremely cautious and extremely careful. We want to see the further release of political prisoners, we want to see the resolution of ethnic conflicts and we want to see that democratisation process continue. That is why we are pushing across Europe for the suspension of sanctions, excluding the arms embargo, which should stay, rather than for the lifting of sanctions. We now have support for that position from most other leading European countries, and I hope that we can deliver it. That would be the right thing in demonstrating to the regime that we want to back progress, and it would also strongly support what Aung San Suu Kyi has said is the right approach.

8. My constituents are angry that the Prime Minister’s priority in the Budget was to give a £40,000 tax cut to millionaires. Will he tell the House how much collectively, as a result of the reduction in the top rate of income tax, his Cabinet will be better off? (102692)

Let me just make this point about the top rate of tax—[Hon. Members: “Answer.”] Let me just make this point. The Labour party had 13 years to introduce a 50p top rate of tax. It did so one month before a general election that it knew it was going to lose. That top rate of tax has not raised any money, and the 45p rate that we have is higher than what Labour had for 12 of its 13 years in government.

9. Earlier this week the journalist Mary Ann Sieghart wrote an article in The Independent about the many young south Asian women who feel that traditionally their votes have been hijacked through abuse of the postal vote system. Will my right hon. Friend please look at revisiting the issue of postal votes on demand not only to strengthen our democracy and trust in it, but to ensure that all voters have a vote and, particularly in the case of south Asian young voters, their votes are not stolen? (102693)

My hon. Friend makes a very important point. I am happy to look at the issue of postal voting, but first we need to sort out individual voter registration. This is vital to make sure that we do not have a system that allows lots of people to be logged on to a housing register when actually nobody is living there at all. There is growing evidence of abuse and concern, and it is right that we are acting on it.

10. Two years ago, in his pensioner pledge, the Prime Minister said:“it is fundamental to me that people who have worked hard all their lives, and are now drawing their pension, deserve to be treated with respect.”Does he really think that trying to sell his granny tax as a “simplification” is treating pensioners with respect? (102694)

Let me explain what we are doing for pensioners. We are increasing the basic state pension by £5.30 a week this April; that is not an increase that Labour would have made. At the same time, we are saving the winter fuel payments, the cold weather payments, the free television licence, the free bus pass, and the other pensioner benefits. That is what this Government are doing. At the same time, we are examining the case for a single-tier pension of around £140 each. I would have thought that Members in all parts of the House welcomed that, because it would be a well-paid basic state pension that encouraged people to save before they became pensioners, and a thoroughly welcome reform.

Over 30 years ago, a British toddler, Katrice Lee, went missing in Germany, and, partly due to the chronic mishandling of this case by the British military police, her parents still have no idea what happened to their little girl. Will the Prime Minister agree to meet the family to hear their calls for an independent inquiry into the bungling of this investigation and give them the closure that they so desperately need and deserve?

I will certainly look at the case that my hon. Friend mentions and see what more we can do. These cases of missing people are completely tragic, and the family do not get closure, as this case and, sadly, other tragic cases show. I am very happy to look at the case and to get back to her.

11. Churches and places of worship, including many in Blackpool, do immensely valuable work in adapting their buildings for community and voluntary sector use. Why, then, is the Prime Minister backing a 20% VAT raid in the Budget on alterations to listed buildings, which will cost many of those churches and places of worship millions of pounds—in the case of the Church of England, an estimated £10 million—thereby infuriating them and the charities concerned and shooting his own big society in the foot? (102695)

Let me try to explain to the hon. Gentleman the basic unfairness in the current system. Repairs to churches are already subject to VAT, whereas alterations to listed buildings are not subject to VAT. That means that if you repair a church, you do pay VAT, but if you put a great big swimming pool in a listed Tudor house, you do not pay VAT, so it makes sense to redraw the boundaries. But this is the crucial point: we will be putting money aside to make sure that churches that are undertaking repairs and alterations get the moneys that they need.

A few weeks ago in this House, I asked the Prime Minister to what extent he believed that the Whitehall machine—the Sir Humphrey factor—was frustrating reform. He assured us that it was not. According to the Financial Times, in Malaysia last week the PM said:

“I can tell you, as Prime Minister, it”—

“Yes Minister”—

“is true to life.”

Can he tell us what has happened to make him change his mind?

12. The Prime Minister’s official spokesman argued last week that rich individuals were avoiding tax by giving to charities which “don’t, in all cases, do a great deal of charitable work”.Can the Prime Minister name any of these charities? (102696)

The figures I gave earlier show that last year 300 people earning over £1 million in our country got their rate of tax down to 10%. Of course we must protect charities and encourage philanthropic giving, but we need to make sure that rich people are paying their fair share of taxes. I would have thought that that principle had some attraction in all parts of the House.

Q13. Does my right hon. Friend agree that universities should be free to admit students on the basis of merit? (102697)

My hon. Friend is entirely right. It is welcome that a greater proportion of 18-year-olds are applying to university than at any time in the past 13 years. No one pays up-front for their tuition or other fees, which is also welcome. He is absolutely right that university entry is about academic merit.

Q14. The Deputy Prime Minister said recently:“We have succeeded to pull the economy back from the brink”.With record youth unemployment, growth lower than forecast and inflation up, does that not show that the Deputy Prime Minister is the Prime Minister’s broken arrow—he does not work, but the Prime Minister cannot fire him? (102698)

I notice that there was absolutely no welcome of the fact that today unemployment has fallen, employment has gone up and youth unemployment has come down. Of course, unemployment is much too high and far more needs to be done. Let me bring the House up to date with one scheme, the work experience scheme, on which the evidence is growing. Fifty per cent. of the young people going into the scheme come off benefits within six months. That means that it is 20 times more cost-effective than the future jobs fund. That scheme is part of the youth contract that the Deputy Prime Minister has been spearheading, and he has been doing an extremely good job.

Order. Hon. Members should not be yelling at the hon. Lady. It is very discourteous. I want to hear what she has to say.

Perhaps Members should listen before yelling. Today, a cross-party group of MPs from across the political spectrum published a report into a matter that is incredibly important to many of us: how we can keep our children safe online. We think that internet service providers should do more and that the Government should deliver a strong lead on this issue. Will the Prime Minister undertake to at least read the summary of the report—I know that he is busy—and perhaps to meet us to discuss our recommendations?

I am very grateful to my hon. Friend, who dropped off a full copy of the report to my office this morning. She raises an important subject. As a parent and as a politician, I am keen that we should help to protect people from such material. I have got together some of the technology and telephony companies to look at offering a choice of blocking all adult and age-restricted content on their home internet. If we start to work with the companies to deliver such changes, I think that we can protect more young people.

Q15. The Government have said that they want to simplify the tax system, so why are they introducing changes to child benefit that the Treasury Committee today said will create further uncertainty? (102699)

I say to the hon. Lady, who did very good work as head of the Child Poverty Action Group, that we have to make difficult decisions to deal with the debt and the deficit. I do not think that it is defensible to ask people who earn £20,000 or £30,000 to pay their taxes so that people sitting in this House can get child benefit. I do not think that that is fair. I know that Opposition Members will walk through the Lobby tomorrow for something that they will benefit from financially, but I think that it is profoundly wrong. [Interruption.]

The caravan industry employs thousands of people across the country, and nowhere more so than in east Yorkshire, where the vast majority of such manufacturing is located. Will the Prime Minister listen to my pleas and those of other local MPs, including my hon. Friend the Member for Beverley and Holderness (Mr Stuart) and my right hon. Friend the Member for Haltemprice and Howden (Mr Davis), and think again about this tax, which will cripple an already suffering industry?

Obviously, I have listened carefully to the points that my hon. Friend has made, and the Chancellor has met other Yorkshire MPs. Again, this is an issue about drawing the VAT boundaries fairly. I do not think that it is fair that VAT is payable on a mobile caravan, but not on a stationary one. No one is talking about putting VAT on park homes, which are people’s permanent homes. This is about a fair drawing of the boundaries to ensure that there is a fair approach in our country.

As I was saying, Mr Speaker, there is an iron-clad consensus across the Front Benches of the three main parties about what they call a mission, but which, given the amount of blood on the ground and the rapidly deteriorating military situation, most of us call a war in Afghanistan. In the wake of Ms Gillard’s decision to accelerate the withdrawal of Australian forces from that war, and in the wake of the Bradford West by-election, will the Prime Minister reconsider his planning on our withdrawal from the bloody maw of Afghanistan?

First, I congratulate the hon. Gentleman on his stunning by-election victory and his return to the House of Commons. I know that he always speaks with great power and great force, but on this issue I have to say I profoundly disagree with him. Our troops are in Afghanistan not fighting a war against Islam but at the invitation of an Islamic Government and under a UN resolution, to try to help that country have a peaceful, prosperous and stable future. He knows the dangers in the past of walking away from Afghanistan and leaving that country to become the terrorist-supporting haven that it did under the Taliban. We must not make that mistake again, and I urge him not to play to the gallery on this issue but to speak up for the work that our forces are doing to make Afghanistan a safer country.