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Commons Chamber

Volume 543: debated on Wednesday 25 April 2012

House of Commons

Wednesday 25 April 2012

The House met at half-past Eleven o’clock


[Mr Speaker in the Chair]

Business before Questions

Canterbury City Council Bill

Motion made,

That so much of the Lords Message [23 April] as relates to the Canterbury City Council Bill be now considered.—(The Chairman of Ways and Means.)


To be considered on Monday 30 April.

Leeds City Council Bill

Motion made,

That so much of the Lords Message [23 April] as relates to the Leeds City Council Bill be now considered.—(The Chairman of Ways and Means.)


To be considered on Monday 30 April.

Nottingham City Council Bill

Motion made,

That so much of the Lords Message [23 April] as relates to the Nottingham City Council Bill be now considered.—(The Chairman of Ways and Means.)


To be considered on Monday 30 April.

Reading Borough Council Bill

Motion made,

That so much of the Lords Message [23 April] as relates to the Reading Borough Council Bill be now considered.—(The Chairman of Ways and Means.)


To be considered on Monday 30 April.

City of London (Various Powers) Bill [Lords]

Motion made,

That so much of the Lords Message [23 April] as relates to the City of London (Various Powers) Bill [Lords] be now considered.—(The Chairman of Ways and Means.)


To be considered on Monday 30 April.

City of Westminster Bill [Lords]

Motion made,

That so much of the Lords Message [23 April] as relates to the City of Westminster Bill [Lords] be now considered.—(The Chairman of Ways and Means.)


To be considered on Monday 30 April.

Transport for London Bill [Lords]

Motion made,

That so much of the Lords Message [23 April] as relates to the Transport for London Bill [Lords] be now considered.—(The Chairman of Ways and Means.)

Oral Answers to Questions


The Secretary of State was asked—

Foreign Business Investment

1. What discussions she has had with ministerial colleagues and others on marketing Wales as a destination for foreign business investment. (104184)

3. What discussions she has had with ministerial colleagues and others on marketing Wales as a destination for foreign business investment. (104186)

I have regular discussions with ministerial colleagues and others on marketing Wales as a destination for foreign business investment. The recent Select Committee on Welsh Affairs report on inward investment in Wales highlighted a number of important issues, and we are committed to closer joint working with the Welsh Government to deliver more inward investment to Wales.

I am grateful to my right hon. Friend for that answer. One of the best ways to improve foreign investment in Wales is for the UK and Welsh Governments to work more closely together. Does she regret the apparent unwillingness of the Welsh Business Minister to do just that?

As the Welsh Affairs Committee has made clear in the inquiry into foreign direct investment, co-operation between both Governments is considered essential to marketing Wales and for potential investors. However, as economic development is devolved and led by the Labour Government in Wales, I share my hon. Friend’s disappointment that the Business Minister did not give evidence to the Committee. I hope that we can develop a more mature attitude, as FDI projects in Wales have diminished over the years and we need to get them back up, so that we are competing effectively.

I thank my right hon. Friend for her earlier answer. Does she agree that it is right to explore investment opportunities in emerging markets? There are markets close to home, such as in the Commonwealth of Nations, which consists of 54 countries and has a population of 3.5 billion-plus, that also offer important investment potential.

The Prime Minister himself has said that he wants

“to link Britain up to the fastest growing parts of the world, because we need to trade and export our way out of our economic difficulties.”

We inherited those from the previous Government. That is why I have taken such a tremendous interest in this area and why I am very pleased that we have now joined up UK Trade & Investment to the Welsh Government. We have offered at least one of UKTI’s investment advisers to work in the Welsh Government offices in Treforest and for there to be two-way secondees between UKTI and the Welsh Government. That is real progress and it shows that we can get our two Governments working together in the interests of Wales.

As the Secretary of State knows, good air transport links are essential in attracting business investment to Wales. What discussions has she had with the First Minister and the Welsh Government about improving the links between Cardiff airport and the rest of the world?

As the right hon. Lady knows, I have constant discussions with the First Minister and the Welsh Government, as does the Under-Secretary. We have certainly discussed the links and there has been some discussion of Cardiff airport. I am pleased to say that I have invited the owners of the airport to meet me shortly, because I have been concerned about some of the reports I have heard in the press. We should be trying to talk Cardiff airport up, not down.

I certainly welcome the announcement by the Labour Welsh Government that Tata Steel will invest £800 million in Wales, but as the Secretary of State will know Tata bosses have repeatedly said that the prices they have to pay for energy in the UK are simply not competitive when compared with what industry pays elsewhere. What discussions has she had with the Energy Secretary and energy companies to secure a better deal on energy prices for heavy industry to provide an incentive for companies such as Tata to invest in Wales?

One of the first things I did when I was appointed was visit Tata Steel, and I took the Business Secretary, Vince Cable, with me to discuss energy prices. The hon. Lady should know that all the Departments have been focused on the energy-intensive industries because we want to ensure that there are good manufacturing jobs in the future, not just in Wales but elsewhere in the UK. I have read the press release from the Welsh Government and the First Minister and he says that he was told at a meeting in India that £800 million has been approved over the next five years for investment in Tata Steel in Wales. I look forward to seeing the detail, because it seems to be a general announcement at this stage without too much detail attached to it.

The Secretary of State was referring to the right hon. Member for Twickenham. We do not name people in this place.

Budget (Welsh Assembly)

2. What assessment she has made of the effect of the Budget on the National Assembly for Wales; and if she will make a statement. (104185)

As a result of the Budget the Welsh Government will benefit from an additional £11.7 million over the spending review period. Consequently, they will have received nearly £500 million in additional funding since the spending review in 2010.

The granny tax, the pasty tax and cutting the top rate of tax for the rich while shutting Remploy factories that give disabled people the dignity of work: those are the priorities of this Government. The caravan tax will hit thousands of hard-working families in Wales, particularly in north Wales. Will the Minister speak to the Chancellor and get him to scrap the caravan tax, rather than sitting on his hands like the hon. Member for Aberconwy (Guto Bebb) did the other evening?

The hon. Gentleman should not get so aerated. The Government fully recognise the importance of the holiday and touring park sector to the Welsh tourism industry and to the economy of Wales as a whole. Her Majesty’s Revenue and Customs is consulting on the proposals, as he should know, and I hope he will play a part in that consultation, which closes on 18 May.

Will my hon. Friend confirm that the Red Book reveals that although 14 Government Departments will see reductions in spending over the next four years, spending in Wales increases year on year despite the fact that the Welsh Assembly Government underspent by £385 million last year while cutting health spending in Wales?

Absolutely. The reduction in the Welsh health budget is a matter of shame for the Welsh Assembly Government. I repeat that the Welsh Government will have had almost an additional £500 million since the spending review in 2010.

Is it fair that Welsh churches, charities, caravanners, pensioners and almost everybody else will pay more taxes so that millionaires can each pay £40,000 less?

That is a very strange rhetorical question. The right hon. Gentleman will know that the reduction in the top rate of tax will not take effect until the end of the public spending freeze and it is quite interesting that the Government of whom he was a member did not see fit to increase the rate of tax until a matter of weeks before their last Budget.

I am amazed that the hon. Gentleman is not ashamed of that impact on some of the most vulnerable in our society. Can we in Wales, through him, apologise to the Secretary of State? We used to think that she was all on her own at sea in the Cabinet, but clearly they are now all at sea together. The Budget omnishambles, Abu Qatada, petrol pump panic—at least Wales has a Labour Government to give us some protection from this Tory-Lib Dem incompetence. At least Wales can reject this disastrous Budget by voting Labour in the council elections next Thursday.

Does the Minister agree that with new law-making powers and a £15 billion budget, the Welsh Assembly Government have both the tools and the money to make a real and lasting difference in Wales?

Yes, indeed. It is vital, too, that the Welsh Assembly Government work closely with the Government in Westminster for the good of the people of Wales. I very much hope that we will now see a far more joined-up approach taken by the Welsh Assembly Government in that regard.

Enterprise Zones

4. What assessment she has made of the treatment of capital allowances in enterprise zones in Wales; and if she will make a statement. (104187)

The Chancellor announced funding for enhanced capital allowances in the Deeside enterprise zone in the Budget in addition to the money already provided for enterprise zones in Wales. We are committed to looking at how we can provide these allowances elsewhere but the Welsh Government must develop strong, detailed and robust business cases.

I thank the Secretary of State for her interest in the Blaenau Gwent enterprise zone. Plans for a motor industry complex there are now at a critical juncture. We need to know if capital allowances can be delivered or if other tax treatments are a better prospect. May I press her for a meeting between developers and the Chief Secretary to the Treasury, so that we can thrash out a solution?

The hon. Gentleman has worked tirelessly for his constituency to develop these proposals for the Ebbw Vale enterprise zone, and I really do congratulate him on that. We have met on other occasions and I have written to him again today, saying that I am very willing to try to secure a meeting with the Chief Secretary to the Treasury, but without a business case the Treasury cannot make any decisions on further enhanced capital allowances. I urge the hon. Gentleman to discuss the subject with the Welsh Government as well as with our Government.

Broadband Technology

5. What discussions she has had with ministerial colleagues and others on funding for broadband technology in Wales. (104188)

8. What discussions she has had with ministerial colleagues and others on funding for broadband technology in Wales. (104191)

My right hon. Friend the Secretary of State has had, and continues to have, regular discussions with ministerial colleagues, Welsh Government Ministers and other interested parties on the funding of broadband technology in Wales.

I thank the Minister for that response and congratulate him on his part in securing £57 million for Wales and, of course, the broadband provision for Cardiff. However, on the roll-out of broadband in scattered rural areas, does the Minister share the frustrations of many in my constituency—small business men, and consumers trying to access their bank accounts—at the speed with which that is being delivered in Wales when compared with authorities such as Cornwall, which are speeding ahead?

As my hon. Friend says, the Government have made available a total of £56.9 million to help bring superfast broadband to Wales. The Welsh Government are working with Broadband Delivery UK on how best to employ the funding, but we are indeed looking to the Welsh Government to make an announcement as to their contribution to speed up the process. I am sure, however, that my hon. Friend will be pleased with the announcement by BT last December that 33 rural communities will have access to faster broadband by this summer, including Aberystwyth.

The South Wales chamber of commerce has called for a more ambitious target for broadband speeds in Wales for 2015, at 50 megabits per second from the previous target of 30. What are the Government doing here, in conjunction with the Welsh Government, to achieve such a target, which could clearly be very beneficial for Welsh business?

It would indeed be beneficial, and I am sure that the hon. Gentleman will recall that in the Budget a sum of £12 million was made available to help transform Cardiff into a super-connected city, which should result in speeds of between 60 and 100 megabits per second—plus, of course, wi-fi connectivity.

Cardiff is not Wales, although some people might be under that misapprehension. Countries such as Finland and Malta have introduced a universal service obligation on internet coverage and connections similar to that for the postal service, to ensure that everybody has equal access to the internet and its advantages, irrespective of location, be that rural or otherwise. Will the Government look into that, and do so in time for the next communications Bill—or perhaps it is something that the Welsh Government can do under the powers set out in part 4 of the Government of Wales Act 2006?

I quite agree with the hon. Gentleman: Cardiff is not Wales, but he referred specifically to the South Wales chamber of commerce. Indeed, as he knows, it is the ambition of this Government to ensure that superfast broadband is rolled out throughout the United Kingdom by the end of this Parliament, and at the moment we are on track.

Broadband suppliers have shown a marked reluctance to invest in Wales. Does my hon. Friend agree that it is important that the people of Wales have the benefit of new technology, and that perhaps the Welsh Assembly might use some of this vast underspend to invest in Wales, so that everyone has the benefit of broadband?

Yes, indeed. As I said in reply to the hon. Member for Ceredigion (Mr Williams), the Welsh Assembly Government are expected to contribute to the process. They are working well with BDUK, but we are waiting for their commitment in financial terms.

Economic Growth

6. What recent discussions she has had with ministerial colleagues on encouraging economic growth in Wales. (104189)

Economic growth is a key priority for this Government and I have regular discussions with ministerial colleagues on ways to encourage economic growth in Wales. Yesterday I met the business advisory group and heard directly from members how this Government’s growth policies are helping businesses in Wales to face the current economic challenges.

Does the Secretary of State agree that the fact that the recent Budget is taking 95,000 people out of tax altogether in Wales is a big boost for business in Wales, as more people will have greater spending power and find it worth their while to be in work?

I agree entirely with my hon. Friend. It must be very good for those people whom we have taken out of tax altogether and the lower paid workers who will benefit from our tax changes, because it will put money directly back in their pockets rather better than the Welsh Labour Government down in Cardiff Bay, under whose auspices council tax has doubled in Wales.

The Budget included a clear framework for reducing localised pay in the public sector. Considering that there is a direct link between money in people’s pockets and spending in the local economy, how will depressing pay encourage economic growth in the poorest parts of the British state?

When it comes to local pay, our aim is to create a more flexible labour market that is more responsive to the challenging economic conditions we currently face. We want to create more private sector growth and, as a consequence, wealth in Wales and across the UK.

If the Secretary of State thinks this Government are interested in growth, she is living in cloud cuckoo land. Is she not keeping up with today’s news that shows that the Chancellor’s obsessive intention of cutting too deep and too fast is taking us back into recession?

No. I have to say that today’s news is disappointing but not totally unexpected. Britain cannot be immune to what is happening on our doorstep. For example, Italy, Holland, Ireland, Belgium and Portugal are already in recession. But let us remember that since the coalition took office in 2010, more than 630,000 private sector jobs have been created, more than outstripping job losses in the public sector, and private sector employment in Wales rose by 12,000 between quarter 3 in 2010 and quarter 3 in 2011.

South Wales Valley Railways

7. What recent progress has been made on electrification of the south Wales valley railways; and if she will make a statement. (104190)

My right hon. Friend and I are working with the Secretary of State for Transport and Welsh Ministers on the business case for electrification of the south Wales valley lines. We expect to make an announcement in the summer.

My hon. Friend the Member for Blaenau Gwent (Nick Smith) has the lovely Ebbw vale line. I live in the beautiful Llynfi valley and catch the Maesteg to Gloucester train via all points including Cardiff and Newport, a route which sometimes takes me through the delightful constituency of the hon. Member for Vale of Glamorgan (Alun Cairns). All these link even as far west as Swansea. We are all valleys people on valleys rail connections, so when considering electrification for south Wales and the valleys, will the Minister’s definition of south Wales be my definition—the definition of the people of south Wales—because when it comes to electrification, we are all in this together?

Yes, indeed. We recognise the importance of the electrification of the south Wales valley lines to the economy of the Cardiff city region and wider. The Chancellor of the Exchequer singled out electrification of those lines as a key infrastructure priority in the Budget, and I was delighted that my right hon. Friend the Prime Minister confirmed his personal commitment to that when he visited Wales earlier this month.

Rail Transport

9. What recent discussions she has had with the First Minister of Wales on developing rail transport in Wales. (104192)

My right hon. Friend has regular discussions with the First Minister about a range of transport issues that affect Wales, most recently last week.

Has the Wales Office done a study of the impact of High Speed 2 on Wales, and has the Wales Office put the case for improving the lines west of Crewe and line speeds, as well as possible electrification, so that we can have a high-speed Wales?

I share the hon. Gentleman’s concern about speeds on the north Wales coast line. The Wales Office discusses these matters regularly with the Department for Transport and will continue to do so.

What discussions has the Minister had with the European Parliament on trans-European network funding to enhance the railways?

As we consider what methods to adopt to improve the funding regime for railway lines in Wales, we will certainly look carefully at the EU TEN network funding, which is available from the European Community.

As we know, economic growth is one of the ways we can improve infrastructure in Wales, but to do so we need a modern railway, and that means electrification as far as Swansea. What impact assessment has been made of the effect on the commuter and holiday trade of rail electrification to Swansea?

I commend the hon. Lady for her interest in this matter on behalf of her constituents and can assure her that we remain very interested in the electrification of the line and are working closely with the Welsh Assembly Government to develop the business case. [Interruption.]

Order. Far too many noisy private conversations are taking place. Let us have a bit of hush for Mr Robert Halfon.

Fuel Prices

10. What recent assessment she has made of the effect of petrol and diesel prices on the Welsh economy. (104193)

The Government recognise that businesses, individuals and families are struggling with the rising cost of fuel, particularly in rural areas. We have eased the burden on motorists by approximately £4.5 billion through the abolition of the fuel duty escalator and the introduction of the fair fuel stabiliser and by cutting fuel duty.

I welcome the Government’s cuts in fuel duty, but the market price of oil is still too high, partly because of oil speculation. The United States is bringing in tough penalties for price fixing and market manipulation. Will the Minister urge his Government colleagues to look at this and put pressure on the big oil firms to cut prices at the pumps?

As I have said, the Government recognise the impact of the rising cost of fuel on people and businesses in Wales. However, it should be remembered that the duty increase that was expected to take place in January this year has been deferred to August and we have cancelled the inflation increase planned for August, which means that there will be just one inflation-only increase this year.

Can the Minister tell us the price of a litre of fuel this time last year and today, and is the rise anything to do with the VAT increase that he voted for?

The price of a litre of fuel in my constituency—I assume the right hon. Gentleman means petrol—is approximately £1.40. I will be happy to write to him with the figure for last year.

Aerospace Industry

11. What recent discussions she has had with ministerial colleagues and others on the aerospace industry in Wales. (104194)

I have regular discussions with ministerial colleagues and other organisations on a range of issues, including the aerospace industry in Wales.

Does the Secretary of State agree that, while the UK Government have taken a lead in establishing enterprise zones, the onus is now on the Welsh Government to ensure that their enterprise zone for the aerospace industry in St Athan is a success?

My hon. Friend is absolutely right. As far as enterprise zones are concerned, a great deal depends on what the Labour Welsh Government will do, because we have capital allowances for only one enterprise zone, which is already in Deeside. The enterprise zone to which he refers will be crucial to the UK and will secure work on the next generation of aircraft, because some 27,000 large aircraft, worth $3 trillion, will be needed over the next 20 years, around 7,000 new helicopters will be required within the next decade and there is a huge potential future market in unmanned air vehicles, and I want us to benefit from that demand in the aerospace business in Wales.

Is it not the case that the success of the UK aerospace industry is due to government and industry working together—[Interruption]—and that saying that business succeeds because government gets out of the way is arrant nonsense?

Over this noise, Mr Speaker, I think the hon. Gentleman is suggesting that government should get out of the way of business. Indeed, that is exactly what this Government are doing, with the red tape challenge, by reducing the bureaucracy that the previous Labour Government imposed on our industries, and by reducing the rate of corporation tax so that our business environment can be one of the most competitive in the G20.

Budget (Women)

Last month’s Budget was one of fairness and values. Although we had to make some difficult decisions, we are committed to ensuring that women all over the UK play a full part in the economic recovery.

Women in Wales are suffering and struggling with rising food prices, the rising cost of living and the rising costs of child care. In the most recent quarter, 4,000 additional women became unemployed. How many women in Wales will benefit from the reduction in taxation on high-level earners from 50% to 45%? Will that benefit women in Wales?

Despite the recession, the employment rate for women remains historically high, at 65.3% now compared with 53% in 1971. Employment has fallen more sharply among men during the recession, so frankly it will be expected to rise more quickly as the economy recovers. This is, however, the fourth consecutive set of figures to show employment and economic activity rising in Wales, which I would have thought the hon. Lady would welcome.

Prime Minister

The Prime Minister was asked—


I am sure the whole House will wish to join me in paying tribute to Sapper Connor Ray, of 33 Engineer Regiment (Explosive Ordnance Disposal), who died on Wednesday 18 April from wounds that he sustained in Afghanistan. He was described by all who served with him as a superb soldier. His dedication and his courage will never be forgotten, and we send our condolences to his family and his loved ones.

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 associate myself with the Prime Minister’s tribute to Sapper Connor Ray and, in doing so, ask my right hon. Friend whether he will confirm that, although British servicemen and women are scheduled to leave Afghanistan in 2014, the actual pace of withdrawal will be determined first and foremost by the need to minimise the risk to those members of our armed forces serving in Afghanistan at that time.

My hon. Friend makes an important point. I can confirm that by the end of 2014 we will not have anything like the troop numbers that we have now, and we will not be in a combat role. Of course, post 2014 we do believe in having a training role with the Afghan army, particularly the officer training role that President Karzai has personally asked for us to undertake. The speed of the reductions between now and the end of 2014 will be in accordance with the conditions on the ground and with what is right in terms of transitioning from allied control to Afghan control—and at all times, of course, paramount in our minds is the safety and security of our brave armed forces, to whom I pay tribute again today.

I join the Prime Minister in paying tribute to Sapper Connor Ray of 33 Engineer Regiment. He carried out his duties with the utmost courage, saving many Afghan and British lives by what he did, and our deepest condolences go to his family and friends.

Today we had the catastrophic news that Britain is back in recession. I am sure that the Prime Minister has spent the past 24 hours thinking of an excuse as to why it is nothing to do with him, so what is his excuse this time?

These are very, very disappointing figures. I do not seek to excuse them, I do not seek to try to explain them away, and let me be absolutely clear that there is no complacency at all in this Government in dealing with what is a very tough situation that, frankly, has just got tougher. I believe the truth is this: it is very difficult recovering from the deepest recession in living memory, accompanied as it was by a debt crisis. Our banks had too much debt, our households had too much debt, our Government had too much debt. We have to rebalance our economy, we need a bigger private sector, we need more exports and more investment. This is painstaking, difficult work, but we will stick with our plans, stick with the low interest rates and do everything that we can to boost growth, competitiveness and jobs in our country.

Typical of this arrogant Prime Minister—he tries to blame everyone else. The reality is that this is a recession made by him and the Chancellor in Downing street. Over the last 18 months since the catastrophic spending review, our economy has shrunk. This is a slower recovery from recession even than that in the 1930s. The reality is that it is families and businesses who are paying the price for his arrogance and complacency. Why does he not admit that it is his catastrophic economic policy, his plan for austerity, which is cutting too far and too fast, that has landed us back in recession?

Not a single business organisation, serious commentator or international body thinks that these problems emerged in the last 24 months. The debt crisis has been long in the making; the failure to regulate our banks has been long in the making; the Government overspending has been long in the making. This is a tough and difficult situation that the economy is in, but the one thing that we must not do is abandon the public spending and deficit reduction plans, because the solution to a debt crisis cannot be more debt. We must not put at risk the low interest rates that are absolutely essential to our recovery—that would be absolute folly. That is why no business organisation and no international economic organisation suggests we follow that course.

It is all bluster; the Prime Minister’s plan has failed. That is the reality. They were the people who said that Britain was a safe haven—the Chancellor even said it on Monday—and we are back in recession. It was the Prime Minister who said that we were

“out of the danger zone”—[Official Report, 15 December 2010; Vol. 520, c. 901.]

and this is what has happened. As even his own Back Benchers are saying, the complacent, “arrogant posh boys” just don’t get it.

Let us turn from the economic disaster of this Government to the political disaster that is the Culture Secretary. We now know, from the evidence published yesterday, that throughout the time when the Culture Secretary was supposed to be acting in an impartial manner, he and his office were providing in advance a constant flow of confidential information to News Corporation about statements to be made in this House, his private discussions with the regulators and his discussions with opposing parties. Having seen the 163 pages published yesterday, is the Prime Minister seriously telling us that the Secretary of State was acting as he should have done, in a transparent, impartial and fair manner?

Let me first of all finish off on the economy, which the right hon. Gentleman has moved off—[Interruption.]

We will not let anyone forget who got us into this mess in the first place. More spending, more borrowing, more debt—that is what caused these problems; it cannot be the solution to these problems.

Let me turn to the Leveson inquiry. I set up the Leveson inquiry and its terms of reference were agreed by the leader of the Liberal Democrat party and the leader of the Labour party. I believe that to step in and prejudge that inquiry would be wrong. Lord Justice Leveson has made that precise point this morning. Let me read to the House what he has said. [Interruption.] Perhaps the House would like to listen. [Interruption.]

Order. Let us hear what the Prime Minister has to say, and then the questioning will continue.

Lord Justice Leveson said this morning that

“it is very important to hear every side of the story before drawing conclusions.”

He then said that

“although I have seen requests for other inquiries and investigations and, of course, I do not seek to constrain Parliament, it seems to me that the better course is to allow this Inquiry to proceed.”

Having set up this inquiry and agreed with the inquiry, the right hon. Gentleman should listen to the inquiry.

Lord Justice Leveson is responsible for a lot of things, but he is not responsible for the integrity of the Prime Minister’s Government. In case he has forgotten, that is his responsibility as the Prime Minister.

It beggars belief that the Prime Minister can defend the Culture Secretary, because he was not judging this bid—he was helping the bid by News Corporation. Two days before the statement to the House on 25 January, the Culture Secretary’s office was not only colluding with News Corp to provide it with information in advance, it was hatching a plan to ensure that it would be

“game over for the opposition”

to the bid. Does the Prime Minister really believe that is how a judge and his advisers are supposed to act?

The Leader of the Opposition clearly does not think that what Lord Leveson said this morning matters. Let me remind him of what he said yesterday about the Leveson inquiry. He said:

“I think”—

this is the Leader of the Opposition speaking—

“that it’s right that the Leveson Inquiry takes its course”.

He went on to say that

“the most important thing is that the Leveson Inquiry gets to the bottom of what happened, of what Labour did, of what the Conservatives did and we reach a judgment about that.”

Is it not typical of the right hon. Gentleman that in the morning he sets out his very clear position, but in the afternoon he cannot resist the passing political bandwagon?

Order. I said the Prime Minister must be heard, and the Leader of the Opposition must be heard. Both will be heard, however long it takes. It is very clear.

Totally pathetic answers. He is the Prime Minister. If he cannot defend the conduct of his own Ministers, his Ministers should be out of the door. He should fire them. He does not even try to defend the Secretary of State and what he did. The Secretary of State told the House on 3 March, in answer to a question from the hon. Member for Banbury (Tony Baldry), that

“today we are publishing…all the consultation documents, all the submissions we received, all the exchanges between my Department and News Corporation.”—[Official Report, 3 March 2011; Vol. 524, c. 526.]

But he did not, because 163 pages have now emerged. The Prime Minister does not defend him over giving confidential information to one party in the case; he does not defend him over collusion; is he really going to defend him about not being straight with this House of Commons?

Let me make it absolutely clear that the Culture Secretary, who has my full support for the excellent job that he does, will be giving a full account of himself in this House of Commons this afternoon and in front of the Leveson inquiry, and he will give a very good account of himself for this very simple reason: that in judging this important bid, he sought independent advice from independent regulators at every stage, although he did not need to, and he took that independent advice at every stage, although he did not need to. The way he has dealt with this issue is in stark contrast to the Governments of whom the right hon. Gentleman was a member.

I say this to the Prime Minister: while his Culture Secretary remains in place, and while he refuses to come clean on his and the Chancellor’s meetings with Rupert Murdoch, the shadow of sleaze will hang over this Government. It is a pattern with this Prime Minister—Andy Coulson, Rebekah Brooks and now the Culture Secretary. When is he going to realise that it is time to stop putting his cronies before the interests of the country?

I have to say to the right hon. Gentleman that he called for an independent judicial inquiry. That is the inquiry I have set up. He agreed the terms of reference. Now he is flip-flopping all over the place. The fact is that the problem of closeness between politicians and media proprietors had been going on for years and it is this Government who are going to sort it out. Whether it is the proper regulation of the press, whether it is cleaning up our financial system, whether it is dealing with our debts: I don’t duck my responsibilities. What a pity he cannot live up to his.

Q2. Is my right hon. Friend aware of recent very good news in the manufacturing and engineering sectors in Lincoln? Hoval has seen an increase in turnover of over 20% to around £17.5 million; Italian firm Brifrangi has confirmed an investment of circa £50 million in a new tooling press, one of the largest in the world; and Siemens is involved in the first new engineering school in our country for 20 years. Will my right hon. Friend accept my personal invitation to visit Lincoln to see for himself the excellent progress our city is enjoying under his Conservative-led Government? (105080)

I am very grateful for my hon. Friend’s invitation and will try to take it up. As I said earlier, although there is very disappointing news today about what is happening in our economy, underneath that there is a rebalancing that needs to take place, and is taking place, in terms of manufacturing investment and exports, and in terms of the Government getting behind that, with more investment in apprenticeships and more investments in technical hubs at our universities, like the one at the university of Lincoln, and by cutting business taxes so that we get Britain working and making things again.

On Monday, the Prime Minister said that he was going on an economic rescue mission. Is it not fair to say that that mission has failed spectacularly in the light of the figures released today?

The point I would make to the hon. Lady is that the recession we suffered—a 7% contraction of our gross domestic product—was much bigger even than what happened in America. It is worth remembering that the biggest bank bail-out anywhere in the world was not in America; it was here in Britain. Getting out of the recession, the financial crisis and the debt crisis is difficult, painstaking work, but this Government are committed to doing just that.

Q3. Last week, I met the chief executive of the fourth largest manufacturing group in the UK, Unison Engineering, which has a substantial factory in Burnley. He has been instructed by his US board to increase the turnover of his UK operations so as to take advantage of the Government’s industrial strategy. He is concerned about the lack of skills. [Interruption.] Can my right hon. Friend assure me that the Government investment in apprenticeships and university technical colleges will increase over the coming years? (105081)

What is interesting is that if any Member of Parliament wants to talk about manufacturing success or business success in their constituency, they are shouted down by the Opposition, because all they want to hear is bad news and to talk our economy down. We are investing in skills and putting more money into the apprenticeship schemes and the university technical colleges. I was at Airbus in Filton this week seeing the expansion and growth plans there, and it is good to hear what is happening in my hon. Friend’s constituency.

Does the Prime Minister agree with his Chancellor, who said in 2008 that

“once…you’ve got a downturn you cannot possibly slash public expenditure”?

Will the Prime Minister stick to his complacent plan of cutting too far and too fast, which has delivered a double-dip recession?

Well read. [Interruption.] The point is that we inherited from the Labour party a budget deficit of 11%. The budget deficit we inherited was bigger than Greece’s, bigger than Spain’s, bigger than Portugal’s. If you do not deal with your debts and your deficit, you will never keep interest rates low, and it is low interest rates that offer us the best prospects of getting out of this difficult economic situation we are in.

At least half a million children died from malaria last year. On world malaria day, may I thank the Prime Minister for his personal commitment to combating this disease? Will he join me in recognising the international leadership that British scientists, aid workers and volunteers, including Rotarians in Penkridge and Stafford in my constituency, show in combating malaria?

I am grateful for the opportunity to join my hon. Friend in wishing the people of Penkridge well. He did rather better in convincing the people of Penkridge to vote for him than I did in 1997. He is absolutely right to raise the issue of malaria on world malaria day. Some 15,000 children die every week from what is a preventable illness. That is why I am proud that Britain is leading on this issue, putting money into the aid budget and malarial bed nets, and making all the scientific advances that he referred to. This is a vital agenda, and even in difficult economic times, we are right to pursue it.

Q5. Does this out-of-touch Prime Minister still believe that the British economy is “out of the danger zone”?—[Official Report, 15 December 2010; Vol. 520, c. 901.] (105083)

One of the biggest problems we faced on taking office was the danger that financial markets would take the same view of Britain as they took of Greece, Spain and Portugal, where interest rates were rising. That Britain has such low interest rates demonstrates that we have credibility. Difficult decisions are needed to get on top of the debt and deficit, and to deal with public spending, but they are the right decisions, not least because, as the shadow Chancellor once said, low interest rates are the mark of economic credibility.

Q14. The head teachers of Calder and Todmorden high schools in Calder Valley welcome the Government’s educational reforms. [Hon. Members: “Reading!”] They are two schools that never qualified for the Building Schools for the Future programme under the previous Government because they attained far too highly. [Hon. Members: “Reading!”] Will the Prime Minister tell the pupils of those schools when they can expect an announcement on the priority school buildings project to which they both applied? (105092)

We are investing more in school building than Labour did in its first two Parliaments after 1997. The figure is along the lines of £17 billion during the spending review period. So there are opportunities for new classrooms and buildings, and I am sure that the Secretary of State for Education, who is listening carefully to my hon. Friend, will be in touch with him about their prospects.

Q6. Did the Prime Minister agree with the hon. Member for Mid Bedfordshire (Nadine Dorries) when she said that the Prime Minister and the Chancellor—[Interruption.] (105084)

Did the Prime Minister agree with the hon. Lady when she called him and the Chancellor “posh boys” showing no compassion or understanding for the lives of others? Is that not further evidence that they are out of touch and an explanation for this double-dip recession?

I agree with my hon. Friend the Member for Mid Bedfordshire (Nadine Dorries) about many, many things.

Over the past two years, UK exports have grown by 23%, and even faster to the BRIC. Will my right hon. Friend join me in congratulating the 151 winners of the Queen’s award for enterprise this week on their success in international trade, particularly GSPK Circuits in Knaresborough and Boroughbridge in my constituency?

I certainly join my hon. Friend in congratulating that business on its export performance. When we look at some of the fastest-growing markets in the world—whether India, China or some of the south-east Asian markets I visited a few days ago—we see that our export performance in some of those markets, compared with 2009, is up by as much as 60%. As well as those markets, however, we also have to remember our old friends, as it were, and the fact that we still export more to the Republic of Ireland than to Brazil, Russia, India and China combined. So we need to expand our existing markets, but it is far harder work to get into the fast-growing markets of the world.

Q7. Recently, the Prime Minister conceded that the Government had made an “important mistake” in the handling of the fuel crisis. Would it not be a positive step in correcting that mistake were the Government to scrap the 3p increase in August, in order to help motorists, haulage companies and hard-pressed families in the UK? (105085)

The Government have actually used about £4 billion of Budget money to keep petrol prices down. They are about 6p lower than they would be under Labour’s plans. Let me update the hon. Gentleman and the House on the issue of the fuel strike. It now looks as if there will be longer before a strike could take place. I am determined that we use that time to ensure that every piece of resilience is in place. The plans we inherited would have allowed the military to provide perhaps 10% of our fuel needs. We have now managed to lift that to about 60% or 70%. We are in a much better place now because of the proper emergency planning that this Government have done, as opposed to the Labour party, which just crosses its fingers and hopes for the best from the trade unions.

Next Wednesday my mother Maud will celebrate her 100th birthday. Living, as she does, five minutes from the Olympic stadium, she has agreed to be Usain Bolt’s pacemaker, in order to give the other athletes a chance. Will my right hon. Friend now call on the indomitable spirit of former Land Army girls such as my mother and encourage our Olympic athletes to go for gold?

I will certainly do that. I have written to Maud to congratulate her on this fantastic milestone, and I am sure that as she speeds past Usain Bolt, she will turn round and reflect that the only way is Essex.

Q8. The Prime Minister has spent plenty of time cosying up to News Corporation in return for political support, so—[Interruption.] I can wait. He is therefore well qualified to answer this: when Alex Salmond agreed to act as a lobbyist for News Corp, was he acting in self-interest or in the interests of Scotland? (105086)

First, I think Alex Salmond can answer for himself. Secondly, this is another issue for the Leveson inquiry—properly set up, properly established—which is going to interview all the politicians, including all sorts of people who cosied up to News International over the years. I think on all sides of the House there is a bit of a need to say, hand on heart, that we all did too much cosying up to Rupert Murdoch—I think we would agree. On that basis, I am sure that Lord Leveson will make some important recommendations.

Q9. Has the Prime Minister seen the research published today by the TaxPayers Alliance, which shows that there are 3,097 town hall employees earning more than £100,000 and 52 earning more than £250,000? My constituents in Burton cannot understand such exorbitant salaries. What can we do about it? (105087)

My hon. Friend is entirely right to raise this issue. The important thing that we have done is to make completely transparent the pay in our town halls and local government. Sadly, I believe there is still one local council—a Labour-controlled council in Nottinghamshire—that is not making that information available. Every council should be transparent about how it spends council tax payers’ money.

Last year the Prime Minister said that those warning him that cutting too far and too fast would risk a double-dip recession should apologise. Now that he has delivered a double-dip recession, should he not apologise?

The point I would make to the hon. Lady is this: we faced a very difficult situation, with an 11% budget deficit. If we had listened to the plans of the Opposition, and spent more, borrowed more and increased our debt, that would have only made the debt crisis worse. How can the answer to a debt crisis be more borrowing? That is the question the Opposition can never answer.

Q10. After weeks of ducking and diving, Ken Livingstone has given a partial publication of his tax affairs. Sadly, he refuses to publish the tax affairs of Silveta, the company he set up to avoid paying his fair share of tax. Does my right hon. Friend agree that Ken Livingstone has ceased to be the old pretender and has now become the Artful Dodger? (105088)

I think my hon. Friend speaks for all of London when he makes that point. Ken Livingstone owes the people of London some proper transparency about this company and about his tax bill. There are still several days to go before this key election. He should make that information available. I have to say that I had something of a shock this week, because I have hardly ever agreed with anything Alan Sugar has ever said, but in saying that Londoners should not back Ken, he was spot on.

Q11. Now that the Prime Minister has admitted that he created the economic mess that the country is in, may I be helpful to him and suggest that he drop his ridiculous proposals for regional pay cuts and accelerate the capital programme for schools in Coventry and the west midlands? (105089)

As I said earlier, we are spending more on capital on schools in this Parliament than either of the first two Labour Parliaments. I am very happy for Education Ministers to look specifically at the case in the hon. Gentleman’s constituency to see what can be done. I also hope that he will join me and invite people in Coventry on 3 May to vote yes for a mayor for Coventry.

Q13. Every year, millions of British people donate money to charities. They do so for the simple reason that they want to help the cause or help others who are worse off then they are. I would describe those actions by members of the public as honourable, kind and selfless. We have all heard recently that some, but not all, of our wealthy citizens want to donate money to charity only if they can continue to reduce their tax bill. Does the Prime Minister think that their motives are honourable, kind and selfless? (105091)

We should support people who give money to charity, which is why the Government have expanded gift aid very generously and made available a change to help people with inheritance tax if they leave bequests to charity. As the hon. Gentleman knows, the Budget set out a number of limits to reliefs, and we specifically identified the potential problem for charities. My right hon. Friend the Chancellor will consult very widely on how we can make sure that we encourage philanthropic giving and charities, and what charities do in our country.

Q12. The Prime Minister’s dismissive response to the fact that the UK is now back in recession suggests that his mind is on other things. Should he not just sack his Culture Secretary and concentrate properly on the job of sorting out the British economy? (105090)

I think the hon. Lady would recognise that there is absolutely nothing dismissive about either my reply on the economy or, indeed, what I think we need to do. We are in a difficult economic situation in Britain, just as we see recessions in Denmark, in Holland, in Italy and in Spain. That is what is happening across the continent with which we trade. It is absolutely essential that we take every step that we can to help our economy out of recession: investing in apprenticeships; setting up enterprise zones; cutting business taxes; and prioritising investment in our infrastructure. We are doing all those things, and we will do more to help get our economy out of the mess in which the last Government left it.

Far from being dismissive, the Prime Minister acknowledged that the figures were disappointing. Does he agree that if we are getting out of a debt crisis we should not spend more money? There is no international organisation suggesting that this country change course and spend more money to do so.

My hon. Friend is absolutely right. It is not just that there is no international body making that case—there is no business organisation making that case. Indeed, the Institute of Directors and the CBI have both said today that, while these figures are disappointing, we must not give up the low interest rates and the credible fiscal policy that we have, as that would land our economy in the problems that the Opposition left it in.

It is a sorry state of affairs when in just two years the economy is in deep recession and now the Government are deep in sleaze. Same old Tories.

It may relate to the Prime Minister but, as far as I am concerned, unless I am advised otherwise, points of order come after statements, and the statement—

I note what the hon. Gentleman has said from a sedentary position. We will now hear the statement from the Secretary of State for Culture, Olympics, Media and Sport. I call Mr Secretary Hunt.

Leveson Inquiry

With permission, Mr Speaker, I would like to make a statement following yesterday’s developments at the Leveson inquiry. Although I intend to respond fully to allegations about my conduct and that of my Department when I present my evidence to Lord Justice Leveson, I believe that it is important to update the House on actions that have been taken as a result of evidence released yesterday.

We are 273 days into a process whose first stage will last until October. This is not the time to jump on a political bandwagon—[Interruption.] What the public want to hear are not my views or those of the right hon. Gentleman the Leader of the Opposition, but the views of Lord Justice Leveson when he has considered all the evidence. I do, however, think that it is right to set the record right on a number of issues, in the light of the evidence heard yesterday at the inquiry. Specifically, on the merger of News Corp with BSkyB, I would like to remind the House of the process that I followed. Throughout, I have followed due process, seeking the advice of independent regulators—something I did not have to do—and after careful consideration, acting on their advice. I have published all advice that I have received from Ofcom and the Office of Fair Trading, together with correspondence between myself and News Corporation, including details of all meetings that I have held in relation to this process.

As part of this process, my officials and I have engaged with News Corporation and its representatives, as well as other interested parties—both supporters and opponents of the merger. Transcripts of conversations and texts published yesterday between my special adviser, Adam Smith, and a News Corporation representative have been alleged to indicate that there was a back channel through which News Corporation was able to influence my decisions. That is categorically not the case—[Interruption.]

Order. The House must calm down a bit. The statement must be heard. There will be a full opportunity for questioning of the Secretary of State, as he would expect. Whether he expects it or not, that is what will happen. That is right and proper, but it is also right and proper that the statement should be heard with courtesy.

However, the volume and tone of those communications were clearly not appropriate in a quasi-judicial process, and today Adam Smith has resigned as my special adviser. Although he accepts that he overstepped the mark on this occasion, I want to set on record that I believe that he did so unintentionally and did not believe that he was doing anything more than giving advice on process. I believe him to be someone of integrity and decency, and it is a matter of huge regret to me that this has happened.

I only saw the transcripts of these communications yesterday. They did not influence my decisions in any way at all—not least because I insisted on hearing the advice of independent regulators at every stage of the process. I will give my full record of events when I give evidence to Lord Justice Leveson. However, I would like to resolve this issue as soon as possible, which is why I have written to Lord Justice Leveson asking if my appearance can be brought forward. I am totally confident that when I present my evidence, the public will see that I conducted this process with scrupulous fairness throughout.

I thank the Secretary of State for his statement. Everyone recognises that the £8 billion News Corp bid for BSkyB was of huge commercial importance and that it had profound implications for newspapers and for all of broadcasting, including the BBC. The Business Secretary had been stripped of his responsibility for deciding on the bid because he had already made up his mind against it, but the Culture Secretary too had made up his mind, in favour of the bid, so how could he have thought it proper to take on that decision? Of course he could take advice, but the decision whether he should do it, and could do it fairly, was a matter for him and him alone.

The Secretary of State took on the responsibility, and assured the House that he would be acting in a quasi-judicial role, like a judge, and that he would be transparent, impartial and fair. However, is it not the case that James Murdoch was receiving information in advance about what the Secretary of State was going to do and what he was going to say—information that was given to only one side, which had not been given to those who were opposed to the bid, and before it was given to this House.

Does the right hon. Gentleman think it acceptable that Murdoch knew not only about what he was going to do and say, but, crucially, what the regulator, Ofcom, had said to the Secretary of State on 10 January 2011 and what the bid’s opponents had said to the Secretary of State on 20 and 31 March 2011. Is he really going to suggest to this House that James Murdoch’s adviser, Fred Michel, knowing all this was just a coincidence? Can the Secretary of State explain how Fred Michel, in a series of e-mails beginning on 23 January, was in a position to tell Murdoch the full detail of a statement that the Secretary of State was not going to give to this House until two days later? Whatever interpretation is put on e-mails, there can be no doubt that Michel’s e-mail accurately and in detail described meetings that the Secretary of State had had, and accurately foretold what the Secretary of State was going to do. Either Michel was Mystic Meg or he had been told.

When it comes to the transparency that the Secretary of State promised, there appears to have been a great deal of transparency for Murdoch, but precious little for opponents of the bid or for this House. If, as suggested on the right hon. Gentleman’s behalf in the media, he was negotiating with Murdoch, why did he not tell the opponents of the bid and why did he not tell the House? Will he tell us now whether he believed himself to have been negotiating? Is that what was going on?

On 3 March, the Secretary of State told this House that he had published details of all the exchanges between his Department and News Corporation. In the light of all the information that we now know that Fred Michel had, does he still maintain that that is the case? His special adviser has admitted that his activities at times went too far, and he has resigned, but will the Secretary of State confirm that under paragraph 3.3 of the ministerial code, it is the Secretary of State himself who is responsible for the conduct of his special adviser?

This was a controversial bid. The right hon. Gentleman could have refused to take it on, but he did not. He could have referred it to the Competition Commission, but he did not. His role was to be impartial, but he was not. His conduct should have been quasi-judicial, but it fell far, far short of that, and fell short of the standards required by his office. The reality is that he was not judging this bid; he was backing it, so he should resign.

I am hugely disappointed by the right and learned hon. Lady’s response today. She had the opportunity to rise above party politics and work towards a solution to a problem that has bedevilled British politics for many years; instead, she has chosen to jump on the political bandwagon. Let me remind her that the Labour party spent over a decade in power and did nothing other than cosy up to the press barons and their families. She speaks for a party whose Prime Minister, when in opposition, flew half-way round the world, in Rupert Murdoch’s words, to “make love” to him “like a scorpion”. [Interruption.] This is a party whose Prime Minister was godfather to Rupert Murdoch’s daughter and whose Prime Minister’s wife organised a sleepover at Chequers. [Interruption.] I will come on to deal with all the right hon. and learned Lady’s points.

Order. I appeal to the House to calm down. I politely but explicitly suggest to the Secretary of State that in addressing these matters, he seeks to address the questions put to him and to address the matters for which he is responsible, which obviously does not include the conduct of other political parties.

I will happily do that, Mr Speaker, but I do think that Opposition Members need to show a degree of humility when they deal with these issues because if we are going to solve this problem, it is necessary for the whole House to work together and not to jump on bandwagons.

Let me now deal with the specific points made by the right hon. and learned Lady. She said that I was backing the bid—that I had made up my mind. That is not true. Let me say this. When I was appointed to be responsible for the bid, my views about the bid, some of which had been made public, were explicitly reported to the Cabinet Secretary, who decided that it was appropriate for me to take responsibility for it in a quasi-judicial role, but—this is the crucial point: it is very important—the right hon. and learned Lady must understand that because I had expressed some sympathy for the bid when I was not responsible for it, I changed the process so that at every stage before I made a decision, I obtained the advice of independent regulators, which I carefully considered and which I followed. I put it to the right hon. and learned Lady that if I had been backing the bid, I would not have sought the advice of independent regulators who might well have opposed it.

I made four decisions in this process, and each of those decisions was contrary to what News Corporation wanted. [Interruption.] If Opposition Members are making the very serious allegation that I was supporting this bid and not acting quasi-judicially, they must at least listen to the evidence of what happened.

The first decision I made was that I was minded to refer the bid to the Competition Commission, which is precisely what James Murdoch did not want me to do. I said that I was minded to do it. I then had an obligation to consider undertakings in lieu of a reference to the Competition Commission, and I made my second decision, which was that I would not accept those undertakings until I had received and considered the advice of Ofcom and the OFT on whether they dealt with the plurality concerns. That was something about which James Murdoch was extremely angry. [Interruption.] I had a meeting which was minuted.

The third decision that I made was to extend the period of consultation—again, at any stage I could have accepted those undertakings—and to insist again that Ofcom and the OFT must have full sight of the undertakings, that I would see their advice, and in practice I followed their advice after careful consideration.

My final decision, at the very end of the process, was made at the time of the Milly Dowler revelations. At that stage, I wrote to Ofcom and asked it whether those allegations should have any impact on my decision with respect to accepting the undertakings, because I thought that there was a question mark over corporate governance procedures which might affect any decision to accept them.

Those four decisions were contrary to what News Corporation wanted. The idea that I was backing the bid is laughable.

The right hon. and learned Lady talked about the e-mails between Frederic Michel and me. In his evidence to the inquiry, Frederic Michel also said—[Interruption.] I think that Opposition Members should listen to the evidence that was presented yesterday. Frederic Michel said:

“some of my emails… may incorrectly suggest to a reader that I had contact with the Secretary of State for Culture, Media and Sport, Jeremy Hunt, when in fact my contact was solely with Mr Hunt’s adviser”.

[Interruption.] I accept, and my adviser accepts, that those communications overstepped the mark. However, I am telling the House today that all the evidence makes it absolutely clear that none of those conversations influenced the decisions that I made.

Let me just say this. The right hon. and learned Lady’s party had 13 years in which to do something about this. During the last year of the last Labour Government, the Cabinet discussed the issue of press behaviour and decided to do nothing. In contrast, she faces a Prime Minister and Culture Secretary who set up the Leveson inquiry within two weeks of the Milly Dowler situation, who therefore have put in place a process that, while fully protecting freedom of expression—which is the foundation of our democracy—will oversee some of the most fundamental reforms of press practices in a generation, and who have shown more commitment to transparency and openness than her Government ever did.

Will my right hon. Friend first confirm that, whatever his advisers may have said, the only advice that he took was from Ofcom, and that he followed it? Secondly, does he agree that usually in circumstances such as these the first thing the Opposition do is call for a judicial inquiry, and given that that is precisely what we have, is it not sensible to wait until it completes its work and not jump to conclusions?

My hon. Friend is exactly right, and given that the Leader of the Opposition has previously said that he thinks it is right that the Leveson inquiry should take its course—that the most important thing is that it gets to the bottom of what happened, of what Labour did, of what the Conservatives did, and we reach a judgment about that—it is curious that he is now trying to pre-empt its conclusions.

Both the Culture Secretary and the Prime Minister have repeated again today that they always followed Ofcom advice. They did not. Ofcom thought this bid should be referred to the Competition Commission; so did the Business Secretary, so did the Labour Government. Why did the Culture Secretary change that policy?

I know that the right hon. Gentleman was disappointed yesterday, as he was looking for a smoking gun that showed that the process had not been properly pursued. The very first decision I took was to say I was minded to refer this bid. That is the proper process. If a Minister wants to refer a bid to the Competition Commission, the proper process is to tell the interested party that they are minded to do so, and it then has the opportunity to come back with undertakings, which the Minister has a duty to consider. That is the process set up by the right hon. Gentleman’s Government in the Enterprise Act 2002, and that is what I was doing.

The Prime Minister reminded us earlier today that for far too long Conservative and Labour politicians and their advisers have been cosying up to the media, and in particular to the Murdoch empire. In the light of that and of the Secretary of State’s own experiences, does he agree that it is inappropriate for a politician to make decisions on media ownership when, however hard they seek to be impartial, politicians will be perceived to be under pressure to meet the wishes of the media barons? Should not these decisions be made openly and independently by the appropriate regulator?

My right hon. Friend makes a powerful point. He knows that I have said that I think this is an issue that needs to be considered, because the perception of impartiality is as important as the impartiality itself. We wait with interest to hear what Lord Justice Leveson says.

Is the Secretary of State seriously trying to convince the nation that these incriminating e-mails and texts are all the work of a single rogue adviser?

I think that the hon. Gentleman needs to be very careful about declaring someone guilty before there has been due process. He described—[Interruption.] He accepts—[Interruption.]

The hon. Gentleman used the word “incriminating.” I said he overstepped the mark, and I think it is very important in situations such as this that due process is followed. The hon. Gentleman wanted an inquiry. He has got an inquiry. Let us listen to the results of that inquiry.

Does my right hon. Friend agree that what these e-mails show is the shocking extent to which lobbyists exaggerate, embellish and invent the access and influence they actually have?

My hon. Friend is absolutely right. There are countless examples in those e-mails of things that simply did not happen—of meetings that were alleged to have taken place not just with me, but with members of my Department, but that simply did not happen. It is very important that we hear all the evidence so that we can get to the bottom of what is truth and what is fiction.

Every councillor in the land knows what “quasi-judicial” means. They know that it means that if they are on the planning committee, they cannot tip the wink to anybody on one side or the other, and that they have to be cleaner than clean, whiter than white. The Secretary of State and the Prime Minister have both asserted for the last two years that they had no inappropriate conversations with that woman, Rebekah Brooks, and that every single one of their meetings has been published. May I just give this one final chance to the Prime Minister to come clean on all the meetings, because I think he might find things are going to get very difficult for him later on today?

Let me say this: the Prime Minister had no inappropriate conversations, because he was not responsible for this decision.

We have heard what the Culture Secretary has to say about his own conduct, and I believe him. As for what on earth his office was up to, I hope Lord Justice Leveson gets to the bottom of that. Does the Secretary of State still think that Lord Leveson should be reporting to the Culture Secretary, or should he now report directly to the Prime Minister instead?

With respect, Lord Justice Leveson is reporting to me and the Home Secretary on the express wishes of the Prime Minister. The most important point is that what he reports is totally independent, and it is.

Some 6,800 people are employed by BSkyB in Scotland. They will have been watching the events of the past 24 hours with increasing concern and alarm. What message has the Secretary of State got for them today?

We want to have a thriving media industry, and I believe that the great strength of our media industry in this country is that we have a strong BBC and strong competition to the BBC. Those employees play a good part in that, and we want to see all companies in this sector thrive.

We have heard today that there are, indeed, many cases in political history of lobbyists with more of Walter Mitty than the truth to their claims. Perhaps the Secretary of State can help the House today. Fred Michel claimed he had 54 separate conversations with the Secretary of State; will my right hon. Friend confirm how many conversations he did have?

The Culture Secretary’s adviser has now lost his job. Does that not prove the theory that when posh boys are in trouble, they sack the servants? Why doesn’t the Secretary of State do the decent thing: tell dodgy Dave and Gideon, and get out and resign?

Adam Smith’s resignation is a matter of huge regret to me. I believe him to be a person of integrity and decency, but my responsibility to this House is to the integrity of this process—the objectivity and impartiality with which this process was conducted—and I believe I have presented evidence to the House that demonstrates that I behaved in a judiciously impartial way throughout.

Order. Whatever strong views Members hold on this subject—as on many others—let me just remind them of the importance, as “Erskine May” has exhorted us, of moderation in the use of language in this House.

No, I did not. What I had on my website was an article from Broadcast magazine in which it wrote that, and I hope the evidence I have been able to present this morning shows that that was not the case.

When the Secretary of State for Business, Innovation and Skills was handling this bid, why did the Culture Secretary offer to help Murdoch to influence the process?

Let me tell the right hon. Gentleman that anyone who is responsible for any sector, be it the aerospace sector, the chemicals sector or the automobile sector, has to talk to all the people involved in that industry. It is my job to talk to the BBC, to ITV, to Sky and to newspaper proprietors, because I want that industry to be successful. This bid did have some implications for media policy, so it was perfectly proper for me to be apprised of those. What was not right was for me to be involved in the decision-making process, and I was not while it was the responsibility of the Business Secretary.

I do not. Throughout the bid process, when I got responsibility for it, the contact that I had with Fred Michel was only at official meetings that were minuted with other people present. The fact is that there is a whole pile of e-mails—54 in total—in which he talks about having contact with me, but that simply did not happen.

I want Lord Leveson to report absolutely everything he thinks, without fear or favour, including his opinion on the integrity of my conduct.

May I thank the Culture Secretary, a man I know to be of the utmost integrity and honesty, for his statement? The previous Government knew of phone hacking and illegal media practices for years but failed to take any action. May I ask the Culture Secretary to contrast his action with their inaction?

In 13 years, there were two Information Commissioner reports, one Select Committee report and two people were sent to prison, yet the Labour party did absolutely nothing. That is why it is totally inappropriate for Labour to be suggesting that this is somehow a Government problem. It is an issue that affects the whole political process, which is why we need to be working together to sort it out.

The Secretary of State will appreciate that one of the main concerns about the fallout from the phone hacking affair is how widely News International’s tentacles reached into the police and into government. BSkyB launched its bid in June 2010 and Andy Coulson resigned in January 2011, so, irrespective of when the Secretary of State took responsibility for the bid, will he tell the House whether Mr Coulson had any communications with him or with DCMS advisers, in any shape or form, about News Corp’s interest in BSkyB while Mr Coulson was still the Prime Minister’s official spokesman?

I had no communication or consultation with Mr Coulson about this bid when I was responsible for it.

I, too, have seen my right hon. Friend serve this House with great integrity. Could he clarify the role that the independent regulators, the Office of Fair Trading and Ofcom, played in this process?

My reason for involving the OFT and Ofcom in this process to a much greater extent than I was required to do under the Enterprise Act 2002 was precisely that I wanted to address the concerns that Members of this House and the public might have about my prejudging this issue. At every stage—I took four major decisions, each of which was not the decision that News Corp wanted—and on every ruling that I made, I carefully considered that independent advice, and after considering it, I followed it.

The Culture Secretary did not answer the question put by my hon. Friend the Member for West Bromwich East (Mr Watson). Will he be very precise and tell the House now, because this is important evidence, whether he knew of the exchanges between his special adviser and Mr Michel? Did he know of the contents of those exchanges?

That information—it is an important question—was set out in a statement made by Adam Smith when he resigned.

I knew about his contact—that was authorised. He was authorised to be the point of contact between my Department and News Corporation. What I did not know was the communications themselves—the first time I saw them was yesterday. Nor did I know the volume of those communications or their tone.

Will the Secretary of State explain how referring the BSkyB deal to the Competition Commission makes him a cheerleader for the Murdoch empire?

My hon. Friend makes the most important point in this whole process. If one looks at the evidence of the decisions that I actually made, one finds that it is clear that at every stage I actually made the decision that News Corporation did not want. That includes the final decision, which was to ask whether I should take account of the Milly Dowler revelations, which was what precipitated the collapse of the entire bid.

Is it not the case that the Secretary of State did not need to speak to Murdoch because his right-hand man was feeding Murdoch all the information he needed?

Those conversations—this is why I am telling the House this today—were inappropriate, but they did not affect my decision. The evidence for that is in the decisions that I actually took, which were four decisions that James Murdoch did not want.

Will my right hon. Friend tell the House what measures he put in place in this process, over and above what was necessary, to ensure that the process was fair, transparent and open?

Absolutely. The most important thing was that when James Murdoch offered undertakings in lieu of a referral to the Competition Commission, which it is his right to do so and my duty to consider, instead of accepting those undertakings, which I was legally completely entitled to do, I said that I would not do so until I had been given proper advice by Ofcom and the OFT as to whether it would be appropriate to do so. When I got that advice, I considered it carefully and I followed it. That is not required by the law, but I chose to do that because of my commitment to the integrity of the process.

Why was the special adviser the nominated person in the Department? If this was so important, as the Secretary of State is saying, why was his special adviser the nominated person?

His role was agreed by the permanent secretary, but he was not the only person; we had contacts on all sorts of levels—[Interruption.] Let me explain this to the House. When complex undertakings are involved in a huge merger, the process is very complex and there are, inevitably, a range of contacts. As I say, I have tried to be as transparent as possible in all those contacts. I think that, in this particular case, the contacts overstepped the mark, which is why, regrettably, Adam Smith has decided to resign. But let me point out to the hon. Gentleman that Adam Smith, in his statement, said:

“While it was part of my role to keep News Corporation informed throughout the BSkyB bid process, the content and extent of my contact was done without authorisation from the Secretary of State.”

The Secretary of State is a fellow Surrey MP whom I have grown to respect as a model professional. He knew that the BSkyB deal was controversial when the issue was moved to his Department. Will he explain what measures he took to ensure that the bid process was fair, transparent and open?

I have talked at length about the role of independent regulators, but let me just make the following response to my hon. Friend: one of the points about getting that independent advice from Ofcom and the OFT was that I published what they advised me to do before I made my decision, so that when I announced my decision the whole country could see whether I had acted in accordance with independent advice, which I did at every stage. That is why this House and the country can be reassured that this extremely difficult bid was conducted with scrupulous impartiality.

The Secretary of State referred in his statement to the “volume and tone” of the communications of his adviser not being appropriate. Does the Secretary of State accept that either he followed due process or he did not? If he followed due process, he should be here today fighting in defence of his innocence. If he is guilty, or if he feels that he did not follow due process, there should be due humility. Why is he doing neither?

With respect to the hon. Gentleman, due process in this situation means that I should take my decision objectively and impartially, setting aside my own prejudices. That is exactly what I did.

Will the Secretary of State assure people in my constituency and throughout the country that at all times in this process he acted with impartiality and integrity?

I absolutely did and I am grateful to my hon. Friend for saying that, but we are very keen in all these processes to learn the lesson that the appearance of impartiality is also very important. That is why today the Prime Minister has asked the Cabinet Secretary to write to all Departments to clarify the rigorous procedures that Departments should have in place for handling all cases of a quasi-judicial nature and said that it is vital that in dealing with these cases all contacts by Ministers, officials and special advisers are carefully controlled and properly recorded so that the independence, integrity and impartiality of the process are upheld and, just as important, seen to be upheld.

In the past 40 minutes I have watched the Prime Minister give the Secretary of State answers to the questions that he is being asked. Does the Secretary of State agree with the Prime Minister that the next great scandal in British politics is lobbying?