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Prime Minister

Volume 547: debated on Wednesday 27 June 2012

The Prime Minister was asked—


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

My hon. Friend makes a very important point. We have been discussing this issue for 100 years, and it really is time to make progress. The truth of the matter is that there are opponents of Lords reform in every party—in the Conservative party, in the Labour party and in the Liberal Democrats in the other place—but there is a majority in this House for a mainly elected House of Lords, and I believe that there is a majority for that in the country. However, if those who support Lords reform do not get out there and back it, it will not happen—that is the crucial point. It is absolutely hopeless—in life and in politics—to do what the Leader of the Opposition is doing: saying that he is in favour of it and he is also against it. It is hopeless.

The Prime Minister said on 11 April:

“I will defend every part of that Budget. I worked on it very closely with the Chancellor of the Exchequer line by line.”

What went wrong?

The fuel duty increase was a Labour tax rise—[Hon. Members: “U-turn!”] It cannot be a U-turn to get rid of a Labour tax increase. They put in place 12 fuel duty increases in government, they left behind six increases in fuel duty, and I am proud of the fact that we are dealing with them.

Then it was all part of a seamless political strategy. Unfortunately, they forgot to tell the Transport Secretary, who went out and defended the increase; they forgot to tell the Cabinet in the morning, although the Chancellor briefed it on the economic situation; and they forgot to tell their own Back Benchers, and sent them out to defend the old policy. Let us call it what it is: another case of panic at the pumps. Month after month, every time Labour Members have proposed putting more money in people’s pockets to get the economy moving, the Prime Minister has denounced the policy as irresponsible, yet yesterday the Chancellor said that this was about doing precisely that. Why does not the Prime Minister admit it—plan A has failed?

Does the right hon. Gentleman support stopping the fuel increase? Yes? Then why not get up and congratulate the Government on being on the side of the motorist and the people who work hard and do the right thing? That is who we are helping. Ever since we came to office, we have been defusing Labour’s tax bombshell. We defused their jobs tax and their increases in council tax, and we have defused their increases in fuel tax. Labour Members should be congratulating us on being on the side of those who work hard and do the right thing.

I am afraid it is back to the bunker after that answer. Even on this Government’s own measure of success, borrowing went up yesterday. No wonder they want to change the exam system—the Chancellor cannot get the maths right. Can the Prime Minister confirm that the reason this Government have had to borrow £3 billion more than this time last year is that tax revenues are down and the costs of economic failure are going up? It is all the result of double-dip recession made in Downing street.

So on fuel tax, the right hon. Gentleman is against it, though he is in favour of it, and on borrowing, he thinks it is too high but he wants to put it up. I think it is back to school.

I know the Prime Minister finds the shadow Chancellor irritating, but it was the shadow Chancellor who called for the fuel duty cut before he did it. The Government are not just economically incompetent; they are unfair as well. The right hon. Gentleman has made six U-turns, but not on two particular decisions in his Budget—the tax cut for millionaires, paid for by the tax rise on pensioners. He says he has been listening to the electorate. What feedback has he had on those two particular proposals?

On the shadow Chancellor, he is the man who put the fuel tax increase into the Budget in the first place. What we have been doing is getting rid of Labour’s tax increases. The Leader of the Opposition asks me about the top rate of tax. I think it is wrong to have a top rate of tax that is higher than that of France, Germany or Italy. For 13 years of a Labour Government in which he served, the top rate of tax was 40p. The top rate of tax is now going to be 45p. Again, I think a “Thank you” would be in order.

The Prime Minister claims to be part of the way in which the decision on the fuel tax was made. The Chancellor hid away yesterday, refusing to defend the decision. No wonder—[Interruption.] The Chancellor yesterday sent out the Economic Secretary to do all the interviews on the issue. It is no wonder the hon. Member for Mid Bedfordshire (Nadine Dorries) said this:

“I…didn’t see Newsnight, however, if Osborne sent Chloe on…he is a coward as well as arrogant.”

So there is no change on the tax cut for millionaires. Does not the Prime Minister realise that what people hate about this Government is the double standards when they say that tax avoidance is immoral but it is okay, when so many people are struggling to get by, to give a tax cut to millionaires, including the millionaires in the Cabinet?

The Leader of the Opposition says that the Chancellor was hiding away. The Chancellor was announcing the tax reduction from the Dispatch Box. I know that the House of Commons does not always get reported, but my right hon. Friend was here making the announcement and, I have to say, completely wrong-footing the shadow Chancellor. What we have heard today from the Leader of the Opposition is a whole series of arguments about process—process about the House of Lords, where he is wrong on the substance; process about the economy, where he is wrong on the substance; process about the deficit, when he wants to put the borrowing up. Absolutely hopeless.

This is about an economic plan that is failing, and it is about the unfairness of this Government. The Prime Minister talks about the tax affairs of Jimmy Carr, but he is giving a tax cut to millionaires of £40,000 a year across this country, including in his own Cabinet. When it comes to tax, it is obviously one rule for the comedians on the stage and another rule for the comedians in the Cabinet. The Prime Minister has spent the past week blundering into the tax affairs of Jimmy Carr, his Budget unravelling, his economic plan failing. From the country’s point of view, it is a shambles. From his point of view, it is just another week at the office.

I am not at all surprised that the right hon. Gentleman is touchy about the issue of tax avoidance, because who have they just voted to the top of the list of the national executive committee? Ken Livingstone. It is this Government who are cracking down on aggressive and illegal tax avoidance and tax evasion, and it is the Opposition who are voting for them.

The International Development Committee spent last week in Afghanistan and would pay tribute to the dedication of our armed forces and civil servants working under very difficult conditions. At the Tokyo conference next month, will the Prime Minister reassure the people of Afghanistan that although troop drawdown will end in 2014, advice, support and development assistance will continue for years beyond that, so Afghanistan can become a functioning state that delivers for its people?

My right hon. Friend makes an important point. He talks about our armed services, and today is the day that we encourage people who serve to wear their uniform to work—not something that Members of this House can do, but none the less we should remember all those who serve our country, whether in the reserves or the regular forces.

On the issue of support for Afghanistan, we have already announced that we will continue with the generous level of aid and development support that we are giving to Afghanistan after 2015—we have very much been leading the charge on that—as well as helping to fund the build-up of the Afghan national security forces between now and 2015.

Q2. What is the moral difference between celebrities avoiding tax and a Cabinet of millionaires cutting tax to benefit themselves? (113859)

Perhaps the best way to answer that question is to quote the hon. Lady’s own leader, who at the launch of his local election campaign said:

“Tax avoidance is a terrible thing. It must be cracked down on.”

That, I thought, was the official position of the Labour party. It should be thanking us for getting on and doing just that.

Q3. I welcome the decision not to increase fuel duty. Does the Prime Minister think that this shows hard-pressed families and businesses that we mean business about refuelling growth? (113860)

My hon. Friend is absolutely right. It is this Government who have taken 2 million of the lowest paid people out of income tax, frozen the council tax, got rid of Labour’s job tax and repeatedly dealt with fuel duty, so it is 10p less than it would be under the plans left to us by the last Labour Government.

Q4. Can we return to the theme of practicalities and tax avoidance? One way in which the Prime Minister could put an end to aggressive tax avoidance schemes is to legislate for a general anti-avoidance principle, not a general rule. Will he make one more U-turn and back up his expression of public outrage with real action and legislate for a general anti-avoidance principle? (113861)

Legislating on a general anti-avoidance rule is exactly what we are doing, exactly what Labour did not do for 13 years, and I look forward to welcoming the hon. Gentleman into our Division Lobby.

Q5. Unemployment in my constituency has reduced by 5.7% in the last year as a result of this Government’s work to reduce unemployment and make sure that we are focusing on the right things to deliver economic growth, unlike the Opposition who have no innovative solution to the economic issue. [Interruption.] Additional growth will come from new businesses. [Interruption.] What are the Government doing to encourage teaching enterprise in schools to nurture the next generation of entrepreneurs? (113862)

It is quite clear that the Opposition just want to shout down anyone who wants to talk up what is happening in our economy. In the last quarter we saw 200,000 new private sector jobs, which was more than four times the rate of growth that we saw in terms of the decline in the public sector. We are seeing a rebalancing of our economy, and 2011 was a record year for the creation of new small businesses in our country, and on this side of the House at least we are in favour of encouraging that.

The coalition agreement stated that the Government would introduce a House business committee by the third year of this Parliament. Will the Prime Minister therefore confirm to the House that he will introduce it within the next 12 months?

We are looking carefully at this issue. Let me just say to the right hon. Gentleman, who has served as a Minister and a Back-Bench MP, that this Government, by introducing the Back-Bench days and Back-Bench business, have already made one of the most fundamental reforms of this place. Back-Bench Members are able to determine both the time and subject of debate, something that never happened under 13 years of the Labour Government.

Gift Aid

Gift aid is an important way of supporting charitable giving through the tax system. We know that charities can have difficulties collecting gift aid declarations, for example when collecting donations in the street. That is why we are introducing the gift aid small donations scheme, which will enable charities to claim a gift aid-style payment on donations when it has not been possible to collect a gift aid declaration. We think that will help charities in many parts of our country and, I am sure, will be welcome on both sides of the House.

I thank the Prime Minister for that answer. Community hospitals across Britain benefit greatly from gift aid donations through their leagues of friends. Will he reassure all those who give so generously that the equipment and facilities they fund will be guaranteed to remain for the benefit of local health communities, and may I invite him to visit a community hospital in my constituency to see gift aid in action?

I have visited a community hospital in my hon. Friend’s constituency while having a holiday there and so have some experience of the excellent service provided in south Devon. I absolutely can say that leagues of friends do a brilliant job across the country and the money they provide for that equipment should remain local. I think that the gift aid change we have announced will be able to help hospitals and leagues of friends such as the one she refers to.


Q7. The Prime Minister has not had time to reach a judgment on the tax affairs of Gary Barlow—he is a busy man—but he has had years to consider those of massive Conservative donor Lord Ashcroft. Are they morally wrong, like Jimmy Carr? (113864)

Like all Members of both Houses of Parliament, all peers have to be full UK taxpayers. That is a change I fully support. While we are on this subject, the hon. Gentleman might want to have a little look at Labour’s chief fundraiser, a man called Andrew Rosenfeld. Between the years of 2006 and 2011 he lived in which key marginal seat? Anyone? Zurich.

Order. The hon. Gentleman deserves to be heard. There has been far too much noise today when Members have been asking their questions. It is discourteous. Let us hear Mr Bernard Jenkin.

Will my right hon. Friend take this opportunity to remind the House that there is a crucial EU summit at the end of this week? Which is more important for UK growth and jobs: the implications of the massive changes being proposed in the EU or House of Lords reform?

Clearly, in terms of growth in the UK economy, what is happening in the eurozone and in Europe is extremely important, and it is a very vital summit that is taking place this Thursday and Friday. The UK Government have a very clear view: the eurozone countries need to do more in the short term to settle the financial instability in the markets, but they also need to take medium and longer-term steps to make sense of the eurozone. That will involve them sharing greater powers, but that is something the UK should not be involved in. I think that we have a very clear view: we push forward our arguments with great vigour and we protect and defend the UK economy and political system at the same time.

Q8. Every hour of every day somebody is killed by a weapon that has been irresponsibly traded from one country to another. Next week the arms trade treaty negotiations start in New York. Will the Prime Minister make sure and guarantee that the British delegation fights for the inclusion in the treaty of not only police and security apparatus that can be used for internal repression, but ammunition, which is vital? It is bullets that kill. (113865)

As the hon. Gentleman knows, we back the arms trade treaty, as we have done for a considerable amount of time, and lobby very vigorously on that issue. On the specific point he raises, I will look at it and write to him.

On Friday night, the towns of Bacup, Crawshawbooth and Darwen were subject to unprecedented flooding when the River Irwell and the River Darwen burst their banks at the same time. Will my right hon. Friend join me in congratulating the emergency services on working through the night and, in particular, the residents of Crawshawbooth, who came out in the morning to clean up their village so that it was able to welcome the Olympic torch less than 12 hours later?

I certainly join my hon. Friend in praising the emergency services. These were really very dangerous and damaging floods, caused by a huge amount of rainfall over a very short period. The emergency services performed superbly, and I hope to go and see that for myself, but now we are in the recovery phase and the phase when people start to look at going back into their homes. There will be all sorts of questions about insurance and about how we can help, and I am sure that he will make those arguments in the House and that the Government will do all they can to help.

Q9. Will the Prime Minister finally answer the question why this year to date this Government have actually borrowed £3.9 billion more than they had by this time last year? (113866)

The deficit, which the hon. Gentleman and his party left, is down by a quarter, and the policy that he supports is to spend more, to borrow more and to put the debt up even further.

Q10. Seventeen-year-old Godwin Lawson, from Enfield, was tragically stabbed to death in 2010. Since then his mother, Yvonne, has become a powerful force for challenging the culture of knife crime, by sharing her experiences of her son’s death with young people in schools. She, like many groups on the front line of knife crime, can make an extraordinary contribution to challenging that culture, but some authorities are not yet getting behind them by supporting and offering funding to achieve that aim. Will the Prime Minister lend his support and encouragement to those people and to the councils to get behind them? (113867)

I will certainly give my support to Yvonne Lawson and to all those who are playing such a heroic role in trying to change the culture of knife crime and of carrying knives in our country. It is worth remembering that this year, for instance, Ben Kinsella would have been 21, and I pay tribute to Brooke Kinsella and to all such family members. It would in many ways be easier for them to try to turn away from the tragedy that robbed them of their children, their brothers and their sisters, but instead they campaign and show immense bravery, raising the profile of the issue. The Government must play their part by making sure that there are tough mandatory sentences, and we are and have done that, but a larger culture change needs to take place, and the bravery of those who have lost loved ones—going into schools and talking about the dangers of carrying knives—can play a huge role in that.

The Prime Minister will be aware of the horrific explosion that occurred in Shaw in my constituency yesterday. I am sure the whole House will want to pay tribute to, and mourn the death of, two-year-old Jamie Heaton and to send its best wishes to burns victim, Andy Partington. Will the Prime Minister join me in paying tribute to the work of the emergency services that attended the event yesterday, work that I witnessed first hand, as well as to Oldham council’s civil contingency service and to the Red Cross? Does he agree that we must never take for granted the courage and bravery of those servicemen and women?

The hon. Lady is absolutely right to speak as she does, and I am sure the whole House will want to send a message of sympathy and condolences to the family of that poor two-year-old, who lost his life, and also our best wishes to the burns victim who is in hospital being treated at the moment. The scenes of what had happened as a result of that explosion were really quite appalling to see on our televisions, and I certainly join her in paying tribute to the emergency services. I also wish all speed to the police in getting to the bottom of anything that might have happened or gone on. Everyone will require answers to what has been an absolute tragedy.

Q11. The Calder Valley flood victims Facebook page and the Community Foundation for Calderdale JustGiving page show great community spirit, and the fact that the arts festival, Mytholmroyd gala and handmade parade are all going ahead this week shows the community’s resilience and, also, that the Calder Valley is open for business. Can my right hon. Friend update our flooded communities on how negotiations are going with the insurance industry, so that they can get insurance in the future and at a reasonable price? (113868)

I quite understand why my hon. Friend wants to raise that issue. I believe that more than 550 properties in his constituency alone were affected by these really damaging and dangerous floods. On flood insurance, we are going to work very hard with the industry to continue to deliver widely available and affordable household insurance in flood-risk areas. I absolutely join him in praising the resilience of his community, having suffered as my constituency suffered in 2007. Although the recovery from floods is extremely difficult, the resilience of our communities and the amount of public and community service that comes out of them is remarkable and deserves our praise.

Twenty years ago this week, the giant Ravenscraig steelworks in my constituency was forced to close. Thousands of steelmaking jobs were lost, and sadly many of my former steelworking colleagues never found work again. Twenty years on, will the Prime Minister apologise for his party’s shameful role in the demise of the Scottish steel industry?

I am sorry for every job that has been lost in manufacturing industry over a very long period of time. I would say, though, that while manufacturing as a share of the economy almost halved under the previous Government, that share is now increasing. It is worth recognising that under this Government the steel industry has started up again on Teesside, and that is something that the whole House should applaud.

Q12. Hereford is the home of the SAS, and 19 July will be the 40th anniversary of the battle of Mirbat, in which nine SAS soldiers fought off more than 300 heavily armed guerrillas. During the battle, Sergeant Talaiasi Labalaba was shot while single-handedly operating a 25 lb field gun—a weapon designed for a six-man team. Successive Governments have declined to recognise the extraordinary nature of his sacrifice. The SAS has many heroes, but will the Prime Minister finally put this matter to rest and give his support to the campaign to award Sergeant Labalaba the posthumous Victoria Cross that he so clearly earned? (113869)

My hon. Friend is right to speak up for the SAS, which, as he says, is based in his constituency, and the extraordinary fight that those soldiers had in Oman all those years ago. We are not allowed to speak a lot on the record about what they do, but it is worth putting on the record the immense gratitude of all Governments and, I think, the entire British people for the risks they take on our behalf. Thinking of the recent hostage rescue, I would like to do that personally. Regarding my hon. Friend’s question, these sorts of decisions are not for politicians to make, but let me once again pay tribute to the heroic actions of that man and everyone involved on that day.

What my right hon. Friend the Education Secretary explained in great detail in yesterday’s debate is that we want to have in our country an absolute gold standard of exams that are about rigour and high standards. The tragedy is that we inherited from the previous Government a system that was being progressively dumbed down, where Britain was falling down the league tables and GCSE questions included things such as, “How do you see the moon—is it through a telescope or a microscope?” Government Members think we need a rigorous system, and that is what we are going to put in place.

Q14. The exciting Goonhilly space science and technology park in my constituency richly deserves the conditional regional growth fund approval that will secure vital jobs and inward international investment into the UK, and will harmonise with the Government’s welcome and crucial commitment to space sector growth. Will the Prime Minister please use his influence to ensure that there is no—I am sorry to say—further avoidable delay in the implementation of the RGF grant and the launch of this vitally important enterprise? (113871)

I will look very carefully at what my hon. Friend says. Almost 60% of regional growth fund projects are now under way, and the money has been distributed in very many cases, but I will look specifically at this project, which does sound interesting and worth while. As I understand it, it involves radio astronomy and satellite management. It will bring to Cornwall high-tech jobs that it wants and needs, so I will do my best to make sure it happens.

A third of south-east London health care trusts’ deficit is due to the private finance initiative. Is not the Secretary of State for Health wrong to suggest that the entire deficit is due to the PFI? Should he not be working with local health managers to deal with the situation rather than imposing an outside administrator to cut local health services?

First, it is this Government who are putting more money into the NHS this year, next year, and the year after. Some of these NHS trusts, such as the one the hon. Gentleman mentions, do have enormous deficits, and a large part of that is down to the completely failed PFI systems that the previous Government put in place. In hospitals up and down the country, it costs £120 to reset an alarm, £466 to replace a light fitting—[Interruption.] Labour Members are shouting from a sedentary position that these were Conservative PFIs. They were not—every single one of them was put in place under a Labour Government. Yet again, time for an apology.

I certainly support flatter, fairer taxes. That is why we have taken 2 million people out of income tax and why we have a lower top rate of tax to make us competitive with the rest of the world. It is important to put it clearly on the record that tax evasion is illegal and wrong, and should be chased down, and that, as my right hon. Friend the Chancellor has said, some of the tax avoidance schemes that have been put in place in recent years are very questionable. The Government should be absolutely clear that the Revenue’s task is to close those schemes down and to ensure that people pay their taxes properly.

In December last year, this House passed a motion calling for a Bill to make urgent reforms to our deeply unfair extradition treaties. Nearly seven months later, there has been no Bill and no action. What makes the Prime Minister more uncomfortable: ignoring the will of the House for months on end or the plight of those facing imminent extradition?

We held the Scott Baker review, which looked carefully at the extradition arrangements. The hon. Lady should of course look at some of the cases that have caused concern, but I urge her to look also at the overall figures, which show that we are benefiting by being able to extradite people who have committed serious crimes from the US back to the UK. We continue to look at this issue. We will ensure that we do the right thing for our country, but people should not think that it is a very simple issue, because it is not.

Will the Prime Minister congratulate the excellent Secretary of State for International Development on producing a flag that will replace the European Union logo on all our overseas aid? He should be thoroughly congratulated.

I am sure that, like myself, my hon. Friend—and probably Mrs Bone as well—got the “Dear colleague” letter from my right hon. Friend the Secretary of State with his excellent new logo. It shows that the aid that we send is provided not on behalf of the British Government, but on behalf of all British people, who I think support the fact that Britain stands for something in the world: we stand for helping the poorest in our world, even as we have a difficult time in our own country.