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Commons Chamber

Volume 547: debated on Monday 2 July 2012

House of Commons

Monday 2 July 2012

The House met at half-past Two o’clock


[Mr Speaker in the Chair]

Oral Answers to Questions

Communities and Local Government

The Secretary of State was asked—

Empty Homes

We have introduced a series of measures to get empty homes back into use, which are backed up by our commitment of £160 million of central Government funding. That is in contrast to the last Government’s pathfinder programme, which was more interested in bulldozing Victorian terraces than refurbishing empty homes.

I am grateful for that answer. Constituents of mine in Pudsey are extremely concerned about the deluge of recent planning applications on greenfield and protected area of search—PAS—sites, given that as of October 2011 the number of empty properties in Leeds stood at nearly 14,000. Does my right hon. Friend agree that it would be better to bring those homes back into use than to destroy our green spaces?

I know my hon. Friend’s constituency well and am a frequent visitor there. He is right to point out the number of empty homes within the Leeds city boundaries, as it is one reason why we have been so keen to have the new homes bonus there, in order to bring long-term empty properties back into use. We would be doing well if we brought some of the fine architecture of Leeds—those wonderful terraced properties—back into use.

Will the Secretary of State congratulate Kettering borough council, of which I have the privilege to be a member, on its work with the Rockingham Forest Housing Association? They have recently spent about a third of a million pounds to bring three empty properties back into use, and now three families have homes that they did not have this time last year.

My hon. Friend illustrates my point. I hope those families enjoy their new property and will come to see it as something that a different Government were able to deliver in a different way.

Empty Shops

2. What steps he is taking to encourage use of empty shops not covered by the Portas pilot scheme or the high street innovation fund. (114386)

11. What steps he is taking to encourage use of empty shops not covered by the Portas pilot scheme or the high street innovation fund. (114397)

Addressing the issue of empty shops is one of the priorities for the industry-led taskforce set up as a response to the Portas pilots. We are also encouraging landlords to make empty shops available for meanwhile use, and have introduced the community right to bid, to help local people sustain their vital community assets.

The Portas pilot is a great boost for Stockport, and I have seen some of the good work done there, particularly during the recent “Love your local market” fortnight. However, there is a record number of empty shops in the town centres of this country—about 24,000. Just how many of those does the Minister expect to see filled as a result of the many initiatives that he has announced?

As the hon. Gentleman will recognise, the Portas review suggested 28 different steps. We have accepted almost all those, and one of the things we added to the list was a £10 million fund that directly helped to bring empty shops back into use. That is £5 million more than was proposed by his party.

Formby, Maghull and Crosby—three towns in my constituency—all bid unsuccessfully for the Portas cash. Sefton’s Labour council would like to help, but the scale of the cuts to local government make that almost impossible. What concrete support is the Minister going to give to revitalise our town centres, because the £10 million he mentions is not going to go far enough?

Hon. Members know that active Members of Parliament are an extremely important asset in getting those town centres working again. A second round of Portas pilot bidding is to take place, which I will announce before the end of this month. That is still open to the hon. Gentleman’s three towns. In addition, I can report to the House that going forward we intend to support all the towns—more than 370—that have applied.

I have been able to see some fantastic schemes in places such as Stockton, where the council has taken over a large double shop frontage, which entrepreneurs rent for just £10 a week. It then uses the empty properties in the town centre to get these people into rentals after a few months when they have made their businesses a success. Those are the types of schemes that I have seen and that I am encouraging, and hon. Members can do an awful lot to persuade their local authorities to play ball.

I am sure the Minister will join me in welcoming the big reduction in the number of empty shops on Redcar high street, but what can he do about the rigidity of the business rates system? In one case, business rates are five times the rent being sought by the landlord.

Business rates are always a heavy cost and people like me who started our businesses in shops are familiar with that heavy burden. We have taken 300,000 of the smallest businesses out of paying any business rates at all and, in addition, we have spread the rise, which is only an inflation-level rise, for other businesses over up to three years. We will continue to look at ways to help businesses, and particularly the smaller shops, with their rates bills.

What plans does the Minister have to assist areas with high shop vacancy rates, such as Grimsby, which has 28.3% vacant, West Bromwich, which also has 28.3% vacant, Stoke-on-Trent, which has 25% vacant, and Sunderland, which has 23% vacant? Those areas, so far overlooked for Government funding, have an average unemployment rate of more than 10%, which is way above average. Can we expect there to be more weighting towards disadvantaged areas in the next round of Portas pilots?

One of the useful changes we have made through the Localism Act 2011 is to allow local authorities to vary the rates downwards, which means that local authorities can look at their high streets and try to help them. I rather brushed over a point earlier. Those on the Opposition Front Bench have previously called for £5 million to be spent on bringing those empty shops back into use—I remind the hon. Lady that those calls came from her own Front Benchers—and we have doubled that and spent £10 million to assist.

There would be fewer empty shops if small retailers in particular could spread their costs more evenly. I know that the Portas recommendation was that wherever possible people should move to monthly rather than quarterly rent. Will the Minister take this opportunity to encourage all landlords to look kindly at such an approach when it is suggested by their tenants?

From my experience, as reflected in the 2007 leasing code, an awful lot of small things could make a big difference to smaller businesses. Finding the money to pay three months’ rent in a single go is enough to topple some businesses over, and smoother payments, fairer leases and not always having upwards-only rent reviews can all help. I am working with the industry, including the likes of the Royal Institution of Chartered Surveyors, to ensure that the leasing code is better implemented.

Parish Polls

4. What discussions he has had with local authorities on reforming the electoral rules relating to parish polls; and if he will make a statement. (114389)

I have regular conversations with local authorities on a wide range of issues, including electoral matters. Parish polls are the most local means of giving communities an opportunity to have their say by voting on a range of issues, from bus shelters and community centres to the installation of CCTV cameras. However, we recognise the current electoral rules are outdated and can be a barrier to local people’s participation in those polls. When an appropriate legislative opportunity arises, we will therefore reform the rules.

I thank the Minister for that very positive answer. Such polls are not just used for bus shelters. We had a parish—or town—poll in Dover on the future of the port of Dover and 98% voted in favour of the people’s port community ownership model, which was the right way forward. The rules are that polls are open between 4 and 9 and there are no postal votes, no proxy votes and no poll cards. That discriminates against the elderly, the disabled and those who work. Does the Minister agree that we need change quite urgently?

I hope that I have shown that I am on the same side as my hon. Friend. I pay tribute to him for his work on the poll in Dover. He observes that some parish and town councils serve large populations. As the rules are set out in the schedule to primary legislation, we need a legislative means of reforming them, but we are looking for that.

Community Assets

5. What plans his Department has to offer support to communities seeking to purchase their local pubs or other assets of community value. (114390)

The Government recently laid before the House the assets of community value regulations, which give communities a fairer chance to bid to take over local assets, including their local and valued pubs. We will also support communities that take up these rights, and details of a support package to achieve that end will be announced very shortly.

Some of the finest pubs in the country are in Northumberland, including the one in Humshaugh in my constituency, which was saved by the local community. Does the Minister agree that it is a concern that soldiers were turned away from a pub down south last week? As Armed Forces day took place last weekend, including in my constituency of Hexham, does he also agree that pubs should be encouraged to accept soldiers at all times?

I congratulate my hon. Friend and his constituents on the initiative in Humshaugh. I have had the opportunity of visiting other community initiatives in his area, including the Forum cinema, which has been very successful. On the point about the welcome to soldiers in our pubs, I, along with all other Members of this House, am horrified at such inappropriate and disgraceful treatment of men and women who, as we sadly learned again today, regularly put their lives on the line on behalf of our country. I note that the management of the premises in question have said that in the light of the public reaction, they will review their policy. I sincerely hope that they do; they ought to, and it ought to be changed. I hope that that is the message that all hon. Members present will send to them.

The continued decline of the local newspaper industry is of huge concern to Members on both sides of the House. Those publications are clearly community assets. What consideration has the Minister given to amending the Localism Act to protect those papers from the actions of predatory news groups?

Under the Localism Act, assets are defined in terms of property assets. However, the hon. Gentleman will know that one of the challenges to local newspapers sometimes comes from the use of taxpayer-funded propaganda sheets by local authorities. It is for that reason that the Government have strengthened the rules on transparency. I hope that he will join me in encouraging those overwhelmingly Labour-controlled councils that do not play by the rules on fair trading and transparency to come into line, because many of us think that they are deliberately trying to squeeze an independent voice of criticism out of those Labour-controlled areas.

I welcome the community right to bid for pubs and other community assets, but does the Minister agree that unfortunately it will not be as successful as it should be while the loophole allowing the demolition of free-standing pubs remains, and while the right to bid allows pubs to be changed into things like betting shops and solicitors’ offices, with planning permission? Would it not be simpler to introduce a separate use class, so that the community always has a say when a pub is to be closed or demolished?

There are two points: first, the Government have indicated that they will look at the operation of the use classes order more generally; and secondly, the issue regarding demolition stems from a court definition of what counts as development, and that recently changed. Now a local authority has in its gift the ability to issue what is called an article 4 direction, removing deemed permissions in relation to various classes of development. That is an option that should be considered. So, too, is the option of neighbourhood plans, which could recognise the importance of local public houses and other community facilities. Indeed, the national planning policy framework strengthens the weight that can be given to such issues as material considerations.

Social Housing

The Government and the private sector are together investing £19.5 billion in an affordable homes programme that is set to exceed all original expectations. It will deliver up to 170,000 new homes for both rent and affordable home ownership. We are also spending £1.3 billion to get stalled developments back on track, and to build the infrastructure needed to unlock sites for housing.

I welcome the Minister’s comments, but in many coastal communities there is a surfeit of holiday accommodation in caravan and chalet park centres. If one of those sites closes down, it has to revert to agricultural use. Does he agree that it would make sense to redesignate caravan parks as brownfield sites to make it easier to develop them for affordable housing?

These are very much matters for the local plan, which is in the hands of my hon. Friend’s planning authority. I am sure that he will also be alert to the options in the neighbourhood planning system for local communities to seek a different designation, if that is appropriate.

I do not know whether the Minister is aware that according to figures from Shelter, in 2010-11 there were 104 new affordable home starts in Sheffield, including social rented housing starts. Assuming that he will put that down to the inadequate legacy of the previous Government, is he aware that in 2011-12, the number of new affordable starts fell to two, in a city of more than half a million people? Does he accept responsibility for that, and if so, what will he do about it?

The Homes and Communities Agency significantly exceeded its corporate plan target for last year. It delivered 51,665 new affordable homes, of which 33,000 were for social rent, and that is in very stark contrast with the Labour Government’s performance; they reduced the number of social homes available for rent by 421,000.

What steps is the Minister taking to ensure that houses sold under the right-to-buy legislation are replaced on a one-to-one basis?

My hon. Friend has been a lively campaigner for more social housing, and rightly so. It is an essential part of the coalition agreement on the right to buy that there will be a one-for-one replacement of every home sold, to provide a new social or affordable home.

I draw attention to my interest, as declared in the register. The House will have noticed that the Minister’s response to the question about the availability of social rented housing was to use a different term—affordable rented housing. Everyone knows that under this Government, social rented housing has virtually come to a halt. When will they recognise that affordable rented housing depends on very much higher rents, and when the Department for Work and Pensions is cutting housing benefit and the Prime Minister is encouraging even deeper cuts in housing benefit, how can they possibly hope people on low incomes will be able to afford those rents, if social housing is not being provided?

The right hon. Gentleman once sat in my office and he will know that during his period of office he reduced the number of social homes available. In 2011-12 two thirds of homes completed—33,227—were social homes for rent. If he had paid more attention to getting a positive input of social homes during his period of office, we would not have such a deficit to fill now.

This Administration are presiding over the worst housing crisis in a generation. There has been a 97% collapse in new social housing starts and a 68% fall in affordable housing in the past 12 months. We have heard the Minister tell us that everything is fine and dandy, but nobody believes him. I cannot help wondering if he is modelling himself on Voltaire’s hopelessly optimistic Dr Pangloss or on one of George Orwell’s cynical apparatchiks, or is he just plain incompetent?

The hon. Gentleman left off the correct response, which is that unlike him, I am supervising the development of more social and affordable homes. It was the Government whom he supported who cut the number of social and affordable homes by more than a quarter of a million. If his Government had performed properly in their period of office, we would not be facing that housing crisis now.

Armed Forces (Housing)

7. What recent steps he has taken to support former members of the armed forces in respect of housing. (114392)

15. What recent steps he has taken to support former members of the armed forces in respect of housing. (114401)

19. What recent steps he has taken to support former members of the armed forces in respect of housing. (114405)

I am determined to help current and former members of the armed forces gain the housing they deserve. I have given service personnel priority for the Government’s affordable home ownership schemes, including Firstbuy, and on Friday last week I issued new statutory guidance to make it easier for service personnel to get access to affordable homes for rent.

I am pleased to hear that that guidance is coming forward because my local housing authority has up till now seemed to be confused about where it stands in relation to the military covenant and its obligations under it.

I am grateful to my hon. Friend for giving me the opportunity to explain to the House that that new guidance makes it clear to his and every other local authority that this nonsense of people returning, often without a base back in this country because of the amount of time they have served overseas, and then not being able to apply for housing in their area because of some trumped-up allegation that they have no locality—in other words, that they do not have a residency requirement —is to end. That is what the guidance makes absolutely clear.

I have a constituent in the village of Belton, Mrs Kirsty Pett, who is a mother of four and has served in the armed forces, whose husband, a former Warrant Officer, was tragically killed in a motorcycle accident last year. She is currently on the council housing list and has been given medium priority, but she will lose her privately rented home in the very near future. Will my right hon. Friend confirm that Mrs Pett’s family, and indeed widows and children of all armed forces personnel, will benefit from the new changes to enable her to remain resident in her home village?

My hon. Friend raises an important point: when Army personnel return, that is one thing, but when they do not and their spouses are left to pick up the pieces, that is when this country owes them a real debt of gratitude. In the new statutory guidance, which was issued on Friday, I have ensured that the bereaved spouses of those who are serving and of reservists get top priority.

I thank my right hon. Friend for his reassuring earlier answer, which indicated that the Government are taking action to support veterans who have made sacrifices to defend our liberty. Many councils in the UK will be giving priority to former armed forces personnel who have urgent housing needs. Will he join me in calling on City of Lincoln council and North Kesteven district council in my constituency to follow suit?

Yes, absolutely. In drawing up the criteria, we have made sure that councils need to provide that additional guarantee to those service personnel for some years after they leave the armed forces, so the residency criterion, for example, will not be placed against them for up to five years.

The whole House will welcome the new guidance to councils, particularly as it relates to social housing. The Minister alluded to support for those who wish to purchase their own home, and many people in my constituency of Castle Point would like to get on the housing ladder. Will he give me more information on what support there is for that?

My hon. Friend is absolutely right. Of course, when many people come back from military service they want to start on the housing ladder by purchasing a home. I have extended the Firstbuy scheme by ensuring that a high preference is given to those people. In addition, we have sent personnel out to bases both in the UK and abroad to ensure that Army personnel know that they can apply to the Firstbuy scheme, for example, and hundreds have done so.

Affordable Housing Starts

If the Government’s record on affordable homes is so good, why has the number of households in bed and breakfast-style accommodation increased by 44%?

Many of these problems would have been a great deal easier if we had had an extra quarter of a million social and affordable homes, which is the reduction that the hon. Gentleman’s Administration produced. We have a social and affordable housing programme that will deliver 170,000 new affordable homes by 2015, and my right hon. Friend the Housing Minister has been very diligent in pursuing the point the hon. Gentleman raises.

There appears to be a discrepancy between the figures used by the Government and those used by the Homes and Communities Agency. Why does it suggest that there was a 68% drop in starts last year, and will the Minister be getting the chief executive of that august organisation in as soon as possible to clear it up?

The hon. Lady should not believe too much of what she reads on these matters—[Interruption.]

Order. The Minister, as we always expect him to, is behaving like a gentleman, but the hon. Gentleman must be heard.

The fact of the matter is that the social and affordable housing programme is meeting an urgent need and we are pressing ahead with it vigorously. The issue that the hon. Lady raises must be seen in the context of the financial and housing situation we inherited from the previous Government.

Given what my hon. Friend said about right to buy and like for like in social housing, does he agree that the more people who take up the £75,000 discount, the more chance there will be for people to have affordable housing, and will he make every effort to encourage every council to offer that discount so that we can make affordable homes for the many, not for the few?

That is of course an important step, and the Minister for Housing and Local Government has also announced a consultation on “pay for stay” to ensure that those on very high incomes do not have the subsidised use of valuable social rented accommodation.

I am not surprised that the Housing Minister has chosen not to answer these questions, given that the House knows he has a bit of a problem when it comes to statistics. Will the Under-Secretary explain how his right hon. Friend came to conclude that the huge decline in affordable housing starts this year—that is what the figures from his own Department show—were in his words “impressive” and “rapid and dramatic progress”?

It is certainly rapid and dramatic progress if someone inherits a situation in which they are going backwards. We are going forwards, and the Homes and Communities Agency housing delivery programme is on track and, in fact, in completion terms, ahead of its corporate plan. There is a cyclical financial profile, but the sector has risen to the challenge to deliver, and 146 providers will deliver 80,000 new homes for affordable rent and affordable home ownership, using Government funding of just under £1.8 billion. This means that we will be able to deliver even more homes for every pound of subsidy from the taxpayer.

I am not surprised that the Minister is unable to answer the question, but the House should be keen to assist his right hon. Friend the Housing Minister in his difficulty. He has already had to be put straight by the UK Statistics Authority, and I suggest that he seeks the help of the Education Secretary and offers to take one of the new mathematics O-levels. I have a question: “If 49,363 affordable houses were started last year and only 15,698 affordable houses were started this year, should Grant describe this as: a) ‘a massive increase’; or b) ‘a 68% decline’? Please show your detailed workings.” Does the Under-Secretary not understand that every time his right hon. Friend does that, it is not just affordable house building that declines, but his credibility? When is the Secretary of State going to get a grip?

The right hon. Gentleman prays in aid the UK Statistics Authority, so if I may I shall very briefly quote this:

“Official estimates of net change are available for social rented dwellings, but not for the wider stock of ‘affordable’ housing beyond this category. They show an overall reduction of 421,000 in the stock of homes rented from local authorities and housing associations over the period 1997 to 2010.”

That seems to me a horrific indictment of Opposition Front Benchers, and what Government Members are doing is repairing some of that damage.

Park Homes

The treatment of residents on many park homes sites is simply unacceptable, and I welcome the Select Committee on Communities and Local Government’s important report, which highlights widespread abuse. The Government will therefore offer their full support to the Mobile Homes Bill of my hon. Friend the Member for Waveney (Peter Aldous) in order to secure a better deal for residents.

I am grateful for the Minister’s reply. The inquiry took a good deal of evidence that criminal fraternities were making considerable inroads into the industry. Will he outline for the House what the proposed measures are going to do to rid that industry of such people?

I know my hon. Friend is a member of that Select Committee, and one of the most shocking things I found when I read the six volumes of written evidence that had been submitted was how many submissions had to be anonymous because the people giving evidence feared reprisals. It is completely unacceptable that bullies and thugs should intimidate some of the most vulnerable people in our society. The Housing Minister has published a consultation on the measures that are needed to deal properly with the problem and to drive out these rogues from the sector, including restricting their ability to block sales. Those measures will be reflected in our hon. Friend’s Bill, to which I hope the whole House will give its full support as it makes progress.

I belong to the all-party mobile homes group, and we have been campaigning for years to strengthen the hand of local authorities to enforce properly the licences that protect people who live on park home sites. Will the Minister outline the specific powers that local authorities are being given to ensure that the powers that they do have are properly enforceable?

Now is not the time, because the Bill will be published, as well as the response to the consultation. However, the hon. Lady can have my reassurance that the Select Committee’s recommendations on strengthening the ability of local authorities to prevent the owners of park homes from denying the rights that every other home owner reasonably expects will be present in the Bill.

I welcome the support that the Government will give to the private Member’s Bill promoted by my hon. Friend the Member for Waveney (Peter Aldous). However, does the Minister agree with me and the Select Committee that the Bill should include reserve powers for a fit and proper person test should the welcome steps that the Government are already going to take not deliver justice for residents?

As I said, the Government will respond to the Select Committee’s report. The Select Committee, of which my hon. Friend is a member, said that the measure would be a big change in the regulation of the sector and that the best thing would be to carry out a review in a couple of years to see whether the changes had had an effect. That approach seems sensible.

Housing (Young People)

12. What steps he is taking to increase opportunities for young people between the ages of 18 and 25 to find suitable housing. (114398)

The housing strategy outlines a range of initiatives designed to get the house building sector moving again and to provide opportunities for everyone. In particular, our NewBuy and Firstbuy initiatives are helping young people into home ownership and we are supporting that with institutional investment in the private rented sector.

Is the Minister sure that that will help 18 to 25-year-olds? There is a crisis out there of young people with nowhere to live. The issue is not just about housing benefit; I believe that all benefit should be linked to education and employment. But the fact is that there is a crisis and there does not seem to be much imagination on the Minister’s part.

The hon. Gentleman is absolutely right to point out that the crisis is very real and we believe that it has been brewing over a long period. By the way, it is about a lot more than simply housing; if we look at the lives of people in chaos, we always find educational problems and family breakdown, and often financial crises are involved. A lot of work is going on across the Government, including the ministerial working group, which brings together eight different Departments. Our next report, which the hon. Gentleman can look forward to, will be published before the summer and will tackle that exact issue.

Under Labour, homelessness fell by 70%. Under this Government, 1 million people are out of work; house building is falling; homelessness is rising rapidly; and now there is the proposal to punish young people who leave home to find a job or get an apprenticeship by making them lose their housing benefit and therefore the roof over their head. The measure was described as “absurd” by the YMCA because it will drive up homelessness and close the facilities that support those people.

The Minister for Housing and Local Government has said that homelessness is what brought him into politics. Is it not becoming increasingly clear that his legacy will be rapidly rising homelessness and should he not concentrate not on making a bad situation worse, but on building homes, creating jobs and driving down homelessness?

From the great passion with which the hon. Gentleman speaks, one would imagine that he had a long-term interest in this issue; in fact, he is the eighth Labour shadow Housing Minister whom I have faced. During the time the Opposition have been in place, guess how many Opposition day debates there have been in the Chamber about this important subject? Zero, none—there has not been a single such Opposition day debate. That is because the hon. Gentleman has a very loose relationship with statistics himself. Homelessness is lower than it was in 28 of the last 30 years—and it is less than half the level it was in the 13 years of his Government.

Negative Equity (North of England)

A Council of Mortgage Lenders report in 2011 suggests that, as of the first quarter of that year, 827,000 UK households were in negative equity. That includes nearly 300,000 in the north of England. The organisation also reported that there were 36,200 repossessions that year—the lowest annual total since 2007.

In its report on home ownership, Standard & Poor’s says that rates of negative equity in the north-west and the north-east are four times higher than those in London. Obviously those areas were disproportionately hit by the Government’s cuts, and unemployment is rising. There are hard-pressed families in these regions struggling to pay their mortgages. What help is the Minister going to give them?

I remind the hon. Gentleman that negative equity becomes a problem if people cannot pay their mortgage. Mortgages are affordable at the moment because of the fiscal and financial policies that this coalition Government are pursuing. Interest payments on mortgages are at the lowest level as a proportion of total income since records began. I invite him to consider how many repossessions in the north of England would result if we had the bond rates of the Italians or the Spanish, and therefore how important it is for this Government to remain steadfast on their fiscal programme.

Does the Minister agree that the way to encourage a successful housing market in the north of England is to encourage the growth of sustainable, private sector-led jobs in that region?

Lewisham, Deptford is some considerable distance from the north of England, to which nevertheless the observations of the right hon. Lady will certainly relate.

I hope to be in order, Mr Speaker, by pointing out that despite what my hon. Friend the Member for Hyndburn (Graham Jones) said about the north of England, Lewisham has the fourth highest rate of repossessions in England. There are 17,000 homeless people on our housing waiting list. What advice would the Minister give to those of my constituents given the misery that they are facing through losing their homes—their most precious possession?

I am a tolerant and obliging fellow and I wanted to hear the evidence, but there is nothing to which the Minister should respond on the Floor of the House, because the question relates to the north of England and he did not expand it. However, the right hon. Lady’s observations are on the record.

The hon. Gentleman says that she is a dame, but even dames must play by the rules, and that is not disputed.

New-build Homes

14. What his most recent estimate is of the number of homes to be built in the south-east in the next five years and of the proportion of such homes that will be let at affordable rents. (114400)

We do not forecast levels of future house building. However, taking into account delivery in the first term of this Government, up until March 2015 we expect to deliver 107,000 affordable homes in London and east and south-east England through the Homes and Communities Agency programme and the Greater London authority. Of those, over 37,000 are expected to be for affordable rents.

I am rather confused by that answer, because the Minister has just said that he does not forecast numbers of new homes but in an earlier answer he forecast 170,000 new homes. I do not know when a forecast is not a forecast. May I tell him what the housing situation is like on the ground, because his responses so far have not revealed it properly? In Slough, 43 affordable new homes have been started, down from 103. I have had more inquiries about housing this year than in any year since I was elected in 1997. We have nearly 300 people whose homes have been repossessed. [Interruption.] If I could come to the question—

Order. I think that the hon. Lady wants to know what the Minister is going to do about the situation.

May I specifically ask the Minister what he can offer to people in a situation where there are more people on the housing waiting list in Slough than there are affordable homes?

Order. There is no breach of order. [Interruption.] Order. I must say to the hon. Lady that the Minister is not out of order. I do not think she should take offence, as the Minister did not mean to be offensive in any way; he was being light-hearted and jocular, as we all seek to be.

If it assists in our proceedings, I am happy to withdraw the comment.

I fully acknowledge that we need more social and affordable homes. That is why we have a programme that is adding to the stock of social and affordable homes. I say to the hon. Lady that Slough will end up with more social and affordable homes in 2015 than there were in 2010, unlike the period in which Labour ran this country and its housing policy.

Council Tax

16. What the percentage change was to average band D council tax bills in real terms in (a) England and (b) Gravesham constituency over financial years 2010-11 and 2011-12. (114402)

Thanks to the council tax freeze, over the last two years, council tax bills have fallen by 1.4% in Gravesham and 4.4% across England in real terms. That is real help for families and pensioners with the cost of living.

I thank the Secretary of State for his answer. I will ask my question in a very calm manner. The majority of councils in Kent have frozen their council tax. Is he disappointed that in Gravesham it has risen by 3.48%, which is just below the 3.5% threshold for a referendum?

Gravesham has joined the small, select list of council tax dodgers. If it was felt that the council tax should go up, it would have been sensible to put it to the people of Gravesham, who no doubt would have given it their consideration.

Wind Turbines

17. What steps his Department is taking to promote small wind turbines within the planning framework. (114403)

Following the requirements of a private Member’s Bill in the last Parliament, the Government have introduced permitted development rights for domestic installations of small-scale renewable energy projects.

Does the Minister agree that although not all communities are keen for large-scale wind generation in their area, many small businesses, families, households and neighbourhoods are keen on small wind-powered generating turbines, such as those supplied by the excellent Windcrop in my constituency, as part of the micro- generation revolution that the Government are promoting? What assurance will he give the House that the Government will continue to promote that popular brand of microgeneration from small, local wind projects?

I am aware that the firm to which my hon. Friend refers creates valuable jobs in his constituency. He will also know that Norfolk, like other places in the country, attracts tourists, so it is right to maintain the quality and character of the landscape. The new permitted development regulations give some latitude to householders, but not in a way that will destroy landscapes.

Topical Questions

On Thursday, I spoke to the Local Government Association annual conference. I announced our intention to make it easier for councils to abolish chief executive posts without having to hand out massive payouts, welcomed the £430 million in bids for the new weekly collection schemes, and noted the next stage of town hall transparency in which new rules will require councils to declare their trade union funding and their interests. In the interests of bipartisanship, I pay tribute to the hon. Member for Warrington North (Helen Jones), who courageously put down questions on council tax collection and exposed the inability of Labour councils to collect council tax.

Shelter has advised me that my borough of Bexley has one of the highest proportions of home owners at risk of repossession in England. What funding and advice does the Secretary of State intend to give Bexley so that it can cope with that risk?

I am sure that the hon. Lady will recognise that repossessions are at their lowest since 2007. The most important thing that we can do to help people is to ensure that interest rates are kept at a reasonable level. That is what the Government have done. An increase of 1 percentage point would add £1,000 to the costs faced by her constituents and put more people at risk.

T2. The Minister will be aware of the excellent representations by the Witham town centre team to bring a Portas pilot to Witham. Will he congratulate that team on their vision and, importantly, support them in bringing that vision to Witham town centre? (114411)

I am aware of the excellent Portas pilot bid by my hon. Friend’s town team. I wish it well, along with the other 350 or so bids that are still in the competition. As I mentioned, an announcement will be made before the end of this month.

Properly targeted and funded family intervention works, so why have the Government introduced a half-baked scheme based on research that fails to distinguish between poor families and those involved in antisocial behaviour? Why do they refuse to give details of their cost estimates on the spurious grounds that the spending of public money is commercially sensitive? Is it not because they want to disguise the fact that they have slashed services such as Sure Start and youth intervention programmes, which really make a difference, and the fact that councils will get back only a tiny fraction of the millions that they have already lost?

I would have thought the hon. Lady would have been a little bit more jolly, considering that I congratulated her on the great work that she has been doing on behalf of the Government.

I am very surprised at the hon. Lady, because we would not have been able to help troubled families without the intensive help of Labour councils. The big difference between what we are doing now and what she suggests is that we are allowing councils to come up with their own schemes and methodologies. All that we are interested in is the outputs. Frankly, she should congratulate all those who have worked hard, because we can now identify the correct families, three months ahead of when people expected us to be able to do so.

T6. Has the Minister had a response from the UK Statistics Authority to the letter from the shadow Housing Minister, the hon. Member for Birmingham, Erdington (Jack Dromey), about net losses in social housing? (114415)

Yes, I can report to my hon. Friend and the House that I have had a response from the UKSA. The hon. Member for Birmingham, Erdington (Jack Dromey) pleaded in his letter for an answer on whether I was right to say that the reduction in affordable homes for rent under Labour was 45,000 or 200,000. I am pleased to say that the UKSA wrote back to both him and me and confirmed that the figures showed an overall reduction of 421,000 homes for social rent during Labour’s time in office—a disgrace, and in stark contrast to the 170,000 that we will be building over the next three years alone.

T5. There has been a 40% reduction in homelessness services for women between 2011 and 2012. As the number of homeless people increases and the services available to support homeless women reduces, what will the Minister do about it? (114414)

As the hon. Lady will know, I bring together eight Departments in a working group on homelessness and its causes. Our next report is very likely to be on the precise issue of the women who make up a subsection of people who are homeless. It is worth bearing in mind that one of the first things the Government did was to change the disgraceful rules that prevented the number of homeless people from being properly registered under the previous system. It is also worth knowing that the level of homelessness is less than half the average under the previous Administration.

T7. Will my right hon. Friend consider working with Cherwell district council, myself and others to make Bicester a garden city? (114416)

First, I congratulate my hon. Friend on his knighthood, which is thoroughly deserved. We have heard that being a dame accords a Member no special privilege, but my hon. Friend commands the respect of the House uniformly.

I am very happy to work with my hon. Friend. The difference between this Government and the previous Government is that such things are entirely up to the local authority, but we will do everything that we can to help that fragrant corner of Oxfordshire become a garden city.

Rochdale is a hot spot for home repossessions and homelessness. Does the Minister accept that there is a link between the bankers’ LIBOR scandal and such problems?

All the research into homelessness proves that there are a lot of different causes, and LIBOR may be a contributory factor if it transpires that mortgage rates have been adjusted as a result. The hon. Gentleman takes a considerable interest in the matter, and I am sure he will be pleased to note, as we are, that repossessions last year fell to their lowest level since 2007. Low interest rates have been a very important reason for that falling number.

T8. One of my constituents recently asked our local planning department whether he needed planning permission to erect a shed for his mobility scooter. The planning officers refused to answer his question and insisted that he had to submit a form and pay a £75 fee to determine whether the shed was covered by permitted development rights, which it was. Does my right hon. Friend agree that it is wrong for local authorities to charge for simply clarifying planning rules? (114417)

The Minister will know that more rain fell on Newcastle upon Tyne and the surrounding areas in a few hours last Friday than would normally fall in the whole month of July. The resulting floods damaged businesses, people’s private homes and the transport infrastructure. Ministers will want to join me in thanking the local authority employees, who responded magnificently, and the emergency services more generally for their response. Will the Secretary of State look again at the Bellwin formula to see whether it works reasonably? It is an old formula, and possibly ripe for revision to deal with exceptional circumstances of that kind.

The right hon. Gentleman will be very familiar with Bellwin and the formula and he is right to praise the emergency services and local people. I have spoken to friends in the area, and I know the events were traumatic. I recall the enormous damage and wreckage—both physical and psychological—caused by a flash flood in my constituency a few years ago. The Government have not yet received an application under the Bellwin rules, but I can assure him that when it comes, we will look at it most sympathetically in terms of the formula.

T10. A woefully inadequate number of new houses were built in Labour’s 13 years in government. What progress is being made on new houses in areas such as Hastings and Rye, so that young people have a chance of getting on the property ladder? (114419)

The good news is that programmes such as NewBuy, which allows people to get a 95% mortgage once again, will help people in Hastings and across the country, as will programmes such as Firstbuy, which is on track to deliver more than 10,500 homes. The record low interest rates will also help people, as long as they continue and as long as we ensure that the deficit is not allowed to balloon.

On social housing, does the Minister agree that it would make a lot of sense if priority were given to the building of bungalows for rent, which would assist the elderly or those who have mobility problems and free up two and three-bedroom family social rented houses for those on the waiting lists?

I absolutely agree with the right hon. Gentleman—that is a very sensible approach, as is ensuring that the right to buy is available. Right to buy frees up the home lived in by the occupant who has had the opportunity to reach the aspiration of purchasing their own home. The cash is then used to build another home to take somebody off the record waiting lists we were left by Labour.

Cherish Chippenham’s bid for a Portas pilot will be even more competitive in the second round, which I am delighted the Minister will announce later this month. We have heard that some places consider their high streets to be in a more dire situation, but does he agree that there is far more to the important criterion of potential for improvement than simply a statistical vacancy rate?

My hon. Friend is absolutely right. A vibrant town centre requires all sorts of things to bring people in to shop there. He will be interested to know that not only will the second round be announced before the end of the month, but so will a £1 million prize for the most improved town centre. That does not have to be one of the Portas pilot—it can be any town centre. Every single one of the towns that apply will enjoy the support of the Government.

Hammersmith and Fulham’s housing strategy involves plans for 22,000 new homes in three opportunity areas. That should be good news for the 10,000 local families waiting for social housing, but not one of those 22,000 homes will be a social home for rent. Is it the Government’s housing policy that my constituents have to move out of London if they want an affordable home?

I know the hon. Gentleman has never quite got over his days as Hammersmith and Fulham housing lead, even though Hammersmith and Fulham is now doing a phenomenal job, delivering far more homes than were available under the Labour administration. I am sure those of the 170,000 homes for affordable rent that are in Hammersmith and Fulham will be enjoyed by the constituents there.

I welcome my right hon. Friend’s announcement last Thursday that he will change the law in order to require councillors to declare union support and donations as pecuniary and therefore prejudicial interests. Did he receive representations from the Labour Front-Bench team against these proposals when the statutory instrument came in this month? If not, would their union paymasters be justified in thinking them asleep on the job?

This matter—not whether Labour has been asleep on the job but the amount of union involvement with councillors—is of enormous concern. We are taking the moderate and reasonable approach of saying, “We support unions and it is wonderful that they support the Labour party, but we would like to know and it should be a matter for public disclosure.” Given that it is so uncontroversial, I am sure it will receive support throughout the House.

Is the Minister aware of the housing crisis throughout central London in the private rented sector, with rents rising well above inflation, housing benefit being capped or cut, and many families being evicted and communities broken up? Is it not time that we lifted the housing benefit level and introduced strict regulation of the private rented sector to preserve families and communities in the inner-city parts of the country?

It is absolutely the case that rents are not well served by caps at all, and when in place they enhanced neither rental levels nor the quality of properties. For example, the housing market shrank to 8% with rent caps. There is no advantage to introducing rent caps. Without them, the market has expanded again to 16%, serving people in London and elsewhere far better.

Are the Government’s excellent proposals for troubled families being embraced by local authorities throughout the country?

I am delighted to report that all 152 principal local authorities signed up last month. I am also delighted at the amount of progress being made and delighted that at least some Opposition Members have been more than helpful. It is our first big chance to do something about this serious situation.

EU Council

I am sure that, like me, the whole House will be deeply saddened by the deaths of three British servicemen in Afghanistan yesterday. These brave soldiers were demonstrating great courage to prevent Afghanistan from once again becoming a haven for international terrorists and therefore to help keep us safe here in the UK. The suspected perpetrator is in custody, and we will do everything in our power, with the Afghan national security forces, to ensure that justice is done. This tragic incident again demonstrates the very real risks that our soldiers face every day, and we will learn all the lessons that arise from it. I know that everyone in the House will want to send their support to our brave troops and their families at this difficult time.

Britain had three objectives at last week’s European Council: first, for eurozone members to take the urgent action needed to deal with the immediate crisis; secondly, to secure a comprehensive growth package firmly focused on Britain’s priorities; and thirdly to send a clear message to the rest of Europe about what we expect from the budget negotiations to come. I shall deal with each before turning to future policy and the Government’s response to the banking scandal.

First, on the eurozone, Britain has been clear that in the short term we want urgent action by eurozone countries and authorities to defend their currency and deal with the instability. In the longer term, we recognise that the remorseless logic of a single currency means that the eurozone may need closer economic and fiscal integration. Britain is not in the euro, and we are not going to join the euro, so we should neither pay for short-term measures nor take part in longer-term integration. The summit made some progress. On shorter-term measures, eurozone members agreed to use the bail-out funds to support intervention in bond markets; to put eurozone money directly into struggling banks; and to ensure that official loans to Spanish banks would not be given preferential treatment over private sector loans. Under the last Government, we could have been liable for financial support for these measures, as members of the EU bail-out fund, but this Government have repatriated that power so that the British taxpayer is not involved.

On longer-term issues, eurozone members agreed important steps towards closer integration following a discussion of a report by the President of the European Council and others. It is vital for Britain—and, we would argue, for the strength and prosperity of the whole European Union—that they do this in the right way. We therefore secured agreement that as this work goes ahead, the “unity and integrity of the single market” will be fully respected.

On the specific proposal of a banking union, we ensured that Britain will not be part of any common deposit guarantees or under the jurisdiction of any single European financial supervisor. I am very clear that British taxpayers will not be guaranteeing any eurozone banks, and I am equally clear that, while we need proper supervision of our banks, British banks should be supervised by the Bank of England, not by the European Central Bank. The original draft of the growth compact included a whole section on economic and monetary union which implied that a banking union might apply to all 27 countries. A number of countries worked together to ensure that that whole section of the growth compact was removed.

Our second objective involved growth. The growth programme includes commitments to deal with weak lending, including through an increase in funds for the European Investment Bank. Alongside this are clear commitments to complete the single market in areas such as services, energy and digital, in which Britain will be one of the prime beneficiaries. The agreed plan included dates and times by which those steps should be concluded.

We also agreed to go ahead with the European patent court. Businesses have complained for decades that they needed 27 patents to protect their intellectual property. That problem will now be solved. In finalising the agreement, Britain had two objectives: that the new patent should be redrafted so that it did not get snarled up in the processes of the European Court of Justice, and that a significant part of the court, covering pharmaceutical and life science industries, would be based in London. I am pleased to say that we secured both those outcomes. That will mean millions of pounds and hundreds of jobs for Britain.

Our third objective involved the EU budget for the next seven years. We want a budget that is focused on growth, not a focus on growth in the budget. EU members as a whole are €3.5 trillion more in debt now than when the last EU budget was negotiated. We have to face up to that tough reality. I made it clear that without the British rebate, we would have the largest net contribution in the EU as a share of our national income. Without our rebate, our net contribution would be double that of France and almost one and a half times bigger than that of Germany. So the British rebate is not up for renegotiation. It is fully justified.

On foreign policy, the Council welcomed the EU oil embargo against Iran, which came into force yesterday. On Syria, we called for united action by the United Nations Security Council to place more robust and effective pressure on Assad’s regime, including the adoption of comprehensive sanctions.

Europe is changing rapidly and fundamentally, and that presents real challenges for all countries. Those inside the eurozone have to face fundamental choices about whether to limit their national democracy and provide financial support to the weaker members. And like others outside the Eurozone, we in Britain also face big choices. As Europe changes to meet the challenges of the eurozone, so our relationship with Europe will change, too.

There are those who argue for an in/out referendum now. I do not agree with that—[Interruption.] I do not agree with that because I do not believe that leaving the EU would be best for Britain. Nor, however, do I believe that voting to preserve the exact status quo would be right. As I wrote yesterday, I do not believe that the status quo is acceptable, but just as I believe it would be wrong to have an immediate in/out referendum, so it would also be wrong to rule out any type of referendum for the future. The right path for Britain is this. First—[Interruption.]

Order. Members are a little over-excitable. They must calm themselves, and the Prime Minister’s statement must be heard.

First, we must recognise that, in the short term, the priority for Europe is to deal with the instability and chaos. Secondly, over time, we must take the opportunities for Britain to shape its relationship with Europe in ways that advance our national interest in free trade, open markets and co-operation. As I argued yesterday, that should mean less Europe not more Europe, less cost, less bureaucracy, and less meddling in the issues that belong to nation states. Thirdly, all party leaders will have to address the question. It follows from my argument that, far from ruling out a referendum for the future, as a fresh deal in Europe becomes clear, we should consider how best to get the fresh consent of the British people.

Finally, as I have said, as the eurozone moves towards a banking union, we must ensure that Britain takes responsibility for sorting out its own banking sector. On the unfolding banking scandal here in the UK, we need to take action right across the board, including introducing the toughest and most transparent rules on pay and bonuses of any major financial centre in the world, increasing the taxes that banks must pay, ensuring tough civil and criminal penalties for those who break the law and, above all, clearing up the regulatory failure left by the last Labour Government.

The British people want to see two things: they want to see bankers who acted improperly punished; and they want to know we will learn the broader lessons of what happened in this particular scandal. On the first, the Serious Fraud Office is looking at whether any criminal prosecutions can be brought, and at whether the full force of the law is being used in dealing with this. On the second, I want us to establish a full parliamentary committee of inquiry involving both Houses, chaired by the Chairman of the House of Commons Treasury Select Committee. This committee will be able to take evidence under oath; it will have full access to papers, officials and Ministers, including Ministers and special advisers from the last Government; and it will be given by the Government all the resources it needs to do its job properly.

The Chancellor will be making a full statement, but this is the right approach, because it will be able to start immediately, it will be accountable to this House and it will get to the truth quickly, so we can make sure this never happens again. I commend this statement to the House.

I am grateful to the Prime Minister for his statement. On the tragic news from Afghanistan, all our thoughts are with the family and friends of the soldiers concerned. The news reminds us once again of the risks our troops face—day in, day out—and of our duty to do everything we can to protect them.

Let me start with the Prime Minister’s announcement on the banking inquiry. It is right for him to reconsider the position of last week on the need for a full inquiry. I welcome that recognition. I have to say, however, that I am not convinced by his way forward because I do not believe it measures up to the scale of what is required. However able or distinguished they are, politicians investigating bankers will not command the consent of the British people. People are understandably angry about the way their banks let them down, and I do not believe that the proposed way forward is the way we can build the consensus required for real change. After all, there have already been a number of Select Committee reports into the banking crisis.

I appreciate that the Leveson inquiry has been uncomfortable for politicians on all sides, but that is the way it should be. We will continue to argue for a full and open inquiry, independent of bankers and independent of politicians. That is the only way, in my view, that we can rebuild trust in the City of London and financial services.

Turning to the European Council itself, let me associate myself with what the Prime Minister said on Syria. Agreement—but, in truth, little progress—was reached at Geneva on Saturday, and the divisions within the international community on this issue mean that too little is being done to bring the escalating violence to an end. In that context, will the Prime Minister update the House on the position of Russia, which is clearly imperative in this regard, on a future for Syria without President Assad?

Turning to the main issues of the summit, it took place against a backdrop of the continuing crisis in the eurozone, a faltering global recovery and a double-dip recession here in the UK. The central challenge, then, was how we can have a Europe not of austerity and unemployment, but of jobs and growth. I am afraid to say that on that central issue, the Prime Minister cannot be part of the solution because he is part of the problem.

On growth, the Prime Minister used an instructive phrase in his post-summit press conference, when he said:

“Just as we have to tackle the euro crisis, so we have to tackle the growth crisis”.

Having at last admitted that there is a growth crisis, he added:

“Britain has been driving this debate.”—[Laughter.]

I do not think it was meant as a joke, but it suggests someone quite out of touch with reality. As he was speaking, the figures were coming in, showing the double-dip recession, created by him in Downing street, was worse and deeper than we thought. The UK is one of only two countries in the G20 in double-dip recession. There can be no solution to the growth crisis unless we tackle the crisis of demand in the European economies and globally? Will he tell us whether he advocated at this summit any measures to tackle the crisis of demand in the European economy, as well as the long-term measures he mentioned?

The Prime Minister talked about the banking regulator. How will he use his popularity and influence in Europe to secure specific legal safeguards between now and December’s final proposals to protect the very important British interest in the single market? He then talked about the patent court, and said, with his customary humility, that the outcome showed that he was succeeding. Only this Prime Minister could pretend, having argued that the court’s headquarters should be in London, that it was a diplomatic triumph that it had ended up being based in Paris.

As for the eurozone and bank recapitalisations, it is welcome that direct help can be provided for eurozone banks, but does the Prime Minister really believe that the funds that eurozone countries are making available are adequate? There are many reasons to believe that that is not the case.

Finally, there is Europe and the Prime Minister’s position—or should I call it his weekend hokey-cokey? On Friday, he ruled out a referendum. He said:

“‘I completely understand why some people want an in/out referendum… I do not think that is the right thing to do”.

Hours later—what a coincidence—100 Back Benchers and the former Defence Secretary called for an in/out referendum. Then, hey presto, on Sunday—[Interruption] —the Prime Minister hinted that he might rule one in. Then the Foreign Secretary—[Interruption.]

Order. I said that Labour Back Benchers should not be yelling when the Prime Minister was speaking, and the same applies to Government Back Benchers. I do not care what they are exhorted or encouraged to do from any quarter; it is not proper behaviour, and however long we have to continue, it is not going to happen. That is the beginning and the end of the matter.

Then the Foreign Secretary was sent out to say on television:

“The Prime Minister… is not changing our position.”

Three days, three positions. First it was no, then it was yes, and then it was maybe.

Can Members on both sides of the House have some clarity about the Prime Minister’s position? First, has there been a change in the Government’s position, yes or no? Secondly, the Prime Minister talked of a referendum being connected to the renegotiation of powers. To be fair to him, his position on renegotiation is longstanding, not least because he has got nowhere in negotiating it, but is he now saying that he may be in favour of withdrawal from the European Union if he does not get these powers? That would be a new position. It would be helpful—and I am sure that his Back Benchers would like it too—if we could have a “yes” or “no” answer to that question as well.

Thirdly, can the Prime Minister explain this? Last October, he said in the House:

“there is a danger that by raising the prospect of a referendum… we will miss the real opportunity to further our national interest.”—[Official Report, 24 October 2011; Vol. 534, c. 27.]

So why is he doing it now? We all know the answer to that question. It is not to sort out the crisis of growth, it is not to tackle youth unemployment, and it has nothing to do with the national interest. It is all about managing the divisions in the Prime Minister’s own party. But a nudge-nudge, wink-wink European policy is not good for the country, nor will it keep his party quiet.

Five years ago, the Prime Minister said that his party should stop banging on about Europe, but now he is the man getting out the drum. As John Major could have told him, it is not going to work. We have a veto that never was, a referendum that the Prime Minister cannot explain, a party talking to itself, a Prime Minister who is managing his party rather than leading the country, and a Government who are letting Britain down.

Let me start with the right hon. Gentleman’s questions about the inquiry into the banking scandal. I think that what he said was rather demeaning to Parliament, the House of Commons and the House of Lords. I see no reason why Parliament cannot get to the bottom of this if we take the best and brightest from both Houses and all parties, and there are few better people to do that than my hon. Friend the Member for Chichester (Mr Tyrie), who has considerable expertise. The key point, however, is that this needs to be done speedily. The Vickers Bill—the banking Bill—will be introduced in the House of Commons in January, and I want an inquiry to be completed by then so that we can take the best of that inquiry and put it in the Bill. I think that that is the right thing to do.

The shadow Chancellor is intervening from a sedentary position. No one would like to see him in the dock of a courtroom more than me, but the job here is to get on with it, find the answers, and put them into law.

Let me now deal with the questions that the Leader of the Opposition asked about the European Union. He asked some very specific questions, including one about Russia and Syria. At the weekend, following some very hard negotiation by my right hon. Friend the Foreign Secretary, all parties agreed on transition by mutual consent. We now need to implement the policy, and all the P5 members need to do that.

The right hon. Gentleman talked about taking responsibility on the economy. When is Labour going to take responsibility for the twin crises: the crisis of the deficit and the crisis of failed banking regulation? He asked what we had done to protect the single market. If he looks at the summit conclusions, he will see that it says very specifically that the single market and its integrity must be protected. On whether the eurozone funds are sufficient, frankly, I think he is right to ask that question. We continually say it is very important that the firewall—the bazookas—are big enough.

On the right hon. Gentleman’s description of recent events, I think he probably ought to give up the hokey-cokey and stick to the Rubik’s cube. But let me tell him this: I am not going to take any lectures from a group of people who gave up the rebate and got nothing in return, who gave up our social chapter opt-out and got nothing in return, and who took us into the bail-out funds when we were not even part of the euro. Those are the people who say that the European Union has not got too much power and that they would join the euro if they were in power for long enough. The right hon. Gentleman likes to tell us endlessly about standing up to vested interests, but the fact is that he will never stand up to two big vested interests: the trade unions and Brussels.

While there is wide agreement in Britain as to the need for reforms in our relationship with the EU, does the Prime Minister agree that the worst possible moment to try to start negotiating with 26 other countries is when all the member states are, quite rightly, preoccupied with the very future of the eurozone and the potential of its collapse? Does the Prime Minister also agree that as the UK is fully protected by the statutory requirement for a referendum if there are any further proposals for the transfer of powers to Brussels, it must be the right policy to establish a link between any negotiations which we wish to begin, and the new treaty that would be required to have unanimous conset if the eurozone 17 wish to achieve a fiscal and banking union?

My right hon. and learned Friend has set out the situation very well. It is worth saying, as I said in my statement, that everyone has to recognise that the short-term firefighting is the EU’s urgent and immediate priority, but my point is that we are safeguarded through the referendum lock in respect of further powers being transferred. However, we must think about how Europe is developing, make sure we make the most of the opportunities, and then think about how to seek the consent of the British people.

Does the Prime Minister agree that the customary celebrations after last week’s euro summit were, yet again, premature? There is not nearly enough money in the European stability mechanism, as its £500 billion is not enough to deal with Spain, let alone other countries. Equally, the German Chancellor’s opposition to eurobonds means there must be a question mark hanging over the eurozone. On banking, if we are to have a truth and reconciliation committee—which is fine—we must just remember that some of the most strident calls for deregulation over the last 30 years came from the Government side of the House.

I have great respect for the right hon. Gentleman, and what he says about the eurozone agreements at the weekend is absolutely worth listening to and having regard to. The point I would make is that for the first time in a long time there was a series of steps that countries such as Britain had been calling for about using the facilities to buy bonds and about direct recapitalisation of banks. They are hedged around with all sorts of ifs and buts, but that was progress. On the truth and reconciliation commission issue, I note that the right hon. Gentleman said that a full independent public inquiry is not the right way ahead. I think the way ahead we have suggested will be swift enough, but also strong enough to get to the answers—and to get to them quickly.

Given that there is practically no unpledged money left in the current bail-out fund and given that the new bail-out fund does not exist, did the member states assembled discuss how they are going to get hold of the £500 billion or more that they might need, and are they proposing to borrow it on the credit rating of countries such as Spain and Italy?

As ever, my right hon. Friend is incisive at getting to some of the difficulties in what is being proposed. I think we should be pushing the eurozone members into taking the short-term steps to try to help with financial stability, which buying bonds, directly recapitalising banks and sorting out issues of seniority are all about. We have to recognise the great difficulties they are going through in trying to raise adequate amounts of finance, but none the less it is in our short-term interests that they do deal with the crisis at the heart of the eurozone, because the high interest rates in Italy and Spain are not only hurting Italy and Spain; they are hurting us, too.

The right hon. Gentleman failed to answer the question from my right hon. Friend the Member for Edinburgh South West (Mr Darling), the former Chancellor of the Exchequer, just a moment ago, in which he asked the Prime Minister to recognise that the pressure for deregulation and a very light touch in the City was coming very strongly from him and—[Interruption.] Oh yes it was. So if there is to be truth and reconciliation, will there be some acceptance by the Prime Minister and the Chancellor that they got it woefully wrong in putting the pressure on us?

Everyone will have to account for what they have said and all the rest of it, but I have to ask: who was in charge for the last 13 years? Who was the City Minister who carried out this action? If the right hon. Member for Blackburn (Mr Straw) wants to go into the interstices of who said what and did what, I can tell him that the Conservative party—I do not think I was in Parliament at the time—actually voted against the tripartite arrangement that has so badly failed.

May I welcome my right hon. Friend’s continuing, and occasionally warm, endorsements of Britain’s continued presence in Europe? Does he also agree that those who wish to take Britain out of Europe now have a duty to provide detail as to what the political and economic cost would be, rather than vague promises of the Elysian fields?

My right hon. and learned Friend makes an important point, which is that we need to make sure that the whole debate about our engagement in Europe is properly informed. I do support our membership; I do think that the single market is vital for us and that determining the rules of that market matters for us. However, it is important that we air these facts and figures, and the balance of competences review that will be launched shortly will help all parties, all politicians and all parts of civic society in Britain to see some of the arguments and some of the facts and the figures. I think that that will help to inform the debate.

Further to that question, I wonder whether there are any circumstances, further to the Prime Minister’s negotiations, in which he will recommend to the British people that they should leave the European Union.

As I said, I want to stay in the European Union for the reasons I have given. But I will always stand up for the British national interest as I see it. That is the job of being Prime Minister.

My right hon. Friend will know that my opposition to excessive centralisation of power in Europe has never been in doubt. Indeed, the only doubt that my Euroscepticism has given rise to was that which John Major cast upon my paternity. Will the Prime Minister, none the less, agree that what we need is not a commitment to an in/out referendum, but a commitment to insisting that our partners give us back powers to govern ourselves if they want our agreement for them to subordinate themselves further to centralisation in Europe?

My right hon. Friend, whose parentage I have never questioned, nor would I ever do so, puts it very well. The fact is that Europe is changing very rapidly. The eurozone countries, in my view, are going to need to take some pretty bold integrationist steps. That will provide opportunities and openings for countries outside the eurozone, such as Britain, and we should maximise those opportunities to pursue our national interest. I firmly believe that that means remaining at the table for those things that really matter for us, but I think that is what we should do.

Is the Prime Minister concerned that on Europe and the referendum he sounds more like John Major by the day?

What matters is doing the right thing. I think that there are two positions that do not make sense. First, unless you actually want to leave the European Union now, and some people do, an in/out referendum now is not the right answer. But ruling out, for ever and a day, any form of getting the consent of the British people for what I would call a fresh deal and a fresh settlement in Europe also does not make sense. This is a question that all party leaders are going to have to answer. We are providing the answer—the right hon. Gentleman’s party leadership will have to do the same thing.

Will my right hon. Friend agree to consider carefully that the Fresh Start project’s options for change paper, which is being launched next week by my right hon. Friend the Foreign Secretary and is the culmination of a year’s work by parliamentarians from all parties and external experts, might possibly offer some of the solutions to the type of reform we are looking for in the EU? Will he also agree to reconsider the issues of competition in the banking sector that, in my opinion, are one of the major reasons why we are in this appalling situation?

I shall certainly consider very carefully what my hon. Friend says. As I said, the Foreign Secretary will shortly set out the balance of competences review and how the process will work. I hope that that will inform debate; clearly, the piece of work undertaken by her and her colleagues will help. She mentions the banking sector and there are clearly rules for financial services at the level of the single market that are required and it is very important that we have a say over them. The fundamental elements of banking union, however, flow from the single currency, not the single market. That is why that union should be carried out at 17, not at 27.

What discussions were there of the likely effects of the oil embargo on Iran and were there any discussions on the knock-on effect on prospects for a sustainable peace in the middle east?

There were brief discussions about Iran because the discussions about the single currency, the eurozone and the growth compact were so protracted. There is strong agreement in the European Union that the sanctions are right and necessary and I think that if we could get Iran to take a more sensible path on the issue of civil nuclear power, that would help unlock the problems of middle east peace rather than making them worse.

I was heartened by my right hon. Friend’s interview on the referendum question, but given his negative answer to me on 23 May on that same question, will he take the advice of the London taxi driver to whom I have just spoken, who just said, “The British people are not stupid; they understand the position. Give them renegotiation, give them a referendum, get rid of the coalition agreement—then, he will be re-elected by a massive majority.”

I can see that it must have been a particularly satisfying and heart-warming taxi ride for my hon. Friend. As I have said, I do not think that an immediate in/out referendum is the answer, but ruling out a referendum is not the answer either. There are opportunities to build the sort of settlement we want in Europe and the Government believe that we should take advantage of them.

Will the Prime Minister tell the House what indications he has had from European colleagues that they would be likely to agree the repatriation to this country of the social chapter and other powers?

We were able to renegotiate the bail-out power and get out of that part of the treaty, so we have had some small success on that agenda already. There is a big change coming in Europe. I cannot say how fast it is going to go and whether it will be a number of small treaties or a bigger treaty, but there will be opportunities. The eurozone countries will have to do more to integrate, which will give others opportunities to pursue their own agendas.

My right hon. Friend the Prime Minister will be aware that the British public are heartily sick of broken promises on European referendums, not least because of the decision of the Labour party to renege on a referendum on the Lisbon treaty. Can my right hon. Friend see the attraction of passing into law in this Parliament a binding commitment to a referendum in the following Parliament and that it might well strengthen his negotiating hand if he can look his fellow Heads of Government in the eye and know that any deal that he negotiates will have to be put to the British people, whose government, after all, we are talking about?

I take seriously my hon. Friend’s point and there is some merit in that argument. We have legislated in this Parliament for a referendum lock that we very much hope will apply to future Parliaments. The problem with the approach he suggests is that the change in the eurozone and in Europe is happening so rapidly that it is quite difficult to predict in legislation passed in this Parliament the exact nature of any referendum in a future Parliament, so I do not think that is the right way ahead. As I wrote in the article in The Sunday Telegraph, I think we need to show some tactical and strategic patience, knowing that we can safeguard our existing position with the referendum lock and make the most of the changes that are happening in Europe, as I have set out.

Will the future referendum that the Prime Minister is now semi-pledging also cover treaty obligations relating to the European convention on human rights and the Council of Europe?

As the right hon. Gentleman knows, the two issues are separate, in that there is the Council of Europe, and the European Union. There is, of course, the attempt to make the European Union a signatory to the European convention on human rights, which I have considerable difficulties with, but as things stand, the two things are separate.

Britain is a trading nation. Does my right hon. Friend agree that, as a trading nation, it needs unfettered access to Europe’s single market, and also a clear voice and say in the rules of that market?

My hon. Friend is absolutely right. That is at the heart of the case for remaining in the European Union. We export a large share of our gross domestic product; we need Europe’s markets to be open. I would not want to swap the status that we have, of having both access to the single market and a say over the rules of the single market, for the status of a country that only has access. It is very important, though, that as the eurozone develops and integrates, we make sure that there are safeguards to prevent caucusing at the eurozone level that could disadvantage us in the single market. There is a whole series of steps that we have to take, some of which are about safeguarding what we have, some of which are about making the most of the future, and all of which are achievable if we play our cards right in the years ahead.

May I simply ask the Prime Minister to look at his terminology? In his statement, he mentioned Britain 12 times; he did not mention the United Kingdom once. Does he agree that if there is to be a referendum, which I think is inevitable, the people of Northern Ireland should have a very strong say? He must, in the European Council, refer to the United Kingdom, or the UK for short; saying “Britain” excludes Northern Ireland.

What I suspect the majority of British people want is what they were offered in the only referendum that they have ever been allowed on Europe, namely a say on whether there should be a common market—no more, no less. Given that our partners have the overwhelming balance of trade in their favour, why should they veto our negotiation for a free market area? The door is unlocked; why does the Prime Minister not walk through it and renegotiate?

The point that I make to my hon. Friend, whom I respect hugely for his views, is that what we have in the single market is not just a free trade area, but a say in the rules about how that free trade area works. It does seem to me that absolutely central to Britain’s case for remaining in the European Union are those two key points. I think that there is a difference between a single market with rules and simply a free trade agreement. That is what I think we should continue to pursue.

May I welcome the continued support that has been given to Greece? It is not just a case of Greece repaying its debts; it is about the responsibilities that it has to the rest of the EU. Last year, as the Prime Minister knows, 100,000 people illegally entered Greece through Turkey. Will we ensure that those resources are directed towards protecting the borders of the EU?

I know that the right hon. Gentleman has great expertise in this area. It seems to me important that we support organisations such as Frontex, and the means by which those countries can protect their borders, but in all these European negotiations we always have to be careful about the language of burden sharing, because of course when we look at where people actually end up, in terms of asylum claims, it is often countries such as Britain, Sweden, and Denmark that bear a very large share of the burden, and we always have to be alert to that argument.

Will the Prime Minister remind his coalition partners that in their 2010 manifesto, they said:

“The European Union has evolved significantly since the last public vote on membership over thirty years ago. Liberal Democrats therefore remain committed to an in/out referendum”?

Given that, and given that I know my right hon. Friend always likes me to remind him that he is in coalition with the Conservatives as well, may I remind him that an in/out referendum is now inevitable in this country at some stage, and that it would be to his advantage to be ahead of that curve, rather than being seen to be dragged into it later on?

My hon. Friend makes a good point. He often rightly criticises me for not delivering every part of Conservative policy, and now he is having a go at me for not delivering Liberal Democrat policy as well. I do occasionally make that point to our coalition partners, but as I have said, I think the sensible position to take is not having an immediate in/out referendum, but not ruling out a referendum in the future. Europe is changing; there are opportunities for Britain, and I am determined that we should take them.

With all these mixed messages, unlike the Thatcher regime, can the Prime Minister tell us whether he came to his present opinion before or after he met Andy Coulson?

I completely disagree with my right hon. and learned Friend the Member for Kensington (Sir Malcolm Rifkind). With the chaos in Europe, there has never been a better time for other EU members to mind their business, not ours, and now is the right time to try to have a debate with them about which powers we would like to bring back, before we have any form of referendum.

My hon. Friend makes a powerful point. The argument that I would make is that although there may well be opportunities because of the needs that other EU members currently have, respecting the fact that they are fighting a fire in the eurozone, which is their urgent work that benefits us if they can deal with those bond spreads, deal with those banks, deal with those problems, the right time to consider institutional changes is as institutional reforms and treaties come through.

The Prime Minister has referred several times to the national interest. He also referred to the brief discussion on the ban on oil imports from Iran. Is not that ban an example of how the European Union acting in concert can assist the British national interest?

Yes, I think that it is, but the argument that I would make is that that was an agreement reached through unanimity. It shows that what is required often in Europe is not institutional structures, but political will to come together and do the right thing. That is what we have done in relation to Syria, Iran and eventually Libya, so I am all for co-operating and often leading the debate with our European partners about foreign policy priorities. That is what we have done about Burma and sanctions, but I do not think that means the endless passage of powers from Britain to Brussels—in fact, quite the opposite.

May I associate the Prime Minister’s Liberal Democrat colleagues with his expressions of condolence and sympathy following the deaths of our servicemen in Afghanistan? Does the Prime Minister agree that, while it is of course right that at the last election his party had a set of manifesto commitments on Europe, as did the Liberal Democrats, the coalition agreement is clear? There is provision for a referendum if there is a handover of power from the UK to Brussels. There is no provision for any other referendum, and we are agreed that the priority, as evidenced last weekend, is that 27 European countries work together to deal with the imminent, urgent economic crisis across Europe.

My right hon. Friend makes an important point. To be fair, in terms of coalition policy on Europe, we said clearly that there would be no further passage of power from Britain to Brussels. We have said that we should protect and defend the single market. Let us look at the achievements over the past couple of years. We have got out of that bail-out fund; we have promoted the single market in energy, digital and services; and we have written into conclusions after conclusions safeguards for the single market. That is all to the good, but all party leaders, whether Conservative, Liberal Democrat or Labour, must think of the future— how we evolve policy in a changing Europe, how we maximise the benefit for Britain, and how we take the British people with us. That is exactly what I am doing.

The Prime Minister suggests the setting up of a parliamentary committee of inquiry. Whenever we have such inquiries and when they are compared with judge-led inquiries, the big difference is access to information, such as e-mail exchanges and other background material. Will he ensure that in its terms of reference such a committee will have the same powers as a judge-led inquiry?

The short answer to that is yes, I want it to have those powers. What Parliament has behind it is that, if people do not produce those policies, papers and people, they are in contempt of Parliament. We are seeing with the Culture, Media and Sport Committee inquiry that the whole concept of being in contempt of Parliament is being strengthened, and that is all to the good. The committee will have the powers that it needs and the expertise that it needs, but crucially it will be able to get on with the job straight away.

Does the Prime Minister agree that the last time we saw the current levels of interference in British domestic affairs, it led to the traumatic split with the Catholic Church? Does he agree that we would be better off having a second referendum than a second Reformation?

As a rather wishy-washy member of the Church of England, I am finding answering this question rather difficult. The point I would make is that there are opportunities, but we should show patience because our colleagues in Europe are dealing with a fire-storm. We can pursue our interests and, I think, deliver on them over the medium term.

The EU decision on the oil embargo on Iran has caused great joy in the paint shops around the Arabian Gulf, as vessels have gone into dry dock to be repainted, renamed and reflagged. Can the Prime Minister set out for the House what practical steps are being taken to monitor Iranian vessels to ensure that there is an embargo in fact as well as in name?

The hon. Gentleman raises an important point. I believe that the embargo will be robust and we will make sure that it is policed. I do not want to set out in public what all those measures will be, but we will make sure that the points he makes are taken on board.

Far be it from me to correct the right hon. Member for Bermondsey and Old Southwark (Simon Hughes), but I understand that the Liberal Democrat manifesto referred to provision for a referendum if there is

“fundamental change in the relationship between the UK and the EU.”

The Prime Minister said in his statement that “Europe is changing rapidly and fundamentally.” Is it not time we had an in-or-out referendum in this Parliament, rather than relying on the outcome of the next general election, which of course nobody can predict?

I completely understand the view held by my hon. Friend and a number of other colleagues on our Back Benches either that we should want to get out straight away and so should have an in/out referendum straight away or, to be fair to him, that the change has been so fundamental that the referendum should be held sooner rather than later. I have set out my argument; I think it would be better not to do that immediately for the reasons I have given. I think that there is an opportunity for what I would call a fresh settlement and fresh consent that would be in the national interest of the whole United Kingdom.

Well, it looks like we are going to have a referendum, maybe in two or three years’ time, and maybe there will be more than one question—a Euro-max option—and we do not know what the question will be, yet the Prime Minister has the gall and temerity to question the Scottish National Party’s referendum process. Does he believe that all this delay for two or three years will create a great deal of business uncertainty across the United Kingdom?

I have to say gently to the hon. Gentleman that there is a slight difference. As I understand it, his party has a very clear view that it wants to leave the United Kingdom, and fought an election in Scotland on having a referendum to do just that. What I am trying to do is help him to have that simple, single-question referendum so that the country can make a decision. I profoundly hope that Scotland will vote to stay in the United Kingdom, which I think would be in Scotland’s interests and in all our interests, but I have to say that we should not have to wait quite as long to get on with it as his First Minister wants.

The Prime Minister has repeatedly said that now is not the time for an in/out referendum, so will he confirm that the letter I and 100 other colleagues sent to him urged him to legislate in this Parliament for a referendum in the next Parliament and so address the mass public distrust in politicians promising referendums on Europe, because they remember all too well the Labour party’s broken promises?

I absolutely hear what my hon. Friend says. I do not want to misrepresent him, and if I have done so in any way I absolutely apologise. That was never my intention. I read very carefully the letter he sent to me. He is not suggesting an immediate in/out referendum. As I said in reply to my hon. Friend the Member for Bournemouth West (Conor Burns), although it is possible to legislate in one Parliament to bind the next, as we have done with the referendum lock, I do not think that it makes as much sense to do that with a referendum for the future, because we do not know the exact pace of developments in the eurozone or the exact changes that will take place in Europe; I do not think that that is the right answer.