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Commons Chamber

Volume 555: debated on Tuesday 11 December 2012

House of Commons

Tuesday 11 December 2012

The House met at half-past Eleven o’clock


[Mr Speaker in the Chair]

Business before Questions

City of London (Various Powers) Bill [Lords] (By Order)

Second Reading opposed and deferred until Tuesday 18 December (Standing Order No. 20).

Oral Answers to Questions


The Chancellor of the Exchequer was asked—

Private Finance Initiatives

Last week, the Government announced the details of a new approach to replace the private finance initiative with private finance initiative 2, which is a more transparent approach to securing investment in public infrastructure. The Government will become a shareholder in future projects. We can all see now that the public sector was sharing the risk under PFI. We will now ensure that we also share in the rewards.

I looked at PFI for nine years on the Public Accounts Committee. I am sure people will agree that it was a good system that was scandalously misused to rip off tomorrow’s taxpayers for the sake of today and to rip off the public sector in favour of the private sector. How can the Chancellor assure the House that, if he is to use PFI 2 to pay for large infrastructure projects, we will not repeat the mistakes of the past?

I sat on the PAC under my hon. Friend’s chairmanship and I remember our investigations into various hospital and prison schemes that had gone wrong. As we saw it, there were three problems. First, contracts were very inflexible, so it cost a huge amount to do things such as change light bulbs or clean hospitals and the like. Secondly, the private sector got all the upside of the projects and made more money than expected. Thirdly, there was no control on the overall off-balance sheet total. We are addressing all three: we are creating more flexible and transparent contracts; we will share in the upside by taking a public sector stake and having the public sector on the board; and at the Budget we will set out a control total for PFI 2 liabilities.

The Chancellor says that things are getting better, but Essex county council has issued a social impact bond on which it proposes to pay 12%—six times the price of gilts—and the Government are putting £20 million into subsidising this financing. Why are the Government wasting money like that at a time of austerity?

I think that most people in the House—I thought this was the case in all parties—welcome the innovative work being done on social financing and social impact bonds. Sir Ronald Cohen is one of the leading advocates of this and has been advising the Government. It is all about trying to get new forms of financing into improving our society. I would have hoped she would have welcomed that, rather than criticising it.

Many on the Treasury Select Committee are already concerned that Whitehall Departments might again find themselves addicted to the “get something now, pay later” culture that bedevilled PFI the first time round. What is also concerning us is that a number of the proposals set out by the Government—I refer, in particular, to page 13 of the document produced—look more like motherhood and apple pie than something substantive enough to offset that Whitehall pressure. Will the Chancellor assure the House that, excluding value-for-money considerations, all accounting incentives to remove PFI from balance sheets will now be closed off to Departments?

I say to the Chair of the Treasury Select Committee that we will set out at the Budget—of course, he will want to scrutinise this carefully—a new control total for the off-balance sheet liabilities of PFI. We already now publish the whole-of-Government accounts so that people can see the liabilities built up under the previous Administration. The country now has more than £280 billion of PFI debt, of which only £40 billion has been paid off, so he is absolutely right to hold our feet to the fire to ensure that we properly account for this and remove perverse incentives in Whitehall. We want the private sector investing with us in public services, however, so it is important that we have the right regime.

The House will be pleased that the Chancellor is not trying to get rid of PFI, but trying to improve it in those areas where it can be improved. What does he mean, however, when he says that the Government will take a stake in the projects? How will he do that? It will need more than a director on the board, which I heard him say.

We propose to take a public sector share and put in an equity stake on behalf of the public sector. It will be a minority stake, but it means that we will share in the upside, and, of course, in order to keep an eye on our investment, we will have a director on the board representing the public sector, which was not the case in previous projects.

Cumbria’s health service is under immense pressure because of PFI deals going back a decade and more. What can the Chancellor do to go toe-to-toe with the private sector to renegotiate existing PFI deals to ensure that more money goes to front-line health services?

We are seeking to renegotiate existing contracts to get better value for money for taxpayers and local communities. I have a figure here showing that in north Cumbria the public were being charged £466 to replace a light fitting under the PFI contract that was signed. That is completely unacceptable—it is people being ripped off. That is what we are seeking to end.

Business and Job Creation

Some 1.2 million private sector jobs have been created since the first quarter of 2010. Last year more new businesses were created than in any other year on record. In the autumn statement we took further steps to support job creation and business creation by reducing the corporation tax rate to 21%, extending the small business rate relief scheme to support 500,000 small businesses and increasing by tenfold the annual investment allowance to £250,000.

The Labour Government more than doubled the national debt. This Government have done well to reduce the deficit by 25%, but this still means that we are adding to our debt, albeit at three quarters the pace. Financial repression and quantitative easing will ease the debt somewhat through higher inflation, but may I encourage the Chancellor, despite some positive measures in the autumn statement, to be bolder in encouraging economic growth, including by cutting small business corporation tax, which is the only credible way—

My hon. Friend is right that the deficit is how much we add to the debt each year. That is why we have to bring the deficit down—it has come down by 25%—but he is also right that we have to have a competitive private sector. We have to have a private sector-led recovery, which is why we have increased the annual investment allowance, for example. He recommends a cut in the small company corporation tax rate. [Interruption.] The shadow Chancellor from a sedentary position said, “That’d be a good idea,” but he was going to put the rate up when we came into office. We have cut the rate to 20% and increased the annual investment allowance.

Does the Chancellor agree that increasing the annual investment allowance from £25,000 to £250,000 will make a huge difference to local small businesses and lead to additional and vital job creation in the private sector?

I think it will help, alongside the reduction in the small company rate. I am pleased that the Federation of Small Businesses said we had listened to the concerns of members, and the chambers of commerce were also supportive. Over the next two years this measure will encourage investment from small and medium-sized businesses, although all businesses that invest will benefit.

As someone who has set up small businesses myself, I think that encouraging small business creation is part of the solution to the country’s economic problems. Does my right hon. Friend agree that it is a sign of the strength of the private sector in this country that we have seen new businesses created in such record numbers and that this has been one of the factors in generating the 1 million-plus private sector jobs created since the election?

It is welcome that more than 1 million jobs have been created in the private sector. We now have record female employment, which is also welcome, while the number of those on out-of-work benefits has fallen by 190,000, which is something I hope everyone would welcome.

May I congratulate the Chancellor on his U-turn on capital allowances for manufacturing industry? When did he realise that his previous stance of dismissing them as complex reliefs was wrong and at total variance with the Government’s stated aim of supporting manufacturing? When did his conversion to supporting these allowances take place, as long called for by Labour Members and the Engineering Employers Federation?

The first thing I would say is that we reduced the small companies rate—which would have gone up to 22% under the plans put in place by the last Labour Budget—to 20%. We have now introduced a £250,000 annual investment allowance for small and medium-sized businesses for the next two years. The right hon. Gentleman says that the Labour party had been calling for this. It had 13 years to introduce a £250,000 annual investment allowance. There were all those Budgets that the shadow Chancellor wrote and he did not put it in place.

The Chancellor will know that the all-party parliamentary groups on Yorkshire and North Lincolnshire and on manufacturing welcome the change in attitude towards the capital allowances. However, businesses in Yorkshire are saying that they are looking for some leadership and some light at the end of the tunnel, and they ended up feeling thoroughly depressed after watching the autumn statement. When is the Chancellor going to show more leadership? Let us see some light at the end of the tunnel.

I have to say that the reaction to the autumn statement from the business organisations of Britain was very positive. It was warmly welcomed because we are maintaining control of the public finances, which is a prerequisite for stability and recovery, and because we are taking steps to cut the corporation tax rate and increase the annual investment allowances. I still do not know whether Labour supports the cut in corporation tax. Its Front Benchers have been sending out confused messages on that over the past couple of days. Perhaps we will hear from the shadow Chancellor when he gets to his feet.

The Chancellor knows that business success is key to getting our economy growing, to getting the deficit down and to creating jobs. Will he therefore tell us what was the judgment of the Office for Budget Responsibility on the impact on growth of the measures that he announced in the autumn statement last week?

The Office for Budget Responsibility said that there was a measurable impact on growth in the short term, and of course we have to pay for this in the long term, so it has taken that into account. I have always said that we want to improve the long-term supply potential of the British economy, and one of the most encouraging signs is that the UK, which was becoming a less and less competitive place to do business, is now back in the world’s top 10 competitive economies.

I am not surprised that the Chancellor does not want to answer my question, because the OBR’s assessment is that his measures will add just 0.1% to UK gross domestic product by 2018. That must also be set against the fact that growth has been downgraded this year, next year and every year of this Parliament. Is it not the truth that the Chancellor has no plans for jobs and growth, and that that is why the Government are set to borrow an extra £212 billion during the course of this Parliament, breaking the fiscal rules that he gave to this country?

When the Labour party was in office, its approach led to the economy shrinking by 6% of GDP. We have set in place plans to ensure that the deficit it left us is dealt with and that our economy is more competitive. I would have thought that the hon. Lady would welcome the fact that we have over 1 million new jobs in the economy and a record rate of small business creation. That is something to celebrate in our economy.

May I welcome the Government’s announcement in the autumn statement to put more resources into ensuring that multinationals pay their fair share of tax? That is a key measure to help UK-based business creation. May I also suggest that the Chancellor consider introducing a requirement on multinationals to disclose in advance significant connected party transactions as a way of speeding up transfer pricing inquiries?

My hon. Friend makes a good point. Obviously, everyone is frustrated when they see multinational companies breaking the tax laws or interpreting them in such a way that they basically avoid paying corporation tax. That situation is not acceptable. We are putting more money into the enforcement of the rules and working with countries such as France and Germany to change the international rules so that we can have a better situation in the future. It would not work if we just acted unilaterally, because these are by definition multinationals. That is why we have to work with other countries.

Child Poverty

4. What recent assessment he has made of the effect of the Government’s fiscal policies on the level of child poverty. (132496)

13. What recent assessment he has made of the effect of the Government’s fiscal policies on the level of child poverty. (132505)

The Government have protected vulnerable groups as far as possible while undertaking the urgent task of tackling the record fiscal deficit that we inherited. Work remains the best and most immediate way out of poverty, and we have continued to prioritise work incentives through welfare reform and increasing the personal allowance.

The total cost to a two-child family on the minimum wage of the freeze in child benefit, the 1% increase in working tax credit and the VAT increase over four years will be £5,033. The extra tax allowances and the child tax credit will save them only £1,770, leaving them with a net loss of £3,263. How many more children do the Government expect to be in poverty as a result of those cuts?

I know that the hon. Lady cares deeply about the issue and she has done a lot of good work with vulnerable families in the past. She will be concerned, as I am, that under the last term of the previous Government child poverty, as defined by the Department for Work and Pensions, increased by 200,000 to 3.9 million. This Government believe that there should be a relentless focus on the causes of poverty, such as worklessness, so I hope that she will join me in welcoming the fact that the number of people employed today in Britain is at a record high.

He cannot get away with that, Mr Speaker; it is complete nonsense. Will he confirm—yes or no—that people on the minimum wage will be worse off at the end of this Parliament because of the tax and benefit changes than they would have been from the tax savings my hon. Friend the Member for Makerfield (Yvonne Fovargue)mentioned a moment ago? Cuts on child benefit and on working families tax credit will make people poorer: will he confirm that?

I am not going to take any lectures on child poverty from the right hon. Gentleman—[Interruption.]

The right hon. Gentleman was a senior member of the previous Government, who, over 13 years, presided over an increase in the number of workless households to a record 3.9 million. In his constituency, in the last Labour term, the number of youth jobseeker’s allowance claimants increased by 148%. I hope that he will join me in welcoming the fact that such claims are down by 19% under this Government.

May I ask the Minister to confirm that the previous Government’s child poverty targets were missed by 600,000, that according to the latest figures child poverty fell last year by 300,000 and that universal credit will reduce child poverty further, by up to 350,000?

My hon. Friend is absolutely right. The Government are relentlessly focused on eradicating poverty and the measures he has talked about, such as universal credit, increase work incentives and help people back into work.

Is it not the truth that the best way to tackle child poverty is to have parents in work? Does my hon. Friend agree that the creation of 1.2 million new private sector jobs, the taking of more than 1 million of the lowest paid out of tax and the abolition of the rise in fuel duty planned by the previous Government make the average family more than £125 better off and does more for child poverty than any scaremongering by the Opposition?

That is right. If we can deal with worklessness, we can help deal with poverty. In the past two years, 1.2 million private sector jobs have been created—more than were created on a net basis by the previous Government over 10 years.

Last month, the Joseph Rowntree Foundation said that more than 6.1 million people in poverty are in working households. Does the Minister believe that a real-terms cut to in-work support for the lowest paid helps to tackle child poverty and will he agree to publish a child poverty impact assessment alongside the Bill on benefits uprating?

As I have said, we will not take any lectures from the Opposition on child poverty. I used the previous Government’s figures. She talks about workless households, but they increased by 200,000 during Labour’s last term in power and I believe that the policies the Government have in place to deal with the root causes of poverty are the right ones.

Transferable Tax Allowances (Married Couples)

5. What consideration he has given to the introduction of transferable tax allowances for married couples. (132497)

The Government’s commitment to introducing a proposal to recognise marriage through the tax and benefits system remains firm. We want to show that we value commitment, so we will consider a range of options and advance proposals at the appropriate time.

With the introduction of the tapered removal of child benefit with one parent earning between £50,000 and £60,000, will the Minister give further consideration to how we can support families at this difficult time?

My hon. Friend is right to highlight the fact that we have introduced a range of measures that will have an impact on all parts of society, including the highest earning 10% to 15% through the child benefit changes. Of course, we look to do whatever we can to support families. That includes providing free early learning for three and four-year-olds and extending the 15 hours a week of early years education and care from 2012-13 to all disadvantaged two-year-olds.

I will be interested to know whether the hon. Gentleman will support the benefits uprating Bill. He is shaking his head, so I take it that we have finally got an answer on the Labour party’s position.

Work Programme (Funding)

6. What assessment he has made of the effectiveness of the funding arrangements which he agreed with the Secretary of State for Work and Pensions for the Work Programme. (132498)

The Work programme is the biggest single payment-by-results programme Great Britain has ever seen. The funding arrangements I agreed with the Secretary of State for Work and Pensions ensure that providers are paid to find sustained job outcomes for those who are or are at risk of being long term unemployed. For the very first time, providers are paid in part through the benefit savings that they generate.

The Chief Secretary wants us to look at the cheapness of the scheme to providers, but buying cheap can be a false economy if the product does not work. The price here is being paid by people staying in long-term unemployment, not getting jobs and still being on benefit. Is not the Work programme a failure?

No, I do not believe it is. The hon. Lady refers to costs, and she will know that the flexible new deal, which the Work programme replaced, cost £7,495 per job outcome; that compares with costs of about £2,000 under the Work programme. It is a great deal more cost-effective. The hon. Lady will also be aware that 56% of those first Work programme starters have come off benefits and that up to September this year, there have been 200,000 job entries, as reported by providers, so there is a sense of progress in the Work programme, too.

Does my right hon. Friend agree with the CBI, which has said that the Work programme has already helped to turn around the lives of thousands of people and is delivering real value for money for the taxpayer?

Yes, I do agree. The fact that the job outcomes are more stretching than previous schemes before providers get paid and that they are paid only for results—not just for activity—of course means that it is harder for them to start with, but the fact that there have been 200,000 job entries under the scheme up to September 2012 speaks for itself.

Long-term Youth Unemployment

8. What recent assessment he has made of the effect of the Government’s fiscal policies on the level of long-term youth unemployment. (132500)

I have made a recent assessment of the impact of fiscal policies on youth unemployment rates. With few exceptions, European countries with the highest deficits also tend to be the countries with the highest youth unemployment rates. In this country, a big increase in the deficit under the previous Government went hand in hand with a big increase in the rate of youth unemployment. Under this Government, the deficit is now coming down, and so is youth unemployment—including, as the hon. Lady knows, in her own constituency.

Overall in my constituency, the number of claimants on jobseeker’s allowance in October was the 22nd highest of all constituencies. Among 18 to 24-year-olds, the rate was 10.4%. That is far too high. My constituency has regular visits from the occupants of No. 10 and No. 11 Downing street to extol the virtues of Tech City, but what is the Treasury doing to make sure that my constituents are able to get any of the jobs created, especially when the Work programme is also failing them?

The hon. Lady was a Minister in the last Government, and she will know that in her own constituency there are fewer young unemployed people now than there were in the last year of the Government of whom she was a member. I am surprised that she has not taken the opportunity to refer to the fact that the rate of youth unemployment in Hackney South and Shoreditch has fallen by 20% over the last 12 months.

May I tell my right hon. Friend that under the last two Labour Governments, the youth unemployment claimant count in South West Bedfordshire rose by 180%, whereas it has fallen by 6% since we have been in office? Does that not show that, in difficult times, although there is, of course, further to go, we are moving in the right direction?

My hon. Friend is absolutely right. That is why it is important for us to maintain the course, pay down the deficit and build confidence in the labour market. We know what happened under the previous Government: in their last two years, long-term youth unemployment doubled.

Is the Minister aware that recent independent surveys show that Corby and east Northamptonshire is one of the most difficult places in the country for a young unemployed person trying to find work? I can tell him that I meet young people, day in, day out, who are desperately trying to find work, so will he look at the unique case for having an enterprise zone for Corby and east Northamptonshire, extending by one the number of enterprise zones that the Government have created?

I welcome the hon. Gentleman to the Chamber. When he organised a day think tank, he and I had some very productive exchanges. I should be happy to meet him to discuss the situation in Corby, which is an enterprising town with the potential to create many jobs. As he will know, under the “city deals” system I am responsible for devolving powers to places throughout the country, and I am keen to receive more applications.

A significant factor for young people seeking work in rural areas is the cost of transport and fuel. I therefore welcome last week’s announcement, and also the news that the Treasury is considering extending the rural islands fuel discount to some especially rural parts of the mainland. Such a change would make a huge difference to some of the poorest communities in the United Kingdom, and would encourage growth in employment.

My hon. Friend is absolutely right: that is one of the reasons why we were determined to reverse, and then to cancel, the fuel tax increase proposed by the Labour party. As for the rural scheme that he mentioned, we are having conversations with the European Commission in order to establish whether we can proceed with it.

Cost of Living

The Government continue to take steps to support households. We will increase the personal allowance further to £9,440 in April 2013 to support hard-working individuals. That cash increase of £1,335 in 2013-14 is the largest ever. We have also cancelled the 3p fuel duty increase that was planned for January, and announced a third council tax freeze and a two-year reduction in the cap on rail fares.

I just want to make sure that I have got my figures right. Am I correct in thinking that under the Labour Government fuel duty rose by 20p, and that had they remained in power, they would have planned for it to rise by 13p more than it will rise under this Government?

As usual, my hon. Friend has his facts absolutely right. The action taken on fuel duty by this Government means that in April next year, pump prices will be approximately 13p a litre lower than they would have been had the last Government remained in office.

I welcome the announcements in the autumn statement, particularly the announcement of an increase in the personal allowance, which will take 2.6 million people in the north-west of England out of income tax altogether. Will my right hon. Friend reassure us that he will continue to raise the allowance to ensure that it always pays to work?

Ensuring, through increases in the personal allowance, that low and middle-income workers in particular can keep more of the money that they earn rather than handing it over to the Exchequer helps those people to deal with pressures related to the cost of living. I can certainly assure my hon. Friend that I will continue to push that policy, along with my Liberal Democrat and Conservative colleagues. At the time of the last general election I made a key promise to lift the income tax threshold to £10,000, and I intend to deliver that promise as soon as possible. [Hon. Members:“ Like the promise about tuition fees?”]

Order. Labour Members are shouting their heads off, and the hon. Gentleman cannot be heard. Let us hear from Mr Davies.

The incomes of the top 10% in Britain have risen by 11% in the last two years, but we heard in the autumn statement that they would be cut by only 0.5%. Does Chief Secretary not agree that those people are in a fantastic position to take on increases in the cost of living, unlike the poorest 40%, who are being unnecessarily smashed by this Government?

The hon. Gentleman should recognise that the top 10% make up the part of the population that is contributing most to dealing with the financial problems caused by the Labour party—the mess that we are trying to clean up—both in cash terms and in terms of a share of their incomes. He should welcome the fact that this Government are doing more than any previous Government to ensure that the wealthiest in society contribute most to sorting out the financial problems that he and his colleagues created.

In the interests of transparency, will the Chief Secretary and his colleagues make public an impact assessment relating to child poverty before the welfare uprating Bill is laid before Parliament, not least because it would help us to understand the impacts of the cost of living and benefit freezes on low-paid working families?

The Department for Work and Pensions will, of course, publish an impact assessment in the normal way when the Bill is published.

The most significant way in which any Government can help people with their household budgets is to put more money in their pockets and purses, particularly money that they have earned themselves and which is subject to taxation. Does the Chief Secretary agree that one of the most important things that the coalition Government will do is lift millions of people out of income tax altogether, and, by April next year, deliver a broad income tax cut of £600 a year in relation to the level in April 2010?

Like my hon. Friend, I want to build a strong economy and a fair society where everyone has a chance to get on in life. The commitment to raise the income tax threshold was a commitment that he and I and all our colleagues made at the general election, and we are delivering on it in Government. There is a tax cut for working people cumulatively over this Parliament, and next year it will be worth £50 a month to people on low and middle incomes. That is real help for hard-working families at what is a difficult time.

Average wages in Scotland have fallen by 7.4% under this Chief Secretary, and from next year 182,000 couple-families in work with children will stand to lose money through tax credits. Why are this Government always standing up for millionaires while hammering the strivers?

I will not take any lectures on millionaires from the Labour party, which thought it appropriate that a millionaire private equity fund manager should pay less on his income than the person who cleans his office. Labour’s record on taxing the wealthy, dealing with tax avoidance and closing tax loopholes is nothing to be proud of, and the hon. Gentleman should stop raising that point.

Tax Avoidance

In seeking a fair contribution from the wealthy, the Government’s first priority is to tackle those who avoid or evade tax. The autumn statement contained a number of new measures to ensure that, including repatriating £5 billion in unpaid tax from Switzerland and new investment in Her Majesty’s Revenue and Customs to enable it to expand its anti-avoidance activity, in particular the specialist unit that supervises the compliance of affluent individuals.

People in Cornwall expect the wealthiest to pay their fair share of tax, so I welcome the Government’s planned offshore tax evasion strategy, which is much needed to track down funds that have been squirreled away and undertaxed. Will it cover British overseas territories as well as Crown dependencies, and what is the Minister’s assessment of the potential revenue?

Yes, it would. My hon. Friend gives me an opportunity to highlight the progress we have made in particular with the Isle of Man in ensuring there is much greater exchange of information. The net is closing in on those who wish to evade their taxes. Whether in Switzerland, Liechtenstein or the Isle of Man, it is becoming ever harder for them to evade paying taxes.

Does the Minister think that HMRC losing an extra 10,000 staff will make it harder or easier to tackle tax avoidance and evasion?

It is important to focus on the number of HMRC staff working on tax evasion and tax avoidance. Let me give two statistics: between 2005 and 2010 that number fell by 9,000, but between 2010 and 2015 it will increase by 2,500.

Does the Minister have any explanation as to why Labour never introduced a general anti-abuse rule when in government?

That is a very good question, but I am afraid I cannot give an answer to it. What I can say is that we have today published draft legislation for a general anti-abuse rule and it will come into force next year.

The Government’s shares for rights scheme is not only unpopular with the business community, but the head of the Institute for Fiscal Studies warned in the Financial Times today that it will

“foster a whole new avoidance industry”,

and the Office for Budget Responsibility believes the tax avoidance loophole it will create could cost up to £1 billion. Does the Minister agree with the OBR estimate? If so, why is he pressing ahead with a policy that is unpopular with business and could cost the taxpayer £1 billion?

First, it is not unpopular with business. Business groups have welcomed it, and the fact is that some aspects of our employment law can stand in the way of job creation. The OBR estimates that within the scorecard period this policy will cost £80 million in 2017-18. We believe it is the right move in order to ensure we have a more competitive environment.

Dark Pool Trades

The regulation of dark pools is subject to the markets in financial instruments directive, which is currently undergoing legislative review. The Government are negotiating to ensure that all dark pools are subject to regulatory oversight and that appropriate transparency measures are applied to them. However, we believe that dark pools provide a valuable service to pension funds and other investors and that regulation should not prohibit that.

Dark pools have that name for a reason: they are murky and not transparent, allowing financial institutions to buy and sell shares without anybody seeing what they are doing. Why will the Minister not just apply the same rules to dark pool trades as are applied to the open stock market, where everybody can see exactly what is sold, when it is sold, to whom it is sold and at what cost?

As you well know, Mr Speaker, dark pools allow one party to keep important details from other parties, which is a fair description of the economic policies of the Labour party. I say to the hon. Lady that the providers of pension funds are very clear that to over-regulate the dark pools would lead to a reduction in people’s pension pots. They have said that over the course of a 40-year pension fund this would require the pension fund holder to work an extra year. That is not in anyone’s interest.

Will my right hon. Friend update the House on the progress the Government are making in implementing the recommendations of the Kay review of equity markets and long-term decision making?

I certainly commend John Kay for the clarity of his review, and we are taking steps, both in Europe and domestically, to implement his recommendations.

Public Sector Net Borrowing

14. What the level of public sector net borrowing was in (a) the first seven months of 2012-13 and (b) the equivalent period in 2011-12. (132506)

According to the Office for National Statistics, public sector net borrowing for the first seven months of 2012-13 was £73.3 billion, excluding the transfer of the Royal Mail pension assets. Public sector net borrowing for the equivalent period in 2011-12 was £68.3 billion.

Will the Minister explain to the many families in my constituency, who are very angry at an autumn statement that has left them with less money to spend in the local economy, why borrowing has been revised up by more than £200 billion compared with the Chancellor’s plans two years ago? What will it take for him to realise that we need jobs and growth before we can get the deficit down?

I think that the hon. Lady submitted that question before the autumn statement, not expecting the Office for Budget Responsibility to confirm that the deficit is going to keep on falling. She risks becoming, like her friend the shadow Chancellor, an economic arsonist. He has created an economic inferno but is more interested in throwing stones at the firefighters. What her constituents want to know is that the deficit is coming down, and it is down by a quarter. That is creating jobs and confidence, and that is what this country needs.

Capital Infrastructure Projects

16. What assessment he has made of the importance of capital infrastructure projects in helping rebalance the economy. (132508)

Investment in infrastructure networks is a major determinant of growth and productivity, but historically such investment in this country has not kept up with the needs of a growing population. That is why this Government have increased capital expenditure compared with the previous Government’s plans, including with the extra capital we announced last week. In fact, public investment as a share of GDP is now higher on average in this Parliament than it was under the previous Government.

I thank my right hon. Friend for that, and I was delighted to see in the autumn statement extra capital investment, especially in housing, rail, cycling, science and broadband, particularly in Cambridge. What plans does he have to improve the energy infrastructure, including storage, to provide more certainty for investors?

That is an extremely good point, because on 29 November we introduced the Energy Bill, setting out the contracts for difference, which will deliver a stable financial environment of incentives, particularly for investment in renewables. Alongside that agreement, we set out the level of support consumers will pay for low-carbon generation—the so-called levy control framework—which will triple support for renewables between now and 2020, ensuring a great deal of investor confidence in that area. Along with gas investment, as set out in the autumn statement, that will help to bring forward massive investment that this country needs.

18. There is a tendency for coalition infrastructure schemes to be news-ready many years before they are shovel-ready. Another tendency is unfairness; three out of the four road schemes in the autumn statement last week were in the south, including one helping port access in Thurrock. When is the port city of Hull going to get the A63 upgrade that is central to our regeneration? (132510)

The hon. Lady ought also to have noted that the autumn statement announced the complete dualling of the A1 between London and Newcastle, which is a very important scheme, and the upgrades for the A160 to Immingham, a very important port on the Humber estuary. That work has been accelerated under the new scheme introduced by the Department for Transport. I would have thought that she would welcome that, rather than criticise it.

Interest Rate Swap Mis-selling

The Government have been clear that the mis-selling of financial products is wrong, and we support the Financial Services Authority’s ongoing work to tackle the issue. The Treasury and the FSA have established monthly round-table discussions with the banks and the business groups to ensure that these concerns are addressed. We will continue to work with all parties involved to ensure that the banks provide the appropriate redress.

Constituents who have contacted me said that they are struggling and that they have been waiting for more than a year for the FSA review, during which time the banks have taken no remedial action whatever. What can the Minister do to help the victims of mis-selling now?

I am glad the hon. Gentleman has asked me that question. I agree that customers who have been mis-sold products need quick redress, so I have pushed the FSA and it has agreed to implement a six-month maximum time scale for the banks to complete the review and provide the redress. I have also asked the banks and they have agreed to stop payments on these products for businesses facing financial difficulty.

Topical Questions

The core purpose of the Treasury is to ensure the stability and prosperity of the economy. I can announce today that Budget 2013 will be on Wednesday 20 March.

I thank the Chancellor for probably the most complete answer he has given today, at a time when every city in our countries has food kitchens feeding the poor and in London people are queuing up to get second-hand reject food from stores and Pret A Manger. I know that the Chancellor borrowed £425 million from the good causes fund of the lottery for the Olympics, and the National Audit Office has said there is an estimated £377 million profit from the Olympics. Could he now return that to the good causes so they can give it to the charities looking after the poor in our country, which he clearly is not?

It is a credit to those who delivered the Olympic games that they came in under budget. The Olympic underspend is money which, if we spent it, would add straight to the deficit. It is not a pot of money sitting in some Government bank account. That would be a difficult decision to take and would have to be balanced alongside other decisions, but I make a broader point: we are trying to sort out the economic problems that this Government inherited. The problems that the hon. Gentleman talks about are problems caused by the deepest recession and the biggest financial crisis of the 21st century, and perhaps one day a Labour MP will get up and apologise for it.

T6. As somebody who has had a long interest in exempting some of the poorest people in this country from tax—incidentally, an idea I held long before the Liberals pinched it from me—I congratulate my right hon. Friend on almost achieving this target in his autumn statement. When economic circumstances allow, could he be even bolder? (132523)

I am proud to be part of a coalition Government of Conservatives and Liberal Democrats who have delivered that policy and are delivering it. A very substantial increase next year will mean that individuals are £229 better off in real terms as a result just of the increase in April, so that is to be welcomed. As for when we get to £10,000, I have just announced the Budget date and we will have to wait for that Budget for tax decisions, but even if the £10,000 allowance were to increase with our current CPI forecasts from the OBR, it would hit £10,000 in 2015.

In the autumn statement, the Chancellor announced a real-terms cut in tax credits and benefits over the next three years and the Government say they will ask the House to vote on that, so can the Chancellor tell the House the answer to two questions? First, what percentage of families hit by these cuts to tax credits and benefit are in work? Secondly, as a result of the autumn statement tax and benefit changes, including the change to the personal allowance, will the average one-earner couple in work with children be better off or worse off?

It is good to see the shadow Chancellor back. Of course tax credits go to some people in work, but we are also helping those people with a personal allowance increase, and working households will be £125 better off. Perhaps he can answer a question, if that is allowed, Mr Speaker: how will Labour vote on the Bill?

It is very important that the public are not misled, however inadvertently, by a member of the Government. This is not an occasion for shadow Ministers to answer questions. In our system, they ask questions and Ministers are expected to answer them. That is the situation.

I will answer, though, Mr Speaker, but before I do it is important that Members on both sides of the House know the answers to the questions I asked the Chancellor. First, 60% of families hit by his tax and benefit changes are in work. Secondly, according to the Institute for Fiscal Studies, as a result of the autumn statement measures a working family—the average one-earner couple—will be £534 a year worse off by 2015. Those are the very families who pull up the blinds and go to work. Every Tory constituency has, on average, over 6,000 of those families who will lose out. In answer to his question, we will look at the legislation, but if he intends—[Interruption.] He asked me a question and I am going to answer it. If he intends to go ahead with such an unfair hit on middle and low-income working families while giving a £3 billion top-rate tax cut, we will oppose it. Why is he making striving working families pay the price for his economic failure?

As I have said, working households will be £125 better off. The right hon. Gentleman quotes the Institute for Fiscal Studies, which has been very clear in its response to the autumn statement that people who are in work and paying the basic rate of tax will do better. The reason we are having to take these difficult decisions on public sector pay, on benefits and the like is because of the mess he created. When will he stand up and say, “I’m sorry we borrowed too much and spent too much. We’ll never do it again”?

T9. Unlike suppliers, who are in a position to judge whether to continue giving goods and services to a company in difficulties, many consumers are not so well informed. Is it not time we amended administration law to make savers and gift voucher holders preferred creditors? (132526)

My hon. Friend makes a good point about the protection of individuals using saving or voucher schemes, and I commend her work on raising awareness about that important issue. I know that she raised the issue recently during business questions and received a response from the relevant Minister. If it would be helpful, I will speak with the Minister and raise her ongoing concerns.

T2. May I welcome the funding in the autumn statement for building future schools, or what we call Building Schools for the Future? May I also welcome the extra allowances for capital investment, or what we call capital allowances? Why did we have to wait two years and have a double-dip recession for those good Labour policies to return to government? (132519)

The hon. Gentleman will recall that the Building Schools for the Future scheme was expensive and inefficient and that we had to scrap it because it was unaffordable. It was one of the many unaffordable promises that he and his colleagues made before the election in order to get people’s hopes up, yet still the former Chief Secretary left a note stating, “There’s no money left.”

It is manifestly in the interests of the British taxpayer that foreign sovereign wealth funds invest in national infrastructure projects. Will the Chief Secretary indicate what progress is being made in that respect?

Significant progress is being made in that respect. We have seen significant investment in Thames Water, for example, by overseas investment funds. We announced in the autumn statement some funding for junction 30 of the M25, which is part of ensuring a significant investment from people in Dubai in a major port facility near London. No doubt there will be further such announcements to make in future.

In my constituency, the claimant count is just short of 3,000, double what it was five years ago. Does the Treasury accept that it is the rise in long-term unemployment and the failure of the Work programme that has resulted in the benefits bill rising so much this year?

No, I do not accept that. As I said in answer to the hon. Member for Edinburgh East (Sheila Gilmore), who has taken a great interest in these matters, the Work programme is a great success in getting people off benefits and into job starts, but not necessarily through job outcomes. Over 1 million jobs have been created in the past two and a half years, so that there are now a record number of people in employment in this country. He should welcome that, not criticise it.

I thank Ministers for listening to the pleas of MPs explaining the plight of pensioners with self-invested pension plans that were affected by the cap on drawdown. Will the announcement in the autumn statement to lift that cap come into force in time to protect their pension income in this financial year?

I thank my hon. Friend for that question; I remember that he raised this issue last time at oral questions. He has been a great campaigner on it, and I commend him for that. I am pleased that he welcomes the decision to raise the cap to 120%. That will be in the next Finance Bill. We are consulting with stakeholders about the easiest way to bring it in, and we will try to do so as soon as possible.

T4. Thanks to Jobs Growth Wales, an innovative start-up in my constituency called Boulders Climbing Centre, which I recently visited, has taken on a new member of staff. Will Ministers join me in congratulating the Welsh Government on their scheme and explain why they cancelled funding for the future jobs fund? (132521)

The future jobs fund was a massively expensive programme that saw more than half of participants return to benefit after completing it, and it was largely in the public sector. Of course I welcome the scheme that the hon. Gentleman mentioned; if it has created a job in his constituency, that is welcome. The truth is, though, that the biggest problem we have in this country is clearing up the mess that Labour left, and that is why we have to find better, more efficient ways of doing things.

The Treasury has today made a written statement alerting Parliament to a newly discovered error made by Northern Rock—an error made, I hasten to add, under the previous Government, starting in 2008—that could cost the taxpayer hundreds of millions of pounds. Does my right hon. Friend agree that this is yet another example of the previous Government’s total failure to regulate the banking system properly costing this country dearly? Could he—[Interruption.]

Order. May I gently explain to the hon. Gentleman two things? First, topical questions are supposed to be brief, and secondly, they are supposed to relate to the policy of the current Government, not that of the previous one. A short one-sentence reply will, I am sure, suffice—no?

Will you allow me, Mr Speaker, to spend a little time on this? We put down a written statement at half-past 11 today because of an error originating in 2008, when Northern Rock was in public ownership. Some customers with certain types of mainly unsecured loans were not given all the mandatory information in their statements to which they were entitled by law. As a result, interest payments on these loans are not legally enforceable. UK Asset Resolution, which manages Northern Rock—[Interruption.] Can I just make this point? One hundred and fifty—[Interruption.]

Order. I do not require any help from the hon. Gentleman; he should concentrate on the pursuit of his own duties to the best of his ability. I would say to the Chancellor that if the written ministerial statement has been made it is not entirely obvious to me why we need its terms to be repeated before the Chamber. [Interruption.] Order. I will use my discretion. The right hon. Gentleman can have a few seconds more, but then I really must proceed with topical questions, for which allowance will have to be made.

Mr Speaker, 152,000 customers have been affected. These are people with loans of less than £25,000. The cost to UK Asset Resolution is estimated at £270 million. UK Asset Resolution has ordered a full inquiry into what happened in 2008, and we will come to the House with more information when we have it. I wanted to bring this news to the House at the very first opportunity, and I find it pretty extraordinary that the Opposition do not want the public to hear it.

Order. Whatever discontent there may be on either side of the House about this matter, it would be a courtesy to hear Teresa Pearce.

Thank you, Mr Speaker.

New research from Which? reveals that nearly half of front-line bank staff believe that pressure selling still dominates the culture of banking. Will the Minister join me in calling for banking remuneration and incentive structures to be changed to reward ethics and service, rather than aggressive selling targets, in order to help to change the culture of banking?

The hon. Lady is absolutely right that one of the real problems in banking over recent years was that the people who had a trusted relationship with their customers saw them as sales targets rather than as people to be helped. That needs to change. The Financial Conduct Authority is very clear that these kinds of incentives have to go.

I congratulate my right hon. Friend the City Minister on reassuring us that he intends to require the Prudential Regulatory Authority and the FCA to promote new bank competition. Does he agree that full account portability could offer the biggest game changer for bank competition, and that an amendment to the draft Financial Services (Banking Reform) Bill could achieve that?

I am grateful to my hon. Friend for her question and for her campaigning on this issue. My hon. Friend the Economic Secretary and I will meet her to discuss her proposals. The draft Bill responds to the Vickers report. He said that if portability reforms were not adequate we could take further steps, so we have a vehicle to do so.

T8. Perfectly viable businesses up and down the country are going bust while the Government meet the Financial Services Authority and the banks on an ongoing basis to try to come to a conclusion on interest-rate swaps, so I have a suggestion that might focus their minds and make them arrive at a decision more quickly. Why will the right hon. Gentleman not take steps to allow a moratorium on paying back loans that include interest-rate swaps? That would make everybody come to a decision very quickly and help perfectly viable businesses during the recession. (132525)

In answer to an earlier question, I said that I have written to all of the banks and asked them—and they have agreed—to forbear on charging businesses where these matters are in dispute and if the company has financial problems. I am also speeding up the process to resolve these issues once and for all. The matter is rightly of concern to many businesses right across the country and I will do everything I can to help.

The beer duty escalator was brought in by the previous Government in a very different economic situation. Many CAMRA members will come to Parliament tomorrow. The Economic Secretary said that he would reflect on and consider the issue. How is he getting on?

My hon. Friend has been an assiduous campaigner on this issue and I welcome the strength of his campaign. I am still reflecting and considering. I am aware that campaigners will come here tomorrow and intend to meet a couple from my own constituency.

T10. Eleven jobseekers are chasing every vacancy in Blaenau Gwent. Does the Chancellor think that the Work programme will prove to be good value for money? (132527)

Yes, I do, and the CBI has welcomed it. I hope that the hon. Gentleman welcomes the fact that we have record employment in our country—a record number of women are working—and that youth unemployment has fallen recently as well.

Benefits have increased at twice the rate of earnings since the onset of the financial crisis. Could the Chancellor reassure me that, in spite of criticisms from those on the Opposition Benches, he will not veer from the 1% commitment that he made last week?

My hon. Friend has that reassurance. We have discovered an extraordinary thing today, namely that Labour will vote against yet another measure to deal with the deficit. Labour would have a higher benefits bill as a result of that decision and it will have to explain that to the hard-working people of this country.

I listened carefully to the Chancellor’s answer to the question asked by my hon. Friend the Member for Linlithgow and East Falkirk (Michael Connarty) about food poverty, but he did not actually answer it. Is he ashamed that, under his watch, by the end of this year a quarter of a million people across the country will have accessed emergency food aid?

We are dealing with the economic mess that the previous Government left behind, when unemployment rose, the economy shrank by 6% and people were put into poverty. That is the cause of these problems and Government Members are dealing with them and clearing up the mess that that man—the right hon. Member for Morley and Outwood (Ed Balls)—left behind.

The Government moved swiftly to compensate the victims of the Equitable Life scandal, who were ignored by the Labour Government. The one set of people who were excluded from the legislation were the pre-1992 trapped annuitants. I know that the Minister has been considering this issue. Will he update the House on what consideration will be given to those weak and vulnerable people who just want some safety for the rest of their lives?

My hon. Friend has campaigned well on this issue and I recently met representatives of the Equitable Members Action Group to discuss it. The Government are focused on delivering the current scheme efficiently and effectively.

Points of Order

May I have your guidance, Mr Speaker? Is it in order for the Chancellor of the Exchequer, pre-empting a written statement, to slip out news during topical questions about Northern Rock that could well have fiscal implications, including for Government borrowing, in a way that is designed to avoid any proper scrutiny or questioning from the Opposition? Is this not just another example of the Chancellor refusing to answer questions in this House? Would it not be in order for the Chancellor or another Treasury Minister to make an oral statement in this House today and be properly scrutinised, rather than once again playing fast and loose with the public finances and Parliament?

Further to that point of order, Mr Speaker. There was no pre-empting of the announcement. It was laid as a written statement one hour ago. I thought that it would be appropriate to illuminate the written statement in oral questions, as Ministers frequently do from the Dispatch Box. There is, of course, a debate on the economy this afternoon, during which we can answer questions. It relates to errors that took place in Northern Rock in 2008 that have affected a number of customers. Customers will be receiving letters from Northern Rock. As I said, I thought that it would be helpful to illuminate the details of the written statement, but apparently that is not the case.

The right hon. Member for Morley and Outwood (Ed Balls) is itching to raise a further point of order, but I ask him to hear what I have to say first. This cannot be a debate; there are a couple of points of order to which I am giving a reply. My response, whether Members like it or not, is as follows.

First, I feel sure that the Chancellor of the Exchequer intended to be helpful to the House. It is not for me to impugn motives, and I do not do so. However, was it a good idea to handle this matter via the device of topical questions in the way that it was done? The answer is no, it could have been better done. I am sure that the hon. Member for Braintree (Mr Newmark) was doing his best, according to his own lights, but it was unwise to deal with it in that way.

Secondly, I simply make the point—[Interruption.] It may be topical, but that does not necessarily mean that it should be raised at topical questions. My understanding, which is very easily explained, is that although something is a topical matter, it does not mean that it should be the subject of a topical question if the Government have tabled a written—

No, I do not require any assistance from the hon. Gentleman. He should do his own job to the best of his ability. I am giving a verdict on the matter.

The Government have laid a written ministerial statement. If they had wanted to make an oral statement, they could have made one. They did not do so, but made a written ministerial statement. I repeat: I am sure that the Chancellor meant well. That is the kindest thing, in the circumstances, that I can reasonably say. There is nothing further to be said on this matter now, but we may well return to it.

Equal Marriage Consultation

With permission, Mr Speaker, I would like to make a statement on the Government’s proposals to enable same-sex couples to marry. Copies of the consultation response will be available in the Libraries of both Houses.

Not long ago, talk of marriage as one of the building blocks of society was dismissed by some as out of date. Of course, those of us in this House who have taken a closer interest know that marriage remains something to which most people aspire. Therefore, far from being a peripheral issue, the future of marriage should concern us all.

Today we are setting out how the Government will extend marriage to same-sex couples. The consultation has been the subject of much debate both within and outside the House, and I am immensely grateful to the many hon. Members who have taken time to discuss the proposals with me, adding their voices to the 19 petitions received by the Government and the record 228,000 individuals and organisations who responded to the consultation.

For some, this is a contentious and radical reform, or, indeed, a reform too far. Historical facts, however, show that over the generations marriage has had a long history of evolution. In the 19th century inequalities prevented Catholics, atheists, Quakers and many others from marrying except in the Anglican Church. When that changed, was it accepted without protest? No, I am sure it was not. In the 20th century when the law was changed to recognise married men and married women as equal before law, was that accepted without fierce protest? No. In each century Parliament has acted—sometimes radically—to ensure that marriage reflects our society to keep it relevant and meaningful. Marriage is not static; it has evolved and Parliament has chosen to act over the centuries to make it fairer and more equal.We now face another such moment—another such chance in this new century.

For me, extending marriage to same-sex couples will strengthen, not weaken, that vital institution, and the response I am publishing today makes it clear that we will enable same-sex couples to get married through a civil ceremony. We will also enable religious organisations that wish to conduct same-sex marriages to do so, on a similar opt-in basis to that available for civil partnerships. That is important for the obvious reason that it would be wrong to ban organisations that wish to conduct same-sex marriages from doing so.

I am under no illusions and I am fully aware that the proposals set out today to allow same-sex couples to marry are contentious. I am also clear that there should be complete respect for religious organisations and individual religious leaders who do not wish to marry same-sex couples. The Government must balance the importance of treating all couples equally and fairly with respect for religious organisations’ rights to their beliefs.

We must be fair to same-sex couples and the state should not ban them from such a great institution. Equally, however, we must be fair to people of faith, and the religious protections I will set out will ensure that fairness is at the heart of our proposals. Churches have a right to fight for and articulate their beliefs and to be under no compulsion to conduct same-sex marriages. As the Prime Minister said, we are 100% clear that if any church, synagogue or mosque does not want to conduct a gay marriage it will not—absolutely must not—be forced to hold it.

Part of our response will include a quadruple lock, putting into English law clear and unambiguous protections. I will go into the detail of those locks, but I first want to reiterate comments I made yesterday on Europe. I know that many hon. Members are worried that European courts will force religious organisations to conduct same-sex marriages. The law is complex, but that complexity is absolutely no excuse for misunderstanding the facts. Case law of the European Court of Human Rights, and rights set out in the European convention on human rights, put protection of religious belief in this matter beyond doubt.

The Government’s legal position has confirmed that, with appropriate legislative drafting, the chance of a successful legal challenge through domestic or European courts is negligible. I have therefore asked the Government’s lawyers to ensure that that is the case. Our response sets out clear safeguards—a quadruple lock of measures to protect religious organisations. The Government have always been absolutely clear that no religious organisation will be forced to conduct same-sex marriages. The system of locks will iron-clad the protection in law, adding to the existing protections in European legislation, so that those who do not want to conduct same-sex marriages will never have to.

First, we will write on to the face of the Bill a declaration that no religious organisation, or individual minister, can be forced to marry same-sex couples or to permit that to happen on their premises. Secondly, I will amend the Equality Act 2010 so that no discrimination claims can be brought against religious organisations or individual ministers for refusing to marry a same-sex couple or for refusing to allow their premises to be used for this purpose.

Thirdly, the legislation will make it unlawful for religious organisations or their ministers to marry same-sex couples unless the organisation has expressly opted to do so. As part of this lock, a religious organisation will have to opt in as a whole, and each individual Minister will then have to opt in too. Therefore, if a religious organisation has chosen not to conduct same-sex marriage, none of its Ministers will be able to do so. However, if an organisation has chosen to conduct same-sex marriage, individual Ministers are still under no compulsion to conduct one unless they wish to do so.

Finally, because the Churches of England and Wales have explicitly stated that they do not wish to conduct same-sex marriage, the legislation will explicitly state that it would be illegal for the Churches of England and Wales to marry same-sex couples. That provision recognises and protects the unique and established nature of those Churches. The Church’s canon law will also continue to ban the marriage of same-sex couples. Therefore, even if those institutions wanted to conduct same-sex marriage, it would require a change to primary legislation at a later date and a change to canon law—additional protection that cannot be breached.

It is important to address directly other concerns raised by religious institutions. Other legal cases, including those involving the provision of services such as bed and breakfast or the wearing of religious symbols, have no bearing on the legal situation regarding marriage, because most religious marriage is a commitment made before God—it is at the heart of religious belief. There is clear protection under article 9 of the European convention on human rights and clarity in case law that the European Court of Human Rights considers same-sex marriage to be a matter for each individual member state.

Faith has underpinned British society for centuries, and it is important to me that equality before the law is seen in the same way. The proposals will allow both to co-exist without threat or challenge to the other. People of faith hold views that must be respected. That is why I have been absolutely clear that I would never introduce a Bill that encroaches or threatens religious freedoms. It is with those strongly held views in mind that the proposals presented today have been designed.

I believe the proposals strike the right balance—protecting important religious freedoms while ensuring that same-sex couples have the same freedom to marry as opposite-sex couples. By making marriage available to everyone, we will ensure that it remains a vibrant institution. Our changes will allow more people to make lifelong commitments and enjoy the benefits of an institution that has for centuries lain at the heart of our society.

Thank you, Mr Speaker—it is good to be here again. I welcome the Minister’s commitment to introduce same-sex marriages, but I am at a loss about why she could not have made all those points in the House yesterday, especially as most of them were made by Ministers to the press on Friday.

I agree with the Minister that we should support same-sex marriage. When couples want to get married and to make the long-term, loving commitment it entails, we should celebrate and not discriminate. Marriage is more than a historic tradition; it is about how the state and society today view and value long-term commitment. We should not prevent people from getting married and gaining recognition from the state on grounds of gender or sexuality, and Parliament should not say that some loving relationships have greater value than others.

While Labour was in government, we changed the law many times to tackle outdated prejudice and discrimination against lesbians, gay men, and bisexual and transgender people. Many of those measures were controversial at the time but are now taken for granted even by those who opposed them at the start: an equal age of consent, ending the ban on serving in the armed forces, ending discrimination in adoption and fertility treatment and abolishing section 28. Year after year, we changed the law and argued for the justice and common sense of each of those changes, and opponents were proved wrong—the sky did not fall in. This is the next sensible step. To deny same-sex couples the chance to marry and have their relationship recognised by the state as of equal worth to other loving couples would be unfair and out of date.

The Minister will know that I have argued for some time for those Churches and religious organisations that want to be able to celebrate same-sex marriage to be able to do so. I have met religious leaders from many faiths who want to be able to treat all loving couples equally and who show powerfully that the debate on same-sex marriage should not become polarised between Church and state. There are very different views between and within faiths.

I agree that freedom of religion is important. The Minister is right that no Church or religious organisations should be required to hold same-sex marriage and that respect for freedom of religion should be built into the proposed legislation, but we will need to look at the details of the proposals because it is important that she does not become too defensive about this. Freedom of religion also means that those faith groups, such as the Quakers, the Unitarians and others who want to be able to celebrate same-sex marriage should be able to do so. Those who argue that marriage should never change are out of touch with public feeling. Based on that argument, civil marriage would never have been introduced in the 1830s, married women would never have been given the right to own property, no one would be able to remarry after a divorce and the law would not have been changed to outlaw rape within marriage.

It is deeply disappointing that some in the House yesterday wanted to link same-sex marriage with polygamy or to suggest that it was somehow an affront to those in so-called normal marriages. I hope that those who have opposed the plans in the House and some Church leaders will think carefully and not repeat some of the hysterical language they have used before. These proposals include considerable respect for freedom of religion, freedom of belief and freedom for those who wish to continue to oppose same-sex marriage within their own organisations. I hope, however, that they will now respect the majority of us in the House and beyond who wish to support same-sex marriage and will not try to veto everyone else. No one faith, group or organisation owns marriage.

Surveys have found that seven out of 10 people support extending civil marriage to same-sex couples and that six out of 10 people of faith support extending it too. Marriage has never been a rigid, unchanging institution. It is only when marriage loses its relevance to communities or is seen as outdated or unjust that it risks becoming weakened or forgotten. I hope that the Minister will accept the support for these measures, promote them with confidence, not be defensive about the changes, and urge everyone to support the reforms, which will strengthen marriage and support equality too.

I welcome the right hon. Lady’s support for the statement. She is right to highlight the widespread support for what the Government have outlined outside this place and on both sides of the House.

It is important to pick up on the right hon. Lady’s point about showing respect for both sides of the argument. As we participate in these or any discussions, none of us should try to polarise the debate. The language we use and the stance we take are looked at far and wide—people will be looking at how we deal with these issues—so I hope that hon. Members will appreciate and echo in their comments the respect that I am showing to religious institutions and to people in same-sex relationships. I think I made it clear that it is up to religious institutions to decide how they deal with these matters. That is not being defensive; it is about respecting those important religious beliefs.

Order. Very many Members are seeking to catch my eye, and I am keen to accommodate them, so brevity is of the essence.

The Secretary of State has outlined a major social change that many of those whom we represent find unacceptable. Such significant change should be allowed to evolve, rather than be pushed through. Will the Minister agree to seek an electoral mandate before proceeding?

My hon. Friend is right that many of these matters evolve over time. Our consultation has allowed us to listen to the many and varied views and reflect those views in the proposals. On an electoral mandate, the Conservative party’s commitment was set out in the contract for equalities, which sat alongside our manifesto at the election, and which laid out the importance of considering the case for changing the law.

Does the Minister agree that, given that respect for freedom of religion is vital, it is right that faith groups that wish to marry same-sex couples should be allowed to do so?

I welcome my right hon. Friend’s statement. She correctly says that this proposal commands widespread support in the country, as all opinion polls show, but, just as this measure is about safeguarding the rights of one minority, is it not also important jealously to guard the rights of another—those who choose in conscience not to agree and those Churches that do not wish to conduct such ceremonies? Does she agree that those who were concerned about the proposal, in the belief that Churches would be forced to conduct such ceremonies, need no longer be concerned, now that they understand that there is a lock and that no Church will be forced to do so?

My right hon. Friend has done a great deal of work in this area, and we listen to him with great interest. He is right that the quadruple lock I have outlined today should give clear reassurance to hon. Members and anybody outside listening that there is a considerable and thought-through way of ensuring that ministers and religious organisations are under no compulsion to undertake same-sex marriages, if they believe that it does not accord with their faith. It is absolutely right that we respect the stance taken by religious organisations and that we put in place safeguards at a domestic and European level to ensure that those safeguards are effective.

As chair of the all-party group on equalities, I very much welcome the Minister’s statement. Does she agree that this is not a matter of redefining marriage, but of extending it to a group that currently does not have that right? It is a matter of equal rights in our society in the 21st century.

I thank the hon. Lady for her support. As I outlined in my statement, we have seen marriage evolve over generations to ensure it remains relevant and vibrant, and these proposals do that again for our century, while putting in place that quadruple lock, those safeguards and the clear articulation of our respect for religious belief, so that we strike the right balance between the rights of same-sex couples and those of religious institutions.

I warmly welcome the Government’s announcement. My right hon. Friend has struck the right balance between protecting religious freedoms and extending legal equality to the LGBT community some 43 years after the Stonewall riots. Does she agree that, despite the noises behind me, it will be much less than 43 years before people wonder what all the fuss was about today?

I understand my hon. Friend’s sentiments; I do, however, understand what the fuss is all about. People have deep-seated religious convictions and beliefs. If we are to go forward successfully with these measures, we need to ensure that our respect is clear. I will meet religious institutions later today to talk about these things in more detail and ensure that they are happy with the locks we are putting in place.

Given that the right to marriage is now being extended, albeit in quite a limited form, should not the right to enter into a civil partnership be extended to those heterosexual couples who perhaps do not like the religious connotations of marriage?

I understand the hon. Lady’s point, but we do not feel that there is significant demand for the extension of civil partnerships in the way she describes. What we want to ensure is that marriage is extended to same-sex couples.

I had the privilege of chairing the Civil Partnership Bill through Committee in the House of Commons. Throughout the passage of that legislation, clear undertakings were given that it was not the thin end of a wedge, that it would not lead to marriage and that it satisfied all the necessary legal and equality demands of the time. I accept that the present Government cannot be bound by a previous Government, but it will require a degree of faith—I use the word advisedly—if we are to move forward down this road. The Minister said that 60% of the general public are in favour of this measure. The letters I have handed to Ministers suggest that 98% of my constituents are opposed to it. Will she publish the figures?

I think my hon. Friend might have mistaken what I was talking about. I did not quote a figure in that respect, although I would always be happy to share with him any such figures. There are important differences in perception of civil partnerships and marriage. What we are putting forward today is about ensuring that the universally understood and recognised idea of marriage is available to more people. That is something we should celebrate. I hope I can convince him, through the quadruple lock I have announced, that the sort of protections that he and his constituents would look for are very much to the fore of our minds.

Marriage has changed over the centuries, has it not? For centuries, the Church of England’s doctrine was that the primary purpose of marriage was the procreation of children, but many heterosexual couples either are unable to have children or choose not to have them. Marriage today is, for very many people, about many other things—companionship, sharing one’s life, mutual support and so on. As I said to the Minister yesterday, I find it difficult to believe that any Christian, including many Anglican bishops and clergy, would not want that for every member of their parish. Will she therefore consider not putting such an ultimate lock on the Church of England, so that there is freedom for the Church of England? Those in the Church of England all voted to keep slavery for 30 years, but eventually they changed their minds.

I am sure that the hon. Gentleman will take time to lobby his previous employer on these matters. Obviously it is for individual religious institutions to look at that. The Church of England can come forward with a change of view at any point in time and we can consider the appropriate actions to be taken.

I thank the Minister for her statement today, but many people in Chesham and Amersham are desperately concerned about the Government’s proposals. What can my right hon. Friend say to my constituents, who genuinely feel that the Government are challenging their deeply held religious beliefs and, despite her many assurances today, do not believe that they are being heard by her or that their religion is truly being protected?

I reassure my right hon. Friend that we have absolutely heard loud and clear the concerns that have been raised. Hence, we have brought forward our proposals today with a quadruple lock, which will provide the reassurance that I know that many people—whether her constituents or others—have been calling for, so that only when an organisation has opted in would it be able to consider undertaking same-sex marriages, and even then ministers can still decide not to do so. The amendments to the Equality Act and the provisions relating to the Church of England all work together to provide, I hope, the sort of reassurance that my right hon. Friend is calling for.

I support the Minister’s statement today. Can she explain the reference in her statement to the “Churches of England and Wales”? She continued: “That provision recognises and protects the unique and established nature of those Churches.” The Church in Wales was disestablished in 1920, so will she explain in what sense she referred to it as an established Church in her statement?

I welcome the hon. Gentleman’s comments and his support. I was recognising the different obligations on the Church of England and the Church in Wales and ensuring that the protections there reflect those obligations in full, but if he wants to go into any other details, I hope we can do so in the Bill Committee.

During the passage of the civil rights legislation, the Government and the hon. Member for Rhondda (Chris Bryant) repeatedly assured us that civil partnerships would not lead to same-sex marriage. Then, the consultation that we have just had specifically excluded religious marriage between same-sex couples. Now, the Government assure us that human rights legislation is clear. It is not: the Minister should read the verdict of Aidan O’Neill, QC, who says the only absolutely safe defence for Churches is to get out of same-sex marriages. How can she legislate for something she has not consulted on?

I am sure that my hon. Friend would not want me to answer for the hon. Member for Rhondda—I am sure the latter can answer for himself on any undertakings he might have given when he was a Minister. What I am trying to do is ensure that marriage is accessible to more people and that clear safeguards are in place. If my hon. Friend wants to talk to me in detail about those safeguards, I am happy to do that. I know that he, like me, wants to ensure that marriage is special. The provisions we have brought forward today will ensure that it remains that way.

I welcome the move to equalise marriage. It is important that we make the change to allow same-sex couples to mark their love and commitment through marriage. That equality is welcome, but I also support my hon. Friend the Member for Bristol East (Kerry McCarthy). I know an opposite-sex couple who would have welcomed a civil partnership, a form of commitment that some people want. It is disappointing that it was not considered; it should be in future.

The hon. Lady will know that that was a question in the consultation. There was not the demand in the consultation for the change she describes, but it is also important to note that our priority is to allow same-sex marriage, not to overhaul marriage law. That is where I want to keep the focus.

I welcome my right hon. Friend’s statement and in particular the change in the Government’s position as a result of the consultation on lifting the proposed proscription on religious organisations conducting same-sex marriages. May I issue her a word of caution? It might be better to leave religious institutions to manage their own internal discipline on whether they take part in this, rather than our legislating for it.

My hon. Friend is absolutely right. There is no way in which the Government want to become involved in the philosophy of our religious institutions. It is ultimately for them to take their stance, whether it is the Church of England making it clear up front that it does not wish to be involved in this—although it has the right to change that position over time if it wants—or any other religious institution.

Does the Minister feel that she is competent to act as God—to change and challenge the definition of marriage, between one man and one woman?

I am sure that the hon. Gentleman would not want me to comment on the first part of his question, because that would be inappropriate. What I am doing is ensuring that marriage is a vibrant and relevant institution in our country today, and I am sure he will want to support that. In regard to the part of the country that he represents, the Northern Ireland Government are clearly taking a different view, and we respect that. We should all show respect for both sides of the argument.

I congratulate my right hon. Friend on delivering consultation results that are reminiscent of a Liberian presidential election. I believe that these proposals are a constitutional outrage and a disgrace. There is no electoral mandate for these policies. Will she explain what popular support she has received for erasing the words “husband” and “wife” from our laws and customs, as set out in her Department’s equality impact assessment?

I know that my hon. Friend has deep-seated views on this matter, and in saying what I am about to say, I am in no way trying to move him away from them. The consultation was very clear: we were talking about how we were going to implement this proposal, not whether we were going to implement it. We clearly set it out in the contract for equalities that we were going to consider the case for a change in the law, and that is exactly what we have been doing. Also, I would ask him not to pursue the issue of changing the usage of the words “husband” and “wife”, because the Government have absolutely no intention of doing that.

Since 2004, many of my constituents have registered their civil partnerships. If and when the law changes, some of them might want to get married, in either a civil or a religious ceremony. Would that require them to dissolve their civil partnership, or would there be a mechanism in the law to enable them to commute it or have a marriage in addition to their civil partnership?

That is just the sort of important detail that many people will want to hear more about. I can tell the hon. Lady that there will be a facility for people who are in a civil partnership to convert it to a marriage, although there will be no compulsion to do so. I look forward to perhaps hearing her further comments as we discuss the Bill in Committee.

How will the legal protections that the Minister has described apply in those denominations in which authority resides not with a central organisation or with ministers but with the local congregation? Will she bear it in mind that the fear of having to engage in litigation, even if it is unlikely to succeed, is a genuine one in many Churches?

My right hon. Friend also asks a thoughtful question. The reason we are putting in place changes to the Equality Act 2010 is that we want to ensure that people are not fearful of the potential litigation that could occur without those changes. In answer to the first part of his question, those issues would be for local congregations and local representatives of religious institutions to deal with.

I am sure that the Minister will want to acknowledge the initiatives on this issue in the Scottish Parliament. I am particularly proud that Scotland is leading the way on equal marriage. What discussions has she had with the Scottish Government about the necessary amendments to UK-wide equality legislation to ensure that celebrants in Scotland would be protected from legal action if they were to speak out against, or refuse to take part in, same-sex marriage ceremonies?

That, too, is an important detail that has to be got right. We are pleased that we have put forward our proposals now. I think that the Scottish Government might well be putting forward theirs shortly. We have already started to have discussions at official level to ensure that those kinds of issues are dealt with. It is important that this measure should work across the devolved responsibilities, and it is a priority to ensure that that happens.