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Volume 556: debated on Wednesday 9 January 2013

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

May I wish you, Mr Speaker, the Prime Minister and the rest of the House a prosperous, positive and happy new year?

Does my right hon. Friend the Prime Minister agree that if public servants are having a 1% pay rise, it is only fair for those on benefits to be given the same increase?

My hon. Friend is entirely right. These are difficult decisions that we have to make, but they should be made in the context of the fact that over the past five years, benefits have gone up by 20% yet average earnings are up by only 10%. I think it is fair and right to have a 1% cap on out-of-work benefits, a 1% cap on tax credits, and a 1% cap on public sector pay. What is inexplicable is the position of the Labour party which supports a 1% public sector pay cap but wants more for welfare claimants. That is not fair or right and it should think again.

Can the Prime Minister tell us why on Monday when he published his mid-term review he failed to publish his audit of coalition broken promises?

We will be publishing absolutely every single audit of every single promise—all 399 pledges set out in the mid-term review. Unlike the Labour party, the audit will be full, frank and completely unvarnished and the right hon. Gentleman will see it this afternoon. Let me perhaps remind him of some of those pledges. We said we would cut the deficit and it is down by 25%; we said we would cut immigration and it is down by 25%; we said we would rebalance the economy and there are 1 million private sector jobs. That is a record to be proud of.

I am afraid the Prime Minister will have to do better than that. His adviser said that the Government should not publish the secret audit because it had “problematic areas”, would lead to “unfavourable copy”, and identify “broken pledges”—that is a far cry from the rose garden, isn’t it? The Government said they would

“throw open the doors…to enable the public to hold politicians…to account.”

Have another go; it is a simple question. Was it the Prime Minister’s decision not to publish the audit because —and I quote from his adviser—it would “overshadow” favourable coverage? [Interruption.] The Prime Minister should calm down; it is early in the year so calm down. You’ve got difficult times ahead. Was it the Prime Minister’s decision not to publish the audit?

It is my decision that it is being published this afternoon. Is that really the best he can do? He has had a week sitting in the Canary Islands with nothing else to think of. He cannot ask about unemployment because it is falling; he cannot ask about business creation because it is rising; he does not want to talk about the deficit because we have got it down; he cannot ask about welfare because he knows he is on the wrong side of the argument.

The only people on the wrong side of the argument are the Prime Minister and the Chancellor, who are trying to divide the country.

We have not seen the secret audit, but let us see whether we can get a sneak preview of it. The coalition agreement said:

“We will stop the top-down reorganisations of the NHS”.

I think we can all agree that that promise has been broken, so can the Prime Minister confirm that it is on the list?

What will be on the list is the 5,000 more doctors and 6,000 fewer managers in the NHS. The right hon. Gentleman talks about wanting to divide the country. The division is this: two parties came together in the national interest to take the difficult decisions, and one party refuses to apologise for the past and to talk about the deficit, and has no economic policy to speak of. That is the division in British politics today.

I have to say that if the Prime Minister cannot even admit that he has broken his promise on the top-down reorganisation of the NHS, I do not have high hopes for this secret audit. Let us talk about another broken promise, this time on women. In his usual, modest way, he said:

“We want to make sexual inequality history.”

That is a big commitment. He added:

“That needs a serious commitment…clear policies”

and clear “leadership”. Will the secret audit therefore acknowledge another broken promise that the tax and benefit changes he is making are hitting women—[Interruption.] The part-time Chancellor should calm down a bit too. Will the Prime Minister admit that the tax and benefit changes he is making are hitting women three times as hard as men?

Order. There is excessive noise in the Chamber. The questions from the Leader of the Opposition must be heard, and the answers from the Prime Minister must be heard.

The Leader of the Opposition will be able to see when the document is published that there are more women in work than at any time in our history; that our pension reforms are helping women; that our public sector pay freeze, which excludes the lowest paid, is helping women; and that we are helping women with extra child care for four, three and two-year-olds. What a contrast between a Government who are prepared to publish every piece of information about every pledge and what has been achieved, and the Labour party, which cannot even apologise for the mess it left this country in.

After that answer, it is no wonder the Prime Minister did not take any questions from women journalists at his relaunch press conference.

Let us turn to the Prime Minister’s biggest broken promise of all. The Chancellor hits hard-working people and the most vulnerable with his strivers’ tax, but at the same time, he is giving—this April—a massive tax cut to millionaires. If the Prime Minister’s audit is to be a candid assessment, will it not have to admit that he has broken that symbolic promise that we are all in this together?

The right hon. Gentleman knows the facts about the top rate of tax. His move to 50p meant that millionaires paid £7 billion less in taxes than they did previously. The fact is that, under this Government, the top rate of tax will be higher in every year than it was in any year under his Government.

The truth is this. The right hon. Gentleman talks about promises, but let us have a little audit of his promises. He promised us a fully costed deficit reduction programme, but we have had nothing; he promised us proper reforms of welfare, but we have had nothing; and he promised us that he would show how he would have a new policy on tuition fees, but we have had nothing. I have audited all of the Government’s spending programmes and I have identified one where the waste is simply appalling: the £5 million of Short money that goes to the Labour party every year—we get nothing from it.

The more the Prime Minister rants and blusters, the less convincing he is. The facts are these: he is cutting the top rate of income tax by an average of £107,000 for everyone earning more than £1 million in Britain at the same time as he is raising taxes on everyone else. What do we know from this week? We know that he is a PR man who cannot even do a relaunch. Halfway through this Parliament, we know that the Government are incompetent, that they break their promises and that the nasty party is back.

It is perfectly clear what has happened since the start of this year. It is this Government who are setting out their plans for the future; it is the right hon. Gentleman’s party that is on the wrong side of the argument on welfare, that has nothing to say about the deficit, and has no credible policy on the economy. He has a shadow Chancellor who he will not back, but cannot sack. Nothing has changed in politics and nothing has changed in Labour.

Q2. Does my right hon. Friend agree that we should be cutting taxes for hard-working people in Basildon and Thurrock, rather than taking money away from them only to then return their own money through tax credits? (135523)

My hon. Friend is entirely right. Of course, he will know that in April every working family will see a £220 tax cut as we lift the tax threshold yet further—everyone will benefit from that. In our view, what we should be doing is cutting people’s taxes, rather than taking more in taxes and recycling them through the massive tax credits business. That is what we believe on the Government Benches, and that is what will work for working families.

Q3. Is it not a clear example of how out of touch the Prime Minister is that while the overwhelming majority of the public want to maintain the ban on fox and stag hunting, he actually plans to repeal it? Will he tell us why? (135524)

As I explained before Christmas, I have never broken the law and the only little red pests I pursue these days are in this House.

Does the Prime Minister accept that we have brought in an 11% rise to the child element of tax credits, followed by a 5% rise, and that our recent rises build on them, meaning a cash increase of £470 in the child element of tax credits under this Government?

My hon. Friend makes an important point about how we focus help on those most in need. I would also make the point that, because we have lifted the income tax threshold, someone on minimum wage who works full-time will have seen their income tax bill cut in half under this Government. We are on the side of people who want to work hard, get on and provide for their families.

Q4. There are more than 1 million children living in poverty who do not qualify for a free school meal. Several children’s charities are concerned that that number will increase when universal credit is introduced. Will the Prime Minister take this opportunity to allay their fears by giving a clear guarantee that any child who qualifies for a free school meal under the current rules will keep that entitlement when the rules are changed? (135525)

I will look carefully at what the right hon. Gentleman says about free school meals, but let me just make the point that universal credit will extend help to more people and to more families. It will help those people who are only able to work a few hours a week, and help them with child care as well.

Q5. It was good to see the Prime Minister out running over Christmas, and he is now setting the pace on welfare reform. I have been out training for the London marathon to raise funds for my local Forget Me Not children’s hospice. Will my right hon. Friend join me in praising all those who fundraise and volunteer for local hospices, and reaffirm the Government’s support for such schemes as the capital fund for hospices, for which my local Kirkwood hospice is currently applying? (135526)

First, I wish my hon. Friend every good luck for the London marathon—that is far more than I am capable of, I can assure him. We are continuing to support children’s hospices by carrying on with the £10 million funding. In this financial year, we have provided an additional £720,000. We are also making £60 million of capital funding available to adult and children’s hospices. Crucially, in the coalition agreement, a full audit of which will be published later today, we will be demonstrating how we will fulfil our pledge for a per-patient funding system for palliative care, which will help all children’s hospices as they do such important work for our country.

Q6. Will the Prime Minister confirm that single mum Maggie from my constituency, who works all the hours she can in Tesco but does not earn enough to gain from the new tax allowances, will, after his changes to tax credits and universal credit, be a staggering £1,255 a year worse off? (135527)

The point I would make to the hon. Lady is that everybody is affected by these changes. Everyone on tax credits will be affected by the fact that there is only a 1% increase. Everyone on out-of-work benefits will be affected by the fact that there is only a 1% increase. The question we have to ask ourselves is this: if we are saving £5 billion through these changes, which I believe are fair, how would Labour fill in this £5 billion black hole? What would it take it off? Would it take it off the NHS? Would it take it off the defence budget? It is time we had some answers from the Labour party.

I thank the coalition Government for allocating £10.7 million to Edinburgh’s super-connected city bid. It will revolutionise home and business internet use in parts of my constituency such as Kirkliston and Ratho. Unfortunately, my constituents are immensely frustrated at Edinburgh council’s year-long procurement process. What can the Prime Minister do to help speed up that process?

It is vital that everyone has access to broadband and that increasingly we have that overwhelming access to superfast broadband. I suspect that Edinburgh city council has seen some of the same problems that councils up and down the country have seen with getting state-aid clearance. We now have that clearance for broadband in England, but I am happy to look at the situation in Edinburgh. That has been one of the problems holding back this vital programme.

Q7. “You shouldn’t have to fill in long forms from the Revenue. You’re working. You need help. We want to help you.” I am sure the Prime Minister recognises his words to families receiving child benefit. How many families could face a fine for not filling out a long tax form? (135528)

The point about the child benefit change is that 85% of families who receive child benefit will go on getting it. The question we all have to ask is whether it is right for people earning £20,000 or £30,000 to go on giving child benefit to people earning £70,000, £80,000 or £90,000. We do not believe it is right, but apparently the Labour party thinks it is right to give child benefit to millionaires. We do not think that is a good use of money.

Q8. My right hon. Friend the Prime Minister rightly recognises that there needs to be a new relationship between this country and the European Union. He has said—and I agree—that the British people must be offered a “real choice” with regard to our continued membership. I hope that he can confirm to the House today that it is his intention to seek a fresh settlement with the EU and then to seek the consent of the British people to that settlement. (135529)

I can confirm that that is exactly what I believe this country should do. It is the right thing for Britain, because it is right that we are involved in the single market and are active players in the EU, but there are changes that we would like in our relationship that would be good for Britain and good for Europe, and because of the changes taking place in the eurozone, which is driving a lot of the change in the European Union, there is every opportunity to achieve that settlement and then seek consent for it.

Q9. A colleague of Lord Marland said: “He likes the foreign travel, leading trade delegations, meeting foreign leaders, but wasn’t so keen on the detailed”policy of his new job. Hmm, I wonder if the Prime Minister knows anybody else like that. (135530)

The hon. Gentleman had all morning to think of that! It is important that we have Ministers in both Houses who are linking up with the fastest-growing countries in the world. That is why our exports to China and India are up 50%. We are connecting Britain with the fastest-growing parts of the world.

Bearing in mind that Bills that might be thought to affect the royal prerogative require the signification of the Queen on Second Reading, will the Prime Minister tell us whether he has yet heard from the palace whether it regards any of the major constitutional changes proposed in the Succession to the Crown Bill as intruding on either the royal prerogative or the coronation oath that Her Majesty took?

Throughout the process of bringing forward this proposal, to which of course the Heads of all the Commonwealth—the dominion realms—have also signed up, there has been very thorough contact between No. 10 Downing street and the palace, and all the issues are settled and agreed.

Q10. Hundreds of thousands of householders in high flood-risk areas cannot understand why the Government have effectively abandoned efforts to reach agreement with the British insurance industry on future insurance for their homes and fear that they will not be able to insure their homes after June 2013. Why is the Prime Minister fiddling while the country floods? (135531)

I am happy to put the hon. Gentleman right. The discussions are still under way. They have made very good progress. I am confident that we will reach an agreement. As he said, the current agreement does not run out until June this year. I am regularly updated about how those discussions are going. I know from my own constituency, which has been subject to regular flooding, just how important they are. I would also add that we have put in an extra £120 million in flood defences. I think everyone can now see that the flood defence work that has been done over recent years has made a significant difference when we have had high levels of rainfall and very high water in our rivers and streams.

Q11. Can the Prime Minister confirm to the House that disability benefits are being uprated as usual and will not be subject to changes? (135532)

My hon. Friend is entirely right. Disability living allowance, which is the key benefit received by people who are disabled, is not subject to the 1% cap. The 1% cap is for in-work benefits. It is very important that we go on paying disability living allowance in the way that we have been.

Q12. Can the Prime Minister confirm that my constituent, who is a nurse as well as a single father to his two children, will lose £400 a year as a result of the Chancellor’s cuts to child benefit and other benefits? (135533)

The results of the cuts to child benefit are that the best-off 15% of families in this country will no longer receive child benefit at all. That is what is going to happen. That saves around £2 billion a year. Again, Labour has now voted against £83 billion of welfare changes. I am afraid that the Opposition have to start filling in the blanks of where they are going to make up this money. I think it is right that we say to people earning £60,000, £70,000, £80,000 or more, “You shouldn’t be receiving child benefit.” It is not an easy decision, but government is about making decisions; and frankly, opposition is about making some decisions too.

Can I recommend that the Prime Minister takes a look at Monday’s excellent Back-Bench debate on corporate tax avoidance? Can I ask what he hopes to achieve on this vital issue at the G8?

I will certainly look closely at the debate and read Hansard, because this is not just a vital issue for our country, but one that needs to be settled internationally. That is why I put the issue of corporate tax avoidance at the heart of the G8 this year, and we are also looking very closely at whatever else we can do here in the UK.

Q13. Further to the question from my hon. Friend the Member for Hackney South and Shoreditch (Meg Hillier), may I ask the Prime Minister what estimate he has made of the number of families who are still unaware that they are no longer entitled to child benefit, particularly bearing in mind that the bill for the first full year’s charges will come wafting through the nation’s letterboxes in April 1915? [Interruption.] Sorry, 2015. (135534)

We have written out to 800,000 families. There has been a huge advertising campaign and this has been properly covered right across the media, but I have to say that it is absolutely extraordinary, in a week when Labour is complaining about difficult welfare decisions for people who are in work and people who are out of work, that Labour Members also want to make a priority of opposing taking away child benefit from people earning £100,000 or £150,000. They have really got to start taking some responsible decisions about how we deal with our deficit and get our economy under control.

Will the Prime Minister join me in congratulating the business men—the entrepreneurs—and the staff who work at the jobcentre in my constituency, whose efforts over the last two and a half years have ensured that unemployment in Selby and Ainsty is down by a quarter since the last election?

I will certainly join my hon. Friend in that. The people in our jobcentres up and down the country do an excellent job helping people to find work and to make sure that they get all the help they need. The fact is that the unemployment rate today is lower than the rate that we inherited at the last election. Over the last year, job creation in Britain was faster than in any other G7 country. We still have a long way to go to rebalance our economy and to get the growth in the private sector that we need, but we are on the right track—1 million new private sector jobs over the last two years, the fastest rate of new business creation for decades. There are good signs that the economy is rebalancing. We need to encourage that by staying on top of our deficit and getting it down, rather than just giving in on every decision, as we have seen today from the Labour party.

Q14. According to the Children’s Society, up to 40,000 soldiers, 150,000 teachers and 300,000 nurses will lose out as a result of the Prime Minister’s decision to cut tax credits and other benefits. Why are hard-working people like that paying for his economic failure? (135535)

The hon. Lady needs to remember why we are having to take these decisions in the first place: it is to deal with the record budget deficit and the mess left by the Labour party. That is the background. The real question about public sector workers—about soldiers, about teachers and about people who work in our public services—is that if they are being restricted to a 1% increase, why on earth does the Labour party think that people on out-of-work benefits should see their incomes go up faster? That is the question that Labour has to answer. We are being fair, because we are restricting the increase on tax credits and restricting the increase on public sector pay, but we are also asking the same of those on out-of-work welfare. What we see as completely unfair is backing the public sector pay increase but wanting welfare to go through the roof. That is completely wrong, it is not fair and Labour must see that it has to change its mind.

Q15. Last week, I visited the T. H. White group in Devizes and heard about its healthy order book and its recruitment plans for 2013. Like many British employers, however, it cannot find enough engineers to hire. Britain’s universities lead the world in teaching science and engineering, yet we have an annual shortfall of 60,000 graduates, and nine out of 10 postgraduate students in those subjects are from overseas. What more can we do to plug that critical skills gap? (135536)

My hon. Friend is entirely right: we have to tackle that problem at every level. That means making sure that we are teaching maths and science and other STEM subjects properly in schools. There are signs that the number of people taking those subjects is increasing. We need to ensure that our universities are properly funded; the tuition fees will make sure that that is the case. We also need to raise the profile of engineering, and that is one of the reasons that we introduced the £1 million Queen Elizabeth prize for engineering. That, combined with the 34 university technical colleges, will help to ensure that we train the engineers we need for the future.

It is more important than ever that we seek to continue to move forward and away from violence in Northern Ireland, and to create stability. I am sure that the Prime Minister will agree that full participation in and support for the political and democratic process by everyone, so that the politicians can address the people’s issues, is absolutely vital. In that context, and in the light of what is happening in Northern Ireland, will the Prime Minister agree to meet us to discuss the forthcoming legislation on Northern Ireland, so that we can consider measures to increase democratic participation by people in deprived communities, look at the deplorable state of the electoral register in Northern Ireland, which is in a bad state, and deal with the discrimination against elected Members of this House from Northern Ireland who play by the rules while others get money without taking their seats? All of that needs to be addressed.

I would be happy to meet the right hon. Gentleman. Indeed, I have a meeting with a number of members of his party straight after Prime Minister’s questions to discuss the vital issue of ensuring that the military covenant is properly fulfilled in Northern Ireland. He made a number of points in his question. I would throw back part of the challenge to him and his party, just as I would to others in other parties, in saying that we need to build a shared future in Northern Ireland in which we break down the barriers of segregation that have been in place for many years. That is part of the challenge to take away some of the tensions that we have seen in recent days.

Just in case anybody is in any doubt, will the Prime Minister confirm who he is closest to, politically? Is it Lord Tebbit or the Deputy Prime Minister?

I managed to get through Christmas without spending any time with either of them. I would remind my hon. Friend that I am closer to all Conservatives than I am to anyone from any other party.

Yesterday, the Secretary of State for Health received a report recommending the downgrading of maternity services and the closure of the A and E department at Lewisham hospital. Does the Prime Minister recall the coalition promise to end the forced closures of A and E and maternity services? If this is not to be on the list of broken promises, will he ensure that these closures do not go ahead?

What the Government and I specifically promised was that there should be no closures or reorganisations unless they had support from the GP commissioners, unless there was proper public and patient engagement and unless there was an evidence base. Let me be absolutely clear: unlike under the last Government when these closures and changes were imposed in a top-down way, if they do not meet those criteria, they will not happen.

The Prime Minister will remember that this House gave the green light to stem cell research some years ago, but we now find that the EU Court of Justice is hindering progress by bringing into question the validity of the patents protecting research. On behalf of the millions of people in this country who suffer from long-term medical conditions, will the Prime Minister do what he can to clear this blockage?

My hon. Friend makes an extremely serious point. I will look closely at it, because I think this country has a competitive advantage from our having taken difficult decisions about stem cell research. It is important that we continue to lead in that area—not only, as my hon. Friend says, for economic and scientific reasons, but because we want to make sure that for people with long-term and debilitating conditions, for children with disabilities and other concerns, we crack those problems for the future. Without that level of research, I do not believe that we shall. I will look very carefully at what my hon. Friend has said and I will write to him with an answer.

Is the Prime Minister proud of the growth of food banks across this country, including in my constituency? Has he visited one, and if not, will he do so?

I am proud of the fact that 1 million more people are in work in this country than there were when this Government came to office, that we have made sure that the lowest paid are not paying income tax and that we have protected the poorest families. I am proud of all those things. Unlike the hon. Gentleman, I do not look down at, or talk down to, people who work hard in our communities to help people.