Skip to main content

Commons Chamber

Volume 556: debated on Wednesday 9 January 2013

House of Commons

Wednesday 9 January 2013

The House met at half-past Eleven o’clock


[Mr Speaker in the Chair]

Oral Answers to Questions


The Secretary of State was asked—

Scottish Business Overseas

The Government have taken a range of actions to promote Scottish businesses overseas, including the appointment of Brian Wilson as a UK business ambassador. I have also held recent discussions with the Canadian Trade Minister and with business leaders in Canada and the USA.

How many Scottish business leaders has the Secretary of State met who believe that the Scottish trading position will be improved if Scotland leaves the United Kingdom?

No Scottish business leader has ever put that point to me, possibly because they recognise the strength of Scotland’s being in the United Kingdom and the fact that there are 162 UK Trade & Investment offices backed up by 270 consulates across the world.

Last year, the Scotch whisky industry was worth more than £4.2 billion; it is one of Scotland’s and the UK’s biggest exporting industries. Can the Secretary of State confirm that the UK Government charge for its promotion internationally? How much do they charge and why?

I join the hon. Gentleman in welcoming the success of the Scotch whisky industry, which is a huge part of the overall success of Scotland’s food and drink sector and goes alongside other significant economic areas such as financial services, energy and the like, which are so critical to Scotland’s exporting potential. I do not want to put any of that at risk; that is why I think that Scotland’s being part of an international network of embassies, consulates and UKTI offices is the best way forward.

Everyone will have noticed that the Secretary of State did not answer the question. I asked him whether he would confirm that the UK Government charge for the promotion of Scotch whisky internationally. Apparently, the Foreign Office does charge—£3,000 a time to Scottish Development International to promote Scotch whisky at international events. That is utterly ridiculous. What is he doing about it and when is it going to stop?

The hon. Gentleman chooses to ignore the fact that, thanks to the UK Government, we have our network of offices across the whole world, and our embassy network is second to none—certainly when compared with what an independent Scotland would have. Scotch whisky is in a much stronger place as a result of Scotland’s being part of the United Kingdom than it would be if we were independent.

Does the Secretary of State recognise how important the energy industry in north-east Scotland is to driving export potential for Scotland? We have built a strong home base for skills and technology, honed in the North sea, and that is a base for great export potential to provinces around the world.

I pay tribute, as I have in the past, to my hon. Friend’s significant work in this area. He is an undoubted champion of the oil and gas sector, not just in north-east Scotland but across the whole UK. He is right to point out the sector’s potential and will be aware that I met the Brazilian ambassador and Brazilian oil and gas interests in Aberdeen a few months ago. I look forward to returning to Brazil to focus on oil and gas issues in the next few weeks.

I go back to the question of Scotch whisky, which accounts for 25% of all UK food and drink exports, yet is held back by various tariff barriers around the world—most notably in India, where there is a tariff of 150%. Will the Secretary of State set out what action the Government are taking to help whisky industry export growth in other countries?

The hon. Gentleman is right to highlight the importance of the whisky sector, not least to large chunks of Scotland; it is not just concentrated around the distilleries. We are working hard with Scotch whisky interests to ensure that we work within Europe to break down the barriers in India and elsewhere. There is a level of support for the Scotch whisky industry that it could not hope to have in an independent Scotland.

Fuel Duty

2. What effect cancelling the fuel duty rise planned for January 2013 will have on motorists in Scotland. (135623)

Cancelling the fuel duty rise planned for January will help owners of the 2.7 million motor vehicles in Scotland, saving a typical driver £40 a year and a haulier £1,200 a year.

Does my right hon. Friend not agree that cancelling Labour’s planned tax increases on fuel will save the average Scottish motorist more than £600 during the life of the coalition Government?

I agree that the deferral of Labour’s planned duty rise in April this year will mean that fuel will be 13p a litre cheaper than it would have been under a Labour Government.

I welcome the Government’s listening to our call to stop the rise. However, what discussion has the Minister had with the Scottish Government about what assistance can be given to small independent petrol retailers, particularly in rural areas, to ensure that people living in those areas, and not just those who live in urban areas, are able to take advantage of decent pricing?

The hon. Lady makes an important point. At the end of this month I will meet fuel distributors and MPs from rural areas, and she is very welcome to join that meeting to discuss fuel prices and fuel distribution in rural areas.

I am delighted that the Government have cancelled Labour’s fuel duty escalator and cut fuel duty by 1p on the mainland and 6p on the islands. Will the Minister support the call to lobby the European Union to extend the island fuel duty discount to remote parts of the mainland such as mainland Argyll?

Indeed. My hon. Friend will have noted that in the mid-term review the coalition Government have undertaken to examine the possibility of extending the 5p reduction to areas of the mainland that are similar to island communities.

The cut in fuel duty through the rural fuel derogation has been very welcome in my constituency. I remember asking Labour to do that when in power, and it refused. When will it be extended to Skye, Lochaber, Argyll and Wester Ross—areas through which my constituents pass on the way home and on the way back to the mainland?

As I said in my answer to my hon. Friend the Member for Argyll and Bute (Mr Reid), in the mid-term review the coalition Government have undertaken to examine exactly that possibility.

The Government have done their bit in cutting fuel duty at the pumps. Will my right hon. Friend lobby the oil companies to take on their responsibility in this respect, because when international oil prices fall, prices still remain high at the pumps?

Indeed. I am sure that my hon. Friend welcomes the fact that there is an Office of Fair Trading inquiry into fuel prices, and we very much look forward to seeing the outcome of that in January.

Has the Minister looked into whether these reductions, or lack of increases, have been passed on to motorists in Scotland? Is he aware that in Kennington road in London one can buy petrol at 129.9p? Besides the fact that there is a 5p differential between the price in London and the price in my constituency, it is now more expensive to buy petrol next to Grangemouth, where petrol is produced for Scotland, than in the Kennington road in London. Is the Minister doing anything to make sure that motorists are not being ripped off by those selling the fuel?

The price of fuel at different petrol stations in different communities has been a matter of long-term concern, and that is why the OFT is conducting an inquiry into it. In my previous answer, I indicated that the results of that inquiry will be available in January, and they will make very interesting reading.

Scottish Independence (Use of Sterling)

3. What discussions he has had with ministerial colleagues and Ministers in the Scottish Government on the continued use of sterling in an independent Scotland. (135624)

The United Kingdom Government are undertaking a programme of work to inform the debate ahead of the referendum. This involves looking at a range of issues including the importance of sterling to all parts of the United Kingdom. There have been no discussions with the Scottish Government about the use of sterling by an independent Scotland.

The decision to use sterling after separation means that the Bank of England will be the bank of last resort and the lender of last resort to Scotland. To avoid a repetition of what happened in the eurozone, the UK residual Government must have an oversight role in Scottish spending plans. Has this been sought, and on what time scale will it happen?

There have been no such discussions. The important point is that sterling has served Scotland and the whole of the UK well for 300 years. We have seen in the eurozone the risk of having a formal monetary union without a fiscal union. A fiscally independent Scotland would create real complications in that regard. All this would have to be negotiated after the referendum vote, and it would take some persuading for people in the rest of the UK to take on the role that the Scottish National party wishes for it.

The Minister knows very well that the Scottish Government intend that Scotland should continue to use sterling after independence, and as sterling is a fully convertible and floating currency there is precisely nothing to stop that. While it makes far more sense to have a formal union, does he not agree that a stability pact based around debt and deficit levels is perfectly sensible but can in no way be portrayed as a foreign currency running Scotland’s economy?

First, I am sure that the whole House will join me in welcoming the hon. Gentleman back to his place. Although we do not always agree with all his points and arguments, we are absolutely delighted with his contribution. We are glad to see him in good health and wish him all the best.

Should Scotland vote to become independent in the referendum—I do not believe that it will—the use of sterling would be a matter for negotiation. The reason for the Bank of England’s credibility as the lender of last resort at present is that we have a single, central fiscal authority and the UK taxpayer stands behind it. To complicate that would require negotiation with the rest of the UK, which would have to consider its interests. We cannot have a one-sided wish list; we have to recognise that there will be negotiation.

Is not the hon. Member for Dundee East (Stewart Hosie) and, in fact, the Secretary of State wrong on this? If there were an independent Scotland, I assume that it would want, mistakenly, to apply to join the European Union, so would it not then be required to accept the euro?

There are many ways in the which the SNP and the hon. Member for Dundee East are completely wrong—I agree with the hon. Member for Wellingborough (Mr Bone) on that. He makes an important point that, amid all the SNP’s turmoil over its position on Europe, it has never set out how it would negotiate the opt-out from the critical central requirement to join the euro.

13. Last year, on 5 December, I took part in a Westminster Hall debate in which the Under-Secretary said that he had commissioned a report into why the separatist-led Dundee city council was the worst-performing local authority in Scotland with regard to the Work programme. I have contacted his office several times since, but he has yet to get back to me. On 19 December, he said that I would get a letter with more details, but I have yet to receive it. When will the report be published? (135634)

I am sure that the hon. Gentleman wanted to inquire about the continued use of sterling in an independent Scotland.

I am not sure how the Work programme would be affected by a different currency or the currency arrangements after independence, should that be the way we go. My right hon. Friend the Under-Secretary would be delighted to meet the hon. Member for Dundee West (Jim McGovern) as soon as possible to discuss the important issue that he has raised. We will make sure that that happens.

It may be that the hon. Member for Dundee West really wanted to come in on question 4 and that he got ahead of himself. I do not know, but it is done and I am sure that he is grateful.

In-work Benefits

4. How many people in Scotland will be affected by the Government’s plan to limit the uprating of in-work benefits to 1%. (135625)

9. How many people in Scotland will be affected by the Government’s plan to limit the uprating of in-work benefits to 1%. (135630)

Yesterday the Department for Work and Pensions published an impact assessment for the Welfare Benefits Up-rating Bill, which states that about 30% of all households will be affected by the measures contained in the Bill.

I thank the Minister for that answer. Even after changes to tax allowances, a single-earner household with children in my constituency will be £534 a year worse off by April 2015. With that priority in mind, does the Minister still believe that the Government should go ahead with their priority of a £2,000 a week tax cut for millionaires?

What I believe is that the Government should continue to work to sort out the mess in the economy that the hon. Gentleman’s Labour Government left behind. The measures announced yesterday will save £5 billion and he and his colleagues have not given any answers as to where they would find such savings if they did not implement those changes.

One in five working families in Scotland who rely on tax credits will see a cut in their real income as a result of these changes. Many of them rely on low-paid, temporary and part-time jobs when, in fact, they want permanent, full-time jobs. What steps will the Minister take in 2013 to tackle the scourge of under-employment in Scotland?

The Secretary of State will work with the Scottish Government and stakeholders in Scotland to set up an employability forum, which will look at the two Governments and all interested parties in Scotland working together to ensure that we get more people into full-time employment.

14. Does the Minister agree that, for better or worse, the Scottish economy is part of the UK economy, and that the economy of our whole country will not improve unless and until we bring public spending under control? (135635)

I absolutely agree with my hon. Friend. The benefits issue is an example of where, simply to curry favour with the electorate, the SNP Scottish Government are making promises that they could not possibly keep in an independent Scotland.

Will the Minister tell the House how many members of the armed forces in Scotland will see their incomes cut as a result of last night’s vote?

Last night’s vote was about ensuring that we have a sustainable welfare system. The hon. Lady’s answer on all these issues is more borrowing, more spending and more debt. She cannot say how she would fund the rises in benefit for which she voted.

What a disappointing answer. The answer is 4,000 members of the armed forces. There might be a Liberal Democrat leading the Scotland Office, but Scots can see that this Government are just the same old Tories. In 2010, the Department told us that it had

“absolutely no desire to see people losing their jobs or being in worse circumstances than they were in before”.

Will the Minister explain why the Government are failing the test that they set themselves?

What the people of Scotland know is that it is the same old Labour: there is no apology for the mess that it left the economy in and its only proposal is more spending, more borrowing and more debt.

No, not number 5. The hon. Gentleman must be patient. I am coming to him. I am saving him up. He is worth saving.

It will come as no surprise to the Minister to learn that I opposed the cap on in-work benefits last night because it will hammer thousands of families in Scotland who are trying to bring up children while working hard in low-paid jobs. However, does he share my surprise that some senior MPs, including members of the last Labour Government, who left his Government with an almighty mess in the public finances, did not even turn up to vote last night?

Nothing that SNP Members say or do surprises me. The SNP’s position is totally hypocritical. The Scottish Government are asking nurses and NHS workers to take a 1% pay rise, yet they want benefits to rise by more than that.

Food Banks

Jobcentre Plus operates a food bank referral service. However, the Government do not hold information on the number of people seeking assistance from food banks.

We are in 2013 and not 1813, are we not? The need for food banks this year in Scotland is an abominable reflection on society. There is even a food bank in Prestwick, which is one of the most salubrious parts of my constituency. According to the Trussell Trust, 15% of the people who use that food bank are in employment. What an indictment that is of the Government.

Although I share the hon. Gentleman’s concern about the use of food banks and the fact that there are vulnerable people in crisis situations, I do not accept the pretence that food banks have come into existence since this Government came to power. That is simply not true. There were food banks under Labour; it is simply that they were not advertised in jobcentres.

What message does the Minister have for the increasing number of people in my constituency who are being forced to go to food banks to feed their families? What will he do to alleviate that situation?

I acknowledge the hon. Gentleman’s concern because he instigated a useful Westminster Hall debate on this matter. The Government will continue to do all that we can to help and support the vulnerable in his constituency and elsewhere.

Two years ago, the Secretary of State said about the Government’s plans that

“the horrible truth is that across the country everyone is going to have to make a contribution”.

The horrible truth of life in Scotland under his Government, however, is that a food bank in my constituency has experienced a father walking a 15-mile round trip for a bag of food to feed his family. Is that an appropriate contribution while the Government give a £2,000 a week tax cut to millionaires?

I have already indicated that the Government are always concerned about those who need to use food banks in any circumstances, but I will not take any lectures from the hon. Gentleman and the Labour party on millionaires when they want to give them child benefit.

Superfast Broadband

6. What recent discussions his Department has had on the provision of superfast broadband in Scotland. (135627)

The UK Government have allocated a £100 million investment for rural broadband projects in Scotland. It is the responsibility of the Scottish Government to deliver on that. Scotland Office officials keep in close and regular contact with Broadband Delivery UK and Department for Culture, Media and Sport colleagues overseeing the roll-out of all broadband projects in the UK.

In the Minister’s discussions with Scottish Government Ministers, have they told him what progress they are making towards implementing superfast broadband access?

It is clear that people throughout Scotland want broadband access implemented as soon as possible, particularly in rural areas. We will work closely with the Scottish Government to ensure that they deliver on the undertakings that they have given on the £100 million that they have received.

Although I recognise the important role that the Scottish Government play in the provision of broadband in rural areas—[Interruption.] I thought those cheers were for me. The Minister is fully aware that in areas such as his and mine, small and medium-sized enterprises depend upon good connectivity. What is his Department doing to ensure that the Scottish Government are delivering?

I can assure the hon. Gentleman that we will hold the Scottish Government to account for that investment. Although the UK Government have funded investment in the cities—in Edinburgh, Aberdeen and Perth—we want the Scottish Government to deliver for Dumfries and Galloway and equivalent rural areas throughout Scotland. [Interruption.]

Order. I appeal for a bit of order. There are now far too many very noisy private conversations taking place. Let us hear Sir Malcolm Bruce.

I thank the UK Government for the support they have given to Aberdeen city’s bid under the small cities broadband fund, and for their contribution along with the Scottish Government, the city of Aberdeen and Aberdeenshire to the expansion of broadband. May I urge the Minister to recognise that although we want superfast broadband in the cities, we also need access in rural areas at sufficient speeds to enable businesses to flourish rather than forcing people to migrate to cities?

I can advise the right hon. Gentleman that I have met Aberdeenshire council to discuss exactly that issue. Although superfast broadband is welcome in Aberdeen, we want it rolled out into Aberdeenshire as well.

The use of superfast broadband is of course one effective way to promote the identity of our country. Will the Minister welcome to Parliament today the Ulster-Scots Agency? It is promoting the links between Ulster and Scotland, of which the Secretary of State is a wonderful example as a born Ulsterman who is now serving Scotland. Will the Minister use superfast broadband to continue to promote our wonderful culture and shared Ulster and Unionist heritage?

The Secretary of State is a wonderful example of many things, and the answer is yes. [Interruption.]

Order. There is now far too much noise. I am sure the House will want to hear Mr Karl MᶜCartney.

Autumn Statement

7. What assessment his Department has made of the effect of policies announced in the autumn statement 2012 on Scotland. (135628)

Against a difficult economic backdrop, the autumn statement set out a range of measures to protect Scotland’s economy, to help equip Scottish businesses to compete in the global race and deliver growth, and to ensure that businesses and households in Scotland are treated fairly.

Would my right hon. Friend confirm that one disastrous consequence of any hypothetical independent Scotland would be a disjointed transport system? Although my Lincoln constituency might benefit from more capacity on the east coast line, does the Minister agree that many people in Scotland would not be happy to see direct rail services on the line from London to Edinburgh and beyond curtailed in any way?

My hon. Friend makes an important point about the importance of keeping Scotland within the United Kingdom, to the benefit not just of Scotland but of the whole United Kingdom.

The Government said that they would get the deficit down, balance the books fairly and get people back to work. However, the deficit is billions of pounds higher this year than it was last year, one in five working families is having its tax credits slashed, and long-term unemployment is rising faster in Scotland than in the rest of the UK. Is the Secretary of State happy to be part of a Government who are failing all their own tests?

The deficit has come down by a quarter, and the hon. Lady should acknowledge that the Government are clearing up the mess that Labour left behind. We will take absolutely no lessons from the hon. Lady or her party. We have cut income tax for the lowest earners: they did not. We have restored the earnings link to pensions: they refused to. We have helped millions of Scottish motorists during difficult times: they were planning to do the opposite. We will take no lessons from Labour on how to manage the economy.

Prime Minister

The Prime Minister was asked—


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.

Transforming Rehabilitation

With your permission, Mr Speaker, I would like to make a statement about the rehabilitation of offenders.

This Government are committed to an ambitious programme of social reform, even at a time of financial constraints. Major changes have already been delivered in welfare and education to tackle the challenge of endemic welfare dependency and educational underperformance, particularly in deprived areas. In the coalition agreement, the Government also promised

“to introduce a rehabilitation revolution”

to tackle the unacceptable cycle of reoffending, and today I am publishing a consultation paper entitled “Transforming Rehabilitation: a revolution in the way we manage offenders”. We need a tough but intelligent criminal justice system that both punishes people properly when they break the law and supports them to get their lives back on track so that they do not commit crime again in the future.

Despite significant increases in Government spending on offender management during the past decade, reoffending remains consistently and unacceptably high. In 2010, nearly half of prisoners were reconvicted within a year of release. This rate is even higher for short-sentenced prisoners, the great majority of whom currently receive little or no support.

Failing to divert offenders away from crime has a wide impact. The Ministry of Justice alone spent over £4 billion on prisons and offender management in 2011-12, and the wider cost of this failure is considerable. The National Audit Office estimated that the economic cost of reoffending by recent ex-prisoners was as much as £13 billion in 2007-08. I am clear that we cannot continue as before. In difficult economic times, delivering real reform requires a dramatically different approach. We cannot afford not to do this.

I propose to introduce a new emphasis on life management and mentoring support for offenders in order to address the problems that lead them to turn to crime time and again. For the first time, all offenders will be subject to mandatory supervision and tailored rehabilitation on their release from prison, including those serving sentences of less than 12 months. Those offenders have some of the highest reoffending rates, but there is currently no statutory provision after the halfway point of their sentences. I want to ensure that persistent offenders do not walk out of the prison gates with £46 in their pockets and little or nothing else.

My vision is very simple. When someone leaves prison, I want them already to have a mentor in place. I want them to be met at the prison gate, to have a place to live sorted out, and to have a package of support set up, be it training, drug treatment or an employability course. I also want them to have someone whom they can turn to as a wise friend as they turn their own lives around. I intend to open up the market for probation services, so that we can combine the expertise that exists in the public sector probation service with the innovation and dynamism of private and voluntary providers.

These radical reforms are underpinned by the principles of the big society. Enabling voluntary sector organisations to participate fully in the transforming of rehabilitation, harnessing their expertise, and making the most of existing local links will be vital to the delivery of the reductions in reoffending that we need to see. Providers will be commissioned to deliver community orders and licence requirements for the majority of offenders, and will be paid by results to reduce reoffending. They will be expected to tackle the causes of reoffending and help offenders to turn their lives around.

Through the introduction of payment by results, providers from all sectors will have a clear incentive to rehabilitate offenders. We will pay in full only for services that succeed in reducing reoffending. Services will be commissioned nationally, and delivered across broader geographical areas. I am committed to ensuring that the new system continues to make best use of local expertise, and to integrate itself into existing local structures. Potential providers will have to be clear about how they would sustain local partnerships in contracts, and commissioning will be informed by local intelligence.

Extending rehabilitation to more offenders will introduce new costs to the system, but I believe that they can be balanced by our drawing more providers into the system. Through increased use of competition, we can generate efficiency savings and drive down unit costs across the system, allowing our funding to go further.

The public sector probation service does an important job in protecting the public. The Government are very clear about the value and expertise that it brings, and we want to continue to use that expertise as we transform our approach to rehabilitation. There will be a continuing critical role for the public sector, which will include advising the courts and assessing the risk that an offender poses to the public. Offenders who pose the highest risk of serious harm to the public will continue to be managed directly by the public sector, and the public sector will retain ultimate responsibility for public protection.

Transforming rehabilitation will help to ensure that all who are given prison or community sentences are properly punished, while also being helped to turn their back on crime for good. That will mean lower crime rates, fewer victims and safer communities. I commend my statement to the House.

I thank the Justice Secretary for giving me advance sight of his statement.

It is universally agreed that we need to do more to reduce reoffending. Preventing offenders from going on to commit more crimes and create more innocent victims should be a priority for us all. Our probation service is the Cinderella of our criminal justice system. It has a low public profile, but is staffed by dedicated professionals who help keep our communities safe. In 2011 it was awarded the British Quality Foundation’s gold medal for excellence, and the performance of every single probation trust was rated by the present Government as either good or exceptional. The service has done all that the Government have asked it to do.

Let me begin by asking the Justice Secretary what he means by saying that he wants to professionalise the probation service. The probation service has been working in partnership with the private sector and voluntary groups for some time now, and I am sure the Justice Secretary will have seen some of the excellent work being done in partnership around the country from Avon and Somerset to Doncaster, and from Peterborough to Manchester. There is a place for all in our justice system, bringing in outside experience and innovation, and working together in partnership to reduce reoffending.

It is always worth looking for new ways to address the serious problem of reoffending, and that was the motivation behind the pilot that the last Labour Government began in Peterborough, which is a payment by results model. I suspect it is also why the Justice Secretary’s predecessor launched two PBR pilots in probation trusts. It is right to test and try out properly any fundamentally new way of working, and there is no history in criminal justice of payment by results. The Justice Secretary has chosen to cancel the two probation PBR pilots set up by his predecessor. Can he explain why? Did he do so because he has already made up his mind that PBR works, despite there being no evidence at present to support that view?

We know, however, from where PBR has been used in the provision of other public services—the Work programme—that it has failed to hit its targets, and the Justice Secretary knows all about that programme, of course. Out of 800,000 people who started the Work programme, only 3.5% were still in work after six months, and not a single provider hit the target. That is bad enough in the context of the Work programme, with people not getting jobs or failing to keep jobs, but in the context of criminal justice, failure could lead to offenders walking the streets without the necessary supervision and support, with the risk that poses to public safety. We are also seeing in respect of the Work programme that it is not the small and local charities that are delivering. They have been crowded out by the big multinationals such as G4S and A4e. How will the Justice Secretary ensure that that pattern is not repeated in probation services? The Justice Secretary is proposing that only low and medium-risk offenders will be dealt with by private companies, but can he confirm that medium-risk offenders include those who have committed burglary and violent crimes, including domestic violence?

One in four offenders’ risk levels fluctuate during their time on licence. How will the Justice Secretary ensure the PBR model will be able to take that into account? In that regard, how does he propose the police should share their sensitive information about offenders under their supervision with the private sector?

The Justice Secretary has also announced a 25% expansion in the number of offenders who will be subjected to mandatory supervision, at a time when his budget is shrinking by 25%. Is it not therefore inevitable that resources will have to be stretched ever more thinly to cover that increase in offenders, and can he assure the House that high and medium-risk offenders will get the appropriate supervision and support?

We are willing to work with the Government to reduce reoffending. We will carefully consider the Justice Secretary’s consultation document and the answers he gives in the House this afternoon, and we hope that the detail given will provide greater reassurance than his statements have so far.

I am grateful to the shadow Justice Secretary, the right hon. Member for Tooting (Sadiq Khan), for the elements of his statement that were supportive of what we are doing, and of course I should thank the Labour party, because it is only thanks to legislation introduced by the Labour Government prior to 2010 that I am able to make such an important reform for this country. I should also pay tribute to the former Lord Chancellor, my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke), who established the Peterborough pilot. The work being done in Peterborough prison by the team involving the St Giles Trust—I met representatives from the trust this morning—and other charities working in partnership with the private sector is an impressive example of what can be done in mentoring offenders.

The right hon. Gentleman mentioned pilots. The last Government were obsessed with pilots. Sometimes those in government just have to believe in something and do it, but the last Government set out a pilot timetable under which it would have taken about eight years to get from the beginning of the process to the point of evaluation and then beyond. Sometimes we just have to believe something is right and do it, and I assure Members that if they went to Peterborough to see what is being done there, they would think it was the right thing to do.

The right hon. Gentleman mentioned the Work programme, and I wish he would stop using statistics that are certainly not entirely—[Interruption.] I am not sure how to describe them; “misleading” might be inappropriate language to use. The Opposition keep missing an important point: in the Work programme, we do not pay until someone has been in work for more than six months. So if 800,000 people joined the Work programme in the first year, half of them could not have been in work for six months. The reality is that the Work programme has so far helped 200,000 people find jobs. Many of those people have been in jobs for the short term and have then gone on to second jobs, and many of them have gone into long-term employment. The programme is making a real difference, and I defy any Member of the House to visit a Work programme centre, see the work that is being done and not come away impressed. [Interruption.] The right hon. Gentleman mentions G4S. It is true that G4S is one of the prime contractors in the Work programme, but interestingly, it subcontracts all its work in the Work programme to voluntary sector organisations and small businesses. The Work programme is the biggest voluntary sector welfare-to-work programme that this country has ever seen, with organisations such as the Papworth Trust delivering support right across East Anglia and organisations such as the Careers Development Group involved. That charitable organisation is running large parts of the Work programme in London. Labour Members need to look at the detail of what is happening.

The right hon. Gentleman made a sensible point and asked a sensible question about the management of and fluctuation in risk. We intend the public probation service to work closely with local providers, and where there is a variation in risk—where it suddenly becomes clear that an individual represents a clear and present danger of harm to the public—the mechanisms will exist to move those people back under the public sector umbrella. So the public sector will continue to work with the most serious offenders, through the multi-agency public protection arrangements and similar, and the police will continue to work closely with the public sector on the most serious offenders. Where there is a clear and present risk to the public, it is the duty of the public probation service and of this Government—and it will continue to be so—to make sure that we supervise and manage that risk, and that intelligence is shared between the police and the public probation service to manage the risk that exists, when it does exist, because we must ensure that the public are protected.

The right hon. Gentleman raised the question of cost, and I simply offer him one example of where efficiencies can be delivered. When we contracted out the delivery of community sentences in London, the cost of delivering those sentences fell by nearly 40%. I am absolutely certain that although very good work is being and will continue to be done in the probation service, and those professionals will continue to work in this field, there are efficiencies to be found. Such efficiencies can be reinvested in providing support to those prisoners whose sentence is less than 12 months, who have never had it before.

Lastly, the right hon. Gentleman asked about the more difficult offenders. I wish to make it absolutely clear, as our consultation document does, that we will have a pricing mechanism that makes it impossible for providers simply not to support the most difficult prisoners. Every prisoner must have support. We are delivering support that is mandated by the courts for every prisoner, and that will be continued.

These proposals, which will greatly increase the potential for offender managers to deliver rehabilitation, should mean that probation officers will be employed by many different types of organisation. Indeed, it will be vital for the success of these reforms that probation officers at all levels of experience are found in the remaining public sector organisations and in the new delivery organisations. Will the Secretary of State therefore ensure that he strengthens the corporate identity, and the training and academic underpinning of probation as a profession, so that there is a strong base for our excellent probation officers and their profession, wherever they are deployed?

I start by paying tribute to my hon. Friend. There is a slight myth in the media that we arrived in the Department in September and nothing had been done before, but that is totally untrue; I have inherited some very good work done by him and his colleagues, which created the foundation for these reforms. Indeed, he and I worked closely together in providing employment support to prisoners through the Work programme. It is very important that we ensure that we have the best possible professional standards. I apologise here, because the point was raised by the right hon. Member for Tooting (Sadiq Khan). One of the questions I have for the probation profession is: should we facilitate the creation of some sort of chartered institute that raises professional standards in the profession? It will continue to be an important profession, with high-level specialist skills needed to manage the most serious risk. I am also ensuring, through these proposals, that existing probation staff have the opportunity to set up social enterprises and mutuals, so that they themselves have the opportunity to be part of the future.

There is nothing intrinsically wrong with working with the private and voluntary sectors in the justice system; I did it when I was the Justice Minister. I have two questions to put to the Secretary of State, if I may. First, on resilience, how does he know that the organisations with these contracts, like G4S in the Olympics, will be able to deliver? Secondly, on accountability, things will go wrong in the justice system, cases will be disastrous and things will be serious. Who will ultimately be accountable to this House and to the public for the errors and mistakes?

The simple answer to the latter point is that responsibility will continue to lie with the public probation service and, ultimately, the Secretary of State. The right hon. Gentleman and I know that in any system with a rate of reoffending there will be further crimes, whether a public, private or voluntary sector provider does the work. I want to ensure that the level of reoffending continues to go down and that we try every means at our disposal. The payment-by-results regime opens the way to innovation to ensure that we do the best possible job in ensuring that people do not reoffend.

Although I understand the Secretary of State’s enthusiasm for getting on with the job without waiting for more pilots, a decision that some of his advisers might have called courageous, may I ask him to pay particular personal attention to ensuring that charities and voluntary organisations with a track record are not crowded out by how contracts are let? Will he also consider whether he should expand the role of the chief inspector of probation so that quality control over the whole of the provision is maintained?

The latter point is an important one and I rather agree with my right hon. Friend on that. I look forward to having discussions with him and his Committee about it. I am also strongly supportive of the voluntary sector. It is simply not the case, even though the Opposition keep saying that it is, that the voluntary sector is not involved in the Work programme. That programme supports well over 100,000 people in the voluntary sector, using the real expertise of small and larger organisations such as the Papworth Trust and the Salvation Army. I want to see more of that in this process.

May I ask the Secretary of State about accountability to the courts? When a medium or low-risk offender is on a programme run by a private company and fails to keep to the conditions of that order, who will make the decision to return that offender to the court? Will it be the private company, which clearly has an interest in a successful outcome to the programme, or will it be a probation officer?

It will be a probation officer. I expect to have in every centre a seconded or attached probation officer who will be responsible for enforcing the legal side of things. In much the same way as happens in the Work programme, where Jobcentre Plus does the sanctioning, it will be a contractual duty of providers to report a breach but it will be the job of the public probation service to decide how to respond and whether to refer it to court or do something else.

I thank the Secretary of State for his statement, which I welcome. Does he agree that the most effective support for former prisoners can be given by those with whom they have developed a relationship of trust—a relationship that has been developed not just over the days or weeks prior to release but over a longer period of time—and that that is particularly the case for young offenders? In light of that, will he consider how support can be given to the excellent restorative justice work done with young men by the Sycamore Tree project at Thorn Cross young offenders institution in Cheshire?

Absolutely. I look forward to visiting Thorn Cross at some point. I visited some years ago when, as my hon. Friend knows, I was the candidate in Warrington South. It is a very good centre and I look forward to visiting it again in the not-too-distant future. I absolutely believe that the role of such local projects is very important. I am often asked why crime is coming down. I think that one of the reasons is that all around the country real efforts are being made by the voluntary sector and the community sector to engage with young people who might otherwise re-engage with or embark on a life of crime.

My right hon. Friend the Member for Wythenshawe and Sale East (Paul Goggins) and I recently had the opportunity to visit the probation service in Greater Manchester, where we saw the programme to deal with some of the most dangerous individuals—that is, people who had been convicted of terrorist offences who will be released over the next few years. The work being done to reintegrate them into the community and to de-radicalise them—very specialised work indeed—was first rate and very professional. Will the Secretary of State reassure us that in the case of such prisoners—ex-terrorist offenders—the community will be kept safe and that vital reintegration and de-radicalisation work will continue?

I can absolutely do that. I envisage no change, unless it is an improvement, to how we manage offenders such as former terrorists in the community. They would fall under the high-risk umbrella and I would expect that work to continue in the public sector, where it takes place at the moment. I pay tribute to Greater Manchester probation trust, which is among the most innovative and entrepreneurial of the probation trusts. I have little doubt that some of the people in that trust will see the opportunity to create a mutual or co-operative. In the spirit of the Labour party and the co-operative movement, this is a great opportunity for a new generation of co-operatives to emerge and I want to see staff participating in the future.

Does the Secretary of State agree that it is difficult and challenging to rehabilitate hardened drug addicts? Does he share my concern that many young people are going into prison as mild drug users but coming out as addicts? Why are there still so many drugs available in our prisons and what is he doing about it?

That is a concern that I and the prisons Minister, the Under-Secretary of State for Justice, my hon. Friend the Member for Kenilworth and Southam (Jeremy Wright), share. We have done quite a bit of work on it already, but we are up against a determined effort to get drugs into prison; some of the means used to smuggle drugs into prison are quite eye-catching. We will do everything we can to reduce the availability of drugs in prisons, but when someone comes out, if they have had some form of rehabilitation in prison I want to see that continue in the community. The structure of these reforms and the through-the-gate approach will make it much more likely that we have consistent rehabilitation through prison and beyond.

The last report of the Select Committee on Home Affairs, entitled, “Drugs: Breaking the Cycle”, pointed out that 35% of those coming out of prisons had a drugs problem. I support the principle of what the Secretary of State has said today, but will he be able to choose the expertise in dealing with drugs of those organisations that will help with his rehabilitation revolution? Not just any organisation can deal with drugs; those people must be experienced in helping people once they have come out of prison.

That is why not just any organisation with cash in the bank will be able to come in and win the contracts. I want to see expertise and understanding of how to bring in the different services that are available. They should be able to bring in the drug rehabilitation services funded by the Department of Health and deal with the local college, ensuring that prisoners are on training courses. The people who do this work must have a joined-up understanding of what needs to be done, otherwise we would not work with them.

I warmly welcome my right hon. Friend’s statement. Will he give me an assurance that those who will now be responsible for rehabilitation will give high priority to getting prisoners working while they are serving their sentences and into jobs when they have completed their sentences?

I intend to continue the work done by my predecessor, the right hon. and learned Member for Rushcliffe, on increasing the amount of work done in prisons. He has done good work in extending that already and it is particularly important that that work continues after prison. That was why my hon. Friend the Member for Reigate (Mr Blunt) and I worked hard to ensure that prisoners who came out of jail entered the Work programme on day one and started to get back-to-work support straight away. I want to see an integration of support that not only delivers the life management and mentoring I have discussed today but ensures that we provide proper back-to-work support for offenders alongside that, as that is the best way of stopping them reoffending.

During his statement, the Secretary of State said that sometimes we must believe that something will work rather than having a pilot. That same Secretary of State believes that we should drastically increase electronic tagging, despite his own impact assessment saying that that will have no impact on reoffending. Should we take the consultation seriously?

I would simply invite the right hon. Gentleman to visit his own probation trust in Wales, which is one of the trusts trialling GPS tagging. I can see real benefits in that tagging. We are considering it and we are recontracting tagging contracts at the moment. I think that GPS tagging offers a new dimension for our community justice system that will help sometimes to protect offenders and sometimes to deal with offenders who are doing things that they should not be doing.

Does the Justice Secretary agree that it is simply astonishing that there has not been rehabilitation support for the roughly 50,000 a year whose sentences are less than 12 months? They have a reoffending rate of about 60% and I congratulate him on the fact that this Government will finally address the issue, helping them back into society and reducing reoffending.

I am grateful to my hon. Friend for his comments. It is baffling that over all the years of plenty for which Labour was in power, this is something Labour never did. We have an extraordinary situation with thousands and thousands of offenders who leave prison with £46 in their pocket and nothing else, and with no support, and a huge proportion of them reoffend. I am determined to change that.

The Government talk a lot about evidence-based policy making. Will the Secretary of State tell me why we are not having pilots to see whether the reform will work?

I simply invite the hon. Lady to look at the work done in Peterborough and by voluntary sector organisations to mentor offenders. Sometimes when we look at something, we can say, “That is the right thing to do.” That is what we are doing.

I welcome the Secretary of State’s commitment to drug treatment. Does he share my concern that, in the past 10 years, there has been a 165% increase in methadone maintenance prescriptions in prisons but a 30% reduction in detoxification procedures? Will he commit today to making rehabilitation and recovery a key and central part of his plans?

I absolutely give that commitment. One problem has been that if prisoners who are in prison for a short time have no support after they leave, all prisons can do while they are inside is to stabilise the situation. When there is through-the-gate rehabilitation, with somebody waiting to ensure that rehab continues in the community, we have a much better chance of addressing the issues to which my hon. Friend refers.

The probation service is staffed by highly qualified, professional, extremely dedicated and hard-working people. Medium-risk cases can be complex and serious in their consequences. The public will be concerned that the same levels of qualification and professionalism should apply to supervision. Will the Secretary of State ensure that the same level of qualifications and experience will apply to probation officers in the voluntary and private sectors?

I do not think that the hon. Gentleman quite understands what we are trying to achieve. We need the qualifications and experience to protect the public from harm, but in my view the former offender turned good—the former gang member gone straight—is the best way of making sure that a young person coming out of jail does not go back to the same ways. This is about getting a mix of high qualifications, of the kind we find in our public probation service, in people who have turned away from crime and who are helping those who might end up in a place where they once were.

I draw the House’s attention to my historic interest in social investment.

I welcome the opportunity for charities and social enterprises to get more involved in this area. Payment by results is very hard on working capital. Will the Secretary of State outline what his Department is doing to increase access to finance for charities and social enterprises—for example, the nascent social impact bond sector?

Let me start by saying that I do not expect this to be a 100% payment-by-results contract. There is a need to enforce orders of the court, so I do not expect to be able to put 100% of the fees that we pay on a payment-by-results outcome basis. However, I do want providers to be at risk; I want them to have their money on the table to deliver excellence for us, but I absolutely accept my hon. Friend’s point. That approach will make the cash flow situation less challenging than it would be in a 100% situation.

I have already held and will continue to hold meetings with people in the social investment sector to encourage them to look at the measure as a real opportunity. This is the kind of area in which social investment in this country should be involved. There is a clear public benefit and the possibility of earning a return. I absolutely hope and believe that our social investment sector will row in behind it.

The Secretary of State was explicit in saying that we could not afford not to do this. Can he be equally explicit about the primary focus of the consultation exercise? Is the measure about a reduction in reoffending or a reduction in expenditure?

This is absolutely about a reduction in reoffending. I have believed for a while that we should carry out this measure. I was particularly pleased when the Prime Minister invited me to take my current position. I absolutely believe that I should try to lead with the reform, and the Prime Minister is absolutely behind it. As the hon. Gentleman will know, in some parts of the United Kingdom, such matters are devolved; I hope that we are setting an example that others will choose to follow.

I thank my right hon. Friend for fulfilling another manifesto promise in this rehabilitation revolution. Will we be following the great model of the National Grid young offender programme, which moves people into work? Its reoffending rates are in single digits, in contrast to the unacceptable rates nationally. Can we follow through with that model and replicate it across the country, so that we have a conveyer belt not into crime but into employment?

I pay tribute to the work done not only by National Grid but many other companies in this area. I have visited the Timpson’s workshop, which involves the father of the Under-Secretary of State for Education, my hon. Friend the Member for Crewe and Nantwich (Mr Timpson). It is a first-class facility in Liverpool jail of the kind that I would like to see more of. The more that we can engage the private sector in helping offenders make the transition from prison into employment, the better. I pay tribute to all those organisations, and particularly National Grid.

I strongly welcome the Secretary of State’s decision to look at the gap between a person leaving through the prison gate and finally being picked up by the authorities, and to close that gap; it is a key vulnerability when it comes to reoffending. Will he also look downstream at creating programmes that will help social and emotional capability to be developed within prisons before people are released? As he has converted to co-operatives, will he extend the Whitehall co-operative to health and education, so that offending behaviours are addressed way earlier and potential offenders do not go to prison in the first place?

The latter point is important, and I give the hon. Gentleman that assurance. I pay tribute to his work in establishing the Early Intervention Foundation. The way in which he works across the House is a good example of Parliament setting aside politics and coming together in the interests of the country. I assure him that we will continue to look for different ways of working.

I see social challenges as a jigsaw puzzle. We are reforming welfare and education, and we have the troubled families programme and an increased focus on early intervention. Today I am trying to put in another piece of that jigsaw. The hon. Gentleman and I know that the problems will not be solved overnight, but if we do not move things in the right direction, we will never solve them. I hope and believe that the measure is one part of doing that.

Following on from the question asked by the hon. Member for Nottingham North (Mr Allen), we should change the attitude towards reoffending while offenders are in prison. Should we not have modern and efficient prisons rather than Victorian ones? Would it not be a good idea to reopen Wellingborough prison—a modern prison and the third cheapest in the country to run?

I congratulate my hon. Friend on continuing to be a first-rate advocate for his constituency. He knows that my strategy is to modernise the prison estate as fast as resources allow; it is clearly both cheaper and better if prisoners are in more modern prisons. I will have more to say about that as time goes by. We have had extensive discussions about Wellingborough prison and its site. My answer is never say never, but he will know the nature of the challenges that we face and how we are trying to address them.

One of the busiest places in prison is the gym. I hope that the Secretary of State will look at how sports can help to reduce reoffending. Will he look at the boxing project in Doncaster prison? It teaches offenders to get involved in boxing and uses boxing coaches. Unfortunately, it has had to be stopped because of a change in the guidelines on boxing in prisons. I understand some of the problems, but the scheme is great and people get jobs at the end of the course.

I can give an assurance to the hon. Gentleman. I am aware of the project to which he refers. I have seen a number of projects around the country in which boxing is used as a way of engaging young people. I have no problem with that happening in our prisons. My hon. Friend the Under-Secretary of State for Justice, the hon. Member for Kenilworth and Southam is writing to the hon. Gentleman to say that we are happy for the project to go ahead; our only caveat relates to violent offenders. We are happy to see the project continue as a way of engaging non-violent offenders.

I warmly congratulate the Justice Secretary on having the vision to have every offender met at the prison gates with somewhere to live and a proper package of support. There was certainly a pilot under the last Government—giving offenders £46 and little else. We have seen where that ended up.

Will the Secretary of State outline the number of offenders who have problems with alcohol? Will he reassure me that alcohol will be given the same priority as drugs as offenders leave prison?

About three quarters of prisoners have an addiction problem, a mental health problem or both. About half of prisoners have had some form of addiction problem. That is a real challenge, which colleagues at the Home Office are looking at closely as well. There are new mechanisms to monitor and help and support those with alcohol problems. I accept that it is a real issue, which I hope and expect mentors working with prisoners to address if they work with people with an addiction challenge.

I congratulate the Secretary of State on the consultation. As one who in a previous life spent four years as Roy Hattersley’s deputy working on our party’s policy in this area, I can say that most Governments have failed to get the issue right. However, I did learn at that time that we must pay careful attention to how many people we put in prison and what we do with people in prison—education and skills training is still absolutely pathetic. Lastly, when a prisoner comes out, he needs the full package of support—housing, education, a job and everything else. Highly skilled people are needed to help make that happen.

I absolutely agree. We are doing this through a consultation document rather than simply arriving with a final blueprint—I am setting a direction of travel but I am not saying that every detail is finalised—to offer people in this House and outside an opportunity to say, “You want to do that, but if you tweak this a bit it might be better.” I hope that over the next two or three months we can look at that feedback, digest it, and help to hone the final package in a way that gives us the maximum opportunity of working with and using the expertise of people such as the hon. Gentleman who have been here and done this.

Order. I am keen to accommodate the extensive interest in this important statement, but I remind the House that this is an Opposition day with significantly subscribed debates to follow. Therefore, if I am to succeed in my mission to accommodate colleagues I require their help in the form of succinct questions, an object lesson in which will now be provided, I feel sure, by Mr Philip Davies.

I warmly support the thrust of my right hon. Friend’s proposals, but the thorny issue is about what constitutes a successful outcome on payment by results. I have met people in the probation service who think that reducing reoffending from 10 burglaries a month to two is a success. Will my right hon. Friend assure me that that will not be considered a success and that only no reoffending will be considered a successful outcome?

I can give my hon. Friend an assurance that I will not be rewarding people for someone burgling a few houses rather than a lot of houses.

The moment at which the probation service has been commended for its effective performance is an odd one for the Secretary of State to choose to put his foot on the accelerator. What is his estimate of the number of probation officers who will be made redundant, what is the anticipated cost of that, and does he have an agreed budget for it from the Treasury?

I do not expect this to lead to wholesale redundancies in the probation service. It certainly means a new world for many people in the probation service in being part of the new organisations, new social enterprises and new consortia that will deliver the services. Yes, of course there will be some changes, but this does not involve, suddenly and instantly, mass redundancies in the probation service—that would not be right.

Of the 50,000 prisoners on short-term sentences who are released each year, a growing proportion are EU and other foreign nationals. These people do not deserve rehabilitation; they deserve deportation. Will my right hon. Friend dig deep within the security provisions of the EU free movement directive to ensure that if any EU national commits an imprisonable offence in this country, of whatever sentence length, they are deported on release and barred from returning to this country?

I agree with every single word that my hon. Friend said. We have far too many foreign national prisoners in our jails. The challenge of returning them, of course, is that there has to be somebody willing to take them at the other end—I am not willing simply to release criminals on to the streets. I absolutely agree that we need to be able to return prisoners as quickly as possible. I intend to do everything I can to use the prisoner transfer agreement, which more and more countries are now ratifying, as much as possible to return offenders to other countries, and to do everything I can, with my hon. Friends in the Home Office, to make sure that they do not come back.

The practical effect of the Work programme in Wrexham is that local charitable organisations have been excluded from providing services, and some of them have closed. Will the Secretary of State impose a contractual condition that local charitable organisations should be involved in the provision of services for the new scheme?

It depends on what works. There are very good charities delivering excellent services for this country. There are charities that do good and noble work but are less good at the jobs they do. What matters to me is that we have the organisations that do the best job. In the Work programme we will find excellent organisations in the charitable sector doing first-rate work and excellent private organisations doing first-rate work, and I would like to have the best of both.

I strongly welcome what the Secretary of State has said. Will he look not only at the amount of money that prisoners get on release but the monetary form in which it is given to them? I am concerned that many prisoners are given the money in cash form and go immediately to the nearest town to use it to purchase inappropriate goods such as alcohol that damage the essential stability of their first 48 hours post-release when they need to set a good pattern of behaviour.

Absolutely. Another problem in the system was that up until a few months ago prisoners could not even sign on for benefits for a week after release, which left a huge hole in their finances and caused a lot of reoffending. I addressed that when I was a Minister in the Department for Work and Pensions. We have to make sure that the environment is right when prisoners are released. If they are met by a mentor at the gate who then sorts out their lives, showing them where they are going to live and making sure that they are signed on to benefits, I hope that their time to go down the pub will be much diminished.

Changing human behaviour is a complex business, and I have been very impressed by the work going on across agencies in the Scunthorpe area to reduce reoffending, particularly when it is related to alcohol and drugs misuse. Changing what is going on puts at risk those sorts of activities. Why is the Secretary of State allowing only six weeks for this consultation when it is so important to get it right?

This is an iterative process. We have a formal consultation period of six weeks. We carried out a consultation on the future of probation last year, and this is an updated consultation. We are going to carry on listening to Members across the House. It will take us a few more months to hone and finalise our final package, and we will look at what works. If the best idea comes in half an hour before we finalise it, then that is fine. I want to make sure that what we have is what works.

While I recognise that the Secretary of State’s proposals seek to ensure that ex-prisoners make a success of their lives once they are released, I want to return to the matter of those who enter prison with a drug problem. Has he managed to call a complete halt to the practice of retoxifying prisoners prior to release when the Prison Service has taken the trouble to detoxify them at the beginning of their sentences?

We will do everything we can to do that. The Under-Secretary of State, my hon. Friend the Member for Kenilworth and Southam, is looking very hard at the whole issue of how we manage drugs in prisons and the nature of such rehabilitation. As a result of these reforms, I hope that we will end up not only dealing with the question of retoxification but identifying problems, starting rehab in prison and continuing it post-prison, and getting prisoners off drugs altogether.

Some parallels have been drawn between this plan and the Work programme. One of the problems with the Work programme is that minimal information is available from some of the private providers, and they are not subject to freedom of information requests. How will this be different?

I am working on reforms to FOI at the moment. We will try to be as transparent as possible. The hon. Lady has to remember, although she is not guilty of this, that over the past couple of years I have been regularly attacked by Labour Members about the use of national statistics. They cannot have it both ways. They cannot demand the information in advance and then want me to conform to national statistics rules. We will publish data as soon as we are able to do so, under the guidance of our statisticians, and we will be as transparent as possible over all this.

In welcoming this statement, may I ask the Secretary of State to expand on one aspect of it? He said, “Services will be commissioned nationally”, but he also said that he is committed to ensuring that the new system will make the best use of local expertise. In an area such as West Mercia, where our probation service has a strong record of working with the voluntary sector, how can we ensure that the existing relationships are expanded and improved on rather than discarded and replaced?

One of the things I intend to write into the tender documents when the time comes is a requirement for the bidder to demonstrate that they are capable of maintaining and developing these local partnerships, which are crucial. In an area such as integrated offender management, for example, it is essential to maintain those close links. The point made in the document is that it is not practical to commission a contract of this kind on a fragmented basis. Trying to have 15, 20 or 30 small payment-by-results contracts around the country, locally commissioned, would be unbelievably complex and take an inordinate amount of time to administer, and the expertise is not really there to deliver that. We will commission nationally but the delivery will be as local as possible.

This statement seems to be driven more by extremist right-wing ideology than by any empirical evidence, because the Secretary of State acknowledged that the public sector is best placed to deliver public safety. Is he planning to allow the police to share intelligence with G4S and other private providers?