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Volume 560: debated on Wednesday 20 March 2013

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

Does the Prime Minister agree that today we need a blue collar Conservative Budget which cuts taxes for people who work hard, do the right thing and want to get on; which stops spending billions of pounds that we do not have on overseas aid; and in which we source the cheapest energy for people, helping them with their costs of living, rather than sourcing the greenest energy?

First, I thank my hon. Friend for giving me the opportunity to remind people that even before this Budget, in two weeks’ time there will be a tax cut for 24 million people in our country as we raise the amount of money someone can earn before they pay tax. We will have taken more than 2 million people out of tax altogether; we have frozen council tax; we have cancelled fuel duty increase after fuel duty increase; and we are legislating to put customers on the lowest electricity tariff. I can also tell my hon. Friend that we are not going to carry on with the proposal made by the previous Energy Secretary, which was to put £179 on everybody’s bill. We have decided to scrap that.

I want to ask the Prime Minister about the situation in Cyprus. Will he update the House on what is being done to protect British nationals, including our armed forces, who have deposits in Cypriot banks?

The Leader of the Opposition raises an extremely important issue at a very sensitive and difficult time for the Republic of Cyprus. First, we have absolutely guaranteed that anyone who is in Cyprus because they have been sent there by the British Government, and the armed forces, Ministry of Defence or the Foreign Office, will not lose out in any way in terms of their earnings or their savings. That is the first thing to say. We have also made sure that money will be available, which is why a plane with money was sent to Cyprus last night.

In terms of British citizens in Cyprus, of whom there are many thousands, of course we cannot insure them against any losses in Cypriot bank accounts, but we can make sure that they get safely the pensions and benefits to which they are entitled. We have frozen those payments for the time being until the situation becomes clear, but everyone should know that they will get those payments.

On Monday, the City Minister said that the UK Government have

“intelligence about what went on”—[Official Report, 18 March 2013; Vol. 560, c. 620.]

in discussions among eurozone members who negotiated the plan. Will the Prime Minister tell us what the Government knew in advance, and what eurozone members said about that plan?

First, as we are not in the euro, we do not join the discussions about eurozone bail-outs. That is important, and it is worth noting that because of the deal I did in Brussels, getting us out of the bail-out fund, we will not be contributing to what would otherwise, under the previous Government’s plans be perhaps up to £1 billion. Obviously what we are doing is waiting to see the action that the Cypriot Government and the Eurogroup agree, and ensuring that we do everything to help British citizens in the weeks ahead.

The point I make to the Prime Minister is that this is a matter not just for the eurozone but for other European economies, because it goes to trust in the banking system. I think it should have been obvious to everyone that a sudden levy imposed on ordinary savers would undermine basic trust and confidence in banks. Will the Prime Minister send a clear message from the Dispatch Box that any negotiated bail-out that is subsequently agreed with the Government of Cyprus needs to rebuild trust in the banking system and not undermine it further?

We have made our views very clear to the Cypriot Government. In our view, when there are deposit protection schemes—as we have in this country; as all of Europe put in place after the crash of Lehman Brothers—those deposit protection schemes should be respected. That is the whole point; that is why they are there for small savers.

The civil service union has chosen today to go on strike, but the country does not seem to have ground to a halt. Does the Prime Minister agree that that probably indicates that there is a bit more room to save in terms of public sector spending, so that we can clear up Labour’s debts and get this country back on track?

My hon. Friend raises an important point. It is important to recognise that we should do everything we can to save and find efficiencies in public spending in order to help hard-working families and keep their tax bills down. That is exactly what this Government will continue to do.

Q2. On 9 January, the Prime Minister told me there would be no hospital reorganisations unless they had the support of the local GP commissioners, proper public engagement and an evidence base. Will he now admit that not one of those tests is met in the case of Lewisham hospital, where he proposes to close down half the services and sell off two thirds of the land to bail out a neighbouring failing trust? Can anyone trust this Prime Minister on the NHS ever again? (148834)

It is worth remembering who set up the PFI deal that has meant that this action has had to be taken. The apology over what is happening at the South London Healthcare trust should come from the Labour party, because it was responsible for creating this situation. As the right hon. Lady knows, £1 million a week is being lost from front-line care. No change is not an option, but the Health Secretary’s plans have ensured that Lewisham will retain an A and E with senior medical emergency cover.

Today, the FTSE index is just under 6,500; in 2008, it was just under 3,500. Does my right hon. Friend agree that the real investors in this economy agree with the coalition Government’s economic policy, contrary to the policies delivered by the Labour party?

My hon. Friend makes a good point. It is a difficult and hard road that we are travelling to turn this economy round after the huge mess made by Labour, but when we look at the facts—just this morning, we have seen that an extra 131,000 are in work—we see the changes necessary to start the rebuilding of our economy.

Last weekend, the Foreign Secretary said that there was a strong case for lifting or amending the arms embargo on Syria in the months ahead. Given that no decision was taken at the EU Council, does it remain the Prime Minister’s intention to seek a relaxation of the EU arms embargo?

First of all, let us look at what we have already achieved in terms of amending the arms embargo. We asked specifically for it to be changed so that we could give technical support to the opposition. We have achieved that, but the French President and I discussed at the European Council looking for further changes to the arms embargo, which will be discussed by Foreign Affairs Ministers this weekend. The reason for that is twofold. First, that the arms embargo still applies pretty much equally to this hateful regime and to the opposition, who we now recognise as legitimate representatives of the Syrian people, sends a peculiar message. Secondly, the French President and I are concerned that we should not be restricted for months and months ahead when we do not know exactly what could happen in Syria—there are very worrying reports of the use of chemical weapons.

I thank the Prime Minister for that answer. Obviously, everybody is appalled by the actions of the Assad regime, but the Prime Minister will know that there is not only a lack of unity among Syrian opposition groups, but the known presence on the ground in Syria of al-Nusra, the al-Qaeda backed terrorist organisation. Does he therefore understand the widespread concern that remains about the idea of seeking to supply weapons to the rebels?

The Leader of the Opposition puts the point absolutely rightly. There is widespread concern about the nature of the opposition. The argument we must engage in is this: are we more likely to help the good elements of the opposition by standing back, or are we more likely to help by getting in there and shaping and giving that technical assistance, so that we can play a part in building up the Syrian opposition, so that they are a legitimate and credible alternative to this hateful regime?

It is worth recalling—we should all recall it—the fact that current policies are not working for the people of Syria. Seventy thousand people are dead and this hateful regime is still in place.

The Prime Minister is absolutely right that the current situation is terrible; we just must not make it worse with the actions that we take. The spokesman for the UN Secretary-General has said that the introduction of more weapons into Syria is “counterproductive” and will not lead to a solution. Special Representative Brahimi recently called for a renewed diplomatic initiative to bring the warring parties to the negotiating table. Will the Prime Minister set out what steps the UK Government, specifically, are taking to support the UN in advancing that initiative?

We are taking specific steps to help the UN with this vital initiative. Trying to achieve a diplomatic solution, with transition at the top of the regime, is worth while. That is why we have had detailed talks with the Russian Foreign and Defence Ministers in the past week. I would just make one other point about the arms embargo. Sitting in the European Council chamber, I felt that there was a slight similarity between some of the arguments being made about not putting more weapons into Syria and the discussions we had on Bosnia, with the appalling events that followed. In my view, it is better to be engaged and working with the Syrian opposition and trying to bring this conflict to an end.

Q15. Traveller numbers on the coastal railway line running through my constituency are growing fast. Given its importance to local tourism in Dawlish and Teignmouth, can the Prime Minister assure me that urgent investment plans are in hand to repair recent flood damage and to create a long-term sustainable future for this railway line? (148847)

I can give my hon. Friend that assurance. I know that the Transport Secretary will shortly be visiting her constituency. Investment is going into the whole of the line that serves her constituency, including major investment that will shortly be completed at Reading station, which will help capacity all down the line.

Q3. The Prime Minister will be aware of the growing disquiet across the UK regarding his Government’s welfare reform proposals—great disquiet, because the proposals are deeply unfair and will, I predict, lead to administrative chaos. Does the Prime Minister agree with me that, in terms of his legacy, welfare reform will be his poll tax? (148835)

I do not agree with the hon. Lady at all. I find that there is strong support for the housing benefit cap, so that we no longer fund homes in the capital of our country by up to £100,000 a year. There is strong support for the welfare cap, and, indeed, there is strong support for universal credit, which will make sure that in every case people are better off in work and better off when they choose to work extra hours. That is what we want: a welfare system that supports enterprise, work and aspiration.

Q14. Is the Prime Minister aware that seven people have died on Norfolk’s roads in the past week? Furthermore, eight have died on the A47 in the past 10 weeks. Does he share my concern about this tragic loss of life? Is he aware of the campaign being run by me and other hon. Members, such as my hon. Friend the Member for Broadland (Mr Simpson), to improve the A47? Norfolk people understand the current budgetary constraints; they simply want a fairer share of resources. (148846)

I am grateful to my hon. Friend for bringing me up to date with this important campaign that he and others are leading in Norfolk. We have a much better record on road safety than we have had in recent years, but we should never be complacent and should continue to work on it. Money has been made available for road schemes in Norfolk, the A11 chief among them. I can see from the Minister of State, Department for Transport, the right hon. Member for Chelmsford (Mr Burns) nodding vigorously behind my hon. Friend that there may be more to come.

Q4. Does the Prime Minister agree with Lord Heseltine that people are suffering under the recession, and that it would be the wrong politics at this time to remove the 50p top rate of tax? Will he now cancel next month’s tax cut for millionaires? (148836)

The point I make to the hon. Lady is that after the start of the financial year the top rate of tax will be higher than in any year when Labour was in office, and I am sure that that is something with which Michael Heseltine would fully agree.

Today is the 20th anniversary of the Warrington bombing. The Prime Minister will recall that more than 20 people were killed and injured, among them a 12-year-old boy, Tim Parry. Will he join me in congratulating Tim’s parents, Wendy and Colin, on how they have worked tirelessly for peace over the past two decades, and particularly on the establishment of the Foundation for Peace, which brings help to victims of conflict around the world?

I certainly join my hon. Friend in praising that family for the incredible bravery they have shown. When someone suffers such a tragedy, it must be so much easier to try and put it behind them and forget about it, but to go on and campaign for peace and to bring together the people of Warrington as they have done shows enormous character and fortitude. They have the backing of the whole country.

Q5. Has the Prime Minister had time to consider the remarks of the leader of his MEPs in the European Parliament, who said of the decision to cut the 50p rate that it was“one of the biggest mistakes that we’ve made so far in this parliament”and “disastrous to do so in a recession”.Is Mr Callanan right or wrong? (148837)

When the hon. Gentleman’s party put the top rate of tax up, millionaires paid £7 billion less in taxation. We are having a lower tax rate that will raise more revenue. That makes pretty good sense.

Just a few weeks back, my right hon. Friend became the first serving British Prime Minister to visit Amritsar in Punjab. As a British Sikh, may I say how warmly his visit was received? More importantly, will he congratulate Her Majesty’s Government on the pioneering work they have done in searching the Sikh turban at European airports? It shows that we can have a proactive relationship with Europe, rather than a reactive one.

I thank my hon. Friend for all the work he does in this area and for how he consistently raises issues about the British Sikh community, the immense contribution it makes to our country and the respect that we should show it. I also thank him for accompanying me on that trip to the Golden Temple—something that I will never forget. It gives me the opportunity to say, on behalf of the House, how much British Sikhs give to Britain and how much we thank them for it.

Q6. My constituent Jordan Kingston found himself homeless aged just 17. He was offered social housing and is now studying for his A-levels, determined to improve his situation through education. From his £56 weekly benefit, he will lose £14 in the bedroom tax and £3 in council tax, leaving just £11 per week to live on after utilities. Based on the Prime Minister’s experience of hardship, what advice does he have for Jordan? (148838)

First, the Government are investing in social housing, and the hon. Lady will hear more about that in a moment. Secondly, when housing benefit costs £23 billion a year, we simply have to reform it. There is a basic issue of fairness: why should someone living in private rented accommodation not receive a spare room subsidy and someone in social housing should? There is a basic issue of fairness, and that is why it should be put right.

Unlike the hon. Member for Shipley (Philip Davies), I am proud of our coalition for sticking to the 0.7% aid target—[Interruption.]

Order. The hon. Lady’s question must be heard. People should not jeer before they have heard it.

Thank you, Mr Speaker.

We set an example to the world, and later on this month, the Prime Minister goes to Bali to co-chair the high-level panel to discuss the next set of millennium development goals. Will he use his leadership to press for a stand-alone goal on gender equality and women’s empowerment?

I will look very carefully at what the hon. Lady says about the importance of gender equality in terms of the new millennium development goals. The point I would make to anyone who raises the issue about our aid commitment is that I do not think we should break our promises to the poorest people in the world. Our key aim ought to be to eradicate the extreme poverty that people sometimes still face, living on less than $1.25 a day. That is what we are talking about, and I think that we should be proud of the fact that we are keeping our promises.

Q7. As a money-saving tip on Budget day, and in line with what the Education Secretary wants for teachers, could the Prime Minister put his Chancellor and the Cabinet on performance-related pay? How much does he think it would save? (148839)

It is this Chancellor who has seen the deficit come down by a third since he became Chancellor and has seen the creation of over a million private sector jobs. He is getting the country out of the hole that we were left in by Labour.

Will the Prime Minister welcome the successful launch in Bedford last week of the country’s first local enterprise fund? People who care about Bedford have raised £400,000 to invest in businesses in Bedford, encouraging enterprise and securing employment? Does he agree that in this respect, as in so many others, where Bedford leads, the rest of the country should follow?

I am sure my hon. Friend is right about Bedford’s leadership in all things. He makes an important point, which is that we need to see more small businesses start and more enterprise. We have seen in Britain over the last three years the fastest rate of new business creation in our history, but we need to see more of it to keep the private sector going.

Q8. Rising unemployment remains an issue in my Stockton North constituency. Is unemployment and recession, which grind hard-working families and the most vulnerable into the ground, a price worth paying for next month’s obscene tax cut for millionaires? (148840)

If the hon. Gentleman looks at the figures today, he will see that there are 131,000 more people in work over the last quarter. We have seen 600,000 more people employed compared with a year ago. That is what is actually happening in terms of employment. I have to say, when we look at the mess we were left by Labour, being given advice on economics on Budget day from Labour is like asking Enron for accountancy advice.

In less than a fortnight’s time, this Government will have taken 3,168 of my constituents out of paying income tax altogether. Does that not show that this Conservative-led Government are on the side of hard-working, low-paid people?

My hon. Friend makes an important point, which is that we have consistently lifted the personal tax allowance—the amount of money that people earn before they start paying tax—starting at around £6,000 and now rising all the time, so that over 2 million people have already been taken out of tax altogether. If he is sitting comfortably for the next half an hour, he may hear some further news.

Q9. Does the Prime Minister agree with his hon. Friend the Member for Hexham (Guy Opperman) that his Government’s focus should be on looking after people who are struggling to pay their mortgages, rather than protecting those in £2 million houses? (148841)

We should be helping people who are paying their mortgages, and that is why it is so vital that we stick to our plans. We have low interest rates in this country because we have a plan to get the deficit down. That is absolutely key. The other point I would make to the hon. Lady is that if we look at the funding for lending scheme from the Bank of England, it has now successfully reduced mortgage rates and also made sure that people who do not have access to a large deposit are able to look at buying a house. We are making progress, but there is a lot more to do.

Q10. This month we have had the wonderful news that Jaguar Land Rover is going to create a further 700 jobs in South Staffordshire, bringing its total investment to over £500 million. Last year we saw the creation of 70,000 manufacturing jobs in the UK. Does my right hon. Friend not think that this is a stark contrast to the 1.7 million manufacturing jobs destroyed under the last Labour Government? (148842)

My hon. Friend makes an important point. Jaguar Land Rover has been a massive success story for our country, and I would praise all of those who have invested money in that business, all those who work in it and all the apprentices who are being trained in it. It is part of a recovery of our automotive sector, which has, for the first time in 30 years, seen a surplus in the number of cars that we export overseas, and it is part of a picture where Nissan, Toyota, Honda and other automotive businesses in the sector are doing well, and we support them.

The Prime Minister will be aware that this week marks the bicentenary of the birth of Dr David Livingstone—born in Blantyre in my constituency, buried in Westminster abbey—which was marked by a service attended by President Joyce Banda last night in the abbey. He will know that one of Livingstone’s proudest achievements was the drive to abolish slavery in east Africa. Given the bicentenary, does the Prime Minister agree that it is now time for his Government to take the lead to end the scandal of the 2.5 million people in modern-day slavery or prostitution as a result of people trafficking?

The hon. Gentleman makes an important point, and he gives me the opportunity to praise President Banda for what she is doing to lift people out of poverty in Malawi, and to thank her for visiting Britain and Scotland this week. The hon. Gentleman makes an important point about slavery, because there is still modern-day slavery and we still need to take action to combat it at European level, at national level and at local level with the police. This Government will continue to take that action.

Q11. Whatever further changes the Chancellor announces today, the payslips of ordinary working people will show a tax cut next month as a result of the personal allowance rise that the Liberal Democrats called for. It represents the largest single income tax change in this Parliament. What does this say about the priorities of my right hon. Friend the Prime Minister’s coalition Government? (148843)

This is an important priority that we have taken action on in Budget after Budget, even in difficult times, saying to people, “We are on your side. We want to cut your tax bills.” In just two weeks’ time there will be a tax cut of over £200 for 24 million people in our country—each and every taxpayer. At the same time, we are lifting over 2 million people out of tax—they will not pay any income tax at all. This is real progress and it is on the side of the people who work hard and want to get on.

When the top rate of tax was put up, millionaires paid £7 billion less. That is the sort of incompetence and inefficiency that the hon. Lady left the sofa of GMTV to support. [Interruption.]

Order. When a question is asked, Members should not shout their heads off when the Prime Minister is giving an answer.

Given that SAS Sergeant Danny Nightingale has had his conviction quashed following the quashing of his military prison sentence last year, does the Prime Minister agree that it would be totally against the public interest, and against the interests of the SAS Regiment, for Sergeant Nightingale to have to face a fresh trial when others are benefiting from the weapons amnesty that was rightly introduced by the Secretary of State for Defence as a result of the Nightingale case?

My hon. Friend raises an important point. Let me say how strongly I support all those who serve in our special forces. As Prime Minister, I have the privilege of meeting many of those brave people and seeing that they are some of the finest and most courageous people in our country. I do not, however, want to get into any trouble with my right hon. and learned Friend the Attorney-General, so I will leave the issues of the courts to the courts.

Q13. The money that the Government have set aside to help people who are hit by the bedroom tax will not cover a fraction of the really hard cases, such as that of my paralysed constituent who receives round-the-clock care from his wife. There is an acute housing shortage in York, and they have nowhere to move to. So will the Prime Minister do one more U-turn on the bedroom tax, and scrap it altogether? (148845)

First, let me remind the hon. Gentleman that only the Labour party could call a welfare reform a tax. It shows how little they understand how tax and benefits work. We are making available a discretionary fund that is there for the hard cases, but we are also recognising that there is a basic issue of cost—about £23 billion is spent on housing benefit every year—and a basic issue of fairness, not just between the private sector and the social sector but in recognising that there are 1.8 million people on housing waiting lists who would love to have a bedroom.

Is my right hon. Friend aware that the Business Location Index has just cited Milton Keynes as the best place in the country to do business and that, with more than 2,000 business start-ups in the past year, it is Milton Keynes that is rebuilding our economy?

I was aware of that statistic, because my hon. Friend helpfully reminded me of it when we were in Milton Keynes together recently, talking about what a fantastic location for business it is, about how it is encouraging business start-ups and about how it is leading to a growth in employment in the region.

Given that the Chancellor has joined Twitter this morning, will the Prime Minister remind him and the House what too many tweets make?

I have made a number of remarks about Twitter over the years, most of which I have had to withdraw because I am now tweeting, too. I look forward to the first tweet after the Budget this afternoon. What is clear is that the hon. Gentleman could tweet even now that we are cutting taxes in two weeks’ time for 24 million working people, taking 2 million people out of tax. Tweeting that would certainly not cause any dangers for the hon. Gentleman.

Recently, the shadow Home Secretary admitted that when the Labour party was in government it got its immigration policy wrong. Does the Prime Minister agree with me that across the breakfast table, she should persuade her husband to make a similar admission on Labour’s economic policy.

I think my hon. Friend makes a very good point. We inherited a complete shambles in immigration—a system completely out of control. We have sort of had apologies for that; what we have not had is any sort of apology for the borrowing, the spending and the debt—the mess that the Labour party left us.

It has been estimated that for the cost of just one nuclear reactor, 7 million households could be lifted out of fuel poverty through energy efficiency and conservation. Hinkley is expected to come with an eye-watering £14 billion price tag and a strike price of getting on for double the current price of electricity. If that does not make nuclear unaffordable, can the Prime Minister tell us what would?

I am afraid that I just do not agree with the hon. Lady. Our fleet of nuclear power stations is coming to the end of its life, and I think it is important that we work hard to replace some of that capacity. That is what Hinkley is about; that is why I think my right hon. Friend the Secretary of State for Energy and Climate Change was absolutely right to give it the go-ahead. It will be an important provider of carbon-free electricity in the years ahead.