Skip to main content

Commons Chamber

Volume 565: debated on Tuesday 25 June 2013

House of Commons

Tuesday 25 June 2013

The House met at half-past Eleven o’clock

Prayers

[Mr Speaker in the Chair]

Business before Questions

London Local Authorities and Transport for London (No. 2) Bill [Lords]

Consideration of Bill, as amended, opposed and deferred until Tuesday 2 July (Standing Order No. 20).

Hertfordshire County Council (Filming on Highways) Bill [Lords] (By order)

Second Reading opposed and deferred until Tuesday 2 July (Standing Order No. 20).

Oral Answers to Questions

Treasury

The Chancellor of the Exchequer was asked—

Bank Lending

1. What recent assessment he has made of the effect on economic growth of the level of bank lending to businesses. (161218)

11. What recent assessment he has made of the effect on economic growth of the level of bank lending to businesses. (161228)

The Government are committed to creating a banking system that supports the British economy, rather than being supported by it. Two months ago, the Government and the Bank of England extended the funding for lending scheme, with a particular focus on small business lending. Last week, the Office of Fair Trading announced its review into how to make that lending more competitive, and at the Mansion House, I announced a plan for taxpayer shareholdings in RBS and Lloyds that will return these banks fully to the private sector, get value for the taxpayer and support the economy.

Last Monday, I met businesses at Greater Manchester chamber of commerce and heard how banks were often failing them, thereby having an adverse impact on business performance. Does the Chancellor accept that bank lending to businesses has fallen over the past year and that the Government’s funding for lending scheme has totally failed businesses in Greater Manchester and the United Kingdom?

Gross lending to businesses is up under the scheme, but I am happy to agree with the hon. Gentleman that there is an issue—let us be honest, there has been an issue since 2008-09—with the contraction of bank lending to businesses in our communities. That is why we are taking further steps in two respects. First, with the Bank of England, we are extending the scope of the funding for lending scheme. It has proved very effective at getting mortgage rates down, and now we need to reduce the rates for small businesses. Secondly, we are sorting out the Royal Bank of Scotland, which is the largest lender to small businesses in our country.

The Government claim to have established a business investment bank. How is it doing, and how many businesses has it actually lent money to?

The business bank, which was established last year, is now making loans to the funds that will lend to small businesses, creating non-bank lending channels. [Interruption.] There was no business bank under the Labour Government. I will tell the House what we had instead: we had a socking great banking crash under the Labour Government, and the person sitting opposite, the shadow Chancellor, was City Minister when it happened. We are cleaning up the mess from one of the biggest financial crises in the country’s history by ensuring that it never happens again.

May I say to my right hon. Friend that after a lifetime as a stockbroker and fund manager, my instinct, as bond yields rise all over the world, is that we are heading for another banking crisis that will certainly choke off the already inadequate lending of banks to small businesses? May I put on the record my dismay that he has not yet committed himself to the total separation of investment from commercial banks, which I have been urging on him ever since he became Chancellor? I am absolutely convinced that if we do not go back to something approaching Glass-Steagall, it will be an absolute disaster when the next banking crisis hits us.

Of course, I respect my right hon. Friend’s experience. A powerful argument has been made that we should completely separate and split up retail banks from investment banks. We asked John Vickers to convene a commission to look at this specific subject, and he came forward with proposals to ring-fence retail banking, as he thought that that would be a better approach. We also set up a cross-party parliamentary commission to consider the ring fence, and it thinks that the ring fence is the best approach. It made a specific recommendation that we should give the regulator the power to split up a bank that had refused to comply with the ring fence, and we are giving the regulator—[Interruption.] The shadow Chancellor shakes his head, but again not one of these things was done when he was City Minister. Let me say to him again, because he obviously does not understand, that we are giving the regulator a specific power to split retail from investment banking in a bank that is ignoring the ring fence. I think that that is the right way forward.

In the Treasury Committee this morning, the Governor of the Bank of England expressed considerable concern that unacceptable pressure had been brought to bear on the Prudential Regulation Authority from within Government, both from No. 10 and from No. 11, at the behest of the banks, putting at risk the regulator’s independence. Will the Chancellor reassure the House that he knew nothing about this, that he was not personally involved, that he will investigate the allegation that others did bring unacceptable pressure to bear, and that he will report to Parliament?

Of course, if there is unacceptable pressure, I absolutely say that that is not acceptable—if that is the right way to put it. The PRA, which we created, is completely independent and it has made its independent decisions on capital in our banks. We also have the Financial Policy Committee, which again is completely independent and able to make these recommendations. We empower our regulators to do their job. Of course, banks, consumer groups and anyone else can make their case, but this is ultimately an independent body, an independent regulator, that makes the judgment. That is the system we have created.

The whole House agrees that we need to see more lending to small businesses and a return of RBS and Lloyds to the private sector so that taxpayers can get their money back, yet two weeks since the Chancellor helped to remove Stephen Hester from RBS, the taxpayers’ stake in the bank has fallen in value by £4 billion. Was that part of the plan?

In case the hon. Lady had not noticed, stock markets around the world are down. Bank stocks are down—

RBS: the world’s largest bail-out, under a Government who completely failed to regulate it. How dare the right hon. Gentleman have the audacity to come here and complain about the Royal Bank of Scotland? We are fixing the problems in the Royal Bank of Scotland. We are looking at the case for establishing a “bad bank”, which, as I said at the Mansion House, should have been done in 2008. We are going to fix the mess in the banking system that Labour left behind.

I congratulate my right hon. Friend on setting up the Parliamentary Commission on Banking Standards. Does he believe that implementing some of its recommendations will help banks to lend? Will he urge the Leader of the House to allocate time for a debate on this subject?

We will have plenty of time to debate the recommendations of the parliamentary commission, which I think has done an absolutely excellent job for the House, by the way. We will shortly have the Report stage of the Banking Bill, at which the Government will say how we intend to respond to those recommendations. If there is more work to be done on the drafting of specific amendments, those amendments can be tabled in the House of Lords and they will of course come back to the House of Commons as well. The whole purpose of the parliamentary commission was to enable us to get on with this. If we had created a public inquiry, as Labour recommended, it would only just be getting going now. Instead, Parliament has done what it is supposed to do, which is to investigate a problem and provide recommendations, and we are going to debate those recommendations here.

Pensions Triple Lock

The triple lock means that the level of the full basic state pension is now £6.85 a week higher than it would have been if it had been uprated only by earnings since 2011-12. That equates to about £356 a year. The average person reaching state pension age in 2013 with a full basic state pension can expect to receive an additional £12,000 in basic state pension over their retirement, thanks to the triple lock.

Can my right hon. Friend confirm that the triple lock will prevent a repeat of the disgraceful situation in which pensioners received a pension increase of only 75p?

I certainly can confirm that. Putting in a floor of a 2.5% increase in the basic state pension will prevent that disgraceful situation, and I can tell my hon. Friend that, thanks to the triple lock, the basic state pension now represents a higher share of average earnings than at any time since 1992.

Let me be clear that we on the Opposition Benches do support the triple lock on pensions. However, at a time when our NHS and social care are under such pressure, why do the Government think it is a priority to continue to pay the winter fuel allowance to the richest 5% of pensioners?

The hon. Lady says that Opposition Members support the triple lock, but they did not introduce it when they were in office. The shadow Chancellor wishes to include the basic state pension in his short-term cap of welfare spending. Let me tell the Labour party what that might mean. Last year, the welfare forecast increased by £2.3 billion; if the pension had been included in the welfare cap, as the shadow Chancellor suggests, it would have meant freezing the basic state pension this year, not increasing it as planned. That is what Labour really means on pensions. I am certainly willing to look at the payment of winter allowance to wealthy pensioners; I am sure it will be a matter to discuss at the next election.

Small Businesses

Three years ago, I cut the small companies tax rate; this year, I have taken a number of further steps to support small businesses, including the new £2,000 employment allowance, which will reduce small businesses’ tax bill. Up to 1.25 million businesses will benefit, with about a third of all employers taken out of paying employer national insurance contributions altogether. We have also increased the annual investment allowance tenfold this year from £25,000 to £250,000. This directly helps small and medium-sized businesses looking to invest in the future.

Small businesses in South East Cornwall welcome the measures that the Chancellor has already introduced. It has taken some of them to a position where they can expand, but they have been applying and waiting for grant funding for a considerable time. Will my right hon. Friend speak to his Cabinet colleagues to ensure that decisions are taken as soon as possible to allow these businesses to grow and to avoid missed opportunities?

I thank my hon. Friend for her work on the Finance Bill, which she put huge effort into. I know she is passionate about her constituents and the businesses of Cornwall. The Department for Environment, Food and Rural Affairs has already given £7 million in rural development grants to her constituency. She has raised some specific cases; a company that makes Cornish Blue has been waiting for what I think is an unacceptable period for an answer from another Government Department about a grant. I will personally look into this matter and see if we can speed the award.

In the £50 billion UK life science industry, the Chancellor’s support for the patent box, the research and development tax credits and a globally competitive corporation tax rate are helping to secure global companies here, as evidenced by Johnson & Johnson’s recent announcement of a global innovation centre here in the UK. Does he also agree that we need to support insurgent small and medium-sized enterprises emerging into the sector? I would like to highlight the role of the biomedical catalyst fund in securing over 50 projects for the UK and £1 billion in venture capital funding.

My hon. Friend’s knowledge in this area is well known, and he has applied it as a Member of Parliament to promoting schemes that help the life sciences industry—and not just the big companies, although we welcome the Johnson & Johnson announcement, but the small companies, too. The biomedical catalyst fund has been very successful at supporting small businesses in this sector. Without giving too much away about tomorrow’s announcements, I can tell him that we will go on funding this scheme.

Can the Chancellor tell us how many firms have been helped by his small firms national insurance holiday since it started three years ago, given that he claimed it would help 400,000 firms?

About 20,000 firms have been helped—[Interruption.] Well, 20,000 firms have been helped, small business creation is at the highest level since the 1980s and there are over 1 million new jobs in the private sector. And we will bring before Parliament new legislation to make sure that the first few thousand pounds of their national insurance bill is completely wiped out—they will not have to pay it at all. That is a real success story, and if the Opposition want to vote against it, they can be my guest.

Finance and credit are the lifeblood of small businesses. The Government have been pumping money into the banking sector, so what is the Chancellor doing to ensure that that money goes to small businesses rather than to repair bank balance sheets?

Of course, as we discussed earlier, the capital position of the banks is important, but the funding for lending scheme is now focused on small business lending. I know that there is a particular issue with the very tough situation that the banking sector faces in Northern Ireland and the problems from the Irish Republic that have spilled over into Northern Ireland. One thing we are doing with the Royal Bank of Scotland is looking specifically at Ulster and the issues surrounding some of the bad loans made in the past, and at how we can help that bank to make good loans in the future to help the businesses of Northern Ireland. We are specifically supporting the Northern Irish economy and we are aware of its problems.

Does my right hon. Friend agree that extending rate relief to a further half a million small businesses will help many of them in the constituencies of Southend West and Rochford and Southend East?

Small business rate relief has helped many small firms to cope with the cost of rates, and we have been able to extend it year after year. We will have to make a decision later in this Parliament about a further extension, but there is clear evidence that the current extension is doing a great deal of good.

The main complaint from businesses throughout the country, both small and large, is that they do not feel they are receiving the support that they need from the banking sector. Given that state-owned banks are among the poorest in terms of lending, what is Jeffrey—sorry, the Chancellor of the Exchequer—doing about it?

As I said earlier, the Royal Bank of Scotland is the largest lender to small businesses in our country. That is why it is such an important support for the economy. We are taking a serious look at how we can enable it to move on from all the bad loans—all the bad bets that it laid—during the middle years of the last decade, when, by the way, the shadow Chancellor, who is still muttering from a sedentary position, was City Minister.

Surely it is in all our interests to try to sort out the banking problem, but I have no idea whether Labour Members support our proposal on the Royal Bank of Scotland. We have heard absolutely nothing from them. However, what we are doing shows that we are actually confronting the problems that we inherited.

Living Costs (Personal Allowance)

4. What assessment he has made of the effect on living costs of changes to the personal allowance. (161221)

It was announced in Budget 2013 that the Government would increase the annual personal allowance by a further £560 to £10,000 in April 2014, thus meeting a key coalition commitment a year ahead of schedule. By that date, as a result of the combined effects of all personal allowance increases under this Government, a typical basic-rate taxpayer will have gained by more than £700 a year in cash terms.

Does my hon. Friend agree that the best way of tackling this issue is to put cash into people’s pockets, and that taking 2.7 million people out of tax altogether is an excellent way in which to proceed?

I do agree. What we have done is quite a contrast with what was done by the last Government, who increased the amount of income tax that some low earners would have to pay by £232. Now the equivalents of those people have been taken out of income tax altogether.

If everything is better for the average family, why did the Institute for Fiscal Studies say that the average family was £891 worse off? Was the IFS wrong?

We do not accept those figures. What I will say is that we have been prepared to tackle the biggest deficit in our peacetime history. We have taken measures to put the public finances back on a sustainable footing, with no help from the Labour party, which has opposed every measure that we have taken to do that.

Is my hon. Friend aware that the Government have taken 3,000 low-income people out of tax altogether in my constituency, and have cut taxes for 40,000 low-income residents? Is this not a Government who are on the side of the poor?

My hon. Friend is absolutely right. He could have added—and I am surprised that he did not do so—that we have taken action on fuel duty as well.

Money in people’s pockets is one thing, but since the financial crash, food prices have increased by 18% compared with inflation of 13%. It is not just a question of the money in people’s pockets; it is also a question of what they have to pay when they go to the shops. Does the Minister really believe that families in my constituency feel that they are better off?

It is because of the need to deal with the cost of living that we have taken measures such as controlling increases in council tax. That is why fuel duty is lower than it was in the plans that we inherited, and why we have taken the measures that we have taken in regard to the personal allowance. [Interruption.] The shadow Chancellor is muttering about VAT. Let us be clear about this. Labour Members did not vote against VAT; then they said they were against VAT. Last week they said that they would not change VAT; now the shadow Chancellor is complaining about VAT. It is just chaos and confusion from the Labour party.

Infrastructure Investment

In a difficult economic climate the Government are committed to investing in infrastructure. We have increased our infrastructure spending plans in this Parliament and have committed to a further £3 billion a year from 2015-16. We are using this country’s hard-won fiscal credibility to support and offer up to £40 billion in guarantees for infrastructure projects, and I will set out our plans for further investment in infrastructure on Thursday.

As an MP for the north-west, may I ask whether the Government can give assurances to the House that large-scale infrastructure projects such as HS2 will proceed under this Government?

Yes I can, and the House will be considering High Speed 2 tomorrow. I hope my hon. Friend and other Members on both sides of the House will give the project very strong support, because it is a massive project that has the capacity completely to transform the regional economic geography of this country. This Government are totally committed to delivering it, and we will do so.

Can the Chief Secretary confirm that only seven of the Treasury’s infrastructure projects in the pipeline have been completed? In view of its overall conversion finally to the need for infrastructure investment, is that not a disgraceful record?

I do not accept that figure, and I tell the hon. Gentleman a very large number of projects are completed or under way that we have announced. There are national road schemes, motorway schemes around the country, local transport schemes around the country, Crossrail under way—tunnelling started in May 2012—and major improvements to over 134 railway stations since May 2010. There is a great deal of investment in infrastructure going on, and he should welcome it.

23. Ahead of tomorrow’s comprehensive spending review, can I make yet another plea about the importance of the M4 around Newport? It is the gateway to the south Wales economy and it needs to be upgraded. That is long overdue; it was ignored by the last Government for so many years. (161242)

Let me reassure my hon. Friend that I am very well aware of the importance of that project. We have been in discussions with the Welsh Assembly Government about the matter, and it is very much tied up with the Silk report, and together those two things will help that project go forward.

20. Why have 80% of the projects in the Treasury’s infrastructure pipeline not even started construction yet? (161239)

A vast number of projects are under way, and a vast number of projects are in the pipeline to start, where work and planning permission are going on. These projects are being delivered up and down the country, and I have to say to the hon. Gentleman that he should show a little humility in this matter. After all, this Government are investing a greater share of our nation’s income in infrastructure during this Parliament than his party managed during its 13 years in office.

I look forward to my right hon. Friend’s announcements about infrastructure on Thursday, but already on my weekly journeys from Bristol Temple Meads to London Paddington I can see the gantries going up around Reading to provide the electrification of the great western main line. Is it not the case that this Government are already presiding over the greatest investment in railways since the Victorian era, providing a stimulus to the economy in Bristol and all stations between there and London?

My hon. Friend is absolutely right, and rather than laughing, the shadow Chancellor should welcome the fact that there is the largest investment in our railways since Victorian times. Electrification is under way, ahead of schedule as my hon. Friend suggests; the intercity express programme train purchase programme will help to improve journey times yet further; what was in our announcements in the autumn statement last year will allow direct western rail access to Heathrow from his constituency and other communities served by that line.

If it is all so wonderful, can the Chief Secretary explain why, two years after he published the national infrastructure plan, according to the Office for National Statistics the level of infrastructure investment in our economy has plummeted by a staggering 50% in the first quarter of this year, its lowest level since he came to office? Why?

The hon. Gentleman should remember that the capital investment we are putting into infrastructure in this economy is much greater than in the plans his party set out before the last election. As the former Foreign Secretary said, Labour was going to halve the share of national income going into capital spending. We have added to that, and by using the fiscal credibility that this Government’s tough approach to the deficit has secured to offer infrastructure guarantees, we are enabling infrastructure projects in the private sector to come forward that would not be doing so otherwise.

What planet is the Chief Secretary living on? A year ago, the director general of the CBI was asking:

“Where are the diggers on the ground?”

A year later, the diggers are still gathering dust. I realise that the Chief Secretary and the Chancellor are busy focusing on headlines for the next general election, two years away, but why are they not taking the advice of the International Monetary Fund and bringing forward capital investment now, in 2013, to make up for their lamentable incompetence on this infrastructure plan?

We are investing more in infrastructure this year than the hon. Gentleman’s party planned during its period in government. We are supporting the private sector to bring forward further investment in infrastructure, thanks to our infrastructure guarantee programme. We are supporting the construction of more affordable homes than his party managed; after all, his party presided over a decline of 421,000 affordable homes in this country. We are increasing investment in that. He should welcome this Government’s infrastructure programme, not criticise it from the position of weakness that he is in.

Job Creation

Private sector employment has been growing robustly, with 1.3 million jobs created in the sector since the start of 2010. At Budget 2013, we announced the £2,000 employment allowance, which will support businesses aspiring to grow by hiring their first employee or expanding their work force. Businesses will be able to employ four adults or 10 18 to 20-year-olds full time on the national minimum wage without paying any employer national insurance contributions at all.

Does my hon. Friend agree that the combination of an enterprise zone and a regional growth fund that has been supporting jobs in my area following the Pfizer closure, and which the Chancellor very kindly opened, has delivered 750 new jobs in one year? We hope to be announcing a further 200 jobs in the next couple of weeks. Does that sound like a private sector success?

It certainly does, and I pay tribute to my hon. Friend for the work that she has done for her constituency. Discovery Park is proving to be a success, with help from the regional growth fund and as an enterprise zone—and long may that success continue.

The 2010 autumn statement confirmed the dualling of the A11, raising investor confidence in Norwich as a destination for growth. May I urge Treasury Ministers to be similarly bold in their spending review in relation to the A47, where investment has the potential to create up to 10,000 more jobs for the region?

I am grateful for that question, and I am sure that my hon. Friend will be listening attentively to any announcements made later on in the week. His constituency is another example of where private sector growth has been very strong, reflecting the national pattern.

Following the success of last week’s G8 summit, Northern Ireland is now looking forward to the international investment conference in October. Will the Treasury work closely with the Prime Minister and the Northern Ireland Executive to ensure that we maximise private sector investment in Northern Ireland, both in 2013 and 2014?

Yes, absolutely. There needs to be a much stronger private sector in Northern Ireland, as has been accepted by this Government and by all the parties in Northern Ireland.

Public Sector Debt

9. What his Department’s estimate is of the likely level of public sector net debt as a share of GDP in 2015-16. (161226)

Public sector net debt is forecast to be 85% of GDP in 2015-16, compared with 94% of GDP and accelerating had the policies of the previous Government continued to be pursued.

Let us hope that that estimate proves more reliable than previous efforts. In the interests of transparency, and given tomorrow’s comprehensive spending review, is the Minister now ready to admit that the national debt has risen from £828.7 billion to £1.19 trillion under his watch? If we eliminate the Royal Mail pension fund, as we have been advised to do, and the Bank of England gilts from quantitative easing, is it not true that borrowing in 2012-13 is up, and not down as the Chancellor told this Chamber?

Like you, Mr Speaker, I take a great interest in the hon. Gentleman’s speeches in this House, and I know that he is deeply interested in fiscal policy. Since the beginning of the year, he has spoken 102 times on the subject of public spending cuts, but in each and every intervention he has opposed spending cuts. To cut the debt, we have to cut spending. He should learn that, and the Labour party should as well.

Does the Minister agree that one reason why our debt is such an issue is that the previous Government ran budget deficits in the good times as well as the bad and that the only way to reduce debt is to get the deficit down?

My hon. Friend is absolutely right. We know that between 2001 and the time they left office, the previous Government trebled the national debt, yet when the shadow Chancellor was asked whether they were too profligate and had too much national debt, he said no. Labour’s new policy is the old policy: more spending, more borrowing, more debt. It is time they learned.

The Prime Minister assured us that by 2015 the books would be balanced. Is it not a fact that as a consequence of the Chancellor’s abject economic failure we are now looking at the deficit reaching £96 billion by 2015? What does the Financial Secretary have to say about that?

I have followed the hon. Gentleman’s interventions over time and he should be familiar, as we all are, with the study from the Institute for Fiscal Studies that made it very clear that if the policies of his party had continued, the debt would be £200 billion higher.

Does my right hon. Friend agree that if we look across the channel to countries such as Italy, we see what can easily happen if a Government lose control of public spending?

The channel is not very far from my hon. Friend’s constituency, so it is possible to look across. He will know that the UK cut its structural deficit by more than any other G7 country over the past three years, whereas Labour racked up the largest structural deficit in the G7. The shadow Chancellor confirmed on Sunday that he would borrow more money in 2013, 2014 and 2015. Labour says it has a new policy, but it is the old policy—to borrow more and to go further into debt.

Housing Market (Budget 2013)

10. What progress he has made on implementing the housing market measures announced in Budget 2013. (161227)

The Government have made excellent progress in implementing the measures. For example, the Help to Buy equity loan scheme has helped 4,000 individuals and families reserve a new build home already and the Help to Buy mortgage guarantee scheme will be in place by January 2014.

In high house price and low wage areas such as mine, where four times more properties are sold to second home buyers than to first-time buyers, intermediate market solutions—shared equity and affordable homes with section 106 planning restrictions—are often the only way for local families to get a toe on the housing ladder, yet the equity loan scheme does not have the rules to enable them to take advantage of it. Will the Government reconsider the rules to help local people in such circumstances?

My hon. Friend is right to raise that issue. He will have upmost in his mind the fact that under Labour, house building fell to its lowest levels since the 1920s. The Government are supporting hard-working households who have saved but who do not have a large deposit from the bank of mum and dad to help in buying their own home. The Help to Buy equity loan scheme he mentioned will help 74,000 families and has already helped 4,000. My hon. Friend will be pleased to know that 20% of the £1.8 billion of additional funding we have promised for affordable homes will go to shared ownership.

Will the Help to Buy scheme help to increase the supply of housing? I am not talking about buying capacity; will it specifically increase the supply of housing?

The short answer is that it most certainly will, and it has been welcomed by the Home Builders Federation. I am pleased that the hon. Gentleman is now concerned about the issue. House building fell to its lowest levels since the 1920s under the previous Government. The number of affordable homes decreased by 421,000 over 13 years and local authority waiting lists almost doubled from 1 million to 1.8 million under Labour—a shameful record.

Average Earnings

12. What recent estimate he has made of the rate of increase of average earnings compared to the rate of consumer price inflation. (161229)

The best way to deal with today’s cost of living challenges is to have paid employment. In 2012, the number of people employed in the UK has risen faster than most of our competitors, including the US, France, Germany and Japan. As a result, household income has risen by 2.1% more than consumer prices over the past year.

Despite what the Minister has just said, the Office for Budget Responsibility says that living standards for many will be lower in 2015 than they were in 2010. Is it not the case that, while the rich and super-rich benefit from tax cuts, working people and their families are worse off? Is not the truth that we are not all in it together?

No, certainly not. I am pleased that the hon. Gentleman is concerned about this issue. The hon. Gentleman became a Member of Parliament in 2010, and he will know that in the last term of the stewardship of the previous Government, his constituency saw paid employment fall, and unemployment rise by a staggering 67%. Paid employment is the best way to raise living standards, and 1.3 million new private sector jobs have been created in the past three years. More people are in employment than at any other time in the history of this country.

On living costs and standards, can my hon. Friend tell me how much more my constituents would have to pay to fill a tank with petrol if we had adopted the previous Government’s fuel price rises?

My hon. Friend highlights an important point. We scrapped Labour’s fuel duty escalator; we have frozen their escalator. Petrol prices are 13p per litre lower than if we had kept the policies of the previous Government.

Does the Minister see any correlation between wages being £1,300 a year less than they were at the time of the election and the number of people who are in work turning up at food banks?

What I see is jobs being created in the private sector at a record rate in this country—1.3 million jobs in the past three years; a faster rate of job creation than any other G7 country last year. If the hon. Gentleman really cared about his constituents, he would welcome that.

What has the effect been of Government policies not just on petrol but on keeping interest rates low, freezing council tax, cutting income tax and helping pensioners?

My hon. Friend has raised the issue of interest rates. If we had not had a credible policy to deal with the record budget deficit that the previous Government left behind, interest rates would be a lot higher. In fact, in the last Budget delivered by them, interest payments on Government debt would have been £30 billion higher in this Parliament. If interest rates were just 1% higher, mortgages would rise by almost £1,000 a year for the average household.

Community Budgets

13. What assessment he has made of the role of community budgets in improving the efficiency of public expenditure; and if he will make a statement. (161230)

I am a strong supporter of community budgets because, by joining up public services locally, we can save money and get better outcomes for our constituents. The troubled families programme is using the community budgets approach to turn around the lives of 120,000 families by 2015. Building on its success, I announced yesterday that the Government would put £200 million towards expanding the programme to work with a further 400,000 families from 2015.

Ernst and Young estimates that between £9 billion and £20 billion can be saved by the national roll-out of community budgets. Given that the pressure is on us, should that roll-out be sooner rather than later?

Yes, it certainly should, and I urge my hon. Friend to listen carefully to the Chancellor’s statement tomorrow.

Child Benefit (Higher Earners)

16. What progress he has made on his policy to withdraw child benefit payments from higher earners. (161233)

In January 2013 a new income tax charge was introduced to reduce or remove the financial benefit of receiving child benefit for those on high incomes. For taxpayers with incomes between £50,000 and £60,000, the amount of the charge is a proportion of the child benefit received. For taxpayers with income above £60,000, the amount of the charge is equal to the amount of child benefit received. Eighty-five per cent. of families with children continue to benefit in full from child benefit. Entitlement to child benefit payments remains universal and will continue to be paid to all those who claim it.

I am delighted to hear about the savings that will be achieved, especially given that those of us who supported them were told by the Labour party that they would destroy the universal principle, and that they were complicated, unfair and unworkable. It now appears that they are workable, and the Opposition have accepted that they will not change the policy. Will my hon. Friend share with us what vital provision of services those savings can achieve, and will he also consider means-testing the winter fuel allowance?

There is a substantial saving to the Exchequer through child benefit. It was not that long ago when the Leader of the Opposition said that millionaires should receive child benefit because

“it’s a cornerstone of our system to have universal benefits”.

It appears that that is no longer the case, although all we have is briefing. On winter fuel payments, the Prime Minister made it clear that they would continue in the course of this Parliament and we will fulfil that commitment.

Topical Questions

In his March Budget, the Chancellor boasted that Government borrowing fell last year. Will he confirm that figures published by the Office for National Statistics on Friday show that Government borrowing last year actually did not go down, but went up?

The Office for National Statistics revised down borrowing for 2010-11, 2011-12 and 2013-14; that is actually good news.

T2. The quality of schools in my constituency is very high. Will my right hon. Friend outline the Government’s intentions on school funding? (161244)

Everyone knows that Britain needs to live within its means, and tomorrow I shall set out the next phase of the economic plan to move Britain from rescue to recovery. However, I can confirm that we will offer real protection for our national health service and our schools. Those vital public services are an investment in our economic future, and they are all about doing what we need to do to win that global race.

The whole House will have heard the Chancellor not answer the topical question asked by my hon. Friend the Member for Rochdale (Simon Danczuk). The reason is that, despite all the Budget speech bluster, borrowing last year went not down, but up.

Let me ask the Chancellor another question. The bonuses paid in the financial services sector this April, the first month of the new tax year, were 65% higher than in the same month last year—up by a total of £1.3 billion. Can the Chancellor tell the House why bank bonuses rose by £1.3 billion this April?

First, on borrowing, the Labour Government were borrowing £157 billion a year. This Government borrowed £118 billion last year, which represents a fall in borrowing. The deficit is down by a third because we are taking the tough decisions to ensure that Britain lives within its means. On bonuses, they are 85% lower than when the right hon. Gentleman was City Minister.

The fact is that the Chancellor promised to get the deficit down, but it is rising, and that month-on-month rise in bonuses is the highest since records began in 2000. There is a simple reason why that happened: thousands of very highly paid people deferred their bonuses into the new tax year to take advantage of the Chancellor’s top rate tax cut, which has cost the Exchequer millions of pounds in lost tax revenue. How can the Chancellor still say, “We’re all in this together,” when living standards are falling for everyone else and the economy has flatlined for three years? Is not this economic failure the reason why the Chancellor will not balance the books in 2015 and why he will be coming back to the House tomorrow to ask for more cuts to public services? He is unfair and out of touch, and he is now revealed as totally incompetent.

Getting a lesson from the shadow Chancellor on how to balance the books is like getting a lesson from Dracula on how to look after a blood bank. He finds himself in a most extraordinary situation. On Saturday, the Labour leader said that Labour was going to rule out borrowing more. On Sunday, when the shadow Chancellor was asked whether Labour could borrow more, he said, “Yes, yes, of course,” and then, on Monday, the Labour party committed itself to higher welfare spending—it is a complete shambles. On the eve of the spending review, Labour finds itself in the extraordinary situation in which it has completely abandoned the economic argument that it has been making for the past three years, but kept the disastrous economic policy. That is a hopeless position. The shadow Chancellor has led Labour Members up a cul-de-sac and they have to find their way out of it.

T4. In the last Budget the Chancellor announced a video games tax relief to help support UK publishers and developers, which was a very welcome step. However, the European Commission has launched an investigation into this tax relief. Will my right hon. Friend join me and industry representatives such as TIGA so that we may make the best case possible for this vital policy? (161247)

We remain committed to introducing video games tax relief as soon as possible and we are working with the industry to provide the Commission with the evidence that it needs to conclude its investigation quickly. These things can take a little time, but we have a history of succeeding in implementing new and innovative forms of state aid.

T3. Since the Chancellor’s last spending review the US economy has grown four times faster than the UK’s. Is this not further evidence of the Chancellor’s failed policies? (161246)

The US fiscal consolidation is faster this year than the UK consolidation. The structural deficit in the UK has fallen by more than in the US. But look at the UK—we have created over a million new jobs in the private sector. That is one of the most impressive employment records anywhere in the world.

T6. Devolution is a continuing process. Does my right hon. Friend agree that if the National Assembly for Wales is to develop into a fiscally responsible governing institution, it must have responsibility for raising a significant part of its own budget? (161249)

I do agree with that. The Government established the Commission on Devolution in Wales to consider, as part of its remit, how to increase the fiscal accountability and autonomy of the Welsh Assembly Government. We are carefully considering the commission’s recommendations and we will respond in due course, having discussed the matter with the Welsh Assembly Government.

T5. May I take the Chancellor back to the question posed by the shadow Chancellor and by my hon. Friend the Member for Rochdale (Simon Danczuk)? Did Government borrowing rise in 2012-13, as compared to 2011-12? (161248)

Figures from the Office for National Statistics show that the deficit fell from 7.8% to 7.7%, so it came down.

T7. In the light of the Chancellor’s assiduous commitment to deficit reduction, what assessment has my right hon. Friend made of the Opposition’s spending plans, which appear to consist of more borrowing, more debt and a return to Labour’s failed policy of boom and bust? (161250)

Order. The Chancellor is not responsible for Labour policy. A very short one-sentence reply will suffice, then we must move on. Members must ask questions that are orderly, not disorderly.

T8. Why does the Office for Budget Responsibility say that the deficit this year will be the same as it was last year and the year before? Is not the truth that the Government’s stalled plan on jobs and growth has led to this appalling situation? (161251)

Let me tell the hon. Gentleman the appalling situation. It was an 11% budget deficit that the Opposition left us when they left office—11%. It is now going to be 7.7%. Borrowing—[Interruption.] The right hon. Member for Morley and Outwood (Ed Balls) asks how much money. I will tell him. The Opposition were borrowing £157 billion. We are now borrowing £118 billion. Borrowing is not going up. It came down from £157 billion to £118 billion, and if the right hon. Gentleman cannot do that maths, no wonder he left the country in such a mess.

The A14 Cambridge toll road is strategically vital for the golden economic triangle that is Cambridge, Norwich and Ipswich—

And indeed Colchester. Can my right hon. Friend the Chancellor confirm that he will have that at the forefront of his mind when the Treasury makes its capital allocations?

The A14 is a strategically important road, not just for my hon. Friend’s constituents, but for the whole country. It links ports to many of our largest cities. It is at the forefront of our mind. My right hon. Friend the Chief Secretary will set out on Thursday not just the capital plans for 2015-16, important as they are, but our long-term plans for road investment. Central to that is making sure that Britain has the economic infrastructure that we need to succeed in the modern world, and the A14 is part of that infrastructure.

T9. The Chancellor must be concerned about the spiralling costs of air travel, with fares currently up by 22%. Does he agree that we need to increase competition by making better use of spare capacity at regional airports? To that end, will he agree to look again at reforming air passenger duty in order to promote growth at airports such as Manchester airport? (161252)

The right hon. Gentleman and I represent both ends of the runway at Manchester airport and know how important it is to our constituents and to economic growth in the north-west. We looked specifically at whether to split APD into a tax for hub airports and a tax for regional airports, but we ruled that out because we do not think that it would be fair. We have stuck with the APD rates we inherited from the previous Government. With regard to the campaign being run on the subject, it is important to recognise that airlines often refer to charges and taxes, and many of the charges are those, such as fuel charges, that they have chosen to put on. I understand the argument, because we have collectively—it was the previous Government’s decision—taken a tough decision on APD rates, but I think that people should read the small print of the campaign.

Does my right hon. Friend share my concern that, notwithstanding the Alice in Wonderland economic world of the shadow Chancellor, a plan to borrow more will not actually bring borrowing down?

I completely agree that Labour’s plan to borrow more to borrow less is completely nonsensical. It really is extraordinary that a day after the Labour leader said that Labour had ruled out borrowing more, the shadow Chancellor committed the party to doing just that. It is a catastrophic position for his party to hold. Frankly, I do not think that the country will ever adopt it.

Given that the Chancellor appears unwilling to give us the answer that dare not speak its name on last year’s borrowing, I will ask him about the time available to debate the recommendations of the Parliamentary Commission on Banking Standards. A number of those recommendations require legislation before they can be given effect. The Government have allocated only one day on Report for the banking Bill. Although I respect their lordships, surely it should be the elected House that is given a chance to debate the recommendations. Will he reconsider and allow two days on Report?

First, I thank the right hon. Gentleman for his contribution to the Parliamentary Commission on Banking Standards, along with all Members of this House and the other House who took part in it. The very fact that the Commission has done its work speedily means that we can consider its recommendations for the banking Bill going before Parliament. Of course, allocation of time is a matter for the Leader of the House to make clear in his statement. The right hon. Gentleman has my commitment that over the course of the Bill’s scrutiny—it will go to the Lords and then come back to the Commons—there will be proper time to consider all the Commission’s recommendations and, if necessary, for the Government to draft changes in order to implement them. It is a parliamentary commission, which is what I wanted it to be, and it is of course right that Parliament should consider its report in detail.

In 2007, 50% of UK gilts were purchased by insurance companies and pension funds. Last year the figure had fallen to 22%, the lion’s share of UK gilts now being bought by the Bank of England. Does my right hon. Friend share my concern that we are funding public sector overspend by having one branch of the state write out IOUs for another? Can that be sustained?

The arrangements for quantitative easing are well established, and the decisions on whether to increase asset purchases are within the envelope that I set for the independent Monetary Policy Committee. I think that an active monetary policy has helped sustain demand over the past few years. It is anchored in a credible fiscal policy, the next stage of which we will set out tomorrow.

It is six months since the Banking Commission’s first report warned against a delay in ring-fencing, so it is disappointing that the ring-fencing of the banks might not be fully implemented until 2019. Can the Chancellor give one guarantee today—that the markets division of RBS, and comparable departments in other large banks, will be outside the retail ring fence and not liable to taxpayer assistance when the new rules are in place?

First, the timetable is one that John Vickers and his commission themselves proposed. Secondly, it is not for me to make individual decisions about individual banks; that is for the boards of those banks and, of course, the regulator. But the whole purpose is to insulate the retail bank from things that go wrong in the investment bank and, above all, to make it possible for the person doing my job to be able to resolve the retail bank and keep the retail operations going without having to bail out the investment banking arm. Indeed, that whole problem of “too big to fail” is something we need to deal with.

It is the Government’s policy that, to cover cutting the Army to its smallest size since the battle of Waterloo, people should be encouraged to join the reserves. Leading by example, will the Chancellor of the Exchequer say how many members of his staff have joined the Territorial Army since January this year?

I can tell the hon. Gentleman that the answer is none. He is passionate about the issue, which he has raised before. I can also confirm that the Treasury implements the policy of the Government—to make sure that all reservists who request a 10-day special leave on a paid basis get it.

On infrastructure investment, there is widespread disquiet—including in the National Audit Office, it seems—about the management of the Government’s broadband investment programme. Does the Chancellor agree that it is essential to harness competition effectively in delivering infrastructure investment?

Our programme of investment in rural broadband is being delivered in every part of the United Kingdom, and it is on track for delivery. We continue to look at the capability of Government Departments to deliver infrastructure projects effectively. My noble Friend the Commercial Secretary to the Treasury has been undertaking a review of these matters and will set out the conclusions shortly.

This morning, it was Labour party policy to cut pensions to spend more on welfare. We have just heard that the party now supports the triple lock. Is the Chancellor optimistic that by tea time it might support our policy on controlled welfare spending? [Interruption.]

The hon. Lady was very difficult to hear because there was so much noise from the Opposition Benches, but fewer than 10 minutes ago I stressed that questions should be about the policies of the Government, not the Opposition. It is a pity to finish on a bad note, but Members really ought to establish the right habit early in their parliamentary careers. We will, I am afraid, have to leave it there. This is a box office occasion, and demand tends to exceed supply.

Points of Order

On a point of order, Mr Speaker. The figures produced on Friday by the independent Office for National Statistics show that borrowing rose from £118.5 billion in 2011-12 up to £118.7 billion in 2012-13. Is there a danger that the Chancellor may have inadvertently misled the House in claiming that the deficit had fallen? Would it be appropriate for him to correct the record now or should he make a statement today correcting the record and saying that borrowing has not gone down but up?

Every right hon. and hon. Member is responsible for the content, including the accuracy, of his or her answers. I know that neither the shadow Chancellor nor the Chancellor would seek to draw me into a debate on substantive matters. That would be unworthy, and neither of them is an unworthy individual.

The shadow Chancellor has raised his point of order. There is an opportunity for the Chancellor to respond if he wishes—[Interruption.] Order. But he is under no obligation to do so. I have a suspicion that these matters will be aired further in the course of the week, and perhaps in weeks, months and indeed years to come. We will leave it there for now.

On a point of order, Mr Speaker. Last week I received a response from the Chief Secretary to the Treasury to my written question on how many occasions Ministers have signed off special severance payments for NHS employees in the past year. He said that it would cost too much to give me that information. How can the Government possibly claim to want an end to the culture of secrecy in the NHS if they are covering up their complicity in these pay-offs? Is there anything you can do to intervene, Mr Speaker?

I will make two points in response to the hon. Gentleman. The first is the point that I have just made—that all Members, including Ministers, must take responsibility for the content of their answers. My second point is that if the hon. Gentleman is dissatisfied with the answer because he thinks that it is uninformative or in some way lacks credibility or plausibility, it is open to him to take up his concern with the Procedure Committee. The House will doubtless be aware that the Procedure Committee, under the auspices of its indefatigable Chairman, the hon. Member for Broxbourne (Mr Walker), is looking at the whole issue of answers to parliamentary questions, and I feel sure that he and his colleagues on the Committee will be happy to hear representations from the hon. Gentleman. That response is intended to be helpful to all Members of the House.

On a point of order, Mr Speaker. I am sure that you will have noticed that I was trying to catch your eye during Treasury questions. On 12 March, the Financial Secretary to the Treasury told me that the case of my constituent, Mr James Boyle, with Clydesdale bank was being looked into. Clydesdale bank has since written to me saying that, no, it has not been reviewed or looked into. Could the Speaker tell me whether the right hon. Gentleman has perhaps inadvertently misled the House?

The hon. Gentleman’s use of the point of order procedure is ingenious, but perhaps a tad cheeky. He is seeking to ask now the question that he did not have the opportunity to ask earlier. If we were to proceed on that basis, Treasury questions would, in effect, be at least doubled in length. The hon. Gentleman has made his point. I have no idea whether the Minister in any way feels that his reply to him requires revision or reconsideration in the light of the verdict of the bank. It has to be said that the expression “looked into” is a commonly deployed term that has about it a certain vagueness, and it therefore lends itself to a number of different interpretations. It would be inappropriate for me to suggest that anyone has misled the House, and I am certainly not doing so. If the hon. Gentleman wishes to take the matter up, he must correspond further with the Minister or hope to be luckier at Treasury questions in future.

Opposition Day

[4th Allotted Day]

Lobbying

[Relevant document: Second Report from the Political and Constitutional Reform Committee, Session 2012-13, Introducing a statutory register of lobbyists, HC 153.]

I beg to move,

That this House notes the absence of a Bill to provide for a statutory register of lobbyists in the Queen’s Speech; expresses its concern at the damage which may be inflicted on the reputation of the House in the absence of statutory regulation; and calls on the Government to immediately begin cross-party negotiations with a view to introducing a Bill before the summer recess, which would provide for the creation of a register for all professional lobbyists, with a clear code of conduct which is backed by sanctions in the event of egregious breaches of the code.

Let me start by entirely accepting that lobbying is a normal part—in fact, an essential part—of an active democracy, and that includes commercial lobbying. However, it has been clear for some time that the professional sector of the industry needs to be properly regulated. The Prime Minister, when he was Leader of the Opposition, said that lobbying is

“an issue that crosses party lines and has tainted our politics for too long”

and that it is

“an issue that exposes the far-too-cosy relationship between politics, government, business and money.”

We agree with him.

I will give way, but not yet.

The subject of today’s debate could not be more important for the reputation of the House of Commons, for every single right hon. and hon. Member knows in their heart of hearts that the perceived integrity of politicians is at an all-time low. The Prime Minister’s prediction that lobbying was the

“next big scandal waiting to happen”

has sadly proved to be all too correct. [Interruption.] It may be one of the few things he did get right, as my hon. Friend the Member for Barnsley East (Michael Dugher) says. Knowing that this was going to happen, we ought to have moved rigorously and rapidly to ensure that our democracy emerged cleaner and with a higher reputation than it currently has.

If we can, we ought to handle these matters in a non-partisan manner. It is therefore with some regret that we raise lobbying reform on an Opposition day, which is usually a political knockabout. It is particularly disappointing because it appeared that a cross-party consensus had begun to emerge that something needed to be done. In fact, by the time the coalition agreement had been signed, all three main parties had agreed to legislation and to the creation of a statutory register, but that was more than three years ago. Unfortunately, all the Government have done since then is to have a long, slow consultation followed by a White Paper, and then another long, slow consultation.

When the reshuffle took place in September 2012, formal responsibility for lobbying reform had been totally removed from ministerial responsibilities. The Government simply forgot about lobbying reform.

I will give way in a moment.

After the reshuffle, not a single Minister was left with a formal duty to bring forward the reform to which the Government had committed themselves. When we called this Opposition debate, we could therefore have had a sweepstake in the office on which Minister would speak on behalf of the Government, because none of them had formal responsibility for lobbying after the reshuffle. At the top of our guess list was the Deputy Prime Minister, but he was not too keen. In fact, he is nowhere to be seen this afternoon. We then thought that it might be my opposite number, the Minister for the Cabinet Office, because that is where the Bill is supposedly being drafted. He is nowhere to be seen either. We then thought that it would have to be the Minister for political and constitutional reform, the Parliamentary Secretary, Cabinet Office, the hon. Member for Norwich North (Miss Smith). She is in the Chamber, but I see that she will not be speaking. None of the above will be responding. Very unusually, the Leader of the House will be speaking on this Opposition day. It seems that he was the last one standing when the music stopped.

Getting back to the subject of the debate, which is lobbying, does the hon. Gentleman agree that it is not right for parliamentary passes to be given to lobbyists?

The funding of political parties is being discussed—[Interruption.] Let me come to the point. That matter is being discussed in another place on a cross-party basis. Financial relationships between political parties and lobbyists clearly ought to be a matter for regulation. I believe that financial relationships between individual Members of Parliament and lobbyists should be outlawed, but I will come to that point in a minute.

I chair the Political and Constitutional Reform Committee, which has looked into this matter at length. It must surely be of concern to all parliamentarians and to Members from all parts of the House that the Government have failed to respond to a report that was published almost a year ago. Rather than legislate in haste, should we not look at this matter in a parliamentary way, with pre-legislative scrutiny and a proper response to a Select Committee that was elected by Members from all parts of the House?

I pay tribute to the work of my hon. Friend and all the members of his Select Committee. They have produced important recommendations. It would be helpful if we had sight of the Bill that it appears will emerge in due course, so that there could be pre-legislative scrutiny. It is time that we saw some progress on this matter.

I welcome the fact that the Leader of the House will speak this afternoon because, although he is not listening to me, he is a decent parliamentarian. His duty as the Leader of the House is to protect all hon. Members, as well as the reputation of the House as a whole. I hope he will drive through the necessary process of lobbying reform.

I thank my hon. Friend for giving way. With all deference to my hon. Friend the Member for Nottingham North (Mr Allen), the Chair of the Political and Constitutional Reform Committee, the Public Administration Committee published a report several years ago in the previous Parliament recommending a register of lobbyists. Also in the previous Parliament, I tabled an early-day motion that received more than 120 signatures from all parts of the House. The Government cannot forget these things.

I agree entirely with my hon. Friend. There has been pressure for something to be done on lobbying for many years.

In the three years since the coalition agreement was signed, we have had nothing but delay, obfuscation and prevarication, and the Government are at it again today. The Government’s amendment does not clearly indicate that they will produce a lobbying Bill, and that is shabby politics.

I will give way to the hon. Gentleman, but when he rises to his feet I invite him to say whether a lobbying Bill should be introduced, without any further obfuscation or prevarication of the type we have seen in the past three years—yes or no?

I thank the hon. Gentleman for taking an intervention. He talks about obfuscation and delay, but I happen to remember that there was a Labour Government for 13 years. Will he tell me what happened to the idea of a lobbying register in those 13 years?

The hon. Gentleman would have a powerful argument about the previous Administration but for the fact that throughout the whole of that period the Conservative party argued for a voluntary register. Even as late as September 2009, the right hon. Member for Horsham (Mr Maude), who became my opposite number, was arguing in the trade press that there should be a voluntary register. In March 2010, my right hon. and learned Friend the Member for Camberwell and Peckham (Ms Harman), the deputy leader of our party, said that we had tried a voluntary register but it did not work, so we now needed to move towards legislation. In its manifesto, the Labour party clearly committed itself to a statutory register, but what did the Conservative party manifesto say? It said that the Conservative party wanted to persevere with a voluntary register. For the whole of the 13 years we were in office, it is clear that the Conservatives were pressing us not to legislate, and the fact is that in the past three years they have done nothing whatever to legislate.

I am grateful to the hon. Gentleman for giving way. Of course, what he is telling the House is that the Labour Government did nothing for 13 years. Two months before the general election, when they no longer expecting to be in power, they said that they might do something in the future. He said that the Government’s amendment was not clear about our commitment, but it

“welcomes the Government’s commitment to bring forward legislation before the summer recess”—

I am about to say when: before this summer recess. For the benefit of the hon. Gentleman that is 18 July, not next summer recess:

“before the summer recess to introduce a statutory register of lobbyists”

within three years. That was in the coalition Government’s programme. His Government did not do anything.

The amendment goes on to talk about all kinds of other extraneous matters. The truth is that the Government are seeking to obscure the nature of the debate that we need to have this afternoon. This debate is about lobbying reform. Will there or will there not be a lobbying Bill that will create a serious register with a code of conduct?

I thank my hon. Friend for giving way. He earlier quoted the Prime Minister on the “next big scandal”. Does he agree that it will be a scandal with planning permission, for both Government and Parliament, if we fail to legislate and to legislate robustly—not a light-touch statutory register, but robust legislation?

My hon. Friend makes an important point and does so more succinctly than I have been doing.

The Government’s strategy has been clear: to kick the whole issue into the long grass for as long as possible and then to try to confuse and obscure the true issues. Only last month, we had the Queen’s Speech in which there was no mention of lobbying reform. It is only now, because of recent unfavourable headlines, that my opposite number finally said that he wanted to see some lobbying reform. We shall have a look later at what sort of lobbying reform that might be.

I will, but will the hon. Gentleman tell me whether there will be a lobbying Bill before the summer recess?

If the hon. Gentleman took the trouble to read Hansard, he would have noticed that a lobbying Bill was introduced yesterday, so there is already a lobbying Bill on the Order Paper from his hon. Friend the Member for Dunfermline and West Fife (Thomas Docherty). However, if this issue was so pressing at the time of the Queen’s Speech, why did the Labour party not raise it then or table an amendment to that effect? Or has it just jumped on a bandwagon?

If there are any more interventions of that poor quality, I will not take any more.

I wrote an article in The Guardian in January 2012, using those three words: delay, prevarication and so on. It is simply not good enough to pretend that we have not been demanding some form of legislation for at least three years. The truth is that the Government have delayed and even this afternoon, as we shall see, they are attempting to obfuscate the true issues. A Bill was introduced yesterday but it was in the name of my hon. Friend the Member for Dunfermline and West Fife (Thomas Docherty), a Member on this side of the House.

I hoped—obviously it was a vain hope—that this could be a non-partisan debate. Our reputation as a political class is now at an all-time low. Lobbyists needs to be made to operate in the clear light of day, so that every citizen can see and know how and why decisions are taken. They also need to see how much is being spent behind the scenes by commercial lobbyists to influence decision makers, and they need to see how that money is being spent. Nothing less will do. Let me illustrate the point with a case.

I said that I would not be too partisan so I will not name the individual. Someone may work out who it is; some might be quicker than others. I shall refer to an Australian gentleman. In an Ashes summer, one would have thought that the Government would be on the British side rather than that of the Australians. He shall be nameless, but he is a highly paid adviser to the Prime Minister. Reportedly, he had discussions at Chequers prior to the Queen’s Speech with the Prime Minister and the Chancellor. [Hon. Members: “Patricia Hewitt?”] I do not think that she was a gentleman, although she was many things.

When the Queen’s Speech was delivered, it transpired that the Government had dropped all reference not only to lobbying legislation but to plain tobacco packaging and minimum alcohol pricing, all of which had been promised. The problem arises when the public find out that this very same Australian is also and at the same time the chairman and managing director of an active lobbying company with an office here in London. The company has actively lobbied in Australia against plain tobacco packaging and against minimum alcohol pricing.

I do not wish to accuse this gentleman of having behaved with any impropriety. Arguably—I do not know—he may have excused himself from the discussions with the Prime Minister at Chequers when the matter of a lobbying register came up. He might also have left the room when tobacco packaging was mentioned and done so once more when alcohol pricing was discussed. I do not know. But his company failed to register itself on the voluntary register of lobbyists in Australia and his company is not on the voluntary register in the UK. Therefore, we have no idea who his clients are, what their objectives are or how much money is being paid.

I am quite quick on the uptake and I have an inkling as to who the hon. Gentleman may be talking about, but will he make it clear that this person is a party employee, not a Government employee, and that the arrangements are very similar to those of Charlie Whelan, Deborah Mattinson, Derek Draper and Alastair Campbell and that it would be duplicitous to say that they are in any way different?

I quoted the Prime Minister at the beginning of my speech. He said that this is a problem that affects all parties and has to be resolved by all parties. I take that point entirely.

Referring back to the gentleman I am talking about, if there were a statutory register in place—as there would have been if Labour had won the last election—we would undoubtedly know who was lobbying on behalf of whom, how much was being spent and on behalf of which clients.

Does my hon. Friend recognise that experiences during the banking crisis, with the charity sector and in other areas have taught us that there is a key difference between registration and regulation and that proposals that centre only on registration do not give us what we need?

That brings me to my next point. The Prime Minister said that sunlight is the best disinfectant and I agree, but I do not believe that the proposals mentioned in the amendment match up to the requirements. Let me explain why. There are three reasons. First, it was drawn in such a way as to cover only the narrowest section of third-party lobbyists, which is less than a quarter of the whole industry. What is the point of having a register of professional lobbyists that will not register all professional lobbyists? Secondly, there is no sign of the Government including in the Bill—it is certainly not in the White Paper—a code of conduct that would regulate the register. Even the voluntary code that covers the more ethical part of the industry already has a code of conduct. Why would we want to have a lower statutory threshold than that which the more ethical section of the industry already imposes on itself and its own members?

My third objection to the consultation, as the Government call it, is this: given that the Government are not proposing a code of conduct, there can be no sanctions applied against lobbyists who breach the code. Again, this is a lower standard than the industry’s existing codes. At the moment, any lobbyist working within the current ethical voluntary register is forbidden to engage in any improper financial relationship with any parliamentarian, which brings us to the bones of the issue.

If we have a voluntary register and someone breaches the code by having such a relationship with a parliamentarian, they will be removed from the register and will be unable to practise as a lobbyist. That should be written into legislation, but it is not envisaged in the White Paper.

The White Paper was

“possibly one of the most shoddy documents I have ever seen government produce.”

That is not my view, but that of a practising, professional lobbyist. Francis Ingham, director general of the Public Relations Consultants Association, said of the White Paper that the Government’s proposals were “unfit for purpose”.

The code of conduct, which my hon. Friend mentions, is habitually broken. For example—he mentioned this sort of contravention—the code says that parliamentarians should not be paid by lobbying companies that are signed up to the code, yet many Members at the other end of the corridor are directors of lobbying firms and so presumably are in receipt of payments. That breaks the code of conduct, but nobody does anything about it.

The problem is that many companies and lobbyists—the Australian I mentioned, for example—do not participate even in the voluntary code, which is why there must be statutory provision.

I will not take any more interventions, because I want to make some progress and other people want to speak.

It is not difficult to define what the House should do to regulate the industry—I agree that the point is to regulate as well as to register, as my hon. Friend the Member for Foyle (Mark Durkan) said—and it need not be burdensome for professional lobbyists. In fact, it takes about 20 minutes to provide the necessary information on the relevant form—I have tried it myself. The Bill should do four things. It should create a clear definition of professional lobbying; a statutory register of all those who lobby professionally; a clear code of conduct that forbids inappropriate financial relations between lobbyists and parliamentarians; and a strong system of sanctions when the code is breached.

All that is detail, however. We are simply asking for a commitment from the Government to agree to cross-party talks—in fact, that is really all our motion asks for—not as an excuse for failing to act, but as a prelude to rapid action to bring this matter into proper order. I hope that the Government’s amendment to the motion is not a signal that they intend to conflate a series of irrelevant issues in order to obfuscate further and therefore once more evade the central question before us this afternoon, which is: how are we going to reform and then regulate the lobbying industry? The noble Lord Wallace, who speaks for the Cabinet Office in another place, said that the Government did not intend to conflate these matters. I hope he is correct, but I fear he is not.

I agree with the hon. Gentleman, but does he agree that if we are genuinely to restore public trust in politics, the statutory register of lobbyists has to be the very minimum, and that we must do far more to tackle the excessive influence of corporate money and vested interests and to address things such as the invisible secondments of people from industry right into the centre of policy making here in Whitehall?

I will be speaking on other matters, as will other Labour spokespeople in due course, but the hon. Lady is right that we have to take big money out of politics across the board. We have proposals to do that, and have made some difficult recommendations on trade unions, if anyone is interested. It is the Government who are stalling the negotiations on party funding.

We need a lobbying Bill that will begin the process of cleaning up our politics and create a level playing field for all the professional lobbyists who behave ethically but are constantly undermined by a few who do not play by the rules. Nothing less will do. The Leader of the House must say whether he will continue to speak for the closed circle, the tiny elite, that seems to run our country and on whose behalf many professional lobbyists often work, or whether he will speak on behalf of the many by placing the professional lobbying industry on a proper footing.

I beg to move an amendment, to leave out from “House” to the end and add:

“notes the failure of the previous administration to implement a statutory register of lobbyists for 13 years; welcomes the Coalition Agreement commitment to regulate lobbying through a statutory register; notes the Government’s consultation paper on Introducing a Statutory Register of Lobbyists; welcomes the Government’s commitment to bring forward legislation before the summer recess to introduce a statutory register of lobbyists, as part of a broad package of measures to tighten the rules on how third parties can influence the UK’s political system; and looks forward to welcoming reforms that ensure that the activities of outside organisations who seek to influence the political process are transparent, accountable and properly regulated.”

I move the amendment on behalf of the Government both as Leader of the House, in which capacity I seek to protect and promote the reputation of the House, which the motion claims might have been damaged—I am sorry that my being here disappoints the hon. Member for Hemsworth (Jon Trickett), who wanted other Ministers to be here, but I am pleased to be here, and am here as a volunteer, not a pressed man—and as a Cabinet Minister who, with ministerial colleagues, has policy responsibilities in this regard. I, along with the Parliamentary Secretary, Cabinet Office, my hon. Friend the Member for Norwich North (Miss Smith), who has responsibility for political and constitutional reform, and the Deputy Leader of the House of Commons, my right hon. Friend the Member for Carshalton and Wallington (Tom Brake), will take responsibility for the forthcoming Bill, which, as the amendment makes clear, we have committed to introduce before the summer recess. It will be a Bill to implement our coalition programme commitment to introduce a statutory register of lobbyists and to promote transparency and an improved regulatory framework for the influence of third parties in the political system.

The hon. Gentleman wishes to intervene already. Perhaps he can add some clarity to his speech.

We might be able to foreshorten the debate, if the Leader of the House will say whether it will be a lobbying Bill.

It will introduce a statutory register on lobbyists. I listened to the hon. Gentleman’s speech—honestly, I did—but I regret that it sank further and further into the quicksands of confused thinking.

I shall try to be even-handed. I shall give way to my hon. Friend the Member for Sherwood (Mr Spencer) first.

It is good to hear that my right hon. Friend is here voluntarily and has not been lobbied, but, further to the intervention from my hon. Friend the Member for Dover (Charlie Elphicke), will he clarify whether he thinks it appropriate for hon. Members to give parliamentary passes to lobbyists?

That is an important point. My personal view is that we should not be doing that. I do not wish to engage you directly in this debate, Mr Speaker, other than by way of approbation. I thought it was absolutely right that you made your proposal in the light of recent press allegations. In particular, it was absolutely right that you considered the question of the number of passes made available to sponsors of all-party parliamentary groups and asked the Committee on Standards to consider the matter. I had planned to refer to that in a moment.

I want to underline my support for the idea that no lobbyist should have a parliamentary pass. In particular, nine Labour MPs sponsor parliamentary passes for union lobbyists. Does my right hon. Friend join me in condemning that, and will he say, here and now, that it is wrong?

My hon. Friend makes an important point. As Leader of the House, I have made it clear, along with my colleagues, that parliamentary passes should be made available for the purpose of supporting Members of Parliament in their parliamentary responsibilities, not for the benefit of third parties. It is not to conflate unrelated issues for the Government to focus on this issue of third-party influence in the political system. The process must be transparent. If third parties are involved, as inevitably they will be—that includes trade union relationships with the Labour party, which are absolutely fine—it must be transparent and not convert what should be a transparent third-party relationship into the undisclosed control of, or influence over, parliamentarians.

The right hon. Gentleman said in response to my hon. Friend the Member for Hemsworth (Jon Trickett) that the Bill would introduce a register of lobbyists. Will he confirm that it will also include the regulation of lobbyists?

The hon. Gentleman should talk to his own Front-Bench team. [Interruption.] I am just answering his question. The point is that it will introduce a statutory register of lobbyists, and in that sense it is a regulatory process. I will explain our approach later.

Did the hon. Member for Hemsworth really think it was sensible to have this debate just weeks before publication of the Bill? What was he thinking?

Yes, we are. Its purpose will be to introduce a statutory register of lobbyists, which is what we said in the coalition programme we would do.

If I may, I will make a little progress before giving way. I have not yet had an opportunity to respond to the hon. Member for Hemsworth, whose speech, I am afraid, sank into the sands of sloppy thinking. I probably should not be surprised about that—people said the motion was nothing but a piece of political opportunism launched off the back of recent reports—but I am a more generous soul. I looked for a purpose in the Labour motion. I hoped that the debate would show evidence of Labour thinking practical thoughts about how to promote a more open and accountable system. That hope was, however, not founded on experience. We know that Labour did not actually do anything about a statutory register of lobbyists for the 13 years it was in government. We are three years into this Parliament, and there have been 86 Opposition day debates, yet this is the first on lobbying.

We know why Labour did nothing about lobbying. The hon. Member for West Bromwich East (Mr Watson) said in October 2011:

“It was very, very, difficult to get right. We were persuaded by the industry that they would set up their own code”.

But Labour did not put in place the statutory register it now calls for, and it so lacked a view during this Parliament—notwithstanding what the hon. Member for Hemsworth has just said—that it did not even respond to the public consultation on the Government’s proposals that were published last year.

No one could be more aware than the right hon. Gentleman, as a former Health Secretary, that the tobacco industry lobby is one of the most powerful groups around this place, given its direct and covert campaigns to delay legislation to introduce plain packaging for its products, among other things. Will the Government ensure, if and when they get round to registering lobbying organisations, that such organisations will be required to reveal whose payroll they are on, to ensure greater transparency? For example, tobacco companies might finance third-party organisations as a front to promote their causes.

The hon. Gentleman and the hon. Member for Hemsworth have chosen the wrong person to attack on the question of tobacco control. When I was in opposition, I made it clear as shadow Secretary of State for Health that my party would not engage with the tobacco industry, and we did not do so. In government, I made it clear that we would comply with the international framework convention on tobacco control, which precludes the exercise of influence on our policy by the tobacco industry, and we do so. I was the person who sat down and talked to the Australian Health Minister, way back in the latter part of 2010, in order to understand what she intended to do, and I was the one who launched a consultation on standardised packaging for tobacco. I know that this Government are taking decisions in the best interests of the people of this country, including on health grounds, and that we are not taking them at the behest of any tobacco company.

Will the right hon. Gentleman clarify whether the Bill will include a statutory code of conduct that lobbyists will have to abide by?