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Commons Chamber

Volume 567: debated on Tuesday 10 September 2013

House of Commons

Tuesday 10 September 2013

The House met at half-past Eleven o’clock


[Mr Speaker in the Chair]

Oral Answers to Questions


The Chancellor of the Exchequer was asked—


1. What recent comparative assessment he has made of trends in real wages in the UK and in similar economies. (900219)

The hon. Gentleman asks about trends in real wages. The main deterioration in wages and salaries was from 2007 to 2009 when growth fell from 5.7% to minus 0.6%. This is a vivid reminder of the damage that the great recession did. The Government have taken continued action to help with the cost of living so that last year real household disposable income grew by 1.4%, the fastest growth for three years. Of course, however, these remain difficult times for families, and the only way to deliver improved living standards for the long term is a sustained, balanced economic recovery with low mortgage rates, more jobs and more income tax-free. Our economic plan is delivering that. The Opposition’s plan for more spending and more borrowing would make things worse.

Well, that is one of the most vacuous answers I have ever heard, and that is against some very stiff competition. In the past three years real wages in this country have fallen lower than in any G20 country bar one—we are second from bottom. For how long is that going to be sustainable?

Let us be clear: this country had one of the deepest recessions of any of the countries in the G20 or anywhere else. We had one of the biggest banking crises and our country has had to recover from that, but I point out that in the hon. Gentleman’s own constituency there are now 12,000 more people in work than at the time of the election, and unemployment is down by a third.

What contribution has real wage restraint in the private sector made to the surprisingly low level of insolvencies in the UK compared with our competitors, which is now enabling more firms to take advantage of the recovery than would otherwise be the case?

My hon. Friend is absolutely right that wage restraint in the private sector and the public sector has helped preserve jobs during the economic shock that we experienced under the previous Government. That is partly a credit to the labour market flexibility of the policies that previous Governments introduced in the 1980s and early 1990s and the last Government did not reverse. The wage restraint has helped us preserve more jobs than would otherwise have been the case in the public sector, which is why at least until recently it was supported by the Labour party.

23. Will the Chancellor confirm, however, that after three years of flatlining growth and with prices still rising faster than wages, working people are on average £1,500 a year worse off than in 2010? (900242)

People have been helped with their low mortgage rates which our credible economic policy is delivering. They are helped by the increase in the personal allowance—£600 this year, £700 next year. They will be helped by our tax-free child care, but above all they are helped by an economy that is turning the corner. The worst thing for living standards, the worst thing for household incomes, would be a return to the disastrous economic policies of the Labour party.

Does my right hon. Friend agree that the trend in real wages further emphasises the need to hold down social security spending?

Of course, the key thing about social security and welfare is that it should encourage people into work. One of the remarkable achievements of my right hon. Friend the Secretary of State for Work and Pensions is that the number of workless households is now at a record low in this country. That is a huge achievement. Since the Opposition have been raising all these questions about living standards and wages, perhaps they would like to hear what the right hon. Member for Birmingham, Hodge Hill (Mr Byrne), a member of their shadow Cabinet, has been saying. He said:

“From 2004 onwards…families on ‘median incomes’—millions of workers—…were feeling the strain…people were working just as hard as ever—but were not getting on”.

He presented his findings to the Cabinet in 2010 but they got buried:

“We picked it up too late. It was very late in the day, is the truth”.

The truth is that working families have paid the price for the three years of flatlining under this Chancellor. Prices have risen faster than wages for 37 of the 38 months that he has been in office. I have a quiz question for the Chancellor this morning. Can he tell the House which one of those 38 months is the odd one out and why?

First, may I welcome the hon. Lady back and congratulate her and her husband Nick on the birth of their baby, Anna?

There has been wage restraint in the public sector, but I thought that, as shadow Chief Secretary, the hon. Lady supported that. When she gave her speech about fiscal discipline before going on maternity leave, she supported wage restraint in the public sector. I am not clear whether she has changed her policy.

The right hon. Gentleman obviously does not get the bonus point. He might find the truth embarrassing, but I must tell the House that the only month in which real wages rose was the month when bank bonuses soared by 80%, as the highest paid took advantage of his tax cut for millionaires. Rather than cutting taxes for the richest, why does he not help families facing the cost of living crisis on his watch?

When the shadow Chancellor was the City Minister, bank bonuses were £14 billion a year. They are now a fraction of that. Indeed, the income tax rate in every year of this Government is higher than in any year of the previous Government. By the way, inequality is now at its lowest level in this country since 1986. We have taken difficult decisions and tough action to ensure that our economy turns the corner. All those things were opposed by the Labour party, but as a result, because of low mortgage rates, because of the large tax-free allowance and because we are creating jobs in the economy, we can hold out the prospect of an improvement in the long-term living standards of the British people.

Does the Chancellor agree that taking 2.7 million taxpayers out of income tax through a higher allowance—a Liberal Democrat policy—will help improve living standards?

It is a policy being delivered by a Conservative Chancellor and a Liberal Democrat Chief Secretary. The hon. Gentleman is right that together we have taken millions of the low-paid out of income tax. Of course, that is also delivering a tax cut to 25 million working people, and there is more to come next April. It is one of the ways that, by securing the economic recovery and having credible policies with the public finances, we can help people by, for example, increasing the tax-free allowance.

Family Incomes

The Government have published distribution analysis for all our fiscal policies at each fiscal event, and we are the first Government to do so. The most recent assessment was at the 2013 spending review, and the analysis showed that the richest 20% of households continue to make the greatest contribution to reducing the deficit, both in cash terms and as a percentage of their income.

I thank the Minister for that reply, although he completely failed to talk about the real issue that I was hoping to raise: the extent to which ordinary families are being hit incredibly hard by the Government’s policies. We are hearing from Citizens Advice that inquiries about food banks have risen by 78% over the past six months, and one in four families is having to borrow to provide school uniforms. What are the Government doing about those real issues affecting real people?

I must say that if the hon. Lady is genuinely interested in the challenges that families face, she should recognise the causes: Labour’s recession, the deepest in our post-war history; Labour’s record budget deficit, the deepest in our post-war history; and Labour’s bank bail-outs, the largest the world has ever seen.

With working families’ incomes on average 1,500 quid down and millionaires taking tax cuts, does the Minister really think that we are all in this together?

As the hon. Lady has already heard, all millionaires will be paying a higher tax rate under this Government than they did for the whole 13 years that the Labour party was in power. She should also welcome the tax cut we provided for the lowest income families, 25 million people, with 2.7 million taken out of taxation altogether. I note that the Labour party has recently talked about reintroducing the 10p tax rate, which they abolished. Well, I have news for it: all those people are now paying a 0% tax rate on that income.

The Times leads this morning on yet another banking scandal that has cost savers in this country billions of pounds. At the same time, bonuses in the financial sector have risen by 90% and ordinary families are really struggling. It is simply not working, so when will the Government step in and do something about the regular obscenities in the banking industry?

The hon. Lady should look up the facts. Bank bonuses reached their peak when the shadow Chancellor was City Minister; today they are almost one seventh of what they were at that time. The hon. Lady should welcome the measures we have taken to help working families. They have helped reduce interest rates and keep mortgage rates low, meaning that the average family with the average mortgage are paying £2,000 less per year than they did under the previous Government.

If it had not been for the Government’s council tax freeze, and if council tax had continued to rise on the trajectory set under the previous Government, the average bill would now be £200 higher. Does the Minister agree that the steps taken by the Government are helping hard-working families keep their council tax bills down?

My hon. Friend is absolutely right. That council tax freeze is helping families up and down the country, as are many other measures we have taken, such as the cap on rail fares.

Household debt peaked in 2008 at 170% of household income. Since then it has come down, but households are still very vulnerable to rising interest rates. Does my hon. Friend agree that any fiscal policy must give comfort to the bond markets in order to help the Governor of the Bank of England keep interest rates low and mitigate the effect of rising rates on households?

My hon. Friend is obviously referring to the fact that when this Government came to office, we had the biggest deficit in our post-war history. The previous Government were borrowing £5,000 a second—£300,000 each and every minute. We have reduced that deficit by a third and, as my hon. Friend suggests, that has brought confidence, investment and jobs.

Does my hon. Friend worry, as I do, that the worst outcomes for children are in those families where nobody is working? If so, is he as delighted as I am that our economy has generated 1.25 million new private sector jobs since 2010, thereby improving the prospects of millions of children?

My hon. Friend correctly highlights that the best way out of poverty is through work. As she says, the private sector has generated almost 1.3 million jobs over the past three years. In fact, it is the fastest rate of job creation in the G7.

17. The Chancellor said recently that he knew that times were tough and that family budgets were being squeezed. Why, therefore, did this Government choose to prioritise a tax cut for those on the 50% rate? (900235)

Perhaps the hon. Lady missed it, but we have made sure that the people who earn the most in our society are making the biggest contribution to the necessary measures we have to take to make sure that the country lives within its means. In each year of this Government, the richest will pay a higher tax rate than under the Government she supported.

Does the Minister agree that, come next April, a family where both parents earn wages will be £1,400 better off than they were in 2010, and that a child of theirs who works on the minimum wage—perhaps in the city centre of my constituency—will be lifted out of income tax altogether?

My hon. Friend is absolutely right. That is a big boost to family incomes. In fact, someone on a minimum wage who is working full time will find that their tax bill is more than halved as a result of this Government’s policies.

The reality is that, because of this Government’s warped priorities, women are paying three times more than men to bring the deficit down. Will this all-male Treasury team explain how that is helping families manage the cost-of-living crisis?

The hon. Lady knows all about unemployment, because she is probably thinking about the record rise in unemployment that took place in her constituency during the last term of the Labour Government. That record rise included men and women. In all categories it has fallen under this Government, and today more people, including more women, are employed in Britain than at any time in our history.

Does my hon. Friend agree that the single most important contribution to household earnings is having a job? Has he seen the latest data that show that the claimant count is now lower than in May 2010, that there are 500,000 vacancies, and that five jobs are being created in the private sector for every one lost in the public sector, leading the ManpowerGroup to say that this is a “game-changing year” for the UK jobs market? Is it not the truth that plan A is working and plan B is redundant?

As always, my hon. Friend speaks the truth very eloquently. The economy is growing. Of course there is a lot more work to do, but there is plenty of evidence that we have turned a corner.

Child Poverty

The Government have protected vulnerable groups as far as possible while urgently taking action to tackle the record deficit we inherited. Work remains the best and the most immediate way out of poverty, and the Budget took action to support families and make the tax and welfare system simpler, including further increases in the income tax allowance to take 2.7 million people on low incomes out of tax altogether.

The chief executive of Citizens Advice, commenting on the huge rise in inquiries about food banks, said:

“The combined impact of welfare upheaval, cuts to public spending, low wages and the high cost of living are putting unbearable pressure on many households, forcing them to seek emergency help putting food on the table.”

Is the Minister concerned by this evidence, which is backed up by the recent statistic showing that 300,000 children have been pushed into absolute poverty since this Government took office?

The hon. Lady did a lot of good work with Citizens Advice before she came to this House, so I think she shares with me a genuine interest in child poverty. If that is the case, she will recognise that the existing measure for child poverty is flawed. It is based on relative incomes and it produces perverse results. For example, according to that measure, during the previous recession—Labour’s recession, the deepest in our post-war history—child poverty fell by 300,000. The hon. Lady knows that that cannot be right, so if she wants to work with me to help develop a measure that actually works, I would welcome that.

Despite the Minister’s divisive rhetoric about benefits, two thirds of all children living in poverty have one or more parents in work, not out of work. Does he not accept that his inaction on prices and wages is not just hammering those young people but hammering the rest of us as well?

Work remains the best and the most immediate way out of poverty. The hon. Gentleman will be concerned that his constituency saw a 72% rise in unemployment during Labour’s last term in office. It has now fallen under this Government. He is rightly concerned about workless households, so he should welcome the fact that the number of children living in workless households is at an all-time low—the lowest since records began in 1996.

Thirty-two per cent. of Nottingham children live in poverty compared with a national average of 20%, and we have the worst affected local authority in the east midlands. For all the Government’s warm words on early intervention, the city’s early intervention grant has been cut by £2.8 million. Is it not the case that across the country this Government’s policies are making child poverty worse?

I have taken five questions from Opposition Members so far, and not one of them has mentioned plan B; I wonder why. It is not very nice for Mr B. The best way to deal with poverty is by tackling the causes of poverty, and work remains the best way out of poverty. The hon. Lady should welcome the fact that jobs are growing at a record rate in our country, with 1.3 million jobs generated in the private sector in three years and more people employed than at any other time in our history.

By any modern measure, my childhood was one of poverty, and strictly speaking I was homeless. The route out of poverty was provided by the creation of a sound economic environment and a belief in economic optimism. Does the Minister agree that that is as pertinent today as it was 30 years ago?

I absolutely agree with my hon. Friend. One of the many things we share in common, apart from both being west midlands MPs, is that by the official measure I was also homeless as a child. I agree with his assessment that the best way out of poverty is through work and a growing economy.

Another excellent way out of poverty is giving children from disadvantaged backgrounds the best education possible. How many children are benefiting from the £2.5 billion that has been put into the pupil premium, which will, in the long term, boost their educational chances and their chances of obtaining work?

My hon. Friend is absolutely right to raise education as another way of tackling the causes of poverty. Thousands of children up and down the country are benefiting from the pupil premium and the further educational reforms that are taking place, not least the focus we put on apprenticeships.

Is not the real truth about child poverty the fact that median hourly pay rose by only 0.3% a year between 2003 and 2008? The only real answer for the United Kingdom economy is for it to be a high-skill, high-value-added economy. Our school reforms, and in particular our poverty-busting university technical colleges, are the answer to the problem.

The question is about fiscal policy, so a very brief reply will suffice. We are grateful to the Minister.

Despite taking action to ensure the country starts living within its means again, the Government have found money in their budget, because of their fiscal policy, to spend on schools and education, and ensure we increase skills. That includes building more university technology colleges and pledging more funding to do so.

21. According to the Institute for Fiscal Studies, by 2020 an additional 1.1 million children will be living in poverty, which will completely wipe out the reduction in the number of children living in poverty made under Labour. Why do the Government’s choices give tax breaks to millionaires and send more children into poverty? (900239)

I am sure the hon. Lady knows that the best way out of poverty is through increased pay and employment. I therefore do not understand why she does not welcome the fact that jobs are being created at a record rate throughout the economy, including in her constituency where I note that during Labour’s last term, youth unemployment rocketed by 120%. It is down by 14% under this Government.

My hon. Friend is right to say that the way out of poverty is to work. Does he agree that by reskilling people we can ensure that British people fill highly skilled jobs, and not rely on mass immigration to fill the skills gap?

I agree with my hon. Friend. The best way to get more British people into British jobs is to ensure they have the skills to do those jobs. That is exactly what the Government are focused on.

Families up and down the UK who are struggling with the cost of living simply will not recognise the rosy picture that the Minister is painting. Is the reality not shown in a recent report from the Child Poverty Action Group and the Joseph Rowntree Foundation, which states that changes brought in by this Government mean that families on low wages now have less than they need for a minimum acceptable living standard? That failure is on this Minister’s watch. Is it a record he is proud of?

It is not clear what the hon. Lady is proposing. Is she saying that she is against some of the changes we have made on welfare? Is she pledging more spending, more borrowing, and more debt? The Labour party need a policy on those issues. Our policies are clear: to deal with poverty we are focused on trying to generate even more growth. The economy has turned a corner; there is more to do but jobs are being generated in Britain at a record rate.

Land Tax

The Government have no plans to introduce a land value tax at this time. In our view, the complexity and cost of administering such a tax, and, more importantly, the likelihood of a significant increase in tax bills for many council tax payers, particularly those such as pensioners with liquid assets, means that such a proposal is not tenable.

I thank the Minister for his response, but given that we have massive increases in house prices, massive increases in the value of farmland and builders and supermarkets land-banking and pushing up the price of land, and given that 1% of the population own 69% of our total land mass, is it not time for action? Do we not need a land tax?

The hon. Gentleman will be aware that some of the construction numbers of late are much more encouraging, and the Government are taking action to improve house building, including our Help to Buy proposal. Believe it or not, not every problem this country faces can be solved by another tax.

Small Businesses

This year the Government are taking further steps to help small businesses. We have increased the investment allowance tenfold, and from next April we will introduce a new employment allowance worth £2,000 for every small employer, taking around one third of small employers out of employer national insurance contributions altogether. From next Monday we will help small businesses get the best deal from their banks by guaranteeing that they can switch their accounts within seven days. That service will also be available to families, which is real choice and competition in banking being introduced by the Government.

I thank the Chancellor for that answer. I know he will want to welcome the new business centre I opened recently in the centre of Winchester, which is part of our plans to find and develop new start-ups. That is all happening in the light of increased business confidence, increased takings and reduced vacancies on the high street. Will he therefore join me in backing Winchester city council, which is working strongly in partnership with the business improvement district to help drive recovery in my area?

I certainly welcome that. I met members of my hon. Friend’s local authority who came to Downing street to tell me about the business improvement district. That involves the local council, the local MP and local businesses working together to attract jobs and investment to Winchester. I congratulate him on the leadership he has shown.

In the past year, 502 small businesses have been set up in my constituency, which is a 12.6% increase on the previous year. Does the Chancellor agree that further extending rate relief to new small businesses will both help them and inspire other people to set up new businesses in the economically vibrant part of the world that I have the privilege to represent?

We have had rate relief for small businesses—I have announced that in previous fiscal statements, and my hon. Friend must wait for further announcements—but we are also helping businesses with the employment allowance. That major change in the tax system means we are taking a third of small businesses out of employer NICs. Four hundred and fifty thousand small businesses will benefit, which I hope is welcomed on both sides of the House.

Given the need to underpin local economies, what progress has been made toward reviewing the current approval criteria for a simplified import VAT accounting scheme? That would enable new businesses, but particularly import businesses, to be underpinned.

I will write to the hon. Lady on her specific point, to which I do not currently have an answer. However, more broadly, the Government are open to ways in which to make the VAT system and the business tax system simpler. We have created the Office of Tax Simplification, which has specifically looked at the burden on small businesses. I will take what she says as a submission.

I wonder whether I could yank the Chancellor out of his complacency for one moment. Is he aware that, in the year since the funding for lending scheme was announced, lending to small and medium-sized businesses is, on the most recent figures, negative? Is he aware that that is symptomatic of a broader failure on investment under his reign?

Gross lending is up under the funding for lending scheme, which we operate jointly with the Bank of England. We are aware of the specific challenge of small business finance, which is why, just before the summer, with the previous Governor, we launched a focus of the scheme on small business funding.

The hon. Gentleman says investment is failing under this Government. He is an MP from the midlands. Given his personal history, I would have thought he would welcome the announcement by Jaguar Land Rover of the 1,700 jobs being created in Solihull. As he well knows, four years ago there was a choice of closing either Castle Bromwich or Solihull. Not only are both open, but a huge investment in the new technology of ultra-light cars is coming along with 1,700 new jobs. The hon. Gentleman is a midlands MP and used to work for the company, so I would have thought he would welcome that.

19. I met the Braintree district business forum last week. The feedback was very positive—the economy is turning around and demand for business is growing—but, as businesses grow, they face a working capital squeeze. What are the Government doing to enable businesses to access working capital more easily? (900237)

The business bank is up and running, and £300 million is in the market to help support small business lending. My hon. Friend has gone around the country promoting some of the investment tax breaks we have provided, such as the seed investment tax break, which provides that crucial, early-stage capital so that the many businesses now being created have the money to grow.

I am glad the Chancellor mentioned the banks. The small businesses in my constituency report that the predatory and risk-averse nature of the banks is still their biggest problem. One particular company has large contracts, including one in Parliament, which the banks have funded and which has just got started on time—the company is tooling up. However, the bank is now talking about stripping its assets and threatening its viability. What can the Chancellor do to stop banks in this country being so risk-averse and get them to support business?

That is a good question from the hon. Gentleman. The repair of the financial system perhaps remains one of our biggest domestic economic challenges. We are conducting a review of the future structure of the Royal Bank of Scotland and I will report back to Parliament this autumn on that specifically. More generally on the banking system, the funding for lending scheme, as a monetary intervention, has helped to support lending. Account switching, which will be possible from next Monday as the result of Government pressure, will help small firms to change their bank account much more easily and, as a result, get a better service.

20. Unemployment in Brighton Kemptown is falling, although there is still much to do. Does my right hon. Friend agree that the £2,000 cut in jobs tax will help small businesses in Brighton take on more staff and get even more people into work? (900238)

My hon. Friend is absolutely right. It is not just jobs that are being created in Brighton; there has been an increase in the number of businesses being created, too. Employment allowance is coming in and people will see that as a real way of helping small businesses with the cost of labour. That should help them employ more people and help the people who are already employed. That is just one example of what we are doing to ensure that this is a balanced private sector recovery, and that we do not repeat the mistakes of the past.

Her Majesty’s Revenue and Customs expects businesses to provide real-time information, which a lot of small businesses find either very difficult or impossible to do. What help will be put in place to ensure that they are able to move on to the new system? Even if universal credit eventually comes into being, it will depend on that information.

Some 90% of businesses are on real-time information. Of course, the transition to any new system is a challenge, but the new system will be much easier for small businesses, and all businesses, to keep an accurate account of their tax payments, and that will help them. We have phased it in so that small businesses, in particular, have time to prepare. This is a real improvement on a tax system that was many decades old and had not kept up with modern technology.

Will the Chancellor consider abolishing business rates for small retail establishments, and to make that fiscally neutral by putting a levy on out-of-town car parks?

I am not sure about the out-of-town car park part of the question, because I want to encourage retail and employment wherever they happen. We are aware of the challenge on our high streets, particularly for small retailers. The Government have, in previous Budgets and autumn statements, extended relief from business rates for small businesses, which has meant that many of the smallest firms do not pay business rates. I will take the suggestion as a good submission for a future fiscal statement.

Mortgage Guarantee Scheme

The Government are making good progress in working with mortgage lenders to introduce the mortgage guarantee scheme from January 2014. The scheme would allow people who can afford repayments on a mortgage but do not have a large deposit to own their own home.

The dangers of feeding a housing bubble are real. According to the Office for National Statistics, house price inflation in Greater London is four times higher than in the rest of the United Kingdom. Will the Minister confirm his assessment as to the extent that funds spent on the scheme in Greater London will exceed their pro rata share, based on the UK’s population?

The scheme comes into effect in January. Government Members believe that home ownership should not be reserved for the well-off and the children of the well-off, which is why we are introducing this measure. The average deposit has risen to 79% of the income of a first-time buyer. That is why we are introducing the scheme: we are determined to help ordinary working people who want to own their own home.

I recently met a constituent who purchased a one-bedroom flat at the height of the boom when she was single. She is now married and expecting her first child. They are desperate to move but are in negative equity and cannot move, despite having two good incomes and good savings. Will the mortgage guarantee scheme offer a positive solution for my constituents, and how can they access the scheme?

Yes it will. The scheme is available to purchasers who already own their own home but want to move to a bigger one, perhaps because, like my hon. Friend’s constituents, they have had children. They are currently trapped in the home they have bought, and that is why the scheme we are introducing is important. It will allow people who can afford to pay the mortgage to achieve their dream of home ownership.

The mortgage guarantee scheme does nothing to help housing supply. In those circumstances, many organisations suggest that the scheme will be inflationary. What is the Minister doing to reassure those who are concerned that the scheme will increase house price inflation?

The hon. Gentleman is wrong to say that the scheme has done nothing to encourage supply; 10,000 homes have been started under the current scheme. The Home Builders Federation itself has said that a lack of affordable mortgage availability remains the biggest constraint on housing supply. That is a problem; we are solving it.

Foreign-based Companies (Corporation Tax)

7. What his policy is on the payment of corporation tax by foreign-based companies; and if he will make a statement. (900225)

The Government are committed to creating the most competitive corporation tax regime in the G20 to support investment that drives economic growth. We want a system that is stable and fair with all companies abiding by the rules and making their contribution. We are cutting the rate to 20% by 2015, clamping down on avoidance and aggressive tax planning and driving forward multilateral efforts to modernise the international tax framework.

Will my hon. Friend join me in celebrating the water industry, a flagship industry since its privatisation over 20 years ago? Will he explain to the House the benefit to consumers of deferring corporation tax against current foreign investment received?

We need investment in infrastructure, including water and my hon. Friend is right to highlight the work being done on that. We want a tax system that ensures that everybody pays their fair share, but also encourages that type of investment.

Tax Avoidance

The Government continue to make strong progress on tackling tax avoidance. Following on from our announcement at Budget 2013, we have introduced the UK’s first general anti-abuse rule, which will act as a significant deterrent to abusive avoidance. We have completed our consultations on avoidance using partnership rules and the use of offshore intermediaries, and we have just launched a consultation on new information requirements and penalties for the promoters of tax avoidance schemes.

I would like to wish the hon. Member for Amber Valley (Nigel Mills) good luck for his forthcoming wedding. I trust all will go as smoothly as his question.

Thank you, Mr Speaker.

I welcome the measures that the Minister has announced. My constituents want to see everyone paying the tax they owe on their income. Does the Minister think that any measures are required to make sure that trade unions do that as well?

First, I add to the words of Mr Speaker and, perhaps, wish good luck to my hon. Friend’s future wife. He draws attention to a story that we have seen in the last few days: allegations of tax avoidance against Unite and against Labour. Maybe the links between the two are closer than we realised.

While it is right that we all press down on active tax avoiders, a number of small businesses that find themselves categorised as such are simply unable to pay the correct amount. Does the Minister think that the average of 29 minutes that it can take for the Revenue to answer a telephone call, the fact that the tax code has reached 11,500 pages, the closure of local offices and the reduction in Revenue headcount—things for which he is responsible—might be contributing to this, at least in some way?

On support for small businesses, HMRC has in place a time-to-pay arrangement. On the service that is provided by HMRC, it is always seeking to improve and deal with telephone calls and letters as efficiently as possible. But we have to bear in mind that the yield that HMRC is bringing in is increasing by £10 billion over the course of this Parliament. HMRC’s performance on phone calls and letters is better than it was when we came to office. It has made considerable progress and that should be acknowledged.


15. What recent assessment he has made of the contribution to the economy made by the manufacturing sector. (900233)

Manufacturing output grew in the most recent quarter by 0.7%, contributing to the growth of the economy as a whole. Growth was broadly based. In June, output increased in all 13 of the published manufacturing sectors, the first time that this has happened since 1992. The whole House will welcome today’s news that Jaguar Land Rover is to create a further 1,700 new jobs in the west midlands and 24,000 jobs in the supply chain.

I thank the Minister very much for that answer. Does he agree that the news that manufacturing output has increased to its highest level in 20 years, as exemplified by firms such as Renishaw, Xograph and Delphi in my constituency, represents a good start to the rebalancing of the British economy?

My hon. Friend is absolutely right. I pay tribute to him for doing his bit in an important cluster of manufacturing businesses in Stroud. He has invented and promoted the festival of manufacturing and engineering in Stroud, which will take place between 11 and 15 November, helping to give a further boost to the already successful companies in Gloucestershire.

According to the Office for National Statistics, Corby is the manufacturing capital of the UK, but over the past three years our businesses have survived despite this Government’s policies not because of them. Will the Minister look again at the decision to pick winners in the boat-building industry and not to award money from the regional growth fund to my local firm, Fairline Boats?

The hon. Gentleman is wrong in his assessment. He failed to say that the 13% collapse in manufacturing happened during the last three years of the previous Government. In the first three years of this Government, it has recovered. He mentioned the regional growth fund—paying tribute, I assume, to another successful intervention, which has helped firms such as JLR and will help others, including in the east midlands.

National Infrastructure Plan

The Government will invest £300 billion over the next Parliament on infrastructure projects, including a pipeline worth more than £100 billion, and covering investment in transport, schools, science, housing and flood defences.

Since the Government took office, tens of thousands of jobs have been lost in the construction sector. I am deeply concerned that more than 80% of the Treasury’s infrastructure projects have not yet even started. Can the Minister explain to the House why there has been such a delay and what he will do to kick-start the process?

It is interesting that the hon. Lady did not mention the Armitt review, which was set up by the shadow Chancellor. Perhaps it is because Mr Armitt concluded that there was an economic crisis when this Government took office and she does not want to draw attention to it. However, she will be reassured to know that the Government take infrastructure investment very seriously. It is a top priority, which is why public investment under this Government is higher in each year of this Parliament than under the previous Government’s plans, as well as being higher as a percentage of national income.

A crucial part of our national infrastructure is broadband for the 21st century. Will the Minister join me in congratulating Worcestershire county council on its excellent plans to put 90% of homes and businesses on superfast broadband?

My hon. Friend is right to draw attention to what is a hugely important plan for the residents of Worcestershire, which includes my constituents in Bromsgrove. We are right to make that investment, because it will make a real difference.

Income Tax

18. What estimate he has made of the annual value of the reduction in the additional rate of income tax to 45% to a person earning £1 million per annum. (900236)

The cost of reducing the additional rate of income tax to 45% is set out in table 2.2 of Budget 2013. We have not broken down the impacts on individuals by income ranges because of the significant behavioural response associated with the additional rate of income tax. The behavioural response is estimated in aggregate and reflected in the costing.

Yesterday, yet another food bank opened, in Methil in my constituency. Fifty volunteers are doing an exceptional job in difficult circumstances. One of the volunteers asked me, “Why has the Chancellor prioritised tax cuts for the very rich, instead of using the revenue to alleviate family poverty in our society, and in Methil in particular?”

I would hope that the hon. Gentleman said in response that in the 2012 Budget we saw increases in stamp duty on high-value properties and a clampdown on tax allowances and reliefs for the wealthiest, all of which raised far more from the wealthiest than the 50p rate, which was failing to raise revenue.

Topical Questions

I thank the right hon. Gentleman for that extensive answer. He was boasting yesterday that he had saved the country, while we have people struggling with electricity bills, transport costs and food prices are up, people on the same wages are getting less and less for their money, and zero-hours jobs mean that people cannot get a mortgage or a loan, unless it is a payday loan. What would the Chancellor say to those people?

I could give a more extensive answer and point out that, in Glasgow North West, which the hon. Gentleman represents in this Parliament, the claimant count is down this year and employment is up. In other words, we are turning the corner and putting right what went so disastrously wrong under the previous Government.

We have now had 50 minutes of this Treasury Question Time, and we are hunting for a Labour economic policy. We have not heard one advocated yet; maybe we will get one soon.

T2. Many of my constituents have been adversely affected by the troubles at Equitable Life. May I please ask the Chancellor, on their behalf, for an update on the Government’s position? (900209)

I said in the Budget that we would make special ex gratia payments to Equitable Life policy holders who had bought their with-profits annuity before 1992. I said that we would try to make those payments as soon as possible, and I am pleased to be able to tell the House and the constituents of my hon. Friend, who represents them so well, that we can make those payments in this financial year, rather than in the next one as we originally predicted. We will shortly be writing to those annuitants with more information, but I can confirm that they will receive the money directly, without having to make an application. We are doing this not because we are legally obliged to do it but because, quite simply, it is the right thing to do.

On growth, on living standards, on the deficit, on every test that the Chancellor set himself, his economic plan has failed. Since 2010, growth has been not 6.9% but 1.8%, families have been worse off not better off, and the deficit has not gone down to £60 billion but is stuck at £120 billion. How on earth can the Chancellor now claim that his economic plan has worked? After three wasted and damaging years, does he not realise that he cannot just airbrush out his failure?

The shadow Chancellor cannot airbrush out his predictions. He said:

“Britain’s double-dip recession is even deeper than first thought”,

but there was no double-dip recession. He also said that it was a “complete fantasy” that private sector job creation would replace losses in the public sector, but it has done so three times over. And three months ago, he said that our policy would choke off the recovery. The fact is that he cannot stand the fact that the economy is recovering and his plan would have been a disaster. Let us fear that the predictions about his own future in the shadow Cabinet turn out to be more accurate than his predictions about the British economy.

Three years ago, this Chancellor did choke off the economic recovery. That is what happened, and his arrogant complacency will jar with millions of ordinary families who, even with growth returning at last, are still worse off because of his failing plan. Let me ask him who is benefiting from his policies. Can he confirm what the Office for National Statistics reported last month—namely, that the incomes of the highest earners were boosted in April because they delayed receiving their bonuses by a month in order to benefit from the tax cut for people earning more than £150,000 a year? The wealthy might be celebrating with the Chancellor, but everyone else thinks that he is completely out of touch.

I hope this is not our last encounter across the Dispatch Box, because we are enjoying this. We are enjoying the fact that the shadow Chancellor simply does not admit to the mistakes he made, not only in office but in opposition. He is increasingly like Monty Python’s black knight defending that bridge. When unemployment falls, he says that it is but a scratch; when business confidence rises, he says, “I’ve had worse”; the recovery—it is just a flesh wound. The limbs are falling off his economic argument, and it would be a comedy if it were not for the fact that Labour’s economic policies were a tragedy for this country.

T6. Next week, along with the university of Chester riverside innovation centre, I am organising a small business fair in Chester to try to encourage people to set up their own small businesses. Will my right hon. Friend the Chancellor tell us what the Government are doing to encourage people to set up their own businesses and create jobs in addition to the 1.3 million that have already been created in the private sector? (900213)

There is a record number of business start-ups in this country at the moment, and I congratulate the business community and people in Chester who want to set up their own business. We are doing everything we can to support them. The new employment allowance will help many hundreds of businesses in my hon. Friend’s constituency. Together, as Cheshire MPs, we can of course make a broader argument that Cheshire is a great place to invent.

T3. To sustain strong economic growth, to restore full employment and to support manufacturing for the long term, it is vital to establish an appropriate exchange rate. Does the Chancellor accept that case and, if so, what is he doing about it? (900210)

I make it a practice, like previous Chancellors, not to comment on the exchange rate, but let me make a broader point about monetary policy. At the Budget, I set a remit for the Bank of England to consider the use of forward guidance. Since we last met, the Monetary Policy Committee has, of course, made an independent judgment to take that up and has made a very clear statement about the future path of interest rates.

T7. Does my right hon. Friend the Chancellor agree that manufacturing surging to a three-year high and investment intentions rising to a six-year high show that this Government are committed to securing a balanced economy? (900214)

My hon. Friend, who is my constituency neighbour, knows as I do that manufacturing businesses are doing better now. Orders are up and exports, particularly to the new emerging markets, are up. In Daresbury in my hon. Friend’s constituency, we are committed to making sure that the manufacturing businesses at the cutting edge of technology get support, and we will continue to do that.

T4. I congratulate the Chancellor on his comedy haircut, but let me tell him that his policies are not very funny for people in my constituency, who are at least £1,500 a year worse off than they were in 2010. Does he accept that a certain few at the top are better off under his policies? (900211)

I have not heard in the 54 minutes of these questions either an apology for what happened under the Labour Government or a single economic policy being advanced. If the Labour party is against our welfare cuts or spending cuts, let it have the courage to get up and say that it would reverse them. We have not heard that at all in this questions session.

T8. My right hon. Friend is well aware that 80% of the employment in my constituency comes from the private sector. Will he tell us his plans for increasing private sector involvement in the economy and for giving that vital sector some support? (900215)

Of course one of the key things as the economy recovers is not to make the mistakes of the past and not to have the unbalanced economy that we had before the financial crash, when, for example, even in the boom years, private sector employment fell in some regions such as west midlands. What we must do in my hon. Friend’s constituency and elsewhere is support small businesses that are starting up, get the capital to the small businesses that want to expand and encourage the big companies to invest. In all those areas, there is positive news, but we have to stick at it.

T5. Yesterday, the Chancellor said that those who opposed austerity had lost the argument, but wages are falling, child poverty is increasing and he is presiding over the slowest economic recovery in over 100 years. Unless the Chancellor is living in cloud cuckoo land or residing on planet Zog, he will surely admit that his record of economic competence has been less than satisfactory— (900212)

On planet earth, we inherited an economic mess, and we are putting it right. As I say, if Labour Members are serious about advocating an alternative economic plan, perhaps they would tell us today—perhaps someone will stand up and tell us—whether they oppose our spending cuts and would reverse them. We have not heard that today.

T9. Will my right hon. Friend continue his support for specific major infrastructure projects such as superfast broadband, rail electrification and High Speed 2, which should begin to address the divide between north and south that grew so much wider under the previous Government? (900216)

I strongly agree with what my fellow north-west MP has said. I think that investment in infrastructure is important, whether it is investment in superfast broadband for rural areas in Lancashire, investment in the northern rail hub—which, although it was campaigned for by parties on all sides in the north of England for years under the last Government, did not happen then, but is happening under this Government —or, indeed, investment in High Speed 2, which will help to change the economic geography of the country, and will ensure that all parts of it benefit from the economic recovery. I absolutely agree with my hon. Friend: those things need to go ahead.

T10. What assessment has the Chancellor made of the impact of zero-hours contracts on the health and well-being of British workers, and also on the consumer confidence of the hundreds of thousands of workers who are on such contracts? (900217)

The Department for Business, Innovation and Skills is investigating zero-hours contracts. It is seeking to establish whether there is abuse, and, if there is abuse, what we should do about it.

The Labour party seems to have suddenly discovered this issue. I do not remember a single Minister ever raising it when Labour were in government. Moreover, a number of Labour councils use zero-hours contracts.

Although the economy is improving, I am afraid that the same cannot be said of the deputy Chancellor—[Interruption.]

Yes—you! [Laughter.]

Given that Sir John Vickers has just warned us that British banks are still seriously under-capitalised, does my right hon. Friend now accept that ring fencing, whether electrified or not, cannot be relied on to provide adequate protection for depositors and businesses in the event of another banking crisis? Will he therefore give further thought to the proposal, supported by Mr Paul Volcker and Lord Lawson, for the total separation of the commercial and investment banking sectors?

I will grant the right hon. Gentleman an Adjournment debate on the matter if he judges it to be necessary after he has heard the reply to his question. We shall see—but I am grateful to him.

Let me say first that the shadow Chancellor was in effect the deputy Chancellor for 13 years, when the economy became so unbalanced and we experienced the biggest crash in modern history.

My right hon. Friend raised a serious question about the separation of retail and investment banking and about, in effect, Glass–Steagall-like reforms or a Volcker rule in the United Kingdom. We asked John Vickers— whom he mentioned—to look into the issue, along with a serious commission of experienced people, and they concluded that ring-fencing retail banks was a better solution. That is what we are legislating for, and it shows that we are learning from the mistakes of what went so badly wrong when that deputy Chancellor was in charge of the City.

As the Chancellor knows, a large number of small and medium-sized enterprises were let down by the conventional banking system. Many are finding that crowdfunding is a useful way of enabling them to start up and grow. Will he and the Secretary of State for Business, Innovation and Skills be very cautious before introducing unnecessary regulation to curb crowdfunding, which is a good thing for most small businesses?

The hon. Gentleman is absolutely right. We want to see a great variety of sources of finance for small businesses. It is important for consumers and businesses to have confidence in those sources, and the Financial Conduct Authority is considering carefully rules that will strike precisely the balance to which the hon. Gentleman has referred.

Worse than the shadow Chancellor’s talking down of the British economy is the Labour party’s love of the jobs tax, which reduces employment, depresses wages and discourages enterprise. Will my right hon. Friend think about what he will do with the employment allowance next year, and see whether he can reduce it further so that we can reverse those trends?

I well remember my trip to Bedford with my hon. Friend before the 2010 election, when we were campaigning against the jobs tax which was the Labour Government’s solution to rising unemployment. This Government are adopting the opposite approach. We are taking taxes off jobs, and from next April there will be a new employment allowance that will help the many businesses in Bedford and throughout the country. That is just one example of what we are doing to fix what went so badly wrong.

Accident and Emergency Departments

(Urgent Question): To ask the Secretary of State for Health if he will make a statement on his plans to alleviate pressure on accident and emergency departments.

This morning I made a written ministerial statement outlining the Government’s plans for the winter and detailing how we are allocating £250 million of funding for NHS England. Working with Monitor and the NHS Trust Development Authority, NHS England will distribute this money in 2013-14 to the areas where it is needed most. This follows the announcement in August by my right hon. Friend the Prime Minister that A and E departments will be given an additional £500 million over the next two years to deal with seasonal pressures. Patients need to be able to rely on the NHS all year round, and especially when demand is at its greatest. Ensuring the NHS’s sustainability means identifying each of the challenges it faces and, where possible, alleviating the burden.

Flu is an avoidable pressure on the NHS. Every year, around 750,000 patients see their GP with flu symptoms and nearly 5,000 people die. While flu levels have been comparatively low in the last two years, it would be complacent to assume that they will not rise. Should this happen, it will increase pressure on A and Es, which have already seen a rise in admissions of 32% in the last decade.

The best way to protect oneself and other people from flu is to get the flu vaccine, so, for the first time, children aged two and three will be offered the innovative nasal spray vaccine. Young children’s close contact with others makes them more likely to transmit flu to vulnerable groups including infants and the elderly.

Around 27,000 people spend time in hospital with flu every year, so it is very important that NHS staff should do all they can to avoid getting, and passing on, flu. Less than half of front-line NHS staff get vaccinated against flu. In some hospitals, that drops to fewer than one in five. The Government want to boost significantly the number of health care workers getting the flu vaccine. Trusts will not be eligible to receive a portion of the money in future years if they do not achieve a staff vaccination rate of 75%, except in exceptional circumstances.

This funding will be targeted in the following way: £15 million will go towards securing a reliable NHS 111 service throughout the winter period; subject to completion of current scrutiny of plans, a total provisional amount of £221 million will go to the 53 highest-risk systems; and a small contingency of £14 million will be used for final settlements, for trusts to use in the winter. My written ministerial statement outlines the indicative amounts that have been allocated to specific trusts. The additional allocation will require an increase to the revenue budget for NHS England for 2013-14, as had been specified in the mandate, and the revision to the mandate will be laid before Parliament in due course.

I recognise, however, that we need more radical change to reduce pressures on A and E departments over the longer term. I am currently consulting on my plans to provide improved care for vulnerable older people, to keep them out of hospital through better, more proactive care in their community. This will include better joint-working between the health and care systems; personalised, proactive care overseen by a named, accountable GP; and the sharing of GP records across different organisations, including out-of-hours GP services and the ambulance service.

NHS staff are working harder than ever before, and the British public rely on the NHS just as much as they have always done, and on a year-round basis. The plans outlined in this announcement will improve patient safety levels and help to reduce avoidable pressure on the NHS in the winter months ahead.

This Secretary of State has been in office for one year—the worst year in A and E in a decade: close to 1 million people waiting more than four hours, and on his watch, the first summer A and E crisis in living memory. But with this Government it is always someone else’s fault: GPs, nurses, patients, the weather, immigration, bank holidays—nothing to do with him, Mr Speaker, he is just a member of the public, as he is fond of saying. Well, I have got news for him: he is the Secretary of State, and it is time he started acting like it. All year we have warned him about the growing A and E crisis. First, he ignored those warnings, leaving A and E ill-prepared on the brink of a dangerous winter, as the NHS Confederation has warned. Now, in panic, he briefs out half-baked plans, without coming to this House. This is too little, too late. It is not good enough that we have had to drag him here on an issue of huge importance to our constituents. With his spin about the GP contract, he neglects the real causes.

First, on staffing, we learn today of the shocking shortage of doctors covering A and Es overnight, and we heard at the weekend reports of A and Es up and down the land without enough staff. More than 5,000 nursing jobs have been lost on the Government’s watch—and counting. Enough is enough. When will the Secretary of State stop the job cuts and ensure that all A and Es have enough staff to provide safe care?

Secondly, on GP opening hours, the Secretary of State tries to blame the 2004 contract but conveniently ignores the fact that A and E performance improved between 2004 and 2010. The truth is that it is the Government who have let GP practices stop evening and weekend surgeries, and it is the Government who ended the guarantee of appointments within 48 hours. What is he doing to restore patient access to GPs?

Thirdly, on social care, in the first two years of this Government there was an appalling 66% increase in the number of people aged over 90 coming into A and E via a blue-light ambulance—that is more than 100,000 very frail and frightened people in the backs of ambulances speeding through our cities and towns. That is a scandal, and it is more to do with social care cuts than anything else. I do not know how many more times I am going to have to ask the Secretary of State this: when will he do something to stop the collapse of social care in England?

All the while the Secretary of State blames a contract signed 10 years ago for today’s pressure he neglects the real causes of his A and E crisis. That is dangerous and it cannot carry on. Patients and staff cannot go through another year in A and E like the one we have just had. He should cut the spin, get a grip or go.

In the right hon. Gentleman’s endless quest to turn the NHS into a political football, he, disappointingly, paints a picture that is a long way from reality. He talks about A and E performance. Yes, since I have been Health Secretary we have missed our target in one quarter, but when he was Health Secretary he missed it in two of the three quarters, including 14 weeks over the crucial winter period. What he does not tell the House is that this Government actually hit their A and E target for the year as a whole, whereas in Labour-controlled Wales the NHS budget has been cut and the A and E target has not been hit since 2009—he repeatedly refuses to confront that.

The right hon. Gentleman talks about the number of nurses being down. He might want to check the figures and correct the record for the House when he uses the 5,000 figure, because the fact is that the number of hospital nurses—hospitals are where A and E departments are—has gone up under this Government, as has the number of doctors, health visitors and midwives. None of that would be possible if we had cut the NHS budget by £600 million from its current levels, which is his policy.

The right hon. Gentleman then talks about the social care budget. Under his Government the number of over-80s went up by more than a quarter, yet the Labour Government cut social care funding per head. We have introduced the innovative £3.8 billion merged health and social care fund, which will transform the joined-up nature of the services that people receive.

Finally, I am afraid that Labour Members are burying their heads in the sand about the enormous damage they did when they removed named GPs for members of the public under the GP contract. Professor Keith Willett, one of the most senior doctors in the NHS and responsible for all A and E services in NHS England, has said that between 15% and 30% of the people using A and E could be using primary care instead. That is why we are announcing really important changes to the way in which the GP contract operates, in order to address this problem. When the Government come before the House with a sensible package of short-term and long-term measures, any responsible Opposition would welcome it—instead, we have had political posturing and no attempt to address the real challenges facing the NHS.

May I welcome the £250 million that my right hon. Friend has announced as short-term relief of the pressures in A and E departments this winter, and in particular the £10 million he has announced for Leicester’s hospitals trust? Does he agree that the way to relieve pressure in A and E departments is by recognising that the health and care system is a single system that needs to be joined up and that the announcement by the Chancellor of £3.8 billion made available from health service spending to promote better integration of health and social care is the most effective single thing we can do to relieve pressure on A and E departments?

As so often on these matters, my right hon. Friend speaks extremely wisely. Since April, we have been working hard to deal with the underlying pressures on A and E departments while ensuring that we have cash available for short-term measures while those longer-term measures are put in place. He is absolutely right that joined-up integrated services are critical for A and E departments, because one of the biggest problems that they mention is the difficulty in discharging people from hospital, which makes it hard for them to admit patients who need to be admitted, often in very distressed circumstances. We also need to address the longer-term IT problems that mean that A and E departments cannot access people’s medical records and the question of alternatives to A and E, particularly in the community and through enhanced GP services.

If the Secretary of State is serious about people not attending A and E unnecessarily, why did he cut Labour’s extended GP opening hours and why is he allowing NHS walk-in centres to close up and down the country?

The fact is that one thing we need to do is to address why people go to A and E instead of the alternatives, such as walk-in centres. Communication about the alternatives to A and E is not as good as it needs to be. We are addressing those issues, but I must say to the right hon. Gentleman that the previous Government failed to address this problem when he was Health Minister and the difficult issue of the reconfiguration of services was never fully grasped. We are grasping it and that is why Professor Sir Bruce Keogh is undertaking his review right now.

I congratulate the Secretary of State on his welcome stand on continuity of care and the role that that plays in reducing A and E admissions. Could he go further in stating how he will ensure that we have more doctors trained from medical school in both A and E and general practice?

My hon. Friend is right and staff recruitment is critical. We have already said that we want another 2,000 GPs and are considering whether that is enough. We recognise the fact that general practice is very stretched, that we need GPs to offer more services and that we need more people to do that. Professor Keogh’s review is considering A and E departments, and one thing we are asking is why we are one of the only countries in Europe to have an emergency medicine specialty. Other countries do not do that and ask all doctors to spend time in A and E. We are also considering what we need to do to make A and E a more attractive profession for people to go into, given the antisocial hours that come with the territory. That is not an easy problem to solve, but we recognise that it is incredibly important that we crack it.

Has the Health Secretary had a chance to pause and reflect on the Government’s decision not to publish the risk register? If so, did the register warn that the reorganisation might have had an adverse effect on A and E performance?

As I recall, the risk register for that period found its way into the public domain. As for our publishing the risk register, we are following exactly the same policies as the hon. Gentleman’s Government followed in office. They refused to publish that register for the simple reason that officials need to be able to give Ministers frank advice in private if Ministers are to do their job properly. That is why we have not changed the policy.

The Royal Bournemouth hospital accident and emergency department treats 70,000 patients a year. Will my right hon. Friend explain how it can possibly be in the interests of those patients for that department to be downgraded to a minor injuries unit?

The changes that my hon. Friend alludes to are locally driven and have not crossed my desk. I want to reassure him that if they do cross my desk, I would not approve them unless there was convincing evidence that that was in the interests of patients and there had been proper consultation.

Having been defeated in the High Court by the Save Lewisham Hospital campaign, the Secretary of State has decided to appeal that decision. Given the crisis in A and E in London, has he any new ideas as to how A and E services should be provided in Lewisham, and if so, will he share them with the local MPs?

We are determined to do what is right for the people of Lewisham and of south London. Let me be clear: the problems of South London Healthcare NHS Trust were not addressed by the right hon. Lady’s Government when they were in office. We are addressing them, and sometimes those decisions are difficult, and sometimes they are not popular with local people. I took the decision that I did because it will save about 100 lives a year. I think it was the right decision, and I want to ensure that I do the right thing by her constituents.

The extra £10 million for the Oxford University Hospitals NHS Trust to deal with winter pressures is very welcome. Sir Jonathan Michael and his team have already made it very clear that they will open a significant number of new beds this winter and take on a significant number of new members of staff. The Oxfordshire clinical commissioning group is already working hard on enhancing primary triage, so that fewer people have to go to A and E. Would it not be better if we just let NHS managers—the NHS—get on with this, rather than the Opposition continuously shroud-waving every winter, in the hope there might be some failing that could shore up their flagging opinion polls?

We have not heard any kind of policy from the Opposition today, or any suggestion as to what they would do differently. We have presented to the House a package of short-term and long-term measures, designed to address the immediate and the underlying challenges. It is a very comprehensive package, but it is going to be a very tough winter and I would urge all responsible politicians from all parties to row in behind the package, which I think will make a very big difference on the front line.

If the 2004 GP contract was to blame for the current crisis in A and E, could the Secretary of State explain why, in 2009-10, over 98% of patients were seen within four hours?

That contract set in train a process whereby it became easier and easier to access an A and E department, and harder and harder to access a local GP. Since that period we have had, I think, 3 million more people going to A and E every year than was the case at the time of that contract change. That is one of the underlying problems. It will take time, but we shall put that problem right.

I recently spent the whole evening on the night shift of the A and E at Colchester general hospital, and I do not recognise what we have heard from the Labour Front Bench today. As the Secretary of State is keen on alternatives to A and E, may I urge him to work with the Secretary of State for Education and implement first aid training as part of the school curriculum? Within a generation, we would have 1 million qualified first-aiders. That is one way of reducing unnecessary visits to A and E.

My hon. Friend has campaigned regularly on this subject and there is a lot of merit in what he says. We do need more young people to know the basics of first aid, and that can be extremely important—even life-saving. But we also need to ensure that the NHS is there when we need it, 24/7, and that is why we need to make some important changes to the way in which A and E departments operate, in both the short term and the long term.

Twenty-four thousand elderly people died last winter due to cold-related illnesses, and many of them had been referred to A and E departments. What specific assurances will the Minister make to vulnerable elderly people, who really dread the onset of winter?

That is what today’s announcement is all about. We are trying to reassure them that we are leaving no stone unturned, and where there are things that we can do in the short term, we are doing those things because we want every older person to feel confident that their NHS will be there for them—that their local A and E department will be able to cope with the additional pressures that develop every winter. But I would also say to them that where there are alternatives to A and E departments, people should consider those as well. That is why some of the measures that we are investing in are good alternatives to A and E, which can often give more appropriate treatment.

Hospital staff have acted with extraordinary enthusiasm to, as they put it, reboot Medway following the Keogh review. Can the Secretary of State confirm that the £6 million or so extra that he may provide to help our A and E should be in addition to anything that the clinical commissioning group might otherwise have agreed to provide?

Yes, I am happy to confirm that it is additional money. I thank my hon. Friend for the interest that he shows in his local hospital, which is going through a very challenging time. We are absolutely determined that where hospitals are failing or delivering inadequate care, we will not sit on those problems; we will expose them and deal with them. That is the best thing we can do for my hon. Friend’s constituents and people all over the country where there are, unfortunately, problems with local hospitals.

In the last year, the A and E target was missed at Southampton hospital in 38 of 52 weeks. Since I last raised that in the House, Monitor has gone in to investigate the governance of the hospital, yet no money has been made available by the Secretary of State in today’s announcement. Is that not a sign that the crisis is so big that he has only been able to give a limited amount of help to those places that have an even worse crisis than we have in Southampton?

The pressure exists throughout the NHS. The right hon. Gentleman is absolutely right: there is real pressure in all hospitals. I commend all A and E departments for their hard work. The ones that got additional resources today were the 53 local health economies where we thought the risks were highest, and I think it was right to target that money to help those areas, but that is not to say that there is not a lot of pressure in other areas. That is why the long-term changes that we are talking about—the transformation in IT systems, the increased availability of GPs to look after frail and vulnerable older people, the integration of health and social care services—will benefit the right hon. Gentleman’s constituents and his hospital profoundly, and I am sure he will notice the difference.

I welcome the extra money for Ealing Hospital NHS Trust and North West London Hospitals NHS Trust. It will come in very useful indeed. However, my right hon. Friend will be aware that four hospitals in North West London are still under threat of losing their A and Es. The independent review into that decision is due to report to his Department very shortly. When are we likely to get a final decision from him?

Let me reassure my hon. Friend. First, I thank her for her assiduous campaigning for her local hospital, which is recognised on both sides of the House. I am expecting that report on Friday, and as the House knows, when it comes to issues of hospital reconfigurations, I want to make decisions as quickly as I can. I will want to consider it very carefully, but I think everyone would like the certainty of knowing what will happen, so I will report to the House as soon as I am able to make a decision.

Hospitals across the north-east, as in many parts of the country, are facing considerable pressure on their A and E departments. Will the Secretary of State set out in more detail the rationale used to allocate the funding? I notice that not a single NHS trust in the north-east appears on his list.

The decision on which 53 areas to concentrate the resources was not made by me; it was made by NHS England, talking to Monitor and the NHS Trust Development Authority, on the basis of where, in their professional assessment, the highest-risk areas are. That is a sign that hospitals in the north-east are performing extremely well. In the past few months I have visited Newcastle, and I thought the hospital was absolutely fantastic; I did a stint on the front line there. There are some outstanding hospitals across the country, and there is very good NHS provision in the north-east. That is probably the reason.

I wish my right hon. Friend well in his quest to reintegrate a fragmented service —a trend which was largely started under the previous Government—but given the fact that the ambulance service provides a very good bolster, and indeed support, and helps to remove pressure from many A and E departments, how much of the £500 million will be made available to support ambulance services in their support of A and E departments?

Quite a lot of the money will help ambulance services indirectly because it will be intended to reduce the number of blue light calls by, for example, providing primary care alternatives to A and E by better integrating health and social care economies, but the long-term change that we announced last week, which I think will make a real difference to ambulance trusts, involves IT. In this day and age it is crazy that an ambulance can answer a 999 call and go to someone’s home not knowing that they are a diabetic who has mild dementia and who had some falls last year. That information could be incredibly helpful to paramedics and we want to make sure that, with patients’ consent, they have it at their fingertips.

The A and E at the Wolverhampton New Cross hospital is already under great pressure and earlier this year had its busiest day in history, but what really concerns local people are the possible implications of the closure of the A and E at Mid Staffs and the transfer of the work to New Cross. Can the Secretary of State confirm that if that goes ahead, New Cross hospital will have the resources in terms of capital and staff to make it work, because the alternative will be a second-class service for patients in both Wolverhampton and Staffordshire?

I thank the right hon. Gentleman for the interest and support that he shows for his local hospital. Of course, Mid Staffs has an extremely troubled history and it would be a derogation of my duties if I did not try to sort out the problems there once and for all, but we will not make any changes that have knock-on effects on neighbouring trusts without proper assessment and making sure that provisions are in place so that they can cope with any additional pressures. The final decision about what is going to be done has not been made, but I reassure the right hon. Gentleman on that point.

The A and E crisis in Wycombe results from the closure of the department under the previous Government. Although I would love to lay the blame squarely on Labour, is not the truth that, over the life of the NHS, clinical practice and management have changed substantially? Will my right hon. Friend consider producing a White Paper that takes a holistic view of emergency and out-of-hours care so that we can have an A and E service that is fit for the 21st century?

My hon. Friend has campaigned as hard as anyone in the House for more personalised and humane care for his constituents, and he is right. We need a radical rethink about the way that A and E departments work. My only hesitation in leaping to accept his suggestion of a White Paper is that that process takes a very long time. Professor Sir Bruce Keogh is in the middle of a review and I want him to be able to report back. I hope that we can get support across the House for what he says so that we can implement his solutions much sooner than that White Paper process would allow.

The Secretary of State may be holding on to some sort of misplaced belief that he did the right thing with regard to Lewisham. However, the High Court judgment in the summer ruled and found him to have acted unlawfully in taking the decision to slash services at Lewisham in order to solve financial problems elsewhere. Rather than wasting more taxpayers’ money in appealing against this judgment further, why will he not allow local health care professionals to determine the future shape of acute services in south-east London to meet the needs of the community and not just the needs of NHS accountants?

I know that the hon. Lady has campaigned assiduously and determinedly for her constituents. Even though we have different views, I hope she will understand that at every stage I have taken the decisions, often difficult decisions politically, that I think will best serve her constituents and the people of Lewisham. I accepted the advice of the medical director of the NHS that that decision on Lewisham would save a significant number of lives. That is why I took that decision. As to what we do going forward, I will continue to do what I think is the right thing for her constituents. If she does not agree with the decisions I make, I hope she will at least show greater respect for the motives behind them.

I have discussed with my right hon. Friend on many occasions the issues facing Croydon University hospital. I am very grateful for the £4.5 million that has been announced today. May I ask him both to look kindly on the bid for capital investment for the A and E department there, and to pay tribute to the doctors and nurses in my A and E department and others across the country who are working so hard under such pressure?

I thank my hon. Friend for making that point. It cannot be said enough how hard A and E staff in particular work—antisocial hours in very challenging conditions. Many hon. Members will have seen that in their local hospitals. With respect to the capital allocations, I hope that the House has a sense from today that we are looking to solve the long-term problems facing A and E departments, as well as giving immediate help for this winter and next winter, so of course we will look carefully at the business case put forward by his local hospital for capital.

The Royal College of Physicians, the College of Emergency Medicine and others have already come up with a 10-point plan for what to do about emergency care. That is the professional view. When will the Secretary of State act on it?

The royal colleges have come up with a number of important and good ideas. I hope that the hon. Lady has seen from my announcement today that we are making some profound changes to address the underlying problems in A and E which incorporate much of their thinking, but there are other ideas. We will continue to engage closely with the royal colleges because they can give us a lot of help in ensuring that we get the right answer.

Wellingborough’s nearest A and E is Kettering general hospital, which is 30 minutes or more for most of my constituents to get to. However, the proposal for an urgent care centre at the Isebrook hospital in Wellingborough will allow 40% of those constituents to go locally and relieve pressure on Kettering. Is this the sort of thing that the Secretary of State wants to encourage?

I always try to support the ideas that come up from different parts of the NHS because people on the ground usually have the best ideas about what needs to be done, but when decisions cross my desk it is important that I consider the knock-on effect on other areas, and I get independent advice on that as well. I shall follow closely the proposal that my hon. Friend mentions.

I think we have done everything we can, and we have tried to listen hard to the suggestions for what can help in the short term and what can address the underlying problems. I believe it is possible for the NHS to meet its targets this winter, but I do not want to say that it is going to be easy. It will be a very tough winter and we need to get behind the doctors and nurses on the front line who are doing their very best to deliver a great service to the public.

I welcome the extra £4.5 million for the Derby hospitals trust. On a separate matter, can the Secretary of State reassure my constituents that if they ring 111 they will now get a quality service that gives them the advice they need?

I thank my hon. Friend for mentioning the support that we are giving to Derby, which I hope will be a great help over this winter and next winter. Improving 111 is an important part of the long-term solution for A and E. If there is one thing that could persuade people not to go to their local A and E, it is to pick up the phone and get a good service. We have 92% satisfaction rates with 111 now, after the teething problems earlier in the year, but I think it can be even better. One of the things that would make the biggest difference is if we did something that has never happened before, which is to make it possible for doctors at the end of the 111 lines to access people’s medical records, with their consent. Then people would be talking to someone who knew about them, their allergies and their medical history. That is a big change. It never happened under the previous Government. Their attempts—[Interruption.] NHS Direct had no access to people’s medical records, which is what we are talking about. That would be a profound change and could make a big difference.

It appears that the Secretary of State is not listening to the Health Committee, which has looked into the issue. The Chair, the right hon. Member for Charnwood (Mr Dorrell), has made it clear that he does not think the 2004 GP contract is to blame for these issues, but we found out that only 16% of hospital trusts have the recommended level of emergency consultants, and we noted that nearly £2 billion has been taken out of adult social care. When will the Secretary of State deal with the staffing cuts and budget issues that are actually causing the A and E crisis?

My right hon. Friend said to the House that he largely agreed with the changes that I wanted to make to the GP contract. I always listen very carefully to what the Select Committee says, but I point out to the hon. Lady what Professor Keith Willett, who is the person at NHS England who is in charge of all A and E departments, said. He said that between 15% and 30% of the people attending A and E departments could be looked after by primary care. If we ignore that—I am afraid that what Labour did in 2004 has made the problem a great deal worse—we will not solve the underlying problems with A and E.

I warmly welcome the additional £2.7 million for Milton Keynes hospital, which will help address short-term pressures this winter, but, looking at the longer term, I urge my right hon. Friend to look again at the case that I and my hon. Friend the Member for Milton Keynes North (Mark Lancaster) and the Milton Keynes Citizen have been making for an expanded A and E centre in Milton Keynes to meet the needs of a vastly increasing population.

I congratulate my hon. Friend and his Milton Keynes colleague on their assiduous and regular conversations with me on the pressures on their A and E. I recognise that it is operating way above its original planned capacity and hope that today’s announcement will make some difference, but we will continue to look at long-term solutions because we recognise that there are long-term pressures.

In view of the continuing and worsening crisis in A and E, will the Secretary of State concede that closing four out of nine A and E departments and 500 beds at Charing Cross hospital is now unsustainable? Will he abandon those plans, or at least suspend them until the crisis is over?

I take issue with the hon. Gentleman’s suggestion that this is a worsening crisis in A and E. We have hit our A and E target for the last 22 weeks. We recognise that there are real pressures and are seeking to address them. On the proposals for north-west London, he knows that I cannot comment until I have received the Independent Reconfiguration Panel’s advice. I will look at it very carefully, but obviously, considering the pressures on A and E departments across the country, I will want to ensure that any proposed solution makes sure that his constituents get the service they need when it comes to urgent and emergency care.

I welcome the £1.5 million for Airedale hospital in Yorkshire and urge the Secretary of State to keep a watchful eye on those hospitals serving some of the most rural parts of our country, such as the Yorkshire dales, which I represent.

Absolutely. I have visited Airedale hospital, which I think is excellent. It is one of the few hospitals in the country where the A and E department has access to GP records, which means it can give patients a much better service. It also has fantastically innovative ways of looking after the frail elderly in the community. I think that some of the smaller rural hospitals are blazing a trail when it comes to the changes we need to make elsewhere.

Kettering general hospital’s A and E department was built for 20,000 people a year but is now trying to meet the needs of 80,000 people. The money announced today is of course welcome, but I ask the Secretary of State to look seriously at our bid—a joint bid from neighbouring MPs too—for capital investment in Kettering’s A and E.

I will of course look at that closely. I have been to Kettering hospital and recognise that it is very busy and that people there are working very hard, but I think that the staff are doing a fantastic job.

Will my right hon. Friend pledge to do everything in his power to undo the mess created by Labour’s 2004 GP contract give-away in order to help restore the essential link between patients and family doctors, which will lead to better patient outcomes and reduce pressure on our A and E departments?

My hon. Friend is absolutely right. I am astonished that the Labour party seeks to defend those changes to the GP contract, which got rid of named GPs, removed responsibility for out-of-hours services from them and broke the personal responsibility that the best GPs always wanted to feel for the people on their list. In fact, many brave practices refused to go along with those contract changes and continue to have named GPs. There is clear evidence that people who have named GPs use hospital services less. If we are going to give older people the right care, we need to undo those damaging changes.

The Secretary of State has spoken confidently about how his changes will make a difference in the short term, but over the weekend the BBC revealed that A and E departments are, on average, 10% understaffed and that one trust in London is 75 nurses down. Despite what he has announced today, how can he be sure that those vacancies can be filled?