Skip to main content

Commons Chamber

Volume 570: debated on Tuesday 5 November 2013

House of Commons

Tuesday 5 November 2013

The House met at half-past Eleven o’clock


[Mr Speaker in the Chair]

Business Before Questions

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

Third Reading opposed and deferred until Tuesday 12 November (Standing Order No. 20).

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

Second Reading opposed and deferred until Tuesday 12 November (Standing Order No. 20).

Oral Answers to Questions


The Chancellor of the Exchequer was asked—

Energy Prices

1. What assessment the Office for Budget Responsibility has made of the effects on the economy of recent changes in energy prices. (900893)

The Office for Budget Responsibility has not published any assessment of the effects of the recent energy price increases on the economy. The OBR’s last published forecast, “Economic and fiscal outlook” was issued in March 2013, and an updated forecast will be provided alongside the autumn statement. The Government are committed to doing all we can to keep energy bills down to support hard-working families.

I welcome the hon. Lady to her post. Is she aware that last year wholesale energy prices rose by 1.7%, but energy bills by 9.1%? Is it not time that the Government stopped defending the big six energy companies and actually called for a freeze on prices while we reset the energy market?

It is very interesting to hear what the hon. Gentleman says, but the first thing he needs to do is explain to his constituents why he voted for the decarbonisation target, which is going to add £125 to energy bills. Secondly, it was the last Labour Government who created the big six. We started off with 20; they left us with the big six. Thirdly, this Government have set out very clearly how they will help households—by reviewing green levies, by encouraging switching, which I am pleased to see the Leader of the Opposition has taken up, and by increasing competition.

I, too, welcome the Minister to her post. She will know that one of the energy bills that my rural constituents have to struggle with is for petrol. Will she tell us whether the Office for Budget Responsibility has done an assessment of how much families are saving by our avoidance of the 13p fuel hike planned by the Labour party?

I thank my hon. Friend for her question. The OBR does an assessment of all taxes and their impact on the economy. The policies that this Government are pursuing in recognition of the pressures on household budgets mean that filling up the average car is costing families £7 less at the moment, and by the end of this Parliament it will cost them £10 less.

Does the Minister accept that the best answer to this question is to freeze energy prices? Surely that is the answer.

I thank the hon. Gentleman very much indeed for his question, but the energy price freeze suggested by the Leader of the Opposition is actually an energy price con. It has been made very clear that the prices will go up beforehand and up afterwards, and the Leader of the Opposition has made it clear that if wholesale prices go up, he will have to stop the freeze. That is a price con; it is not sustainable; we are fixing the problem.

Will the Chancellor of the Exchequer join me in congratulating the Eastleigh Liberal Democrat borough council on the large part it has played in bringing the local unemployment rate down below 1,000?

Whatever the worthiness of the efforts of the council to which the hon. Gentleman refers, unfortunately it has absolutely nothing whatever to do with Question 1.

Fuel Duty

Thanks to this Government’s action, pump prices are 13p a litre lower than they would have been under the previous Government’s plans. Provided we can find the savings to pay for it, my intention is to freeze fuel duty for the rest of this Parliament.

I thank my right hon. Friend for that reply. The cost of fuel is of great concern to many of my constituents. If he can freeze the price of fuel for the remainder of this Parliament, how much cheaper will petrol be, come the next election?

If we are able to freeze petrol prices for the rest of this Parliament, the price will 20p a litre lower than it would have been if we had stuck with the plans that the shadow Chancellor advocated at the last general election. That would mean, as my hon. Friend the Economic Secretary was just reminding us, a saving of over £10 every time people filled up their average car. That is what this Government are doing; by fixing the public finances, we are able to help people.

When the Chancellor became Chancellor, unleaded petrol was £1.19 a litre. Can he tell us how much it is today?

It depends, of course, where you buy it. The last price I saw at a petrol station was around £1.35, but it would have been 20p higher if we had stuck with the last Government’s plans—the hon. Gentleman voted for them—in the last Labour Budget. That is the truth, and it is because we are fixing the public finances and fixing the economy that we can avoid these disastrous Labour tax rises.

The freeze on duty makes a crucial contribution to improving business competitiveness, and will have been welcomed by all our constituents throughout the country. Will the Chancellor undertake, as part of his work on the autumn statement, to publish the Treasury’s own estimate of the full amount by which both motoring and energy input costs have been increased by climate change-related measures?

Of course the OBR provides an assessment of the impact of Government policies on the economy, and I will consider my hon. Friend’s specific suggestion that we look into the impact of climate change policies on energy prices. We are currently examining the charges and levies that the last Government, among others, added to energy bills, and seeing what we can do to roll them back in order to provide relief for customers.

I welcome the action taken by the Government to freeze fuel duties, but UK taxes on petrol and other fuels remain among the highest in any country in the European Union. What will the Chancellor do to remedy that much unwanted achievement?

I looked at the plans that this Government inherited, and then cut petrol duty in March 2011. We have frozen the duty ever since, and I intend to continue the freeze for the rest of the current Parliament, provided that we can find the savings to pay for it. That is the crucial point: if we do not sort out the economy, if we are not fixing the public finances, if we do not have an economic plan, we cannot have a living standards plan.

Notwithstanding the excellent news of the fuel freeze, petrol pump prices are still under threat from hard-liners at Grangemouth. Does my right hon. Friend agree that extremism in the pursuit of hard-pressed motorists is no virtue?

My hon. Friend is absolutely right. The greatest threat to fuel supplies recently has been the threat of industrial action from the Unite union, led by the chair of the Falkirk Labour party. We now hear the former Labour Chancellor and the former Labour Foreign Secretary saying that Labour should open its inquiry and publish what it finds, and a Labour Front Bencher saying that Labour does not “publish internal documents”.

Order. That has nothing to do with the responsibilities of the Chancellor. [Interruption.] Order! In the name of respect for parliamentary process and the traditions of the House, I ask Ministers not to behave in that way. We deserve better.

I shall return to the actual question of duties. Has the Chancellor found the £750 million that is needed to pay for the freeze? At the party conferences, he also promised to spend a further £700 million on school meals, a further £300 million on his Work programme, and a further £600 million on a marriage allowance. That is £2.3 billion of promises. Let us be clear about this. Is the Chancellor going to raise taxes or cut services to pay for those promises, or is he planning simply to borrow even more? Which is it?

What a question from a Labour Front- Bench team that wants to spend £27 billion more, and to borrow every penny of it. If this is the hon. Gentleman’s debut performance as shadow Chief Secretary, I am afraid that he will have to do a lot better. His job should be to control the promises that he makes. As for our side, we are paying for the commitments that we are making to the hard-working people of this country.

Despite all that hot air, it seems that there are still £2.3 billion of unfunded promises. Would it not be far easier if all those promises were fully costed and funded and independently checked by the Office for Budget Responsibility, just to ensure that the Chancellor’s sums add up?

We have proposed that all the main political parties should be able to submit tax and spending plans to the OBR ahead of the election manifestos. Surely we can all agree that—as the Chair of the Treasury Committee has suggested—an independent audit by the OBR for all the main political parties would be good for the democratic process, so will the Chancellor now join us in a cross-party consensus on that?

As to a cross-party consensus, I remember when I was speaking from the Opposition Dispatch Box and the hon. Gentleman’s party was in government that it opposed the creation of the OBR—opposed it time and again. I believe it is important that we preserve the independence and integrity of this new body, which is working well but is entrusted with the very important task of providing the economic forecasts for whoever is in government. That should be its primary purpose and the changes to the primary law that the hon. Gentleman is proposing are not very practical.


3. What his policy is on the issuing of Government bonds in the form of sukuk; and if he will make a statement. (900895)

The Government want the United Kingdom to become the first sovereign state outside the Muslim world to issue an Islamic bond. The Treasury is therefore working on the practicalities of issuing about £200 million of sovereign sukuk as early as next year. The Government see sukuk issuance as an excellent opportunity to promote London as the leading centre for Islamic finance.

As chairman of the all-party group on Islamic finance and diversity in financial markets, I welcome the Government’s decision to issue a sukuk. It is something the group has campaigned on. I also congratulate the Government on their part in hosting the World Islamic Economic Forum in this country, the first time it has been held in a non-Muslim country. What else are the Government doing to promote Islamic investment in this country and sustain the Islamic banking sector?

I thank my hon. Friend for his continuing work in promoting Islamic finance and diversity in financial markets. London is already a global player in Islamic finance, which brings in significant investment and creates thousands of jobs. Last week I also announced that we are bringing together a global Islamic investment group. This group will have the expertise to help Islamic finance grow globally, as well as developing London as one of the leading centres for Islamic finance.

May I also welcome what the Government have done? It will make this country the first anywhere in the western world to provide sharia-compliant bonds. We do not just want people to invest from outside, however. Although the last census showed that Brecon and Radnor had 116 Muslim people, I have 21,075 in my constituency. How does the Minister intend to sell those bonds to the people of Leicester East?

I thank the right hon. Gentleman for his warm words. Britain already has 20 banks offering Islamic financial products. We also have 49 sukuk listed on the London stock exchange, valued at over £25 billion, and 25 law firms that have significant Islamic practices. We will bring all this experience together to further develop Britain as an Islamic finance centre, and I am sure that will help his constituents with their investment decisions.

Air Passenger Duty

4. If he will introduce a time-limited exemption from air passenger duty on new long-haul routes from uncongested airports. (900896)

The Government are always open to ideas that promote regional growth. The Airports Commission will shortly publish a report on the best use of existing airport capacity in the short to medium term and the Government will take its findings into account in our response.

I am grateful to the Minister for her answer, and I welcome her to her position. As part of the growing links between the north-west and China, Manchester airport is seeking to develop a new route to Beijing, but one of the major obstacles is the very high level of UK APD. Will she take a careful look at new research by York Aviation, which has concluded that a time-limited exemption from APD on new long-haul routes from regional airports would make the Manchester-Beijing route immediately viable?

I thank the right hon. Gentleman for his question. The Government will always take a look at the evidence. In fact, we debated APD in the House only the week before last. In October 2012, Her Majesty’s Revenue and Customs published modelling on price differentials at UK airports, and it showed that even large price changes have a relatively small impact on total passenger demand, but I am sure he will welcome my right hon. Friend the Chancellor of the Exchequer’s announcement of the £800 million investment in Airport City in Manchester, which will create over 16,000 jobs. The involvement of Beijing Construction Engineering Group as a partner in this project is the latest in a line of new partnerships being forged between the UK and China.

Manchester airport is second only to Heathrow in terms of airport capacity, but it is operating at under half capacity, yet Heathrow is full. Boris Johnson talked yesterday to the CBI about getting these new routes out to China and Asia, but instead of forcing people from the north-west to fly down to London in order to fly to China, why cannot we get people to come from London up to Manchester to fly out on all these new routes that we need?

I thank the hon. Gentleman for his question. As I said, we will always look at any evidence that people want to send us. We want to encourage new links between the UK and China, and the Mayor of London made some interesting points. The point is that we have to change prices a lot in order to change passenger behaviour, and we would need to look at that further.

Is the Minister aware of the success of Barcelona airport in gaining more than 20 international routes in the past year because of a 100% APD reduction? Does she think that such a reduction would help Scotland to regain the millions of passengers it has lost owing to this Government’s APD costs?

The hon. Gentleman will be aware that there is no APD charge from airports in his constituency. As he knows from our recent debate, APD makes an important contribution to the deficit reduction plans; we will always keep it under review, but it is a very important part of this Government’s attempts to rebalance the economy.

APD can also have a disproportionate effect on regional airports operating lifeline routes with modest passenger numbers, such as Newquay’s. Will the Minister factor that into the discussions she is having with colleagues on the future of APD?

I thank the hon. Gentleman for his question. We will always look at the evidence, and if cares to write to me, we will certainly take that into account.

Private Sector Jobs

5. What estimate he has made of the number of jobs created in the private sector in the last 12 months; and if he will make a statement. (900897)

11. What estimate he has made of the number of jobs created in the private sector in the last 12 months; and if he will make a statement. [R] (900904)

In the past year, employment in the private sector has increased by 380,000, more than offsetting the fall in public sector employment of 104,000. For every public sector job lost, more than three have been created in the private sector. That confounds the predictions of those who thought it could never happen.

Unemployment in my constituency is lower than it was when I became the MP. With the further good news that Waitrose is creating 140 new jobs in Northwich later this month, will my right hon. Friend the Chancellor set out how small and medium-sized enterprises will benefit from a reduction in national insurance contributions?

I am delighted by the news of the new jobs being created by Waitrose in Northwich; as my hon. Friend well knows, I represent part of that town. That will be good for the people who live in it, and I hope that some of my constituents will find work there. The employment allowance, which we debated in this Parliament this week, is going to take £2,000 off the national insurance bill of every firm, but the biggest benefit will be felt by the smallest companies; 450,000 firms will be taken out of employer NICs altogether. That is a real boost for business, and it shows how we can help to support the recovery.

Unemployment is down by almost 30% in my constituency since the last election. Given that Selby lost almost 2,000 jobs in 2004 in the mining industry, that is very encouraging. Given UK Coal’s recent troubles and its callous decision to withdraw concessionary fuel from some ex-miners and their widows, what comfort can the Chancellor give to these pensioners, who potentially face fuel poverty this winter?

I know that this difficult situation has been brought about by the failure of UK Coal. I congratulate my hon. Friend on leading this campaign to do something about the situation, and I know that my hon. Friends the Members for Sherwood (Mr Spencer) and for Nuneaton (Mr Jones) have joined him in coming to see me about it. We are looking very carefully at the case for what we can do to help those who have had their concessionary fuel allowance taken away because of the failure of UK Coal. I am personally looking at this case and I hope to have some good news shortly.

Evidence shows that it is not just having a job, but having the right job and the right level of pay that lifts someone out of poverty. So can the Chancellor tell us how many of those new jobs that have been created are full-time jobs, how many do not involve zero-hours contracts and how many actually pay the living wage?

We have 1.4 million new jobs in this economy. To take on the point about part-time work, there has also been an increase in the number of hours worked in the economy, and a lot of the recent increase in employment has come from full-time employment. Let us compare that with the disastrous situation we inherited from the Labour party, where unemployment was rocketing and youth unemployment was rocketing. Unemployment is now lower than it was at the general election, and many thousands—[Interruption.] That is the fact. Many thousands of young people have come off the claimant count for youth unemployment, too.

Can the right hon. Gentleman now confirm that the number of people working part time because they cannot get a full-time job has risen over the past year to 1.45 million and is now at a record high? With prices rising faster than wages for 39 of the past 40 months, is this not just another reason why so many working people are facing a cost-of-living crisis after three wasted years under this Chancellor?

The best thing we can do for anyone’s cost of living is make sure that they have a job. Jobs are being created under this Government, after they were destroyed by the Labour Government. I am surprised that the hon. Lady did not thank us for creating an economy in which, in her constituency, unemployment is falling, and has fallen over the past year, and the claimant count is falling, when it was rocketing in the last years of the Labour Government.

The Chancellor made some important announcements last week about the future of the Royal Bank of Scotland. Although we are absolutely right to keep pressing the bank to improve its poor lending record, will he also put on record the need for us to recognise the hugely important private sector jobs underpinned by RBS in Scotland and elsewhere, and the fact that we see a strong future for that company?

I have discussed RBS and what we can do to ensure that it supports the Scottish economy with my right hon. Friend on many occasions. The plan that the management has proposed, which we and the Governor of the Bank of England support—it is the first time since RBS collapsed in autumn 2008 that all those groups agree on a single strategy for the bank—will mean a strong, healthy future for RBS as a bank that supports the entire United Kingdom economy and, in particular, the Scottish economy. It is an important part of Scottish economic history and of Scotland’s economic future, too.


6. What recent assessment he has made of the rate of increase in (a) average earnings and (b) consumer price inflation. (900898)

Disposable income increased last year at the fastest pace since 2009. In March, the Office for Budget Responsibility forecast that real household disposable income growth would accelerate each year from 2014 to 2017, reaching 2.3% in 2017. The best way to raise living standards is to stick to the Government’s economic plan and deliver a recovery that works for all. Britain is back on the path to prosperity, the economy is growing, the deficit is falling and jobs are being created.

I do not understand how the Minister and the Chancellor can think that their economic policies are a success. After three wasted and damaging years of flatlining, working people are on average £1,500 a year worse off. Is it not clear that his plan has failed hard-working families?

It has not failed the people of Bolton West, where unemployment has fallen by 1,800 in the past year.

On the subject of the cost of living, does my hon. Friend think it astonishing that Opposition Members do not understand that this Government have done so much to keep council taxes down? If we were still subject to their policies, the average council tax cost would be £210 a year higher.

My hon. Friend is absolutely right. It was not this Government who doubled the rate of council tax, it was not this Government who doubled the rate of income tax for the lowest earners and it was not this Government who increased fuel duty 12 times.

Why does the Minister think that April 2013 was the only month on this Chancellor’s watch in which pay rose faster than prices? Does he agree with the ONS that it is because people deferred their bonus payments to make the best use of the Chancellor’s millionaires’ tax cut?

Of course, under the previous Labour Government bonuses were four times the rate they were this year. I would also ask the hon. Gentleman whether Labour believes in reversing the 45p rate of income tax, because I am not sure what the answer is.

Does my hon. Friend agree that one way of tackling rising prices is to leave people with more of their own money in their pocket? Will he confirm that the 50% tax cut we have given to those on the minimum wage has done exactly that and shows that we are on the side of hard-working people?

My hon. Friend is absolutely right. If we want to help living standards, we want to be able to cut taxes in a sustainable way. That is what we are managing to do.

Home Buyers

The Government are committed to making the aspiration of home ownership a reality for as many people as possible. That is why we recently announced that participating lenders will be able to offer high loan-to-value mortgages supported by their Help to Buy mortgage guarantee schemes three months earlier than planned. I was pleased to hear that Lloyds Banking Group recently announced that the first such mortgage was taken out by a first-time buyer in Dartford, Kent.

Will my hon. Friend update the House specifically on helping the hard-working people in my constituency, where there is 77% home ownership, which is increasing, compared with 65% across the UK?

Under Labour, the number of first-time buyers fell to its lowest level for 25 years, from an average of 470,000 a year in the early 2000s to around 190,000 by 2008. That destroyed the hopes and aspirations of many hard-working families. This Government’s two Help to Buy schemes will help thousands of hard-working people to get on the housing ladder, including those in Elmet and Rothwell and those throughout the UK.

16. Is it fair for taxpayers in my constituency to subsidise a London property bubble that has already increased by 10% since the introduction of this scheme? (900910)

The hon. Lady should know, as she would if she looked at the facts carefully, that the Help to Buy scheme is priced on commercial terms; it is designed to break even and it will not cost the taxpayer anything.

Does the Minister share my concern that, reportedly, some young people have actually given up saving for a deposit, and will he ensure that those of us on the Government Benches will stand with those people who have a dream of home ownership to make sure it can be fulfilled?

My hon. Friend is absolutely right. Some Opposition Members believe that only people who have rich parents that can help them meet some of the large deposit requirements should be able to buy their own home. That is not the policy of this Government, who support hard-working families.

On the issue of fiscal steps to help people buy homes, the Chancellor of the Exchequer said last year that people buying homes through a company to avoid tax was unacceptable, and he would come down on it

“like a ton of bricks”.

Has he investigated reports that the Under-Secretary of State for Transport, the hon. Member for Wimbledon (Stephen Hammond), has avoided tax in that way, and will he come down on him like a ton of bricks?

I welcome the hon. Lady to the shadow Front Bench team. I look forward to debating with her. The Government have already taken steps to ensure that property buyers pay more in tax, by increasing stamp duty and by dealing with purchases through companies, and it would not be appropriate for any Minister to make a comment on any individual’s tax circumstances.


Investment in infrastructure is a key priority for this Government. In June, I set out a pipeline of investment in specific projects, worth over £100 billion out to 2020, including the largest investment in our railways since the Victorian era and the biggest investment in roads since the 1970s.

I welcome the support of my local Labour leader of Kirklees council for the new north-south railway, but does my right hon. Friend agree with the leader of Manchester council, who said that politicians need to stop taking cheap shots at HS2

“unless we want an increasingly disconnected North…slowly grinding to a halt”?

I wholeheartedly agree with those sentiments. My hon. Friend could have added to that list the leader of Nottingham city council, who said that the Labour Front Bench should get off the fence on HS2. The project is needed to promote growth, and connectivity outside London. I agree with that, and so should they.

22. When the Chancellor talks about increased investment, is that what he meant to cover the £10 billion increase in the HS2 costs, which have gone up on his watch? (900916)

We set out in June the budget for HS2. We will absolutely stick to that budget. Using the excellent leadership we have brought in, with Sir David Higgins and others, we will make sure that the project is delivered under budget. The hon. Gentleman should be committed to the project because it will support growth all over the United Kingdom. It is the most significant investment in our railways for 100 years, and his party should support it.

17. I refer the House to my entry in the Register of Members’ Financial Interests.I congratulate the Chancellor and his Government on their investment in infrastructure in the west midlands, which helped to deliver the Jaguar Land Rover plant, and thousands of manufacturing jobs in the process. I also draw the Minister’s attention to the A50, a key corridor in my constituency, connecting Stoke to Derby, which involves a number of manufacturing businesses that could hugely benefit from road improvements and infrastructure spending. (900911)

The hon. Gentleman is right that targeted infrastructure investment can unlock job creation in enterprise zones, including at JLR and in various places around the country. I am well aware of the particular scheme that he is promoting and I look forward to discussing it further with him to see how we can take it forward.

The Chief Secretary will be aware that several conflicting and not very encouraging cost-benefit analyses for HS2 are currently in circulation. Could he not clear the air by commissioning and publishing a genuinely independent internal Treasury cost-benefit analysis of the project?

The Government have set out various cost-benefit analyses of the project. With respect to the hon. Gentleman, what is needed in this project is not more procrastination, delay and extra reports, but a commitment in all parts of the House to get on with this north-south railway and allow economic growth in every part of the United Kingdom.

Small Businesses

The Government are very supportive of small businesses. We demonstrated this support again at Budget 2013 through the introduction of the new £2,000 employment allowance for small businesses and charities from April 2014.We have extended the small business rate relief from April 2013. We have increased the small business research and development tax credit to 225% and the lifetime limit on entrepreneurs relief to £10 million. In addition, we have launched a £1 billion British business bank to improve access to finance for small and medium-sized enterprises in the UK.

I congratulate my hon. Friend on the fact that the new employment allowance will mean that 450,000 small businesses pay no national insurance contributions at all. Is this not a positive help to small businesses such as those in my constituency as they seek to take on more employees?

I entirely agree. That £2,000 for every business will feed through by helping businesses take on new staff, invest in their business or pay higher wages. It is a positive contribution, which contrasts with the proposals that we inherited for an increase in employer’s national insurance contributions.

We have had to deal with the aftermath of a banking crisis that occurred, in part, because of failed regulation set up by the previous Government.

Does my hon. Friend agree that it is good news that, due to the investment in small businesses, unemployment in Morecambe has fallen by 10% in the past three months?

That is very good news. As we are hearing from various constituencies, unemployment is falling. It is going in the right direction and it is important that we stick to the economic path.

Why should we believe from the Minister that the present scheme for dealing with national insurance contributions will be any more successful than his previous scheme, where take-up was extremely poor and did nothing to increase jobs?

I do not know whether Labour is opposing the scheme. That was not the impression I got. This is a very simple scheme. It does not require applications or involve any of the complexities that we saw with two of the Labour national insurance contribution schemes. We are confident that the current scheme will work. It has been widely supported by business groups and I think it will make a big difference to small businesses.

In-work Benefits

The latest forecasts of benefits and tax credits are available online via the website of the Department for Work and Pensions. They are consistent with the Office for Budget Responsibility forecasts and reflect the Government’s wider policy.

Will the Minister explain why she is allowing companies that are making massive profits to pay poverty wages that need a subsidy from the taxpayer through in-work benefits? Why does she not stop those companies sponging off the taxpayer and adopt a Labour policy of requiring companies that can well afford it to pay a living wage?

It seems that even the shadow Chancellor has questions about a living wage policy, saying in 2010 that he was not sure about it. I am surprised that the hon. Gentleman did not talk about the fact that in the north-west and Merseyside 306,000 people have been taken out of paying income tax altogether as a result of this Government’s policies.

It was the case, was it not, that under the previous Government work simply did not pay because people who got into work found that a huge proportion of their extra income and, in some cases, all their extra income was clawed back by the complex benefits system? Will my hon. Friends redouble their efforts to make sure that work pays?

I thank my hon. Friend for his question. He is absolutely right. This Government believe that work should always pay. By 2010, nine out of 10 working families had been made dependent on the state by the previous Government. This Government believe that families should keep more of their hard-earned money to spend on the things that are important to them.

Youth Unemployment

The UK labour market is showing some signs of recovery. Youth unemployment, excluding those in full-time education, fell over the last quarter and the number of young people claiming jobseeker’s allowance is lower now than it was in 2010. The Government are committed to supporting long-term unemployed young people, which is why we launched the Youth Contract in 2012 and why we have increased the number of apprenticeships, with over 1 million starts so far.

The Chief Secretary refers to the Youth Contract, but does he not accept the assessment of the Government’s own social mobility adviser that it is having a limited impact on the

“appallingly high levels of youth unemployment”?

I certainly accept that there is a great deal more that we have to do to get people off benefit and into work, but if the hon. Lady looks at the work experience programme within the Youth Contract, she will see that it is having a significant effect on the number of young people getting off benefit and into work, and at one 20th of the cost of the future jobs fund, which I think is good value for money.

Is not the single most important measure we can take to tackle youth unemployment the creation of jobs? I therefore welcome the creation of over 1.5 million new jobs and 600,000 new apprenticeships and the news that last year this country had more small businesses than ever before. Does that not show that we have a Government who are seriously tackling youth unemployment, after it rose for 13 years?

My hon. Friend is right. In fact, there are now more people in work, including more women, than ever before in our country’s history, and there are now more households in which someone works than in any year under the previous Government. There is a lot more to do, but that is a record to be proud of.

Yorkshire Bank

13. What representations he has received on Yorkshire bank and lending to small and medium-sized businesses. (900907)

All meetings between external organisations and Treasury Ministers are published on the Government’s website. However, it is not the Treasury’s practice to provide details of all representations Ministers receive. Lending to small and medium-sized businesses is an important issue, and I can assure my hon. Friend that it receives the Government’s highest attention.

I thank the Financial Secretary for that answer. He might be aware that two years ago the owners of Yorkshire bank announced their intention to downsize in the UK and invest more money in Asia. Since then they have aggressively reduced the size of their UK loan book, despite assurances made to small businesses. That has affected many businesses across the country, including Arley Homes in my constituency, which has been forced into administration, with the loss of many jobs. Is there more we can do to make them behave responsibly?

I know that my hon. Friend raised this issue with my predecessor on behalf of his constituents, and he was absolutely right to do so. The way in which a bank structures its business is a commercial decision, as I am sure he appreciates, so I am unable to comment on it. However, if a bank decides to restructure its business in a certain way, I would expect it to pay due regard to the interests of all its customers and to treat them fairly.

Small businesses in my constituency used to borrow from Yorkshire bank, and many have told me that they never missed a repayment, but now the bank simply will not lend to them, despite excellent credit histories. Why are the banks refusing to lend to small businesses that have a strong history of repayment?

May I give the hon. Gentleman some advice on how he can help small businesses in his constituency and elsewhere? The SME appeals process that the Government set up with the banking sector has been very successful, with 40% of businesses that appeal finding decisions overturned. He can help to advertise that, as the Government will be doing shortly to banks.

The point of capitalism is that people who take risks should be rewarded when they are successful and should lose money when they fail. Yorkshire bank has been among the worst for penalising its good customers to try to make up for its own losses. That is an abuse of capitalism. I hope that the Minister will take steps to ensure that Yorkshire bank treats its customers fairly, because in too many cases it has been treating them terribly unfairly.

My hon. Friend has made a number of representations on this issue, and he is right to do so. As I have said, we want all banks to treat their customers fairly, and the Government are absolutely committed to that.

I agree with the comments made by the hon. Member for Warrington South (David Mowat). Following an article I wrote for the Yorkshire Post, I have received dozens of complaints about Yorkshire bank from small businesses, particularly about being locked into tailored business loans with very high interest rates and very high redemption clauses and payments to get out of them. Will the Minister look at involving the Financial Conduct Authority to see if there could be an investigation into what has been going on?

I believe that my predecessor raised this issue with the FCA, but I would be more than happy to do so again.

Wage Levels

14. What recent comparative assessment he has made of trends in real wages in the UK and in similar economies. (900908)

This Government recognise the pressure on households, but the fall in living standards is a consequence of the economic crisis left to us by Labour. The only way to raise living standards is to stick to our economic plans and deliver a recovery that works for all. Britain has turned a corner: the economy is growing, the deficit is falling, and jobs are being created. Last year, UK take-home pay was the highest in the G7 and the third highest in the OECD.

That is a very interesting answer. Why does the Minister think that the 15% cut in wages suffered by British workers over the past five years is more than in any comparable five-year period and the second biggest in the G20?

It is interesting to note that the main fall in wages and salaries came in 2007-09, when growth fell from 5.7% to less than 1%. Of course the Government understand that the situation is very difficult, but I am surprised that the hon. Gentleman has not welcomed the fact that the claimant count in his constituency has fallen by 11% under this Government, whereas it went up by 75% under the previous Government.

Will my hon. Friend tell the House by how much those on low and middle incomes are going to be better off because of this Government’s decision to raise the personal allowance to £10,000 from April 2014?

I thank my hon. Friend for his question. The average taxpayer will be better off by £700 a year as a result of these changes.


The Government are driving a wide-ranging and ambitious programme of reforms to make the banking sector more competitive and to give consumers a better deal. This includes reducing market barriers, encouraging current account switching, and putting competition at the heart of the regulatory system.

Will my hon. Friend commend the Church Commissioners for their investment in Williams and Glyn’s as a new competitive bank that intends to have the highest ethical standards? As well as increasing competition in banking, is it not also crucial that we have a system of banking regulation with clear accountability and responsibility, avoiding mistakes in the system designed by the previous Administration?

I congratulate the Church Commissioners on their role and the expertise that they bring. Given that my hon. Friend is a commissioner, I take this opportunity to congratulate him too. He is right to highlight the fact that the previous Government’s changes to financial regulation contributed significantly to the banking crisis in 2008. That caused misery and hardship for millions of hard-working families, yet I notice that the Opposition have yet to apologise.

The Minister will agree that a level playing field is important for competition. Why, then, did the Chancellor make the misguided offer to the Chinese Government to give light-touch regulation to Chinese banks operating in this country? If we are going to have competition, will that approach be extended to all other banks?

The hon. Gentleman will know that such decisions are made by the independent regulators—in this case, the Prudential Regulation Authority, which has made the reasons for the decision absolutely clear.

Topical Questions

The core purpose of the Treasury is to ensure the stability and prosperity of the economy. Today I can also announce another step in the fight against tax evasion. This afternoon we will sign a tax information-sharing agreement with the Cayman Islands—the first ever with an overseas territory. As a result, information on UK taxpayers held in the Cayman Islands will automatically be provided to Her Majesty’s Revenue and Customs, which will use it to collect the tax that is due.

Is it still the Chancellor’s intention to withdraw jobseeker’s allowance from all young people under the age of 25?

That is not part of the Government’s programme. We are seeking to help young people into work through the Work programme and the Youth Contract. The good news is that the youth claimant count has fallen by many tens of thousands. I would have thought that the hon. Gentleman would use this opportunity to get up and point out that unemployment has fallen in his constituency over the last year, and there are—[Interruption.] Unemployment has fallen in his constituency, and every job created is one that he should be celebrating. He should remind his constituents of the enormous damage done to the north-east economy by the previous Labour Government.

T3. The most important financial issue in the lives of many young families is mortgage interest. Does my right hon. Friend the Chancellor agree that the best way—indeed, the only way—to keep mortgage rates low is to stick with the Government’s economic plan of cutting the deficit? (900920)

I completely agree with my hon. Friend. Of course, one of the consequences of the higher borrowing that the Labour party is advocating would be not just higher taxes, but higher interest rates, which would be absolutely disastrous for families. That is precisely why we have to stick with the economic plan that is delivering the recovery.

I welcome the Economic Secretary and the shadow Financial Secretary to their new jobs, and let us not forget the former Treasury Whip, the Treasurer of Her Majesty’s Household, the hon. Member for Chelsea and Fulham (Greg Hands), who has finally got the promotion we have been urging him to get for three years.

On this Chancellor’s watch, the UK is experiencing the slowest recovery for more than 100 years, and with prices, including energy prices, rising faster than wages, for millions of people this is no recovery at all. Yet from the Chancellor’s earlier answers to the Chair of the Treasury Committee, he seems to think he can get away with cutting energy bills by simply shifting the burden of his green levies on to the ordinary taxpayer. Let me ask the Chancellor—[Interruption.]

Why will the Chancellor not agree with us and Sir John Major that it is the energy companies that are making the excess profits and that it is they, not the ordinary taxpayer, that should bear the burden?

First, I join the right hon. Gentleman in welcoming the two hon. Ladies to their new Front-Bench positions, although I think he got the title wrong of his new shadow Exchequer Secretary. By the way, while I am at it, may I welcome the fact that the right hon. Gentleman did not move in the reshuffle, because he is exactly where we want him to be?

Perhaps one of these days the right hon. Gentleman will welcome the fact that GDP is increasing, that unemployment is coming down and that today we had the best services purchasing managers index since May 1997. I believe we should roll back some of the levies and charges that have been imposed on energy bills. I am not clear whether he agrees.

After three years of flatlining, people are worse off because of this Chancellor of the Exchequer. As for ordinary people’s rising energy bills, he just does not give an EDF.

Is it not the case that, over the past year, energy prices in the euro area fell by 1.7% while in the UK they have risen by a staggering 7.7%? Simply switching green levies on to the taxpayer is giving with one hand and taking with the other. Why does this Chancellor always hit ordinary families while standing up for a powerful few?

With questions like that, the right hon. Gentleman is never going to be npower, is he?

The truth is that the right hon. Gentleman created a situation in our economy whereby living standards were hit hard, because he destroyed jobs and economic prosperity. Like a bonfire on Guy Fawkes night, every single one of his economic predictions has gone up in smoke, and he has nothing credible or serious to say about the British economy.

T4. Is it not true that the only way to improve considerably our standard of living is to focus on the economic situation of the country to boost growth and pay down debt? (900921)

I completely agree with my hon. Friend that unless we have a credibly economic plan to grow the economy, deal with public finances and support business rather than tax it, we will get the reaction the shadow Chancellor got from the CBI, whose members said that the hairs on the backs of their necks stood up as they listened to all the terrible things that a Labour Government would do to them. The truth is that we are fixing the economic mess the shadow Chancellor left behind, and that is the best way to improve people’s living standards.

T2. The Chancellor was warned that his cuts would choke off the growth that had returned to the UK economy when he took the job in 2010. Of course we welcome the fact that Britain is finally returning to growth, but does he not realise that if he had taken the advice of my right hon. Friend the Member for Morley and Outwood (Ed Balls) earlier, we would not have had three wasted years, the average working person would not be £1,500 worse off, and the talents and potential of 1 million young people would not have been laid to waste? (900919)

I remind the hon. Gentleman that the shadow Chancellor said that our economic policies would choke off the recovery in the spring of this year—the very moment when the recovery was under way. When will a Labour MP welcome the fact that our GDP has grown by 0.8% and unemployment is coming down? When will Labour acknowledge that it is our economic plan that is delivering that?

T5. One of the frustrations of losing ministerial office is that one cannot see through the things that one started. Will the Chancellor look carefully at the recommendations of the independent future of farming review, which I commissioned, because it has made far-reaching suggestions for changes in taxation that will benefit rural areas? (900922)

I pay tribute to the work that my hon. Friend did in government. I will make it a personal priority to ensure that his review sees the light of day and is acted on.

The key thing is that people are getting into work. That is another Labour MP who has not acknowledged the fact that unemployment has fallen in his constituency. When will Labour Members acknowledge that our economic plan is repairing the mess that they left behind?

T6. On behalf of brewers everywhere, I thank the Chancellor for being the man who scrapped Labour’s hated beer duty escalator and who cut beer duty for the first time since 1959. Last month saw the biggest growth in beer sales this century, with 1 million extra pints being sold and £60 million extra going to the Exchequer. I ask him to keep supporting Britain’s pubs and brewers. (900923)

This is a case of teamwork, because my hon. Friend has led a brilliant campaign involving many Members of Parliament in support of the local pub industry in their constituencies and the brewing industry, which is so important in Burton. The work that he has done has been fantastic. It was thanks to his campaign, which drew the evidence to my attention, that we were able to take the action that he has welcomed.

T10. Will the Chancellor make a statement on why the decision has been taken to extend HMRC’s pilot of the new customer service model in the north-east by two months until the end of December? (900927)

We want to look at the evidence further, so that seems to be a sensible approach; we want to see whether the model is working. The final decision has not been taken on whether to extend it. This is about improving the service for the people who need it most. We believe that that is an important objective.

T8. As you know, Mr Speaker, I am of a nervous disposition. I was therefore alarmed this year—not three years ago—to hear predictions that 1 million jobs would be lost, there would be a decade of lost growth and the recovery would be choked off as a result of the Government’s plans. Will the Chancellor allay my fears and explain what has happened in the real world? (900925)

My hon. Friend is right that there were a lot of predictions from the Opposition Dispatch Box. They said that there would be a decade of lost growth, but the economy is now growing and we have had the fastest growth in the G7 this year. They predicted that 1 million jobs would be lost, but 1.4 million jobs have been created in the private sector and unemployment is down. Above all, they advocated—indeed, they continue to advocate, because it was in the speech that the shadow Chancellor made yesterday—increased borrowing, which would lead to higher taxes and higher interest rates. The biggest threat to the British recovery is sitting right opposite me.

What progress has been made on the extension to the fuel duty rebate scheme, which is due for further implementation via a submission to the European Commission?

We have completed a call for evidence on that subject and have put forward an initial list of locations that meet the strict criteria that are required to make a successful application at the European level. Further work is needed to ensure that we have all the information that is necessary to submit the application. That will be the subject of a supplementary piece of work and we will submit the application early in the new year.

T9. I was delighted to welcome my right hon. Friend to Hainsworth mill in my constituency recently. Will he join me in welcoming the news that production output increased by 0.5% in the last quarter, and does he agree that that shows that British business is rising to the challenge of rebalancing the economy after an unsustainable decade under the Labour party? (900926)

I was very impressed by the work being done at Hainsworth mill, which is one of the oldest textile mills in Britain and has been going for a couple of hundred years. It is now exporting textiles from west Yorkshire to China, which shows that the British economy can achieve remarkable things if we get the investment and economic policy right. My hon. Friend is right: we must stick with the economic plan that is continuing to improve the situation in his constituency and across the country.

Every newly created job in the private sector is very welcome, but will the Chancellor tell the House how many public sector jobs have been redesignated as private sector jobs in the past three years?

I am happy to write to the hon. Lady with that number. Let us be clear: the Labour party and the shadow Chancellor said it was a complete fantasy that private sector job creation would outstrip the loss of public sector jobs required by fiscal consolidation. That is complete nonsense and we have not yet had an apology from the shadow Chancellor.

Companies up and down the country have been investing in manufacturing capacity for the green infrastructure of tomorrow. Those in the north-east Energi Coast consortium have already invested £400 million. Will the Chancellor confirm the Government’s commitment to support the renewable energy industry?

I am grateful to my hon. Friend for the question, and I congratulate him on his new appointment in this House. I can reassure him on his point. We are, of course, looking at the range of support that exists in terms of people’s energy bills, but we will not compromise on our commitment to renewable energy and green infrastructure investment. That means we remain absolutely committed to the renewables obligations and the contracts for difference, and that will not change as part of this process.

The Institute for Fiscal Studies estimates that more than 1 million more children will be living in poverty in 2020, which absolutely wipes out the number of those lifted out of poverty under the previous Labour Government.

The best approach to lifting children out of poverty is to ensure that they live in working households. We now have the lowest number of workless households since records began, which is due to the achievements of my right hon. Friend the Secretary of State for Work and Pensions, and of the economic plan that is getting the parents of children into work.

Given that the cost of the EU will double in this Parliament, and the huge current account deficit with the EU, does the Chancellor agree that our current economic relationship with the EU is wrong and that we should renegotiate?

I certainly agree that we need to reform the European Union so that our entire continent is not priced out of the global economy. We must also make reforms to the European Union, and Britain’s relationship with it, so that British businesses can thrive, compete and create jobs. I point out to my hon. Friend—he knows this anyway—that the cost of the European Union would have been much higher if my right hon. Friend the Prime Minister had not secured a very good deal. [Interruption.] The right hon. Member for Morley and Outwood (Ed Balls) says, “We did it,” but Labour gave up the rebate. The Prime Minister went to the EU battling for Britain and delivered for Britain.

Over the past six months more than 350,000 people, many of them in work, have accessed emergency food aid from a food bank. When will the Chancellor visit a food bank so that he can see for himself the impact of his cost-of-living crisis on hundreds of thousands of people across the country?

I have visited a food bank in Northwich in my constituency and seen the excellent work it does. I commend the volunteers at that food bank, and indeed across the whole food bank movement.

If Scotland chooses to vote for independence next September, how will handing over control of the Scottish economy to a foreign bank, namely the Bank of England, benefit Scotland’s economy?

My right hon. Friend makes an important point. It would be very foolish indeed for anyone to vote for independence on the basis that Scotland will keep the pound. It is highly unlikely that a currency union would be workable, and therefore highly unlikely that any euro-style arrangement for the UK would be in the best interests of either Scotland or the rest of the UK. The only way to be sure of keeping the pound is to keep the UK together.

Order. I am sorry to disappoint remaining colleagues, but, as usual, we have bust the box office for Treasury questions. There is nothing unusual about that.

Points of Order

On a point of order, Mr Speaker. The Guardian newspaper has constantly denied sending details of UK intelligence agents overseas, particularly to The New York Times, and yet, this weekend, The New York Times published highly specific information regarding UK intelligence teams operating in the middle east. Is it in order, Mr Speaker, for a national newspaper constantly to refuse to answer questions from the House and to threaten the security of our constituents in that way?

I am grateful to the hon. Gentleman both for the fact of his point of order and for notice of his intention to raise it with me. However, the issue he has raised, though of seminal importance, is not an issue of procedure with which the Chair can deal. The hon. Gentleman is drawing attention to what he believes to be, and what I think I can probably best describe as, an equivocation by The Guardian. That is a matter he must pursue by other means. I know that he has already led a well attended debate on the subject in Westminster Hall. He may well wish to try to continue that debate by other means. He is well aware of the location of the Table Office in the House, and he is a dextrous user of parliamentary procedure. We will leave it there for today.

On a point of order, Mr Speaker. I will keep it brief. The last time we had an opportunity to debate the badger culls linked to bovine tuberculosis was in an Opposition day debate on 5 October. In that debate, the evidence on which the House made its decisions included statements from the Secretary of State for Environment, Food and Rural Affairs, in which he said:

“Evidence suggests that at least 70% of the badgers in the areas must be removed.”—[Official Report, 23 October 2012; Vol. 551, c. 836.]

I further quote:

“It would be wrong to go ahead if those on the ground cannot be confident”—

Order. I recognise and respect the hon. Gentleman’s commitment to brevity but, unfortunately, his attempted point of order was not as brief as I would wish, especially as it was an attempted point of order rather than a genuine point of order. I would say to him, in so far as he is alerting me and the House to statements that he believes to have been in any way incorrect, erroneous or partial, that Ministers and all Members are responsible for the accuracy of their remarks in the Chamber. What we cannot have is the continuation of debate by the ruse of a bogus point of order. If I did not know the hon. Gentleman better, I would think that that was his game plan, but as I know him as well as I do, and know him to be a person of the highest moral probity, I feel sure that he had some other mission in mind. We will not continue the exchange now. He will deploy the resources of the Table Office to advance his purposes. We can leave it there for today.

Benefit Claimants (Automatic Transfer to Alternative Benefits)

Motion for leave to bring in a Bill (Standing Order No. 23)

I beg to move,

That leave be given to bring in a Bill to ensure that individuals claiming state benefits are automatically enrolled onto alternative benefits to which they are entitled when a benefit ceases to be applicable; and for connected purposes.

The Bill is needed because worrying and growing numbers of people find themselves without income, stuck in a bureaucratic benefits-bungling muddle or benefits limbo for extended periods for technical reasons.

I have become aware of the problem through a number of constituency cases. Mrs N lost her entitlement to employment and support allowance on 15 March but, owing to a wholly official error, the benefit continued to be paid until 1 August, causing an overpayment of £1,431. Having approached me for help in early September, Mrs N was left with the option of appealing the appeal without any income during that time or of making a new claim for ESA from 16 September, which she did—it was once again granted. My constituent was left without income for almost six weeks, from 8 August to 16 September, and was not advised to apply for an alternative benefit at any point between March and September. She managed to keep debt collectors at bay only by borrowing money from family and friends, and was barely able to avoid the debt trap that is payday lending after she found herself in benefit limbo.

There is the case of Mrs A, whom I saw at my surgery on 12 October. When her benefit entitlement was stopped in July, she did not receive a decision assurance phone call or written notification informing her of her entitlement to claim jobseeker’s allowance. She has not received any income since July. She, too, has been stuck in benefit limbo. Her doctor advised her that she is not fit for work and provided documents to that effect, but the Government say she is fit for work, and, because of an error in the system, she was not informed of what she should do. Had she been automatically enrolled on to jobseeker’s allowance at the moment her previous entitlement ended, she would not have been left without income. She would have been entered into the system to either find work or be enrolled anew on appropriate state support. What is important about this case is that I have previously asked the Department for Work and Pensions what it does when ESA entitlement ceases, and was told that it tells people to claim JSA. That, however, clearly does not happen in all cases.

We then encounter the passporting problem. The system is efficient when it comes to people automatically qualifying for housing benefit. However, it also efficiently knocks people off housing benefit when they wrongly fall out of the support system. That means that when they finally ask for help, they are probably also facing an eviction notice. That is unnecessary. The Department could simply start them on the new benefit, which it already knows they qualify for. I have been told that the law does not allow that, for data protection or other reasons. The Bill would cut the Gordian knot.

There is significant delay in the system. I am aware of one constituent who, having been referred by the jobcentre to a local food bank, missed an appointment at the jobcentre. As a result, he was sanctioned. An appeal would take up to 10 weeks—three times longer than the sanction itself.

We should not overlook the effect on the health of those left in benefits limbo. The uncertainty, stress and choices for those without income experience do nothing to help their mental or physical health. They do not face a choice to heat or eat; they are left reliant on handouts and charity—a lack of dignity no one in this House would wish to impose on anyone.

There is the case in Westminster of child EG, who died of starvation after his mother, Mrs G, referred to in the serious case review, suffered a serious illness and died shortly afterwards. She was a survivor of domestic violence and, with her children, successfully sought asylum. After many months, however, she had still not been placed on mainstream state support. The serious case review reflected on the effect on her health, and that of her children, of ad hoc sources of income from charities and the local authority, the failure of the UK Border Agency to hand over necessary papers, the absurd requirement that she become homeless for the local authority or benefits agency to assist her, and the insecurity of her housing situation. The case review concluded that the situation was

“worrying for anyone; it must have been extremely difficult and contributed to her difficulty in managing her children and their collective health needs”.

This young mother found herself in a desperate situation. The failure of the authorities to get into gear and provide the support she needed contributed to a tragic outcome, yet in the months leading up to her death she was relatively well. I have examples of people left in similar situations—unable to pay the rent, in fear of debt collection and forced to rely on charity and food banks—because of the same bureaucratic delay and befuddlement that contributed to those deaths.

My office is authorised to hand out food vouchers for the local food bank. However, I have a case of someone who refused food vouchers, because he could not pay for the cost of cooking the food as he was destitute. Aside from the stress and anxiety an appeal causes to a person who is, in many cases—if not the majority—not fit for work and really rather ill, the Government announced in February that they were introducing a mandatory reconsideration pending appeal during which benefits were to be stopped. A freedom of information request issued in April this year revealed:

“If the claimant wishes to dispute this decision they must request that the decision maker looks at it again (mandatory reconsideration). Whilst the decision maker is reconsidering the decision, ESA cannot be paid as there is no legal basis to do so.”

ESA may not be paid, but at least the Department for Work and Pensions could ensure that people are not destitute by paying them JSA. The principle is the same when it comes to transfers from disability living allowance to personal independence payment, or indeed the payment of discretionary housing payments or other situations, such as the case of EG. At times, the Department clearly has evidence that people qualify for benefits, but does not manage to pay them and they end up destitute. I do not think that is the Government’s objective; however, the Bill is one way of resolving the issue. Another would be to introduce a legislative and regulatory reform order to remove the burden of a formal application.

It would be preferable to ensure that a claimant continued to receive regular payments and had any overpayment recovered over time, rather than leaving people at the mercy of the debt traps of payday loans or to be forced to rely on charity, food banks or emergency support. As the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Wirral West (Esther McVey), told me in a letter dated 23 October, there are stigmas and confusions associated with the system at present. As she told me, many claimants of ESA, having been found fit for work, fear making a claim for JSA because they think it might prejudice an appeal.

Although the Minister assures me that this fear is misplaced, I think it would be far better for the user if we removed that fear. Such a move should have no impact on the benefits budget, because it would be money someone is entitled to and a replacement for a benefit they would be getting otherwise. It would allow decision makers to make informed decisions in the time they need without leaving a claimant without income. Indeed, it would create a bureaucratic saving, because not having to process a backdated claim for housing benefit and council tax support would reduce the amount of effort for the state.

We need to remember that although some people have abused the benefits system in the past, there are also people who are confused about what is going on. As I have explained, that confusion can lead to tragedy, and the Government should support my Bill in order to avoid such tragedies. As I said, there are various routes towards this objective: the DWP might be able to manage it under current legislation and rules—although this is not clear—but a legislative and regulatory reform order would achieve the same outcome, and would also be quite a rapid process. As a member of the Regulatory Reform Committee, I am sure the Committee would welcome the work. Alternatively, I would be happy for the Government to take over the Bill.

Question put and agreed to.


That John Hemming and Jim Shannon present the Bill.

John Hemming accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 22 November, and to be printed (Bill 125).

Gambling (Licensing and Advertising) Bill

Second Reading

I beg to move, That the Bill be now read a Second time.

British remote gambling regulation is currently conducted on a point-of-supply basis. Only operators with at least one piece of their remote gambling equipment in Britain require a Gambling Commission licence and are subject to the required standards. This means that overseas operators offering gambling services to consumers in Britain are currently regulated not by the commission, but by the regulatory regimes in the countries in which they are based. In consequence, there are different regulatory standards and UK consumers might experience varying levels of protection, depending on the operator they are dealing with.

The Gambling Commission estimates that about 85% of remote gambling activity by UK consumers takes place with operators that the commission does not regulate. The Bill aims to regulate remote gambling on a point-of-consumption basis. With this change, all operators selling into the UK market, whether based in Britain or abroad, will be required to hold a UK Gambling Commission licence, making them subject to robust and consistent regulation, increasing protection for UK consumers, supporting action against illegal activity and establishing fairer competition for British-based operators.

The Minister says that this is about regulation and stopping illegal activity. What proportion of people is currently estimated to bet illegally in the UK, and what will that estimate be after the Bill has been introduced?

At the end of the day, this is about establishing a level playing field. I hope that my hon. Friend will bear with me for a little while, because I shall go into that matter in greater detail.

The Bill aims to regulate remote gambling at the point of consumption. Under the new regime, overseas-based operators will be subject to the provisions of the Gambling Act 2005, its regulations and the Gambling Commission’s social responsibility and technical standards requirements. This will mean, among other things, that all licensed operators will be required to contribute to research, education and treatment in relation to British problem gambling, and to comply with licence conditions that protect children and vulnerable people.

Just to help the hon. Member for Shipley (Philip Davies), may I point out that this is an important part of the licensing objectives of the Gambling Act, and that the Bill is consistent with those objectives?

The hon. Gentleman makes a good point.

The Bill will also level the playing field for the advertising of remote gambling. At present, operators based in the European economic area or in a country on the “white list” can advertise remote gambling to consumers in Great Britain. The 2005 Act allows the Secretary of State to designate non-EEA jurisdictions that have strong regulatory systems comparable to Britain, and to give them permission to advertise remote gambling services in Britain. Those jurisdictions form what is informally known as the “white list”, and they include Antigua and Barbuda, the Isle of Man, the States of Alderney and Tasmania.

The Bill will repeal section 331 of the 2005 Act, removing the offence of advertising foreign gambling and, consequently, the distinction between EEA and “white list” countries, and non-EAA jurisdictions. Instead, all operators who hold Gambling Commission remote licences will be able to advertise to British consumers, regardless of where the operators are based. As now, gambling operators who wish to advertise in Britain will need to comply with the advertising codes of practice. Overseas operators that are required to hold but fail to obtain a Gambling Commission licence will be committing the offence of providing facilities for gambling or the separate offence of advertising unlawful gambling. The Gambling Commission is empowered to pursue and bring appropriate action against the operator concerned.

The repeal of section 331 will also have an impact on Northern Ireland, where gambling is a devolved matter. New provisions creating an offence of unlicensed advertising of remote gambling have been included in the Bill to ensure that Northern Ireland continues to have the same protections for the advertising of remote gambling as we have in Great Britain. The Northern Ireland Assembly formally agreed these changes through a legislative consent motion on 17 June. Gambling is a reserved matter with regard to the devolved Administrations in Scotland and Wales. Scotland, England and Wales will all receive the same protection in relation to the advertising and regulation of remote gambling.

The Minister has kindly outlined the situation in Northern Ireland. Has she had discussions with the relevant Minister in the Northern Ireland Executive about the regulation of remote gambling in Northern Ireland? I know this is a devolved matter, but did the issue arise in the discussions on the legislative consent motion and, if so, what was the outcome?

I have not personally had any such discussions, but I am sure officials will have done so, and I know that the Gambling Commission and others will continue to liaise on this matter.

Clause 1(4) of the Bill confers a power on the Secretary of State to make provision, by statutory instrument, about

“the making, consideration and determination of advance applications”

for a remote operating licence. This will allow robust interim measures to be set up, permitting a smooth transition between the current regulatory regime on remote gambling and the proposed new regime. Similar powers were used as part of the 2005 Act.

I would like to thank the Culture, Media and Sport Committee for its thoughtful and thorough pre-legislative scrutiny of this small but important Bill, and for its support for the move to regulate remote gambling on a point-of-consumption basis.

I support the Bill, and I agree with its aim to ensure that there is a level playing field. Will my hon. Friend tell the House what financial benefits the Bill will bring to the Government and the taxpayer?

My hon. Friend makes a good point about the level playing field; that is certainly what the Bill sets out to achieve. However, this is about consumer protection, which is an important feature of the legislation. Taxation matters are ones for the Chancellor of the Exchequer.

Regrettably, a number of my friends have got into huge difficulties through gambling on smartphones, because the situation is so liberal. I appreciate that companies operating remote gambling will be brought onshore and regulated at UK level, but how will the Bill prevent individuals from getting into thousands of pounds-worth of debt and losing their homes, families and livelihoods?

This is exactly why we are seeking to regulate remote gambling. The process is quite circular in many ways. Unfortunately, according to the Gambling Commission, 85% of the remote gambling that takes place in Britain is unregulated. Many people are therefore not protected. The Bill will enable them to enjoy a more consistent and robust level of protection. That is exactly what the Bill is about.

The Bill will also ensure that remote gambling organisations are paying something towards dealing with the outcomes of problem gambling.

Absolutely. It is important that they should pay their fair share, just as the onshore companies offering remote gambling already do. Again, this is about achieving a level playing field.

Regarding the level playing field for domestically based businesses, the Minister will know that casinos pay tax and employ local people, yet they cannot undertake remote gambling from their premises. Will the Government look at what the Culture, Media and Sport Committee has said on this matter, and consider whether there should be changes to allow them to do so?

We will look at all the relevant information, and I am certainly happy to take another good look at what the Committee has said. The important thing for casinos is that they maintain a proper balance between table play and machine play, because we do not want them to become machine sheds, as some have suggested they might. I can confirm today that I am happy generally to review the issue of gaming machine provision in casinos.

We will go into this matter in considerable detail in Committee. Enforcement will be a matter for the Gambling Commission, which has many tools at its disposal to ensure that everyone is properly regulated and that the rules are complied with.

If a company set up in, say, China or America, and advertised only through the internet, would it be covered by the scope of the Bill? The Minister will correct me if I am wrong, but I do not think that it would.

Territorial restrictions have been removed, but if a company is advertising here and its facility is being used here—or if it ought to know that that is so—it will need a Gambling Commission licence and it will be bound by the regulations.

I must make some progress now.

I pay tribute to my hon. Friend the Member for Weston-super-Mare (John Penrose) for his sterling work on developing the Bill and getting it to where it is now. It is fitting that he should be sitting near to me, if not quite next to me, on the Front Bench today. I also want to pay tribute to the previous Administration’s review of the remote gambling regulatory framework, and I am pleased that the Bill has the support of hon. Members on both sides of the House.

The Bill is largely a prudential measure to prevent what is currently a risk from becoming a major issue in future, especially as accessing online gambling products is becoming much easier—as has already been mentioned this afternoon—with the growth of smartphones and other portable devices.

According to the latest Gambling Commission statistics, remote gambling is very much on the increase—year after year, all year round—and increased by 10% in the last year alone. We must therefore take this opportunity to ensure that the Gambling Commission has the power to intervene if problems occur now or at some point in the future. The Bill will do just that, providing public protection for consumers based in Great Britain by tightening current legislation to ensure that all remote gambling, whether provided by UK or overseas suppliers, is a licensed activity subject to Gambling Commission standards and controls. I commend the Bill to the House.

I start by welcoming the Under-Secretary of State for Culture, Media and Sport, the hon. Member for Maidstone and The Weald (Mrs Grant), to her new post, which I neglected to do under pressure of time at questions last week. I look forward to debating with her over the coming years. [Interruption.] Well, she may well keep her position in opposition.

The Bill has been a long time coming. The need for changes in the licensing of remote gambling operators was first identified by my hon. Friend the Member for Bradford South (Mr Sutcliffe) when he was Minister for Sport. Online gambling was first regulated in the UK in 2007. Since that time, in order to avoid taxation, all but one of our major online betting companies has moved offshore and they justified that by claiming that that is necessary to remain competitive. The consequence has been that these operators are outside UK regulation, which is one of the reasons why we are here debating this Bill today.

In 2009, my hon. Friend ordered a review of overseas gambling operators who advertised in the UK. In 2010, we began the consultation on extending Gambling Commission licensing to include online gambling operators offering services in the UK. Consultation responses were published after the general election in July of that year by the then Minister with responsibility for gambling, the hon. Member for Weston-super-Mare (John Penrose), whom I see in his place. It was then a full year before he issued a written statement on the Government’s plans to legislate. The draft Bill was published in December 2012, and the Select Committee published its report on the draft Bill in May 2013. Four years and four Ministers later, we have finally got the Bill, so what was all the waiting about?

I agree that there have been too many delays, but if the Labour party had not messed around with large-scale casinos and the accompanying shenanigans, could this not have been achieved under the last Government?

As I said, the regulations on online gambling were introduced in 2007 and the issues relating to online gambling were identified in 2009 by my hon. Friend the Member for Bradford South, who then began the process of dealing with the situation, and nothing was held up at all by casino gambling. We now have before us a five-clause Bill that deals with the licensing of remote gambling operators at the point of consumption. That is not contentious. Virtually everyone, including large parts of the gambling industry, is in favour of that.

The delay in bringing the Bill forward could be understood if it addressed many of the issues that have come to light since 2007. For instance, does the Bill include clauses to introduce financial penalties for companies that breach licensing codes? Does it set out detailed methods for enforcing compliance with new powers for the Gambling Commission? Does it require all licensed operators to display a kitemark to inform consumers that they are using a UK licensed online operator? Does it introduce a whole new set of penalties for operators who fail to report suspicious activities? Does it deal with betting advertising before the 9 pm watershed? Does it include requirements on operators to contribute to research on, and treatment of, gambling behaviour and problem gambling?

Does the Bill define what a betting shop should provide before it can advertise as such? Does it deal with unmanned betting shops providing self-service betting terminals? Does it create the framework for a single form of self-exclusion across the industry for those who need help with their gambling addiction? Does it deal with the anomaly of spread betting being regulated by the Financial Conduct Authority? Does it require every operator taking bets on horse racing from UK-based customers to contribute to a horse race betting levy? Does it require the betting industry to make some contribution to all sports from which it profits yet to which it makes no contribution? Does it deal with the issue of dormant accounts, on which the Government promised to legislate? This Bill deals with matters that have been under consideration for four years and on which there is pretty much unanimous agreement, so it is difficult to understand why we have had to wait so long, when the Bill is so limited in what it seeks to achieve.

What the hon. Gentleman says is completely incoherent. He started by arguing that things should have happened faster, but then raised a whole series of issues that would have delayed the Bill even further. Which of those two things does he believe?

My point is that if the Bill addressed those issues, we could understand the delay, but it does not. It deals only with something we all agreed with nearly four years ago. I am highlighting a number of issues about which people who monitor the gambling industry are concerned. It is perfectly legitimate for the House to raise and debate those issues, particularly when we are intending to legislate in a very important area of gambling activity.

I wish the hon. Gentleman the best of luck with all the questions he peppered with the Minister, most of which seem wholly irrelevant to me. I hope he does better than I did when I posed a question to her, which did not seem to get an answer. I wonder whether the hon. Gentleman could answer my question, which is rather important for the purposes of this Bill. Can he tell us what proportion of gambling in the UK he estimates takes place with illegal operators, and what proportion of it will take place with illegal operators after this Bill has been introduced?

The hon. Gentleman will know that the chief executive of the Gambling Commission said in the evidence she gave to the Select Committee on which he sits that there was very little reporting of illegal gambling activity from 80% of the market that was unlicensed—a point for which I shall return. The gambling prevalence survey, which last took place in 2010, has been abolished, so we have very little empirical evidence on which to base our views. What we do know, however, is that people have raised entirely legitimate concerns and we should address them in our consideration of legislation.

We could understand the delay if we had had a full legislative timetable from the Government, but we have not, so why have we waited so long? We want to say that we welcome the Bill and that we particularly welcome the adoption of Labour’s policy of regulating online gambling, but we are disappointed, given the time that the Government have had to consider these issues, that a number of them have not been included in the Bill.

I have been listening with fascination to the hon. Gentleman’s great speech. Will he assist us by explaining why, given the multitude of things that he would have liked to see included in the Bill, the Labour party did not introduce any of them when they were in government?

Let me explain to Government Members that the Gambling Act 2005 was a major piece of legislation that has largely stood the test of time. When the legislation was put in place, the then Government said that the issues in the Bill would be kept under review. A number of areas have subsequently come to light, such as online gambling, which has grown exponentially over the last few years, that present some challenges to Government, in respect of which regulation might be necessary.

The 2005 Act was the first parliamentary legislation on gambling since the 1960s. Betting changed dramatically between that period and the Budd report of 2000. This Bill represents the first time the present Government have allowed us to discuss gambling as an issue, and it may be the last time before the next election that we have an opportunity to look at the many issues affecting the gambling industry.

I am grateful for the benefit of my hon. Friend’s knowledge of this issue. As he says, the Bill has been a long time coming. The Department has few opportunities to find time on the legislative calendar, and we should not waste this opportunity to explore all the aspects of online gambling that may need to be addressed.

Gambling is enjoyed by more than 56% of the population, and the figure rises to more than 70% if the purchase of lottery tickets is included. Obviously we welcome the move to create a level playing field between operators who have remained onshore and those who have moved offshore, have based themselves offshore, or have recently entered the market and wish to trade with United Kingdom customers.

However, when we consider legislation on matters of this kind, we tread a difficult path between our wish to promote an industry from which people gain a great deal of pleasure and our responsibility to protect the vulnerable. Online gambling is of particular concern because of its very nature. It is possible for vulnerable adults to indulge their addiction without leaving their homes, and hence to suffer alone while running up debts that they cannot hope to pay. It is our duty as legislators to create a safe and well-regulated environment in which people can enjoy the pleasure that they experience from gambling.

The online industry has grown to be worth more than £2 billion a year in a relatively short time, and with that has come a relative increase in the capacity of online gamblers with an addiction to lose money before anyone becomes aware of their problem. Unlike codes of conduct in other jurisdictions, the Bill contains no requirement for licensed operators to monitor the behaviour of their customers and intervene if they think there is a problem.

Is there not a potential for illegal sites to crop up all over the internet, left, right and centre, because of the lack of consumer protection in the Bill?

I think that we shall be seeking assurances from the Government on the issue of consumer protection. We shall want to see exactly where the lines will be drawn, and where the Government feel that action should be taken if any form of illegal activity is taking place or there is no protection for vulnerable people.

Online gambling is an important issue of public concern, and we are entitled to know how the Government intend to monitor it. The Bill does not specify a point at which operators would be required to intervene, and to discuss directly with their customers whether there is a problem. Some people have expressed concern about the fact that we have a weaker regulatory framework than that which operates under the regulators in white-listed countries such as Alderney and Gibraltar. There is new technology designed to identify people who may have problems, but there has been no indication from the Government that they intend to use it to protect vulnerable consumers.

One of the problems of the current system is that, while the likes of Gibraltar may have a fairly good regulatory system, those of other white-listed countries may be less than desirable.

I have seen no evidence suggesting that any white-listed countries have a significantly lesser regulatory system. Indeed, the position appears to be quite the opposite when it comes to protecting vulnerable people. The Bill, however, opens the market to people who currently cannot operate within the United Kingdom, and that is one of the main points of concern. What steps does the Minister expect the Gambling Commission to take, and at what stage does she expect it to intervene if operators fail in their duty to monitor gambling activity?

There is widespread concern about pre-watershed gambling advertising. Although most gambling is not advertised before the watershed, there are exceptions for betting during sports fixtures that are televised before 9 pm. Can the Minister assure us, given the amount of concern about the issue, that she will consider reviewing that aspect of advertising regulation?

Although it is welcome that every gambling operator who advertises in the United Kingdom will be required to be licensed by the Gambling Commission, the Bill will open up the market to operators outside the European economic area and the white list. In her evidence to the Select Committee Jenny Williams, chief executive of the commission, said that

“the Gambling Commission received one or two reports per month from its online gambling licensees, who handled…20% of the market, but from the 80% licensed overseas the Commission had received a total of about ten since 2007. Ms Williams suggested it was implausible there were so few suspicious transactions.”

In that context, the Bill is a giant leap in the dark. What will be the demand on the commission’s resources? No one can say for certain what the scale of the problem may be. The Government have allowed themselves scope to regulate in the future, but given their reluctance so far to act to protect the consumer, we must insist on some indication from them of what they are prepared to tolerate before they will take such action. What will be their response if the commission says that it cannot cope with money from licence fees alone, and asks for extra resources? What if it needs extra powers with which to tackle the problems presented by the opening of our market to companies that are currently excluded? The Minister must explain what benchmarks the Government will set themselves, according to which we can hold them to account. It has taken so long for them to present the Bill that we cannot pass up the opportunity to secure from them clear guidelines explaining how they expect the market and the regulators to deal with these important issues.

I do not by any means agree with everything that is said by the Remote Gambling Association, but I do believe that the enforcement issue needs to be explored further during the Bill’s subsequent stages. According to the RGA, not only is the lack of enforcement measures problematic for the licensing regime, but the Government may experience problems in collecting the revenue that it expects to receive as a result of the change in the system overall.

There is a great deal of concern about the details of the Bill. It is easy to understand why it is desirable, and, as I have said, we support it, but its application may present problems. As my hon. Friend says, during its further consideration we need to look into exactly how it will be enforced.

Any company that is paying the licence fee and doing its best to operate according to the highest standards has a right to expect the integrity of the licensing system to be rigorously enforced. There should be a kitemark on the website of every UK licensed operator to indicate clearly to the public that the company is a registered, licensed operator that is overseen by the Gambling Commission. We need to see some evidence that the Government have thought that through. Does the commission have enough scope within its powers to take action to protect consumers? What does it mean when it says that the provision of a kitemark will effectively happen? What form will the kitemark take, will it be easy to recognise, and will it provide links to information and advice from the commission, particularly information about the dangers of using unlicensed sites?

According to the Select Committee’s report, when asked why the Bill did not include measures on enforcement, such as provision for financial blocking or the blocking of specific internet protocol sites, the Government assured the Committee that “most were already available”. What does that mean? Will the commission have the power to request financial blocking? Will it be able to request an internet service provider to block an IP address? We should be expecting matters to move on considerably as a consequence of the Bill. Why should we miss this opportunity to give the commission the full range of powers? Why should we risk being behind the game and having to wait again for time in which to legislate?

It is surprising that the Bill contains no measures to ensure that spread betting is licensed in the same way as other forms of betting. It rightly requires all betting operators, wherever they are based, to comply with Gambling Commission licence condition 15.1, which means that betting operators will have to share irregular betting patterns with the commission and with sports bodies. The licence condition will then be integrated across the industry, with one notable exception. Spread betting is regulated by the Financial Conduct Authority, but it currently has no licence condition 15.1, although compliance with that code is cited—rightly—as one of the main justifications for the Bill. Just today I looked at the Sporting Index site. It offers a range of sporting spread bets, including on shirt supremacy. The specific example I looked at involved the Tonga versus Cook Islands match in the rugby league world cup. For anyone who is unclear, I should explain that shirt supremacy bets are about the difference between the totals of the numbers on the shirts of the try scorers of each team. Unlike traditional bets where people can win or lose a set amount, spread betting allows potentially unlimited losses. If I place a bet on Tonga and it loses on shirt supremacy by 23 points, I will be liable for 23 times my stake money.

Action on spread betting is strongly urged by sports bodies including the English cricket board, the Football Association, the Premier League and the Rugby Football League. They are experts in this field and work together on sports betting. Will the Minister accept an amendment to the Bill to require those who offer spread betting and who advertise to comply with licence condition 15.1, or will she give a commitment to work with her ministerial colleagues at the Treasury, who have responsibility for the FCA, to get it to introduce its own version of licence condition 15.1 as soon as possible?