House of Commons
Tuesday 25 March 2014
The House met at half-past Eleven o’clock
[Mr Speaker in the Chair]
Business before Questions
Transport for London Bill [Lords] (By Order)
Second Reading opposed and deferred until Tuesday 1 April (Standing Order No. 20).
Oral Answers to Questions
Deputy Prime Minister
The Deputy Prime Minister was asked—
New Anglia Local Enterprise Partnership
In the last 10 weeks, I have travelled across England to meet with all 39 local enterprise partnerships. As part of those visits, I had a very productive discussion with the New Anglia local enterprise partnership in Ipswich on 25 February, where we discussed its strategic economic plan.
I welcome the positive discussions that my right hon. Friend the Minister had with the New Anglia LEP. May I urge him to make sure that we get the full responsibilities and powers that the New Anglia LEP board is seeking in order to accelerate the economy in East Anglia? Will he also pay tribute to Andy Wood, who is giving up as chairman of the LEP this coming Monday?
I will certainly pay tribute to Andy Wood. He is the chief executive of Adnams, one of the biggest and most prestigious businesses in East Anglia, and he has done a fantastic job, not only in negotiating two city deals but in laying the foundations for what is—having discussed it with him—a very ambitious local growth deal that will build on the success that the economy is experiencing in East Anglia and create many more jobs and apprenticeships.
Business Growth (Lancaster and Fleetwood)
I visited Lancashire twice in recent weeks and met with Edwin Booth, the Lancashire local enterprise partnership chair, to discuss its emerging strategic economic plan. Through the Government’s decentralisation agenda, we are giving local leaders the tools and resources they need to drive local growth. As my hon. Friend will know, in Fleetwood for example, we are supporting the creation and safeguarding of over 400 jobs through investment in the seaside regeneration scheme.
Fleetwood has a number of thriving fish processing businesses but needs modern buildings and a complicated land swap to allow them to expand to get a form of northern Billingsgate. Given that we have limited capital resources, is there any chance of some kind of national competition for local authorities to bring forward their most difficult regeneration schemes, which potentially could be the most rewarding if they are unlocked?
My hon. Friend is absolutely right and the local growth deals proposed by Michael Heseltine afford precisely that opportunity. I know, having discussed the matter in Lancashire with Lancashire LEP, that it will have a keen eye on that particular proposal. The revival of the economy along the Fylde coast and in the rest of Lancashire is very much in all our interests and I know that it has my hon. Friend’s strong support.
One way to support the fish processers of Fleetwood is to address the issue of the A585, which is the main road into Fleetwood going through my constituency. When the Minister negotiates the new city deal for the area, will he bear in mind the critical importance of the A585 to the local economy?
I cannot fail but to bear it in mind, having visited my hon. Friend’s constituency—he brought a stellar delegation of local businesses and civic leaders to make precisely that point. I received it loud and clear and look forward to the negotiations of the growth deal.
Oxfordshire Local Enterprise Partnership
I was in Oxfordshire on 30 January to launch the Oxford and Oxfordshire city deal, where I visited the Diamond synchrotron particle accelerator at Harwell. The city deal in Oxfordshire supports innovation through projects as well as investment in skills and transport improvements. I am delighted to see that the latest draft of the growth deal is going to reflect the comments made by my hon. Friend’s distinguished predecessor, the former Member of Parliament for Henley, Lord Heseltine.
It will come as no surprise to my right hon. Friend the Minister that the Oxfordshire LEP has tried to contact me for the very first time in the last couple of days in view of my question. Notwithstanding that, will he join me in urging it to do more than simply talk and to turn a blank area on the map into something a little more active?
I would say to all local enterprise partnerships that they should engage with their Members of Parliament. My view is that MPs have a pretty keen view as to what are the economic priorities of their areas and LEPs would do well to take into account what they have to say. I think it would be almost as unwise to ignore my hon. Friend’s comments as it would be not to take into account the views of his neighbour, the Prime Minister, my right hon. Friend the Member for Witney (Mr Cameron).
Greater Birmingham and Solihull Local Enterprise Partnership
On 5 February I visited Birmingham and met the LEP to discuss in detail its ambitious plans for growth. Its proposals focus on important economic opportunities, including the 143-hectare site around the proposed HS2 interchange in Birmingham.
I am grateful to my right hon. Friend for that answer. Greater Birmingham and Solihull LEP was one of the first LEPs to attract a city deal under wave 1. However, wave 1 LEPs do not currently attract funding for an advanced manufacturing growth hub. The west midlands, as he has found out, is the advanced manufacturing capital of the United Kingdom, so will he consider the decision so that we can get on with creating more growth in the west midlands?
I will certainly do that. Having been in Coventry yesterday to sign the Coventry and Warwickshire city deal, which focuses precisely on advanced manufacturing, I know that there is great recognition that the whole of the west midlands has a big opportunity to come together to ensure that the order books that are filling up can be supported by companies in the supply chain. I will take my hon. Friend’s representations on board as we negotiate the growth deals during the weeks ahead.
I would first like to say how delighted I am that Siemens has now confirmed its £160 million investment in wind turbine facilities at Green Port in Hull and at Paull in the East Riding. Together with an additional £150 million investment by its port partner, Associated British Ports, that development will support 1,000 new jobs in the area and demonstrates the huge economic potential of the green industry. I was delighted that the hon. Lady was able to attend the signing of the Hull and Humber city deal on 13 December, along with the Minister of State, Cabinet Office, my right hon. Friend the Member for Tunbridge Wells (Greg Clark). As she knows, through the city deal the Government agreed an additional £9.2 million of funding to support the growth of Hull and Humber’s economy.
I think that we all agree that cities are best placed to make decisions about regeneration funding and what is best for their local populations. As the Deputy Prime Minister rightly points out, a great example of that is the announcement this morning of Siemens’s investment in renewables, which means that Hull will be not only the city of culture, but the city of energy. Given that that success was made in Hull, will he congratulate, in particular, the Hull business community and Hull’s Labour council, because without them this would not have happened? Finally, does he agree that if we had listened to the climate change-denying UK Independence party, those jobs would be going abroad?
I certainly agree with the hon. Lady’s latter point. There is absolutely no way that a multinational such as Siemens would invest that amount of money if we were on the brink of pulling out of the European Union single market. I have been in several discussions with Siemens board members, as have many members of the Government, to persuade them to make that decision, and I am delighted that they have finally done so. She is quite right that Hull city council and the councils in the area—it is a triumph not only for Hull, but for the Humber area more generally—have worked together, and it has been a cross-party approach. None of that would have been successful if we had been on the brink of pulling out of the single market. That is why Siemens has continued to invest in our country.
I am delighted to say that I have a distant family connection with Hull, as my great-grandfather practised medicine there. Will my right hon. Friend explain how city deal regeneration will help rural and coastal areas, such as Thirsk, Malton and Filey, where we have flagging fishing and tourism industries that desperately need boosting?
My hon. Friend makes an important point. City deals are a template for the further decentralisation of powers and control over money and policy to local areas. Of course that should not be confined to urban areas, which is why we are extrapolating the approach through the local growth deals, which will be available to all areas—coastal or inland; rural or urban—and which we hope to conclude over the summer.
The Opposition support city deals. Portsmouth and Southampton are keen to work more closely together and to form a city deal, which we welcome. However, Hampshire county council is refusing to get involved in such a deal. What steps are the Government taking to open up city deals to such collaborations between authorities that might not be contiguous?
I know that the Minister of State, Cabinet Office, my right hon. Friend the Member for Tunbridge Wells (Greg Clark), has had discussions with the Solent local enterprise partnership on exactly that point. Although this is of course a bottom-up process and we are reluctant to impose too many conditions in an old-fashioned, centralising way, he is making it very clear to everybody who is working towards local growth deals or new city deals that they must be based upon a partnership in the area. We want to ensure that the deals act as a catalyst for people to work across local authority boundaries, and indeed across political boundaries.
I am deputy chair of the Local Growth Committee, which my right hon. Friend the Deputy Prime Minister chairs and which brings together Ministers from a wide range of Departments to focus on local growth programmes, including the delivery of recommendations of the Heseltine review. Local enterprise partnerships are submitting their strategic economic plans at the end of the month, and announcements on the growth deals will be made later this year.
Is my right hon. Friend aware of the review that the Communities and Local Government Committee is undertaking on devolving fiscal responsibility to London and cities throughout the country? Does he agree that this gives us the ideal opportunity to put back into the hands of local authorities the power that was taken from them?
I do agree. I am looking forward to giving evidence to my hon. Friend’s Committee next week in pursuance of that. However, I do not think I am letting the cat of the bag when I say that I am strongly in favour of the direction of the inquiry. The fact that the Mayor displays his usual muscularity in forcing this on to the agenda is very much an illustration of the power of the devolution of powers that has already taken place.
The Heseltine recommendations will work only where there is proper buy-in both to the planning policies and the economic policies for a local area. What discussions is the Minister having to make sure that local authorities—combined authorities where we have them—and local enterprise partnerships are working together to ensure that the populations themselves support that co-ordinated approach?
The hon. Gentleman makes a good point. As a Manchester MP, he will know that the Greater Manchester combined authority is perhaps the best example of the fruits of the co-operation between local authorities. The relationship between the combined authority and the local enterprise partnership is very close, and that closeness of working has been one of the key contributors to the economic success of Greater Manchester in recent years.
The Minister will be aware that one of the recommendations of the Heseltine review emphasised the importance of businesses and others engaging with young people in colleges and schools. In Northern Ireland, the schools initiative model has made a difference in raising the electoral registration of young people to 50% more than would otherwise be the case. The Minister gets on very well with the Secretary of State for Education—better, I think, than the Deputy Prime Minister—so will he discuss with him bringing this model on to the mainland so that we can all see the benefits that Northern Ireland saw?
The House will know that I am very keen to make sure that every young person gets the chance to vote. One of the announcements that I made in recent weeks was to make £4.2 million available to every local authority in the country specifically to enable them to fund talks and exercises in schools in order to sign up young people to vote. I am glad that that has the right hon. Gentleman’s endorsement.
South East Local Enterprise Partnership
As with all local enterprise partnerships, I have met the South East LEP to discuss its growth deal proposal and to provide feedback and support on its draft proposals. When Lord Heseltine and I met the LEP earlier this year, we were encouraged by the direction that the proposal set out, particularly in addressing transport bottlenecks and support for small and medium-sized businesses.
I do agree. I know that that scheme will have a prominent place in South East LEP’s proposals. I should also like to commend the involvement of Sir Roger de Haan, my hon. Friend’s distinguished constituent and activist, who has been very much been involved in transforming the future of Folkestone. He deserves the congratulations and support of everyone in this House.
Is the Minister aware that in past times the South East England Development Agency spent £20 million in my constituency without creating a business partnership? We have seen a dramatic sea change. Does he agree that we should trust South East LEP, which has been doing an excellent job?
I do agree. Peter Jones, who chairs South East LEP, has done a fantastic job in building on the already excellent work of the county council. The relationships that have been forged with business are driving the prosperity of the coastal area of Kent in particular, which my hon. Friend represents.
Business Growth (Medway)
As I said to my hon. Friend the Member for Folkestone and Hythe (Damian Collins), I have read the draft strategic economic plan produced by South East local enterprise partnership and had a very helpful feedback session with the LEP. I am particularly encouraged by the extensive proposals for supporting small businesses, which I know are particularly important in Medway.
I thank the Minister for that answer. Does he agree that many businesses now rely on internet connectivity, and will he welcome the initiative in Medway to provide free wi-fi throughout the area, benefiting economic growth and improving the public’s access to the internet?
I do support that. It is very important that small businesses should have access to good internet connections. It is right to point out that even in our big cities and urban areas where connections are available, they are not comprehensive enough: about 5% of premises in urban areas cannot be connected to a high-speed connection. That is a very important feature to be corrected and I hope the local growth deal will do so.
As Deputy Prime Minister, I support the Prime Minister on a full range of Government policy and initiatives. Within Government, I take special responsibility for this Government’s programme of political and constitutional reform.
When he was a senior tax civil servant, Mr Dave Hartnett met the head of Deloitte 48 times, including one meeting in which he reduced the tax liability of one of its clients from £6 billion to £1.25 billion. The Public Administration Committee issued a report about the revolving door and its dangers 20 months ago. Why have the Government not replied?
Of course the Government will reply to the report, but, much more importantly, in Budget after Budget and autumn statement after autumn statement, we have taken steps to close the huge loopholes in our tax system that we inherited from the Labour party. We have recouped billions of pounds into the Treasury’s coffers that otherwise would have gone walkabout because of such large-scale tax avoidance and, indeed, illegal tax evasion.
The new figures show that there are now more people at university than ever before; that a higher proportion of youngsters from disadvantaged families are at university than ever before; that there is a higher rate of participation in higher education by youngsters from black minority ethnic backgrounds than ever before; and that there is a higher rate of applications to go to university from our youngsters than ever before. Surely, rather than speculating on what people may or may not earn in 35 years, the Labour party should celebrate the fact that more people are going to university and that more people from disadvantaged backgrounds are going to university.
The Deputy Prime Minister’s bluster will not have disguised the fact that he has not answered the question. He said he had to back the Tories on tuition fees because it was too expensive not to. The truth is, as even the former departmental special adviser has now admitted, the Government “got its maths wrong”. There are now rumours that, to cover the costs of this incompetence, the Government could put up fees again. The Deputy Prime Minister said that he got it wrong on tuition fees in his last manifesto. Will he now confirm that the next Lib Dem manifesto will rule out any further tuition fee increase?
There is absolutely no need for a further increase. In fact, we announced at the end of last year that universities will be able to take an unlimited number of students. We are removing the cap on the number of British students going to British universities and there is no cap on the number of overseas students, so there is no need for an increase. The right hon. and learned Lady talks about the figures and the cost. What is the cost for individual students? Someone earning £24,000 was paying £67.50 per month under the fees system that her Government introduced. Under our system, they are paying not £67.50 per month, but £22.50 per month. Is that not the reason why, despite all the Labour party’s predictions that people would not apply to university, applications have gone up? Is that not the reason why, despite all the predictions by the right hon. and learned Lady and her colleagues that fewer people from disadvantaged families would go, the proportion has gone up? Those are the facts that really matter for students these days.
T7. The recently announced sale of AstraZeneca’s Alderley Park site to Manchester Science Parks is a vital step in creating a sustainable future for that site. Given that news, does my right hon. Friend agree that serious consideration should be given to the proposals for a science corridor from the Cheshire and Warrington local enterprise partnership and the neighbouring LEPs in their growth deal submissions? (903254)
I am delighted that AstraZeneca, with the support of the Alderley Park taskforce, has attracted a new owner that shares its vision for a sustainable, science-led future for the site. I know that Manchester Science Parks will continue to work with local partners to develop a clear vision for an exciting future at the site. It is very encouraging that the LEP is promoting the opportunities within the science corridor that stretches across Cheshire from Thornton in the west, through Warrington and on to Alderley Park and Jodrell Bank in the east. I very much look forward to receiving the proposal.
T2. Two weeks ago, the Deputy Prime Minister and his Liberal Democrat colleagues could have voted to retain the legal protection for successful hospitals that neighbour failing trusts placed into administration, but they did not. Instead, there was shameless posturing and then spineless behaviour when it came to the vote. What is his excuse this time? (903249)
We actually strengthened the provisions on local consultation. Given that the hon. Lady is so keen to reinvent history, how about this for a record? In Wales, which is run by Labour, the A and E targets were last met in 2009. It was her party that entered into a quarter of a billion pounds-worth of sweetheart deals with the private sector—something that we have outlawed in legislation.
T9. In January, the Deputy Prime Minister addressed a conference on mental health. There are concerns in my constituency that patients are having to travel long distances to get a bed. One patient in Medway was transferred 350 miles to Carlisle. What are the Government doing to ensure that patients get help and support within the community? (903256)
I strongly share the hon. Gentleman’s concern. It is unacceptable for any patient to be transferred such a long distance to receive proper care in the mental health system. As he will know, and as I announced in January in respect of our action plan on mental health, we are the first Government to put mental health and physical health on the same footing in the mandate for the NHS. It is now up to clinical commissioning groups and other commissioners within the devolved structures in the NHS to reflect that parity of emphasis on mental health and physical health in their commissioning decisions. Until that happens, I worry that some patients will fall between the gaps. That is why I am keen that commissioners should act on the mandate that we have given them.
T4. The Deputy Prime Minister actively campaigned on the campuses of both the universities in my constituency on his solemn pledge to oppose any increase in tuition fees. He has apologised for making that pledge. Now that the system is transparently broken, will he realise that his real mistake was to break it? (903251)
The system of the hon. Gentleman’s party meant that thousands of part-time students paid up-front fees. We ended those. His party’s system meant that people paid more out of their bank accounts every week and every month repaying Labour fees than they are paying under the current system. Under his party’s system, a smaller proportion of people from disadvantaged backgrounds went to university. Instead of constantly denigrating the fact that under this Government more youngsters are going to university than ever before, he should be celebrating it.
T12. Dorset is obviously not a core city, but it does have significant pockets of deprivation. How will the Deputy Prime Minister ensure that there is a growth deal that builds on the opportunities of our air and sea ports, and the high potential for growth and job creation in a number of spheres? (903260)
I urge my hon. Friend and everybody in the private or public sector who is concerned about the economic future of Dorset to work together to assemble the best possible proposal for the new local growth deals which we stand ready to receive in the coming days. We will look at it as quickly as possible and will hopefully make a positive announcement in the summer for the economic future of Dorset.
T5. Last week’s Budget confirmed that this Government are to go ahead with a £600 million raid on the incomes of the working poor over the next three years by freezing the work allowance on universal credit. Is it not the case that what this Government give with one hand in the personal tax allowance, they will take away with the other under universal credit? (903252)
I remind the hon. Gentleman that it was his party’s monumental mismanagement of the economy that cost every household in this country over £3,000. I read last week that a former Labour adviser said—this is extraordinary—that
“you cannot trust people to spend their own money sensibly”.
I have got news for him: people do not want to trust Labour with their money.
I, too, welcome the news about the Siemens investment in Hull and congratulate the Government on their efforts in achieving that, particularly the Minister with responsibility for cities, the Minister of State, Cabinet Office, my right hon. Friend the Member for Tunbridge Wells (Greg Clark), for his work on the city deal. Will the Government give an assurance that they will now work hard to conclude the Able development on the south bank?
As the hon. Gentleman knows, I have visited the site with him. It is very important that the Siemens deal, which has finally been confirmed, is not the end of the story and acts as a catalyst for wider regeneration, particularly in the green and renewable technology fields in the whole Humber area.
T6. Given the Deputy Prime Minister’s keen interest in child care, will he commit to immediate help for low-paid families by increasing the percentage cover to 80% now, not waiting for the roll-out of universal credit, especially as that roll-out for families is disappearing over the event horizon? (903253)
The hon. Lady is pushing for an increase to 80% of all child care costs. We have gone much better than that: we have said 85% of all child care costs will be covered for those receiving universal credit. As she will also know, we are the first Government to deliver 15 hours of pre-school support to all three and four-year-olds; we are the first Government ever to deliver 15 hours of free pre-school support to two-year-olds from the poorest families; and we are the first Government ever to announce tax-free child care entitlements, which will be available to everyone with children up to the age of 12 as of next year. Those are huge changes. Yes, let’s all go further, but I hope she will agree that those are big, bold, progressive changes.
I do so strongly. I join my hon. Friend in recognising the joy of many same-sex couples who will finally be able to marry under British law this weekend. It is a great, great moment. It is a day that they will always remember, and I hope it is a day that the nation will never forget. It is a great step forward for us all.
T8. The Deputy Prime Minister promised to make mental health a priority for this Government, but on their watch mental health spending has been cut in real terms, hundreds of mental health beds have been lost, and services are now under such pressure that the police are having to legally section people with mental health problems just so that they can get a bed. Can the Deputy Prime Minister tell us what happened to the promise? (903255)
As I said earlier, we have moved to provide a legal recognition of the status of mental health, which has for far too long been overlooked in the NHS as greater emphasis has been placed on physical health issues. In the mandate given to the NHS, they are now on an equal footing, but of course I accept that that parity of emphasis needs to be reflected in many individual commissioning decisions. I am not content when I hear that some clinical commissioning groups are not yet reflecting the equality of esteem for mental and physical health in their commissioning decisions. As the hon. Gentleman knows, we have put hundreds of millions of pounds into improving talking therapies, and hundreds of millions of pounds into improving mental health for children, but I accept that there is still a long way to go.
I understand that my right hon. Friend had discussions last week with a resident of North Cornwall about the disposal of dredge spoil in Whitsand bay in my constituency and is reported as being shocked that all sides are passing the buck. What action has he taken or is he taking?
I am sure the hon. Lady will have raised the matter with the Department for Environment, Food and Rural Affairs, which will need to look into it. If she has not done so, I strongly urge her to do so. I am keen to ensure that that happens. I was not aware of the issue, but I can certainly imagine that it is a matter of great concern to the local residents she represents.
T10. The Government’s bedroom tax has affected nearly 2,000 families in Redcar and Cleveland, putting some families into arrears and increasing the number of unused, vacant properties. Does the Deputy Prime Minister think his policy has been a success in relation to his portfolio of increasing social mobility? (903258)
The hon. Gentleman may wish to bury his head in the sand, but there is a problem. About 1.7 million people are unable to get into housing, many children in our country are living in overcrowded properties where there is no space for them to do their homework, and there are 1.5 million spare bedrooms. We somehow need to make sure that those who do not have space are provided with it, and we need to deal with overcrowding, and that is what the Government are seeking to do.
A few moments ago, the Deputy Prime Minister was a tad shy when my hon. Friend the Member for Christchurch (Mr Chope) asked him about the coalition policies that the Liberal Democrats had vetoed. Will he confirm that transparency is one of the principles that fall within the ambit of his responsibilities for constitutional reform, or do we have to wait until the general election and the Liberal Democrat manifesto to hear about the Liberal Democrats’ commitment to open government?
The hon. Gentleman wants some examples: I said no to proposals from his party that anyone could basically be fired at will with no reason at all; I said no to his party’s proposals for a snoopers charter; and I have said no to profit making in state schools and to prioritising tax cuts for millionaires when our priority should be tax cuts for many people on middle and low incomes. If he wants me to go on about how the Liberal Democrats are anchoring the Government in the centre ground to ensure that we build a stronger economy and a fairer society, be my guest.
T11. A recent answer to a parliamentary question reveals that by 2015 construction will have started on only 10% of schools in the Deputy Prime Minister’s priority school building programme. Is he happy with that record? (903259)
There has been a long record of ineffective use of the public funds provided to schools for their redevelopment. The Building Schools for the Future programme, for instance, was widely recognised to be inefficient in the deployment of funds. We are providing billions and billions of pounds of capital so that schools can be rebuilt across the country, and of course all of us, on behalf of our constituents, want that rebuilding programme to take place as soon as possible.
Will the Deputy Prime Minister encourage his colleagues to apply for a grant for Somerset from the European regional disaster fund before the deadline of 4 April? Gloucestershire had £31 million from the EU solidarity fund after the flooding in 2007; why not Somerset?
I know my hon. Friend feels strongly about that, but I hope she is also aware that there are a number of eligibility requirements when seeking to access funds from the EU solidarity fund. We have compared the damage today with the 2007 floods, and following contact with the European Commission, our assessment is that we have not met those conditions. Of course, that does not mean that there are not other avenues that we can explore. As I think she knows, we are having discussions with EU institutions such as the European Investment Bank to support the existing package of UK Government assistance, which includes £130 million for flood recovery in the south-west.
T13. May I ask the Deputy Prime Minister about another of his pledges—universal free school meals for infants from September, which were pioneered in Hull but scrapped by the Liberal Democrat council when it came to power? Will he confirm whether they will be hot school meals or cold packed lunches? (903262)
They need to be healthy meals that are provided to all toddlers and young children in the first three years at primary school. The hon. Lady is right that that has been piloted across the country, not only in her constituency but in Durham, Newham and elsewhere, and it has been shown to provide dramatic educational benefits. Of course the majority of the meals will be hot, but we are not going to prescribe, in the centralising way that I know her party is so fond of, that they are going to be hot in every single location across 24,000 schools in our country, but they do need to be healthy, hot and freely available. That will benefit families to the tune of hundreds of pounds and boost social mobility across the country.
The Deputy Prime Minister takes a lot of personal credit for extending free child care places for two-year-olds from families on low incomes from September. However, what advice would he give the headmaster of Carterhatch children’s centre, who is now telling fee-paying parents to remove their children from his school to make way for that expansion?
This is not a zero-sum game between better-off families and less better-off families. The evidence is overwhelming that if we want all children from all backgrounds to do well, regardless of the circumstances of their birth, we should use what available resources we have to give pre-school support to very small children—two-year-olds—from the poorest families. That is why it is a groundbreaking entitlement. I accept that it is of course a challenge for some nursery settings, but I very much hope and I think it is already the case that it is being implemented successfully across the country and will benefit children for many years to come.
Will the Deputy Prime Minister go back and think about universities, and perhaps talk to some vice-chancellors? Vice-chancellors who are giving evidence to the Higher Education Commission, which I co-chair, have said that they are extremely worried about the long-term financial sustainability of a higher education system based on a mountain of student debt.
What I find so curious is that the hon. Gentleman’s party now seems to be attacking our student loans repayment system for being too generous. It is more generous in many respects than the one over which Labour presided. Under Labour, graduates had to pay back the moment they earned £15,000; under our system, they do not have to pay anything back at £16,000, £17,000, £18,000, £19,000 or £20,000, but only at £21,000. The figures he refers to are predictions, which will of course vary wildly from one estimate to the next, about what graduates will earn not next decade, not the decade after that and not the decade after that, but in 35 years. Surely he should focus on the success of more young people from disadvantaged backgrounds going to university, rather than trying to make political mischief about what may or may not happen in 35 years’ time.
After the general election, I had the privilege to be the first MP to introduce 100 apprentices in 100 days for Eastbourne, which was a huge success. Since then, more than 3,000 new apprentices have started in Eastbourne, which is more than in the previous seven years put together. However, I have a real concern. A lot of the apprenticeships have come through on a level 2 pathway, which is crucial for people who are less academic, and I am concerned that the Labour party appears to be pulling that rug out from under them. What does the Deputy Prime Minister have to say about that?
I certainly share my hon. Friend’s pride in the fact that this Government, led by my right hon. Friend the Secretary of State in the Business Department, have spearheaded the largest expansion of apprenticeships in living memory. I am utterly dismayed that the Labour party wants to pull the rug out from under hundreds of thousands of youngsters on level 2 apprenticeships by no longer calling them apprentices. What a great way to support young people in our country!
The Attorney-General was asked—
Proceeds of Crime (Confiscation)
Last year, the Serious Fraud Office collected £3.9 million in proceeds of crime, but it hoped to collect £32 million. Will the Minister explain why the shortfall occurred, what he intends to do about it and whether the £19 million requested Treasury bail-out has anything to do with that shortfall?
No, the shortfall does not have anything to do with that figure. It is worth bearing in mind the fact that money is recovered in different ways. More than £76 million has been returned to victims as a result of Serious Fraud Office activity since 2009, so it is wrong to ignore compensation and other moneys paid to victims when looking at the overall picture.
The Solicitor-General refers to the National Audit Office report—it was shocking, was it not?—which talks about how the confiscation of criminal assets is just not working at the moment. There are 27% fewer asset restraining orders than there were in 2010; £450 million remains unpaid, even after defendants have served extra time; and £285 million in foreign banks cannot be touched—I could go on, but I am sure that Mr Speaker would not wish me to do so. What plans do the Solicitor-General and Attorney-General have to strengthen enforcement of confiscation orders? Will the Solicitor-General improve our co-operation with overseas jurisdictions? How can we make sure that our justice system gets its hands on these ill-gotten gains?
The hon. Lady is covering a much broader area than that raised in the question. As I think she would agree, the Serious Fraud Office has a superb unit that is actively after the money that it leads on—£100 million—and it is believed to be extremely competent. [Interruption.] The extra money is nothing to do with this particular aspect. Overall, we do need a proper strategy to improve confiscation and asset recovery, and that is under way. Ministers are meeting on the matter, and a new strategy from the Crown Prosecution Service was explained in more detail when evidence was given to the Justice Committee. I think the hon. Lady is being over-critical, as it is not always easy to extract money that is overseas in complex trust arrangements and hard to recover.
The steps taken by President Putin to annex Crimea to Russia, including recognition of Crimea as a sovereign state, are a flagrant breach of international law and Russia’s international obligations. The United Kingdom, in common with the European Union and the majority of the international community, does not recognise the 16 March Crimea referendum or its outcome as legitimate or of any credibility or value. As has been made clear by my right hon. Friends the Prime Minister and the Foreign Secretary at this Dispatch Box, Russian actions threaten the rules-based system of international order, a fundamental principle of which is respect for the territorial integrity of states.
My constituents of Ukrainian descent in Huddersfield are following this crisis closely. Does my right hon. and learned Friend agree that this crisis should have been resolved through diplomacy and international law, and that we, and others, must not exacerbate the situation through such unilateral and provocative actions?
I agree entirely with my hon. Friend. As he is aware from what the Prime Minister said, there was no basis or justification for Russia’s actions in Crimea, even before it moved on to annexation. Its decisions to do that are, as I said, in flagrant breach of its international legal obligations. The United Kingdom is co-operating with other states, including those of the G7 and the European Union, in making clear that such behaviour is unacceptable, and that there will continue to be consequences for as long as Russia does not de-escalate the crisis.
I agree entirely with my hon. Friend. Although at times people call into question the mechanisms of international order under the charter of the United Nations, or in a European Context those of the Council of Europe, they have delivered over time real improvements in the way in which states behave towards each other. That is why the actions of the Russian Government in tearing up the rule book in this way are so sinister and so chilling.
I have no reason to think that the United Kingdom has not fulfilled its undertakings under the memorandum. The memorandum provided some important mechanisms and assurances for the Ukrainian Government when Ukraine gave up its nuclear arsenal, and it is clear that those have not been observed by the Russian Government.
So why does the United Kingdom not move to expel Russia from the Council of Europe? My right hon. and learned Friend has said in the past that if we do not give prisoners the vote we will be expelled from the Council of Europe, so surely on the issue of proportionality it is important that we spell out to Russia that it should leave the Council of Europe, and if not, it should be expelled.
As my hon. Friend is aware, and as the Prime Minister made clear at the G7 summit, the United Kingdom Government will, along with its partners, look at a range of sanctions and responses, depending on how the crisis unfolds and whether the Russian Government seek to de-escalate it. The best answer I can give is that nothing is ruled out at all.
Law Officers’ Departments (Running Costs)
Over the next two financial years, the total expenditure of the Law Officers’ departments will be reduced through measures such as shared legal services, reduction in non-front-line staff, increased digitalisation, rationalisation of estates and more efficient court listing practices.
How much is the Department spending to contest freedom of information and court decisions, in order to suppress information to the public? The claim has been made that information is available that would show that an important person is unfit to do his future job. Should we not allow the lobbying letters of Prince Charles to be made public?
The hon. Gentleman raises a case that involves issues of constitutional significance, including upholding Parliament’s intentions for the freedom of information regime and the Government’s ability to protect information in the public interest. It is important that the Government continue to fight the case in question. To protect public funds, if we are successful at the next stage of the legal proceedings, we would expect The Guardian to meet our legal costs in full.
My hon. Friend has a long interest in this matter in his role as vice chair of the all-party group on Hillsborough and because Anne Williams, who sadly died last April and whose son Kevin died at Hillsborough, was one of his constituents. As the hon. Gentleman may know, a number of pre-inquest hearings have taken place since the appointment of Lord Justice Goldring in February 2013. I am able to tell him that the inquests themselves are scheduled to commence next week on 31 March.
Tuesday 15 April marks the 25th anniversary of the Hillsborough disaster. Friends and relatives of those affected have waited far too long to find out what happened. With the inquests starting next week, will my right hon. and learned Friend confirm that the press now have to be extremely careful in how they report the inquests, to avoid any form of accusation of prejudicing inquests?
I agree entirely with my hon. Friend. The families have waited a long time, and I am very pleased that the inquest is going to take place. It is right that the coroner issued a warning on 11 February about reporting, and I issued a contempt advisory on 10 March. It is important that the issues that will be raised and considered at the inquests are not prejudged through comment in the media or social media, and that the lawyers representing the families, the coroner and the jury can get on with their work.
I thank the Attorney-General for his comments. As the hon. Member for City of Chester (Stephen Mosley) pointed out, we will soon mark the 25th anniversary of Hillsborough. It is important to remember that we lost 96 individual people, and that thousands more were terribly affected. Will the Attorney-General join me in remembering the people we lost and offer his support to the memorial events taking place over the next month or so?
I am very happy to join with the hon. Lady in that respect. Having studied the papers that led me to make the reference to the High Court to seek a fresh inquest, I can understand the scale of the tragedy that took place very well indeed. For those reasons, I hope the commemoration goes well and is of use and help to the families. I join wholeheartedly in the sentiment she has expressed.
Rape (Charging Decisions)
The Crown Prosecution Service’s new rape and serious sexual offences units now advise police in all areas at the start of rape investigations. Rape charging decisions require meticulous attention and can include complex evidence. They are monitored by the Director of Public Prosecutions in all areas at six-monthly intervals, and recent improvements have resulted in the highest ever levels of rape convictions.
But figures unearthed by the Opposition show that it is taking prosecutors more than a month to charge alleged rapists—10 days longer than it took five years ago. Is it not awful for rape victims to have to wait that extra period, and does it not run the risk that they will withdraw their support for a prosecution? What are the Government going to do about that?
It is important to charge as soon as possible, particularly when vulnerable witnesses are involved, and there is a protocol to that effect between the Crown Prosecution Service and the police. However, it is also important for the CPS to be able to take on more cases that are referred to it by the police than has previously been the case, and to take on more complex cases involving more vulnerable victims. It is doing that now, and the result is an improved conviction rate. While timeliness is important, it is also vital for there to be that careful attention to detail which results in a successful outcome.
It has had no impact whatever, because there has been a clear prioritisation of cases of this kind—involving specialist rape prosecutors—and, indeed, of child abuse cases. Cuts would certainly never affect performance, and the overall statistics show that they are not doing so
In a recent statement, the Minister for Crime Prevention said that he had
“held discussions with the Director of Public Prosecutions, who has agreed to establish a CPS-police scrutiny panel to look at how forces deal with rape.”
When is that panel likely to be set up?
This is part of the six-point plan that I outlined during an earlier Question Time. It is designed to establish why there are fewer referrals from the police, and, in particular, why that is the case in certain parts of the country. The national scrutiny panel will sit on 4 April with the Director of Public Prosecutions and the national policing lead on rape, and will examine evidence compiled from seven police force areas to see what the implications are.
A range of special measures can be taken in the courts themselves to make the experience of court less troubling for vulnerable witnesses. There are also witness care units. I have already mentioned the rape and serious sexual offences units, which are another part of our efforts to support witnesses. As the hon. Lady has implied, if prosecutions of this kind are to be effective, there must be confident witnesses who are prepared to explain exactly what happened, and that is what we are aiming to achieve.
Serious Fraud Office
I meet the director of the Serious Fraud Office regularly to discuss a range of matters, including finance. The SFO has a current core budget to enable it to carry out its work, but the nature of that work means that it will need additional funding from time to time for its very largest and most complex investigations and prosecutions, such as those relating to LIBOR. As with any other department, the principal arrangement is for the SFO to apply for any additional funding that is required during the year through the estimates process, as it has recently done.
As the Attorney-General has just explained, because the SFO is so underfunded, every time a major case comes along it must go cap in hand to the Chancellor for more funds. David Green, the director of the SFO, has described the arrangement as
“a mystery…inside an enigma”,
and has told the Justice Committee that he is
“keen that an appropriate and more certain funding model can be agreed by all those with an interest.”
Will the Attorney-General do as the director has repeatedly asked, and review the funding arrangements?
If I may say so, I always keep the funding arrangements under review, and I am always happy to discuss them with my colleagues in the Treasury. The nature of the SFO’s work load is very flexible, and I therefore think it almost inevitable that if it is to do its work effectively, there will be occasions when it will need extra funding, or will require funding in excess of what it needs. This is an interesting balance which we need to look at. That said, I am mindful of the fact that there may be other ways in which the funding can be delivered and I discuss that frequently with the director of the Serious Fraud Office.
I pay tribute to the work the hon. Lady has done in this area. The CPS prosecutes violent offences robustly, including cases where victims have been attacked on the basis of subculture. Targeting particular groups is treated as an aggravating feature in such cases.
I thank the Minister for that response. As he is aware, I have been working with the Sophie Lancaster Foundation. She was killed seven years ago and her mother has been tirelessly campaigning for police forces to record such crimes as hate crimes. Might it be part of the sentencing guidelines given to courts that they can sentence specifically in relation to hate crimes?
At present statutory provisions cover cases motivated by hostility or prejudice based on race, religion, sexual orientation, disability or transgender identity, but none the less it is possible for a judge to sentence on the basis that the crime was motivated by hate of a different kind, as Judge Russell did in the case the hon. Lady mentioned, and to treat that as an aggravating feature. I think the hon. Lady is arranging a meeting at the House of Commons tomorrow at which the Sophie Lancaster Foundation will be having a listening event.
Point of Order
On a point of order, Mr Speaker. I have given notice of this to the hon. Member concerned. On Thursday, the Under-Secretary of State for Education, the hon. Member for South West Norfolk (Elizabeth Truss), visited my constituency, a visit of which I was given notice while she was driving, I understand, from one part of Warrington to another. I do not know whether that was down to the Minister’s inexperience or her lack of knowledge of the geography of Warrington and the boundaries of Tory marginal seats, or whether she simply did not want to discuss the recent funding announcement in which Warrington did not get any money. However, will you confirm, Mr Speaker, that the normal courtesies of the House require notice to be given to a Member in a reasonable time frame when a Minister is visiting their constituency, not when they are driving from one part of the town to another?
I am happy to confirm that that is the established convention. Moreover, the convention applies across the piece; that is to say, when any Member visits another Member’s constituency on parliamentary or official business, prior and timely notification is required, so the convention does not apply only to Ministers or shadow Ministers. It is on the whole rather unseemly for this matter to have to be aired on the Floor of the House. I make no criticism of the hon. Lady, but it would be good to think colleagues could treat each other with courtesy and that there would not be a necessity for the matter to be raised again on the Floor of the House. I hope note is taken, and it is very important that this convention is observed, not merely in terms of the letter, but of the spirit.
Energy in Buildings Bill
Presentation and First Reading (Standing Order No. 57)
Martin Caton, supported by Mr David Amess, Sir Bob Russell, Mr Clive Betts, Joan Walley, Dr Alan Whitehead, Paul Burstow, Jim Dowd, Caroline Lucas, Andrew George, Dame Joan Ruddock and Roger Williams presented a Bill to require the Secretary of State to draw up and publish an Energy in Buildings Strategy; to make provision to implement that Strategy; and for connected purposes.
Bill read the First time; to be read a Second time on Friday 6 June, and to be printed (Bill 188).
Representation of the People (Scotland)
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 amend the Representation of the People Act 1983 to disenfranchise all residents of Scotland eligible to vote in any United Kingdom General Election held after 18 September 2014 in the event of a positive vote in the Scottish Independence referendum; and for connected purposes.
This Bill seeks to address one of the consequences that would arise from a yes vote in the Scottish referendum. On 18 September, the people of Scotland will decide whether they will remain part of the United Kingdom or become an independent country. Whichever route they choose, the result will have major implications, not just for Scotland, but for the rest of the United Kingdom. I very much hope, and I believe the overwhelming majority of this House would wish, that the Scottish people will vote to remain part of the United Kingdom. Indeed, I would very much like a decisive and resounding no vote to cement the Union between Scotland and the rest of the United Kingdom, and to demonstrate clearly that Scotland, although governed differently and with a large amount of autonomy, is still a proud part of the United Kingdom—one that wants to remain part of the United Kingdom. I acknowledge that should Scotland vote no in the referendum, there would still need to be a review of the devolved powers. In my view, both the Scottish Government and the English councils should have far greater power and responsibility on issues such as taxation. But the purpose of this Bill is not to deal with the outcome of a no vote; it is to deal with the consequences of a yes vote.
If Scotland were to vote yes, a substantial number of issues would need to be addressed, negotiated and agreed to. Such issues would preoccupy civil servants and Ministers for months, but I do not wish to touch on any of them today. I do, however, wish to address one issue of huge constitutional significance: the returning of Scottish MPs to Westminster in the 2015 general election in the event of a yes vote. If, on 18 September, there is a majority vote for independence, Scotland would not suddenly become an independent country: negotiations would have to take place; treaties would have to be signed; Acts of Parliament would have to be passed; political and practical arrangements would have to be put in to place; and then, probably at some time in 2016, a formal separation would take effect. But what would happen in the 2015 general election?
For a number of reasons that I wish to discuss today, I believe it would be unacceptable to this House and to the remaining parts of the United Kingdom for Scottish MPs to be returned to this Parliament in 2015 after a yes vote. That is why I want to tackle this issue head-on by introducing a Bill to remove all Scottish constituencies from the 2015 Westminster election in the event of a yes vote on independence. Some may ask: why is there a need to do this? Why is this so important? The first reason is a simple point of principle. At the moment, the consensus seems to be that Scotland would return MPs to Westminster in the 2015 election until such time as the country becomes independent, but that is wholly unacceptable. Why should the peoples of Northern Ireland, Wales, and England have laws passed upon them in this House by MPs who will, for all intents and purposes, be about to be part of a foreign country with divergent interests and priorities?
Some may argue that if we remove the Scottish constituencies in the 2015 election Scotland would not be properly represented, but I do not believe that is the case. Scotland would have its own existing Scottish Government and Parliament to represent it. It would certainly be a period of transition, but the Scottish Parliament would, I am sure, be capable of managing it, while fully representing the people of Scotland, before taking full national responsibility.
That period of transition brings me to the second reason for the removal of the Scottish constituencies. How can proper and fair negations be had between Westminster and the Scottish Government if there are still Scottish MPs having influence in Westminster? In the event of Scotland voting for independence, it is incumbent on Members of this House to represent the interests of the rest of the United Kingdom during any such negotiations. Unless the Scottish constituencies are removed, we will be left with the perverse situation whereby Scottish MPs, arguably representing the rest of the United Kingdom, are negotiating with the Scottish Government and Parliament representing Scotland. Nobody can seriously believe that the interests of the rest of the United Kingdom would be served under those arrangements.
The final reason this Bill is necessary is the political implication of the arrangements for the 2015 election. Let us imagine that the Scottish MPs, soon to leave the Westminster Parliament, held the balance of power in this Parliament—that is hardly inconceivable. It would mean that, potentially, the Prime Minister would be chosen by representatives from a part of the UK that is shortly to become an independent country, who—let us be realistic—will have little concern about the future of the rest of the United Kingdom.
In addition, of course, in 2015 the Scottish people would be voting knowing full well that they would soon be an independent country. That will hugely affect the way they vote; knowing that Scotland was about to enter into a serious period of negotiations, the Scottish people are likely to vote with that in mind—who could blame them? They will naturally and understandably vote for their own interests, knowing that it would be their chance to get representation on the other side of the negotiating table. That would be unacceptable for the people whom I represent, and this Bill seeks to avoid an unnecessary constitutional problem in the event of a yes vote. Without it, the interests of the rest of the United Kingdom would simply not be served. Worse still, they could be actively undermined.
The Scottish Government are capable of representing the Scottish people during the transition period to independence should a yes vote occur, and this House, whatever Government it supports, should only represent the rest of the United Kingdom, and should only be made up of representatives from the rest of the United Kingdom.
I speak as a proud Scot, sincerely hoping that on 18 September the people of Scotland will vote no. A yes vote would not be in the interests of Scotland, the rest of the United Kingdom, or my constituency of Carlisle. I am in the unusual position of proposing a Bill that I do not want to see take effect. I will campaign vigorously for Scotland to remain part of the Union. However, we must prepare for both eventualities after the referendum in September. That is what this Bill does. I therefore commend it to the House.
I rise to oppose the Bill that has been brought forward today. It is slightly ironic that, on the one side of the argument, we have the hon. Member for Carlisle (John Stevenson) who was raised in Scotland and who represents a Cumbrian constituency, and on the other side, we have a Member who is proud to have been raised in Cumbria and now represents a Scottish constituency.
I am proud to be British, proud to be a Scot and proud to be a Cumbrian. I do not see any need to have the false divide that the handful of nationalists who have turned up today seek to put forward. My right hon. Friend the Member for Edinburgh South West (Mr Darling) leads the campaign to keep the UK together, and I am delighted to say that, under his leadership, we continue to enjoy the confidence of the majority of Scots. We look forward, in the months ahead, to the First Minister and my right hon. Friend debating the matter and setting out the argument.
The hon. Member for Carlisle raised an interesting issue, which is worthy of further debate. I look forward to having longer and fuller discussions in the months ahead. None the less, there are flaws in his argument. Some 430,000 residents of Scotland were born elsewhere in the United Kingdom. They face a difficult choice if the unthinkable happens and Scotland chooses to break away from the rest of the United Kingdom. The question I put back to the hon. Gentleman, who made his case well, is this: who represents those 430,000 non-Scots-born residents of the United Kingdom? What also happens about the important issues that will continue to have to be debated in the period between the 7 May general election and the date in March 2016 when Scotland breaks away from the rest of the United Kingdom? I imagine that the Scots will still be expected to pay taxes to the Treasury; I am conscious of the debate that follows this one. What happens to those Scots? Would they, under the proposal put forward by the hon. Gentleman, continue to pay taxes to the Treasury?
What happens to the spending decisions that would affect Scotland in those 10 months between the general election and the break up of Britain? Would the Departments of the UK Government still make spending decisions on behalf of the Scots? What happens on issues such as defence and international relations? What happens in the dreadful event of this country being required to take military action? Would the brave men and women who served so proudly in the British armed forces be represented and have their voices heard?
Unfortunately, the hon. Gentleman did not mention what would happen in the other place. There are Members of the House of Lords who arguably would face a constitutional issue as well—[Interruption.] I am sorry that the nationalists continue to chunter from a sedentary position rather than listening to the debate that is taking place.
Many of the hon. Gentleman’s constituents work over the border, for example at the decommissioning site in Chapelcross. As the Under-Secretary of State for Scotland, who is in his place, knows, many residents of England work at Chapelcross at a station under the control of the Department of Energy and Climate Change. Who would be responsible for the decommissioning of Chapelcross during those 10 months? The hon. Gentleman did not answer those questions, unfortunately.
In the Edinburgh agreement, the Prime Minister and the First Minister set the date of 18 September. For a Conservative Member to have realised only now that a constitutional issue needs to be dealt with is slightly surprising, and he might perhaps be better off taking up the issue with the Prime Minister.
This is not the first time that the United Kingdom has had to consider such constitutional issues. In the last century, when the southern part of Ireland chose to break away, the same issues had to be examined. Following the ceasefire in July 1921, a number of non-Sinn Fein Members continued to sit in Parliament. Constitutionally, they were perfectly entitled to do so and they played an important role. I am grateful to the House of Commons Library for providing some information about that. Important issues had to be resolved. What will happen to the service personnel in Scotland who do not wish to be part of the Scottish defence force? The same issues were considered by the five Members from the south of Ireland—from Dublin and elsewhere, Independent Unionists and others—who took part in the debate. What will happen to our pensions? What will happen to our property, assets and liabilities?
It is not just a question of ensuring that the interests of those 430,000 residents in Scotland are looked after. Important constitutional issues need to be debated. Further to the point of order that was made earlier, if the hon. Gentleman is, as I believe, sincere that he does not seek the break-up of the United Kingdom, I offer him an open invitation to come over the border to Dumfriesshire, Clydesdale and Tweeddale, to Dumfries and Galloway and to the rest of Scotland. The vast majority of Members of this House and the other place do not wish to see Scotland break away from the rest of the United Kingdom.
I appreciate the spirit in which the hon. Gentleman has introduced his Bill, and it is not in Scotland’s interests that we break up the United Kingdom, but there are important constitutional issues to deal with and this is not the mechanism by which to do that. The Opposition will not support him today and we urge colleagues on both sides of the House to reject the proposition, so that we can go forward—better together—to 18 September and keep Britain together.
Question put (Standing Order No.23).
Ways and Means
Budget Resolutions and Economic Situation
amendment of the law
Debate resumed (Order, 24 March).
Question again proposed,
(1) It is expedient to amend the law with respect to the National Debt and the public revenue and to make further provision in connection with finance.
(2) This Resolution does not extend to the making of any amendment with respect to value added tax so as to provide—
(a) for zero-rating or exempting a supply, acquisition or importation;
(b) for refunding an amount of tax;
(c) for any relief, other than a relief that:
(i) so far as it is applicable to goods, applies to goods of every description, and
(ii) so far as it is applicable to services, applies to services of every description.
Last week the Chancellor presented his Budget, reiterating this Government’s commitment to a long-term economic plan. [Interruption.] I will say that again—a long-term economic plan, something that Labour does not have or is in search of, I am not sure. We are restoring the public finances and supporting businesses while providing security and stability for Britain’s families. I must say that today’s other news that inflation is down to 1.7% is very good news for hard-working families.
Following Labour’s great recession, which, I remind the House, wiped out 7.2% of our economy, worth £112 billion or £3,000 for every household in the country—it is still in denial—last week we learned that our economic recovery is now established and taking hold faster than originally forecast.
I will give way, but many Members want to speak, so first I want to make a little progress.
A year ago, the Office for Budget Responsibility predicted that growth in 2014 would be 1.8%. Now, the forecast is 2.7%, the biggest upward revision between Budgets for at least three decades. The deficit has fallen by a third in three years, and is forecast to halve by next year. By 2018-19, the OBR expects the public finances to move into surplus by some £4.8 billion for the first time in 18 years. Before that, in 2017-18, the fiscal mandate will be met a year early. Employment has been revised up and unemployment revised down in every year of the forecast.
The right hon. Gentleman was talking earlier about the process under the previous Government, and he claimed that it was Labour’s recession. When he was leader of the Conservative party was there any point at which he did not agree with the spending plans of the then Chancellor of the Exchequer?
I remind the hon. Gentleman that when one goes into government one is responsible for what happens. I know it is hard to take, but I have always believed that one wants to go into government to take responsibility for all the things that take place while one is government. He may not want to know it, but the reality is that the Labour was in government, the recession was very hard, and people have suffered.
There is still more to do—we have not done enough—if we are to secure Britain’s future. That is why the Budget set out further investment to ensure a resilient economy that delivers the promise for business that it can compete with the best in the world, and hope for families—this is important—about their prospects now, and for their children’s futures. From next week, corporation tax will be down to 21% from the 28% inherited from Labour, and will be down again to 20% next year—the joint lowest in the G20—making it competitive to invest in Britain, which is good for jobs and good for young people.
That will be matched by the best export finance, doubling direct lending to £3 billion and the investment allowance to £500,000, so that British business can take advantage of the best opportunities at home and abroad. Again, that is good for investment and good for growing jobs.
We are cutting tax not just for business but for Britain’s hard-working people, ensuring all can share in the benefits of Britain’s growth. By raising the personal allowance threshold to £10,500 next year, we are taking some 3 million of the lowest paid out of tax altogether and ensuring 25 million people pay less.
As a result of those changes since 2010, the typical taxpayer is £800 better off—something that Labour’s simple measure of real earnings fails to recognise. Similarly, through new child care support, we are helping families overcome prohibitive costs and ensuring that more parents find that it pays to get a job. Under universal credit, we have already invested £200 million to remove the 16-hour rule, so that 100,000 families in mini-jobs or part-time work receive help for the first time. Now, we are going further still, increasing child care support from 70% to 85% of costs so that work pays more for half a million families.
It pays to work, and now, finally, it pays to save, reversing the damaging trend whereby for too long Britain has borrowed too much and saved too little. The radical changes to retirement saving announced in the Budget are possible only because of the significant pensions reforms the Government have already delivered: a triple lock on the state pension; auto-enrolment to make saving the norm, helping up to 9 million save in a workplace pension—over 3 million are already saving, and I give due credit to the Minister of State, my hon. Friend the Member for Thornbury and Yate (Steve Webb) for that—and, vitally, the single-tier pension, for which I again give credit to my hon. Friend, set above the level of the means test, so that those who have contributed for 35 years have a secure basic income, without having to resort to additional state support in later life.
I listened carefully to what my right hon. Friend said about incentives to work. Will he say a little about the 450,000 fewer workless households, and the 290,000 fewer children living in such households? Perhaps that has something to do with his welfare reforms.
I am going to come on to that, but one of the great success stories is the fact that the number of workless households has fallen for the first time in 30 years. My hon. Friend is absolutely right, and I shall give a few more details about that in a second.
I shall make a little more progress before giving way to the hon. Member for Edmonton (Mr Love).
As a result, for the first time, we can rethink the rules and trust people to use their own money as they see fit, not as the Government tell them. After the Budget, gone will be the prescriptive limits on how and when people can turn their pension pot into annual income, which, we all agree led, for too long, to inertia among consumers and risked locking people into low-yield annuities, with rates that have fallen by 15% since 2009. In countries such as the United States, Australia and Denmark, Governments do not impose restrictions. Now, that will be the case in the UK too, freeing people to shape their finances in retirement as they choose, which is absolutely right.
We are consulting on guaranteed guidance—an important feature of the Budget—asking the Financial Conduct Authority to work with the pensions regulator, consumer groups and others, to develop a robust set of standards and monitoring arrangements, with £20 million provided to kick-start that thinking. Whether people choose to buy an annuity as now, take the cash, or grow their pension pot, the reforms will increase the attractiveness of saving for retirement. That will pave the way for new financial products, increasing competitiveness in the market, driving innovation and a better service, as well as giving people new choice over their future.
As I recall, the savings ratio under the previous Government fell to all-time lows, and under this Government it will be higher at the end of this Parliament than it ever was under Labour. When I take interventions from the Opposition they always fail to recognise that the economy crashed in 2009-10, taking 7.2% off gross domestic product, which had a staggering effect on savings and everything else. The reality is that we will have a better savings position, which will grow, given the fact that we are working to improve savings in pensions in the workplace, with a single-tier pension and giving people the right and responsibility to choose where their savings go.
I have given already way to the hon. Gentleman, and I just want to make another point about something that is typical of what has been going on.
On Wednesday, in his Budget response, the Leader of the Opposition did not mention pension reforms at all. Come to think of it, he did not mention any single measure in the Budget. On Thursday, the shadow Chancellor would say only of the measure that Labour would somehow look at the proposals. On Friday, in a panic, I think, the hon. Member for Leeds West (Rachel Reeves) said on “Any Questions” that she supported the reforms. On Sunday, when asked whether he supported the measure, the shadow Business Secretary began to backtrack and said:
“I’m not going to sign a blank piece of paper on your show”.
Later the same day, the hon. Member for Leeds West began to backtrack, saying that Labour supported the reforms but that they did not go far enough. Labour’s position on this policy is a complete shambles. It has struggled to reach a position and say that it may support the measures not because it believes in it but because it realises that it is popular. The reason Labour does something is all about popularity and nothing to do with values—that is the truth of it.
Over and above the radical changes to pensions savings, the Budget announced four further important measures to make saving pay, including abolishing the 10p rate for savers altogether, for the first £5,000 of savings. As my right hon. Friend the Chancellor said, when we abolish a 10p rate, we take it to zero; when the previous Government abolished the 10p rate, they took it to 20p. Those measures also included merging cash and stocks to create a single, simple new ISA, with an increased annual limit of £15,000; launching a new pensioner bond, paying market-leading rates; and introducing something that we have worked on in the Department with the Treasury and my right hon. Friend, the excellent Chief Secretary: a class 3A national insurance contribution, so that anyone who has reached state pension age before the single tier is introduced can top up their state pension.
The Opposition’s response is becoming chaotic. I want to press the hon. Member for Leeds West: normally by this point in the Budget debate, I understand, the Opposition make it very clear what resolutions they will vote against, but we have heard nothing from them at all. It seems that there is a row and chaos, so I will give way to the hon. Lady if she would like to tell us which ones.
I particularly want to ask her about resolution 43, which, I understand, is about the treatment of salaried members within limited liability partnerships. I wonder if she can tell us whether the Opposition will vote against that, given the fact that their economic policy is now fundamentally limited, that their leadership is a liability, and, after all their rows, that they are clearly not in a partnership? I will give way to her if she would like to tell us which resolutions she is going to vote against. Will she confirm or deny that she is voting against anything? I will give way to her if she wants. Well, they clearly do not know, Mr Speaker, so we will look forward to this evening with some relish.
It now pays to save. That is what is going on—I am glad that you enjoyed that joke, Mr Speaker; you are always a good test on these things—and so under the Government it pays to work, breaking dependency and getting people back into jobs.
The Secretary of State will be aware that, for very many people, the average level of savings is in the hundreds, not the thousands. Do the Government regret abolishing the savings gateway as one of the first measures they took on coming into government?
When the hon. Lady got up to make an intervention, I wondered whether she would take the opportunity to say how much she welcomes the fact that unemployment has fallen by 20% in her constituency—a very good thing. I know she does not want to say that, but I say it for her.
I have to say to that no, we do not regret that. What we have undertaken since we came into power is going to hugely incentivise and improve pension savings and the savings marketplace. The extra vehicles announced in the Budget will rapidly improve that and I believe, all in all, that we will have a much better savings position than we inherited, so I think I have answered that question.
I need to make the point about employment and unemployment. Let me get this right: when we came into power, we inherited a situation where unemployment rose by nearly half a million. At its peak, some 5 million were on out-of-work benefits—1 million for a decade or more—and in one in five households, no one worked. The number of households where no member had ever worked doubled under Labour, from 184,000 in 1997 on an upward trend to 351,000 by 2010. I do not recall Labour Members mentioning those figures, and they avoided them when they were in power.
Correspondingly, since we came to power, unemployment is down 168,000 since the election. The claimant count has fallen by almost a quarter over the last year, which is the fastest annual fall since 1997. Workless households have fallen to the lowest rate since records began, down 450,000—two percentage points—since the end of 2010.
At the same time, we now have record employment: more people in work than ever before, more women in work than ever before and more people in work in the private sector than ever before—up over 1.7 million since the election. Ninety per cent. of the increase over the last year has come from British workers, unlike before, and more than three quarters of the increase since the election is from full-time work, up over 1 million compared with part-time work, which is up only 300,000.
Here is the point: we hear a lot from Labour Members about what they would do if they were in government, but youth unemployment increased under the previous Government by nearly half from 1997 to 2010—up almost 300,000. Now, on what the shadow Work and Pensions Secretary called
“the failure of this government to get young people into work”,
youth unemployment is down 81,000 on the year and is lower than what we inherited. The International Labour Organisation long-term youth unemployment is also down 37,000 on the year. The number of young people out of work and not in full-time education is down 63,000 and the long-term youth claimant count is down 23,900 on the year, having fallen for the last 15 consecutive months.
I remind the Opposition, who are chuntering away from a sedentary position, that under them long-term unemployment nearly doubled in two years, from 400,000 in 2008 to 800,000 in 2010. While they were seeing that rise, they gerrymandered the figures on the claimant count: 80,000 were put on to training allowances so that they came off the measurement of whether they were long term unemployed. Even though they were back out of work or back out of training, they went back as though they had just started their claims.
The trend slowed and is now falling. ILO long-term unemployment is down 38,000 this quarter and is down 59,000 on the year. The number on the claimant count for 12 months, ungerrymandered, is down 74,000 on the year—a fall of 17%. That is down, I believe, to so many of the reforms and changes that we have made, improving the labour market and improving the process of getting people back to work. The latest labour market statistics are remarkable and nothing demonstrates more clearly the Government’s success in getting Britain working.
Again, I say to the hon. Gentleman that he really needs to address his question to those who were governing, because, as I said earlier, GDP fell by 7.5% under the previous Government during the recession. What does he think forced those economics for individuals and working households to fall? It was the fact that there was a massive recession—the biggest for 100 years —on Labour’s watch.
I want to make some progress. The latest labour market statistics are remarkable. The Work programme that we brought in is now helping long-term unemployed people dramatically: half a million people under the programme have started a job; 252,000 have now gone into sustained work; and 10 times as many people have achieved job outcomes now compared with the end of the first year.
Compared with the flexible new deal, one of Labour’s great flagship programmes, under the Work programme, twice as many people have gone into a job, and it costs £5,000 less per place according to all the estimates. So, too, with the work experience programme that we brought in, allowing young people to take a work experience placement for up to two months while still keeping their benefit. That has helped 50% of participants off benefits and into work. It has the same success rate as the future jobs fund, but at a 20th of the cost—£325 as opposed to £6,500 of wasted money. What is more, the majority of places are in the private sector, whereas the future jobs fund created jobs almost exclusively in the public sector.
This Budget has been very good for jobs but it is very good for apprenticeships as well. The Government have already committed to a quarter of a million more apprenticeships than Labour ever planned, with 1.6 million starts since 2010. The Budget announced £170 million more for another 100,000 apprenticeship grants and for developing new degree-level apprenticeships as well. It is important that the Government are not only finding and helping to find people work, but helping to shape their skills and experience.
In the Secretary of State’s list of successes, rightly attributed to the businesses in this country and the Government’s policies, will he also make reference to those that are now being supported by the enterprise allowance and the start-up schemes? As we saw at my recent jobs fair, more people are seeking self-employment as well.
I pay tribute to my neighbour and hon. Friend for his phenomenal work on the jobs fairs, on all the creation he has done and on the work he has done with local unemployed people. He is absolutely right: the new enterprise allowance has been a phenomenal success. Thousands of people have started their own businesses under it. It is one of the big success stories of this Government. It is going to grow and we are going to ensure that many more people, particularly young people who are more and more keen to start their own businesses, get the kind of support they want.
Does the Secretary of State not have any concern that even now there are 2.3 million people unemployed, and as his own statement made clear, the total has gone done by only some 160,000 since the election? The figure was 2.4 million before the election and now it is 2.3 million. What has gone wrong with getting those people into jobs?
Of course I want to see more people back in work, particularly young people, but the hon. Lady must remember that we inherited from the previous Government an economy that had hit the buffers, with young people cascading out of work in the two years running up to the election. Youth unemployment rose over their whole period in office, which suggests to me that their policies were hurting young people long before the recession. What we are doing is aimed at getting more people back into work. We have been successful in improving the situation, as the figures now are better than those we inherited—more people are in work, including more young people—but of course there is more to do, and it is this coalition Government who are doing it.
We are also introducing our other programmes, including the Work programme and universal credit, with the pathfinders moving into the north-west and eventually rolling out by 2016. We know that 90% of claims for jobseeker’s allowance and other benefits are already being made online, which is a huge change—only about 10% or 12% were made online before—that is improving speed and accuracy. Some 78% of claimants are confident about their ability to budget with monthly payments, as a result of the programmes we have run. Two thirds think that the universal credit process offers a much better work incentive than jobseeker’s allowance. Even in its early stages, universal credit is having a significant impact on people’s work prospects: claimants are likely to spend twice as long looking for work; two thirds agree that it is easier to understand their obligations; and 86%—rising to 90%—are confident of gaining a job within three months, which is a much higher rate than for jobseeker’s allowance.
These are dynamic changes that we are making, improving the path back to work, the incentives and the choices that people make. We are improving their work prospects and helping them into meaningful, long-term jobs. However, I gather from the Chief Secretary that the Treasury received a submission from the Opposition in the run-up to the Budget for an alternative to our programmes, which they call a jobs guarantee. I thought that we should look at that, just to examine whether it was worth embracing. I think it only fair that we tell the House whether or not it would work. Having looked at the proposal in a completely ambivalent manner, I have to say that it is confusing. The first submission said that it was a six-month programme for young people. The second submission said that it was a year-long programme. The third submission said that it was a two-year programme for the long-term unemployed. I gather that there is now some suggestion that it might be a six-month programme for everybody.
Apparently the jobs guarantee is now a flagship policy for the Opposition, but I understood that it would be funded for only one year. Now we hear that the same funding they announced for one year is meant to last all the way through a full Parliament. We asked the Treasury to do some formal costings for that, which I hope have been made available to the Opposition. They said that their scheme would cost only £1.9 billion in its first year and £0.9 billion thereafter, but the Treasury’s formal costings—[Interruption.] I know that Opposition Members do not want to listen, because the last thing they want to hear is how they would pay for it The Treasury, which is full of decent people doing a hard day’s work, has shown that there is a massive gap of £2.6 billion per year between what the Opposition say their jobs guarantee will cost and what we calculate it will cost.
Not only have the Opposition underestimated the costs by £0.6 billion in the programme’s first year, and £1.7 billion in future years, but they have no robust means of funding it. They say that they will fund it with a bankers’ bonus tax that will raise £2.3 billion, which is questionable, but I understand that they have spent that 10 times over. Let me list a few of the things they have committed to spend it on: reversing the VAT increase, which would cost £13.5 billion; more capital spending, which would cost £5.8 billion; reversing child benefit savings, which would cost £3.1 billion; reversing tax credit savings, which would cost £5.8 billion; and more housing, which would cost £1.2 billion. They have made £30 billion of spending commitments, apparently to be paid for by a tax that would save them £2.3 billion.
Does my right hon. Friend agree that the lesson of Labour’s crash is that more spending, more borrowing, more debt and more taxes do not work? Does this not show that the Opposition have not worked that out, because they have spent their bankers’ bonus tax more times than the number of sides on the new £1 coin?
My hon. Friend is absolutely right. The reality is that the Opposition are not very good at learning lessons. Were they in power again, I suspect that they would crash the car into the buffers, just as they did the last time.
At the same time, the Opposition’s proposal for restricting pensions tax relief has been called “extraordinarily complex” by the IFS and “unworkable” by the CBI. Labour needs a little reminder that make-work schemes are enormously expensive and, worse still, a mean attack on these pension proposals. The saving they expect to make from pensions tax relief is another mean attack on people who do the right thing by saving for their future. Labour has learnt nothing. Its proposal is even possibly a rehash of its old StepUp programme, which ended up costing a massive £10,000 per place before it binned it, rather than introducing it.
There we have it: a policy—the only one I have heard from the Opposition—that is full of flaws, unfunded and simply would not work. It is small wonder that when asked they said, “Okay, this will be about the private sector.” Actually, the future jobs fund, on which this proposal is based, never got jobs in the private sector. In fact, Barnsley council reported that only 7% of those jobs were in the private sector, and Birmingham council reported only 2%. It is small wonder that when asked to confirm whether that would be for private sector jobs, the shadow Chancellor said:
“But if not, you can do it through the voluntary sector. If not… you have to have a final backstop: public work scheme.”
If not one, then the other, but if not that, then another one. It begins to sound a bit like Vicky Pollard: “Yeah but no but yeah but no.” They have no policy for employment at all. To this date the private sector’s response has been unequivocal:
“Wage subsidies for employers are not the source of sustainable jobs… Government must focus on creating the conditions for growth”.
It is the same old Labour; the same old failed policies.
A little over a year before the next general election, this Budget sets out the choice now facing the electorate. On one hand we have an Opposition who every day are mired in confusion, who have voted against every reform measure and who have learnt nothing. After making welfare spending balloon by 60% during their time in government, they now want to spend more.
I want to ask the hon. Member for Leeds West what she meant by something she said when addressing a meeting of Christian socialists—perhaps they were just socialists, but I am not sure. She said:
“It will be much better if we can say all the changes that the Government has introduced we can reverse and all benefits can be universal.”
There we have the beating heart of Labour, and the public should know this—[Interruption.] They are cheering, because that is exactly what they want. Only now will they vote for the welfare cap—although I understand that a number of them will not—but they have no intention of sticking to it. That is only because, as the hon. Lady went on to say, to do what she wants to do would at the moment appear unpopular. They do something because it appears popular, not because they believe in it.
I wonder whether my right hon. Friend can help me. Does he know whether it is now the policy of Her Majesty’s Opposition to have an individual welfare cap or a universal budget cap? It is not only hon. Members in this place who would like to know what their policy is; 27 bishops in the other place would, too.
With respect, I have found in the past few weeks that I cannot really answer for bishops. They usually think they can answer for me, which is a fair response, but I am happy to avoid that challenge.
The Opposition have been quite confused about the welfare cap. They say that they are going to support it, but within the cap they have a policy they say they are going to change by ending the spare room subsidy. [Interruption.] Opposition Members call it a bedroom tax. I noticed that when they said last week that there were 24 tax rises under this Government, they did not schedule that as one of those tax rises. The truth is that they know it is not a tax, so, as ever, they are trying to fool the public. Let me point out that reversing that policy will cost them up to £500 million a year, and they have, they say, produced only one measure within the welfare cap that they will use to pay for that—means-testing winter fuel allowances for wealthier pensioners, but that will save only £100 million. Almost as soon as they vote for the cap tomorrow, they will be planning to break it. Perhaps the hon. Member for Leeds West can tell us—I will give way to her if so—what other elements she is going to change within the capped programme to reduce spending to bring it under the cap. Will she will intervene to tell me that? Of course not; she has no idea. There we have it—it is just a game for them. The only reason they might vote for the cap is that they are worried that it would be unpopular not to do so, but they do not intend at any stage to implement it.
On the other hand, this coalition Government are reforming welfare in the firm belief that it is the right thing to do, not only saving money but breaking dependency and restoring the incentive to work. We have record highs in employment and record lows for the rate of workless households. What is more, this Government are rewarding hard work and saving, in the belief that people have a right to take their own decisions on the money that they have earned, not dictating to them through high taxation or forcing them to buy poor yielding products as the previous Government did. This Budget delivers support for those who try, help for those who need it, and security for hard-working families up and down the land. I commend this Budget to the House.
Order. I should say to the House that in the light of the very large number of Members who wish to contribute, there will be a time limit on Back-Bench speeches of seven minutes. It is conceivable that that limit could even go down, although it might rise over the course of the debate. That may not be conclusive, but it is a guide, at any rate.
Wednesday’s Budget was certainly dressed to impress, but at its very heart there was an admission of failure. Let us remember what the Chancellor told us in 2010: that the Government would clear the deficit during this Parliament. They laughed at Labour’s plan to halve the deficit by the end of the Parliament, yet last Wednesday the Chancellor had to admit that he will not meet his targets until 2018—fully four years late.
The Chancellor comes from a wealthy family of wallpaper manufacturers, and this really was the ultimate Osborne and Little wallpaper Budget: paper over the cracks, use a stunning design to mask the underlying structural faults, and repeat patterns from last year’s range. But the truth is that for all the patterns and effects, people are worse off by £1,600 per year under this Government. Energy bills are up by £300, and however he dresses it up, people will be worse off in 2015 than they were in 2010.
This Budget was an opportunity to tackle the cost of living crisis faced by hard-working people across this country, but, again, the Government have failed to do so. They failed to do anything for families struggling with the costs of child care this side of an election. They failed to do anything to address youth unemployment and long-term unemployment with a jobs guarantee. They failed to help those working two or three jobs but still struggling with not enough to live on. They failed to help older people struggling to pay their energy bills, and they failed to help the disabled people so unfairly penalised by their bedroom tax.
The Government’s own figures show that the number of pensioners in poverty is set to rise, not fall, under this Government; that is the Chancellor’s legacy.
The Chancellor called this a Budget for the makers, the doers and the savers. The reality is that for the makers, over the past three years, manufacturing is down by 1.3%, infrastructure investment is down by 11%, and exports are falling, not rising. For the doers, real wages are down by 6% in this Parliament, energy prices are up by £300, and long-term youth unemployment has doubled. As for the savers, what has he done for them? According to the Pensions Minister, the hon. Member for Thornbury and Yate (Steve Webb), he is allowing them to cash in their pensions and buy a Lamborghini. How incredibly out of touch is that? The average pension pot is about £30,000. I checked on the internet this morning, never having looked at this before, and found that the Lamborghini Aventador costs £263,000. The Cabinet might be lucky enough to be able to afford to buy a Lamborghini with their savings, but ordinary people would be lucky to be able to afford the door of a Lamborghini.
For the record, it is inaccurate to describe everybody on the Government Benches as having a wealthy background; that is clearly not the case. On helping hard-working families, does the hon. Lady’s party support the overall DWP welfare cap, and the individual welfare cap, given the views not only of Members in this place, including the hon. Member for Rhondda (Chris Bryant), but of 26 bishops in the other place, plus one other bishop who does not sit in the other place—Archbishop, soon to be Cardinal, Vincent Nichols?
I am sorry if the hon. Gentleman cannot afford a Lamborghini with his savings. I will come on to the welfare cap. We have been clear that we will be supporting the welfare cap in the vote in Parliament tomorrow.
If the Chancellor really wanted this to be a Budget for the makers, he would have cut business rates, supported a British investment bank to help small businesses, and committed to build more homes—the 200,000 extra homes a year that Labour has promised. If he really wanted it to be a Budget for doers, he would cut taxes for millions of working people with a 10p starting rate of tax, freeze energy bills and reform the broken energy market, and expand child care for parents with three and four-year-olds, as a Labour Government would.
The hon. Gentleman will know that the Institute for Fiscal Studies has counted the costs of what this Government have done. Taking into account all the changes to taxes, including VAT, which he voted to increase from 17.5% to 20% despite what was in his party’s manifesto, changes to tax credits and benefits have cost the average family £891. It is a case of giving with one hand but taking much, much more with the other.
My hon. Friend talks about a Budget for the doers. Yesterday I met three young people in my constituency aged 22, 24 and 23 who had never had proper long-term jobs because they had worked for agencies and on zero-hours contracts. If the Chancellor cared about doers and young people, his Budget would have addressed those issues.
I thank my hon. Friend for that intervention. As he knows, Labour’s compulsory jobs guarantee would benefit people exactly like the young people he met in Corby. It would guarantee a job for every young person who has been out of work for a year, giving them real hope and opportunity and utilising their skills and talents.
If things are going as swimmingly as the Government wish us to believe, is my hon. Friend as concerned as I am about the numbers of people getting into personal debt trying to make ends meet, and about all the evidence that shows that personal debt will rise, not fall, over the years ahead? Does she think that is a sign of an economy recovering, or of people scraping to make ends meet under this Government?
The compulsory jobs guarantee, which will last for the full five years of the next Parliament, will be based on what we have seen with the jobs growth Wales programme, whereby 80% of the jobs are in the private sector. A couple of weeks ago, the shadow Minister for employment—my right hon. Friend the Member for East Ham (Stephen Timms)—and I visited a software company in Cardiff that had taken on 12 people through jobs growth Wales. It had made a huge difference to those young people, giving them hope and opportunity. The Government carp at our policies to get young people back to work, yet under them long-term youth unemployment has more than doubled. That is the Secretary of State’s record under this Government.
If the Chancellor really wanted this to be a Budget for savers, he would cap fees and charges on pensions and require insurance companies to provide free independent brokerage, as Labour has called for. Why did the Chancellor not do those things? It is because he is strong when it comes to standing up for the rich, but weak when it comes to standing up for the poor.
Does my hon. Friend agree that one of the biggest indictments of this Government and the Budget is the way in which they have adjusted taxation such that women will fund the bulk of the £14 billion the Government have to save? Women will have to save £11 billion—that is an indictment of this Government.
My hon. Friend makes an important point: women are disproportionately hit by the changes introduced by this Government and are struggling with the rising cost of living more than anybody in this country. Moreover, the increasing costs of child care under this Government are making it harder for working parents, particularly working mums, to go back to work and make the contribution we need to the economy.
Four years ago, this Government said that debt would fall and that living standards would rise, yet the reverse has happened. They have broken their promise to balance the books by 2015 and they are set to borrow £190 billion more than they had planned. National debt is rising this year and it will rise next year and the year after that. There is more borrowing, more debt and more welfare spending under this Government.
On the subject of debt and future spending—the hon. Lady will probably get to this later in her speech—will she answer the question asked by my right hon. Friend the Secretary of State about her remarks at a meeting last week? She is reported to have said that it would be better if she could reverse all of the changes and make benefits universal. That is a spending commitment of hundreds of billions of pounds. She needs to say whether she said it or not; otherwise no one will believe a word the Opposition say.
We are the party who have said that we will cut the winter fuel allowance for the richest pensioners and means-test that benefit to save money, but Government Members do not support that. The reality is that we are the party who are willing to take tough decisions to get the welfare bill down, whereas it is rising, not falling, under this Government.
The truth is that social security spending is £13 billion more than this Government had planned. In last week’s Budget, the Chancellor had to revise up spending on social security by £1 billion more this year and £1 billion more next year than the Government had planned just six months ago. Was that what the Prime Minister meant when he said that he was cutting the cost of welfare? It is going up, not down.
The problem is that without addressing the cost of living crisis, it is not possible to control the costs of social security. Long-term youth unemployment has doubled since 2010, costing taxpayers £330 million a year. The number of people working part-time who want a full-time job is up to 1.4 million, costing £4.6 billion in extra social security. One in five workers are paid less than a living wage—up from 3.9 million in 2009—costing the Treasury an estimated £3.2 billion a year. Housing benefit is increasing and has been revised up again because house building is at a record low. The Secretary of State has also played his part, with his shambolic welfare reforms. Just one in five people who have been on the Work programme for two years have secured a job; £1 billion has been paid out, yet more people are ending up back in the jobcentre than getting a job through the Secretary of State’s failed Work programme.
I think I am grateful to the hon. Lady for giving way. Given that I have been listening for 12 minutes to her critique of my right hon. Friend the Chancellor’s Budget, why is it that her party has come out saying it will support so many of its measures? Why is Labour thrashing around with such difficulty to find what to vote against tonight? Will the hon. Lady share with the House what her party plans to vote against?
The right hon. Gentleman will not have to wait too long: at 7 pm, he will find out how we will vote on the different measures. Let us be clear: what matters most of all is what was omitted from last week’s Budget, including a compulsory jobs guarantee, a cap on fees and charges and cancelling the bedroom tax. Those things would make a real difference to the lives of our constituents, but the Chancellor did not even mention them in last week’s Budget statement.
The Secretary of State has not just failed with the Work programme; he is failing with universal credit as well. It is years behind schedule and £130 million has already been wasted on IT, yet the Secretary of State continues to say that his flagship reform is on time and on budget.
He continues to do so now. If three years later and £130 million down the drain is on time and on budget, that says more about the Secretary of State’s grasp of mathematics than anything else.
The truth is that from Easterhouse—where the Secretary of State had his epiphany—to the Vatican, people are queuing up to tell the realities of this Government’s reforms. Rosemary Dixon, the chief executive of a charity on the Easterhouse estate in Glasgow—the Secretary of State might remember her—has said that the simple truth is that “things are going backwards.” A letter from 27 bishops stated that
“we must, as a society, face up to the fact that over half of people using foodbanks have been put in that situation by cut backs to and failures in the benefit system, whether it be payment delays or punitive sanctions.”
Archbishop Vincent Nichols has said that
“the role of food banks has been crucial to so many people in Britain today and for a country of our affluence, that quite frankly is a disgrace.”
The Secretary of State says that he is on a moral crusade. The people affected by his policies know what sorts of morals he has.
The hon. Lady may regret bringing the bishops and the moral case they were arguing into this. Perhaps she would like to reflect on what the position was of the bishops, and what Labour’s position was, when her Government kept people on benefits at a 95% marginal tax rate? Those people could not afford to take a job and Labour did nothing but trap them in a life on benefits.
The employment rate reached a record high under the previous Labour Government and it has not risen to that level today. I believe that work did pay under the previous Government, and a flagship reform to make work pay under this Government has failed. The national minimum wage did more than anything under the previous Labour Government to make work pay, but that policy was opposed by the hon. Gentleman and his party.
If the Secretary of State really wants to get the welfare bill down, he must tackle the low wages and zero-hours contracts that leave too many people reliant on in-work benefits. If he really wants to get the social security bill down, he needs to build 200,000 extra homes a year to control the cost of the rising housing benefit bill. If he really wants to get a grip on the social security bill, he should introduce a basic skills test to help those who are unemployed to find and stay in work. If he really wants to control the cost of social security, he should introduce a compulsory jobs guarantee to get the young and the long-term unemployed back into work. The Budget failed to do those things. If we did them, however, we would gain control of social security. For those reasons, we will support the Government when we vote on the welfare cap tomorrow.
However, Labour would make different choices. We would get a grip on the failing programmes, such as universal credit and the Work programme, and focus on the cost of living crisis. We would scrap the bedroom tax, which is cruel and costs more money than it saves. We would take tough decisions, such as scrapping winter fuel allowance for the richest pensioners. We would get more people into work on decent wages that they can afford to live on. Different parties, different values, different priorities. Our priority would be to control the cost of social security; under the Tories, it continues to rise.
On pensions, I think that we can all agree that people need more help to save for their retirement. That is why I am pleased that the Labour Government legislated for automatic enrolment and that this Government have taken forward that Labour policy, based on the Turner consensus. We support greater flexibility so that people can get a better deal from the pensions market when they retire. We will continue to support reforms in the annuities market, which we have campaigned for and which the Leader of the Opposition called for in 2012.
The Government should go further than they did last week. Their figures show that savers are losing up to £230,000 from the value of their pension pots because of excessive fees and charges when they save. The Government should bring forward a meaningful cap on fees and charges to ensure that people’s pension pots are not drained by insurance companies. They should ensure that there is full disclosure of fund manager charges alongside that cap. They should ensure that, for those who want to turn a lifetime of savings into a secure and decent stream of income with an annuity, that is not made harder, and that brokerage is not just offered, but is taken up, so that people get the support they need to make the decisions that are right for them. We must not risk another Tory mis-selling crisis like the one that followed the personal pensions revolution of the 1980s.
To ensure that the Government get the reforms right, we will hold them to account with three tests. First, is there robust advice for people who are saving for their retirement? Secondly, is the system fair to those on middle and lower incomes who want a secure retirement income? Thirdly, are the Government sure that the changes will not result in extra costs to the state, either through social care or by increasing housing benefit bills? We will continue to push for the reform of pensions, but it must be reform that works for people who have saved all their lives, who deserve security and confidence in retirement.
We must be clear that the Office for Budget Responsibility has delivered a damning verdict on the Government’s record of getting people saving. The proportion of income that people are saving has fallen from 7.2% in 2012 to 4.1% this year, and it will fall to 3.2% by the end of the forecast period. More needs to be done to ensure that people have the confidence and the ability to save.
To conclude, whether you are a young person looking for work, a couple looking to buy your first home, a mum and dad trying to pay the bills and get decent child care, a pensioner struggling with rising energy bills or a business trying to access finance, you are worse off under the Tories. They have had four years to deal with the cost of living crisis and they have failed. They have had four years to help young people and the long-term unemployed, and they have failed. They have had four years to help those who are disabled and vulnerable, and they have failed.
There is a tax cut for millionaires, and beer and bingo for the working classes. George Orwell wrote of his nightmare vision of the world in 1984 that
“beer, and above all, gambling, filled up the horizon of their minds.”
Thirty years on in 2014, it seems that the Chancellor thinks that all he needs to do is to cut taxes on beer and bingo, and they will be happy. It is them and us, Mr Speaker—how patronising, how out of touch, how very Tory. The Tories cannot deal with the cost of living crisis; only Labour will.
I will start by drawing attention to the question that I asked the shadow Secretary of State. I notice that she did not deny saying that she wanted to reverse all the changes that the Government have made—[Interruption.] Well, according to the well-known Guido Fawkes website, with which I believe one or two Members are familiar—[Laughter.] If she did not say it, then she should deny it. At a meeting of Christians on the Left, she said:
“It will be much better if we can say that all of the changes that the Government have introduced we can reverse and all benefits can be universal.”
If she did not say that, she should just say so. I will take her intervention. She should deny that she said it. Given that she has not taken the opportunity to deny it, we will know when she leads her party into the Lobby to support our benefit cap that it is a mirage to fool the voters. If Labour ever gets its hands on the tiller, it will increase welfare spending and it will not help people into work.
Let me take the hon. Lady squarely on to the cost of living agenda and her allegation that my right hon. Friend the Chancellor said nothing about it. That is complete and utter nonsense. This morning, the rate of inflation fell according to the consumer prices index and the retail prices index. CPI inflation is at its lowest level for four years.
On jobs, unemployment is continuing to fall. When Labour was in power between 2003 and 2008, when the economy was creating jobs, 90% of those jobs were going to foreign nationals. That provoked the former Prime Minister, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), to say that there should be
“British jobs for British workers”,
but he had no idea what to do about it. I am very proud, as should be the Secretary of State and the Home Secretary, that since this Government have been in power, because of our welfare, immigration and skills reforms, more than 75% of the 1.3 million net new jobs have gone to British citizens. The British public will be very supportive of that. [Interruption.] The hon. Member for Rhondda (Chris Bryant) keeps chuntering, but he should listen. More than three quarters of the 1.3 million net new jobs have gone to British citizens. That is a record of which I am very proud.
I have been very clear that net migration from outside the EU is falling, but that it is going up from inside the EU. That is why we will renegotiate and put the terms to a referendum. We trust the British people with that decision—something that the hon. Gentleman’s party is not prepared to do.
One of the most important things that we have done on the cost of living is to enable interest rates to stay low. That means that one of the largest costs for any family—their mortgage—has stayed at a very low rate. That has been incredibly important and the Labour party would put it at risk.
Is it not a bit galling to take lessons from the Labour party on equity and fairness when, under this Government since 2010 there are 400,000 fewer workless households and 290,000 children who are no longer in workless households? That is a record that I will be proud to stand on at the general election next year.
My hon. Friend is absolutely right.
Also on the cost of living, I am very proud that Conservative councillors in Gloucestershire, working in partnership with the Government, have delivered a council tax freeze. Council tax is one of the most significant costs for families, after their mortgage. Gloucestershire county council has delivered a council tax freeze in every year since 2011-12; Forest of Dean district council has delivered a freeze since the 2011 local election; and Tewkesbury borough council has frozen council tax for four years running. I am looking at my council tax bill. The Conservative-controlled bits of the bill are frozen. The only bits that have gone up are those that are controlled by the independent police and crime commissioner who, for the second year running, has broken his promise and put up council tax for hard-working families across my constituency. That is an unacceptable breach of his manifesto promises. I am pleased that Conservative councils, working in partnership with the Government, have kept council tax low.
In constituencies like mine, having a car is not a luxury but a necessity, so I am pleased that we have frozen fuel duty. That means that for my constituents petrol is 20p a litre cheaper at the pumps than it would have been if the fuel escalator put in place by Labour had continued. That is not a trivial matter for my constituents. It saves them £11 or so every time they fill up and it is very much welcomed.
The hon. Lady spoke about our pension reforms. I know why there is some confusion, to which the Secretary of State drew attention. I raised in the House last week at Business questions the interesting response from one of the Opposition’s key policy advisers, a man who used to advise their Social Security Secretary, the right hon. and learned Member for Camberwell and Peckham (Ms Harman). He said—and I think this is what many on the Labour Benches believe—that
“you cannot trust people to spend their own money sensibly planning for their retirement”.
He was not a lone voice. He was supported by the hon. Member for West Bromwich East (Mr Watson), who said that the Labour party must oppose our policies, and there are a number of other Labour MPs such as the hon. Member for Great Grimsby (Austin Mitchell), and the hon. Member for Aberdeen South (Dame Anne Begg), who is in the Chamber, who sounded a little confused. She was sort of welcoming—[Interruption.] She sounded a little confused about our policy. I have great respect for the hon. Lady, with whom I worked when I was in opposition as the shadow Minister for disabled people.
All I said is that the hon. Lady is not as enthusiastic about our changes as the hon. Member for Leeds West suggested. It is clear that we on the Government Benches, as the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Thornbury and Yate (Steve Webb) set out clearly, trust people to save their own money and we trust them to make sensible decisions in retirement about how to spend it. The idea that somebody who has spent their entire lifetime working hard and building up a pension pot is going to throw the money away when they reach retirement age is nonsense.
I will not give way; I will make progress. Our pension reforms are very valuable and will be well supported.
Finally, I draw the attention of the House to the use of the phrase “middle income”. I noticed that a story I was reading in The Guardian referred to 40p taxpayers as being on a middle income. For example, according to the latest figures that are available by parliamentary constituency, the median income in 2011-12—not the mean income—in my constituency is only £18,800. We on the Government Benches are right to keep our tax changes focused on the least well paid and those genuinely on a middle income.
There is not a single constituency in our country where the median taxpayer—the middle taxpayer—is paying the higher rate of tax, not even in the Cities of London and Westminster, Chelsea and Fulham or some of the wealthiest parts of London. In those constituencies, the median income earner is paying the basic rate of tax. My right hon. Friend the Chancellor’s focus on helping those middle income payers was absolutely right. It is right for our party. The Conservative party should be focused on helping the great majority of taxpayers.
It is worth bearing in mind that a higher rate taxpayer—again, I am using the 2011-12 figures—is in the top 14% of income earners. That does not mean that those people are not important, but it is right that we focused our help on those at the middle and lower end. This Budget was one for hard-working people at all levels of the income scale. It was for people who want to save and for people who want to get on in life. I am proud to support it this evening and will continue doing so.
The hon. Member for Forest of Dean (Mr Harper)will forgive me, I hope, if I do not follow him directly in what he has just said. I want to say something about infrastructure in this country, and I want to talk about some of the slightly longer-term issues in relation to the capacity in our economy as it now is, as well as levels of public expenditure, but I start with annuities. In drawing the attention of the House to my entry in the Register of Members’ Financial Interests, I declare a further interest. As I was 60 at the end of last year, my professional interest in pensions has become rather more personal.
Five years ago when I was Chancellor I looked at the whole question of annuities, which at that time was receiving quite a lot of publicity. There were two reasons that I did not make any changes. One was that I was concerned about any major change that would undermine the insurance principle that underpinned the idea of annuities when they were introduced some 70 or 80 years ago. Also, at that time I was concerned about some of the safeguards that we would need. Given the general economic climate at the time and because I was more focused on what was happening to our banks rather than our insurance companies, I did not pursue the matter.
However, I quite accept now that, because of the very poor annuity rates in the past few years and because the industry has not helped itself in the range of products that it offers people, it is time to look at the matter again. There are three areas about which I want to express my concern. These are issues that the whole House needs to address, and the Government need to address them during the consultation period that follows. First, I am concerned about the effect of the proposals on the annuity market. It is interesting that one does not have to get too many pages into the White Paper to see that at paragraph 2.27 the Government say that annuities are
“the only realistic option for many.”
I read last week that the IFS is concerned about the effect that taking out the higher end contributions will have on annuity rates. The Government need to have regard to that. It is not insuperable, but we need to look at it.
Secondly, the Australians have shown that it is possible to have a wide range of products that we would not necessarily recognise as annuities, but safeguards are needed, particularly in relation to the advice being offered. The Government said last week that they had made £20 million available. When I read the detail, I was surprised to find that that is a one-off payment. There is nothing after that. We in this House should all know that unfortunately the financial services industry has shown that if there is scope for mis-selling, mis-selling will happen. This is critically important.
Although the Pensions Minister may be indifferent as to whether or not somebody buys a Lamborghini, if they are buying it, they must at least understand that there might be consequences for how much money they have for the rest of their lives. It is not in the public interest that people go into something that might have to last them for the next 20 or 30 years without having received proper advice. That needs to be looked at. The offer of guidance is not enough.
Thirdly, the Government will have to consider the scope for tax avoidance. The reason that pensions are tax-privileged is that there is a societal interest in making sure that we save for our retirement. It was never designed to enable people to shelter their money from tax. Those are all aspects that need to be looked at.
I want to say a word about infrastructure. On Monday last week in the Financial Times there was the now traditional announcement of all the infrastructure projects that were on their way and on show, and an invitation to the pensions industry and others to invest. That is all very well. There were some old familiars which I recognise from my time in government, which are still not built and are still looking for money. Owing to the Budget, the pensions industry has just been relieved of quite a large sum of money. I would be interested in the Government’s assessment of where we will get the additional funds that we all know are needed from both the public and the private sector if we are to improve our housing stock, our transport stock and our ageing power fleet, which we are still struggling to replace. Successive Governments have had difficulties with that and this Government need to attend to the matter. That infrastructure will have some bearing on the capacity in our economy if we are to be able to provide for an ageing population and everything we have taken for granted over the past 30 or 40 years.
Reading the OBR report on the Government’s measures announced last week in relation to the economy, we see, rather surprisingly, that none of the measures announced by the Chancellor will, in the view of the IFS, make any difference whatever to the country’s GDP. The annual investment allowance which he doubled will, it says, have a negligible effect. That did not surprise me, because I doubled it when I was the Chancellor and it had no effect then. At least the advice from the IFS and the Treasury is entirely consistent. What is worrying is that we must increase the capacity of our economy. If we do not, we are locking ourselves on to a path where austerity will be unavoidable, because we will not have the wealth to pay down our debt, reduce the borrowing and generate the capacity needed in an economy.
This is an issue for Members on both sides of the House. We must decide how we are going to get more capacity into the economy. I hope the measures announced last week in the Budget work, but whether firms come to this country will be determined far more by big issues such as our infrastructure than by simply fiddling round the edges with tax reforms.
Absolutely, and the argument that has been with us throughout this Parliament has been about how to ensure that we generate growth to pay down the debt. Part of the problem that the Government have at the moment is that the plan that they started out with did not achieve significant results—it is not the same plan as they are operating now, by the way, because it is running some four years late and is significantly different from the one set out in 2010—because we simply did not have the economic growth that people expected.
One of the most worrying points in the OBR’s report is that it expects our economy to be at full capacity in just four years’ time. Normally, when growth recovers after a recession, as it did in the ’80s and ’90s, it peaks at 3% or perhaps 4%, because spare capacity is being used up. The OBR says that there simply is not spare capacity in the economy at the moment. That should worry us, because if our economy is operating at capacity in four years’ time and inflationary pressures start kicking in, how on earth will we meet the future bills of a mature economy with an ageing society?
I understand that some Government Members are more ideological than others about public expenditure, and understandably, many of them expressed concern about the flooding in the west country earlier this year.