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Volume 589: debated on Wednesday 17 December 2014

I am sure the whole House will join me in condemning the outrages that have shocked the world in recent days. The siege of the café in Sydney ended in tragedy but was accompanied by heroism so typical of that great nation, and we all grieve with the Australians today. What happened several thousand miles away in a school in Pakistan is utterly heartbreaking: a massacre of the innocents that has left the world numb. The world stands, head bowed, with Pakistan today. Words can comfort but words cannot defeat the men of violence, so let this be the moment when the whole of Pakistan and every nation come together and say, “Enough. We will act together to defeat this evil in our midst.”

I am sure the whole House will want to join me in sending our warmest Christmas wishes to all our armed forces deployed across the world, in particular, to those in the middle east, Afghanistan and west Africa. We are for ever indebted for the sacrifices they make on our behalf.

May I associate myself with my right hon. Friend’s comments on the evil atrocities that took place in Pakistan and in Australia, and with the best wishes to our armed forces, who may be serving abroad?

Today’s unemployment figures showed that in the last quarter the south-west was the region with the largest increase in employment in the United Kingdom. To continue to realise its full economic potential and to deliver the city deal, does my right hon. Friend agree that Plymouth needs a faster, better and more resilient railway line, as laid out in the south-west rail taskforce’s three-point plan, which was the discussion last week with my hon. Friend the Member for South West Devon (Mr Streeter)?

My hon. Friend has campaigned over and over again for the important improvements in these rail links, and he knows what is being done to help the south-west in that regard. I received a presentation from the taskforce, and we are going to take forward each of the three points in its plan in the work we do in future, to make sure that there is real resilience and that there are better services for people in the south-west. On the issue of unemployment, the figures in the west country are welcome. In his constituency the claimant count has now fallen by 42% since the election. What these figures show nationally is employment up; unemployment down; and the claimant count falling for the 25th consecutive month. What is an important moment for our country is that unemployment is now below 2 million and wages are rising faster than inflation—something I am sure will be welcomed across the House.

I want to join the Prime Minister in paying tribute to those murdered in the appalling massacre in Pakistan. Even as we have become accustomed to tragic events, this slaughter of innocent children in their classrooms has shocked the world. We stand in solidarity with the grieving families and the people of Pakistan, and in the fight against terrorism. I also join the Prime Minister in condemning the sickening terrorist attack in Sydney, and our condolences go to the families of those who died and to the Australian people. I also, like, the Prime Minister, pay tribute this Christmas to all our troops serving around the world; they do our country proud and they show the utmost courage and bravery.

The independent Office for Budget Responsibility, established by the Chancellor to give independent expert advice, claims that his plans take

“total public spending to its lowest share of”—

national income—

“in 80 years.”

Why does he believe the OBR has joined the BBC in a conspiracy against the Conservative party?

First, I welcome what the Leader of the Opposition said about the atrocities that have taken place. Can I also welcome his welcome for the Office of Budget Responsibility? We still remember the days of the fiddled forecasts, the fake figures and all that we had to put up with. If he is going to quote the OBR he might want to read the complete quote. Let me do that for the benefit of the House. It says about our spending plans that the closest equivalent of the national accounts implies that by 2019-20 day-to-day spending on public services

“would be at its lowest level since 2002-3 in real terms.”

Now, 2002-03, in my memory, was after five years of a Labour Government, when the right hon. Gentleman was an adviser in the Treasury. Presumably he is now going to tell us that it was a time of appalling poverty and deprivation, but I do not seem to remember that that was the message at the time.

The right hon. Gentleman has spent four years saying that we spent too much; now he is saying that we spent too little. The OBR says—and this is the full quote— that it takes total public spending

“to its lowest share of national income”

in 80 years. Is he really saying that it is wrong about the proportion of national income?

The percentage of national income will be roughly the same as it was in 1999 after two years of Labour government. The fact is, after seven years of economic growth we should have a surplus; we should fix the roof when the sun is shining. Is the Labour leader really saying that he does not think that we should run a surplus ever?

If the right hon. Gentleman is just a little bit patient, in four months’ time he will get to ask the questions and I will get to answer them. He knows what has happened—the mask slipped in the autumn statement. He has been revealed for who he really is. Let us talk about the scale of the cuts to get to the 1930s vision: they are over £50 billion—more than the entire amount that we spend on schools, half of what we spend on the NHS, and significantly more than in this Parliament. Is he really pretending that cuts on this scale will not do massive damage to front-line services?

Of course we have to make difficult decisions. We have done so every day since taking over from the shambles that we inherited. Everyone can now see that the right hon. Gentleman’s pretence, which lasted for about one week, of caring about the deficit is over. This is what the Institute for Fiscal Studies says about his policy, “Under a Labour Government…there would be much more borrowing, and therefore” more “government debt”. Labour has not learned a single thing from the last four years: more borrowing, more debt, more taxes—all the things that got us into this mess in the first place.

The right hon. Gentleman is borrowing £207 billion more than he planned, and he has broken his promise. The difference is that we will cut the deficit every year—he wants to go back to the 1930s. If that was not bad enough, he has £7 billion of unfunded tax cuts on top. Before the last election, he said that

“you can’t talk about tax reduction unless you can show how it is paid for, the public aren’t stupid”.

What is it going to be: further cuts in public services or a rise in VAT?

What this Government have shown is that if you get on top of the national finances and if you grow the economy you can cut taxes for 26 million people. It is interesting that, on this of all days, not a word from the right hon. Gentleman about the fall in unemployment. That is the truth. Remember the predictions: the Opposition told us that there would be no growth, then there was growth. They told us that there would be no jobs, then there were jobs. They told us that the jobs would not have pay ahead of inflation; now the jobs have pay ahead of inflation. They told us the deficit would go up; the deficit has come down. They have got absolutely nothing to say about the economy because they have been wrong on every single count.

The right hon. Gentleman is crowing that everything is fixed. It may be fixed for his Christmas card list, but it is not fixed for far too many people in this country.

The right hon. Gentleman did not really answer the question on VAT, did he? This is what he said before the last election on 5 April 2010: “We have…no plans” to put up VAT. Barely two months later he put up VAT from 17.5% to 20%. He has £7 billion of unfunded tax cuts, a deficit plan that he cannot meet, and we know that he has got form. Will he now categorically rule out a rise in VAT?

We do not need to raise taxes because we have a plan for efficiencies in spending. It is the Labour party that does not have a plan. The right hon. Gentleman asks what has changed for real people over the past year, and I will tell him: 588,000 people who did not have a job last year have one this year. Long-term unemployment has fallen. Youth unemployment has fallen. You might have thought that the Labour party would welcome those things. It is Christmas, so we should all enter into the Christmas spirit. I have had my Christmas present a little early, because I have here the document being sent to every Labour MP. In case they have not had time to read it, let me advise them that if they go to page 17—[Interruption.] Be patient. It is there in black and white: on managing the economy, the Conservatives have a 17-point lead. Thank you.

I hope that over Christmas the Prime Minister will get to reflect on his year. He has lost two Members of Parliament to UKIP, he lost 26-2 in Europe, and he brought a whole new meaning to the phrase “conviction politician” when Andy Coulson went to jail. The truth is that he has given up on compassionate conservatism. They have been exposed for who they really are. His plan for the 2020s is to go back to the 1930s. It is not about balancing the books; it is about slashing the state. In just four months’ time that will be the election choice.

What this has shown is that on a day when it has been shown that unemployment has fallen, inflation is down and our economy is growing faster than any other major economy in the western world, the right hon. Gentleman has absolutely nothing to say. I almost feel sorry for Labour MPs. They cannot talk about the deficit, because it has fallen. They cannot talk about growth, because it is rising. They cannot talk about jobs, because we are increasing them. They cannot talk about immigration, because they have been told not to. They cannot talk about their leader, because he is a complete waste of space. No wonder for Labour MPs this year it is a silent night.

First, may I concur entirely with the Prime Minister’s words about the appalling tragedies that have unfolded around the world?

Bearing in mind the continuing success of our long-term economic plan, can my right hon. Friend please reassure the House that there will be no further cuts to our armed forces under a future Tory or coalition Government?

I absolutely agree with my hon. Friend that we can have a strong defence budget and strong defence forces only if we have a strong economy and a clear long-term economic plan. Our defence budget is the biggest in the EU and the second largest in NATO, and we meet the guideline of 2% of GDP. I can tell him that, because of the success of our economic plan, we are able to commit to over £160 billion of investment in equipment and equipment support over the next 10 years. That is why we will see the aircraft carriers, the Type 45 destroyers, the future frigates, the A400Ms and the hunter-killer submarines. We are seeing incredible equipment rolling off the production lines in our country to help keep us safe.

The terrible slaughter of the innocents in Pakistan yesterday shocked the world and is another example of the obscene atrocities being visited upon children in various parts of the world by these barbaric forces. Another example was the attack on the 200 schoolchildren who were abducted in north-east Nigeria in April of this year. At the time, the Government and other Governments pledged their support to do what they could to assist in the hunt for those children. What reassurances can the Prime Minister provide on that and on the commitment that British experts will assist?

In all these cases, we see what expertise and assets we can bring into play to help Governments who are trying to combat these problems. In Nigeria, for a period, we lent the expertise of our fighter jets, with their RAPTOR pods, in order to provide imaging to try to help find the Chibok girls, and we continue to work with the Nigerian Government in every way we can. With Pakistan, again, we believe that the Pakistan Government must confront terrorism in all its forms, and they are taking steps to do that. I think today is the day when we should redouble our support and our efforts, and the whole world should do the same, to say that if the Pakistan Government want to continue to act to root out terror—and none of this can be justified—they have the support of the whole world, Britain included.

Q3. Will the Prime Minister join me in thanking businesses, schools, my Festomane team and the college for organising the week-long festival—week long—of manufacturing and engineering in my constituency, which was opened by the Prince of Wales? Does my right hon. Friend agree that by focusing on innovation and productivity this Government will deliver more exports and higher standards of living? (906685)

I certainly join my hon. Friend in that. People might know that this is an annual week-long festival, championed by him, that showcases local manufacturing success stories. I remember that when I visited his constituency we watched a 3D bike being printed in metal—it was extremely impressive. We need to continue with the long-term plan, which is delivering a more balanced recovery, with manufacturing growing, as well as construction and services. Our commitments to increasing the number of apprentices, to helping companies with research and development and to keeping tax rates low are all delivering a very strong manufacturing success rate for Britain.

Millions of people will work extra hours this Christmas in difficult and often low-paid jobs so that they can send money to relatives living abroad. Their remittances to sub-Saharan Africa alone account for more than donor aid, but their money transfers will be hit by fees and charges often as high as 15%. Five years ago, the G8 committed to reducing this transfer tax to 5%. Will the Prime Minister therefore join me in calling on the transfer companies to cut their charges for Christmas as a first step to meeting the G8 promise to families in some of the poorest countries in the world?

The right hon. Lady is absolutely right to highlight the importance of remittances. The amount of money that goes from our country, in the form of remittances, to countries such as Somalia and others in sub-Saharan Africa in desperate need actually outweighs significantly the aid we are able to give to those countries. So yes, we should look, and we are, at every way we can to help these remittances take place. There have been problems in the past with making sure that we apply measures on money laundering and other potential issues to them, but we are looking hard at what we can do to keep the charges down.

Q4. One of the characteristics of the decade leading up to the financial crisis was the £1 trillion increase in household debt. Will my right hon. Friend assure the House that no future long-term economic plan will be financed by a debt bubble inflated on the backs of hard-working households? (906686)

My hon. Friend is absolutely right. One of the changes we have made since the crash is to put in place proper arrangements for the Bank of England to call time on the level of indebtedness in the economy and to make sure that financial regulation, including regulation of the mortgage market, for instance, is properly put in place. That is one of the important lessons. I have to say to Labour Members that one of the other important lessons is that when you have had a long period of economic growth you should be trying to pay down your debt and aiming for a surplus. That is what fixing the roof when the sun is shining is all about.

Q5. I welcome the fall in unemployment, but it is still too high in the north-east of England. Will the Prime Minister tell the House, and my unemployed constituents, who are the principal candidates for working-age benefit cuts? (906687)

Let me join the right hon. Gentleman in welcoming the fall in unemployment; it has fallen in every region of the country over the past year. In the north-east over the past year, unemployment is down by 11,000, and that is welcome. In terms of addressing the costs of welfare, I think we should be very frank about this, as I was discussing, calmly, earlier with the Leader of the Opposition. Whoever is Prime Minister after the next election is going to have to make public spending reductions. We have a choice: whether we leave the welfare bill as it is, or whether, like Labour Members, we vote this afternoon to add £2 billion to the welfare bill—that is what they are talking about this afternoon: £2 billion on welfare—and then have to take that money out of the Education Department, or the Health Department, or policing. We think we should not do that; we think, yes, there are reductions in welfare that can be made. We will make them, and that will keep taxes down and make sure that we can have good public services.

Q6. For people starting their careers, newly married couples or others, the prospect of owning their first home is a much desired but very difficult step. What are the Government doing to help young people in my constituency make that positive move? (906688)

There are two vital steps that we can take. The first is to go on backing the Help to Buy scheme, which has helped thousands of people in our country—I think over 70,000 people now. It enables people who are working hard, who earn a decent salary and who can afford the mortgage payments to take out that mortgage and buy that home because they do not need such a big deposit. That is the first thing we should do, and we shall continue with that.

The second, as I announced on Monday, is that we want to build starter homes that are 20% below the market price. These should be homes not for rent, but that young people can buy. They will be reserved for people under the age of 40. Again, this is for people who work hard, and who want to get on and do the right thing for themselves and their families. Under a Conservative Government, they will have homes they can buy.

I was contacted at the weekend by a constituent who told me that a fall left his 78-year-old mother bleeding on the kitchen floor and that it took almost an hour and a half for the ambulance to attend. Is that not indicative of the health service under this Government? What is the Prime Minister going to do to ensure that pressures on ambulance services are eased?

What is indicative of the NHS under this Government is the fact that there are 1,700 more paramedics and 200 more ambulances than when we came to power. The reason for that is we did not listen to the Labour party, which said that it was irresponsible to increase health spending; instead, we put £12.7 billion into the NHS. Where any ambulance trust falls down, that is a matter of serious regret and should be looked into very carefully. I will look into this case, as I would with any other.

Q7. Does my right hon. Friend agree that it is not unhelpful to discuss the concerns of voters in Basildon and Thurrock about border controls and immigration? Anyone who thinks that is out of touch, and perhaps should be moved on. (906689)

My hon. Friend is right. Our job as elected politicians is to respond to people’s concerns and to address them. This is why I fear for the Christmases of Labour MPs. What are they going to talk about? This document says immigration. That is out of the question: they cannot talk about that. On the figures today, there is not much point talking about unemployment, because it is plummeting. They have got nothing to say about the deficit. They spent precisely one week telling us the deficit mattered before pitching up today and spending £2 billion on welfare. I think they will want to skip over leadership issues quite quickly. It is going to be a very difficult time for them.

I do not know whether the Prime Minister has received any Christmas cards featuring husky dogs, but will he tell us whether he agrees with his right hon. Friend the Member for North Shropshire (Mr Paterson), who has said that the UK’s groundbreaking Climate Change Act 2008 should be scrapped?

I have not checked all my Christmas cards, but I do not think I have so far had the one the hon. Lady suggests. I spent an hour and three-quarters in front of the Liaison Committee yesterday discussing issues of climate change. The legislation we have in place is delivering cuts in carbon emissions. Under this Government, we have seen the world’s first green investment bank—beating the rest of the world in doing that—and we have doubled the amount of investment going into renewable energy compared with the previous two Parliaments. That is what is happening under our Government.

Q8. Will the Prime Minister confirm that, owing to the long campaign led by my hon. Friend the Member for Enfield North (Nick de Bois) and, of course, the Government’s long-term economic plan, my constituents can have extended urgent care this winter, and can look forward to the rebuilding, at long last, of Chase Farm hospital in the new year? (906690)

I know how hard my hon. Friends have worked for this outcome. I am happy to say that Enfield clinical commissioning group has announced an extension to the opening hours of Chase Farm urgent care centre. This will be in place until the local urgent care review reports. Further, I can confirm that the Government have set aside £230 million for the redevelopment of the Chase Farm site. That is very good news for the people of my hon. Friend’s constituency and his borough in London. What we are doing, because we have a long-term economic plan, is investing in local health services.

Obviously the hon. Gentleman has not been studying either the documents he gets sent by his own party or the figures. Today, actually, there are new figures out on the NHS, and I am delighted to give him the new figures. We were saying that there were 2,000 extra nurses under this Government. That was wrong: there are 3,000 more nurses under this Government. We were saying until very recently that there were 7,000 more doctors under this Government. I am ashamed to say that was wrong, too: the figure is 8,000 more doctors under this Government. The NHS is performing well because we have put the money in and made the reforms.

Q9. May I commend to my right hon. Friend some advice from Karl Marx, who, as European correspondent of the New-York Tribune, observed that there were“vital interests which should render Great Britain the earnest and unyielding opponent of the Russian projects of annexation and aggrandisement.”He went on to say that in“the arrest of the Russian scheme of annexation…the interests of…Democracy and of England go hand in hand.”Does my right hon. Friend agree that for the United Kingdom, Europe, the west and indeed the whole world, one of our most important foreign policy priorities for 2015 should be to see that Russia behaves, as one would expect a member of the Security Council to behave, in the interests of international law? (906691)

I very much agree with my right hon. Friend. I have not spent as much time studying Karl Marx as he has, or perhaps even as the Leader of the Opposition has—I do not know what goes on in Camden these days.

In this respect, Karl Marx was right that the interests of the United Kingdom and democracy go together. We should stand up very firmly against the Russian aggression that has taken place, and we led the way in Europe in making sure that there were sanctions. What the combination of the lower oil price and the sanctions is showing is that it is not possible for Russia to be part of the international financial system but try to opt out of the rules-based international legal system. That is what is being demonstrated, and we should keep up the pressure.

Q10. The levy control framework—the total cost added to energy bills and taxation by green targets—will rise from £2.3 billion in 2012 to £9.8 billion in 2020, at a time when many households are struggling to heat their homes. Does my hon. Friend think that is fair? (906692)

The levy control framework has been fixed, and it sets the overall amount of investment that can go into renewable energy schemes, many of which are providing jobs for constituencies up and down the country—often particularly those on the east coast of our country, not least in Hull, where an enormous amount of investment is going in. I welcome that investment, and I am not sure what the hon. Gentleman’s view is.

Will the Prime Minister confirm that if he and the Chancellor deliver their plans for the economy, they will take public spending back to the level that was being delivered by a former Labour Chancellor, but only because he was bound by an election pledge to stick to my economic plan, which he therefore inherited from a Conservative Government?

My right hon. and learned Friend gives us a very important historical perspective. It comes back to the point that the Opposition now seem to be basing their entire economic policy on some throwaway remark on the BBC at about 10 past 6 on a Monday morning. The truth is, what is envisaged is getting public spending back to the level where it was in 2002, when the Leader of the Opposition was sitting in the Treasury. I am afraid that his whole idea, like all his economic policies, has collapsed within five minutes.

Q11. The most recent OECD report, No. 163, on income inequality, shows that the UK economy would be 20% bigger if tax policies had redistributed income to the bottom 40% of citizens. Can the Prime Minister resist the temptation to waffle and consider seriously his policies and those of Chancellor Scrooge over his five years, of rewarding the rich with tax cuts and hammering middle and low-income people with rises in the cost of living, not only— (906693)

I was just about getting the hang of it. The problem with the Labour party’s attemptive narrative is that it simply is not true. Labour Members talk about inequality, but inequality is lower than it was at the election. They talk about poverty, but there are 600,000 fewer people in relative poverty than there were at the election. They talk about child poverty, but there are 300,000 fewer children in relative poverty than at the election. This afternoon we will be talking about children, and there are 390,000 fewer children in households where no one works than there were in 2010. Those are the facts. They may be inconvenient, but Labour ought to have a look at them.

Q12. Last week, my constituents, charity workers Alex and Becky Ewing, faced a tax bill of more than £8,000 as they moved into their first home. As reported in the excellent Salisbury Journal, Mr Ewing declared that he was “blown away” by the Chancellor’s statement and will be giving some of the £4,500 stamp duty that he unexpectedly saved to local charities. What message does last week’s announcement send to first time buyers this Christmas? (906694)

I am grateful to my hon. Friend. The message that the autumn statement sends is that we are on the side of people who work hard, want to get on, and who want to own their own flat or home. We have cut stamp duty for those families so that they can afford those houses. What a contrast with the Labour party, which wants a new homes tax.

Q13. My constituent who is paying £12 a week out of an income of £72 a week on the bedroom tax was less than impressed to find out that annual spending on housing benefit is now £4 billion higher than it was in 2010. When will this Prime Minister tackle the real causes of the increase in spending on housing benefit, which are low wages and high rents? (906695)

The point is that the Labour party has opposed every single change to welfare and housing benefit, and this afternoon Labour Members will vote in this house for an extra £2 billion of welfare spending—all that in the week when they are meant to be telling us how much they care about the deficit. It is completely incoherent, and that is why the British public will never trust the Labour party with the economy again.

Q14. The recent announcement about the building of the Glossop spur, and the consultation to extend the bypass around Tintwistle, has been widely welcomed across my constituency. There is, however, some scepticism about it actually happening, given that the previous Labour Government shelved their scheme in 2009. Will my right hon. Friend reassure me and my constituents that a future Conservative Government can be relied on to deliver that scheme? (906696)

I can certainly give my hon. Friend that assurance. I know that he has campaigned tirelessly to improve roads in his High Peak constituency, and the trans-Pennine routes are vital. We can give that assurance because we have a long-term economic plan that is delivering the economic growth that we need and seeing our deficit come down. Because we have made that success, we can commit to these road schemes.