House of Commons
Monday 23 March 2015
The House met at half-past Two o’clock
[Mr Speaker in the Chair]
Oral Answers to Questions
The Secretary of State was asked—
1. What her policy is on the net migration target; and if she will make a statement. 
9. What her policy is on the net migration target; and if she will make a statement. 
Uncontrolled mass immigration increases pressure on public services and can drive down wages for people on low incomes. That is why we are committed to reducing net migration. Where we can control immigration, our policies are working; we have reduced non-EU immigration, raised the standards required to come here and clamped down on abuse. Without our efforts, met migration would have been far higher.
But net migration is much higher now than it was when the Conservatives came to power—54,000 higher. It now stands at more than 300,000, which is more than double their target. Is the Home Secretary trying to take the public for fools by suggesting that her party will repeat its broken promise to cut migration drastically?
I have been very clear that of course we have not met the net migration target we set, but I have to say to the hon. Gentleman that this Government have clamped down on abuse—860 bogus colleges can no longer bring in overseas students—and tightened every route into the UK from outside the EU, and we have set out clear plans for what a Conservative Government would do to deal with free movement. We on the Government Benches will take no lessons from a Labour party that allowed uncontrolled mass immigration.
Contrary to that reply, is not the reality that the Home Secretary is leaving office with net migration higher than when she arrived, because it now stands at 298,000? She claims she has cut migration from outside the EU, and that is true: it is down from 196,000 to 190,000. Rather than all this waffle, why will she not finally admit that her record at the Home Office is one of complete failure in that area and a series of broken promises?
As I said in response to the hon. Member for Stockton North (Alex Cunningham), I fully accept that we have not met the net migration target that we set, but we have tightened every route into the United Kingdom from outside the European Union, and we have said clearly what a Conservative Government would do to deal with free movement from the European Union. I say once again that it ill behoves the Labour party to make such comments, because in government it presided over uncontrolled mass immigration that had the impact of keeping incomes at the lower end of the scale down and was identified by its own policy guru as a 21st century wages and incomes policy.
The public certainly want immigration to be properly controlled, and far better controlled than it is at the moment, but they also want some honestly about immigration. Is not the fact of the matter that while we remain in the EU with free movement of people we cannot guarantee how many people will come to this country, so we should not be making promises that we are in no position to keep? Is not the fact of the matter that we cannot control the number of people coming to this country while we remain in the EU?
My hon. Friend is right to identify the significant increase in the number of people coming to this country from inside the European Union as the key reason we have failed to meet our net migration target. However, crucially, not only has the coalition already taken steps to tighten up on movement from inside the European Union—for example, by reducing access to benefits—but the Conservative party has clearly set out what we would do in government after the election to deal with free movement and tighten up further to reduce migration from inside the European Union.
Does the Home Secretary recognise the sense of grievance felt by citizens of Commonwealth countries who for years have abided by the rules when trying to get into this country as immigrants, only to see EU citizens being able simply to walk in and out of the country at will?
My hon. Friend makes a point about Commonwealth citizens, many of whom have come to the United Kingdom and contributed greatly. We are clear that we want to tighten the rules on people coming from inside the European Union, particularly in relation to the ability to claim benefits, which I believe will have an impact on the number of people coming here, but in order to do that we need a Conservative Government to be elected on 7 May.
Could the Home Secretary bring herself to say the words, “Net migration is 54,000 higher than when Labour left office”? Could she stand at the Dispatch Box and say that today—not tens of thousands, as she promised—and could she say to the House with no ifs and no buts that she has broken her promise made at the election?
The right hon. Gentleman’s question is the third that I am answering from Labour Members. In response to the first two, I said clearly that the Government have not met their net migration target. I am not trying to claim that we have; I am very clear about the fact that we have not met our net migration target, but this Government have recognised the significance of immigration as an issue, and the impact that it has on public services and wages at the lower end of the income scale, and it is this Government who are doing something about it.
2. What assessment she has made of the risks to the UK from gaps in communications data capability. 
Our law enforcement and intelligence agencies continue to face a decline in their ability to obtain the communications data they need. This is caused by the use of modern technology and changes in the way in which people communicate. We believe that further changes to the law are needed to maintain capabilities. We cannot let cyberspace become a haven for terrorists and criminals.
Can my hon. Friend assure me that the next Conservative Government will introduce the appropriate legislation to restore our declining communications data capability?
It is very clear that although this Government have taken some steps to close the gap, significant gaps remain. The Joint Committee on the draft Communications Data Bill identified that, but we have not been able to bring those measures through in this Parliament. We need to remedy that. Given that about 95% of serious crime cases involve the use of communications data, those measures are an essential tool in fighting crime, and we are determined to take further action to close the gap and make sure that our police and security agencies have the powers they need.
What discussions has the Minister had with the Scottish Government in relation to the risk and responsibility for communications data?
On issues of national security, there are reserved powers. We therefore retain that focus on ensuring that security is assured. Clearly, communications data and other measures play an important part. I am sure that discussions with others, including devolved Administrations, will take place in future, but ultimately this is a matter for the UK Government.
The Minister and his boss must be aware that our police, under-resourced as they now are, are still in a mode of fighting traditional crime. Cybercrime, as we all know, has been the great challenge. Throughout the country we are unequipped to deal with it, and it is what most citizens will face in the form of fraud and other criminal activity.
This Government have invested heavily in capabilities to deal with cybercrime through the establishment of the new cybercrime unit in the National Crime Agency and the work of police forces throughout the country to ensure that we have the digital forensics—the digital information to fight the new crime types. The hon. Gentleman clearly does not recognise the important achievements of this Government in cutting crime, at a time of having to save money to deal with the deficit that we inherited from Labour.
3. If she will conduct a review of the effectiveness of anti-radicalisation programmes. 
We continually monitor and evaluate the Channel programme to ensure its effectiveness. Through the Counter-Terrorism and Security Act 2015 we have placed the programme on a statutory basis. The duty aims to secure local co-operation and delivery in all areas and we, of course, work closely with international partners to make sure that we are sharing expertise and best practice in tackling extremism and radicalisation. I have today published the latest annual report on our counter-terrorism strategy, Contest, alongside the annual report on the serious and organised crime strategy, and copies of both reports will be made available in the Vote Office.
How many people returning from Syria have gone through the deradicalisation programme, and how many people in total have gone through that programme?
More than 2,000 people have gone through Channel since it was rolled out nationally in 2012, and hundreds have been offered support. This is dealt with case by case. It is not appropriate for everybody to be put into the Channel programme, but it has been effective and we are seeing significant numbers of people referred to it.
I welcome my right hon. Friend bringing clarity about what is and what is not acceptable in the context of radicalisation and extremism. In an environment where our press and media are prone to hysterics and have the capacity to achieve the objectives of the enemies of our society by sowing fear and anxiety where none need exist, will she continue to proceed calmly and on the basis of the evidence?
My hon. Friend makes a very important point about proceeding on the basis of the evidence. I am grateful for his comments about remarks that I made earlier today about the necessity for us to develop a wider partnership to counter extremism across its broadest spectrum so that we can deal with the hateful beliefs that the extremists are propagating.
I too welcome the Home Secretary’s comments in her speech this morning. Only by working with communities are we able to tackle this problem. I also commend the Metropolitan police and Turkish authorities for bringing back to London the three young men from Brent. It is sad that we missed the opportunity of doing this with the four young girls from Bethnal Green. What is the message to families to get them to report areas of concern so that they do not feel stigmatised if they do so?
I am grateful to the right hon. Gentleman for his comments about my speech. He is right. As I made clear in that speech, Government cannot deal with this alone; we need to work with families, communities and civil society. The message that the Government have given to families consistently in relation to those who might be travelling to Syria to get involved in terrorist-related activity, or to be with terrorist groups, is that the sooner they can give information to the authorities, the easier it is to work with them to ensure that their young people are not put into that danger.
In the all-party group on Islamophobia we have heard countless times of the need to offer more support to the mothers of young Muslims who fear that their children might be in danger of being radicalised. What specific efforts are being made to support the mothers who are tackling this issue?
My hon. Friend makes a very important point. I am pleased to have been involved with two civil society organisations that have been working with families—particularly, in one case, with women. FAST—Families Against Stress and Trauma—is giving support to families whose young people may have travelled and helping them to prevent young people from travelling. Inspire’s “Making A Stand” programme is about Muslim women up and down this country saying that radicalisation is not taking place in their name, and working together as Muslim women to ensure that their young people are not radicalised.
The Home Secretary said this morning, and has just reiterated, that she wants a new partnership on Prevent between communities, individuals, civil society and Government. When she came into government, she inherited 93 Prevent areas, which she cut to 23 and then put up to 30. She now says she wants 50, and they might go up to 90, so we are going back to where we started five years ago. Why the rollercoaster in such an important area for this country?
No, we are not going back to where we started. First, the hon. Lady has made a fundamental mistake in her question in saying that my speech this morning related to Prevent. It did not; it related to the new counter-extremism strategy that the Government are introducing. Secondly, when we came into government we found that the Labour Government were funding extremist organisations, and members of the Labour party were standing on platforms embracing extremist hate preachers. Government Members take a very different view.
Domestic Abuse: Police Response
4. What assessment she has made of the effectiveness of the police response to domestic abuse. 
Domestic abuse is an appalling crime, and this Government are determined that the police response is the best it can be. The Home Secretary commissioned Her Majesty’s inspectorate of constabulary to review the response to domestic abuse across police forces in England and Wales. We are driving change through a national oversight group. All 43 forces have action plans on domestic abuse. In November, HMIC highlighted the commitment of forces to improving their response.
This Government have a truly terrible record on tackling domestic abuse, whether it is closing specialist courts, restricting legal aid, or failing to prosecute. There is a rising number of offences, but since they came into office there have been 4,000 fewer prosecutions. What are they going to do about that?
I totally refute the hon. Gentleman’s assertions. This Government have a record to be proud of in the work we have done on domestic abuse, not just the ring-fencing of stable funding of £40 million but the introduction of new laws, protection orders, and measures on stalking abuses. We have done more in the five years we have been here than the Labour Government before us did in all their 13 years. What is more, I seem to recall that Labour Members are not proposing to reverse any of the legal aid cuts, and we have preserved legal aid for cases in which domestic abuse plays a part.
On legal aid for victims of domestic violence, I and other colleagues have come across women who are victims but who have had to fork out from their own pockets, and some have just given in after spending too much, moving too often and finding that the system does not work. Surely the Minister must acknowledge that there is a problem. What is she going to do about it?
I reiterate that the £2 billion annual cost of legal aid, combined with the economic circumstances left by Labour, meant that hard choices had to be made. Labour was also committed to reducing legal aid. We have retained legal aid in key areas impacting on women, particularly with regard to injunctions to protect victims from domestic abuse and in private family law cases where domestic abuse is a feature.
5. What steps her Department is taking to tackle extremism. 
6. What steps her Department is taking to tackle extremism. 
Today I delivered a speech on the challenge of extremism in which I set out the need to develop a better understanding of the threat from extremism; to promote more assertively our values and the proposition that everybody living in this country is equal and free to lead their lives as they see fit; to ensure an effective response from the state; and to build up the capacity of civil society to identify, challenge and defeat extremism. I made it clear that the challenge to the extremists must be centred on a new partnership consisting of every single person and organisation in our country that wants to defeat extremism.
In the light of recent incidents, including that of the three young London girls who travelled to Syria, does the Secretary of State have any plans to set up a hotline for parents concerned about extremism, so that they can seek professional advice if they believe their children could be at risk, as is the case in Australia?
There are a number of opportunities available to families to report concern, including the anti-terrorist hotline. The Metropolitan police also made a further call to families last week to encourage them to report as early as possible, and organisations such as Families Against Stress and Trauma are actively working in communities to help people understand what they need to do when they are concerned about their children.
Will my right hon. Friend assure me that the next Conservative Government will introduce new powers to tackle extremists and groups that spread hate but do not break existing laws?
My hon. Friend raises an important point. We have looked at addressing the issue of those people and groups who act in a way that does not meet the current proscription threshold, and we will, indeed, introduce extremist banning orders and extremist disruption offers, which will do exactly what my hon. Friend says.
In her response to the hon. Member for Gillingham and Rainham (Rehman Chishti), the Home Secretary referred to the three girls from Bethnal Green academy. When the first girl left in December, what specific assistance was given to the school by the Home Office?
Following the first girl leaving in December, assistance was given to the school by the local Prevent co-ordinator and the local authority’s schools officer, who went into the school to make arrangements for extra training to be given.
What steps is the Home Secretary taking to encourage police forces to record accurately and comprehensively incidences of Islamophobia and hate crimes against Muslim victims, which Greater Manchester police is already doing?
The hon. Lady raises a very important point. The approach to recording hate crime has developed over the past five years and I am pleased that we are now able to see much more clearly what is happening. I was very clear in my speech today that this is an issue for a future Government, but a future Conservative Government would require the police to record anti-Muslim incidents as well as anti-Semitic incidents.
7. What steps her Department is taking to tackle organised crime. 
The Government are committed to tackling the threat of serious and organised crime. In 2013 we launched a comprehensive new strategy and a powerful new crime-fighting organisation—the National Crime Agency—which are already making a difference. We continue to strengthen our response through the Serious Crime Act 2015, the Modern Slavery Bill and strategy, and the anti-corruption plan. We have also forged new collaborative relationships with the private sector to tackle money laundering and to combat online child sexual exploitation.
The National Crime Agency has clearly had a good start, with 300 convictions in just the first six months. Will my hon. Friend confirm that the Serious Crime Act 2015 will ensure that the National Crime Agency continues to have the resources and powers to address serious and organised crime?
I thank my right hon. Friend for his question. He is right that the National Crime Agency has made a good start. We have looked carefully at where powers are needed to increase the weapons that it has in its arsenal, and the Serious Crime Act really assists the National Crime Agency and other police forces in making sure that they can tackle particularly criminal finances to stop the Mr Bigs keeping hold of their money.
One of the most serious forms of organised crime is child sexual exploitation. The National Crime Agency was given information over a year ago about 20,000 people who had downloaded abusive images of children. Twelve months later, only 2% have been fully investigated or charged. What has happened to the other 98%? With that kind of backlog of CSE cases, does the Home Secretary really think that this is the right time to cut thousands more police?
The hon. Lady disappoints me. We have had this conversation on several occasions. The fact of the matter is that the National Crime Agency, through Operation Notarise and others, has protected more children from abuse than any other agency, and it is ensuring that children at risk of abuse are looked after and protected in a way that has never happened before.
Does my hon. Friend agree that one of the signal successes of the NCA is that it has made more than 600 arrests in dealing with online child sexual exploitation through the operation that she has just mentioned? Will she assure the House that this will continue to be a high priority, not just for the NCA but for each individual local force?
My right hon. Friend, who has considerable experience in this area, will know full well that the National Crime Agency and local police take this issue incredibly seriously. Bringing the Child Exploitation and Online Protection Centre into the National Crime Agency, as a command within it, has increased both capability and capacity to consider such crime and to make sure that we find those criminals who want to hurt our children and prevent them from doing so.
8. What steps she is taking to reduce crime rates. 
Police reform is working, and crime is down by more than a fifth under this Government, according to the crime survey for England and Wales. We are taking decisive action to cut crime and protect the public, including through working with the National Crime Agency. We are tackling the drivers of crime, including through our drug and alcohol strategies, and we have intensified our focus on issues such as violence against women and girls, gangs and sexual exploitation.
I thank the Minister for that answer. While police funding has been cut by about a fifth, police-recorded crime has fallen by 14%, and by 28% across Elmbridge in my constituency. Will she join me in commending front-line officers in Surrey and across the country for the great job they are doing? Does that fall not demonstrate how vital reform is, and that public services cannot be judged only by the amount of money going in?
I am happy to join my hon. Friend in commending front-line officers in Surrey, and I congratulate all police forces that, with their police and crime commissioners, are rising to the challenge of driving efficiency and cutting crime. Effective policing plays a key part in reducing crime, and PCCs are ensuring that forces focus on the issues that matter most to local people. My hon. Friend is right that money is not the only thing that we need in order to cut crime; dedicated officers are our greatest resource.
There is no doubt that the huge increase in the use of so-called legal highs has an impact on crime rates. I have seen that in my constituency. The Government have agreed to ban legal highs, but have not yet acted to do so. Will the Government take action in this Parliament, and if not, why not?
Given that this Government have actually banned and outlawed 500 legal highs, I do not think it is accurate to say that we have taken no action. We obviously want to move to a general ban on legal highs—lethal highs, as I call them—and that is on the shelf, ready for the new Government.
There is a glaring difference between the Government’s complacency and the City of London police commissioner’s view that online crime is growing exponentially. Does the Minister agree with the Office for National Statistics that if all bank and credit card fraud were included, the statistics would show that overall crime was up by 50%?
I am having a lot of disagreements with the Labour party today. The ONS is working to incorporate measures of cybercrime in the main crime survey. It looked at this issue specifically and said, when it published the latest crime figures, that it had found that although there may have been some movement by criminals into fraud and cybercrime, it certainly had not been enough to offset the substantial falls in traditional crimes, such as burglary and vehicle theft, over the past 20 years. Action Fraud’s reporting is up. That is a specialist reporting agency. We are acting on fraud.
Early Intervention Programmes
10. What steps she is taking to encourage police and crime commissioners to support early intervention programmes. 
As part of the work of the Home Office crime prevention panel, the Early Intervention Foundation and the College of Policing recently launched new guidance to help front-line police support early intervention. The police and crime commissioners from Dorset, Lancashire and Staffordshire were involved in the development of the guidance.
May I ask the Minister to do something very practical? We are grateful that she launched the report, but will she ensure that every single police and crime commissioner and every single chief constable gets a copy of it so that they can not only reduce crime by cutting down dysfunction in the population early on in life, but save the taxpayer a lot of money through not having to invest money late on through late intervention?
The early intervention guidance for police will provide invaluable support in stopping potential criminals before they commit crimes, which will save the police a great deal of work in the long term. The guidance is already available online. We encourage all police officers, police community support officers, chief constables and PCCs to read it. I am happy to take up his suggestion if I have time, because the more officers have access to it, the better. I am sure that we can get it done before Thursday.
11. What recent discussions she has had with police unions and associations on the effect of changes to police budgets on frontline staff. 
The Home Secretary and I hold regular bilateral meetings with police work force representatives. I have said since day one as the police Minister that my door is always open to those representatives.
The Minister will know, then, what pressure front-line policing is under. The Government promised to protect and even increase front-line policing numbers, yet 8,000 front-line jobs have gone. Why will the Home Office not look at alternative ways of saving money, such as introducing better procurement practices or scrapping police and crime commissioners, rather than pursuing plans to axe yet another 20,000 officers?
I would have thought that the hon. Lady would have praised the work that is being done by Avon and Somerset police, rather than following the party line. In her constituency there has actually been a 5% increase in front-line officers, who are not doing back-room work, and a 21% cut in crime.
Avon and Somerset police have indeed done very well. However, an understandable operational response to difficult budgets is to withdraw policing from rural areas, which empirically have a lower level of crime. That is understandable, but wrong. Will the Minister reassure me that he will tell all police forces that they have a duty to people who live in rural areas? Those people must not think that they are being exposed to crime or abandoned by the forces of law and order.
I assure my right hon. Friend that each time I go into any force I say to anybody who listens to me not only that it is their duty to address rural crime—my constituency has large rural areas—but that all crime, no matter where it is, needs to be detected and prosecuted.
Visas: Income Threshold
12. What her policy is on the minimum income threshold requirement for people wishing to sponsor their partner’s visa to settle in the UK. 
The minimum income threshold of £18,600 for sponsoring a partner under the family immigration rules ensures that couples who wish to establish their family life in the UK can stand on their own feet financially. The requirement prevents burdens on the taxpayer and promotes integration. It has been upheld by the Court of Appeal and is helping to restore public confidence in the immigration system.
The Minister has just asserted that the purpose of the minimum income threshold is to ensure that a spouse from overseas who comes to live here is not a burden on the taxpayer. However, at £18,600, the threshold is more than £3,000 higher than the living wage. Does he not think that it should be reviewed to ensure that the original purpose of the minimum income threshold is what counts and that it does not discriminate against those on the living wage or below, or against people who happen to live in the wrong part of the country?
As the hon. Gentleman knows, the income threshold was set on the basis of advice given to the Government by the Migration Advisory Committee, which considered this issue in great detail to assess the appropriate level. Perhaps he will find interesting the fact that the 2014 annual survey of hours and earnings for the Office for National Statistics showed that median earnings of those in full-time employment were appreciably higher than £18,600 in all parts of the UK.
In practice, the length of time in which a sponsor is required to demonstrate that they have met the minimum income threshold is driving families apart. Would it be sufficient for a sponsor to demonstrate that they have secured permanent employment on such a salary, and not have a situation where several months have to pass with someone providing bank statements to show their income, during which time their partner is separated from them?
Migrant partners with an appropriate job offer can apply to come to the UK under tier 2 of the points-based system, and those using the family route to come to the UK must be capable of being independently supported by their sponsor, their joint savings, or non-employment income. We have considered the issue in an appropriate way to ensure that people are not a burden on the taxpayer, and I underline again that the system has been tested and upheld in the courts.
Has the Minister made any assessment of the minimum age of sponsors as well as minimum income, because the two factors often relate to each other?
The hon. Gentleman will no doubt be aware that the minimum age for spouse visa applicants and sponsors was increased to 21 in 2008, and the Government defended that position. The Supreme Court found in 2011 that although the Secretary of State was pursuing a legitimate and rational aim in seeking to address the problem of forced marriages —the hon. Gentleman will know that such issues exist—increasing the minimum marriage visa age from 18 to 21 disproportionately interfered with the right to a family life under article 8 of the European convention of human rights. We keep such issues under close review, but they are complex.
Will the Minister think again about this whole policy? It is cruel on children who are denied the right to live with their parents, contrary to the principles of the conventions on human rights, and really not necessary. Its only effect is that of hurting the very people who should not be hurt because of it.
While ensuring sufficient resources so that those arriving are supported at reasonable levels, the minimum income threshold is also intended to ensure that family migrants can participate sufficiently in every-day life to facilitate their integration into British society. That is one of the fundamental purposes of the policy, and I think that is right.
Post-study Work Visas
13. What discussions she has had with the Secretary of State for Scotland on the potential introduction of a scheme to allow international students graduating from Scottish further and higher education institutions to remain in Scotland to work for a defined period of time. 
My right hon. Friend the Home Secretary meets colleagues regularly for discussions on a range of issues, including how we can continue to attract the brightest and best to study here while bearing down on abuse.
The recommendation comes as part of the Smith agreement. It recognises that the higher education sector is a multi-billion pound industry, and Edinburgh university is one of the most successful participants in that. More than 10,000 foreign students are now studying at Edinburgh, generating some of the highest quality research in the UK. Does the Minister agree that keeping more of those excellent students in the UK while their research is commercialised would be of enormous benefit, not just to the Scottish economy but to the UK as a whole?
My hon. Friend will know that the Russell Group of universities, of which Edinburgh is a member, has seen a 30% increase in the number of applications from overseas students since 2010, showing that studying in the United Kingdom is an attractive offer to students. There is no cap on the number of students who can stay in the UK after completing their degree, provided they have a graduate-level job, get an internship or become a graduate entrepreneur.
The Minister will have seen the Scottish Government’s post-study work working group, which recommends that a post-work study visa is reinstated for a wide range of people, including businesses, education and student representatives. Will the Minister consider that or will she ignore it again? What can the Scottish people do to progress that agenda and ensure that our economy and higher education institutions benefit?
What the Scottish people can do is clear: stay part of the Union. I repeat that there is no cap on the number of graduates who can stay on after their studies, provided they have a graduate job, an internship or a graduate entrepreneurship.
The Minister will be aware of the reduction in the number of students from the Indian subcontinent. One of the major reasons for that is that they are unable to remain in the United Kingdom for a few years to work and to pay off their fees. This policy, therefore, discriminates against those who come from poorer nations, rather than those from richer families.
I repeat that since 2010 there has been an increase in the number of visa applications from overseas students. It is difficult to say what the drivers are for our seeing more students from some countries and fewer from others. For example, we are seeing a significant increase in the number of students from China, which indicates that it is not the reforms that are stopping people coming.
Police Forces: Finance
14. What assessment she has made of the financial condition of police forces in England and Wales. 
The Home Secretary and I have made it clear that there is no question but that the police will have the resources to do their important work. Her Majesty’s inspectorate of constabulary has reported that forces up and down the country are reducing crime and protecting communities, while balancing their books.
Since 2010, Lancashire police has lost 700 posts and 11 police stations have been closed due to £60 million-worth of cuts, with more to come. Offences such as burglary, theft and violence are all on the rise. The Lancashire Police Federation says that the police are at breaking point. Will the Minister please apologise to the people of West Lancashire for failing to honour his promise to protect front-line policing?
I like the hon. Lady—I get on with her really well—but she should apologise to her constituents for not mentioning that crime is down by 9% in her constituency and across Lancashire, something we should all be very proud of.
On Friday night, I went out with the very impressive section 136 team at Worthing police. The initiative, under which community psychiatric nurses go out on patrol with the police, is being piloted in Sussex. Given that up to two thirds of police call-outs are estimated to relate to mental health and substance abuse problems, this has the potential to free up a lot of police time and save a lot of money. These pilots really work, so will they be rolled out across the whole country?
That pilot and other pilots around the country are working. I have seen them myself. It is our intention to continue to roll them out. We are working enormously closely in particular with the mental health team in the Department of Health. I have seen dramatic changes not only in my constituency but around the country. There are people who should not be in cells and should not be arrested. They should be in a place of care, where they need to be. That is what we expect to happen.
My Greater Manchester police force has had to make savings of £145 million in the five years to 2015, and has lost more than 1,300 police officers as a result. Across the country, the picture is pretty similar. Will the Minister say whether, as a result of the changes to police forces, response times have improved or got worse on his watch?
What has happened on the Home Secretary’s watch and on my watch is that crime in the hon. Gentleman’s constituency is down by 20%, something that is forgotten every time Labour Members stand up in this House.
Police Numbers: Lancashire
15. What assessment she has made of the adequacy of the number of police officers in Lancashire. 
Crime has fallen by a fifth across the country and by 9% in my right hon. Friend’s constituency. That is because we have proved that more can be done with less. We should be very proud of police forces across the country, particularly in Lancashire.
Unlike the hon. Member for West Lancashire (Rosie Cooper), I want to praise the work of the Lancashire constabulary in my county, where crime has gone down by 19% since 2011. Antisocial behaviour is down by 35.8% and robbery in the past 12 months is down by 47%, which is a remarkable figure. Will the Minister assure the House that the Lancashire constabulary will, under a Conservative Government, have sufficient resources to carry on doing its great work in the next five years?
Not only will we guarantee that, we will continue to roll out the specialist equipment that is helping the police day in, day out, especially body-worn cameras. They are ensuring that more people in the community are protected, the officers are protected and we get more convictions, something I expect to see in Lancashire, as well as in the rest of the country.
16. What recent steps she has taken to tackle sham marriages. 
This month, the Government introduced a new scheme to tackle sham marriages and sham civil partnerships allowing the Home Office to investigate suspected sham cases under an extended 70-day notice period. Since April 2014, we have intervened in more than 2,000 suspected sham marriages, and last year 30 organised crime groups involved in arranging sham marriages were disrupted, with many receiving long custodial sentences.
Will my hon. Friend update the House on the number of people he expects this country to protect itself against following the introduction of these new powers?
This has been a priority for me since I took on the immigration responsibilities last year. We will take strong action, including prosecution and seizure of assets. As for an update, this financial year we have undertaken more than 2,000 operations, resulting in 1,200 arrests and more than 430 removals, which compares with 327 sham marriage operations, resulting in 67 arrests in 2010, showing that, unlike the last Government, this Government are committed to this issue.
17. What the level of crime was in Northamptonshire in (a) May 2010 and (b) March 2015. 
Police reform is working and crime is down by more than one fifth under this Government, according to the independent crime survey for England and Wales. According to the latest figures published by the Office for National Statistics, police recorded crime in Northamptonshire fell by 18% between June 2010 and September 2014.
We are blessed in Northamptonshire with excellent and hard-working policemen and women, and it is marvellous that crime has fallen. Given that we were told by Her Majesty’s loyal Opposition that crime would rise because of the police budget cuts, why does my right hon. Friend think it has actually come down?
I congratulate my hon. Friend on his work as a police special constable. He rightly says that the Opposition doubted our ability to bring down crime. However, our police forces have proved that where there is a will there is a way, and they have cut crime by more than 20% this Parliament, according to the crime survey. We should be very proud of them.
T1. If she will make a statement on her departmental responsibilities. 
For too long, thousands of people have been on bail for months or even years, with no independent oversight of the police’s investigation. To put a stop to this, I announced to the House in December that I was consulting on the introduction of statutory time limits for pre-charge bail. That consultation closed on 8 February, and I am grateful to the 300 individuals and organisations that responded. I have today placed in the Library of the House and on the gov.uk website a summary of the consultation responses and the Government’s response.
On the key point of independent review, it is apparent from the consultation that the model where all extensions of bail past 28 days would be done in court would not be viable, as there is unlikely to be sufficient capacity in the magistrates courts. I have therefore decided to adopt the model endorsed by the consultation under which pre-charge bail is initially limited to 28 days. In complex cases, an extension of up to three months could be authorised by a senior police officer, and in exceptional circumstances, the police will have to apply to the courts for an extension beyond three months to be approved by a magistrate. This will introduce judicial oversight of the pre-charge bail process for the first time, increasing accountability and scrutiny in a way that is manageable for the courts.
We are all now very fully informed.
I recently visited Hampshire’s cybercrime unit and spoke to officers detecting online crime, particularly child abuse. I am sure the Home Secretary will want to join me in commending those officers for their dedication. Does she agree that we need to do everything we can to help police in this work and, in particular, to ensure that social media and other websites verify the identity of UK residents using their sites?
First, may I take up the point that my right hon. Friend made about the work of police officers in police forces, the Child Exploitation and Online Protection Centre and the National Crime Agency more widely in dealing with child abuse cases? These are not easy issues, and they do a very valuable job. Over the period of this Government, we have invested £86 million in dealing with cybercrime, and the creation of the national cyber crime unit at the NCA is, I believe, an important element in dealing with cybercrime. We expect social media companies to make it easy for users to choose not to receive anonymous posts, to have simple mechanisms for reporting abuse and to take action promptly when abuse is reported.
The Office for Budget Responsibility says that the Chancellor is planning cuts that are much more severe than anything we have seen over the last five years. The Institute for Fiscal Studies has said that the cuts will be twice the size of any year’s cuts over this Parliament. That means a real-terms cut for the Home Office under the right hon. Lady’s plans over the next few years alone of 23% and the loss of 20,000 more police officers on top of those who have already gone. When the terror threat is growing, when more child abuse cases are coming forward, when recorded violent crime is up and when chief constables say that neighbourhood policing cannot be sustained, is she really saying to communities across the country that she and the Tories are prepared to cut 20,000 more police officers?
The right hon. Lady knows full well that the funding for counter-terrorism policing has been protected and that this Government are putting more money into dealing with child sexual exploitation. When she comes to deal with this issue, perhaps she could remind people why it is that this Government have had to deal with budget cuts across the public sector: it is because the last Labour Government left us with the worst budget deficit in our peacetime history.
But the right hon. Lady has not managed even to meet her deficit plan, and we have already seen the police cut across the country. Her plans mean going further in the scale of police cuts, with 20,000 further police officers going across the country at a time when recorded rapes are up 30%, but fewer rapists are being arrested; when recorded violent crime is up 16%, but fewer violent criminals are being convicted; when online fraud is through the roof, yet fewer fraud proceedings are going ahead; and when recorded child abuse is up 33%, yet 13% fewer paedophiles are being prosecuted. On her watch, 999 waits are up, the police cannot keep up with extremists on the streets and more criminals are walking free. Is she really saying she is going to go around the country, campaigning with all her Back Benchers, saying she is content for 20,000 more police officers to go—because we’re not, and we won’t?
The right hon. Lady mentioned that reports of child sexual abuse have increased, and yes they have. In a sense, that is to be welcomed, because more people feel that they can now come forward and report their abuse, which means that those issues can be investigated and the cases looked into. She talked about the figures for rape and domestic abuse, but I have to say that the volume of domestic abuse referrals from the police rose in 2013-14 to the highest level ever: 70% of those referrals were charged, which was the highest volume and proportion ever; there has been a rise in charged defendants from 2012-13; and conviction rates have risen since 2010-11. The figures on which she bases her rant show once again, I am afraid, that she is not paying attention to what is actually happening. What is happening is the exact opposite of what she and her colleagues said five years ago. She said crime would go up, but crime has gone down under this Government.
T3. My right hon. Friend will be aware that we in Harlow have had more than 109 illegal and unauthorised encampments over the past 15 months, and there is now a town-wide injunction banning anyone from setting up unauthorised or illegal encampments. Will my right hon. Friend look at how we can strengthen the law, possibly following the Irish example of making trespass a criminal rather than a civil offence? 
I pay tribute to my hon. Friend for the campaigning and work he has done on behalf of his constituents whose lives have been blighted by these illegal camps. When we are back in government after the election, we will look at the law—I can assure you of that, Mr Speaker—but we must also make sure that the police use the powers they have and are not frightened of using them, as appears to have happened in certain parts of the country, including in my hon. Friend’s part of Essex.
T7. I am concerned about a recommendation in a recent Home Affairs Committee report that those arrested on sexual offences charges should be given anonymity. Does the Home Secretary agree that in these circumstances, these prosecutions are extraordinarily difficult, and that the decision should be made carefully by the police? Will she ask the independent panel inquiry also to look at this issue? 
The hon. Lady raises an important issue. As she will be aware, there was a significant debate about this very thing early on in this Parliament. The Government have not yet responded to the Home Affairs Committee report—for understandable reasons, given that it has only just come out—but I was asked about the matter when I was in front of the Home Affairs Committee last week. This issue has to be dealt with on a case-by-case basis. I think that an assumption of anonymity on arrest is right in general, but there will be cases when it is right for the police to ensure that the name is put out so that other people can come forward to report crimes by the same perpetrator.
T4. The use of legal highs is a significant problem all over the country, and it is certainly a problem in Harrogate and Knaresborough. Such drugs can have devastating consequences. The papers covering my area, the Harrogate Advertiser and The Knaresborough Post, have run a very good campaign highlighting the scale of the local problem. What progress has been made in tackling these dangerous drugs? 
It is very helpful when the local media join the campaign against what I term “lethal highs”. As I said earlier, the Government are drawing up proposals for a general ban on the supply of new psychoactive substances throughout the United Kingdom, with a view to introducing legislation at the earliest opportunity. Obviously there is not enough time left for us to legislate in the current Parliament. However, we have already banned more than 500 new drugs, created a forensic early warning system to identify new psychoactive substances in the UK, and supported law enforcement with the latest intelligence on new substances, and we are taking a number of actions in relation to health, prevention and treatment.
T8. The Minister told me a moment ago that there were more front-line police officers in Avon and Somerset. However, a report by Her Majesty’s inspectorate of constabulary tells me that the number is down by 10%, from 2,937 in March 2010 to 2,651 in March 2015. In what way is that “more”? 
I apologise if I misled the hon. Lady, but I am sure I said that we were taking staff out of the back rooms and putting more on the front line. There are more officers serving on the front line today than there were when the Labour Government left office.
T5. I understand that the Home Secretary has asked officials to carry out a detailed piece of work on the future requirements of the immigration detention estate, in conjunction with her decision to halt the expansion of Campsfield. What is the remit for that work, what is the timetable for it, and will it be made public? Will the Home Secretary direct the officials to look at the international evidence that was presented in our cross-party report on the immigration detention system, which suggests that we could substantially reduce our need for detention places? 
Let me take this opportunity to wish the hon. Lady well for the future, as that was probably the last Home Office question she will ask before she leaves the House.
We will certainly look at the all-party parliamentary group report, and I intend to write to the hon. Lady about it before the House rises on Thursday. We are examining the issue of the detention estate internally, but our work will be informed by Stephen Shaw’s review of the welfare aspects. It is important to ensure that we are providing a humane environment for people who are being detained.
Crime rose by 6% in Greater Manchester last year. Will the Minister update us on her improvement plan with Action Fraud, and can she assure me that the defrauding of my constituents will be investigated and they will be kept up to date with the progress of that investigation?
The hon. Lady and I have had several discussions about Action Fraud. Let me bring her up to date with the latest figures from the organisation. As we have established in earlier discussions, fraud is historically an under-reported crime. The number of recorded offences has almost trebled, from 72,000 before the introduction of Action Fraud’s centralised reporting system to 211,000 now. As the hon. Lady knows, Action Fraud is also embarking on an improvement plan. It has resulted in a reduction in the number of complaints, which should be welcomed, but we are still keen to ensure that local police forces in particular treat and correspond with victims in a way that enables them to understand the action that is being taken to deal with these crimes.
T6. Yesterday huge crowds turned out in our most multicultural city, Leicester, to celebrate English history. Did not that celebration of monarchy and continuity provide a fine example of British values, and should we not learn from that example of history that it is not a good idea to get on politically by bumping off one’s close relations? 
We could have an interesting debate about my hon. Friend’s last comment, and I am grateful to him for not suggesting that the princes in the tower is an historic case that the police should take up today. The point he made about those in Leicester coming together yesterday from all parts of the community and celebrating British values is an important one. It is exactly what I was speaking about this morning, when I said that we need a partnership of individuals, communities, families and Government, going across Government and including other agencies, to promote our British values and what it is to live here in the United Kingdom and to be part of our British society.
The Home Secretary will know that one of her former Cabinet colleagues and a former chief inspector of prisons were among those of us from all parties and both Houses on the recent inquiry into immigration detention which recommended that the Government learn from best practice abroad where alternatives to detention not only allow individuals to live in the community, but are more effective in securing compliance, and at a much lower cost to the public purse. Will she respond positively to our recommendations?
I have already indicated that we are examining the points made in the recent all-party parliamentary group report, but I have to say to the hon. Gentleman that there is a need for detention in managing immigration and ensuring that we can remove people safely and appropriately. It is also worth underlining that we cannot detain people indefinitely. This is about the perspective of ensuring that there is the ability to remove, and that is the way in which the Government operate the rules.
T9. Does the Home Secretary agree that until such time as front-line resources and targets are set for rural crime, these crimes will not be taken seriously in rural constituencies? Will she give an edict from the Dispatch Box today that Travellers who are on rural land illegally will be removed forthwith? 
The police already have powers. As I indicated to my hon. Friend the Member for Harlow (Robert Halfon) earlier, the police often have the powers in respect of illegal Traveller sites. Crime in rural areas is a very serious issue and we should all take it seriously. While crime is down 16% in the part of the world of my hon. Friend the Member for Thirsk and Malton (Miss McIntosh), any crime is bad.
Yesterday I spoke to community leaders at one of my mosques about the young men who had been educated at schools in Brent North and who have now been returned from Syria. They expressed to me their deep concern about the lack of community facilities for some of the community groups and the way in which this was tending to lead to radicalisation of the young men. Does the Home Secretary regret the cuts to the Prevent programme?
The changes we made to the Prevent programme are very simple. We did two things when we came into office: we said Prevent should look at non-violent extremism as well as violent extremism, but we also said that the part of the Prevent programme that was about the integration of communities came better under the Department for Communities and Local Government than under the Home Office, because people were looking at this as people effectively spying on them rather than a proper integration of communities. What we are doing now is standing back and recognising that we need to deal with extremism across a broader spectrum, because Prevent has always been cast in terms of counter-terrorism. That is why in my speech today I talked about the broader partnership with Government, other agencies, communities, families and individuals to deal with extremism and give a very clear message to the extremists that they will not divide us.
I have a short statement to make. Under the chairmanship of the right hon. Member for Blackburn (Mr Straw), the Select Committee on the Governance of the House of Commons recommended, and the House agreed on 22 January, that the roles of Clerk of the House and Chief Executive should henceforth be split. It invited the House of Commons Commission to make arrangements to select a new Clerk and thereafter to begin to recruit for a separate role of Director General of the House of Commons. Accordingly, a trawl for the vacant post of Clerk of the House of Commons was held. Four applicants were interviewed by a panel chaired by me and also including the Leader of the House, the shadow Leader of the House, the Chairman of the Finance and Services Committee and Liz McMeikan, an independent assessor. The unanimous recommendation of the panel was that Mr David Natzler, at present acting Clerk of the House, should be recommended for appointment. I am glad to be able to tell the House that Her Majesty the Queen has approved the appointment. I am sure that the House will join me in warmly congratulating David.
I have further to report to the House that the deadline for applications for the separate position of Director General of the House of Commons has passed and that the selection process is under way. In keeping with the recommendation of the Straw Committee, it is expected that this recruitment process will be completed very early in the next Parliament.
I know that the whole House will join me in welcoming David Natzler as the new Clerk of the House. Mr Speaker, you went to the ends of the earth in search of the best candidate, but I am glad that we found the right answer right here in Britain.
Before turning to the main focus of the Council, which was the situation in the eurozone, let me say a word about the discussions on Tunisia and Libya, on the situation in Ukraine and on the nuclear talks with Iran. I am sure the whole House will join me in sending our deepest condolences to the friends and family of Sally Adey, a British holidaymaker who was among at least 20 tourists and two Tunisians brutally murdered in the terrorist attack at the Bardo museum last week. I have written to President Essebsi to assure him that Britain will stand with the people of Tunisia as they seek to defeat the terrorists and build a peaceful and prosperous future. The EU has agreed to offer practical assistance, and Britain will play its part, deploying SO15 and military counter-terrorism experts and continuing to provide assistance in aviation security and tourist resort protection.
The suggestion that some of the terrorists involved had been trained in Libya is the latest evidence of the very difficult situation in that country. The Council agreed on the need for a political solution, supporting UN-led efforts to bring the different parties in Libya together to agree a national unity Government. Britain has provided Libya with aid and military training, and we will continue to do all that we can to assist. I know that some people are looking at this situation and asking whether Britain, France and America were right to act to stop Colonel Gaddafi when we did. We should be clear that the answer is yes. Gaddafi was on the brink of massacring his own people in Benghazi, and we prevented what would have been a wide-scale, brutal, murderous assault. It was the right thing to do, and we should be very proud of the British servicemen and women who carried out that vital task.
Turning to the situation in eastern Ukraine, the Council welcomed the significant reduction in fighting and the progress on the withdrawal of heavy weapons. But as President Obama, President Hollande, Chancellor Merkel and I agreed earlier this month, it is essential to send a clear signal that sanctions will not be eased until Russia delivers on its promises and the Minsk agreements are fully implemented. The European Council did exactly that. The conclusions say that
“the duration of the restrictive measures...should be clearly linked to the complete implementation of the Minsk Agreements.”
The conclusions also underline our readiness to take further measures if required.
One of the best things we can do to help Russia’s neighbours is to help them to fight corruption and strengthen their democracies. Just as the Know-How fund, set up by Margaret Thatcher, did a great job of helping eastern European countries after the fall of the Berlin wall, so we need the same approach today. At the Council, I announced a good governance fund with an initial £20 million to support reforms in countries in the eastern neighbourhood and the western Balkans. This will complement support from other donors, accelerating efforts to fight corruption, strengthening the rule of law, reforming the police and justice systems and supporting free markets by liberalising key sectors such as energy and banking. The fund will be up and running by the summer. As well as covering Ukraine, it will initially cover Georgia, Moldova, Serbia, and Bosnia and Herzegovina.
Turning to Iran, I met Chancellor Merkel and President Hollande in the margins of the Council to discuss progress in the vital talks on Iran’s nuclear programme. We are absolutely clear and united in our purpose. Iran must never be allowed to develop a nuclear weapon. But there is a peaceful path to civil nuclear energy, and we believe that a comprehensive, durable and verifiable deal is possible, but only if Iran shows greater flexibility and takes some tough decisions during the talks this week. We also discussed proposals for co-ordinating Europe’s energy policy, ensuring transparency of gas supply agreements and that Europe’s energy policies are consistent with reaching the vital deal at the climate change summit in Paris this December.
Turning to the eurozone, the Council welcomed the agreement between Greece and the euro area to extend their programme. Let me say again—this is the last of these statements in this Parliament and I have probably uttered this sentence 11 times: Britain is not in the eurozone and we are not going to join the eurozone. But we do need the eurozone to work properly. A disorderly Greek exit from the euro remains a major threat to Europe’s economic stability and it could be very damaging to the British economy. Protecting our economy from these wider risks in the eurozone means sticking to this Government’s long-term economic plan. Five years ago, Britain’s economy was close to the edge. We had the biggest budget deficit in our peacetime history. We had a deficit that was forecast to be bigger than that of Greece or of any other developed country on the planet. Five years on, the deficit has been halved and our national debt is falling as a share of GDP; we have the fastest growth of any major western economy; we have 1.89 million more people in work; and we have more jobs created in Yorkshire than in the whole of France, and more jobs created in the UK than in the rest of the European Union put together. We need to stay on this path, not abandon it just as it is leading our country to prosperity.
Just as we are acting in our national interest at home, so we have acted to protect our national interest in Europe, too: we have cut the EU budget for the first time in its history; we got Britain out of the euro bail-out schemes; we vetoed a treaty that was not in our national interest; we stopped attempts to discriminate against EU countries outside the eurozone, not least with our successful legal challenge last month; we have made vital progress on cutting red tape and completing the single market; at our G8 in Lough Erne, we kick-started the talks on what will be the biggest bilateral trade deal in history, between the EU and the US; we have put power back in the hands of our fishermen so they can sell what they catch; we have negotiated a new single European patent that will reduce cost for entrepreneurs, and part of that patent court will be based right here in London; we have ensured new safeguards to protect our vital financial services industry; we have returned over 100 powers from Brussels to Britain, giving us more control over our borders, policing and security; we have clamped down on benefit tourism; and in foreign policy, we have worked with our European partners to get things done and keep our people safe, on matters ranging from sanctions on Russia and Iran, and practical assistance to help countries in north Africa fight terrorism, to international action to help those in desperate need around the world, including in west Africa, where British aid workers are risking their lives, helping to stop the spread of Ebola.
In the coming two years, we have the opportunity to reform the EU and fundamentally change Britain’s relationship with it. We have the opportunity to build a European Union that is more competitive, more flexible and more accountable to the people, where powers flow back to member states, not just away from them, and where freedom of movement is no longer an unqualified right. And for the first time in 40 years, we have the opportunity to give the British people their say on Britain’s place in Europe with an in-out referendum. If I am Prime Minister, that is what I will do. Those who would refuse to give the British people their say should explain themselves to this House and to the country. I commend this statement to the House.
May I thank the Prime Minister for his statement? He is obviously getting in his preparations for opposition now. Let me also join him in congratulating David Natzler on his very well-deserved appointment.
I also wish to join the Prime Minister in condemning the appalling terrorist attack in Tunisia last week. Our thoughts go out to the family and friends of Sally Adey and all the victims who were involved in the attacks. This despicable act of terrorism once again reinforces our determination to stand united across Europe.
Before turning to other matters, I also want to note that since the last European Council we have had the Israeli elections, although they do not appear to have been discussed at the European Council. Let me say that there is now one overriding priority, which is restarting negotiations towards a two-state solution: a secure Israel alongside a viable Palestinian state. Can the Prime Minister, when he replies, say whether he agrees that we must put pressure on both sides now to restart negotiations? In the light of Prime Minister Netanyahu’s comments in the run-up to the election, has our Prime Minister sought reassurances about his continuing commitment to a two-state solution?
On Iran, we support the talks. We cannot allow an Iran with nuclear weapons. It is vital that we secure a successful outcome and we will support the EU in seeking to bring that about. Let me also echo the Prime Minister’s words on Libya. We supported the military action—it was the right thing to do—and we support the call for an immediate and unconditional ceasefire. However, the Prime Minister needs to tell the country why things have gone so wrong in Libya. Are people not entitled to conclude that the international community did not adequately plan for the aftermath of the conflict, and what does he realistically believe can be done now?
On Greece, rather than recycling his failing election slogans, can the Prime Minister tell us what the prospects are for a long-term agreement with Greece? That agreement is in the interests of Greece, the eurozone, and the United Kingdom.
Turning to the situation in Ukraine, it is vital that the international community stands united in ensuring that the Minsk agreement is implemented in full. We welcome the commitment, which the Prime Minister reiterated, that EU sanctions on Russia should be eased only in the event of the full implementation of that agreement. Given that the current situation on the ground is not showing signs of getting better, will the Prime Minister tell us whether discussions took place during the summit about increasing further the pressure on Russia, particularly on the so-called tier 3 sanctions on specific sectors?
It is clear that the security dimension of the EU is becoming more and more important. That has been particularly apparent over the past year. It demands common action, resolve and a clear commitment to our continuing place in the European Union—a commitment that the Prime Minister is incapable of delivering. As this is his 29th and last European statement, I had hoped that he might do what he has failed to do in the past 28 and spell out his negotiating strategy. All we had was the same empty rhetoric. Perhaps he can now specifically tell us what the non-negotiable reforms are that he is seeking in Europe. Is he seeking treaty change? Would he countenance voting for “out” in a referendum—[Interruption] Oh, the Minister for Europe says no from a sedentary position; he would not countenance supporting “out”. Perhaps, when the Prime Minister replies, he can confirm that the Minister for Europe said from a sedentary position that, under no circumstances, would he countenance an out vote in a referendum—the Minister knows that the national interest lies in staying in. Those are the questions to which the country deserves answers.
Was the Prime Minister disappointed last week when the President of the European Council, who is supposedly an ally of Britain, described his position as “mission impossible”? With the typical modesty that we have come to expect from the Prime Minister, he then compared himself to Tom Cruise. [Interruption.] I am coming to that; he will enjoy it. To be fair, he did admit to one crucial difference. He said, “He’s a little bit smaller than me.” I have to say to the Prime Minister that I am not sure that that is the main difference that comes to mind. One has a consistent and relatively coherent approach to international affairs and the other is the Prime Minister of Britain.
The Prime Minister mentioned his achievements. Let us remind ourselves of them. He talked about his veto of the treaty, but the treaty went ahead. He did not mention the stand he took against President Juncker; he lost that 26 votes to two. He did not mention either the £1.7 billion bill from Brussels. His attitude to that was: can’t pay, won’t pay, oh, all right, we will pay. But let me relay my personal favourite over the past five years. Who can forget his phrase that in this town, you need to
“lock and load and have one up the spout.”
Up the spout is exactly where his European policy is—not so much Tom Cruise, more David Brent. He cannot tell us what he is negotiating for—
No, I have not quite finished. The Prime Minister cannot tell us what he is negotiating for; he has no strategy for achieving change—[Interruption.] I thought that Government Members wanted to talk about Europe—not any more. He cannot tell us what he is negotiating for. He has no strategy for achieving change and he cannot even tell us whether he will vote yes or no in a referendum. A Prime Minister who cannot tell us whether he wants to be in Europe or out of Europe is a weak Prime Minister. He cannot provide the leadership that our country needs. For that, Britain needs a Labour Government.
I had not been counting, but I think that reporting back to the House 29 times is quite an impressive record—too many. The right hon. Gentleman does have one thing in common with Tom Cruise: every policy he touches self-destructs in five seconds—tuition fees, spending, the deficit, taxes; it is all the same.
Let me deal with the right hon. Gentleman’s questions. On the very important matter of the Israeli elections, I am sure that we will all want to congratulate Prime Minister Netanyahu on his election victory. I agree with the Leader of the Opposition that we must put pressure on both sides to ensure that talks on a two-state solution get going. I will be talking with Prime Minister Netanyahu this evening, and I will make it very clear that I support a two-state solution. I think that is in the long-term interests of not only the Palestinians, but the Israelis, and Britain’s policy on that will not change.
I thank the right hon. Gentleman for what he said in support of the Government’s position on Iran and on Libya. He asked why we have seen the difficulties after the fall of Gaddafi. One of the things that we have to be clear about is that the Libyan people and the Libyan Government did not want some occupying force; they did not want to be remotely controlled by others. They were given opportunities to opt for a more unified future, but so far they have not taken them, so we have to do everything we can to keep putting those options on the table, not least through a national unity Government.
The right hon. Gentleman asked about Greece and the prospects for a long-term agreement. I still think that the prospects are quite worrying, because on one hand we have the creditor nations that want to see Greece fulfil its programme, and on the other hand we have a Greek Government who do not seem at the moment to be coming up with reforms that give their creditors confidence. One of the lessons that needs to be learned—the right hon. Gentleman needs to learn this—is that government involves difficult decisions, and the Greeks still have to make difficult decisions. [Interruption.] Yes, he was in government. I remember, because he completely crashed the economy, as a member of the Government who left this country in hopeless amounts of debt.
The right hon. Gentleman asked a very specific question on the Minsk agreement: will there be more sanctions if there is more destabilisation? The answer is yes. We should be prepared to consider more sanctions if the situation deteriorates. The key point about the Minsk agreement is that the difficult decisions for Russia will come at the end of the process, which is why it is so important to keep the sanctions right to the end.
The right hon. Gentleman wants to know why we want to renegotiate in Europe, and I will tell him why: we want to get out of ever-closer union; we do not want that to apply to Britain; we want control of our welfare system; we want safeguards for the single market; we want powers to flow back to Britain. Let me ask him this: if those are the things that we want, what is it that he wants? The answer, when it comes to Europe, is absolutely nothing. He told us that he does not think that Brussels has too much power. He refuses to rule out joining the euro because, as he said, “It depends how long I’m Prime Minister for”, so that is a hopeful message. He has made it clear that he will never give the British people a say in a referendum.
Frankly, I will compare my record on Europe with his party’s every day of the week. They gave away £7 billion of the rebate; we have protected the rebate. They gave away our ability to veto what is not in our national interest; we vetoed a treaty that was not in our national interest. They signed Britain up to being in the euro bail-out fund; we got Britain out of the euro bail-out fund. The truth is that we on the Government side of the House stand up for Britain in Europe and the Labour party just sells us out.
I commend my right hon. Friend for what he has just said, and for stating unequivocally in his Bloomberg speech that it is our national Parliament that is the root of our democracy, for which people fought and died, but in what specific respects will he repatriate the powers of the British people to govern themselves and return the powers of sovereignty to this Parliament so that we can govern this country as we wish?
My hon. Friend makes an important point. We have already returned a power to Britain by getting out of the bail-out fund. We have returned 100 specific powers as a result of the opt-out on justice and home affairs. I have been very specific that when it comes to the free movement of people, and particularly its interaction with our welfare system, we need powers to be returned to this country. Specifically, I have said that people coming from European Union countries to Britain should not be allowed to claim unemployment benefit, that they should have to leave after six months if they do not have a job, that they should have to pay in for four years before getting anything out of the tax credits system and that they should not be able to send child benefit or other child tax payments to families back home. Those things require serious change in Europe, including treaty change, and that is what we will secure, and what a contrast with the Labour party, which will do absolutely zip.
May I add my own congratulations to Mr Natzler as Clerk, and say how pleased I am personally that the cross-party process of the Governance Committee has led to one of many important decisions that have been made following it?
When the Prime Minister speaks to Mr Netanyahu this evening, will he underline two things—first, that in respect of the negotiations with Iran, a deal which is acceptable and honourable on both sides is more likely to help guarantee Israel’s security, as well as that of others, than no deal at all? Secondly, will he emphasise to Mr Netanyahu that what his party and Government have been involved in is trying to change the reality on the ground through settlement building, so that if it goes on, it will be impossible for there to be a separate state of Palestine, and that if he carries on like this, the patience of this House and of Europe will run out?
First, just in case it is the last time I look at the right hon. Gentleman across the Floor of the House of Commons and he does not catch the Speaker’s eye at the last Prime Minister’s questions on Wednesday, may I pay tribute to him for all the work that he has done in government and in opposition, including in some very senior roles at some very difficult times for this country? The one pledge I make him is that if he continues to live where he does, his constituency MP will always stand up for him in this House of Commons and make sure that he receives a premium service.
The two points that the right hon. Gentleman makes about Israel are right and they are points that I will be happy to make. They are linked: if there is no two-state solution, the situation ends up moving towards a one-state solution, which I think will be disastrous for the Jewish people in Israel, so I really do believe in the two-state solution. We are very much opposed to the settlement building that has taken place. We have been very clear about that and will continue to be clear about that. It makes a two-state solution more difficult and that, in turn, will make Israel less stable, rather than more stable.
In his Bloomberg speech the Prime Minister set out five core principles for a 21st-century EU. If he has had a chance to look at the current European Commission work programme, he will have seen that, contrary to what the Leader of the Opposition has just said, there has now been significant movement towards these principles, particularly on migration and the single market. Does my right hon. Friend agree that we do not have to demand a renegotiation before a referendum? Europe is already offering us one.
My right hon. Friend is right. It is because we have been clear about the things that need to change that the European Commission is already looking at the sorts of changes that could be made. This is an organisation that responds not simply to pressure, but to political realities, so we have to make sure that the political reality after the next election is someone walking into the Berlaymont building or the European Council building and demanding change, rather than someone wandering in and just saying, “Relax—there’s nothing you need to do. We don’t have to have a referendum. We don’t need a renegotiation. One day we’ll join the single currency.” All the pressure would be off and, yes, some in Brussels would breathe a sigh of relief, because it would be business as usual with Labour and probably the Scottish National party too.
I endorse the Prime Minister’s welcome to our excellent new chief Clerk. I also welcome the fact, Mr Speaker, that you are proceeding speedily to the appointment of the post that will carry out the chief executive duties, the director general. That is very important.
On Greece, may I suggest to the Prime Minister that simply repeating the same dose of austerity on the Greek people and their Government will not achieve the objective any more than the last dose did? National debt went up in Greece as a result of the austerity programme. Of course, the Greek Government have to reform to collect their taxes and to get rid of corruption, and the Government have volunteered to do that, but going down the same austerity road is not going to revive the Greek economy or enable it to repay its debts. Those must be rescheduled and the reforms around that must ensure that Greece is capable of repaying its debts, not being strangled with austerity.
I do not entirely disagree with the right hon. Gentleman. The problem is, though, that the people who have lent the money to Greece want their money back, and they believe that Greece should carry out a series of reforms before they give it any more money. He or I can take a different view and argue as I would, although he would not, that Greece should never have joined the eurozone in the first place. That is not the right hon. Gentleman’s view because he is a fanatic about the eurozone. None the less, as we have not lent money to Greece, we are not in that position. If he had been at the European Council he would have heard, whether from the Germans, the Dutch and the Scandinavian countries, or from the Spanish, the Portuguese and the Irish, who have all been through these painful processes, that there is very little appetite to cut Greece a lot of slack.
On behalf of the Liberal Democrats, I echo the Prime Minister’s congratulations to Mr Natzler. I welcome the Prime Minister’s remarks on Tunisia and Libya, where we must all still hope that the promise of the Arab awakening will be fulfilled and sympathise about the fact that uniting the Tory party on Europe really is “mission impossible”? On the Transatlantic Trade and Investment Partnership, does he agree that the UK should never ratify a treaty that would undermine the NHS?
Of course. But I do believe that all of us in this House who support free trade and want to see Britain as a success story in international markets should really get behind TTIP rather than listening to some non-governmental organisations that are raising entirely false fears about it. There is no way that TTIP can in any way undermine our NHS. Our NHS is determined by the policies we pass here in this House. One of the things that was so striking about the European Council was countries worrying about the so-called investor protection mechanisms, even though Britain has 94 of these things and we have never lost a case. There is an awful lot of scaremongering about TTIP. Any of us who want to see a successful British economy should get behind what could be a real jobs boost for our country.
If the Prime Minister is so certain that TTIP will not undermine the NHS, does he have assurances in the treaty that specifically mention the NHS and therefore make it absolutely clear that what some of us fear might happen will not happen?
There is this very powerful quote, which I think I have read out in the House of Commons before, where the previous Trade Commissioner said:
“Public services are always exempted—there is no problem about exemption. The argument is abused in your country for political reasons but it has no grounds.”
The point I would make, though, is that it is local NHS commissioners who make decisions about who delivers services. One of the things that is being done with TTIP is that people or countries who want to raise concerns, like over the investor protection mechanisms, are asking for more things to be put in the treaty, which in the end we will have to pay a price for; and if they are not necessary and there is not a problem, why are we creating one? With the investor protection mechanisms, the country that was raising this problem was Austria, which has 60 of these agreements and has never, ever lost a case. Of course let us have the robust negotiation and seek any safeguards we might need, but let us not raise problems that do not really exist.
Is my right hon. Friend aware that in contradistinction to the views expressed by the Leader of the Opposition, there are millions of ordinary voters in this country who want their say on whether Britain should remain part of the European Union—a say that is long overdue? Is it not absolutely crystal clear that they will get that say only if my right hon. Friend continues to occupy Downing street after the election and is in a position to deliver on that promise?
I think there are millions of people in our country who want to have that say. We have not had a referendum since 1975. We cannot remain in these organisations without the full-hearted consent of the British people behind us. So it is time to have the referendum, but let us have it on the basis of a renegotiation. My hon. Friend is absolutely right: there is only one way to get that referendum, and that is to make sure that there is a Conservative majority and a Conservative Prime Minister after the next election.
The crisis in Libya is having catastrophic consequences. Prime Minister Matteo Renzi has said that of the 170,000 people who entered Italy illegally last year, 92% did so from Libya, and the figures for this year show a 64% increase. Does the Prime Minister agree that it is not enough to give more resources to Frontex—we also have to deal with the source countries to help them stop migrants putting their lives at risk or being profited from by traffickers?
The right hon. Gentleman is absolutely right. We will not solve the problem simply by more sea patrols—nor, indeed, by returning to the Mare Nostrum policy, which sounded humanitarianly sound, but deaths at sea during the period of its operation increased fourfold. So there is no alternative to trying to stabilise these countries and deal with the problem at source. We are able to use our aid and other budgets, with European partners, to do that, and we should certainly do so.
A few weeks ago I went to No. 10, along with my hon. Friend the Member for Kettering (Mr Hollobone) and Tom Pursglove, the excellent Eurosceptic Conservative candidate for Corby, to deliver the results of the north Northamptonshire referendum, in which 81% of the people of north Northamptonshire voted to come out of the EU. Unfortunately, when we knocked, the Prime Minister was not in, but he kindly wrote to me stating, rather importantly, that, if it was at all possible, he would be delighted to bring forward the EU referendum. I think there is a misunderstanding that it has to be held at the end of 2017, so will the Prime Minister confirm that it could take place earlier?
First, may I apologise for not being in? It is not that I have an adverse reaction when I see the men in grey suits approaching Downing street, but I obviously was not there on the right day and I am very sorry about that. What I have said is that the referendum must take place by the end of 2017, but if it is possible to complete the renegotiation and hold it earlier, no one would be more delighted than me. I think it would be—[Interruption.] The Leader of the Opposition complains from a sedentary position, but there would be no referendum or choice with Labour. They would literally just turn up in Brussels and say, “Tell me how much to spend. Where do I sign? No renegotiation or referendum.” It is absolutely clear that there is only one way to give the British people a choice, and that is to make sure I am at this Dispatch Box after the next election.
Does the Prime Minister accept that thousands of small and medium-sized businesses and companies throughout the United Kingdom would love, and are desperate to see, a different relationship with the European Union? Does he accept that promising a referendum is a better way of getting that ultimate change?
I agree with the hon. Lady and wish she could talk some sense into her Front-Bench colleagues. She is absolutely right. By holding a —[Interruption.] The Leader of the Opposition says that the hon. Lady does not agree with me, but she just stood up and made the case for a referendum rather better than I did. I will take careful note of what she said. The point is that, by having this pledge and renegotiation, we can get things done for businesses large and small.
We are all being a bit unfair on the Labour party. After all, 40 years ago it was the Labour party that gave us a referendum and, to be fair to the Liberals, they promised one in the last Parliament, although I do not understand why they have gone wobbly on trusting the people. Perhaps it is because the people may give the wrong answer. Is not the answer to the Leader of the Opposition that every single person in this country, no matter how important they are—whether they are the Prime Minister, the Deputy Prime Minister or the Leader of the Opposition—gets one vote? Will my right hon. Friend therefore give a categorical assurance that any Government of which he is Prime Minister will deliver this choice to the British people?
I have been absolutely clear: I will not be Prime Minister in a Government that do not hold a referendum. I could not be more clear about it. My hon. Friend makes an important point. I remember Tony Blair standing at this Dispatch Box as Prime Minister —I was sitting somewhere on the Opposition Benches—and saying with respect to the European constitution, “Let battle be joined”, and making a great pledge. He could have held a referendum, but he did not. That is one of the things that has poisoned the well in this country and that makes a referendum even more important today.
During discussions on the middle east with his European counterparts, did the Prime Minister explain why the United Kingdom has allowed only 140 refugees from Syria to come into this country?
We have spent about £800 million helping refugees in Syria, which makes us the second largest bilateral donor to the programme. We have taken 140 people under the vulnerable persons relocation scheme, and it is right that we have done that, but we have to be frank with ourselves and with the public. In a refugee crisis of this scale, which runs into millions of people, the idea that even a small part of the solution is for our country to take in hundreds or thousands is completely wrong.
Does the Prime Minister agree that inward investment from the European Union, including Sartorius Stedim investing in my constituency, is a sign that Europeans believe in a reformed European Union and that we have a large number of allies in Europe who want to reform the EU in a constructive way, ready for a referendum?
My hon. Friend makes the important point that Britain is a magnet for inward investment. In fact, we are getting 50% more inward investment than either France or Germany, the next two biggest recipients of such investment. The interesting point is that, since I made my Bloomberg speech and that referendum commitment, there has been no sign of change in the inward investment from countries in the rest of the world coming into the United Kingdom, because they know that it is right to hold that renegotiation and that referendum.
We can all wish for a political solution and a national unity Government in Libya, but the reality is that it is not happening and an al-Qaeda or ISIL-linked state is being established on parts of the coast, which is a serious threat to our country and the rest of Europe. What are we going to do about the situation in Libya, rather than just wishing for a change?
It is not a question of simply wishing for a change; we are working with our allies to help to bring one about. The aim so far has been to produce a national unity Government by bringing together the different parties that there are in Libya. We have not taken the approach that some in the region have taken of trying to pick sides and creating conflict between the various parties. I accept, however, that as we see the growth of ISIL in Libya, we are going to have to challenge all those who could take part in a national unity Government to oppose ISIL and any formation it is able to achieve in Libya. That will be an important part of the stability that we seek not just for the sake of the Libyan people, but for that of our own.
In my last week as a Member of Parliament, may I commend my right hon. Friend not just for his statement, but for his work over the past five years in re-establishing the United Kingdom as a serious and respected player in international affairs?
Turning specifically to the good governance fund that he mentioned with regard to Ukraine and eastern Europe, will the Prime Minister look at the money that has been transferred to this country, particularly from Russia? Oligarchs and others seem to have thought that here and western Europe were good places to put their money, most of which was looted from the good people of Russia. Part of the reason why there is a problem in Russia is that money has been taken out of Russia and placed here.
First, may I thank my right hon. Friend for the valuable work that he has done for his constituents in this House, but also as part of the Government both in Northern Ireland and at the Ministry of Defence? He has played an absolutely crucial role, and he will be missed.
On the issue of Russian money, we have some of the toughest controls anywhere in the world in terms of money laundering and other such issues. I would make the point that Britain has very much been in the vanguard of arguing for sanctions on Russia and Russian individuals, even though it could be argued that this might in some way disadvantage investment coming into the United Kingdom. We have put the interests of Europe and the interests of the Ukrainian people first.
Is the Prime Minister aware that many of us on the Labour Benches who are pro-European want what our allies want, which is a strong Britain in a strong Europe? Yes, we want a reformed Europe—all of us are in favour of reform in Europe—but we are not in favour of weakness and vacillation, which manufacturers and exporters in my constituency say will damage this country over the next three years while we wait for a referendum.
The hon. Gentleman says that he is in favour of reform, but I have not heard one single proposal from the Labour party about anything it wants to reform. He is presumably standing on his leader’s ticket, but I do not know whether he has his picture on his leaflets. When I met my Labour opponent in Chipping Norton market square this week, I had a look at his leaflet, and there was not a dicky-bird when it came to the Leader of the Opposition. It could have been from a totally different party. There are plenty of pictures of me. The Leader of the Opposition has said:
“I don’t think Brussels has got too much power”.
That is the official position of the Labour party: it is not for reform, but for the status quo.
As the only major party leader to trust the British people with an in/out referendum on EU membership, my right hon. Friend has certainly reassured the patriotic British electorate. Will he now go the whole way by reassuring them that throughout the next Parliament, when he is Prime Minister, Britain will not fall below the NATO recommended minimum of 2% of GDP on defence?
I would say to my hon. Friend, who I know cares passionately about this issue, as I do, that we are one of the few countries in Europe to meet 2%. We have met it through this Parliament, and we are meeting it this year and next year. He has very specific guarantees about a full replacement for Trident, a £160 billion equipment programme that will go up in real terms each year and no further reductions in regular personnel in our armed forces. I think those are bankable assurances, which will resonate on the doorsteps as he goes house to house.
Even at this late stage, I think that the Prime Minister might thank my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown) for keeping us out of the euro. As he knows, the euro has been sinking like a stone in recent weeks and there are terrible stresses inside the eurozone, arising from the rigidities of the euro. Is not the only serious solution to dissolve the euro and recreate national currencies? Is he not in a strong position to say that?
I believe strongly in maintaining our national currency, but it is not a realistic option to tell all other countries in Europe which currency they should use. Many of them are hugely enthusiastic about the euro. However misguided I feel that is, arguing that they should all break up their currency is not a viable option. Obviously, being in the euro and not being able to devalue have damaged Greece’s ability to respond to the problems, but we cannot lay all the problems with the Greek economy at the door of the euro. Greece has a long history of not making structural reforms, having ludicrously early retirement ages—[Interruption.]—having problems with its working practices and all the rest of it. The hon. Member for Bolsover (Mr Skinner) asks what is wrong with ludicrously early retirement ages. He has enjoyed making such comments from a sedentary position for many, many years and I am sure that he will do so for many years to come. There is a slight irony there.
Did my right hon. Friend have any discussions at the European Council about the jobs miracle in this country, in that there are more people employed here than at any time in our islands’ history? Did he ask members of the European Council to come and see that miracle at first hand in Harlow, where unemployment has halved, youth unemployment is down by nearly 60% and apprenticeships are up by 116%?
I am grateful to my hon. Friend for his question. We discussed the employment situation across Europe and I was able to give a very strong report on what is happening in Britain: the 1,000 jobs that are being created every day and the plummeting levels of unemployment and youth unemployment. I said that that is evidence of the combination of long-term structural changes and economic recovery. There are European countries with very high structural rates of unemployment that need to take action to deal with that.
My party heartily congratulates David Natzler on his appointment. There could be no one more suitable and appropriate for this role in the House of Commons.
On the Tory European referendum, what will happen if the UK votes to leave the European Union, but Scotland votes to remain within it? Should the Scottish people just put up with being yanked out of Europe against their will? Would it not be better if all the siblings in the Prime Minister’s family of nations agreed individually before they were taken out of Europe?
What I want to know is, where are the rest of the Scot nats? They are preparing for power and writing Labour’s Budget. They are obviously very busy. What I would say about referendums is that the hon. Gentleman lost the first one and he will lose the next one.
You will have noticed, Mr Speaker, that my hon. Friend the Member for Wellingborough (Mr Bone) no longer talks about his wife, but about the excellent Conservative parliamentary candidate in Corby, Thomas Pursglove. I believe that that is because Mrs Bone is going to become a councillor in my constituency and so has been talking to me. She regrets the fact that the Liberal Democrats have not allowed the Government to negotiate formally on a renegotiation in Europe, but she wonders whether the Prime Minister has taken advantage of his meetings on the sidelines of the European Council to talk about our renegotiation with our European partners.
I must say, I did not know that those sorts of things happened in Northamptonshire. They are obviously very exciting events. I congratulate Mrs Bone on trying to become a councillor. I am sure that she will make a great contribution, as she did to the film about this place. Of course I have had discussions with our European partners about what Britain wants to see renegotiated and I will continue to do so.
The Prime Minister is keen to extol the virtues of a referendum and the benefits of Europe, so will he say whether he would lead the yes camp or the no camp?
I have been absolutely clear: I want Britain to stay in a reformed European Union. That is the aim I have and I am confident I will achieve it.
Does the Prime Minister agree that this Government’s great progress in turning round the British economy has been achieved despite the eurozone and not because of it?
Although my hon. Friend and I do not always see eye to eye on issues European, he is making a strong point. We have not seen much of a boost to the British economy from the eurozone because it has been relatively stagnant. We have had to achieve economic recovery by selling to other parts of the world and getting our own economy moving. If we do see a recovery in the eurozone—which we hope to—that will obviously be very good news for Britain.
If we ask a group of lawyers their opinion on whether TTIP would apply to the NHS, we will get as many answers as there are lawyers. The Prime Minister cannot get away with saying that it will not apply, because by opening up the NHS to market tendering and market forces in the way he did with the Health and Social Care Act 2012, he has opened the door to treaties such as TTIP applying to the national health service. That is the problem he needs to protect the NHS against.
I am baffled by Labour’s position on this as I thought it was a party that believed in free trade and backing Britain’s exporters. There are so many areas where we are disadvantaged in our trade with America and where we could be creating jobs and growth, but instead Labour Members want to read out a script handed to them by the trade unions to oppose the trade deal. It makes you weep for the time when the Labour party was in favour of progress and trade.
At the Council did anyone raise the treatment of journalists? Does my right hon. Friend agree that the witch hunt that has seen several journalists from The Sun, for example, put through three years of hell and cases that juries keep throwing out is un-British, in that the Crown Prosecution Service is seeking to neuter the abilities of journalists to obtain information in the public interest? Should there be a rethink of CPS policies for similar prosecutions, because that reflects across the whole of Europe?
That issue was not raised with me or at the press conference. Obviously, the CPS is independent in our country, as it should be, but my hon. Friend is right to say that justice delayed is justice denied and these things should always be resolved as speedily as possible.
Many jobs in my constituency depend on continued investment by leading manufacturing companies that also have companies on mainland Europe. Labour Members can say that a Labour Government would give them a categorical reassurance that the UK will remain in the EU. What would the Prime Minister say to those companies if his shilly-shallying over Europe about some sort of referendum were to drive them to invest elsewhere?
Interestingly, the conference of the British Chambers of Commerce—probably the biggest business trade body in Britain—supported my approach of a renegotiation and referendum, and did not support the alternative of just meekly going along with whatever the European Union is doing today. Business is on the side of the changes I am putting forward.
I am a big fan of the public sector. Does my right hon. Friend agree that Greece teaches us a lesson that we can have a strong public sector only if we have a strong economy?
My hon. Friend is absolutely right. If we look at what happened in Greece with the economic difficulties it has had, we see that it had to make sweeping cuts to its national health service because it was in so much economic trouble. That underlines the point that we will make every day from now and for the next 45 days, which is that if we want a strong NHS, schools and policing, we must have a strong economy.
In his statement the Prime Minister said that he wanted a European Union where freedom of movement was not an unqualified right. If he does not secure an exemption from freedom of movement by the time of the referendum in 2017, will he be voting no?
I am very confident that we will get the changes we need, not least on the operation of our welfare system. Back in European history, there was a time when freedom of movement was about accepting a job that had been offered, rather than simply the freedom to move to look for work. I have been clear, and we will be clear on the doorsteps, including in the hon. Gentleman’s constituency: no unemployment benefit for visiting EU migrants; after six months if someone has no job they have to go home; someone must work for four years before they get in-work benefits; and no sending home of child benefit. Those are things that I suspect each and every one of the hon. Gentleman’s constituents wants put in place.
With regard to the Iranian nuclear deal, may I urge great caution on the part of the Prime Minister and, indeed, other members of Europe? The road between a civil nuclear energy Iran and a military nuclear Iran is a very short one. Contrary to what at least one of my right hon. Friend’s constituents has said, it would be better for the middle east to have no deal than a bad deal.
I absolutely understand and share the concerns that people right across the world, including in Israel, have about the prospect of a nuclear-armed Iran. The deal should keep Iran away from having a nuclear weapon, with proper inspection and verification so that if there were any changes to those circumstances, they could be seen. Obviously, we should not do a deal at any price, but the alternatives to doing a deal are not attractive. Frankly, they are not attractive for Iran. The sanctions we put in place—Britain led the charge in Europe—have done such damage in Iran that it is in its interests to conclude a deal.
Earlier this month, I met a group of talented young people at John Fisher and Thomas More Roman Catholic high school in Colne, who, through CAFOD, are helping to raise the profile of climate change. They have all made their own climate change pledges, which they presented to me. Will the Prime Minister say more about his discussions on energy policy and the prospects of our reaching a long-term agreement in Paris this December?
I am very grateful to my hon. Friend for that question. I think the prospects are good, because of the deal Britain helped to broker at the previous EU Council. It shows that the European Union will be making a very serious contribution to reducing carbon emissions. We obviously had to allow some countries, such as Poland, some flexibility, but the overall numbers for Europe are impressive. Now what we need to do, with the movement by the Americans and the Chinese, is discuss the matter with all the countries which might, if we are not careful, put a spoke in the wheel of progress, so that, with others, we will help to ensure that the sort of mitigation that they will need in their countries goes ahead.
In his statement, the Prime Minister spoke about opportunity. Does my right hon. Friend agree that people will have an opportunity to reform the EU and have an in/out referendum on this country’s membership of the EU only by voting Conservative, and that voting for any other party will kill that opportunity?
My hon. Friend is right. Voting for another party is really opening the back door to a Labour Government, who would not renegotiate or have a referendum. It would just lead to a sigh of relief in the corridors of Brussels that none of those changes was necessary. If people are serious about wanting reform and a referendum, there is only one box they can put their cross in.
On foreign policy, did the European Council look at the coup in Yemen against the legitimate Government of President Hadi? Taking into account the words of the Yemeni Foreign Minister in today asking for Gulf Co-operation Council countries to send in their forces to avoid civil war, the Saudis have asked their ambassador to operate from Aden to show support for the legitimate Government. Will we be doing the same?
We did not discuss Yemen specifically at the Council because we were very focused on Tunisia, Libya, Ukraine, energy union and the eurozone crisis, but my hon. Friend is absolutely right that what is happening in Yemen is deeply worrying. It is extremely unstable. We still, obviously, support and believe that President Hadi is the legitimate power. Frankly, what is needed in that country is what is needed in so many other troubled countries in the middle east, which is inclusive government that includes representatives of all the people of that country, so there can be some sort of progress.
Despite yet another eurozone crisis, the UK economy continues to grow strongly, creating more jobs than the rest of Europe added together. Does the Prime Minister agree that it would have been a huge error of judgment, especially by someone who aspired to be Prime Minister, to have backed Francois Hollande’s failed socialist policies when he should have been backing our long-term economic plan?
We all remember what the Leader of the Opposition said. He stood on the steps of the Élysée and said he wanted Britain to follow the French course. If we had done that, unemployment would be twice as high as it is and growth would be one seventh of what we have achieved, so I am sure that when it comes to the choice at the election, people will recognise that we should follow not the French course but the British course, which means voting Conservative.
Before I call the Minister for the Cabinet Office and Paymaster General to make his statement to the House, it might be helpful to colleagues to know that the final day’s debate on the Budget is very heavily subscribed, with no fewer than 38 colleagues seeking to catch the eye of the Chair. As a consequence, it will be important to be very pithy in the statement now, both from the Back Benches and the Front Bench. We will then proceed with the main business of the day.
Government Efficiency and Reform
With permission, I would like to make a statement on Government savings from efficiency and reform.
Since May 2010, my Department has led a cross-Government programme, working closely with the Treasury, to ensure that taxpayers’ money is focused on front-line services. With rising public expectations for high-quality services, coupled with the huge budget deficit we inherited in 2010, the coalition faced a huge challenge to do more—and better—for less. Over this Parliament, we have secured unprecedented levels of savings, delivering for successive years £3.75 billion, £5.5 billion, and £10 billion, compared with spending in Labour’s last year. For 2013-14, we saved £14.3 billion, against a 2009-10 baseline.
That is testament to the hard work of civil servants across Whitehall and the strong support of my right hon. Friends the Chancellor and the Chief Secretary and other Treasury colleagues. Last July, the Comptroller and Auditor General recognised the pace and priority we had injected into the efficiency agenda. We started this with the introduction of tight spending controls just days after we entered government, and these controls have delivered the largest share of savings. Since 2010, we have negotiated billions of pounds off expensive legacy contracts and cut central Government spending on consultants and interim workers by over half. Like for like, the civil service is 21% smaller. I publish today our annual “State of the Estate” report, which shows that we have exited in aggregate more than one building every day since May 2010, reducing the total size of our estate by 20%.
As part of our long-term economic plan, our aim was to save £20 billion from central Government efficiency and reform for the last year of this Parliament, including by reducing losses to the public purse through fraud, error and uncollected debt. I can tell the House that we are on course to meet and indeed exceed this target. Up to January 2015, we have already identified £11 billion of efficiency and reform savings—over a third up on the same point last year—with the largest savings coming in the final quarter every year so far. With fraud, error and debt benefits still to be counted, we are well on the way to the £20 billion target. The full year’s savings will need to be confirmed by independent audit, and, as in previous years, we will invite the National Audit Office to undertake this.
We have made significant progress in transforming government and cutting costs, but this is only the beginning. At the autumn statement, we published, with the Treasury, a document entitled “Efficiency and reform in the next Parliament”, which set out our intention to save a further £10 billion for 2017-18 and £15 billion to £20 billion for 2019-20 compared with the current year. We now set out our next steps. We will implement a new approach to land and property, based on central ownership and management of assets and Departments paying market-level rents. This will provide greater incentives for Departments to rationalise space, as well as releasing land and property for productive use—for example, for up to 150,000 homes. To do this successfully will mean working even more closely with local government, including through our One Public Estate programme, which now operates across 32 local authorities.
The UK is now a world leader in digital government, and we will work with local government to take this transformative approach into the wider public sector. Digital services improve the citizen experience, while being significantly cheaper to provide. We will continue to reduce the cost of technology in government, as extravagantly expensive legacy IT contracts fall in over the coming years. To that end, I have signed an innovative deal to create a joint venture for data hosting that will save up to £100 million.
All of this work has been driven by an increasingly strong corporate centre, supporting and challenging Departments to work together to maximise efficiencies and improve services. We are strengthening central leadership across 10 key cross- departmental functions, including commercial, digital and technology, project management, legal and human resources. Later this week, we will publish our functional leadership model.
The chief executive of the civil service will lead the build-out of this strengthened model, under which the Treasury and the Cabinet Office will work together as the corporate centre to support Departments to continue their programme of reform and to deliver future spending consolidations. Spending controls will remain in place and evolve in time to strong functional standards, while Departments will need to own more of the transformation agenda. As part of this, we are recruiting 25 commercial directors across government and launching a new project leadership programme at Cranfield university. This programme will help to build project management skills in parallel to our successful major projects leadership academy.
I am grateful for the collaborative way in which the shadow Cabinet Office Minister has approached this important programme, which continues that of her predecessor, the hon. Member for Barnsley East (Michael Dugher), and also for the support of the Chair of the Public Accounts Committee and its members, who have seen the point of what we are seeking to do and given significant support to it.
We have made substantial and long-overdue improvements to the way government operates, but much more lies ahead. We have shown that we can drive down the cost of government while improving the quality of services. We have shown that we can get more and better for less, and that we have a long-term plan to deliver it. I commend the statement to the House.
I thank the right hon. Gentleman for advance sight of his statement. His statement today has a little bit more content than his empty statement of two weeks ago, but only a little bit more. One has to wonder again why it is that I keep being called to this House for his statements. Is it perhaps because he wants to continue his very long career of public office in the other place after May and is using Hansard to scrub up his CV? Or is it, more seriously, to distract me and this place from the disarray that is now besetting the Conservative party’s election campaign? Perhaps his and his colleagues’ time would have been better spent today deploring the despicable actions of the Tory candidate for Dudley North or by explaining to the public where the axe will fall, following last week’s confirmation of the Chancellor’s extreme spending cuts in the next Parliament.
The Minister has carried out his job in government of identifying efficiency savings with zeal and his work to reduce the cost of government bureaucracy is welcome. While I might disagree with him on occasion, I do not question his motives to reduce costs. I also commend the civil service for its work on the shared agenda.
The Minister for the Cabinet Office thanked the Chancellor for his support on this agenda, but I have to say to the right hon. Gentleman that it really should be the other way around. It is clear from the Office for Budget Responsibility and the Institute for Fiscal Studies that after the Chancellor’s Budget last week, unprotected Departments will face huge and colossal cuts to meet his spending plans and unfunded tax cuts. With all due respect to the Minister, no amount of back-office efficiencies will save front-line police, armed forces or social care services, or working families from the Government’s secret VAT plans. Only so much can be got from efficiency savings and even with his savings in this Parliament, the Government are still only halfway to their own deficit reduction targets. That is why, even with his savings, public services would face even bigger cuts in the next Parliament than they have in this one. Opposition Members have a better plan. We will balance the books in a fair way, ensuring a recovery for the many, not just for the privileged few.
We broadly support the approach to land and property that the Minister has outlined. On digital government, I am pleased to see that he has been reading our independent review on this topic. Just weeks ago, he was saying that the Government Digital Service could not work with councils to improve services and save money. Now he is championing this, and I welcome his conversion today. We agree that stronger functional skills in the civil service are important, and we will examine in detail the Minister’s plans for new commercial directors and a new project leadership programme.
Any new Government will have to think about how we can provide better and more responsive public services with less, but with just a few weeks to go, the country faces a clear choice at the election. No amount of spinning on efficiency savings will hide the Tories’ true agenda of cutting front-line public services and hitting families with a rise in VAT.
I am very sorry that the hon. Lady has been so mean-minded about this. She has cast some unworthy aspersions on the reasons for my statement. The historic purpose of the House is to vote Supply and scrutinise the way in which Governments spend their money. I am astonished that, when I come to the House to explain how this Government have delivered savings running into tens of billions of pounds, and have protected front-line services by taking out the cost of government, the hon. Lady should trivialise something that is at the core of the historic mission of the House of Commons. She has done no honour to her position.
The hon. Lady should reflect on the fact that the Office for National Statistics, which began its series on public sector productivity in 1997, has shown that during the years of the Labour Government, up to 2010, productivity in that sector remained flat, while productivity in the nearest analogue, the private services sector, rose by nearly 30%. She should reflect on the difference that could have been made to the deficit of historic proportions that her party bequeathed to the coalition.
The hon. Lady talked about the future, and about the contribution that could be made by what she described as back-office efficiencies. We are talking about much more than back-office efficiencies; we are talking about the introduction of very different and improved ways of delivering public services. That can be done, and we have shown that it can be done. The public’s expectations in terms of the quality of public services are, properly, rising; the demand in terms of the quantity of public services is also rising as people—happily—live longer; and the amount of money that is available to support those public services is less, thanks to the deficit that we inherited.
We therefore must do more, and do it better, with less money. We have shown over the last five years that that can be done, and we have also shown that it needs to be done again. There should never be an end to efficiencies. The most efficient organisations in the world always look for further efficiency savings every year, and that is what this Government, under a Conservative leadership, will do in the next Parliament.
Why has the rigorous challenge that the coalition Government have had to make to the way in which money is spent in many Departments not been applied to the criminal justice system? Having a larger prison population than nearly all the other European countries is not necessarily the most cost-effective way of keeping people safe. Will the Minister look at the American states that are trying to reverse that trend in order to spend the taxpayer’s dollar in the way that is most likely to keep the taxpayer safe?
Let me say to my right hon. Friend, as we both enter our last week in the House of Commons, that, as he knows, the reason our prison population is so large is the rate of reoffending. I know that he will support, as I do, the rehabilitation revolution, led by our right hon. Friend the Lord Chancellor, which is committed to a radical reduction in the rate of reoffending that is the sole reason why our prison population is so much higher than those of comparable countries.
The Treasury’s problems are, above all, about income, not expenditure. There is a gap of £120 billion a year between the tax that should be paid and the tax that is actually paid. However, the Government have presided over tens of thousands of job cuts in Her Majesty’s Revenue and Customs, where senior staff collect 20 times their own salaries and junior staff 10 times theirs. Are the Government not shooting themselves in the foot?
The hon. Gentleman is completely mistaken if he believes that there is a direct linear relationship between the number of HMRC officials and the amount of tax that is being collected. There is absolutely no evidence of that. The size of HMRC, in terms of headcount, was falling before the 2010 election, and the amount of tax being collected has risen. We can do things differently and we can do things better—we have already shown that that is the case—but if the hon. Gentleman thinks that the only problem with the public finances is that we are not taxing enough and not raising enough taxes, I am afraid that he and I differ. I think that we must cut our costs first, which is what we are doing and will continue to do.
May I congratulate my right hon. Friend and parliamentary neighbour, who has done a superb job in driving these savings and thereby ensuring front-line services can be protected? He has done a fine job behind the scenes and will be much missed from this place, but I hope he will be able to continue in some way in this important public service. Does he agree that the key part of his statement was that these savings have been achieved as a result of a strong corporate centre—a central drive for efficiency—and is it not the case that that centre will have to be strengthened further if significant additional savings are to be achieved?
I am grateful for my right hon. Friend’s kind comments, and I also hugely appreciate what he and the right hon. Member for Wentworth and Dearne (John Healey) have done in leading the work of GovernUp, which has made the case very powerfully, as indeed has the Public Accounts Committee, for a strong corporate centre in Government that can drive these sorts of changes. When we examined this, we found that, in almost all cross-government functions, the historical position of the British Government is to have an extraordinarily weak centre. That is part of the reason why it has been proved in the past to be so difficult to drive these sorts of efficiency savings, but we are changing that.
This was a swansong statement, if I may say so, which largely looked backwards rather than forwards. Nevertheless, what the Minister has announced today about stronger central leadership within Whitehall, clearer professional standards right across the Departments and more power to the elbow of the new chief executive of the civil service are welcome on all sides. The right hon. Gentleman over five years has made something of a start in ensuring we get better and more for less, but his statement this afternoon is clearly passing the baton for the next five years to this side of the House and my hon. Friend the Member for Manchester Central (Lucy Powell) on our Front Bench.
I agree with every part of what the right hon. Gentleman says except the last part, but I am grateful for what he says and the work he has done on this issue. He is a very experienced former Minister himself and he has seen very vividly how we can do these things better. We have made a start but there is much, much more to be done.
As my right hon. Friend has stated, public sector productivity flatlined between 1997 and 2010, but what assessment has he made of improvements in civil service productivity since 2010?
Productivity has improved dramatically. Like for like, the civil service is 21% smaller, yet I do not think anyone would say the civil service is doing less. It is not; if anything, in some places it is doing more. Productivity has markedly improved and I pay a very warm and genuine tribute to those hundreds of thousands of civil servants who do a fantastic job, often in very difficult circumstances. All of us in this House should be warm in our tribute to them.
I agree with what the Minister has said about extending digitisation in government, but what is he doing to ensure millions of people are not excluded from the process of digitisation?
That is a very good point. When the now Baroness Lane-Fox reported to me at the very beginning of this Parliament when she introduced the concept, which we warmly adopted, of digital by default—if a service can be delivered online, it should be delivered only online—she made the point, which again we strongly supported, that there must always be an assisted digital option, which ideally can be used to help people who are currently digitally excluded to become full participants in the online world, so, for example, older people can more easily communicate with distant family members. There is a big programme here that we are strongly promoting.
I am so pleased to hear that we are protecting public services while cutting down the cost of government, but does my right hon. Friend share my concern that we have been prevented from delivering one of the bigger cuts—namely, cutting the number of Members of Parliament by delivering our proposed boundary changes? Does he agree that although the Opposition refer to fairer cuts, they give no indication of what those cuts would be, and that the public therefore cannot trust anything they have to say?
Aneurin Bevan once said:
“Why look into the crystal ball when you can read the book?”
The last Government did nothing to drive the sort of efficiency savings that we have achieved, so when it comes to making cuts in public spending, we can only fear that they would cut the services, whereas we are cutting the costs, which is the better way to go.
Why has there been no reform of the continuing parliamentary scandals of cash for access to politicians and cash to buy peerages? Why has there been no brake on the revolving door that allows retiring Ministers to prostitute their insider knowledge to the highest bidder, and why are there no controls over lobbyists who are still free to buy influence and privilege in this House? Is not the Minister ashamed that, after his Government have been in office for five years, the reputation of politics remains firmly in the gutter?
I cannot imagine a greater contribution to that reputation than the hon. Gentleman going on about it all the time. As he above all people ought to know, most people come into this particular form of public service, known as politics, for high reasons and with high motivation, and they do their job in an honourable way. He might just occasionally shrug off that carapace of cynicism and give due credit to the public servants in this House as well as to those outside it.
My right hon. Friend can leave the House knowing that he has done an outstanding job in reforming our public services, and it would have been nice to hear a little more humble pie from the hon. Member for Manchester Central (Lucy Powell). On the question of getting better digital coverage across our country, does he agree that the public estate should be made more available for things such as mobile phone masts if we are to have a 21st-century digital economy? What more can be done to encourage the public sector estate to make up for the absence of support from the private sector estate in getting greater digital coverage?
My hon. Friend makes a really good point, and there is much more that we can do. For example, we will make available public sector Government-owned land and buildings for the siting of mobile phone masts, which will be beneficial in lots of ways. It will provide locations for the masts as well as income for the Government. We have now also published the second iteration of our map of the publicly funded digital infrastructure. This includes the many thousands of miles of fibre that have been paid for by the taxpayer but which are massively underused and under-exploited. If that network can be mobilised to support the roll-out of mobile coverage and rural broadband, it could accelerate the programme to which my hon. Friend and I are both deeply committed.
It is three years to the day since the Minister took up my invitation to visit Ark Data Centres in Corsham with me, and I am delighted to hear that the taxpayer stands to benefit to the tune of £100 million from the Crown hosting joint venture with the company. Does he agree, however, that the benefits of digital services extend much further than that, in that they allow a total redesign of the processes that underpin our public services?
My hon. Friend is completely right. The digitisation of services is sometimes seen as just a pretty front end on a website, but this goes much deeper. It is about a fundamental redesign of the way in which services are delivered, with the processes being designed and built around the needs of the citizen instead of around the convenience of the Government, which has far too often been the case in the past.
As this is probably my right hon. Friend’s last statement in the House, may I thank him for the numerous visits he has made to Pendle over the past few years and for recently meeting Training 2000 in the Cabinet Office to discuss its plans to set up a cyber-security institute in my constituency? Will he say more about public service mutuals, the increase in their number under this Government and how they can benefit productivity?
I am grateful to my hon. Friend. The public service mutuals programme is important. There are now more than 100 of them, whereas there were fewer than 10 when the coalition Government were formed. More than 35,000 members of staff have joined public service mutuals, which are delivering public services to the value of more than £1.5 billion. Most of them choose to be not-for-profit, and have seen an extraordinary improvement in productivity by bringing together: entrepreneurial leadership, of which there is much more in the public sector than is generally thought; staff who are liberated from bureaucratic constraints; hard-edged commercial discipline; and the public service ethos. Those four factors, brought together, are an extraordinarily powerful driver of improved productivity and value.
In my right hon. Friend’s swansong—I commend him for it and for his five years’ work, saving money for the public purse—I wonder whether I might pick up on one specific issue of government efficiency reform, which is the trade unions training fund. It was set up a dozen or so years ago by the previous Government; some £10 million to £12 million was given to trade unions’ training and, lo and behold, £12 million came back as a bung to the Labour party. Will he update the House on what has happened to that?
My right hon. Friend should not assume that this is my swansong. Although it is my last week in the House of Commons, I am answering oral questions on Wednesday and I am looking forward to that—[Interruption.] I am looking forward to engaging with the hon. Member for Manchester Central (Lucy Powell) on that occasion. It is very nice to see my right hon. Friend the Chief Secretary to the Treasury here, as he has been my comrade in arms as we have driven forward these efficiency savings over that period. My right hon. Friend the Member for South Leicestershire (Mr Robathan) will know that I made a statement, either last week or the week before, about the reform of trade unions within central Government. We have cut the cost of the subsidies to trade unions significantly over that time, bringing into these things a proper sense of proportion.
I thank my right hon. Friend for his statement and for the work he has done, saving taxpayers billions of pounds. Does he agree that by merging Departments even greater efficiencies and savings could be made?
I understand what my hon. Friend says. The studies that have been done on machinery of government changes do not always indicate that they pay for themselves, but there are undoubtedly ways in which we can organise government to yield—in addition to what we have already done—significant improvements.
I congratulate my right hon. Friend on his statement. Many of us recall my hon. Friend the Member for Cannock Chase (Mr Burley) making his suggestions to the House at the beginning of this Parliament and being vilified by some Opposition Members. May I say how resolutely and quietly the Minister has gone about this work? Not only has he made the savings, but he has taken the civil service with him to improve the public services of this country.
I am grateful to my hon. Friend. This has been a long process and it is fair to say that the further we have gone, we have discovered a deep appetite for reform and change within the civil service, particularly among its younger members, who often get frustrated. They are the people who complain most about bureaucracy, and they have welcomed the fact that Ministers have taken a real interest in driving out bureaucracy and speeding things up.
Tobacco Manufacturers’ Producer Responsibility
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 require the Secretary of State to undertake a programme of research into the costs and benefits of introducing an annual levy on sales to be paid by tobacco manufacturers, with the proceeds to be used to support tobacco control measures, to discourage young people from starting to smoke tobacco, to help existing tobacco smokers to stop smoking; and for connected purposes.
This Bill is about establishing the principle that the tobacco industry, which has done so much to harm our society, should pay more than it does now to help reduce the harm that it might do in the future. Like the majority of Members in this House, I warmly welcomed the announcement by the Chancellor last autumn—it was in the autumn statement—that he would consider a levy on tobacco manufacturers and importers. I strongly agreed with him that:
“Smoking imposes costs on society and the Government believe that it is therefore fair to ask the tobacco industry to make a greater contribution.”
I welcomed the announcement by the Leader of the Opposition that his party was also committed to such a levy. It is right in principle that the tobacco industry should pay for the damage that its addictive and lethal products cause. The industry is one of the most profitable on earth. The two largest tobacco firms in the UK market, Imperial and Japan Tobacco International, hold around four fifths of the UK market and achieve joint profits of about £1 billion a year. Charging those firms to help clean up the damage their products cause is a rational and justified extension of the “polluter pays” principle to public health policy.
In the United States, the tobacco industry is required, under the Family Smoking Prevention and Tobacco Control Act 2009, to pay an annual “user fee” to the Food and Drug Administration to fund tobacco regulation and wider tobacco control activity. In effect, that fee is independent of the wider US fiscal regime, and the proceeds are controlled directly by the FDA.
As of 31 March 2014, the US Food and Drug Administration had collected $1.88 billion in manufacturer user fees, of which it spent $1.48 billion. About half a billion dollars went on public education, and another half billion went on scientific research projects to support additional FDA regulations on tobacco products.
In the UK, there is a policy parallel in the energy companies obligation, which places a legal requirement on the energy industry to invest in energy efficiency and related measures, especially for poor and vulnerable households. That leads us to a key problem with both the Chancellor’s and the official Opposition’s approach to the levy. The Treasury consultation on the levy, which was announced in the Budget but is still ongoing, does not include any commitments on how the money raised should be spent. Instead, it seems that the levy will be used simply to go to the Exchequer.
If a tobacco levy is introduced, the tobacco industry will have to decide whether to pass on to consumers some, or all, of the cost in higher prices. That would of course have some public health benefits, as price increases are known to be the single most effective policy lever in reducing smoking prevalence. However, the potential benefits to public health can be fully realised only if the levy is used to fund tobacco control action, which is designed to increase the rate of quitting tobacco use over and above what might otherwise be expected as a result of price rises.
I strongly believe that at least some of the funds raised should be directed towards actions to reduce the harm caused by tobacco consumption. A research paper by the economist Mr Howard Reed suggests that £500 million could be raised without much difficulty every year from a levy based on sales data. If the programme of research proposed in this Bill were carried out, it would show that the recurring cost of tobacco control activity at every level—local, regional and national—could be met from the proceeds of the levy. Indeed, it is likely to generate a fund sufficient to support these activities as well as assisting deficit reduction.
That would include national action through Public Health England and regional strategy through regional offices and any future regional governance structures, and tobacco control work by local authorities and in the third sector. The funding would cover: stop smoking services, mass media and public education campaigns and research, and efforts to tackle illicit trade at local and regional level. It could also fund new initiatives such as a positive retail licensing scheme to help ensure that retailers do not face any new costs. I also note with interest that the Communities and Local Government Committee has recommended that some levy proceeds be used to help clear up the litter and environmental problems caused by discarded cigarettes.
Local stop smoking services play an essential role in helping people to quit. However, following the transfer of the public health function to local authorities, which I support, those services are vulnerable, because of the financial strains placed on local authorities and the difficult choices that they have to make.
There are already grounds for concern about how many people are being reached by stop smoking services. Indeed, the Health and Social Care Information Centre reported in 2013-14 that the number of people quitting had fallen relative to the previous year. Although stop smoking services are demonstrably highly cost-effective and greatly benefit the whole of society, the direct savings they deliver go mainly to the NHS and not to the local authorities that pay for them. That applies also to local action by trading standards officers and others, for example when it comes to reducing the scale of illicit tobacco trade. The Exchequer benefits financially from that action, not the local authorities.
I draw the House’s attention to NHS England’s “Five-Year Forward View”, published in October of last year. This includes a section entitled, “Getting serious about prevention”, which states:
“The future health of millions of children, the sustainability of the NHS, and the economic prosperity of Britain all now depend on a radical upgrade in prevention and public health.”
Those words will remain simply a pious hope if we do not find new ways of financing public health policy and that would in turn mean that the chances of bridging the £30 billion NHS funding gap identified in the forward view forecast will not be achieved.
The Bill also proposes that research should be conducted into how the levy could be assessed and collected. I would favour basing it on sales data made public by manufacturers at a local and regional level as well as a national level. That would allow resources to be focused on the areas with the greatest sales and the greatest prevalence rates, better targeting tobacco control in the future.
Like most of us in this House, I was delighted when the former Health Secretary, the right hon. Member for South Cambridgeshire (Mr Lansley), said that he wanted the tobacco industry to have no business in this country. Smoking still causes hundreds of thousands of premature deaths across the UK every year and for every death caused by smoking, 20 smokers suffer from smoking-related disability. That is a terrible toll of death, disease and disability. It is why we must carry on seeking ways to improve public health measures to tackle smoking. A tobacco levy could provide vital funds for that purpose and I am confident that the programme of research proposed in the Bill would show just that. I therefore commend the Bill to the House and hope that Members will support it.
I shall speak only briefly. I should say at the start that I do not intend to divide the House, as I know that many people wish to speak in the forthcoming debate, but I could not allow this Bill to stand without any opposition whatsoever. It takes the typical Lib Dem populist approach, trying to attack the tobacco industry without any evidence whatsoever, probably just because the right hon. Member for Sutton and Cheam (Paul Burstow) thinks that he might be able to extract four extra votes from it in his constituency at the general election.
The right hon. Gentleman made big play of wanting the tobacco industry to pay its fair share. I have never met anyone who would disagree with that sentiment, but he failed to mention one thing. I received a briefing note from Action on Smoking and Health—I see that the right hon. Gentleman is putting himself up as the spokesman for ASH, as it is its campaign that he is advocating—and it estimates that the cost of smoking to the NHS is about £2.7 billion a year. That figure comes from ASH, the deadliest opponent of the tobacco industry, yet tobacco excise and VAT already raise about £12 billion a year in revenue according to Her Majesty’s Revenue and Customs. How on earth the right hon. Gentleman has come to the conclusion that the fair share is not being raised from the tobacco industry is beyond me. The industry is clearly paying well above the cost of smoking to the NHS and even if he wants to add on the cost of cleaning up cigarette butts, fires and all the other things that ASH tries to add on, it comes nowhere near £12 billion.
I particularly wanted to oppose the Bill because the right hon. Gentleman has done us all a great service. He has let the cat out of the bag. Of course, the Government have already accepted ASH’s campaigning on banning smoking in cars where there are children, which is completely unenforceable. They have also accepted the plain packaging of tobacco, which is completely idiotic. Of course, the Government accepted those policies because ASH told them that if they did so the amount of smoking in the country would plummet. We were told that if we introduced plain packaging it would be absolutely fantastic because all of a sudden cigarettes would not appeal to young people and children and that would close the gateway into tobacco use. The whole policy was based on that premise.
That policy has not even been implemented and already the right hon. Gentleman is saying, “Actually, that was all a load of tripe. It won’t make any difference whatsoever. What we need now is a levy on the tobacco industry so that we can do some research to find out why young people smoke and then try to stop them smoking.” Well, what on earth was the plain packaging campaign about, if not that? I am grateful to him for letting the cat out of the bag by telling us that the whole premise behind plain packaging was a complete load of old codswallop. Unfortunately, the Government idiotically accepted that codswallop in a mindless fashion without even thinking it through, because they, too, are in the pocket of ASH and, rather than making up their own policies based on evidence, just want gleefully to accept anything ASH tells them.
If we want to raise more money from the tobacco industry, there is one great way of doing so: by clamping down on the illicit trade in tobacco, which would raise far more than the right hon. Gentleman’s levy ever would. Yet the Government are pursuing policies, such as plain packaging, that will reduce the amount of revenue from the industry and increase the illicit trade. Why he says that he wants to raise more funds from the tobacco industry but supports measures that will do exactly the reverse is absolutely beyond me.
The point is that this is just the latest campaign from ASH. Every time it advocates the introduction of another measure, it tells us that that is what the Government need to do to tackle tobacco, but as soon as it is implemented we are told that actually it was a load of old cobblers and now we need something else. It is like those companies that tell us their washing powder is absolutely magnificent, only to bring out a new one a couple of years later and tell us that the previous one was actually terrible and that really we need to buy the new one. ASH cannot now hand over the keys to the company car; it has to keep going and justifying its role. It will keep coming up with new, innovative solutions to try to keep its jobs, which no doubt the Government will accept, because they do not have a mind of their own and just have to do what ASH tells them to do.
I just hope that we can start thinking these things through, rather than simply accepting all the nonsense that comes from ASH, the Liberal Democrats and other hon. Members on these subjects. The right hon. Gentleman wants the tobacco industry to pay its fair share. I want the tobacco industry to pay its fair share. It is already raising far more in taxes and duties than it ever cost the NHS, according to ASH’s own figures. If we want to get more money, let us stop the illicit trade, and the best way to do that is not by having a levy, but by getting rid of the ridiculous plain packaging policy.
Question put (Standing Order No. 23) and agreed to.
That Paul Burstow, Kevin Barron, Bob Blackman, Dr Julian Huppert, Alex Cunningham, Martin Horwood, Nick Smith, Sheila Gilmore, Sir Alan Beith, John Robertson and Dr Sarah Wollaston present the Bill.
Paul Burstow accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 27 March, and to be printed (Bill 192).
Ways and Means
Budget Resolutions and Economic Situation
Amendment of the Law
Debate resumed (Order, 20 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.
It is a pleasure to open the debate, possibly for the last time, and to welcome this final Budget—[Hon. Members: “Hear, hear.”] I knew that I would draw support from different parts of the House, and I am pleased to hear that I draw it from the Opposition Front Bench as well. Last week the Chancellor reiterated the Government’s commitment to our long-term economic plan—even the previous Chancellor, the right hon. Member for Edinburgh South West (Mr Darling), slightly smiled at that one—restoring the public finances and supporting businesses while providing security and stability for Britain’s families.
At the start of this Parliament we inherited an economy that had suffered a greater collapse than almost any other country, with £112 billion wiped off our GDP and 750,000 people losing their jobs, contributing to a welfare bill that had risen by 60% in real terms under the previous Government. Over the past year, however, Britain has grown faster than any other major advanced economy, with the Office for Budget Responsibility’s future growth forecast revised up. Britain has had the best performing labour market in the G7, with employment forecasts revised up too, and unemployment revised down. We are on the path, therefore, from austerity to prosperity. The deficit has been cut in half. The fiscal mandate has been met in the target year. National debt is set to fall in the coming year. A surplus of £7 billion is forecast by the end of the next Parliament. Welfare spending is down in real terms for the first time in 16 years and is below its 2010 level as a share of GDP.
Underpinning this recovery is the remarkable performance of our labour market, with the highest employment rate that Britain has ever seen, at 73.3%. The rise in youth employment in the UK over the year is larger than the rest of Europe combined, and there are now more people in private sector jobs than ever before, more women in work than ever before, more lone parents in work than ever before, more older workers than ever before, more disabled entrepreneurs than ever before, and perhaps most importantly, the most households in social housing in work since records began. That is arguably the most important of all the figures.
Will the right hon. Gentleman give way?
In a moment.
Importantly, and contrary to the myths that the Opposition promulgate, of this rise in employment since 2010—I want to make this clear, as I suspect the hon. Gentleman may ask about this—80% is full-time work and 80% is permanent. Three fifths has come from managerial, professional and associate professional jobs, 70% of private sector jobs have been outside London, and two thirds of jobs have gone to UK nationals, reversing the damaging trend under the previous Government when more than half went to foreign nationals.
Will the Secretary of State kindly tell the House how many of those new jobs were on low pay?
I think I have just told the House. It is always good to ask another question when I have just answered it. The jobs that we are providing are paid well. We have seen a rise of 2.1% in private sector pay against inflation of 0.3% now, and a rise in public sector pay of 0.7%—somewhat over and above inflation.
So we have seen unemployment fall to pre-recession levels. The number of out of work benefits has fallen to its lowest for a generation, and the number of workless households has fallen to the lowest on record.
Precisely on employment at record levels and the other boasts that the right hon. Gentleman has made, why then are national insurance and tax receipts way below budget and employment above budget? Does that not reflect the quality and level of the employment that is being offered—1.8 million zero-hours contracts, for example?
I respect the hon. Gentleman and I am glad he asked me that, because it allows me to point out something that I was going to come to later. We have raised the thresholds on taxation. It is not surprising, therefore, that some of the insurance levels are low. I am proud of that. I am proud that my right hon. Friend the Chief Secretary is also proud of the fact that we are raising the point at which people pay tax for the first time. The real reason behind all these facts and any other issues that the hon. Gentleman raises in this regard is the fact that the previous Government saw the economy go over the edge of a cliff, and we have been picking it up ever since. If the question is why it is not perfect yet, the answer is that we still have some way to go, but we are making progress and going in the right direction.
Through this Government’s employment programme we are ensuring a jobs recovery for all. I want to point out some of the figures: 2 million apprenticeship starts since the beginning of this Government; over 1 million claimant commitments signed—as people go in to sign on to jobseeker’s allowance, setting out and reinforcing people’s obligations; work experience for 250,000 young people; 60,000 start-up businesses through the new enterprise allowance; and the Work programme helping more long-term unemployed people back into work than any other programme before.
I will come back to the hon. Gentleman. I want to make a little progress, as I know that others want to speak.
The Work programme is continually improving. Nearly 1.1 million people have spent time off benefits, 680,000 have got a job, 400,000 have found lasting work, and job outcomes after 12 months are nearly twice as high as with the early cohorts, including the new employment and support allowance claimants. Compared with the previous back-to-work programmes—the flexible new deal, for example—the Work programme has helped more than twice as many people into work in the first two years as the flexible new deal, with nearly three times as many people in jobs for six months. This is not just getting people into work but ensuring that they stay there—that is the critical element.
I will give way to the hon. Member for Coventry South (Mr Cunningham) and then make some progress.
The Secretary of State said that when the present Government took over, the economy was on a knife edge. I remember the previous Conservative Chancellor claiming credit when we were in power for the handling of the economy. More importantly, the Secretary of State has not mentioned the fact that recently the purchasing power of wages has dropped by 6%. Wages might have gone up by 2% in the private sector, but their overall purchasing power has dropped by 6%.
I am a little bit lost. I am not sure whether the hon. Gentleman is saying that the previous Prime Minister was claiming credit when he was Chancellor in the previous—[Interruption.] If he is referring to my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke), it is difficult for the previous Labour Government to claim credit when their Chief Secretary left a letter on the desk saying, “There’s no money left.” If the hon. Gentleman wants to claim credit for that, I will certainly allow him to intervene.
While the Budget proposed new measures to boost growth and support private sector job creation, in turn increasing employment, the Opposition’s only alternative, the jobs guarantee, it now turns out, is more like a no-jobs guarantee—a make-work scheme that the Institute of Directors has said is
“not the source of sustainable jobs”.
It is the kind of scheme that, for the past 20 years, the OECD has demonstrated is expensive and counter-productive in the long term. It says that large deadweight losses, displacement and substitution effects are of little success in helping unemployed people to get permanent jobs in the open labour market. We got rid of the Opposition’s last scheme, which did not work, and this one will fare no better. Labour’s flagship programme is just a rehash of the failed make-work schemes that seem to be its solution almost every time.
The hon. Member for Leeds West (Rachel Reeves) made this comment about Jobs Growth Wales:
“I went to see a scheme very similar to this in Wales last week and...that’s what we would aim to do across the UK”.
If that is what she thinks she is going to do, let us deal with what Jobs Growth Wales actually produces. It has been revealed to be an expensive exercise in cherry-picking the best-quality people who want to go back to work. Far from being a guarantee for all, which I understood was her policy, the hardest to help are not eligible for the programme, and only one in three applicants has got a place on it. A success rate of 80%, at a cost of £6,000 per place, is trumpeted, yet that compares with the 90% success rate of all—not some of—the eligible people in Wales who apply, who move off jobseeker’s allowance within nine months anyway. The reality is that this programme, on top of already successful programmes getting people into work, is less successful than the programme that it seeks to replace. Apparently, this is the programme that the Opposition want to copy and turn into a national programme in government, and it is all a rehash of the future jobs fund.
In the public sector, this Government have achieved the same success as the future jobs fund achieved through work experience in the private sector, but—here is the key—at a twentieth of the cost of what it cost Labour to provide jobs in the public sector. That is the problem with this make-work scheme.
While the right hon. Gentleman goes on mudslinging about party policies, he is skimming over the fact that what is wrong with our economy and the jobs being created is that over the past five years we have had a terrible deficiency of highly skilled workers. We are still churning out apprentices from short-term apprenticeships of a year, on average. That is not meeting the real need. When is he going to address that? If he does not do so, he will never solve the problem of low productivity.
I agree with the hon. Gentleman that that was the situation we inherited. As I said earlier, under this Government there have been 2 million new apprenticeships aimed at getting people the necessary skills. There are also more people going to university and studying science. The reality is that it is not possible to turn around in a few years the problem mentioned by the hon. Gentleman, which followed 13 years of Labour government. We have set in train all of the right measures for the medium and long term to get more skilled people back into work. Before the hon. Gentleman sneers a little too much about people going back to work, I want to say that they are far better off in work and working towards full-time pay than sitting on benefits being depressed and worried.
The hon. Gentleman agrees with me. The key point is that we want to get people into work, including skilled work, and for them to develop skills not only while they are in work, but as they come through apprenticeships and university.
I want to return to the make-work scheme, because I have a feeling in my bones that the Opposition are beginning to slide away from it. They have failed to answer a number of questions. We have asked them time and again how many private businesses have signed up to the jobs guarantee, but we have never had an answer. We have been told endlessly that there is a lot of interest, but we have never heard any examples.
I heard the shadow Chancellor on, I think, a Radio 4 programme and he seemed rather scared and unusually unable to be coherent. [Interruption.] All right, I will drop the “unusually”. He was unable to list the vast number of private sector companies taking part. When asked how many there were, he seemed to lose his nerve and said:
“But if not, you can do it through the voluntary sector. If not, you have to have a final backstop: a public work scheme.”
The shadow Chancellor has pretty much made it clear that the scheme is going to be about jobs created not in the private sector, but in the public sector. [Interruption.] Oh no, it will not: the right hon. Member for East Ham (Stephen Timms) knows that to be the case. In other words, the Opposition would repeat the mistakes of the past.
I hope that the hon. Member for Leeds West will answer another question we have asked the Opposition time and again: how long will the guarantee last? Back in 2011, we heard about a 12-month guarantee for young people unemployed for one year. By 2013, the proposal had morphed into a six-month guarantee—half the time previously advertised—for those unemployed for two years. Even that is not enough, for as Labour begins to see what a disaster the policy is and the shadow Chancellor begins to wind away from it—there is no interest in it from private sector firms and it has no traction with business—they seem to be beginning to realise that it is not worth all the money they are talking about spending.
I had a look at the Labour website when it launched its tuition fee policy. Interestingly, buried in the relevant document—I would like to say it was in the small print, although the print was pretty small anyway—I found that the scope of the flagship jobs guarantee had been halved again. This announcement was made without fanfare and without anyone taking to the airwaves to tell everybody what a wonderful scheme it was going to be. Labour now proposes “a six-month job”—remember it was for a year originally—
“for any more 18-24 year olds who find themselves claiming Jobseeker’s Allowance for a year”.
It also proposes “a three-month job”—it used to be for six months—
“for the over 25s out of work for two years”,
not one year. In other words, Labour is edging back, killing off its policy bit by bit, and I suspect that eventually it will let it go altogether.
Following a Budget in which the Chancellor once again pledged that no spending commitments would be unfunded, the final and most significant unanswered question—I hope the hon. Lady will answer it, because this is her last opportunity to do so—is: how will the jobs guarantee be paid for? That is a legitimate question, for the Budget punched a hole in Labour’s two proposals with two new measures: the first to levy funding from the banks and the second to restrict pensions tax relief.
Given that the shadow Work and Pensions Secretary has herself declared that
“we need to make sure that the sums add up”,
it is right that we do the maths, starting with the cost of the jobs guarantee, an estimation of which was done by Treasury officials in January. The cost of the jobs guarantee for 2015-16 is forecast to be £1.54 billion for over-25s and £540 million for under-25s. That is £2 billion in total in one year alone, which is far more than the Labour estimate. Taking the small print of the document we found, even if the figure in it is halved, as the Labour U-turn seems to make clear that it will be, it is more than three times the £300 million a year that Labour says it will cost, at close on £1 billion a year.
When the hon. Lady gets up to speak, I hope that she will explain how Labour will fund the jobs guarantee. If she is going to use the bankers’ bonus tax again, I must tell her that it has been spent 11 times over. Here are the things on which it has been spent: reversing the VAT increase—£12.75 billion; reversing the tax credit savings—£5.8 billion; more housing—£1.2 billion; reversing the child benefit savings—£3.1 billion; more capital spending—£5.8 billion; child care—£800 million; and there are more. The last Chancellor, the right hon. Member for Edinburgh South West, said that he did not think it would be feasible to repeat the one-off bankers’ bonus tax, but the reality is that Labour will repeat it to pay again and again for other things.
Another announcement in the Budget was the excellent decision to reduce the tax-free lifetime allowance. It had already been reduced from the £1.8 million inherited from Labour to £1.25 million, and it will now fall to £1 million. The latest change will save about £600 million a year. Importantly, it will affect only 4% of those approaching retirement. That is in stark contrast to Labour’s proposal to reduce the tax-free annual allowance, which would plunder the pension pots of moderately paid, long-serving public servants such as police officers, teachers, nurses and others. With the Government already taking effective steps to curb the size of the very largest pension pots—my right hon. Friend the Minister for Pensions has been involved in that—Labour’s proposed pension tax relief changes will be left null and void. Despite the fact that Labour has committed the money for the purpose of increasing working and child tax credits and, very recently, to pay for the £3.1 billion cost of lower tuition fees, it will apparently be used only to fund the jobs guarantee. As for Labour’s final funding proposal, restricting pension tax relief for those with incomes of more than £150,000, it would not come in for a further three years.
Will the Secretary of State give way?
Not yet. I will finish this particular point before I move on to the rest of the stuff in the Budget.
In this key area, the Opposition have absolutely no idea what they will do. They do not have the money, they are losing interest in the very policy that they said was at the heart of their policies and the rest has just become smoke and mirrors. It is as simple as that. There we have it: the cobbled-together nonsense of Labour’s jobs guarantee is destined to fail as wholly unfunded. Yet we should not be surprised by that from a party which built an entire economy on debt, with policies paid for by more borrowing and higher taxes. Under Labour, Britain accumulated personal debt of a record high, reaching some £1.5 trillion, while the level of household saving fell to a 50-year low.
Will the Secretary of State give way?
Will the Secretary of State give way?
In a minute.
This Government are restoring stability in our economy, with no unfunded spending and no extra borrowing; instead, aspiration, responsibility and security will pave the way for a better future. The principle behind the Budget is to restore a Britain built on savings and investment, and that will be done with three new measures. There is a radical, more flexible individual savings account, with the complete freedom to withdraw money from a cash ISA and pay it back later in the year without losing any of the £15,000 tax-free entitlement. There is the brand-new Help to Buy ISA: we are working hand in hand with first-time buyers to help them to save for a home—£3,000 will be provided by the Government for every £12,000 saved—which is an excellent idea. There is a new personal savings allowance, with up to £1,000 interest-free. It will take 17 million taxpayers out of savings tax, not just cutting but abolishing that tax for 95% of people.
On pensions, the Government have already reversed the decade-long decline in pension saving, rolling out automatic enrolment to make saving the norm and introducing the new state pension, while reducing the means test and creating a solid foundation on which to save. We are returning to people who build up their pension pots the freedom to use that money as they see fit. In last year’s Budget, the Chancellor announced radical changes to abolish the prescriptive rules that dictated how and when people could use their pension savings. That means that from April, 320,000 people a year will be able to choose what to do with their pension savings on turning 55. In last week’s Budget, he went further still by allowing 5 million annuity holders to access their existing annuities. He has extended the freedom to give those people greater control over their finances, which is an excellent idea.
One group of people who do not have much chance to accumulate pension pots is unpaid family carers, many of whom have to give up work in order to care. Will he say, at the end of this Parliament, whether he regrets forcing 60,000 unpaid family carers to pay the bedroom tax, meaning that not only can they not acquire pensions, but many of them are having to cut back on food and heating to pay it?
The spare room subsidy policy that we introduced has been assisted by some £380 million that we have given to local government to ensure that anybody in the local community is supported and aided, as necessary. I do not regret that policy. I think it will bring fairness to social housing. Why does the hon. Lady not get up one time and answer this question: does she not feel ashamed about leaving so many people—7 million people—on long waiting lists for accommodation? Why does she not apologise for leaving so many people, when Labour left office, in overcrowded—
No, she has had her word. Why does she not apologise for leaving so many people in overcrowded accommodation? Labour Members do not apologise for that. The answer is that they have no policy on that. Social house building under the Labour Government fell to the lowest level since the 1920s. She should get up and apologise for that.
I thank the Secretary of State for giving way, eventually. Perhaps he would like to look at the case of the couple in Sefton—the disabled person and her carer—who have fought their case through to the Supreme Court. The Prime Minister was unable to give an answer about that couple. It is not a question of such couples giving up their home or their spare room to anybody else. Carers find those rooms essential. That couple found their room essential. The Prime Minister could not answer. Will the Secretary of State answer?
That is exactly the reason why we gave £380 million to local authorities to deal with individual cases. The courts have supported us in this. Again, the hon. Lady did not get up and apologise for the mess Labour left social housing in: overcrowded accommodation, people who could not find the right houses, people on huge waiting lists for accommodation and the lowest level of house building on record since the 1920s. That is the shame of the 13 years of the last Labour Government.
I spoke a moment ago about the pension freedoms that have been provided. The last pension freedom that has been provided by my right hon. Friend the Chancellor is to allow 5 million annuity holders to access their existing annuities. I pay tribute to my right hon. Friend the Minister for Pensions because that was originally his idea. It shows that the coalition is working at all levels.
It pays to save and, through our welfare changes, this Government have ensured that it pays to work. We have undertaken the most significant reforms in living memory, which span not only pensions but job-seeking benefits, disability benefits, child maintenance and more. They have been opposed at every turn by the Opposition. We are delivering a welfare state fit for the 21st century.
Universal credit is rolling out nationally. It is already in 150 areas and is set to be in every jobcentre by this time next year. The earliest claimants are spending more time looking for work, are moving into work quicker, are working more and are earning more than those on jobseeker’s allowance. It will bring economic benefits of up to £35 billion over 10 years, as the Public Accounts Committee agrees.
The benefit cap has ended the something-for-nothing culture. Capped households are 41% more likely to move into work and 12,500 have done so. Housing benefit is capped too. There has been the first real-terms fall in housing benefit spending in a decade and it is set to carry on falling in real terms up to 2020. Our reforms are restoring fairness and mean that we are making better use of Britain’s housing stock as we build more houses.
Over this Parliament, the increase in welfare spending has been the lowest since the creation of the welfare state at 0.5% a year compared with the 3.5% increase in Labour’s last Parliament in office. Total welfare spending is below what we inherited in 2010 as a proportion of GDP. In the coming year, out-of-work benefit spending will be back to pre-recession levels. Welfare reforms are set to have saved nearly £50 billion cumulatively, all while departmental baseline spending is down—I say this to the Chief Secretary to the Treasury—by some £2 billion a year. He can say “well done” if he likes. We are doing more, and we are doing more efficiently as a result.
As we come to the end of this Parliament, I am proud of the work we have done with my right hon. and hon. Friends in this House. I pay tribute to some of my previous Ministers, including my right hon. Friends the Members for Epsom and Ewell (Chris Grayling), for Basingstoke (Maria Miller) and for Hemel Hempstead (Mike Penning), and my hon. Friend the Member for Fareham (Mr Hoban), as well as to current Ministers, including the Minister for Employment, who has done brilliantly in her job, and the Minister for Disabled People, who is doing brilliantly in his. I pay particular tribute to an hon. Friend who is unsung and unfairly traduced by the Labour party: my good friend Lord Freud. He has worked tirelessly for two different Governments, determined only on one thing, which is to improve the quality of life for people in Britain. I am also proud of my working relationship and what has been achieved with the Minister for Pensions. We have worked well together and achieved good things, and we have also worked closely with the Chief Secretary to the Treasury on many subjects.
The last five years have often been hard and difficult, but always rewarding. We took a system that was bloated and unfair, and which under the previous Government seemed to penalise those who tried and rewarded those who did not. The last Government left us a system that measured only the amount put in and not the results obtained, and it trapped many in dependence. We took that system and changed it for the better, leaving a positive legacy: the deficit down, unemployment down, youth unemployment down, long-term unemployment down, employment up, private sector work up, working households up, growth up. That is a legacy of which any Government of any stripe should be proud. This Budget is key to that legacy, and I commend it to the House.
I thank the Secretary of State for his valedictory address this afternoon, and I hope that this will be my last speech from the Opposition Benches.
The last five years have been a tragic and terrible waste for working people in this country, and a shocking record of Tory welfare waste at the Department for Work and Pensions. What a wasted opportunity this Budget was to put in place the better plan that we need. People in my constituency—and in every constituency around the country—have been let down yet again. People are putting in the hours at work but still falling behind with the rent and the bills; they are desperate to work and earn, but are not getting the support they need to find a job. People who cannot work because they are sick or disabled are forced to turn to food banks because the safety net is being pulled away from them.
The people of our country have been put through five years of hardship by this out-of-touch Government, and they are still waiting to feel the benefits of what has been the weakest recovery in more than 100 years. Five wasted years in which working people have put in the hours, day after day, year after year, only to find themselves £1,600 a year worse off than when the Government took office. Five wasted years in which families have been hit by tax and benefit changes that cost the average household more than £1,100 a year, only to find that the Government have borrowed £200 billion more than they said they would and have totally failed to deliver on their central promise to balance the books. Five wasted years in which people have been told “We are all in this together”, while the Government prioritised tax cuts for millionaires and came back time and again to take money from the poorest. Five wasted years in which a Secretary of State for Work and Pensions has waxed lyrical about his grand scheme for welfare reform, but all he has delivered is delays, backlogs, write-offs and overspends—a record of Tory welfare waste that we cannot stand for another five years.
Let us remind ourselves of the backdrop to this Budget and of the complacent and self-congratulatory speech we have just heard from the Secretary of State. The Chancellor promised in 2010,
“we will bring down the benefits bill.”
Since then we have had five years of cruel and unfair policies: taking money from the pockets of disabled people through the bedroom tax; taking money from working families with restrictions to tax credits; driving hundreds of thousands of people to food banks to feed their families; and increasing the number of children in absolute poverty by 500,000. And yet, at the beginning of this year, the Institute for Fiscal Studies confirmed that
“Real terms benefit spending…is forecast to be almost exactly the same in 2015–16 as it was in 2010–11”.
Why is that, we may ask, after the Government have inflicted so much hardship on so many people who have the least? It is because, the IFS explains, these harsh and unfair policies have been cancelled out by upward pressure on the benefits bill resulting from
“weak wage growth and rising private rents”.
Meanwhile, it says, most of the major structural changes, such as universal credit, have run into problems and are yet to be delivered. This is the reason why, in the past five years, the Government have spent £25 billion more on social security than they said they would in 2010. It is why, yet again, the small print of the Budget reveals another £600 million overspend this year against last year’s forecasts.
My hon. Friend is making some incredibly strong points. On low wage growth, does she agree that we have seen particular challenges in very low paid sectors, such as care? Not only are carers struggling to get by on very low wages and struggling with the cost of living, we are seeing the minimum wage being undermined and some companies possibly not even paying it. Allegations have been made this week about MiHomeCare in Penarth in my constituency. The Government are failing to enforce the minimum wage.
We know that still too many people are not even paid the minimum wage, and we know that the number of people paid less than the living wage has increased from 3.4 million to 4.9 million in the past few years. It is also true that we need to do more to ensure the minimum wage is always enforced, which is why we have said we would increase fines for non-payment to £50,000 and why we would give more powers to local authorities to ensure that the minimum wage is always paid.
Will my hon. Friend confirm what the Secretary of State failed to confirm? What she has clearly exposed this afternoon, supported by an earlier intervention, is that there have been 1.8 million zero-hours contracts in the past five years. As a consequence, tax and national insurance receipts are, cumulatively, £100 billion below the Government’s own projections. That is at the heart of the problem.
My hon. Friend is right. Income tax and national insurance receipts have fallen short of forecasts by a staggering £97 billion in the life of this Parliament. As he makes clear, too many people are working on zero-hours contracts or in very low-paid jobs where they just cannot make ends meet.
As a fellow Yorkshire Member of Parliament, does my hon. Friend share my anger that despite all this bland talk about the success of the economy and the success of the welfare system when it is actually being destroyed, in my town—and probably in hers—30% of people working are on low wages? It is women and families with children who are being particularly hard hit.
My hon. Friend is right to talk about the experience of people in his Huddersfield constituency. People in Huddersfield, Yorkshire and around the country will, I think, be slightly shocked by the degree of complacency from the Secretary of State today and from the Chancellor last week, when for them and their families things are very often getting harder, not easier.
The Government have failed to control social security spending, as they promised they would, because they have failed to tackle the true causes of rising welfare spending, such as low pay and the lack of affordable housing, and because they have failed to deliver the flagship reforms the Secretary of State made such great claims for five years ago. What a tragic waste of time, talent and taxpayers’ money: wasting the precious time of sick and disabled people forced to wait for months on end for the support they so desperately need; wasting the talents of people who are not getting the help they need to get into work, or who are stuck in low-paid insecure jobs that my hon. Friends have spoken of that do not make the most of their potential; and wasting money on IT systems that do not work, assessment and appeals procedures that have descended into chaos, and soaring spending on in-work benefits because of this Government’s failure to build an economy that actually rewards hard work.
The hon. Lady talks about what she calls soaring benefit costs. Does she accept that under her Government not only did in-work benefits rise by more than 50%, but housing benefit for those out of work rose by 70%? In other words, both in-work and out-of-work housing benefit claims rose dramatically under her Government.
Under the last two Conservative Governments, unemployment reached 2.5 million. There was a global financial crisis during the period of the last Labour Government, and as a result, unemployment rose, but it has risen even further under this Government, from 1.5 million, when Labour left office, to 1.7 million in February 2012. The OBR’s Budget forecast last week showed a £600 million increase in the forecast for social security spending in just one year, and since 2010, the Government have spent £25 billion more on social security than they set out to spend.
Under the Government, the number of people paid less than the living wage has soared by 44%, while house building has fallen to its lowest levels since the 1920s. It is for those reasons that housing benefit spending—the second-largest area of DWP spending, after pensions—was more than £2 billion higher in 2014-15 than in 2009-10. It was due largely to the rocketing numbers of working people not paid enough to cover their rent. In this Parliament, the Secretary of State has spent £1.8 billion more than he planned on housing benefit for working people and, on current Government forecasts, the cost of working people’s rising reliance on housing benefit to pay their rent will reach £14 billion by the end of the decade, if left unchecked—£488 for every household in the country.
I think there is some common ground between us, particularly on zero-hours contracts for women who choose to work part time, but could the hon. Lady not congratulate the Government on regulating part-time zero-hours contracts, especially given that the Office for National Statistics has knocked the figures Labour used? This is often something that working mothers choose.
According to the ONS, the number of zero-hours contracts has increased from 1.4 million to 1.8 million in the last year. This is a huge challenge for working mothers and others. We want to ban the exploitative use of zero-hours contracts so that if someone does regular hours, they will be offered a regular contract and so that their hours cannot be cancelled at the last minute without compensation. If we make those changes, I hope we can stem the increase in the number of zero-hours contracts, giving more people the security of paid work they know will happen week after week.
I want to give an example from the social care sector to add to that given by my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty). I recently spoke to a constituent working in the care sector whose job decayed over the years after an agency took over the firm she worked for, to the point where, instead of working the 35 to 40 hours a week she wanted, she was lucky if she got 20 hours a week, and the agency constantly cancelled at short notice. She could not manage from week to week with that. Sadly that is the care industry these days.
My hon. Friend speaks powerfully about something she knows a lot about. The number of zero-hours contracts in the social care sector, and more widely across the economy, has grown. It is incredibly difficult to plan from week to week if someone does not know how much money they will take home or whether they can afford to pay the rent and bills and put food on the table. That is why more people in work are having to rely on food banks to make ends meet.
I move now to key reforms that have spun out of control under the Government. Universal credit was supposed to cut fraud and make work pay, but after five wasted years of this Government and more than half a billion pounds of taxpayers’ money spent, it is being paid to just 41,000 of the 1 million people who were supposed to be receiving it last April. The National Audit Office has identified a fortress mentality and a “good news” reporting culture in the Department as key factors behind this fiasco. Last summer, the Secretary of State promised an accelerated roll-out plan, but we have yet to see much evidence of it—things could not be going much slower.
The Work programme—another failed programme—was the Government’s belated and inadequate replacement for the future jobs fund they scrapped, but it has failed to tackle long-term unemployment. Indeed, the number of long-term unemployed people has risen by a staggering 49% since 2010. It still sends more people back to sign on at the jobcentre after two years than it places in a job and has made no impact on the disadvantaged and high-risk unemployment faced by over-50s and disabled people. The introduction of personal independence payments has also been a complete and utter shambles, leaving sick and disabled people waiting months on end for support, while total spending has gone over budget by more than £2 billion. The roll-out of employment and support allowance was supposed to deliver big savings by helping more disabled people into work, but just 8% of people on ESA have been helped into work by the Work programme. Furthermore, analysis by the House of Commons Library shows that the Secretary of State has spent £8.6 billion more than he said he would on ESA. What a mess and what a waste—five years of Tory welfare waste we needed this Budget to put an end to.
The Budget was a wasted opportunity. We needed a better plan to make work pay and get social security spending under control, but instead the report of the independent OBR confirmed that all we could expect from the Government in the future was more of the same: more unplanned spending on social security and more failure to deliver promised savings on disability and sickness benefits, with the OBR noting on page 143 that
“projected spending on incapacity benefits, DLA and PIP is up by £0.2 billion a year on average between 2014-15 and 2019-20”;
more failure to deliver promised savings on fraud, with the OBR reporting on page 191 that it had
“revised down the savings associated with tax credits operational measures. These increase spending by £0.2 billion a year between 2015-16 and 2019-20”;
and more of the “good news” culture on welfare reform, with the OBR noting on page 192 that
“we have noted a history of optimism bias relating to reforms to incapacity benefits, disability benefits and universal credit.”
“Optimism bias” is a polite way of saying that we cannot trust a word the Government say.
In a moment of optimism bias, the Secretary of State promised that 1 million people would be on universal credit by April 2014, but one year on, fewer than 41,000 people are claiming it. In another moment of optimism bias, he promised that universal credit would be on time and on budget, but with delay after delay and millions of pounds written off, everyone knows that it is neither on time nor on budget. In yet another case of the Government’s optimism bias, they promised to back carers but then forced 60,000 households with carers to pay the bedroom tax, as my hon. Friend the Member for Worsley and Eccles South (Barbara Keeley) mentioned. Was it not optimism bias that led the Chancellor to promise to reduce the benefit bill, only for the Government to spend £25 billion more on social security than they set out to spend? And perhaps optimism bias is why the Chancellor broke his promise to clear the deficit by the end of this Parliament.
Is the hon. Lady’s muddled jobs guarantee an example of optimism bias?
Labour’s jobs guarantee would help 150,000 people get into work in the first year of a Labour Government. I am optimistic that we can transform the lives of young people and the long-term unemployed, unlike this Government, who have left them on benefits. Funded by a repeat of the bank bonus tax they abolished and by restricting pensions tax relief to 20% for people earning more than £150,000 a year, our compulsory jobs guarantee will help young people who have been unemployed for a year and older people out of work for two years. Should that not be our priority, rather than tax cuts for bankers?
The Budget also reforms the rules governing pensions and annuities. The Opposition have long called on the Government to sort out the failing pensions and annuities markets, which result in too many hard-working savers finding their retirement pots eroded by excessive fees and poor-value products. So we welcome more freedom for savers to choose how to access their money and plan their retirement. Just as with last year’s announcement, we find the same failure to ensure that savers and pensioners have the support and protection they need to secure a decent and reliable income and to avoid the rip-offs that are already threatening to create another mis-selling crisis.
Just this weekend, we learned that with fewer than two weeks before the reforms announced in last year’s Budget come into effect, there is still no telephone number for the promised advice service, Pension Wise, leaving hundreds of thousands of savers exposed to scams that could have a devastating effect on their retirement plans. Instead, we have the ridiculous spectacle of the Pensions Minister trying to wash his hands of the responsibility by warning of the rip-offs that will result—without doing a single thing properly to protect people from those risks.
Any decisions about annuities are extremely complex decisions to take. Failing to get the advice lines up and running is not just a fault on the part of this Government, it is negligent. It is negligent to allow people this freedom without providing them with any back-up to help them make the right decision. What is more, there is no thought given to the remedies if the decision they take is wrong.
When the Chancellor spoke in the 2014 Budget he said that people would be given “advice”, which was then watered down to “guidance”. Now, with two weeks to go, we know that nobody has received this guidance, yet people will be making irreversible decisions about their retirement income.
This Budget has been more of the same from the same old Tories: more overspends, delays and missed targets on social security; and more big promises for savers and pensioners that are not backed up with the support and the protections we need to make these reforms work.
The hon. Lady is concerned, as we are, to make sure that consumers get good value. She has proposed a cap on charges for these new pension products. Presumably, she thinks the cap should come in straight away. What should it be?
We have said that there should be a cap on fees and charges—not just for the annuities products, but for the new drawdown products. We think it should be at the same level as the Government have set out, but then reduced over time. In that way, we will ensure that savers get value for money. Unless we do that, more people will be ripped off. Unfortunately, despite all the Government’s rhetoric, they have not taken action to protect people’s retirement incomes.
What we have heard from the Secretary of State today is the same complacency and self-congratulation. Yes, of course we welcome any fall in unemployment, but it was this Government who allowed unemployment to soar to record levels in the first place, peaking three years ago in February 2012 at 1.7 million. Under this Government, the number of long-term unemployed, abandoned to a life on the dole, has risen by 49%. That is why Labour will have a compulsory jobs guarantee.
The hon. Lady made a number of comments about the prices and charges that should be levied on pensions. Will she confirm that the price cap that has been levied on auto- enrolment pensions is, in fact, half that of the amount levied on stakeholder pensions when her Government were in power?
We introduced a cap on charges for stakeholder pensions and the automatic enrolment brought in policies for which Labour had already legislated. We are proud of automatic enrolment, but we disagree with the changes that this Government introduced, which mean fewer people are benefiting from automatic enrolment —1.5 million fewer, two thirds of them women. That is a real lost opportunity to ensure that those people who should be saving are actually saving.
What this Secretary of State and the Government he speaks for simply do not understand is that their failure to make work pay and to deliver a recovery that raises living standards for all is the root cause of their failure to control social security spending and balance the books as they promised. They have spent £25 billion more than they planned and their receipts from income tax and national insurance have, as has been pointed out, fallen short of forecasts by a staggering £97 billion over the life of this Parliament.
It is because of that failure that, in order to deliver his objective of a large surplus in the next Parliament, the Chancellor has now committed to even deeper spending cuts over the next three years than we have seen over the past five years. The Office for Budget Responsibility confirms that these plans will mean
“a much sharper squeeze on real spending in 2016-17 and 2017-18 than anything seen over the past five years”,
“a sharp acceleration in the pace of implied real cuts to day-to-day spending on public services”.
My right hon. Friend the Member for Morley and Outwood (Ed Balls)and my hon. Friend the Member for Nottingham East (Chris Leslie) have highlighted the threat this poses to police, defence and social care. Is it not the truth that the Chancellor’s extreme fiscal plan can be delivered only by putting our NHS at risk or imposing yet another Tory rise in VAT? Although it is hard to see how this Government can make the extra £12 billion-worth of cuts to social security spending when they have failed to deliver any savings in social security so far, these cuts could not be delivered without inflicting unimaginable hardship on low-paid workers, children in poverty, disabled people or carers.
So for this Government, this empty Budget will be a fitting epitaph. What of this Secretary of State who wanted to take his place in history as the compassionate Conservative who reformed welfare? His time is up and his record is clear: major reforms undelivered or descending into costly chaos; food banks in every town and child poverty back on the rise; more and more spending on in-work benefits as more and more working people find their wages do not cover the rent. No wonder the OBR says that the Government are guilty of “optimism bias”.
One important factor in looking at low pay, child poverty and similar issues is that many people’s employment rights are eroded. We need only to look at City Link in Coventry to see that more than 1,000 people could not even get any redundancy pay because of the erosion of employment laws under this Government. That only adds to the poverty.
I thank my hon. Friend for that intervention. Of course, this Government have made it harder for people to access justice, too, through the cuts they have made there.
We have had five years of Tory welfare waste—and it is high time we put it behind us. The Secretary of State wanted universal credit to be his legacy, but it is being paid to less than 4% of those who were supposed to be receiving it a year ago. Instead, this Secretary of State will be remembered for the hundreds of thousands of disabled people hit by the bedroom tax; for the 1 million people forced to resort to a food bank to feed their families last year; for the 3 million low-paid working families who have been hit by this Government’s cuts to tax credits. We cannot afford another five years of this Tory Government.
This could have been a Budget to make work pay, with a plan to raise the national minimum wage to £8 an hour and measures to promote and incentivise the living wage. This could have been a Budget for mums and dads who want to work and earn more, with 25 hours a week of free child care for all working parents of three and four-year-olds and guaranteed wrap-around care for those with children at primary school. This could have been a Budget that gave relief to working families on low incomes, by scrapping the ill-conceived and unfair married couples tax allowance and using the money to introduce a 10p starting rate of income tax instead. This could have been a Budget to create more of the productive, well-paid jobs we need by backing entrepreneurs, small businesses and the growth industries of the future, with a cut to business rates, a proper British investment bank, and new powers devolved to every city and county region across the country.
This could have been a Budget to secure our NHS for the future, with a tax on properties worth more than £2 million to pay for the thousands more doctors, nurses, midwives and home care workers that our health service desperately needs. This could have been a Budget that began to right the wrongs of the past five years, by tackling the tax loopholes and reversing the tax giveaways that have benefited a few and by cancelling the cruel and unfair bedroom tax that is hitting disabled people so hard. All that is not just the Budget that this could have been; it is the Labour Budget that we can have and the Labour Budget that we will have if we elect a Labour Government in just 45 days’ time.
Several hon. Members
Order. Due to the large number of right hon. and hon. Members who wish to speak, there will be a time-limit for all Back-Bench speeches. There will be 10 minutes for the first two Back Benchers and five minutes for each remaining speech thereafter.
I congratulate my right hon. Friend the Chancellor, the Chief Secretary and the rest of the Treasury team on the Budget. I also congratulate them, even more emphatically, on the extraordinary record of the last five years which enabled a Budget of this kind to be presented. I think it must be acknowledged that we took over a worse situation in 2010 than any Chancellor had taken over since the war. It was even worse than the winter of discontent in 1979. I have not looked up the debate on that first Budget, but I believe that our present position would then have been beyond the wildest dreams of most Members on either side of the House. That is why this Budget gives us such a firm foundation for making further progress.
I also congratulate the Treasury team on the type of Budget that we have been given. I am relieved and delighted that it was not a gimmicky Budget, and that we did not see one of those foolish attempts to start buying votes with populist measures. Chancellors who are facing elections are always besieged with requests for them to do unbelievably silly things in the belief that the public will respond by voting for them, but the public are usually far more sensible than most of the journalists and most of the politicians, and have never responded to such measures in the past. Admittedly, both the right hon. Member for Edinburgh South West (Mr Darling) and I eschewed that type of Budget, because we were producing the last Budgets for Governments who on any sensible view were doomed to be defeated at the next election, but we did what has been done on this occasion. It is not a question of the electoral purpose; it is a question of the national interest. A sensible, competent, prudent Budget is in the national interest, and gives us the best opportunity to deliver what we hope to deliver over the next five years.
In her peroration, the hon. Member for Leeds West (Rachel Reeves) produced a great, long shopping list of things that could have been done in the Budget. “It could have been a Budget” for this, that and the other. Would not the best response to the hon. Lady be “It could have been a Budget to bankrupt Britain if Labour were in charge”?
I think that it would. Blatantly going around telling people that their pay will go up and that expenditure will be increased in a number of instantly popular ways, along with Labour’s earlier promises to start ordering companies to reduce the prices of sensitive products in highly volatile markets, is totally irresponsible. I hope that, were the population so foolish as to return a Labour Government in six weeks’ time, their policies would be hastily abandoned when they found themselves confronted with the realities of power.
In basic terms, this is a fiscally neutral Budget, which is plainly what was required. During Budget debates, we used to spend more time discussing the Budget judgment, and on this occasion that judgment was “fiscally neutral”, which I think has been widely applauded. That does not mean that the Budget is devoid of significant measures, including measures that will have a considerable impact on the rest of the human race—the ordinary men and women out there who have ordinary, moderate incomes. I am rather surprised that so little attention has been paid to the wider impact of another rise in personal allowances, which will not only have the welcome effect of taking the very low paid out of tax altogether, but will have a big impact on the great bulk of the population who are receiving perfectly ordinary pay. Some 27 million people will benefit, and average taxpayers will be better off by £900 million a year.
However, so that the Budget could remain fiscally neutral, that easing of the problems of the ordinary population has been balanced and financed by a rather eye-watering increase in the bank levy—which I think is a perfectly sensible way of raising money now that the banks are on their way to recovery—and a further reduction in tax relief on the pension contributions of not the very wealthy, but the better off. They can build up a pension pot of £1 million, which is not to be sneezed at; they have secure jobs, are making contributions, and have plans for their retirement. How that measure can be characterised—as the activities of this Government often are—as helping the rich at the expense of the poor and ignoring the demands of the ordinary man, I cannot imagine. It is the banks and the better off whose taxation has been raised, and the ordinary man and woman whose income tax has been lowered. That shows that free-market economics can be combined with a social conscience, which I have always believed is the best guiding principle for the Conservative party when it is running the macro-economic affairs of the country.
There are also further measures—which, again, will not create pleasure among all the rich—to deal with tax avoidance, of which a great deal has been made. On this occasion, they mostly involve corporate tax avoidance. My right hon. Friend the Chancellor has set a very ambitious target for the future—he is aiming to get another £5 billion out of tax avoidance—but he has already introduced a general tax avoidance measure in the Finance Act 2012, which has had an enormous impact on what we can do. We have agreements in the G20 and with Switzerland and Liechtenstein, and it is now impossible to hide money in the way that caused a scandal recently, when it was discovered that in 2007, under the last Government, thousands of British taxpayers were finding it easy to evade tax abroad. That is not favouring the rich. The present Government have done far more to tackle tax avoidance and evasion, and to make the raising of revenue more efficient, than any of their predecessors for 20 years or more, including the Government in which I served. Looking back, I have to concede that.
I do not have time to go into all the other measures that have been introduced, but ending the annuities racket and giving more flexibility to those who are saving for their retirement and their old age, so that they can make more use of their own resources, is a major social reform, on which I congratulate the Government and the Pensions Minister in particular. All that has been taken further in the Budget, together with our drive to help business. That is very important: we have to be pro-business. We are trying to revive the economy through lower corporate taxation and more extension of investment allowances, and by easing the tax burden on North sea oil. This Budget is an extremely responsible package, and it bodes well for the future if we are returned to office.
The debate has been dominated by extraordinary arguments about deficits: the size of deficits in the past, the size of deficits now, and where the deficit will go in future. Most of those arguments are based on strange interpretations of statistics or wild over-reliance on forecasts that are at least five years out, which has reduced the debate to a rather simplistic level. I agree—indeed, it is absolutely fundamental—that tackling the problems of debt and deficit is an essential pre-condition of putting the disasters of 10 years ago, and since, behind us, and paving the way for a modern, competitive economy in future.
Will the right hon. and learned Gentleman give way?
No, I will not, because, with great respect to the right hon. Gentleman, it would not be fair to the 30-odd other Members who wish to speak.
The hon. Member for Leeds West keeps criticising the Chancellor for not succeeding in eliminating the deficit entirely in the last five years. I am very glad that he did not do so. It is the same with all forecasts—[Interruption.] It is not possible to find a Chancellor who has produced forecasts that are three, four or five years out and which resemble what actually happened. It is necessary to take account of what is happening in the real world. Macro-economic policy has to be pragmatic.
I cannot tell what will happen over the next five years, and nor can any Opposition Member. Will China actually have a soft landing? What will happen to the oil market? Is the recovery in the United States really sustainable? Will the eurozone begin to achieve a bit more growth this year and beyond? What about difficult emerging markets like Brazil? The fact is that we are part of a globalised economy—quite apart from the impossibility of forecasting with exactitude what will happen here.
The Chancellor has cut the deficit substantially, and has moved nearer to getting it under control. Had he moved at a faster pace, heaven knows where we would be now, but we would be in a very difficult situation. Actually, I do not know whether the Labour party thinks that he should have moved faster or more slowly, but I am sure that it is not capable of maintaining progress. I hope that we can achieve a surplus in the next Parliament—and so, obviously, does the Chancellor—but that will depend, again, on whether circumstances permit us to do so. In five years’ time, we shall find out where we are.
Meanwhile, having that kind of responsibility is an essential precondition to raising our educational standards and continuing to tackle the skills shortages which always slow up the British economy—we are making great progress with apprenticeships, and we have much further to go. At last we are beginning to see business investment come through, with more confidence and, I hope, improved credit for businesses. That should pave the way for the productivity growth that we desperately require. We need infrastructure investment, which the Government are pressing on with. We need the EU reforms, which the Prime Minister was talking about earlier. If we can complete the single market—if we can extend it to services, if we can have a common energy market, if we can have a common market for the digital economy, if we can have an EU-US trade agreement—all that will reinforce the efforts of the Government to put this country in a much better position than any other to look optimistically to the future.
If we were in the world of traditional politics of 30 or 40 years ago, this Government would be on a walkover in this election, producing figures to die for after taking over a disaster. We still have to rise above the cynical comedy of today’s protest politics. This Budget shows that a competent Conservative Government can finish the job.
I continue to admire the humour and chutzpah of the right hon. and learned Member for Rushcliffe (Mr Clarke) in delivering that speech.
Thank you, Mr Deputy Speaker, for allowing me to make what I am pretty certain will be my last speech in this House; I am very grateful to you for that. I will not follow on from the comments of the right hon. and learned Gentleman, although I will return to some of the points he made, and nor will I follow on from what the Secretary of State for Work and Pensions said, except by saying this: I agree very much with what my hon. Friend the Member for Leeds West (Rachel Reeves) said in relation to annuities. Here we are, days away from people being able to choose what they do with their annuities, yet we hear that we are still to recruit the people who are going to be giving the advice—let alone training them and let alone members of the public being able to access that advice. The only thing the Secretary of State did was lay off some of the blame on to his Liberal Democrat colleague—so when the inevitabl