Commons Chamber

  House of Commons

Thursday 23 April 2009

The House met at half-past Ten o’clock

Prayers

[Mr. Speaker in the Chair]

Oral Answers to Questions

Energy and Climate Change

The Secretary of State was asked—

Clean Coal Technology

Mr. Stephen Hepburn (Jarrow) (Lab)
2. What assessment he has made of the future use of clean coal technology in England; and if he will make a statement.

The Minister of State, Department of Energy and Climate Change (Mr. Mike O'Brien)
Coal has a vital role in our energy mix, particularly in ensuring that we maintain our energy security. My right hon. Friend the Chancellor of the Exchequer yesterday outlined plans for a financial incentive to support up to four commercial-scale carbon capture and storage demonstration projects. A new framework for the development of clean coal will be announced very shortly.

Mr. Hepburn
I thank the Minister for that reply, but does that mean that the coal industry in this country has a clear long-term role in energy generation in the UK, and is that not marvellous news for coal mining and for UK industry on this, the 25th anniversary of the miners’ strike?

Mr. O'Brien
I hope that our announcement will indeed secure a long-term future for coal in this country. Today coal generates around a third of the electricity that we use annually, and in peak times particularly, such as when it was snowing in February, that can go up to 50 or 60 per cent. However, coal emits carbon and that is why carbon capture and storage is important. The CCS announcement is good news. A commercially viable CCS power station could secure the future of miners such as those at Daw Mill in my constituency for decades to come. There are still about 5,000 miners and 800 companies supplying the industry, many of which are small and medium-sized enterprises, so our announcement is, I hope, good news indeed.

Mr. Mike Weir (Angus) (SNP)
The Minister will be aware that under BETTA—the British electricity trading and transmission arrangements—clean coal generation in England may well have to be balanced by generation in Scotland. However, the new system being promoted by Ofgem and the National Grid Company for balancing charges may lead to huge new costs for Scottish generators and could undermine investment in clean coal. Will he look into that and ensure that no such charges are introduced?

Mr. O'Brien
I cannot give the hon. Gentleman a guarantee that no such charges will be introduced. However, I am very happy to meet him and discuss some of those issues, which are enormously important. We meet regularly with Ofgem and we want to ensure that discussions about such issues are conducted appropriately.

Andrew Mackinlay (Thurrock) (Lab)
Will one of the four clean coal pilot schemes to which my hon. and learned Friend referred be at Tilbury in Essex? If so, what sort of generation of jobs and skills, as well as energy savings, can my constituents expect?

Mr. O'Brien
I am afraid that I cannot indicate at this stage where each of the projects will be, but bids can be put in. My hon. Friend is a great advocate for his area and has been throughout his service in the House. I cannot indicate where the sites will be, but we will consider the projects in due course. We hope that we will be able to get a project in place and producing with carbon capture and storage between 2014 and 2016.

David Howarth (Cambridge) (LD)
Many of us who have long supported carbon capture and storage as the best option for an interim technology to get us through to a more renewable energy supply system will welcome the announcement. However, we have also long been worried about the Government’s dithering on the issue, which we suspect might have something to do with the fact that the closest rival of carbon capture and storage is nuclear. Will the Government now apologise to all those environmental campaigners who have been treated almost as if they were a terrorist threat over the past couple of years for putting forward a proposition that the Government now appear to be on the brink of accepting?

Mr. O'Brien
I am not quite sure what the hon. Gentleman means by various environmental campaigners, because people in the green movement have all sorts of views on the issue. There are some in the green movement who have been strong advocates of carbon capture and storage and there are others who have said that under no circumstances can we have coal power generation in this country. As with other groups of people, there are differences. However, we need electricity generation for the future in which we ensure a base load of nuclear and a clear component of renewables. The problem of intermittency needs to be addressed and that can be done by having the flexibility that gas and coal-powered generation with carbon capture and storage can provide.

David Taylor (North-West Leicestershire) (Lab/Co-op)
Given the prerequisite of carbon capture technology, I would welcome an expanded role for coal in power generation. The last Leicestershire miners work in the Daw Mill colliery in the Minister’s constituency and the coal is burnt at Ratcliffe power station just yards from the constituency boundary. Does he agree that there is a risk that an expanded role for coal will encourage UK Coal in its expansion of open-cast coal extraction, which is absolutely unacceptable almost wherever we find it? UK Coal’s vultures will be flying over the residual shallow seams left by the closure of deep mines and we cannot countenance that as the price of an expanded role for coal.

Mr. O'Brien
As my hon. Friend knows, the issues that surround planning and open-cast are matters for the Department for Communities and Local Government, but we want to ensure the future of miners—as he said, some of his constituents have worked at the colliery in my constituency at Daw Mill—and that deep mines have a long-term sustainable future. That depends on ensuring that we have CCS. As for open-cast, the Government and minerals planning guidance 3 have a presumption against it.

Gregory Barker (Bexhill and Battle) (Con)
The news that the Government have effectively abandoned their previously slow, embarrassingly unambitious and unfunded CCS competition and moved towards the vision for CCS that was articulated by my right hon. Friend the Member for Witney (Mr. Cameron) last year is welcome, but there is still huge scepticism that this is just another Labour smokescreen of spin and rhetoric. We are to have a statement shortly on CCS, but can the Minister answer one fundamental question? Can he guarantee that not a single new coal-fired power station will be built without CCS being up and running from day one? Or is this just another Labour “Sometime never; well into the future; not on my watch” strategy to get the Government through a difficult political period?

Mr. O'Brien
We can see that the Conservative party’s attitude towards the coal industry during the 1980s and early ’90s, when the Conservative Government closed the pits, remains in place. The vehemence with which the hon. Gentleman put his points demonstrates how miners in this country have faced the Conservative party’s opposition to their even being employed.

We will be making a statement within the hour—or very shortly; it depends on the first statement, so perhaps in two hours—in which we will set out in detail how we will be taking CCS forward. The hon. Gentleman’s claim that the Leader of the Opposition has been in some way an advocate for the coal industry is laughable. Ensuring that we have a low-carbon economy, with coal as a part of that, and that we generate electricity from coal using CCS, is a key component of our policy.

Nuclear Power

Mr. Adrian Bailey (West Bromwich, West) (Lab/Co-op)
3. What recent assessment he has made of the contribution made by nuclear power to a balanced energy mix; and if he will make a statement.

The Secretary of State for Energy and Climate Change (Edward Miliband)
In the nuclear White Paper, the Government made clear their view that new nuclear should have a role to play in the UK’s energy mix. Nuclear is a low-carbon energy source that can help address the twin challenges of tackling climate change and ensuring security of energy supply. We are taking active steps to facilitate early deployment of new nuclear build in the UK by increasing certainty for investors and removing unnecessary obstacles.

Mr. Bailey
I thank the Minister for his reply. Rightly, the Government are committed to a low-carbon future. Can he explain how the recent announcement of 11 potential sites for nuclear power stations will contribute to that low-carbon future?

Edward Miliband
My hon. Friend is right. It was significant that the announcement about the strategic siting assessment and the 11 sites was broadly welcomed. That is a sign of the way in which the debate on nuclear has changed. Many people who once had doubts about nuclear have changed their view in the light of the threat of climate change. The strategic siting assessment is important for taking forward our plans for new nuclear. It will be followed in the autumn by the national policy statement, which will have the strategic sites attached to it. This is genuinely a consultation. There will be a month for the public to register their views, which precedes the formal consultation—a proper 12-week consultation. So we want to listen to people’s views, but broadly the announcement seems to have been welcomed, including by those who live near the sites, which is a positive development for climate change and energy security.

Mr. Robert Goodwill (Scarborough and Whitby) (Con)
As vice-chairman of the all-party nuclear energy group, I certainly join in welcoming the decision, which is not before time. However, it often takes as long to get planning permission for a new nuclear power station as it takes to build it. Can the Secretary of State reassure me that the Government’s Planning Act 2008 will do what it says on the tin and get planning permission through rapidly and effectively?

Edward Miliband
I can give the hon. Gentleman that reassurance. It is only regrettable that the Opposition did not think it appropriate to support the Planning Act and its Infrastructure Planning Commission, which is designed precisely to do what he says should be on the tin—to speed up the development of new nuclear. Just to make it clear to the House, the process will involve the publication of a national policy statement in the autumn with the strategic sites attached to it. There will then be a period of consultation—including, I think, with a Select Committee. The plan is then to designate by the spring. So, all being well, we have tackled the big issue around planning and I hope that we have done so in a fair way that gives people a chance to air their views. I am pleased to hear the hon. Gentleman’s support for our plans on planning.

Mr. David Chaytor (Bury, North) (Lab)
Will the Secretary of State update the House on his plans for the nuclear waste repository? Will he tell us specifically where it is going to be, how much it is going to cost and whether it will be open before the first new nuclear power station is built?

Edward Miliband
I can update my hon. Friend. We should be honest about this: this is one of the two most difficult issues around nuclear. The other is to reassure people about safety. I can tell him that three councils have come forward with proposals for the site of the repository. Preparing the repository will be a long-term process, but those plans are on track and we are talking to those councils about the kind of financial help that will be required. This is important for existing and new nuclear waste. Another important point is that the cost of decommissioning will be borne by the companies; that is a very important part of the Energy Act 2008.

Martin Horwood (Cheltenham) (LD)
In answers to parliamentary questions, the Department has made it clear that the office for nuclear development now costs the taxpayer £72 million a year and has more than 60 staff. Answers to similar questions about the office for renewable energy deployment have been much less clear, however. Given the importance of renewables, will the Government reassure the House that the renewables office will be the same size as the nuclear office, if not bigger and better funded? Or is this simply the first concrete example of the Government’s commitment to new nuclear squeezing out resources for renewables?

Edward Miliband
Normally, the hon. Gentleman and I agree on a lot of issues, but we will have to agree to disagree on this one. In the debate on the low-carbon energy of the future, there is a danger that we might pick and choose between the technologies, when in fact we need all of them. We need renewables, new nuclear and clean fossil fuels. On the question of the size of the new office, I am sure that it will have the quality that it needs. The question about the renewables industry is completely right, and the announcements that my right hon. Friend the Chancellor made yesterday are significant for offshore wind, for the increase in the renewables obligation—which we intend to introduce—and for the funding for renewables. I can also reassure the hon. Gentleman that the office for renewable energy deployment—ORED—will be up and running and will make an important contribution to renewable development.

Mr. Andy Reed (Loughborough) (Lab/Co-op)
Following on from that answer, will my right hon. Friend give us the reassurance that microgeneration—particularly at domestic and community level—will form an important part of the mix? Will the same level of effort be put into microgeneration, given that it will surely play an important part in ensuring energy security?

Edward Miliband
I agree with my hon. Friend about this. Yesterday, the Chancellor made an additional £45 million available for microgeneration, to take us up to the introduction of the feed-in tariff in April 2010 and the renewable heat incentive in April 2011. Those are important steps to help the micro-power industry, from which we have had strong representations. Microgeneration can play an increasingly important role at individual and community level, and I hope that we are now putting in place the mechanisms that will support it.

Charles Hendry (Wealden) (Con)
We agree with the Secretary of State about the role for unsubsidised nuclear alongside renewables and gas and coal with carbon capture in a balanced energy mix, but does he recognise that the energy crunch will be with us by 2016 at the latest, as one third of our existing coal capacity is due to come offline before then, and that because of the Government’s failure to secure investment earlier, most of the new capacity, including all new nuclear, cannot come on-stream until well after that date? Does he understand why so many people believe that the Government’s failure to lead in carbon capture technology, their failure to secure adequate levels of gas storage and their over-reliance on onshore wind at the expense of other forms of renewables all mean that our energy security has been fundamentally compromised—and that without energy security, affordable and clean energy become much harder to achieve as well?

Edward Miliband
I have great respect for the hon. Gentleman, but it takes a real brass neck to say to us that we should have gone faster with new nuclear, when the Leader of the Opposition was opposing us on new nuclear and saying that it was a last resort; he was dragged, kicking and screaming, to support us on new nuclear. New nuclear will make an important contribution to our energy mix in 2017 and 2018. Carbon capture and storage can play an important role as well, as can renewables. We have plans in place to move towards low-carbon energy supply, and I am confident that we will meet them.

Wind Farms

Mr. Peter Bone (Wellingborough) (Con)
4. What recent assessment he has made of the cost-effectiveness of (a) onshore and (b) offshore wind farms in electricity generation.

The Minister of State, Department of Energy and Climate Change (Mr. Mike O'Brien)
Our onshore and offshore wind farms are cost-effective, large-scale renewable energy generators and they are supported through the renewables obligation. The Chancellor announced yesterday that we are looking to increase the renewables obligation certificate support for offshore wind.

Mr. Bone
I am grateful to the Minister, particularly for the last part of his response. There is a great deal of concern in my constituency about an onshore wind farm. Although offshore wind farms are to be welcomed, would the Government consider the possibility of a presumption that onshore wind farms should not be developed unless the local community wants them?

Mr. O'Brien
I cannot comment on Nun Wood farm in the hon. Gentleman’s constituency; obviously, that is part of the planning process. If we are serious about dealing with the creation of a low-carbon economy, we must have both onshore and offshore wind generation; we cannot do it with offshore alone. Therefore, onshore wind is a key component of making the changes that we need to make in the generation of energy to create a low-carbon economy. Obviously, each planning application will have to be considered on its merits in the appropriate way. We want to ensure the focus to get the investment so that wind provides the renewables generation that this country needs.

Mark Lazarowicz (Edinburgh, North and Leith) (Lab/Co-op)
If we are to take full advantage of both offshore and onshore wind, we need to ensure that the energy can reach the consumer. What steps are the Government taking to improve access to the grid for offshore and onshore wind and, in particular, what is the Government’s view of the proposals for a European super-grid?

Mr. O'Brien
The transmission access review has been looking at how we get access to the grid, because that is key to ensuring that we build up the capacity of wind generation, not only onshore but offshore. In the coming weeks, we hope to get agreement on about 1 GW of access, so we are in the process of working through with National Grid and Ofgem the need to ensure that the demands of the energy revolution—the low-carbon energy generation that we need to create—are met in access and transmission.

Sir Nicholas Winterton (Macclesfield) (Con)
I fully support the views expressed by my hon. Friend the Member for Wellingborough (Mr. Bone): there is huge opposition to onshore wind farms. What is the subsidy for every wind turbine erected in this country? Is it not true that there is a shortage of such turbines and that we have to import them, which is certainly not helpful to the country’s manufacturing base?

Mr. O'Brien
The hon. Gentleman is right: we do have to import most of our wind turbines. Although until recently wind turbines were made in the United Kingdom, they were exported to the United States. We are talking to a number of manufacturers with the intention of returning those jobs to the United Kingdom in due course, because that is important to us in the long term.

I should point out to the hon. Gentleman that while the Leader of the Opposition says that he is in favour of creating a low-carbon economy, Conservative Members of Parliament are going around the country constantly running down the whole issue of the need to ensure that we have a level of onshore wind generation. We cannot build that low-carbon economy without onshore wind.

Appropriate levels of support are provided, although the precise level of subsidy varies according to the value of the renewables obligation certificates.

Mr. Philip Hollobone (Kettering) (Con)
Surely it makes sense to put wind farms onshore in the windiest places, but according to the London Metropolitan business school, in 2007 the mean load factor of the 81 wind farms in England was just 23 per cent. In other words, they were working for less than a quarter of the time. How can that be an efficient use of resources?

Mr. O'Brien
The normal working level is about a third of the time. Intermittency has always been an issue in the build-up of the renewables economy, and, as the hon. Gentleman says, it must be addressed. We can reduce the intermittency problem by ensuring that, once it is switched on, nuclear generation has a reliable base load, and also by building renewables, including wind. We need to deal with both intermittency and the variability of demand and supply. In the case of gas and coal, that can be done through carbon capture and storage.

Broadly speaking, we need to create the right level of generation, but it is also important for us to deal with intermittency. The decision to locate wind farms in areas where they will generate must be made by the companies that fund them.

Aviation

Norman Baker (Lewes) (LD)
5. What recent discussions he has had with the Secretary of State for Transport on managing the effects on climate change of the Government’s proposals for the aviation market.

The Secretary of State for Energy and Climate Change (Edward Miliband)
Tackling the impact of climate change on aviation is a key priority. That is why we led the way in ensuring that the EU emissions trading scheme would cover aviation emissions for the first time from 2012. It is also why we are the first Government in the world to make a commitment to returning aviation emissions to their current levels by 2050. We are also striving to ensure that international aviation is part of global climate change agreements.

Norman Baker
The Secretary of State has made the courageous and correct decision to set a target of 80 per cent. for carbon reduction emissions by 2050. Unfortunately, however, if aviation is to return its emissions to their current levels by that date, all other sectors will be required to make an 89 per cent. cut to cater for it. Given that fact, given the entirely unnecessary expansion of Heathrow, and given that transport is the only sector in which carbon emissions have increased since 1990, is it not time that the Secretary of State had a word with the Secretary of State for Transport and told him to stop derailing his climate change strategy?

Edward Miliband
Surprisingly enough, I do not see it that way. [Hon. Members: “Yes, you do!”] Let us not turn this into a pantomime, but no, I don’t.

There is a respectable position with which I disagree: the hon. Gentleman’s position, which is that we should make across-the-board cuts of 80 per cent. in every sector. In the case of aviation, that would mean returning to 1974 flying levels. I do not think Members could truthfully say that we have those levels now.

As was pointed out by the Committee on Climate Change itself, when it comes to decarbonisation it is inevitable that bigger cuts will be possible in some sectors than in others. I believe that we have been incredibly forward-thinking in making the ambitious commitment, on which the committee will advise us by the end of the year, to return aviation emissions to their current levels—to enable aviation to consume its own smoke, as it were.

Of course there must be a price for carbon emissions from aviation. That is what the EU emissions trading strategy does. I am afraid that the hon. Gentleman and I will have to agree to disagree on this matter.

Mr. David Evennett (Bexleyheath and Crayford) (Con)
I noted the Secretary of State’s comments on this matter, but as travelling by air causes 10 times more pollution than travelling by train, why are the Government still intent on increasing aviation capacity, such as through the extension of Heathrow? Surely we should be looking at a shift from plane to train for short-haul journeys?

Edward Miliband
I agree with the hon. Gentleman on the issue of domestic flights; we should do all we can on that, which is why we have announced plans for high-speed rail. Let me make this point to him, however, which the Heathrow debate raises: even after the recession, and even after putting a price on carbon, passenger demand in the UK is expected to double in the next 20 years, and as we know, the world is getting closer together, not further apart. I cannot honestly say to the hon. Gentleman that the right way forward is to have no expansion of aviation. Indeed, in the debate on this issue the Conservative Front-Bench team said, revealingly, that they were in favour of aviation expansion in the south-east, but—this is the problem, and we suspect a bit of opportunism here—not at Heathrow, not at Gatwick and not at Stansted. I therefore do not quite know where the Conservatives want the expansion. We have a very genuine and thought-through position, unlike the Conservative party.

Nuclear Development Forum

Mr. Mark Hendrick (Preston) (Lab/Co-op)
6. What recent representations he has received on the work of the nuclear development forum; and if he will make a statement.

The Minister of State, Department of Energy and Climate Change (Mr. Mike O'Brien)
We have received representations from the NDF on a range of issues, but not specifically on the NDF itself.

Mr. Hendrick
My hon. and learned Friend will be aware of the plethora of measures introduced in yesterday’s Budget to deal with the growing problem of climate change. Nuclear development is very important, because nuclear power can play a big role in the battle against climate change. It is safe and efficient, and it is now a crucial tool in that battle. There is a whole industry out there that this country needs to develop, particularly in the area of nuclear fuels—and I am proud to be able to say that Westinghouse, which can develop such fuels, is located close to my constituency at Springfields. When will the Government get their act together and develop the technologies that we need to combat climate change?

Mr. O'Brien
I hope that the Government have set out very clearly how we are going to create a low-carbon economy. We need to develop the base load of nuclear, so that we have new nuclear power stations to replace some of those that will come off-stream in the coming decade and a half. We also need to ensure that we have the renewables, particularly wind generated both onshore and offshore. Beyond that, we need to ensure that, with carbon capture and storage, we have the flexibility to deal with problems of variability of demand and intermittency, and that will come from coal and gas-fired power stations. So there is a clear vision of the way forward for energy generation in this country that will move us towards a low-carbon economy, and with the commitment to reduce our emissions by 80 per cent. by 2050, we are on a clear trajectory to ensure that we meet our climate change needs.

Fuel-poor Households

John Howell (Henley) (Con)
7. What estimate he has made of the change in the number of fuel-poor households between 2006 and 2009.

The Secretary of State for Energy and Climate Change (Edward Miliband)
Between 2005 and 2006, the latest year for which figures are available, the number in fuel poverty increased to 3.5 million—down from 6.5 million in 1997. We are determined to do all we can, through measures to improve housing and increase the incomes of the most vulnerable and through proper regulation in the energy market, to tackle fuel poverty.

John Howell
Given that the term “fuel poverty” does not seem to have been used once in yesterday’s Budget statement, can the Secretary of State confirm that Warm Front will be sufficient to address Age Concern’s assessment of the Budget that its failure to tackle fuel poverty will continue to leave more pensioners out in the cold?

Edward Miliband
I disagree with the hon. Gentleman—and, of course, the Conservative party cannot support any of the measures that we took on public spending, because as we know it is completely opposed to increasing public spending at this time. The measures that we took on housing, including specifically £100 million for energy efficiency in the social housing sector, will help precisely some of the most vulnerable people in our country. My hon. Friend the Under-Secretary of State for Energy and Climate Change will announce in a written statement this morning an increase in the maximum Warm Front standard grant from £2,700 to £3,500. I think that will be widely welcomed, alongside other improvements in Warm Front, because it is helping some of the most vulnerable people in our society. I am very proud of the record of what we are doing to help some of the most vulnerable people in our country who are facing fuel poverty.

Derek Twigg (Halton) (Lab)
I welcome the measures that my right hon. Friend is taking to help people with energy efficiency in the home, but many people in recent weeks have received some of the largest fuel bills of their lives. What discussions has he been having with the energy companies to try to ensure that they treat people fairly and well and take account of the difficult economic situation that people currently face?

Edward Miliband
My hon. Friend is right about this, and we are discussing with the energy companies how to ensure that people, particularly those in difficulty, are treated properly. I am also pleased that Ofgem is changing the law on pre-payment meters and the unfair pricing that was taking place. I have said from the time when I came into this job that we wanted the quickest change possible in terms of outlawing that unfair pricing, and that is what is happening. We want people to be assured that the kind of abuses occurring in relation to pre-payment meters will not continue.

Mr. Hugo Swire (East Devon) (Con)
The reason why there was no mention of fuel poverty in yesterday’s Budget is that the Centre for Sustainable Energy estimates that fuel poverty has

“at the very least doubled since 2003.”

So I suspect that the Labour party will not be mentioning it in its manifesto either.

My constituency is in Devon, where 21 wards, including Exmouth Littleham Urban, fall within the worst 21 per cent. of wards in England. However, the real problem lies outside the main town centres and urban areas; it is to be found in the rural areas, where Warm Front is less effective because of the lack of accessibility to gas boilers and the problems with cavity wall insulation. Those things are so typical of the kind of houses that exist in rural areas in my constituency. What can the Secretary of State do to ensure that the disguised fuel poverty in rural areas resulting from Warm Front’s failing in that respect can be addressed urgently?

Edward Miliband
The hon. Gentleman makes a good point in the second half of his question, if not in the first. On his first point, as I said, fuel poverty has increased because energy prices have increased, but since 2002, some 5 million houses have been insulated under our programmes. Our record on fuel poverty and what we have managed to do through housing and income are not matched by the previous Government or, indeed, by other previous Governments. He knows very well that fuel poverty would be far higher if we had not taken those measures, which have cost lots of money and which the Conservative party opposes.

On the second part of the hon. Gentleman’s question, with which I am more sympathetic, he is right to say that people off the gas grid face particular challenges. I think that he will see from this morning’s announcements that the non-standard grant level has also been increased. I hope that that will help people who are facing the circumstances that he describes. I also hope that if he has further concerns following the announcement, he will take them up with the Minister in charge of Warm Front.

Greg Clark (Tunbridge Wells) (Con)
The Secretary of State knows that the coverage of the Warm Front scheme is limited, but does he accept that for most homes investing in energy efficiency saves money on fuel bills?

Edward Miliband
I do, which is why we unveiled plans in February for “pay as you save” insulation, whereby people will be able to spread the costs of energy efficiency measures over a number of years; it will not be linked to the person in the house but to the house itself, so that the costs can be spread over 20 years or so. Therefore, part of the savings from the energy bills will be able to be used to fund to kind of insulation that we need. We have very ambitious plans for 7 million houses to have whole-house refurbishment by 2020 and all houses to have it by 2030. Unlike the Conservative party’s plans, those are costed plans; they have been worked through and they will work.

Greg Clark
Yesterday, Greenpeace described the Secretary of State’s plans as strikingly lacking in ambition. If he accepts that savings can be made through investment in insulation, why, when households will face higher tax bills for years to come, is he resistant to our policy, which would give every home in the country an entitlement to £6,500-worth of immediate energy efficiency improvements, paid for from the savings that people make on their fuel bills? Why is he resisting that?

Edward Miliband
I will explain this to the hon. Gentleman. My hon. Friend the Under-Secretary of State for Energy and Climate Change wrote him a letter—he may have replied, but I am not aware of his reply. His proposal is that £6,500 will be available to every household in the country. That would cost £170 billion up front. As far as I can see, he has no idea where that £170 billion will come from and how he will raise it. I hope that he comes forward with that. I look forward to his having interesting discussions with the shadow Chancellor about how £170 billion of funding will be provided. I think it is the largest uncosted commitment made by the Conservative party, but of course it is not the only uncosted commitment that the Conservatives have made, and it shows that they simply cannot be trusted with the nation’s finances.

Topical Questions

Laura Moffatt (Crawley) (Lab)
T1.  If he will make a statement on his departmental responsibilities.

The Secretary of State for Energy and Climate Change (Edward Miliband)
Yesterday’s Budget saw a series of measures to help tackle climate change and create the low-carbon jobs of the future, including action on carbon capture and storage, renewables and energy efficiency. It was also the first Budget to unveil legally binding carbon budgets, whereby the UK has pledged a 34 per cent. reduction in emissions by 2020. It underlines our commitment to domestic action by setting a zero credit limit in the first budget period up to 2012.

Laura Moffatt
I am delighted and very grateful to hear that carbon capture and storage will be part of our future fuel security into the next decade. Will companies such as Doosan Babcock, which have pioneered this work and have put their necks out to ensure that this technology is available, be fully consulted as we move forward with these excellent technologies?

Edward Miliband
My hon. Friend makes an important point. I have had a couple of meetings with Doosan Babcock, which is pioneering some of the most important technology in this area. As I shall say in my statement later and as the Chancellor made clear in the Budget yesterday, the task facing us is to trial as many of the technologies as possible. CCS is at an early stage. We all think that it will be a big hope for the future in terms of clean coal, but we know that we need all the technologies to be developed, including post-combustion, pre-combustion and a range of technologies. That is what my right hon. Friend the Chancellor’s announcements yesterday are designed to achieve.

Mr. Philip Dunne (Ludlow) (Con)
T2.  At a public inquiry last week on a potential biomass plant at Bishop’s Castle in my constituency, one of the objectors suggested that the Environment Agency is now indicating that the carbon emissions from electricity generated by biomass plants are greater than those generated by fossil fuel plants. Is that the Government’s view?

The Minister of State, Department of Energy and Climate Change (Mr. Mike O’Brien)
I have not heard that particular suggestion before, but I shall certainly consult the Environment Agency to see whether it has said that and, if so, what the basis for making such a claim is.

David Taylor (North-West Leicestershire) (Lab/Co-op)
T8.  I welcome the announcement of the rise in the Warm Front grant to £3,500. That will certainly help the off-the-mains people, such as my constituent Jon Kirkman, who has had a very poor service from Eaga in recent times. Has the Secretary of State had an opportunity to assess the green credentials of the scrappage scheme announced in the Budget yesterday, bearing in mind the fact that 20 per cent. of carbon emissions during a car’s life are associated with its manufacture? The logical way to approach the issue would be to encourage people to keep cars longer, not least because the average car in the UK fleet is less than five years old. It is a green coat of paint—

Mr. Speaker
Order.

Mr. O’Brien
I am very grateful to you, Mr. Speaker.

Older cars tend to emit more products into the atmosphere, as a result of which they are greater polluters. The aim is to get some of the much more fuel-efficient cars on the road. The newer cars not only consume far less fuel, by and large, but emit less into the atmosphere. If we can get the newer cars, rather than the older ones, on the road, we will reduce the problems that we have with atmospheric damage.

Jo Swinson (East Dunbartonshire) (LD)
T3.  Yesterday’s Budget was a missed opportunity to invest in green measures and to stimulate the economy. The Government offered us £1.4 billion, but the Committee on Climate Change has estimated that £15 billion a year needs to be spent on green measures and this week Lord Stern said that it should be as much as £20 billion. Why are the Government rejecting the advice of their own experts?

Edward Miliband
We are not rejecting the advice of our experts. One very important point is that we already have a huge amount of investment going into green technology in this country. For example, the renewables obligation will mean that about £100 billion will go into green investment between now and 2020. Yesterday, my right hon. Friend the Chancellor added to that with what he did on the renewables obligation, on carbon capture and storage and in raising finance from elsewhere, such as through the European Investment Bank and other sources. I do not accept the hon. Lady’s portrayal of what we did yesterday. It is also worth adding that, as I said earlier, the carbon budgets aspect of yesterday’s Budget was a world first.

Mr. Eric Illsley (Barnsley, Central) (Lab)
Returning to carbon capture and storage, may I urge my right hon. Friend to address the issue with some speed, regardless of which technology is used? If we decide to embrace the retrofitting of carbon capture and storage to existing coal-fired power stations, we will have to do so before they are decommissioned in 2015.

Edward Miliband
I will be addressing the matter with some speed, in an hour or so. My hon. Friend is right: there is urgency about this, but there is also urgency to make sure that we have a funded mechanism to ensure that carbon capture and storage happens. That was made possible by my right hon. Friend the Chancellor’s announcements yesterday, and that is why I will make a statement later today.

Andrew Selous (South-West Bedfordshire) (Con)
T4.  In October last year, when oil was around $70 a barrel, a litre of unleaded petrol cost the motorist about £1.07, yet in June 2007, when oil was around $71 dollars a barrel, a litre of unleaded cost 97p. Does that not indicate a degree of market failure among some of the major petrol retailers? Why have the Government not instructed the Competition Commission to instigate an inquiry to make sure that the beleaguered motorist is treated fairly, not least because the motorist was clobbered again in the Budget yesterday? Does the Minister not realise that many people have no choice but to use their car?

Mr. Mike O’Brien
It is the case, of course, that the escalator was introduced by a Conservative Government. But let us not go there; let us instead deal with the real issue of the price of fuel for cars. The price of petrol and diesel spiked last year; that was a substantial burden for the motorist, but the price has gone down sharply. It is dependent, obviously, on the overall world economic situation. The demand for oil responds very quickly to global financial circumstances and, as a result, prices have fallen, but it is interesting that they have started to rise again, albeit not to a substantial extent. On the price of oil there is not only a need to ensure that we are able to get out of the recession without it spiking too high; we also need to sustain investment in the oil and gas industry, particularly—from the UK’s point of view—in the North sea.

John Mann (Bassetlaw) (Lab)
What support are the Government giving to the reopening of Harworth deep-mine colliery in my constituency?

Mr. O’Brien
The Government are working, and are in discussions, to ensure that we can encourage the process of reopening Harworth, but there are still further quite detailed discussions to be had.

Ann Winterton (Congleton) (Con)
T6.  Can we not have a more balanced discussion on climate change? We are told so often that the north pole is melting, yet Arctic ice has reached a maximum area this winter, and the British Antarctic Survey has confirmed that over the past 30 years, the area of sea ice around the continent has expanded. In fact, the south pole has experienced significant cooling in the past 30 years. Why do we not hear the facts, so that we can make up our mind about what is happening?

Edward Miliband
I am all for unconventional thinking, but I say to the hon. Lady that on these sorts of questions, it is best to trust the science. [Interruption.] If she will let me finish my answer, I can point out that the overwhelming scientific consensus is that climate change is real, is happening, and is man-made. I really worry about an approach that says, “We can leave all this to one side, because perhaps it is not happening”, as that is not what the scientists are telling us. To take one year, or one fact, and say that somehow it shows that climate change is not happening is precisely what the scientists tell us that we must not do. We must look at the trend over 20 or 30 years, and that shows unequivocally that climate change is happening.

Leader of the House

The Leader of the House was asked—

Parliamentary Scrutiny

Mr. Peter Bone (Wellingborough) (Con)
1. How many Report stages of Bills there were in the 2007-08 Session; and in what proportion of these all selected amendments were debated.

The Deputy Leader of the House of Commons (Chris Bryant)
There were 27 Report stages in 2007-08, of which 24 were on Government Bills. In seven of those cases, all the groups of selected amendments were debated. That represents a proportion of about one in four.

Mr. Bone
The Deputy Leader of the House was a well-respected and highly regarded parliamentarian before he was plucked from the Back Benches and put on to the Front Bench. Not many people are listening today, so will he say what his personal view is? It really is not good enough—scrutiny is not great enough and the Government are failing.

Chris Bryant
I am grateful to the hon. Gentleman for the kind comments he made. On Shakespeare’s birthday, perhaps I could say that some have greatness thrust upon them.

All I can say to the hon. Gentleman is that there is no difference between my Back-Bench view and my Front-Bench view. I believe that many Members confuse the difference between Committee stage and Report stage. Many members of the Procedure Committee have told me that they would much prefer a system involving time limits on speeches on Report, although I am not sure that that is the right way to go. We would like to consider all amendments, but as he perfectly well knows, many amendments tabled on Report are a response to Committee requests from Opposition Members, so I think that that shows the system is working.

Mr. David Heath (Somerton and Frome) (LD)
But it transparently is not working. Only a couple of months ago, Mr. Speaker, you intervened to allow a vote on a matter that a lot of Members felt was important, without any discussion at all. Does that not in itself illustrate the fact that we are failing to debate matters that Members of the House think are important, and instead conforming to a timetable devised by the Government Whips that reflects the Government’s interests and not those of Back Benchers? Is it not the duty of the Deputy Leader of the House and the Leader of the House to ensure that matters that Members want to debate on Report are debated properly?

Chris Bryant
My right hon. and learned Friend the Leader of the House and I try our level best to make sure that there is adequate time for all the subjects that all Members want to debate. Just because one Member wants to debate one issue does not necessarily mean that he wants to prevent other people from debating other issues. In particular, the hon. Gentleman knows very well that on the day to which he refers, Members from the Government Whips’ office and I, and Members from his own team, were in lengthy discussions about how we could make sure that we had proper debate of every single item. Furthermore, on that Bill, there were two days for Report. My right hon. and learned Friend and I are keen to try to make sure that happens on every occasion, but we will not be able to achieve perfection.

Mr. Shailesh Vara (North-West Cambridgeshire) (Con)
In her very first business questions on 5 July 2007, at Hansard column 1091, the Leader of the House said that she was very keen to ensure that Back Benchers’ rights were protected and that there was proper scrutiny of legislation. However, as we have just heard, that simply is not happening, so even now, will the Deputy Leader of the House give an assurance that his right hon. and learned Friend’s original pledge will be honoured? Perhaps the right hon. and learned Lady could start by ensuring that instead of curtailing legislation she curtails our ever-lengthening summer recess.

Chris Bryant
I remember my right hon. and learned Friend’s comments on her first day as Leader of the House, and I know from every single week that she has been in that post that she has been trying to make sure that we have adequate debate on every single amendment. It is not always perfection. We strive, and we have constant discussions. If Members are ever unhappy with the process all they need to do is to come round and talk to my right hon. and learned Friend or me to see whether there are ways of making more space and time available. As the hon. Gentleman knows, quite often the discussions between the usual channels are not necessarily reflected in the comments that are then made from the Opposition Front Bench.

House of Commons Commission

The hon. Member for North Devon, representing the House of Commons Commission, was asked—

Employment Contracts

David Taylor (North-West Leicestershire) (Lab/Co-op)
2. What recent discussions the House of Commons Commission has had with the trade union representing hon. Members’ staff on the development of a basic employment contract for such staff.

Nick Harvey (North Devon)
The House of Commons Commission has had no recent discussions with trade unions or staff associations on the basic employment contract for Members’ staff. The Commission and the House are not the employer of Members’ staff; each Member is an employer in his or her own right. However, it is a condition of drawing public funds to employ staff that Members use standard contracts, job descriptions and pay scales.

David Taylor
Pending the announced review of employment arrangements for Members’ staff, the Green Book says that a standard contract must be used, and in practice MPs use that contract as is. The present contract represents the lowest common denominator in employment standards and is poor compared, for example, with those held by civil servants doing an equivalent job. When will the House recognise the staff union Unite so that staff themselves can have a say in improving the standard contract and other terms and conditions?

Nick Harvey
If hon. Members, their staff or, indeed, trade unions or associations to which the staff belong wish to make representations about the basic contract, they are certainly welcome to make them to the Committee on Members’ Allowances, which has responsibility for the contract. The issue of recognition of the union goes back to my point that the House is not the employer of Members’ staff, and because the House is not the employer, it is not in a position to recognise the union for collective bargaining purposes. However, as the hon. Gentleman knows, staffing arrangements will be voted on next week, and perhaps there will be a different situation thereafter.

Hugh Bayley (City of York) (Lab)
Given the discussions that we will have next week, will the Commission consider the feasibility of extending to Members’ staff the entitlement to join the House pension scheme? One member of my staff has worked for me for 16 years and is on one of the higher grades for Members’ staff. As a result of paying into the money purchase pension scheme that is available to Members’ staff, that employee would—the last time I checked—receive a pension of just £2,200 a year. I do not think that that is either satisfactory or a decent way to treat our staff, who are just as important to us Members discharging our duties as the staff of the House are. Will the hon. Gentleman ask the Commission to look at that very important issue?

Nick Harvey
As I have already indicated, this is a matter about which the hon. Gentleman, staff or anybody else is welcome to make representations to the Committee on Members’ Allowances. In the event that the arrangements should change after next week’s debate, the issue could be looked at, but as far as I am aware, as long as staff are employed by Members, there is no prospect of their joining the House pension scheme, because it is not available to non-employees of the House.

Sir Patrick Cormack (South Staffordshire) (Con)
Is the hon. Gentleman aware that many people feel it is crucial that Members should continue to employ staff directly? It is wholly right and proper that they should be paid via the Department of Resources, as they are, and that they should have proper contracts that are lodged with that Department, but will he do all he can with his fellow Commissioners to ensure that we do not move to this central employment by the House?

Nick Harvey
This is a matter that I understand the House will have a chance to vote on next week, and the hon. Gentleman and others will have their chance to make their view known then.

Leader of the House

The Leader of the House was asked—

Representation of Women

Jo Swinson (East Dunbartonshire) (LD)
3. If she will make arrangements for the House to mark anniversaries of significant historical events which led to increases in the representation of women in Parliament.

The Deputy Leader of the House of Commons (Chris Bryant)
We are proud of every step that has been taken to increase the representation of women in Parliament, which is why we celebrated last year the 90th anniversary of a woman’s right to stand. We shall shortly introduce the equality Bill, and the Speaker’s Conference is already considering the issue of representation of women in the House. We very much hope that these events will become similarly important landmarks that Members will want to celebrate in 50 years’ time.

Jo Swinson
I thank the Deputy Leader of the House for that reply. One hundred years ago on Monday, suffragettes chained themselves to statues in St. Stephen’s hall, and to remove those women, the statues had to be broken. In fact, one can still see a piece of that history today, as the repairs form part of the parliamentary tour. How might we improve and better use such anniversaries to highlight the history of women’s representation and, most importantly, to encourage more women to become involved in politics?

Chris Bryant
The hon. Lady ends with the most important point, which is how we ensure that more women want to come to Parliament and have the opportunity to represent a constituency in the House. We could celebrate many more events. For instance, next week is the 80th anniversary of the first woman Cabinet member taking her post; Margaret Bondfield was, appropriately enough, the Minister for Labour; of course, she was a Labour Minister. We are also delighted that it is our side of the House that has produced the first elected black woman MP. [Interruption.] If the hon. Ladies want a commemoration of the first woman Prime Minister, I suspect that it will not be happening in the Rhondda.

Mr. Hugo Swire (East Devon) (Con)
There is a statue of her in the Lobby.

Chris Bryant
As the hon. Gentleman, who chairs the Advisory Committee on Works of Art, points out, there is a very fine—if rather frightening—statue in the Lobby. I can assure him that if it were in the Rhondda, it would not get the same reception as it gets from Opposition Members.

Commons Business Committee

Sir Nicholas Winterton (Macclesfield) (Con)
5. What recent representations she has received on establishing a Commons business Committee; and if she will make a statement.

The Deputy Leader of the House of Commons (Chris Bryant)
We have intermittent representations on this issue, including, very regularly, from the hon. Gentleman. The last time the House considered a legislative business Committee, however, it rejected the idea.

Sir Nicholas Winterton
Is the Deputy Leader of the House aware that there is a group in the House called Parliament First, which is fully representative of all parties? Its members are very senior and experienced, and they believe that the only way in which the House can meet the aspirations of the Prime Minister, who believes that the House should be the centre of our democratic procedures, is to have a business Committee representative of Back Benchers so that the House can attain some independence from the Executive, who currently dominate the House to the disadvantage of democracy.

Chris Bryant
I do know of the group to which the hon. Gentleman refers. Indeed, the Members on it are so senior that I try not to meddle with them too often. However, all that glisters is not gold. If we introduced a business Committee, I think that the hon. Gentleman would find that we would lose a lot of the flexibility that we have at present, which is enjoyed by Members on all sides of the House—

Sir Nicholas Winterton
Both sides.

Chris Bryant
On both sides of the House. In addition, under our current arrangements, Standing Orders limit the Government in significant ways—for instance, they ensure that there are 20 Opposition days a year. Furthermore, after both the Budget and the Queen’s Speech there are five days of debate in which the topic is decided by the Opposition, not the Government. That is more flexible and a better system.

Delegated Legislation

Norman Baker (Lewes) (LD)
6. What recent consideration she has given to the effectiveness of the House’s procedures for scrutinising delegated legislation.

The Deputy Leader of the House of Commons (Chris Bryant)
As I am sure the hon. Gentleman knows, delegated legislation is subject to a number of different procedures, usually depending on the provisions in its parent Act. My right hon. and learned Friend the Leader of the House and I continue to monitor the effectiveness of all the House’s procedures.

Norman Baker
The Deputy Leader of the House will know that a great deal of legislation goes through, necessarily, by statutory instrument, but he will also be aware that it is impossible to amend such statutory instruments; we are given a “take it or leave it” option when such an instrument is put before a Committee upstairs in the Committee corridor. Does he not agree that legislation might be better if amendments to statutory instruments were permitted during such consideration?

Chris Bryant
Again, this is a proposal that seems attractive but which in the end I do not think is a good idea. As Lord Rippon said in the Hansard Society commission back in 1992, an amendable statutory instrument would be very like a Bill, and all the advantages of the greater flexibility of delegated legislation would be lost. The truth of the matter is that if the Government want to provide for a full legislative process, with amendments possible, it should be primary, not secondary, legislation that is being brought forward.

 Business of the House

11:33:00

Alan Duncan (Rutland and Melton) (Con)
May I invite the Leader of the House to give us the forthcoming parliamentary business?

The Leader of the House of Commons (Ms Harriet Harman)
The business for next week will be as follows:

Monday 27 April—Continuation of the Budget debate.

Tuesday 28 April—Conclusion of the Budget debate.

Wednesday 29 April—Opposition Day [10th Allotted Day]. There will be a debate entitled “The Erosion of Civil Liberties and Freedoms” followed by a debate on the situation in Sri Lanka. Both debates will arise on a Liberal Democrat motion.

Thursday 30 April—House business.

The provisional business for the week commencing 4 May will include:

Monday 4 May—The House will not be sitting.

Tuesday 5 May—Remaining stages of the Apprenticeships, Skills, Children and Learning Bill.

Wednesday 6 May—Second Reading of the Finance Bill.

Thursday 7 May—Topical debate: subject to be announced followed by a general debate on the Intelligence and Security Committee Annual Report 2007-08.

Friday 8 May—Private Members’ Bills.

Alan Duncan
I thank the right hon. and learned Lady for giving us the business.

Most of us in the House will be pleased that the case of the arrest of my hon. Friend the Member for Ashford (Damian Green) has now been satisfactorily resolved. Even though the issue became rather heated, surely we should now stand back and study the implications of what happened. May I therefore ask the Leader of the House to reflect on early-day motion 1307?

[That this House notes the statement of the Director of Public Prosecutions on 16 April 2009 announcing his decision that no charges would be brought against the hon. Member for Ashford in relation to the documents leaked and stating that, ‘Mr Green's purpose in using the documents was apparently to hold the Government to account'; and calls for the House to be given the opportunity to debate a motion to refer the matter to the Committee on Standards and Privileges.]

Will the Leader of the House support the motion that was originally tabled on the Order Paper before the Easter recess to ensure that the House can refer this matter to the Committee on Standards and Privileges as soon as possible? Now is the best time to learn the lessons of this affair so that all the confusion can be cleared up for the future. It is no good her saying that the Attorney-General’s opinion was that there was no confusion, because there was. There is a perfectly good process available to us, and we should invoke it; will she confirm that she will co-operate in doing so?

We have still not had a satisfactory report on what the Leader of the House intends to do about the policing of Parliament square. On Monday, the road was shut all day. When will she tell the House how she intends to stop Parliament square becoming a site of permanent protest?

May we, perhaps rather esoterically, have a debate on road signs? We have heard this week that the Government intend to ram through their proposals on reducing national speed limits. Can we have the right hon. and learned Lady’s absolute guarantee that this will not lead to a new forest of pointless metal poles and bossy signs that completely wreck the landscape of our streets? Will she ensure that Government policy is designed to reduce street clutter as much as to reduce accidents?

More importantly, may we have a statement and a full explanation from the Secretary of State for Children, Schools and Families? Yesterday, in highly significant evidence to the departmental Select Committee, Dr. Ken Boston, the former head of the Qualifications and Curriculum Authority, accused the Schools Secretary of smearing his name by, as he put it, “sexing up” evidence and dodging the blame by presenting “untrue and false evidence” to last year’s inquiry into the SATS fiasco.

Mr. Elliot Morley (Scunthorpe) (Lab)
I hope you have told him.

Alan Duncan
This is the same Minister who is implicated in much of the propaganda and, indeed, economic collapse associated with his Prime Minister—so much so that the poor man has even become—

Mr. Speaker
Order. I say very gently to the hon. Gentleman that he cannot criticise a Minister in this way. Criticism of any hon. Member of this House has to be with a substantive motion of the House. He has made the point, so perhaps he can move on to another matter.

Alan Duncan
I will move on, Mr. Speaker, but I was responding to a sedentary intervention. I assure you that I had notified the Secretary of State of what I intended to do, but I hear what you say—it is understood. I would certainly say, however, that he should explain himself at some stage about what has happened and is being seen on television and read about in our press.

May we have a debate on the guarding of Budget secrets? By yesterday morning, we were already aware of several of the Chancellor’s headline schemes, including the car scrappage and HomeBuy initiatives. Is there to be an inquiry into these indiscretions? Obviously, it is unthinkable that Ministers would ever have passed those details to journalists themselves, but will the Leader of the House deplore such leaks and urge an investigation?

On Tuesday, the Prime Minister published his proposals for reforming our system of expenses. If I may be a little personal, may I ask whether the right hon. and learned Lady feels sufficiently appreciated by the Prime Minister? Does she feel that she can still be the guardian of Parliament’s voice in the Cabinet? Is it not clear that she was completely bypassed by No. 10 and then bounced into making a written ministerial statement, as the presentable face of Government, after the Prime Minister’s deeply weird statement on YouTube? Is it really true that No. 10 has said that Labour Members who do not vote for the Prime Minister’s proposals will be deselected? How can she possibly defend his barmy plan for an automatic daily allowance, for which no receipts will need to be presented, as an improvement on what we have already?

May I take this opportunity to wish the right hon. and learned Lady a happy St. George’s day? I hope that I am not too much of a dragon against this maiden in distress. In the spirit of St. George, will she now renew her pledge to fight for the rights of this House, the freedoms of the country, and the power of MPs to scrutinise and hold to account an unsuitable and arrogant Executive?

Ms Harman
The hon. Gentleman asked about the arrest of the hon. Member for Ashford (Damian Green) and the issues of parliamentary privilege that arose from it. The House has already made a resolution to refer the matter to a Committee of the Speaker, and I do not think that it would be a good idea to set up a twin-track approach. All the issues about entry to the premises of Parliament, the searching of parliamentary offices and constituency correspondence and what is, or should be, available to the court can be considered by the Speaker’s Committee, which the House agreed should start its work after the criminal proceedings had come to a conclusion. I do not agree with the hon. Gentleman that we should set up a twin-track approach and a separate inquiry into the same issues via the Standards and Privileges Committee.

Alan Duncan
Different issues.

Ms Harman
The hon. Gentleman says that, but he would need to explain why the Speaker’s Committee could not consider the issues that he is concerned about and believes need to be looked into. I am obviously keen for the House to be able to have all the issues that it wants resolved looked into, and I have no vested interest in the House not looking into them and coming to a satisfactory conclusion. I just do not want there to be a twin-track proposal or for us to undermine a resolution that the House has already made at your request, Mr. Speaker, that there should be a Speaker’s Committee to look into the matter.

The second point that the hon. Gentleman raised was about the policing of Parliament square. It is obviously very important that people have the right to demonstrate and are able to make their views known publicly and peacefully, but we have to ensure that the business of this House and the very important site of Parliament square are properly protected, and we do not want the undue tying up of police resources. The matter is under consideration by many authorities and is the operational responsibility of the police. I know that there is ongoing concern and discussions about it, but I do not have anything specific to tell him or the House today.

The hon. Gentleman talked about road signs and a forest of bossy signs. Speed limits are a very important issue, because they are about cutting deaths on the road through traffic accidents, and particularly about cutting pedestrian deaths. This is not being done for the sake of it, and, by the way, it is a consultation; it is not being pushed through. The evidence is that lower speed limits save lives, and particularly the lives of children who would otherwise be killed in road accidents if they were hit as pedestrians. I ask him to reflect on that, and anybody will have the opportunity to involve themselves in the consultations. If it comes to an ugly road sign or a child being killed, I would go for the ugly road sign.

We all want to be certain that the national curriculum tests, which are important, are properly marked and the information made available to schools promptly. That did not happen, and there was great concern about that. The Sutherland inquiry was established jointly with Ofqual, and it looked into the situation and made proposals for change. Ken Boston resigned, and he has now given evidence to the Select Committee on Children, Schools and Families. Incidentally, the Minister for Schools and Learners, who gave inaccurate information, corrected it is as long ago as February, and Lord Sutherland said that it was not material to his findings anyway, so I urge the hon. Gentleman not to make so much of that. We await the report of the Select Committee, and there will be Children, Schools and Families questions next Monday, so hon. Members who want to ask questions about the matter can do so to the Secretary of State and his ministerial team.

As far as prior publicity about car scrappage is concerned, that first came into the public domain as a demand from the automotive industry. Hon. Members on both sides of the House whose constituents have interests in the automotive industry proposed that scheme to Business Ministers and the Treasury. There was debate and consultation, and the matter could not be kept as a national security issue in those circumstances. There was some discussion in advance—indeed, some of it was in the papers. Rather than focusing on that bit of the process, however, the hon. Gentleman should welcome the car scrappage scheme.

The hon. Gentleman talked about parliamentary allowances. Many Members have constituencies that are far away from Westminster, which inevitably involves extra cost. We do not want only those who can afford to pay the cost of living away from home to represent far-flung constituencies. I hope that there is general agreement on that point. It is important for us to say that, because sometimes the public do not recognise that that would be the result of not assisting with the extra costs incurred in representing far-flung constituencies. First, none of us wants that to happen. Secondly, we all want the public to have confidence in the way in which the House goes about its work and the way in which public money is spent. Thirdly, it is evident that the public do not have that confidence, and, fourthly, we need to do something about that. Fifthly, I hope that we still agree that it is important to involve an independent element.

I hope that the Prime Minister’s asking the Committee on Standards in Public Life to look at the matter will assist the House. I thank Sir Christopher Kelly for agreeing to take on that work, which he has started today. He needs to engage in consideration, deliberation and consultation, and he needs to take some time before he reaches his conclusion, even though he is going to do it expeditiously. In the meantime, because of the high level of public concern, it is important to introduce an interim change. A number of hon. Members think that we should leave the matter until after Sir Christopher Kelly has made his decision, but I do not think that that is right, because we need to introduce interim measures pending the outcome of Sir Christopher Kelly’s report.

My sixth point concerns the proposed arrangements in my written ministerial statement—if I am going on too long, please put me out of my misery, Mr. Speaker. We all agree that there is no perfect remedy and that all the solutions have different upsides and downsides. The flat-rate daily payment acknowledges the additional costs in far-flung constituencies and is tied to business being conducted in Westminster—if one were in one’s constituency all the time, there would be no additional expenses. That proposal includes a reasonable rate. I admit that we will not reach a perfect solution, but it would be good if we were to try to find as much agreement as possible.

The hon. Gentleman did not mention that it is Shakespeare’s birthday. [Interruption.] He has now. I shall call on the Shakespearean wisdom of the Deputy Leader of the House from his days in the National Youth theatre. He has mentioned a character whom I have never heard of, Autolycus, who might have been describing the hon. Gentleman when he referred to

“a snapper-up of unconsidered trifles.”

Derek Twigg (Halton) (Lab)
The National Burn Care Review group is looking at the future of burns units around the country. It has been pushing strongly for the unit in Manchester to be designated as the main one, but that would lead to the units at Merseyside’s Whiston and Alder Hey hospitals being downgraded. We were promised that we would be kept informed of progress, but we heard nothing for 18 months until being told this week that an announcement was to be made that Manchester would be the main centre. Could my right hon. and learned Friend possibly arrange time for an urgent debate on the review of burns units in the north-west?

Ms Harman
I suggest that my hon. Friend raise his considerable concerns about this matter with the Secretary of State for Health, and that he should seek a meeting with him or one of his Ministers.

Mr. David Heath (Somerton and Frome) (LD)
First, may I say that I believe that the right hon. and learned Lady is quite wrong about the affair of the hon. Member for Ashford (Damian Green)? There are distinct differences between the events surrounding that affair and the more general question of privileges. That question should be referred to the Standards and Privileges Committee, whose job it is to look at it. I hope that she will reconsider the matter.

Will the Leader of the House confirm exactly what we will be debating on Thursday 30 April? I notice that the day is now to be devoted to “House business”, rather than to “motions relating to allowances”. Will she confirm that it is the Prime Minister’s motion that we are to be discussing that day? She spoke about the process at some length, but does it not illustrate how the Prime Minister sets about consultation? First of all, he scribbles something on the back of a fag packet, then as an afterthought convenes the leaders of the other parties to rubber-stamp his proposal. When they fundamentally disagree with him, he determines that he will carry on with the scheme that he first thought of anyway—a scheme that in effect proposes a daily banker style bonus to Members of Parliament, without transparency or any relation to real costs incurred. He believes that it will engender the support and confidence of the British people, but it will not. I hope that we will have a chance to debate alternatives to his proposal, because it is very important that we get this matter right.

If that is what we are to debate on Thursday 30 April, will the Leader of the House also confirm that there are a great many details to do with costs and definitions to be discussed? Her statement did not go into those details, which also include the position of staff and questions about whether there will be staff transfers. Will she produce detailed supporting papers for the proposition early next week, so that we know exactly what we are talking about, or are we to be asked to buy a particularly ill-smelling pig in a poke?

In 2002, the Public Administration Committee produced a report on special advisers entitled “These Unfortunate Events”. Given that there have been more unfortunate events over the Easter recess, will the Leader of the House confirm that it is the Government’s intention to introduce the provisions of a civil service Act, either as a stand-alone Bill or as part of the Constitutional Renewal Bill? That intention has been often stated, but when will we have statutory control of the civil service, including special advisers?

Can we have a statement or a debate on broadband? In yesterday’s Budget, the Chancellor referred to extra investment in broadband, but there is a great deal of concern around the country that it will not lead to Britain having the broadband speed that it will need to be truly competitive in the future. That concern is especially strong in rural areas, where people worry that they will simply not get the provision at all. Can we have a clear statement therefore on what will be provided, and the implications?

Lastly, after months of waiting and many parliamentary questions, on Tuesday we finally got the implementation of the homeowners mortgage support scheme that had been announced in December. However, does the right hon. and learned Lady accept that not one UK bank that is not under state control is participating in the scheme? I am talking about the Abbey, Nationwide, Barclays, HSBC, the Alliance & Leicester—none of the major lenders that are not directly controlled by the state is taking part. Is not that a huge omission, and will it not leave many homeowners in a very poor position when compared with others who have borrowed from those banks that have had to take money from the state? Can we have a clear statement on the operation of the homeowners mortgage support scheme, so that hon. Members can ask proper questions about the position of their constituents?

Ms Harman
The proposal for a flat-rate daily payment does not come from the back of one of the Prime Minister’s envelopes. It is one of the alternatives that has been considered by this House over a period of time, including by the Committee on Members’ Allowances in its former incarnation. The flat-rate daily payment system proposal is not new and should take no one by surprise, but it would be transparent about the number of days, and precisely which ones, for which each hon. Member claims.

The hon. Gentleman asked about what the House will be asked to support. The motion for debate will be tabled in my name, and I hope that it will set out the situation with sufficient detail and clarity that the House will vote for it. This is obviously a House matter, and we will table the motion in enough time for hon. Members to consider the propositions that it contains. They will also be able to table amendments if they wish.

The written ministerial statement did deal with the issue of the status of staff. I can confirm that the Deputy Leader of the House will meet staff members’ union representatives, because we are aware of the very important work that staff do in helping us to serve our constituents and perform our duties in the House. They should not feel insecure or uncertain about how the proposals will affect them.

The hon. Gentleman asked about the Constitutional Renewal Bill, and he will be aware that it has been discussed by a Committee of both Houses. It proposes putting the civil service on a statutory footing, and will be introduced into the House when time allows.

The hon. Gentleman asked about investment in broadband, and I can tell him that Lord Carter is in the process of producing his second report on the matter. The post-recovery economy must be green and family-friendly, with a big emphasis on high skills and digital communications, and that is why investment in broadband is central to our proposals. Finally, I remind the hon. Gentleman that he will be able to ask further questions on the matter at Department for Innovation, Universities and Skills questions next Thursday.

Mr. David Winnick (Walsall, North) (Lab)
There is undoubtedly public disquiet about the second homes allowances, although hon. Members are absolutely justified in claiming for the accommodation that is essential when they are away from home. However, if the new proposal is put forward, does my right hon. and learned Friend accept that people are bound to think that hon. Members are being paid extra money just for turning up to do our job? If a flat-rate payment is established, no documentary evidence will be required to show how we have spent the money, so what are we supposed to do—pocket all the money that we do not spend legitimately within the rules? The proposal needs much more explanation. I hope that there will be a vote next week to reform the system, but it is open to question whether the proposal as it stands is the sort of reform that will reassure the public that all is well.

Ms Harman
My hon. Friend reiterates a criticism that has been made of the proposal, but the extra money would not be given just for turning up. Instead, it would go towards the costs of having a constituency away from London, but it would not be right for people to claim that money if they did not turn up here. They would not incur those costs if they never came to Westminster and only stayed in their constituencies. The proposal recognises the extra costs incurred by having to be in more than one place.

The system would be transparent because, as I said, evidence would have to be supplied showing that an hon. Member had attended Westminster or performed parliamentary or ministerial duties. Otherwise, claims for the extra expense incurred by having to do both constituency and Westminster work at the same time could not be justified.

Mr. Hugo Swire (East Devon) (Con)
Although it was most welcome to hear the Chancellor announcing £50 million in the Budget yesterday to upgrade the homes of our armed forces personnel, I understand that that is an acceleration of money and that there is probably only £500,000 of new money in that announcement. What he did not address, and what the House has not addressed, is our responsibilities to members of our armed forces returning to the communities in which they grew up, particularly when they have been medically discharged or disabled in some way. The Leader of the House may be aware, because it has been in the national press, of the case of a constituent of mine, Lance Corporal Paul Baker, who has been unable to find accommodation in East Devon. He says:

“You join up, serve your country and expect you will be allowed to come back to live where you grew up—then you find you’re not allowed.”

The problem is that the Government have changed the responsibility in that respect. Although Lance Corporal Baker is based at Bulford camp, from which he is about to be evicted, under the current legislation it is Bulford’s responsibility to find him accommodation, not East Devon council’s. Will the Leader of the House agree to a debate in Government time so that we can look at allowing local authorities additional resources to provide accommodation for our returning armed forces personnel who have been discharged in that way?

Mr. Speaker
Order. Before we go any further, I understand that these matters are very important, but supplementaries should be brief, not mini-Adjournment debate contributions.

Ms Harman
I suggest that the hon. Gentleman seek a meeting with one of the Ministry of Defence Ministers about his constituent’s concerns. The hon. Gentleman will know, because he follows these matters closely, that we have given priority in the NHS to returning members of our armed forces. We are reviewing the provision in primary care for former members of our armed forces. There are major issues relating to housing, which he touched on and which were raised in our recent debate on the armed forces. However, perhaps he should seek a meeting with a relevant Minister to try to help his constituent further.

Mr. Speaker, I forgot to answer the important point about the home owners mortgage support scheme that the hon. Member for Somerton and Frome (Mr. Heath) raised. I think that there is a genuine misunderstanding. Eighty per cent. of lending for mortgages is covered under the scheme, because those who lend into 80 per cent. of the mortgage market have signed up to it. That means that we will back those lenders so that they can allow people who get into difficulty with their mortgage interest payments to defer them, either in whole or in part, for up to two years. That means that those people will not face repossession, which is very important indeed.

I reassure the hon. Gentleman that 80 per cent. of mortgages are covered by the scheme, but it is not the first thing that we have done. We have also brought forward the point at which people can claim payments through social security benefits for their mortgage payments, from 39 to 13 weeks, and we have increased the amount for which people can claim in interest. We have also issued rules for the courts, so that repossession ought to be the last resort and not the first, and agreed a moratorium with all building societies and banks, so that they should not take any repossession proceedings for at least three months. The home owners mortgage support scheme is not the first thing that we have done; it is one of a number of things that we have done, and it covers 80 per cent. of the mortgage market.

Siobhain McDonagh (Mitcham and Morden) (Lab)
If my Tamil constituents who are demonstrating in Parliament square were in the House today, they would be the first to apologise to everybody here for the disruption that they may have caused. However, it is their anxiety, fear and terror for their families and friends in Sri Lanka that have driven them to these actions. They look to the Government to be a world leader in fighting against a Sri Lankan Government who spend 20 per cent. of their GDP on arms to use against their own people. We have to take a lead for our citizens who are protesting outside, so will the Foreign Secretary come to the House at the earliest opportunity to lend his support to the recent words of the American and Indian Governments?

Ms Harman
As the hon. Member for Somerton and Frome said, there will be an opportunity to debate the issue next Wednesday on an Opposition motion. However, my hon. Friend makes some heartfelt points. The primary concern for the Government and for us all is the safety of the civilians caught in the conflict area. The Prime Minister has taken a leading role and was one of the first to call for a ceasefire. Although large numbers of civilians have been able to leave the conflict area, a longer pause is needed. We have to work internationally. My right hon. Friend the Member for Kilmarnock and Loudoun (Des Browne) has also been playing a leading role, along with the Foreign Office, as has my right hon. Friend the Member for Leicester, East (Keith Vaz).

Sir Alan Beith (Berwick-upon-Tweed) (LD)
What assurance can the Leader of the House give me, as someone who supports the principle that Members’ staff could be employed by the House centrally, that we would be voting on the general desirability of that and not on a motion that precluded proper consultation with all the staff affected or failed to recognise their rights? Members’ staff are diverse, they work in many parts of the country, some part time and some full time, and they are not subject to the political restraints that hon. Members’ House of Commons staff accept.

Ms Harman
The right hon. Gentleman makes some important points, all of which I want to take up. Hon. Members make many diverse arrangements because of their different constituency work patterns, and they might not fall neatly into the working arrangements of, or the demands on, those who work for House. We need to put on a proper footing public recognition that the money is not part of our income, but financial support for work that we have done on our constituents’ behalf. However, we do not want to precipitate a load of unintended consequences—the point the right hon. Gentleman rightly raises. We will perhaps talk to him further about that before we table the resolution.

Mr. Elliot Morley (Scunthorpe) (Lab)
My right hon. and learned Friend was quite right when she said that speed can kill. However, I hope that the proposed restrictions on rural roads do not take a blanket approach but are based on risk assessments. I also hope that the Department for Transport will look at some anomalies. For example, on the A15, which is one of the most dangerous roads in the whole of Britain, there is a 40 mph restriction on lorries over a certain weight. The restriction relates to their braking capacity and goes back years, but the design and technology have moved on. Lorry drivers tell me that the restriction leads to big queues, tailbacks and people taking risks, thereby causing accidents; it is also not good for optimal fuel consumption. Those are issues that should be addressed as well.

Ms Harman
I know that Ministers in the Department for Transport will take on board the point that my right hon. Friend makes. I was just responding to the general point that the shadow Leader of the House made, but there are also specific points about individual roads, such as the A15. That is why there is a consultation, so that the issues can be addressed not only in their generality, but area by area.

Sir Patrick Cormack (South Staffordshire) (Con)
Bearing in mind that the Leader of House’s statement on allowances specifically excluded Northern Ireland Members, five of whom never take part in the proceedings, but each of whom draws £20,000-plus on average, and as Sir Christopher Kelly and his committee will almost certainly have to look at the proposal, does that not underline the need to avoid the extraordinary cost of interim measures that may well not meet with his committee’s approval?

Ms Harman
I think that it is the case that, depending on how it is validated, a flat-rate daily payment would be cheaper to administer than processing the myriad receipts that come with the current additional costs allowance system. There have been further discussions about the situation for representatives in this House from Northern Ireland parties, but it will be possible to address that matter in the resolution.

Jim Sheridan (Paisley and Renfrewshire, North) (Lab)
May we have a debate on the positive contribution that trade unions make to our society and, in particular, the magnificent contribution of the late Jack Jones? Jack had many achievements, not only as a trade unionist, but as a campaigner for pensioners. I suggest that he deserves the proper recognition of this House.

Ms Harman
I very much welcome the opportunity that my hon. Friend has given me and all Labour Members to pay our warmest tributes to Jack Jones, who has passed away. I knew him personally for some 30 years. He represented all that was best about trade unionism. He fought for his members in the Transport and General Workers Union up and down the country and, when he retired, he went on to fight for trade union retired members and all pensioners. He was absolutely tough and ferocious in the interests of his members, but he was also a kind, gentle and warm-hearted man. We are proud of him in the trade union movement; we are proud of him as a supporter of the Labour party; and we are proud of him in south London, where he lived.

Mr. Patrick McLoughlin (West Derbyshire) (Con)
Will the Leader of the House consider issuing a statement to the House on the way in which Members should expect to receive replies from Ministers? I received a letter the other week from the Under-Secretary of State, Department of Health, which is signed off:

“Approved by the Minister’s private office and electronically signed in her absence.”

As far as my constituents are concerned, the Minister never even looked at the correspondence. Can we have a position in which Ministers in the main sign off letters personally rather than electronically?

Ms Harman
If the House is in recess, an interim reply to an hon. Member by a private office might well serve until the Minister can reply. We all accept the situation in which the reply is approved by the Minister and signed in their absence, but a reply signed by the private office in the Minister’s absence is a step further that I have not cognised before. I will look into the matter. Either the reply is from the private office or it is from the Minister. It can be from the private office on behalf of the Minister, but it cannot be from the private office instead of the Minister.

Mr. David Chaytor (Bury, North) (Lab)
Every Member of the House will have in their constituency a number of war memorials and so will appreciate the sensitivity about any proposal to move the location of one. In my constituency there is some controversy surrounding the decision by the Royal Regiment of Fusiliers to move the historic memorial designed by Sir Edward Lutyens. Several thousand constituents have signed a petition asking for the memorial to stay where it is, but the regiment has a good argument for moving the memorial to a new site outside the new Fusiliers museum in Bury. May we have a debate on war memorials in which the case in my constituency and many other issues can be fully explored?

Ms Harman
If my hon. Friend has already pursued the matter by raising it with the Fusiliers, the local authority and the relevant Ministers, perhaps he might pursue it further by initiating a Westminster Hall or Adjournment debate. I know that hon. Members will understand—for some reason my deputy has written me a note saying:

“Brevity is the soul of wit.”

Mr. Andrew Mackay (Bracknell) (Con)
It is very funny and I agree it was worth pausing, but let us now return to the serious issue of the Secretary of State for Children, Schools and Families. I put it to the Leader of the House that the accusations made by Mr. Ken Boston to the Select Committee were immensely serious; he is a man who held a considerable job, so he cannot just be ignored. I further suggest to the Leader of the House that just saying that departmental Question Time is on Monday will not be satisfactory. It is vital, in the interests of the Secretary of State and the Minister for Schools and Learners and of good governance, that the Secretary of State comes to the Dispatch Box and makes a statement and answers the serious accusations, and that he does so next week.

Ms Harman
Without transgressing the objective of my deputy’s note, which I have now worked out was telling me to shut up, perhaps I can try to engage in answering the right hon. Gentleman’s point. There were serious delivery failures by the Qualifications and Curriculum Authority and they caused delays to the release of results for 11 to 14-year-olds. That was unacceptable. Ministers had pressed on several occasions for reassurances that delivery was on track, and the Government acted swiftly to respond once it was clear that there would be unacceptable delays. We announced Lord Sutherland’s review. There was an error, which was put right, and we await the Select Committee’s report. If agencies are running something and it goes wrong, they must be called to account, an investigation must be conducted and action must be taken. That is the responsibility of Ministers.

Keith Vaz (Leicester, East) (Lab)
Further to the reply that my right hon. and learned Friend the Leader of the House gave to my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh), of course we appreciate greatly what the Government, the Prime Minister and the Foreign Secretary have done, and the statements by the Indian Government and Hillary Clinton yesterday. However, it remains the case that thousands of innocent Tamil people are being killed in Sri Lanka. A young man has been on hunger strike in Parliament square for three weeks. The situation is not getting better; it is getting worse.

The UK is a permanent member of the Security Council. Could we please take a resolution to the Security Council as quickly as possible? May we have a statement from the Foreign Secretary on the current situation before the debate on Wednesday? The point of being on the Security Council is that we can have an influence. This is our opportunity to influence what is happening in Sri Lanka.

Ms Harman
The British Government are working to influence the action taken throughout the world to mobilise the concern and press for a peaceful outcome for civilians. As I said, my right hon. Friend the Member for Kilmarnock and Loudoun has been to New York to discuss with Sri Lankan and UN officials how the matter should be taken through the UN, and a Department for International Development Minister is going to Sri Lanka later this week, so action is being taken. We want to reassure the Tamil community here, who play a big part in this country and who are very concerned about what is happening to their friends and relatives back home.

Sir George Young (North-West Hampshire) (Con)
Reverting to next Thursday’s business, how committed is the right hon. and learned Lady to a 1 July start date for all the propositions, which seems to me extremely challenging? If there is some flexibility, does that not strengthen the argument for allowing Sir Christopher Kelly to complete the job that the Prime Minister asked him to do? How on earth can the House sensibly vote next Thursday for a new proposition when we do not know what the daily rate is going to be? There are public expenditure consequences, and we should not sign a blank cheque.

Ms Harman
It may well be that we can put a daily rate in the resolution until such time as the Senior Salaries Review Body produces its proposal for the daily rate. The 1 July start date is stretching, but there are a number of simple propositions here. The point is that we have to take action. Public confidence has been draining away. We do not want Sir Christopher Kelly to have to truncate his work and complete it in an unsatisfactory way—obviously, he would not be prepared to do that anyway. He has to take some time to deliberate, but it is not acceptable to leave the present lack of confidence to continue until after Sir Christopher has reported. It is therefore right to take on the issue by way of interim proposals that can come into effect. The public do not accept the current situation and they want it to be changed. We can change it on an interim basis while Sir Christopher Kelly continues to reflect and until he comes forward with his independent proposals.

Hugh Bayley (City of York) (Lab)
My right hon. and learned Friend will have heard earlier what I said about the shamefully low pensions that are payable under the present pension arrangements for Members’ staff. Before Thursday’s debate, will she commission some research into the proportion of Members’ staff and of House staff who are women? I think that there really is a problem of gender bias in the pensions available to our staff and House staff. Will she come to the debate on Thursday well prepared to discuss the matter of transferring Members’ staff to the House of Commons pension scheme if their employment is transferred to the House?

Ms Harman
My hon. Friend makes important points, and I will do exactly that.

Dr. Julian Lewis (New Forest, East) (Con)
Given the typical state of the Liberal Democrat Benches throughout business questions, it is easy to see why that party is so strongly opposed to Members having to turn up at Westminster in order to be able to claim their allowances. However, my question is about NATO. One of NATO’s two supreme commands is based in America and the other in Belgium. There are reports that the one based in America might now be moved to France as part of the price for France reintegrating with the NATO military structure. That move would be important and very expensive. May we have a statement from the Foreign Secretary as soon as possible on whether Britain is involved in negotiations of that sort?

Ms Harman
I will draw the attention of my right hon. Friend the Foreign Secretary to the point that the hon. Gentleman has raised.

Mark Lazarowicz (Edinburgh, North and Leith) (Lab/Co-op)
Millions of people have seen the videos and photos of the incidents during the G20 demonstrations in London. I accept that my right hon. and learned Friend will not want to comment on individual incidents today, but may we have an opportunity to debate the way in which such demonstrations are policed, so that we can ensure that the right balance is struck between maintaining public order—we all know that the police have a very difficult job—and maintaining the democratic right to protest?

Ms Harman
As the hon. Member for Somerton and Frome has pointed out, there will be an Opposition day debate next Wednesday, the title of which is broad enough to allow those issues to be raised. My hon. Friend makes the important point that we want to defend the right of free speech and freedom of protest while allowing the City and the rest of the country to go about their business. There are thorough and rigorous investigations taking place into what happened to cause that tragic death during the G20 demonstration.

Sir Nicholas Winterton (Macclesfield) (Con)
In supporting the views expressed by my hon. Friend the Member for South Staffordshire (Sir Patrick Cormack), my right hon. Friend the Member for North-West Hampshire (Sir George Young) and the hon. Member for Walsall, North (Mr. Winnick), may I ask how we can enter into the debate on Thursday when the proposed per diem allowance will be no more transparent than the present arrangement? It will not deal with Members who are away carrying out duties with the Commonwealth Parliamentary Association, the Inter-Parliamentary Union or the Organisation for Security and Co-operation in Europe, or other parliamentary duties, but who still have to maintain accommodation in London. Furthermore, no mention has been made of how Members will pay for the accommodation that they have to maintain during the summer recess, when no per diem will be paid. This really is absolute nonsense. As many people have said, the proposal appears to have been decided after writing a few notes on the back of an envelope.

Ms Harman
If the criteria involve parliamentary duties, duties involving the CPA or the IPU could certainly come within that definition. Obviously, the resolution will need to address these issues and satisfy Members that they will be able to carry out their parliamentary duties. In relation to that, we need to ensure that parliamentary duties are properly defined. As far as the recess is concerned, the proposal is that the new scheme would be introduced in July and that the flat-rate daily payments would depend on the days attended. Because there would be fewer such days between July and 12 October, owing to the recess, there would have to be transitional arrangements.

It is easy to think of all the things that are wrong with every proposal. Among the 650 Members of this House there are 650 different views on what would be the best system—in fact, there are probably more, because some people change their mind from day to day. Actually, there is not a perfect system. I hope that we will all try in good faith to establish a system that recognises the extra expense of representing a constituency outside London, while satisfying the public by showing that Members are claiming expenses for coming to Westminster, rather than simply claiming them because their constituency is far away.

David Taylor (North-West Leicestershire) (Lab/Co-op)
May we have a debate on the funding, role and value of sixth forms in state comprehensive schools, including the excellent Ashby and Coalville King Edward schools in my constituency? Those schools and others around the country were seriously alarmed and unnecessarily impacted by the late changes introduced by the Learning and Skills Council in March. Yesterday, after pressure from many hon. Members, myself included, and from early-day motion 1295, which I amended, the Chancellor thankfully announced the money necessary to head off what would have been a problem.

[That this House is concerned by the late and unexpected reductions in funding allocations to schools and sixth form colleges; notes that these reductions place school managements in great difficulty balancing their budgets; is concerned that schools face the prospect of cutting staff, reducing student numbers, or both; and calls on the Learning and Skills Council and the Department for Children, Schools and Families to restore the cut in sixth form funding.]

It would be useful to reassure those sixth forms of their status in the eyes of the Government by having a proper debate on their work in our society.

Ms Harman
I reassure all those concerned about sixth forms that hon. Members’ representations about the problem were responded to by the Chancellor yesterday. More young people want to stay on in education, and the Learning and Skills Council initially indicated to sixth forms and colleges that that would be possible, but then said that the finance was not available. Now, however, in response to representations, the Chancellor has said that finance will be guaranteed, so 50,000 more students will stay on and all concerns should now be allayed. The Department for Children, Schools and Families will write to all schools and colleges to reassure them that they can now get on with their work positively in September.

Mr. Bernard Jenkin (North Essex) (Con)
May I return the attention of the right hon. and learned Lady to early-day motion 1307?

[That this House notes the statement of the Director of Public Prosecutions on 16 April 2009 announcing his decision that no charges would be brought against the hon. Member for Ashford in relation to the documents leaked and stating that, ‘Mr Green's purpose in using the documents was apparently to hold the Government to account'; and calls for the House to be given the opportunity to debate a motion to refer the matter to the Committee on Standards and Privileges.]

The motion seeks to refer the issue of the arrest of my hon. Friend the Member for Ashford (Damian Green) to the Committee on Standards and Privileges, and it is sponsored by three very senior Members of this House from all parties, notably the right hon. and learned Member for North-East Fife (Sir Menzies Campbell), my right hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard) and the right hon. Member for Birkenhead (Mr. Field), among others. The remit of the resolution passed on 8 December makes no reference whatever to the issue of privilege. It also insists that there should be a Government majority on the Committee in question, which is not in the spirit of the way in which the Committee on Standards and Privileges operates. The Leader of the House is now the only apparent obstruction to following the procedure set out on pages 167 and 168 of “Erskine May”—namely, to refer the matter to the Committee on Standards and Privileges in the normal way. Why is she obstructing the House in that way? Is she really comfortable with being so obstructive on a purely partisan basis, when she should be representing the interests of the whole House?

Ms Harman
I object to what the hon. Gentleman says. I am happy for all these issues to be looked into. If there is strength of feeling about them, senior Members need to get together to look into all these issues, to reassure the House that they have all been examined and to produce their analysis of what went on and their proposals for changes, if any are needed. I am perfectly behind the idea that that should happen.

The House decided, at the request of the Speaker, that a Speaker’s Committee would be the way forward, and the resolution says that that Committee will be able to make recommendations for the future. I could say, “I don’t care how many Committees look at it. As many Committees as want to look at it should be able to do so.” As there is so much complaint about the issue, I will look at the matter again.

This is not about being obstructive. The idea that the House first responds to a request from the Speaker to set up a Speaker’s Committee and, shortly afterwards, before the Speaker’s Committee has even started its work, asks the Standards and Privileges Committee to look at it—[Interruption.] They could be technically defined as different issues, but there is no reason why the Speaker’s Committee should not look at all the questions about privilege that Members are asking for the Committee on Standards and Privileges to look at. However, as people are complaining so much, I will have another look at it, and I might do something ill judged and unwise and set up a twin-track process. Then, when there is duplication and overlap, I will say, “I told you so.”

John Bercow (Buckingham) (Con)
May we please have a debate in Government time on the Floor of the House on the method of composition of our Select Committees? Working on the assumption that, in a modern, healthy, vibrant parliamentary democracy, the Executive should not choose the members of the Committees that scrutinise them, would not such a debate provide an opportunity for the argument to be made for scrapping the present arrangements and replacing them with a sensible system in which the members of Select Committees are elected by a secret ballot of Members of the House?

Ms Harman
Whatever people’s views on the processes for appointing the members and Chairmen of Select Committees, I think that our Select Committees do a damn good job on behalf of the House: they are robust, they are independent, and they are fair-minded and fierce in doing their duty of holding the Executive to account. I can see that there are many ways of twiddling how to get people on to Select Committees, but I would ask, “What’s the problem? If it ain’t broke, why fix it?” I think our Select Committees do a proud job; as soon as Government Members become Chairmen of them, they go native.

Hugh Robertson (Faversham and Mid-Kent) (Con)
The Leader of the House will be aware of the concern felt on both sides of the House about the number of pubs that are closing each week—a concern that is particularly important to those of us who have breweries in our constituencies. She will be aware that the number of these small businesses closing each week has now reached 40 and she will be aware of the feeling in the industry that the provisions of yesterday’s Budget will only worsen the situation. Will she therefore make time for a debate on a Government motion on the future of the pub industry, particularly on the impact of pub closures on many small communities up and down the country?

Ms Harman
I know that this is a matter of continuing concern, not just in urban areas but particularly in rural areas. A number of factors have come together to cause problems for publicans. Will the hon. Gentleman give me some time to reflect further and to talk to my ministerial colleagues before I get back to him? I know that he and other Members have raised this matter on a number of occasions. It is an important issue to which I do not have a snap answer, but I will get back to him.

Mr. Rob Wilson (Reading, East) (Con)
May we have a debate in Government time about the current squeeze on university finances? The two universities in my constituency—the universities of Reading and of the Thames Valley—are facing considerable financial pressures, so is it not time that the Government started their promised review of funding in that sector and stopped kicking the issue into the long grass? If they did that, at least the sector would know where it stands.

Ms Harman
I think the sector does know where it stands. It knows that it has the strong commitment of this Government, which has been exemplified in recent years by a steady increase in capital and revenue budgets. That is the case because we believe that the future of our economy depends on high qualifications, on our science base and on skills. The hon. Gentleman can reassure those in his constituency who are concerned about this issue that, as long as we are in government, we will maintain our commitment to capital and revenue public spending, whereas if his party were in government, they could expect cuts, starting right away.

Mr. Philip Hollobone (Kettering) (Con)
May we have a statement from the Foreign Secretary on the deteriorating situation in Pakistan, the effective surrender to the Taliban of large parts of Pakistan’s north-west frontier and the strategic risk that presents to British troops fighting in Afghanistan, because of the extended and exposed supply lines through Pakistan?

Ms Harman
This remains a very high priority on which we need to work multilaterally through the UN and other organisations and with the Pakistan Government. I will certainly draw the hon. Gentleman’s points to the attention of the Foreign Secretary.

 Coal and Carbon Capture and Storage

12:33:00

The Secretary of State for Energy and Climate Change (Edward Miliband)
With permission, Mr. Deputy Speaker, I would like to make a statement on coal and carbon capture and storage. In our energy policy, we face three challenges: to transform our energy to low-carbon sources; to maintain security of supply; and to do so in a way that is right for the British economy and industry. To meet that challenge will take all the low-carbon technologies at our disposal.

We need renewable energy, and in the last five years we have tripled renewable electricity supplies. We have more offshore wind power than any country in the world, and yesterday my right hon. Friend the Chancellor announced new support for offshore wind and new financial help for the wind industry to get through the credit crunch.

We need to facilitate nuclear energy, too. In the face of climate change, with assurances on safety and cost, many who once opposed nuclear power now support it. Thanks to decisions made by my predecessor, Britain is on track for a renaissance in nuclear power, and I announced last week the nominations for 11 potential sites.

The future of coal in our energy mix poses the starkest dilemma we face: it is a polluting fuel, but it is used across the world because it is low cost and it is flexible enough to meet fluctuations in demand for power. In the UK, a third of our existing coal-fired power stations are due to close in the coming decade.

To ensure that we maintain a diverse energy mix, including maximising our domestic fuel supply, we need new coal-fired power stations—but only if they can be part of the low-carbon future. Across the world, we know the challenge that coal presents. With many countries, including China and India, reliant on coal and many building new coal-fired power stations at a rapid pace, there is an urgent international imperative for us to make coal clean. With a solution to the problem of coal, we greatly increase our chances of stopping dangerous climate change. Without it, we will not succeed.

There is a solution to the challenge—through carbon capture and storage. Capturing the CO2, transporting it and locking it permanently underground would reduce emissions by 90 per cent. While this technology has been demonstrated in its different parts and at small scale—capturing emissions from 30 MW—it has never been tried on a commercial scale, and never as the complete process from start to finish on a power station, so the first task is urgently to drive the technology at scale. We are already running a competition for one of the first end-to-end demonstrations in the world, covering capture, transport and storage. It will be one of the biggest CCS projects in the world—more than 10 times bigger than the largest existing pilot.

Yesterday, my right hon. Friend the Chancellor announced the public funding for the next stage. We will select bidders to proceed to detailed designs, but we know that we need to go further and, because of yesterday’s Budget, there will also be funding for up to three more demonstration projects, which we want to involve a mix of pre and post-combustion so that all the technologies can be tested.

To support that, the Chancellor yesterday announced plans for a new incentive mechanism to support CCS. It could be based on a CCS feed-in tariff, so that projects could receive a fixed price for electricity, or on a fixed price for carbon abated. We will consult on this alongside our new coal conditions by the summer.

We need to ally this reliable stream of funding for carbon capture and storage, which we now have, with a policy on coal-fired power stations to drive the demonstration and deployment of CCS. We consulted last year on carbon capture readiness as the condition for new coal-fired power stations, but I have concluded that while it is right to go ahead with this condition, it will not on its own drive the change we need. I believe that we need to signal a move from the building of unabated coal-fired power stations—it is right to drive our country towards low carbon as part of a progressive decarbonisation of our power supplies. That is also an essential part of a new industrial strategy, and it is necessary if we are to show international leadership on climate change.

I therefore propose two new conditions that any new coal-fired power station must meet to gain consent in England and Wales. We are proceeding with a strategic environmental assessment and will consult formally in the summer. First, we must send a decisive signal that change starts now, so I propose a requirement to demonstrate CCS on a substantial proportion of any new coal-fired power station. We will propose for consultation a requirement to demonstrate at least 300 MW of net capacity or around 400 MW of gross output as a condition of any consent. The demonstration condition would mean that henceforth unabated coal-fired power stations would not get Government consent. Secondly, alongside that, we must secure not just a commitment to demonstrate, but, when the technology is proven, a commitment that CCS will be fitted on the entire plant.

The Committee on Climate Change concluded that

“conventional coal-fired power generation should only be built on the expectation that it will be retro-fitted with CCS by the early 2020s”—

the earliest it believes will be feasible. With the demonstrations in the UK and abroad, we will plan on the basis that CCS will be technically and economically proven by 2020. There will be an independent judge of when the technology is proven and I envisage the Environment Agency playing that role. Every coal-fired power station built from now would have to commit to retrofitting CCS on the whole plant—100 per cent.—within five years of 2020, subject to the technology being ready. Once the technology had been judged as proven, every new coal-fired power station would have to commit to CCS, not just on a portion, but on the whole plant.

I believe CCS will be effective and can be shown to work, but I will seek views in the consultation on whether we need a safety net if it does not become proven as quickly as we expect. We will also consult on whether, through an emissions performance standard, it is possible to implement the conditions I have outlined.

The new conditions come on top of the requirement on every power station to buy carbon permits, which under the EU emissions trading scheme are capped and falling. I believe that the funding for demonstrations and the conditions I have proposed meet the criteria I have set out. They set us on a decisive low-carbon path, with the UK doing more than any other country to demonstrate and deploy CCS, and they are the most environmentally ambitious coal conditions of any country in the world. They protect security of supply by making possible the only sustainable long-term diversity there is—low-carbon diversity.

I have received representations that there should be 100 per cent. CCS on new coal from day one, but I believe that they do not appreciate the need that still exists to demonstrate the technology before full-scale commercial deployment is possible. Such a condition would reduce the range of technologies that could be affordably demonstrated, would mean that demonstration of post-combustion CCS would be far less likely, and would fail to meet our international obligation to drive forward low-carbon technology.

By embarking on today’s path to low-carbon coal, we shall be able both to meet our climate change commitments and to secure up to four new coal-fired power stations by 2020, whose operation will include the use of indigenous coal. This route to low-carbon coal is also right for the British economy, and will enable us to lead the world in carbon capture and storage. With a reliable stream of finance, we are investing in British skills so that our industries can lead CCS not just in Britain, but at power stations around the world. I hope that our industry, universities and scientists will respond to the challenge of creating a new industry in Britain.

Research suggests that CCS and other carbon abatement technologies could sustain 50,000 jobs by 2030. This is a massive regional opportunity for Britain. I pay tribute to our regional development agencies for what they are already doing on carbon capture and storage, and look forward to working with them. Teesside, the Thames Gateway, the Firth of Forth and the Humber are among the locations that could be suitable for a new CCS cluster. For our North sea oil and gas industry, CCS can herald a new low-carbon future. The 1960s and 1970s saw the development of a new North sea industry; in later decades, Britain can do the same with CCS.

The proposals that I have announced seek to combine the drive towards low carbon at home and around the world, meeting the need for security of supply, with the building of Britain’s industrial future. They signal that the era of unabated coal is over, but a new low-carbon future for coal with CCS can begin. I commend the statement to the House.

Greg Clark (Tunbridge Wells) (Con)
I thank the Secretary of State for early sight of his statement. I know from our exchanges that he is an avid student of my policy documents, and he knows how long the Conservatives have been trying to persuade him and his predecessors to give Britain a lead in carbon capture and storage. Sadly, that leadership has now passed to China, Germany and the USA. It is two years since the Government’s characteristic dithering led to the collapse of BP’s CCS project at Peterhead. That work is now being done in Abu Dhabi.

A year ago, my right hon. Friend the Leader of the Opposition set out the policies on CCS that Britain should adopt: to build a network of pipes and connections that would allow captured carbon dioxide to be transported from generating plants to areas of storage in the North sea; to equip at least three new coal plants with CCS technology, financed by Britain’s share of receipts from the EU emissions trading scheme; and to introduce an emissions performance standard that would limit emissions from any new plant to the equivalent of those from a modern gas-fuelled power station.

Our criteria remain those against which today’s announcement must be judged, but let us be clear why the statement was so urgently needed. After 12 years, Britain's energy policy is as much of a horror show as our public finances, and for the same reason: the Government did not fix the roof when the sun was shining. We have known for more than a decade that a third of our generating capacity is to be turned off during the current decade, and that there is no remotely adequate plan to replace it with a low-carbon alternative. We have known for many years that North sea oil and gas are in decline, but our gas storage capacity is grossly inadequate. During the cold snap last February, storage dropped to just four days’ worth. No other major European country generates less of its electricity from renewables, although we have some of the best wind, wave and tidal resources in Europe. If anyone thinks that the Government’s handling of the economy was an aberration, let them look at the mess of their energy policy. While we welcome the Secretary of State’s Damascene conversion to Conservative policy, it is from that appalling position that we now need to recover.

The Secretary of State will understand our need for reassurance about his intentions. Will he confirm that the new coal-fired power stations to be developed with CCS technology will be required to achieve an overall emissions performance standard of no more than 500 kg of carbon dioxide per MWh from the outset? If there is consent for four pilots, each generating 300 MW of abated electricity, that will mean the abating of 1.2 GW of new capacity by 2020. How much unabated electricity does the Secretary of State expect to be generated by those plants by that date? Is there any limit on the proportion of unabated electricity generated by them? Can we expect to see a monster new coal plant generating massively increased carbon dioxide emissions of which only a small proportion are abated by means of the measures that the Secretary of State has described?

As for the funding for the CCS clusters and the demonstration plant, will the Secretary of State explain why the Government have chosen to raise the money by means of a consumer levy rather than from EU ETS receipts? Will he tell us how much that levy will be and on which consumers it will fall, bearing in mind the burdens placed on households and firms by yesterday’s Budget? Will he tell us how many clusters he expects there to be, and can he assure us that their locations will be chosen with technical viability rather than political convenience at the forefront of the considerations? Will he tell us plainly whether he will consent to new coal plants outside the cluster areas?

In yesterday’s Budget speech, the Chancellor vainly tried to distract attention from the wreck of Labour’s economic policy with a few meagre and meek environmental proposals. If the Secretary of State’s conversion on CCS is genuine, I welcome it, but I sincerely hope that today’s announcement does not turn out to be another example of Government greenwashing. The Secretary of State said that the Government must send a decisive signal, but much of the commitment that he has made is still subject to consultation. He has left it perilously late to secure our energy supplies for the decade ahead and to reduce our greenhouse gas emissions, but it is absolutely vital that these decisions are finally acted on now, without delay.

Edward Miliband
I have respect for the hon. Gentleman, but I hope that when he reflects on his performance today he will reconsider his position and think hard about what policy he wants to pursue. I have to say that he gave a pretty disappointing response that did not show much understanding of the difficulties that we face.

The hon. Gentleman asked about the funding mechanism. He was right to point out that part of the challenge is finding the funding, but the problem with his proposal of using funds from the auctioning of the European carbon allowances is that that has already been accounted for in the Chancellor’s Budget plans. The money is not available. The hon. Gentleman’s proposal constitutes an uncosted commitment to providing billions of pounds without the faintest clue about where the money will come from. He does not have the money, because it is included in the general accounts published in the Budget. It is difficult to find the necessary finance, and I pay tribute to my right hon. Friend the Chancellor for deciding that we will fund these measures. I hope that the hon. Gentleman will reflect on the means of financing them; he has no such means at his disposal.

The hon. Gentleman asked how much unabated coal there would be. Let me say to him candidly that while he can pursue his demand for 100 per cent. CCS from day one—I dealt with that in my statement—I believe that it is a foolish approach. It is unaffordable, and it does not make sense in the context of a demonstration technology. It is true that 20 or 25 per cent. of the plant would be abated through CCS, and obviously we will consult on that, but I have thought hard about the matter, and I believe that we have struck the right balance between what is affordable and what is a proper way of demonstrating the technology.

We will of course consult on the level at which the emissions performance standard could be set, but I must caution the hon. Gentleman against plucking figures out of the air. I have given careful consideration to the proposal for 500 kg per MWh, and I do not think that it would necessarily be appropriate for the conditions that I have described. However, I shall be happy to engage in consultation.

We shall have more to say about clusters in the consultation document, but I believe that it will be possible to have a number of them around the country, and we will view the bids impartially. Many regions are already submitting proper bids.

I genuinely hope that we can build consensus in the House. I believe that the combination of the Chancellor’s announcements yesterday, the funded demonstration of CCS and my statement today represent a real step forward in security of supply and the environment. I hope that, on reflection, the hon. Gentleman will be able to give our proposals a warmer welcome.

Malcolm Wicks (Croydon, North) (Lab)
I genuinely welcome my right hon. Friend’s important and well-balanced statement, which has significant implications for the future of our country. I congratulate both him and the Minister of State, but, if he will forgive me, I congratulate particularly his officials in the Department and outside experts who, contrary to what we have heard, have worked on this for a number of years and unravelled the complexities.

Would it help if the Secretary of State organised a workshop to bring Opposition Front Benchers up to speed on the complexity of the issues, the economics involved and the technical work that has been done not only in Britain but in Norway, because this is too important an issue to play politics with? Does he agree with me—

Mr. Deputy Speaker (Sir Michael Lord)
Order. I think that that is enough for the time being.

Edward Miliband
I was rather enjoying my right hon. Friend’s contribution. I agree with all the points he made. Teach-ins were fashionable in the 1970s, but I am sure that the Opposition could benefit from a teach-in on this issue given the contribution we just heard.

I join my right hon. Friend in paying tribute to the officials who have worked on, and helped in, this incredibly complex policy area, and I also pay tribute to my right hon. Friend for the work on this issue that he did as an Energy Minister, and that he continues to do. He understands its international dimension, and I assure him that we will work with other countries to develop this technology. I have already talked to Secretary Chu, the US Energy Secretary, about how we can co-operate on our learning about CCS.

Martin Horwood (Cheltenham) (LD)
I too am grateful for receiving notice of the statement.

This is a step in the right direction: carbon capture is a vital technology in the transition to a lower carbon electricity-generating economy. It also has huge advantages over, for instance, nuclear, not only because it contributes to base load supply, but because it can provide variable supply, thereby tackling some of the problems of intermittency and peaks and troughs of demand.

I recognise that the Secretary of State might have had to overcome opposition from within his own Government. Last year, some of us battled against the former Minister, who has just spoken, the right hon. Member for Croydon, North (Malcolm Wicks), during the passage of the Energy Act 2008, when he fought tooth and nail against expanded competition, and I think it would be appropriate to say that we have the scars on our backs. Sadly, as a result, we have lost crucial ground to the United States, Canada, Brazil, China and others in benefiting commercially from this technology.

My first question is on funding, which the Committee on Climate Change and The Guardian seem to agree will come from a charge on the power system—in other words, on customers’ bills. Today’s statement was, understandably, a little cagier, because is there not a risk that this will contribute to fuel poverty without cuts in income tax for the least well-off, without mandated social tariffs—as suggested in the Bill proposed by my hon. Friend the Member for Somerton and Frome (Mr. Heath)—and without massive investment in energy efficiency for millions of homes, as proposed by the Liberal Democrats?

My second question is about emissions performance standards. I echo many of the comments from Conservative Members and hope that the Government will now support the private Member’s Bill promoted by my right hon. Friend the Member for Ross, Skye and Lochaber (Mr. Kennedy).

My third question is about the commitment to 100 per cent. retrofitting. That looks fine until we see the escape clause—whether the technology is ready. The critical question is: who bears the risk of it not being ready, the energy companies or the planet? If CCS is not ready, would a Labour Government close Kingsnorth? Unabated coal-fired power stations are the worst of all options—worse even than seeking a derogation from the European Union to extend the life of existing gas-fired power stations for a few more years until CCS is ready. This statement and policy proposal is well intentioned, but it contains a dirty great loophole that is big enough for some of the dirtiest possible power stations to fit into.

Edward Miliband
The hon. Gentleman started off well, but slipped into the same mode as the Conservative spokesman. We certainly look forward to being in power in 2020 to be able to answer some of his questions.

We all face a problem in respect of fuel poverty, and it is best to be candid about it: there are upward pressures on prices from both the high and low-carbon futures. If we carry on with the high-carbon future—I know the hon. Gentleman does not want us to do that—demand from China and India will force prices up, so that is no solution. We are looking at social tariffs—compulsory social tariffs is one of the issues—and the answer is to act on fuel poverty at the same time as driving towards a low-carbon future. Therefore, I agree with the hon. Gentleman that we need to take additional measures on fuel poverty.

I have said that we shall consult on the emissions performance standard. I told the hon. Member for Tunbridge Wells (Greg Clark) that we need to be cautious about plucking figures out of the air about the EPS. I have set out the way in which we should demonstrate the technology, and I think we need an EPS that is appropriate for the technology. We should debate the precise figure, but I am not going to state a number today because I do not think that is a sensible way to make policy.

The technology for retrofitting needs to be proven. For us to demand that CCS must be fitted on a whole plant, it needs to work. I believe that it will work— obviously, we all hope that it will work—but I also said in my statement that, importantly, we must discuss the eventuality that it does not work and whether, in that case, there should be restrictions on the operation of the plant. However, we are performing a very fine balancing act between getting coal plants built—because, after all, energy companies and others could say they are just going to build gas—and driving towards low carbon. That is why I have set out a framework today, and I say, in the spirit of genuinely wanting co-operation, let us consult on the detail and get that right. The framework needs to last for some time, and I will want to engage in genuine dialogue with the hon. Gentleman about it.

Mr. Elliot Morley (Scunthorpe) (Lab)
I greatly welcome the statement. It sends very clear signals, and we should not underestimate the benefits that come from that in commitments. It is also balanced about what can and cannot be done at present. I am particularly pleased that my right hon. Friend mentioned regions and clusters. While the priority must be coal, as he will know, a lot of carbon capture work is going on in, for example, the steel and the petrochemical industries. In the south Humber and Yorkshire region we have, of course, Europe’s biggest coal plant: Drax. Regionally, there are some very exciting proposals for clusters and network collections of CO2. On the south Humber, there is a centre for the whole low-carbon sector, particularly the offshore sector. Would my right hon. Friend be interested in meeting a delegation from our region to talk about how regions can work with the Government to achieve the outcomes we all want?

Edward Miliband
I would be delighted to do that, and I pay tribute to my right hon. Friend’s work on these issues. I had the privilege of receiving a presentation from Yorkshire Forward about its plans. My right hon. Friend makes the important point that carbon capture not only could apply to coal-fired power stations, but could be of use for steel and other sectors. That network could play an important role, too.

My right hon. Friend makes another important point. There are huge industrial opportunities for this country—such as jobs—in this cluster approach. That is certainly the basis on which we will want to proceed, and we will want to work with his Select Committee again to get the details right.

Mr. John Gummer (Suffolk, Coastal) (Con)
I congratulate the Secretary of State on his long-awaited and welcome statement. He understates his own contribution, however, because one of the reasons he has encountered a certain amount of scepticism from Opposition Members is that many of the measures he has announced today are those that we pressed for but which Labour Members said were impossible. Therefore, we will go on pressing him, as it seems to help him very much. Will he assure the House that he will take tough measures to make it clear to the industry, especially the generators, that this is not an easy push—that they will have to do their best to deliver, and that they cannot get out of it when we reach 2020?

Secondly, can the right hon. Gentleman point to the precise spot in the Budget statement that refers to the emissions trading scheme, because this remarkable statement suggests that the money has already been both calculated and applied elsewhere? That is something that we did not know, and there is a big question from the green movement about whether the money might be used for purposes other than the improvement of Britain’s green economy.

Edward Miliband
May I say that I benefited very much from conversations with the right hon. Gentleman about these issues? His contribution to this debate has been very important. He is right that, on coal, we are moving towards a need for the right form of smart regulation to drive the right investments by energy companies. I have also benefited from my discussions with them about these issues and about getting the balance right. The EU emissions trading scheme is calculated as part of the general accounting that is done by the Government and the Treasury and is part of those overall accounts.

Mr. Eric Illsley (Barnsley, Central) (Lab)
My right hon. Friend’s statement tends to concentrate on new-build coal-fired power stations. Will he give some encouragement to technologies that I hope are being demonstrated? I am talking about pre-combustion capture technologies that use the old British Coal topping cycle—a technology that was abandoned by the Tory Government back in 1988. There are companies that believe that they could retrofit that old British Coal topping cycle technology to existing coal-fired power stations, which could extend the length of those stations after 2015. That could be part of the solution to this problem.

Edward Miliband
I pay tribute to the work that my hon. Friend has done on these issues. I shall examine his proposal, as it could certainly make a contribution. In respect of coal, and all kinds of other fuel, it is necessary to use all the technologies at our disposal, and co-firing with biomass can also make a contribution to reducing emissions. We will use all those technologies and I am happy to examine my hon. Friend’s specific proposal.

Mr. Brian Binley (Northampton, South) (Con)
I, too, welcome this statement. I do not wish to be churlish, so I pay tribute to the work done by the right hon. Member for Croydon, North (Malcolm Wicks), who laid the platform for this particular statement—we should recognise that fact. May I also say that I hope that my own Front-Bench team will become more consensual once the Budget period is out of the way?

I wish to ask two very quick questions, the first of which relates to the coal-producing areas. We know that much of the coal required is being imported and there is a lot of work to do to involve our coal-producing areas, so what thoughts does the Secretary of State have about that? Secondly, I wish to press him on a decision about Kingsnorth, but, from day one, I also urge him to include that power station within the parameters that he has outlined today. We need a decision on the current proposal on Kingsnorth urgently, but we also need that power station to be included in the particular programme that he has described today.

Edward Miliband
I obviously agree with much of what the hon. Gentleman said, and I think that today’s announcement offers a big opportunity for the former coalfield areas from which they can really profit. Kingsnorth is involved in our competition, and the next stage of the process will be front-end engineering and design studies—the bidders will put forward their proposals and we will judge who will be the eventual winner of the competition. The good news is that there are a number of opportunities to benefit from the four demonstration projects.

David Taylor (North-West Leicestershire) (Lab/Co-op)
I congratulate the Secretary of State on a very imaginative statement. Will he say a word or two more about sourcing? If we do nothing to develop new deep mines, for example in north-east Leicestershire, where 800 million tonnes of clean coal is available, what will inevitably happen is that there will be an expansion of imports from sometimes unstable regimes and, more worryingly, an expansion of open-cast mine extraction. That affects all mining constituencies, particularly those in England, where there are shallow, unworked seams that the open-cast coal people would like to access because of the low cost. However, the environmental and social impact of such mining is very significant, as we see in respect of the Minorca application in north-west Leicestershire, which is about to be submitted.

Edward Miliband
On my hon. Friend’s first point, indigenous coal does have an important future, and I obviously discuss that with UK Coal, the miners’ unions and others when talking about these issues. It is important to put that on the record. It also helps security of supply if we are able to benefit from such coal. On his second point, the existing planning guidance, which has been in place for some time, is obviously a matter for the Department for Communities and Local Government, and it remains the basis on which we are moving forward.

Mr. Mike Weir (Angus) (SNP)
I am tempted to say better late than never. Scotland could have been well in the forefront of carbon capture and storage had the Government not pulled the rug from under the Peterhead project. Given that Scotland has some of the largest carbon storage reserves in Europe in the North sea saline aquifers and depleted oil and gas fields, and the expertise on how to access them, it would be a tragedy and a travesty if the firth of Forth was not one of the clusters chosen in this project. Can the Secretary of State tell us when the winning entry will be announced? Is he still committed to having a full-scale demonstration project up and running by 2014?

Edward Miliband
Two processes are involved—the existing demonstration competition, in which three bidders are still involved, and the new incentive mechanism, which will require legislation to go through this House. If the Scottish Executive also want to put some money into taking these projects forward, we would be interested in having some of it. The basic point that I wish to make is that the firth of Forth will be part of the competitive process. It is not part of the existing demonstration, but given our announcements about an extra three demonstration projects, there is the potential for it to be involved. We have to use all the means at our disposal to develop this technology, and that will be true throughout the United Kingdom.

Joan Walley (Stoke-on-Trent, North) (Lab)
May I offer a warm welcome to the very measured statement made by my right hon. Friend? It really will set us on a transformational agenda in terms of the future low-carbon economy worldwide. Given that carbon abatement technology is the new black gold, will he carefully examine what can be done in areas such as the former coalfields in north Staffordshire, where there used to be many jobs in mining? Will he work with the regional Minister and the regional development agency to see how the former Chatterley Whitfield colliery in my constituency, which produced more than 1 million tonnes of coal in its heyday, can be transformed so that the people still living around that site have opportunities for new manufacturing work in carbon abatement technology?

Edward Miliband
My hon. Friend makes a very important point in a characteristically eloquent way. There is a real opportunity, including in her area, and this will require work with the regional development agencies and others who are already getting involved. It will also require work with our scientists, our universities and others. I recently visited a university that is already working on carbon capture and the role that it can play. We need to mobilise all such forces in order to develop this technology and to win jobs for Britain and for our regions.

Mr. Philip Hollobone (Kettering) (Con)
If all goes according to the Government’s plans and there are four new coal-fired power stations by 2020, does the Secretary of State think it will predominantly be British coal or foreign coal that is decarbonised?

Edward Miliband
As I have said in earlier answers, indigenous coal has an important role to play. If the Conservatives are supporting indigenous coal supply, that is much to be welcomed—it certainly does not bear any relationship to their record in government. Indigenous coal can play an important role and some of the decisions made in the 1980s were a tragedy; we could have much more viable coal mines and many more mines than we have if those wrong decisions had not been made. We need to do all we can to maximise what we can get from indigenous coal.

Mr. Michael Clapham (Barnsley, West and Penistone) (Lab)
I welcome the Secretary of State’s announcement. The framework that he sets out will be very helpful, and I was particularly pleased to hear what he said about his meeting with Yorkshire Forward. He will be aware that the Yorkshire Forward project is an infrastructure project that would rejuvenate the engineering and steel industries in south Yorkshire, because it is proposed that it would create 55,000 jobs. May I say to him that we are likely to hit a real problem between 2012 and 2015, when there will be the simultaneous run-down of coal power stations and nuclear power stations? Perhaps we could consider some retrofitting with super-critical boilers, because we would thus be introducing a CO2-reducing technology. Such work would provide us with the opportunity to be able to have them fitted ready for carbon capture so that when the technology is proven, it could be fitted. That would get us through a crucial energy supply period.

Edward Miliband
My hon. Friend has huge expertise, and I pay tribute to him for the enormous amount of work that he has done for our coal mining communities.

My hon. Friend made a very important point about the Yorkshire Forward project, but I will generalise. We need public investment, and that is what we will see as a result of the Chancellor’s announcements, but we also need private investment. That combination, including investment in some of the industries that he was talking about and the networks that we need, can make a real difference in the future. I am very happy to discuss further with my hon. Friend his other points about new investment, retrofitting, flue gas desulphurisation and so forth.

Dr. Julian Lewis (New Forest, East) (Con)
I welcome the comprehensive approach that the Government are taking to these questions. Will the Secretary of State tell us what examination he made of the type of balance being struck by other European countries between different forms of energy generation? France, in particular, as we know, has a great degree of self-sufficiency based on nuclear power stations. What sort of balance does he think that we should have between nuclear power and the new technology that he has described?

Edward Miliband
The hon. Gentleman makes an important point. The view about nuclear in this country was coloured by the experiences that we had, the plants that were gone for and the cost of waste and clean-up. I am pleased that my predecessor made the decisions that he did about nuclear. As I said earlier, I think that climate change has changed people’s view about the role of nuclear in the energy mix. On the subject of the French example, I am not sure that we would want to be wholly reliant on nuclear. It should be part of the energy mix along with clean fossil fuels and renewables, and there should still be a role for gas, at least for the time being. I think that that is the right way to go.

Nia Griffith (Llanelli) (Lab)
I welcome my right hon. Friend’s statement and the commitment shown by the Government to carbon capture and storage. Will he elaborate a little more on the use of indigenous coal? We know that, very sadly, many mines were abandoned after considerable investment in the ’80s. Sinking new deep mines requires considerable investment, and I want to know what steps the Government are taking to foster further development of deep mines so that we are not reliant on imports, which have a carbon footprint because of their transportation and which offer less security of supply, and so that we provide jobs for our own people here.

Edward Miliband
There are obviously limits—one should be candid about it—in terms of rewriting history on these things. Decisions were made in the 1980s and 1990s and it is hard to reverse some of them. I have mentioned Harworth, where a particular case has been made. It has been mothballed for a couple of years and we are in discussions with UK Coal about it. We will listen to all representations that we receive about deep mines and their potential. The mines that are open provide an important indigenous source of fuel for Britain and will do so for many years to come.

 Points of Order

13:13:00

Dr. Julian Lewis (New Forest, East) (Con)
On a point of order, Mr. Deputy Speaker. On 1 March, the News of the World smeared me in a story about parliamentary allowances, based on a false claim that I hardly visit the home in my constituency where I have lived every week for more than a decade. That story is now before the Press Complaints Commission. It was given credibility by a clear endorsement by the hon. Member for Lewes (Norman Baker), who knows that I am mentioning him and was in this Chamber earlier today, but who could not possibly have known whether the specifics of the story were true or not. Instead of apologising for not even consulting me first, the hon. Gentleman has claimed in correspondence that he gave only what he describes as “a generalised non-specific quote” that “does not even name” me, that he was “unaware” of much of the story’s contents before commenting, that he has not accused me

“of breaking the rules or indeed doing anything wrong”

and that he

“did not, for example, ‘fume’”

about my behaviour as the newspaper alleged.

I have now seen the newspaper’s evidence to the Press Complaints Commission. Its reporter, Jamie Lyons, states that

“before publication I had a lengthy telephone call with Mr Baker in which I went through in detail the specific allegations about”

Julian

“Lewis. He was then happy to give me the quote used in the story. I have spoken to Mr Baker since and he has absolutely no complaints about the quote.”

Is there any general guidance that you can give, Mr. Deputy Speaker, about standards of decency and integrity to be adopted by hon. Members when publicly criticising the personal conduct of colleagues, particularly when the person making the criticism has previously claimed very large sums of money from the public purse, including tens of thousands of pounds to pay rent to himself for a constituency office inside his own main home?

Mr. Deputy Speaker (Sir Michael Lord)
The hon. Gentleman’s point of order is obviously not a matter with which the Chair can deal in detail. I will say to the House, however, that I think that all right hon. and hon. Members should be very careful in their dealings with the media, particularly when reference is made to colleagues in this House. On every occasion, colleagues in this House should deal with each other with the greatest possible care and respect.

Mr. Charles Walker (Broxbourne) (Con)
rose—

Mr. Deputy Speaker
I think that I have dealt fully with that point of order.

Mr. Walker
It is a different point of order, Mr. Deputy Speaker. A month ago, secondary schools in my constituency were notified that their funding for sixth form places was going to be cut. It was rumoured today that there might be a statement from the Secretary of State for Children, Schools and Families on the state of play in returning that money to the schools. How can we persuade the Secretary of State to come to this House to make a statement on this important matter, which affects all our constituents across the country?

Mr. Deputy Speaker
I am well aware of how important these matters are, not just to the hon. Gentleman’s constituents but to others. He will know full well that the Chair does not have responsibility for when and where Ministers make statements to the House, but his points are firmly on the record and I have no doubt that those on the Treasury Bench have taken note of them.

 Ways and Means

Budget Resolutions and Economic Situation

Amendment of the law

Debate resumed (Order, 22 April).

Question again proposed,

That,—

(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.

13:17:00

Mr. George Osborne (Tatton) (Con)
It is a great pleasure to open the second day of this Budget debate. It gives us an opportunity to look at the detail of the Budget and to highlight the points that the Chancellor of the Exchequer entirely omitted from his speech yesterday lunchtime. It is also a pleasure to do so opposite the Secretary of State for Energy and Climate Change. The Chancellor has let me know that he is on his way to an important meeting in Washington, and I entirely accept that.

Mr. Peter Bone (Wellingborough) (Con)
He’s going to the International Monetary Fund.

Mr. Osborne
As my hon. Friend says, the Chancellor might well want to put in a call to the IMF for all sorts of reasons.

It is good to open this debate with the Energy Secretary here. He is always an engaging fellow and we always have a good relationship. After all, he was one of the key economic advisers of the last 10 years—one of the members of the council of economic advisers and one of the adjuncts in that famous Treasury bunker. To be fair, he has always stressed that he just stuck to giving economic advice rather than trying to run the political operations. Given what has happened to the British economy, perhaps in the interests of his long-term ambitions, he should take credit for the political operations and leave Mr. McBride to take the blame for the economic advice.

We welcome the Secretary of State to this debate, and it is a special one. Government Budgets normally take a few days to unravel—sometimes just one day—but this one set a new record. It unravelled half an hour after the Chancellor sat down. He sat down at around 1.30 pm, and at 2 pm the IMF produced its growth forecasts for the world economy and the British economy, which completely contradicted the growth that the Chancellor had given to the House just a few minutes earlier.

Instead of the economy going from a staggering 3.5 per cent. contraction to a fantastically optimistic 3.5 per cent. growth in just two years, the IMF says the recovery will be much slower and, indeed, that Britain’s economy will still be contracting next year. I hear sneers and dismissal from Government Members about the IMF’s figures, but I thought that the IMF was going to be the new early-warning system for the Prime Minister. In a stroke, the IMF destroyed the credibility of the premise on which the Budget and its borrowing figures had been built. The claim is that within just two years, the British economy is supposed to bounce from the deepest recession that it has known since the second world war to levels of economic growth and household consumption seen only at the height of the boom; we now know that, frankly, in the view of almost every independent forecaster, that is a complete fantasy. No wonder that one paper this morning described the whole thing as “Alistair in Wonderland”. I guess that that leaves the Prime Minister as our mad hatter—and given the expression on the face of the Secretary of State for Energy and Climate Change, he is the white rabbit.

As I say, the IMF was not the only one to question the central Budget assumptions. Almost every single business organisation and independent forecaster followed suit, including the Institute of Directors, the Engineering Employers Federation and a host of others. This is what the chief economist at Standard Chartered—one of the few banks that has not gone bust under this Government—said yesterday afternoon:

“The chancellor…believes recovery will be rapid…we will see growth of 1.25 per cent. in 2010 and 3.5 per cent. in 2011. This is fantasy…as this…rebound is expected to occur”

while the “legacy” of the borrowing binge “lingers on”.

Extraordinarily, the Chancellor of the Exchequer yesterday announced the worst public finances ever announced in the House of Commons, told us that in the next two years we would borrow more than has been announced at that Dispatch Box by all previous Chancellors combined, and said that he would double the national debt, yet he was guilty of being too optimistic. That is the scale of the mess that the Government have created. The tragedy of yesterday was that instead of being honest about that mess—instead of taking responsibility for the mistakes that have been made and giving us a credible plan to pull Britain through—we got that complete fantasy.

This is what the director general of the CBI said yesterday afternoon:

“The key question for this Budget was whether it set out a credible and rigorous path for restoring the public finances to health. The CBI’s preliminary judgement must be that it does not”.

That sums up the scale of the failure yesterday. The central task of a Budget in a recession such as this is to inspire confidence in the future—confidence that the Government are realistic about the problems that the country faces, confidence that they have a credible and rigorous plan to deal with those problems, and confidence that they have the leadership and vision to take this country forward. Who would say that in Britain today, people and families are feeling more confident about this country’s future as a result of the Budget? Almost no one. That is why yesterday was not a route map to recovery but the death rattle of a tired and discredited Government who are limping on until the law of the land actually forces them to hold a general election.

Let us look at the components of what a credible and rigorous path for restoring the public finances might look like, and then we can see why the Budget failed. [Interruption.] Indeed, and it might come as a surprise to the Secretary of State for Energy and Climate Change, that there is such a thing as a credible and rigorous path because we certainly did not hear of one yesterday. First, it would involve understanding why the public finances are in such a disastrous state. The Prime Minister is still stuck in the rut of claiming that this is the recession that came from America and hit an otherwise sound British economy. I see the hon. Member for Midlothian (Mr. Hamilton) nodding his head. He must be about the only person in the world who believes that now. [Interruption.] Okay, the three of them do—the hon. Members for Glasgow, North-West (John Robertson), for Coventry, South (Mr. Cunningham), and for Midlothian. Perhaps if we have a swipe-card system, we will get some more in, too.

Whether we are talking about Lord Turner, from whom the Government commissioned a report, or the Treasury Secretary of the United States, there is now consensus that the British economy, like the American economy, went through a credit boom that fuelled an unsustainable rise in house prices, household borrowing and bank leverage. Indeed, it was greater in the UK than in the US. It was an illusion of economic stability built on a mountain of debt. Given that, the claim to have abolished boom and bust was surely one of the greatest political deceits ever told to the British people, and the decision to borrow at unsustainable levels during the boom, instead of fixing the roof when the sun was shining, left Britain totally unprepared for the economic slow-down. That is why Britain now has the worst public finances of any major economy in the developed world. Even in the past 24 hours, after the Government forecast a Budget deficit of over 12 per cent. of national income, Ministers still will not admit it.

I welcome the Chief Secretary to the Treasury to the Chamber. Yesterday, I watched her saying in the media that the US deficit was going to be higher than ours. I do not know whether she read the IMF report published yesterday afternoon. It says that with the exception of Ireland, the UK has the highest budget deficit of any of the countries that it looked at—higher even than that of Iceland, let alone the United States of America. That is the highest deficit in our peacetime history.

Let us remember what the Prime Minister said just last year. Perhaps these words were crafted by the Secretary of State for Energy and Climate Change:

“Look in the early 1990s, let’s look at how economies go wrong,”—

said the Prime Minister—

“in the early 1990s Government borrowing went up to 8 per cent of GDP, that’s what happened under the Conservatives. It went completely out of control.”

If he describes 8 per cent. as “completely out of control”, what does he call a 12 per cent. budget deficit?

In the Red Book, there is an admission, which we might well be putting on posters in the run-up to the next election, that the current downturn is forecast to be much deeper than that of the early 1990s.

The Secretary of State for Energy and Climate Change (Edward Miliband)
indicated dissent.

Mr. Osborne
The right hon. Gentleman shakes his head, but it is there on page 200 of the Red Book. He can read it out if he likes, or I will. [Hon. Members: “Go on!”] Oh, all right. It says that

“the current downturn is forecast to be much deeper than that of the early 1990s”.

There we go—from the lips of Labour itself, after all those years of lectures about the 1990s, Black Wednesday and all that, we have that admission, and we will treasure it.

Of course, when the Government’s defence on the deficit is looking a little threadbare, they turn to the argument about the stock of debt—overall levels of Government debt—but that argument is now falling apart, too, because the stock of debt is soaring as well. According to the OECD, Britain will have higher debt than 20 other developed nations—higher than France and Germany. The significance of that is that the Prime Minister said, just a few months ago:

“The national debt, even after the difficulties that we go through, will be lower as a percentage of national income than in France, Germany”—[Official Report, 26 November 2008; Vol. 483, c. 716.]

That commitment—that promise—given by the Prime Minister just a few months ago is now completely worthless. We will see whether the Secretary of State for Energy and Climate Change repeats it today. How on earth can the Prime Minister be trusted to get the future right when he does not understand the mistakes of the past or the problems of the present?

The second component of a credible and rigorous path to restoring some sanity to the public finances is a clear statement that the principal weapon in dealing with Britain’s overspending is spending restraint. Let me be fair: Labour has come off its spending plans. Fantastic! At last! We have been telling it to do that for months. We would like to hear an apology from every single Labour Minister who has stood at that Dispatch Box month after month and said that coming off Labour spending plans meant savage public service cuts. Only a few months ago, the Prime Minister said of my right hon. Friend the Leader of the Opposition:

“he wants to cut public spending. He is totally on the wrong side of the argument.”—[Official Report, 14 January 2009; Vol. 486, c. 210.]

But listen to what the Chancellor of the Exchequer said on the “Today” programme this morning:

“I have cut overall public spending”

in the Budget. In fact, the Budget Red Book shows that Labour will cut its departmental spending plans by £9 billion, and its capital spending plans by £11 billion, over the next four years. That is what the Labour MPs were cheering about at the end of that Budget statement—not that the cheering went on for very long.

That is the political tragedy of the Budget. We have moved from the age of prosperity to an age of austerity, but the leadership of the Labour party has been completely left behind by events. There should be a sensible debate in this Parliament, now, about how we can deliver decent public services in a period of tight spending control. We should be discussing how to get better value for money now that the cupboard is bare. We should be deciding—and perhaps have a debate between the parties—on the best way of tackling the long-term drivers of public expenditure, such as unproductive services, welfare dependency and family breakdown. We should be working out what replaces the completely defunct fiscal rules and the two-year spending reviews that used to provide at least some appearance of a fiscal framework. But what do we have from the Labour party? Absolutely nothing. The fiscal framework now consists of a temporary operating rule that will be more permanent than the temporary fiscal rules that were supposed to be permanent.

To be fair, some people in the Labour party, and some people who used to be in the Labour Cabinet, want to have debate about the politics of austerity and how to deliver government to the people in a time of spending constraint. The right hon. Members for Birkenhead (Mr. Field) and for Norwich, South (Mr. Clarke) and even the hon. Member for Dagenham (Jon Cruddas) have all called for such a debate, but their problem is that their party is led by someone who still wants to reduce everything to a pathetic dividing line of Labour investment versus Tory cuts. How on earth does the Prime Minister expect to achieve that? How on earth does he expect to advance that argument when, on the basis on which Labour fought the last election, the cuts announced in yesterday’s Budget amount to £84 billion? Does he really think people will not notice that, far from seeing so-called Labour investment, we have just seen investment in the health service—capital investment—cut by £2.3 billion next year and investment in schools and universities cut by £900 million?

The Government have another problem. Although the Budget accepts the principle that Labour spending plans were completely unaffordable, and although the Government have told us that billions of pounds are being wasted in Whitehall as we speak, they cannot explain why they are still planning to increase spending in 2010 by 2.9 per cent. Indeed, yesterday the Government actually increased their spending plans for 2010—next year—by £20 billion, and only half of that was extra spending on debt interest and unemployment. When will they admit in their arguments what the figures in their Budget tell them? Their spending plans are simply unaffordable.

The Chancellor has admitted that there is scope for efficiency savings. On the radio this morning, he said:

“Any organisation can always be more efficient…We”—

the Government—

“need to be more efficient.”

Anyone listening to that might have been under the impression that the Government were actually taking some of those tough decisions to make things more efficient, but the Chancellor will start to constrain public expenditure only in 2011. I wonder why he picked that date—[Interruption.] The Secretary of State says that we want to cut it now. Just to be clear, we are proposing, in a recession, to restrain the growth of public expenditure by £5 billion and use the money to reduce taxes on pensioners and savers and to provide extra courses for people who are leaving university this summer. Even with the right hon. Gentleman’s economic understanding, he must realise that that is not a fiscal tightening or a fiscal loosening. It is fiscally neutral and it is the right way to spend money that the Government themselves admit is being wasted at present.

Is it not the most cynical trick of all for the Government to pretend that they are only hitting the rich by raising their taxes before the election, while delaying the real tax rises and tough spending decisions until after the election? How courageous. What leadership: a move worthy of a Prime Minister who has never had the courage to submit himself to a democratic vote. Thankfully, the public have seen straight through it. Instead, we see the Labour party lurching left, off the centre ground that Tony Blair put it on all those years ago. Gone is the language of aspiration and opportunity; in comes the talk of “soak the rich” and “pips squeaking”. Never mind that a 50 per cent. tax rate before the election clearly breaks one of the central promises in Labour’s election manifesto. It will be interesting to hear what the Secretary of State says about the election manifesto commitment not to raise the top rate of tax. The manifesto said:

“We will not raise the basic or top rates of income tax in the next Parliament.”

As I understand it, if there is a general election next May or June, that will have happened and the manifesto promise will have been broken. That is from a Prime Minister who, unbelievably now, came into office pledging to restore trust in politics.

Of course, it is not the rich who will bear the burden of Labour’s historic incompetence. When we look closely at the Red Book, it is clear that the headline-grabbing measures announced by the Chancellor will actually raise less money than the national insurance rise on the jobs and incomes of people earning more than £20,000 a year. Although we do not think that higher marginal tax rates are a good idea, and although we agree with all the arguments that used to be advanced from the Dispatch Box by the former Chancellor and the former Member for Sedgefield that higher top rates of tax can damage enterprise, our priority will be to reverse the tax rises on the many, not the few.

Mr. Clive Betts (Sheffield, Attercliffe) (Lab)
Will the hon. Gentleman say whether a future Conservative Government would actually implement the 50 per cent. tax rate? If not, what would he do instead to raise the necessary finances?

Mr. Osborne
I do not know whether the hon. Gentleman noticed, but one of the key changes in the Budget is that the tax will be implemented by a Labour Government before the general election. I make it very clear that I cannot make a pledge to reverse that—[Hon. Members: “Ah.”] No, I cannot make a pledge to reverse that. I do not claim that it is a great idea, but my priority is to avoid tax rises on the many, not tax rises on the few. By the way, Labour MPs had better get used to the phrase, “Labour’s tax rises on the many, not Labour’s tax rises on the few”, because they will hear it a lot between now and the general election.

Mr. John Gummer (Suffolk, Coastal) (Con)
Is my hon. Friend aware that the former Labour Minister, Lord Digby Jones, said today that the Budget gave him no hope whatever about the future of British exporters and the British economy, and that it was a Budget without any kind of vision? Is that not an interesting comment from somebody who was sitting on the Labour Benches only a few weeks ago?

Mr. Osborne
It is a telling comment from a person who was appointed just days after the Prime Minister became Prime Minister. No doubt the Secretary of State for Energy and Climate Change and his cronies, such as the Chief Secretary, plotted the appointment of Digby Jones for months. They thought it would be a brilliant appointment. I have to say that some Members, including me, were sceptical about whether he should really be Lord Digby Jones of Birmingham, but given how helpful he is being at the moment I think that he should indeed represent an entire city in the House of Lords.

Miss Julie Kirkbride (Bromsgrove) (Con)
And Bromsgrove.

Mr. Osborne
Indeed. He can have a dukedom as far as I am concerned.

The national insurance tax rise, which we will hear much of between now and the election, is about the only real policy the Government have for the recovery: a tax on jobs at a time when we have the fastest rise in unemployment in our history. There was almost nothing in the Budget to help Britain move from an economy of borrow and spend to one where we save and invest.

The measures on unemployment were another cruel mirage on a day when we saw a record rise in unemployment.

Edward Miliband
Why?

Mr. Osborne
I am coming to why if the Secretary of State could be a little patient. Perhaps he can explain why the Chancellor did not tell anyone that the Budget assumption is that the claimant count will go up to 2.4 million, which would put the labour force survey figure well above 3 million. Why was that not in the Chancellor’s statement to the House yesterday?

Mr. Bone
What would my hon. Friend say to my constituents who have seen a rise in unemployment of 67 per cent. under the Labour Government since 1997?

Mr. Osborne
I would advise them to continue returning my hon. Friend to Parliament. I remind the House that he was one of the first to draw attention to the impact of unemployment in individual constituencies as a result of Labour’s recession.

The Chancellor made great play yesterday of his guarantee to everyone aged between 18 and 24 who claims jobseeker’s allowance for more than a year that they will be given a work placement or work-related training. That was the big promise on unemployment. Well, we have done some research over the past 24 hours. What the Chancellor did not tell us is that, as of today, only 5,755 people are covered by that guarantee. I hope that it is good help to that 5,755, but there are 1.2 million young people aged between 18 and 24 who do not qualify. They are languishing; they are not in school, not in a job and not in training—a record number of NEETs under the Government.

We heard much of the green recovery that would be unleashed by the Budget—something that I know is very much on the mind of the Secretary of State; no doubt he thought all about it in advance and did the spinning. What happened? What about the electric car announcement? The battery ran out before it even made it to the Budget speech. Friends of the Earth said about yesterday:

“The Government has squandered a historic opportunity to kick-start a Green industrial revolution.”

WWF says that

“what was announced is not the bold leadership we desperately need to secure a truly low-carbon future.”

The leadership on that future, like the leadership on so many other big challenges facing Britain today, has to wait for a new Conservative Government. That lack of leadership is the legacy of a Prime Minister who has always been more interested in short-term political dividing lines than in any long-term vision for the country.

For years, the Prime Minister said that the choice was between Labour investment and Tory cuts; now, he has cut investment in schools and hospitals and given us £84 billion of Labour cuts, but he still lacks the courage to admit it or debate it. For years, he said that the choice was between the many versus the few; now, he is raising taxes on the many and the few, including a tax on jobs in a recovery. For years, he said that the choice was between Tory boom and bust and Labour prudence and stability, and now he has given us the prudence of the worst budget deficit in our history, the stability of the deepest recession since the second world war and the tragedy of the greatest boom turning to the biggest bust.

Eighteen months ago, the Prime Minister cancelled the general election—no doubt on the advice of the right hon. Gentleman the Secretary of State—and said that he wanted more time to set out his vision. That is what he said. Now we know, after yesterday’s Budget, that there is no vision to set out, and the sooner we change our Government, the sooner we will get the change that our country so desperately needs.

13:41:00

The Secretary of State for Energy and Climate Change (Edward Miliband)
I am pleased to open this Budget debate with the shadow Chancellor. For one brief, shining moment during his speech, when he said that he would present a positive plan, I thought that he might do so, but we heard nothing positive—no plan for how to get out of recession, no plan for how to build for the future, no plan for fairness in this country. That is the truth about what he said. It was a highly predictable diatribe. He would have convinced more people with a more balanced speech.

The shadow Chancellor says, for example, that the downgrading of growth is a purely British problem, but the International Monetary Fund has forecast negative world growth for the first time since world war two. That shows the gravity of the situation that we are dealing with. He says that we are worse placed than others, but the IMF showed yesterday that we are faring better this year than Germany, Japan, Italy and the euro area. He says that our deficit—[Interruption.] I am coming to that. He says our deficit is worse than others’, but the United States Congressional Budget Office says that the US deficit will be 13 per cent. this year. On the question of the deficit, we did pay off the debt during the years when the economy was growing—

Peter Luff (Mid-Worcestershire) (Con)
Tory spending plans.

Edward Miliband
If the hon. Gentleman listens, he is welcome to intervene.

The national debt went down from 42 per cent. to 36 per cent., including the £22 billion of spectrum auction proceeds. It is also true—I make no bones about it—that we did choose to invest in schools and hospitals, which the Opposition opposed at every step; that we did choose to invest in public transport, housing and all the things that matter; that we did fix the roof when the sun was shining; and that, for example, as a result, tens of thousands of children are being taught in schools where that was done.

I shall discuss the future, because it is important, and the three questions that underlie the Budget debate. The parties have some big differences on those questions, which are worth highlighting. First, how do we get Britain out of recession as quickly as possible? That is what people want to know. Secondly, how do we build the economy of the future? Thirdly, how do we meet the challenges that we face, including those on the public finances, in a way that is fair to ordinary families? I know that the shadow Chancellor does not really want to do this, but let us try to engage with the substance of the argument, because on the question of how get Britain out of recession, we have an honest difference of view, which it is probably better to make plain.

Yesterday, my right hon. Friend the Chancellor announced a 0.5 per cent. fiscal easing this year. I assume the shadow Chancellor thinks that that is the wrong thing to do to help Britain out of recession; that the money to help tackle unemployment is the wrong thing to do; that the money for housing is the wrong thing to do—if he wants to intervene and say that it is the right thing to do, he is welcome to do so—and that the money for low-carbon measures which will help this year and next is the wrong thing to do. Perhaps he would like to tell us whether he supports such action. I should be happy to give way to him.

Mr. George Osborne
We support in a recession getting money to the front line from the waste that the Government have identified. They say that there is £15 billion of waste sloshing around Whitehall. If the right hon. Gentleman thinks that those schemes are so good, he should use the money from that waste and not add to the national debt.

Edward Miliband
I am not quite clear from that answer whether or not the hon. Gentleman supports the action. I suspect that he wants to have it both ways.

On how we get out of recession, however, there is a philosophical difference that is worth highlighting. The shadow Chancellor may not want to talk about it, but it is important that the country knows the difference. In a debate in the House last month, he was asked about his view on borrowing and on borrowing rising in a recession. He gave a very illuminating answer, saying that

“tax receipts fall off and welfare payments increase,”

and that, as a result—these were not his words—borrowing rises. He continued:

“Those are the fiscal stabilisers, and that provides a fiscal stimulus. That was a debate that was had in this country and many others over many decades since the 1930s.”—[Official Report, 18 March 2009; Vol. 489, c. 932.]

There you have it, Mr. Deputy Speaker. The shadow Chancellor’s view, even when interest rates are at 0.5 per cent. in this country, is that the limits of fiscal policy—this is a very important point—are to let the automatic stabilisers work. On that point, however, he is pretty much alone: 19 of the 20 G20 countries have put more money into their economies; the Institute of Directors and the CBI support putting extra money into the economy; the managing director of the IMF supports it, too; and—[Interruption.] Opposition Members ask about the Governor of the Bank of England, but he also supported our fiscal measures—and our targeted action in the Budget.

The shadow Chancellor calls himself the moderniser in the Conservative party. I think he once said that we was not an über-moderniser, but he says that he is a moderniser. Interestingly, there is someone who I think is the shadow Chancellor’s secret hero: President Obama is, I am sure, someone for whom the shadow Chancellor has great admiration. What did the President say in November 2008? I agree with what he said, and perhaps the hon. Gentleman will tell us whether he does, too. The President said that

“we have to do whatever it takes to get this economy moving again...we’re gonna have to spend money now to stimulate the economy...short term, the most important thing is that we avoid a deepening recession”.

I would be happy to give way to the shadow Chancellor, because he did not want to illuminate our differences of view. I am happy for him to come back on this point. I repeat, President Obama said that

“we’re gonna have to spend money now to stimulate the economy”.

He believes in fiscal expansion and targeted action. I wonder whether the shadow Chancellor will tell us whether he agrees. I am happy to give way.

Mr. Osborne
indicated dissent.

Edward Miliband
The hon. Gentleman does not want to intervene. It is not surprising.

Bob Russell (Colchester) (LD)
Will the right hon. Gentleman give way?

Edward Miliband
I shall give way to the hon. Gentleman in a few minutes. He might answer on the shadow Chancellor’s behalf.

It is not surprising that the shadow Chancellor does not want to intervene; he does not want to admit the central difference that the country must know about—that the recession would be deeper, longer and more painful if he were in charge of the economy. That is the truth that dare not speak its name in his speech.

Bob Russell
Will the Minister accept that, in the real world, after years of plenty and 12 years of a Labour Government, almost 4 million children still live in poverty, and that, thanks to the Government’s 12 years of failure, the housing crisis for low-income people is the worst for a decade?

Edward Miliband
I think the hon. Gentleman overdoes it. A more balanced view would be welcome not just from the shadow Chancellor, but from him. We have made significant inroads into child poverty on the most testing definition of relative poverty. [Interruption.] Conservative Members shout from sedentary positions, but we all know the truth: child poverty would be far worse if they had their way and if they were in power. There would be no money to tackle child poverty or the housing situation. My right hon. Friend the Chancellor made money available for housing, and it is important that he was able to do that even at these difficult times.

The problem for the shadow Chancellor is not simply that he opposes fiscal action, wrong-headed and isolated though that makes him. Obviously, his policies would make the recession deeper, longer and more painful. His problem is also that he does not even follow his own strictures about the 1930s.

The Conservatives’ policy on spending is interesting: their argument is that we should cut spending now. In January, the leader of the Conservative party was very clear when he said:

“let’s say there’s an election April this year…I’d immediately instruct my ministers to go into their departments and say instead of the increase of perhaps 2 per cent. real terms you’re expecting, it’s a 1 per cent. real terms increase”.

I do not think that there is any doubt about what that means. It means cuts in spending. It means taking away money that has been promised to schools and hospitals.

Mr. Osborne
Will the right hon. Gentleman concede that, using his formulation, there are £84 billion of cuts off previously published Labour spending plans? Yes or no?

Edward Miliband
I am glad to have tempted the hon. Gentleman back to the Dispatch Box. Let me say to him very clearly that his party would take money away that has already been promised and cut the real-terms growth in spending. In contrast to his proposals, we are sticking to our spending plans up to 2010-11 and sticking to the money that we have promised for schools and hospitals. The big difference, although he wants to get away from it, is that he is doing something that is seen to be economically illiterate. He is saying that the time to cut spending is now, in the middle of a recession. Whatever he says, he knows that that is the case. I do not know why he boxed himself into that position.

Mr. Osborne
Let me ask the question again, because it is very important. The definition of cuts that the right hon. Gentleman used is money that comes off previously published spending plans. Will he now concede that that means that, on his definition, there are £84 billion-worth of cuts in the Budget and the pre-Budget report, because they have come off previously published Labour spending plans? Yes or no?

Edward Miliband
I do not concede that. I was making it quite clear that money has been promised in 2009-10 to hospitals, schools and others and has then been taken away. We have not got to the next spending review; we have not allocated the money in the next spending review.

Mr. Charles Walker (Broxbourne) (Con)
I have a lot of time for the Secretary of State—[Hon. Members: “Why?”] Because he is a very nice and honourable chap. However, on 3 March, secondary schools in my constituency were told that they were going to get a certain sum of money to fund their sixth forms. Less than a month later—three days before the new financial year started—£40,000 was removed from each of those schools’ sixth forms. Will the Secretary of State at least answer the concern that I am raising and please get someone to return that promised money to secondary schools in Broxbourne and around the country?

Edward Miliband
I have respect for the hon. Gentleman, too, but let me say to him that he certainly would not get any money from his party’s Front Benchers. They want to cut money in the spending review. The Chancellor announced money for sixth forms yesterday, and I hope that it will help the hon. Gentleman’s sixth forms.

Mr. Osborne
The Secretary of State said something pretty significant about future spending plans. During the Budget speech, the Chancellor announced from that Dispatch Box that current spending would grow by 0.7 per cent. from 2011 onwards. The Secretary of State for Energy and Climate Change now says that those spending plans are not valid because there might be a spending review before then. That is the basis of the question. He said that there was going to be a spending review and that we cannot take those figures as fixed. Given what has been promised by Labour, the right hon. Gentleman is now, in his terms, cutting those spending plans by £84 billion. He said that he wanted an honest debate, so why does he not have the honesty to admit that? Then we could debate how to deliver public services in a tight spending environment.

Edward Miliband
I was making a very simple point. The money has been allocated for the spending review up to 2010-11, because, as the hon. Gentleman knows, we have three-year spending plans. The Chancellor set out the figures for the future spending review. That is a very simple point. The hon. Gentleman wants to take away money that has already been promised.

Let me move on. The second test of the Budget is whether it prepares our industries and our economy for the future. Contrary to what the shadow Chancellor said, significant announcements were made yesterday by my right hon. Friend the Chancellor. Not only were there the first legally binding carbon budgets, which provide a certain framework for industry, but we heard announcements on renewable energy, carbon capture and storage and a range of other things.

Earlier today, I made a statement about carbon capture and storage and the role that it can play for Britain, offering a huge industrial opportunity for this country and thousands of jobs. I am sure that the hon. Gentleman has good intentions, but what he has said reflects a difference of view about the role of the Government. We think that it is right to support the emerging industries of the future and that there is a role for public spending as we do that. However, I do not think that that is in the Conservatives’ philosophy. I do not think that the shadow Chancellor really believes in it. I think that he believes that markets will take care of it.

Joan Walley (Stoke-on-Trent, North) (Lab)
My right hon. Friend is bringing us to the details of what is in the Budget report. The question is how we deal with energy efficiency and all the other aspects. Does he agree that the announcement to increase the money for the Warm Front scheme will do an amazing amount for households with vulnerable people? That is exactly the type of public expenditure that will help to deliver the decent homes standard, and it will be widely welcomed across the country.

Edward Miliband
I agree—my hon. Friend is absolutely right. The priority that the Chancellor gave to those measures in a difficult Budget, where there was not much money to spend, is important. That is true of Warm Front, carbon capture and storage and a whole range of other matters.

The shadow Chancellor quoted certain organisations that have expressed disappointment, but I sense a real understanding that significant progress has been made in this Budget, not only on carbon capture and storage but on a range of issues. I think not only of the additional support for offshore wind technology, but of the support from the European Investment Bank, which will get the renewables industry moving. Those measures are very important, just as grid access is.

Mr. Mike Weir (Angus) (SNP)
Before the right hon. Gentleman moves on, I should say that the two Front Benchers have had a totally artificial argument about cuts this afternoon. The truth is that both of them are cutting. Although the Secretary of State says that there are no cuts, £1 billion is coming off the Scottish budget over the next two years, and similar things are happening in Wales and Northern Ireland. That has been said by the First Ministers of the two devolved Administrations. Is it not a fact that the right hon. Gentleman’s Government are cutting just as the Conservatives did, and that the sooner Scotland gets out of the Union, the better?

Edward Miliband
If anything, the financial crisis has shown that the Scottish National party’s view about independence is completely wrong-headed. The strength that the United Kingdom gives to all of its parts is important. Furthermore, I do not accept what the hon. Gentleman said about the fiscal numbers and the impact on Scotland.

Adam Price (Carmarthen, East and Dinefwr) (PC)
The right hon. Gentleman has dismissed the SNP Government, but what does he say to comments made by the First Minister of the Welsh Assembly yesterday? He admitted that the announcements in the pre-Budget report and the Budget would mean £416 million of cuts from the Welsh Assembly Government budget for the following financial year. The First Minister said that he could not give any commitment that that would not result in cuts in public services in Wales. Is the Labour First Minister in Wales wrong as well?

Edward Miliband
Those are efficiency savings. I do not accept the notion that they are the cuts in spending that the hon. Gentleman suggests.

I was explaining the investments that we are making in green industry and the £400 million of funding for that. It is clear that we understand the role of Government in supporting these industries of the future; I do not believe that the Conservatives do.

Let me turn to the third question, on which, again, the shadow Chancellor did not want to focus—how we face the challenges, including on the public finances, in a way that is fair. We have set out some pretty clear objectives on efficiency savings and plans of how we can get those savings—[Hon. Members: “How?] Five reports were published on Tuesday about precisely what needs to be done. Again, there is a difference of philosophy that the shadow Chancellor probably will not want to talk about. He now says that he accepts the higher top rate of income tax, but he did not mention his uncosted proposals on inheritance tax, which are still out there and have, I think, been reaffirmed. This is an interesting point, given that we are in the middle of a time when resources are scarce. The shadow Chancellor made his promise in 2007; he now has an opportunity to move off it. Indeed, the shadow shadow Chancellor, the right hon. and learned Member for Rushcliffe (Mr. Clarke), gave him a heaven-sent opportunity to do so when he said:

“I don’t think we’re going around any longer saying this is something we’re going to do the moment we take power”.

Just to be clear about the proposal on inheritance tax, it represents an extra £200,000 each for the richest 3,000 estates in the country—£600 million. What is extraordinary about the shadow Chancellor’s judgment and priorities is that at this moment, of all moments, he continues to think that that would be a good way to spend resources. He says that there will be posters around the country. I can tell him that there will be posters all round the country talking about his commitment on inheritance tax—people all round the country will know that his priority is a tax cut for millionaires. If he wants to challenge the idea that it is a tax cut for millionaires, he is welcome to do so, but the figures are—

Mr. Osborne
So that we are fully in command of the facts, will the Secretary of State confirm that the Labour Government cut inheritance tax from the beginning of this tax year?

Edward Miliband
Yes, of course I will, but that was to reflect the particular position of couples. Again, I invite the shadow Chancellor to intervene to confirm that he wants to spend well over £1 billion on inheritance tax.

Mr. Osborne
indicated dissent.

Edward Miliband
The hon. Gentleman shakes his head—is he denying it? Oh, so it is his policy. He does not really want to talk about that policy. The shadow shadow Chancellor gave him the opportunity to dump it, but what did he do? He pushed the right hon. and learned Gentleman to issue a statement saying that actually he got it completely wrong and that that was the priority at this stage of the recession. The shadow Chancellor rolls his eyes from a sedentary position, but it is a fair question to ask: does he really think that spending some £600 million on the richest estates in the country, on millionaires, is the right priority at the moment? [Interruption.] He is talking from a sedentary position; I am happy for him to intervene to say that he thinks that spending that £600 million, given all the competing pressures on public spending and tax, is the right thing to do. He has suddenly gone a bit coy. I do not think that he really wants to say that it is the right priority.

Angela Browning (Tiverton and Honiton) (Con)
rose—

Edward Miliband
Perhaps the hon. Lady would like to answer for the shadow Chancellor.

Angela Browning
How much has the tax take to the Treasury declined since the Labour Government introduced their inheritance tax proposals in a mad panic because we had introduced ours? It is in the Red Book; perhaps the Secretary of State would like to give us some figures.

Edward Miliband
Funnily enough, I do not know the figures off the top of my head. What I do know, however, is that there is a big difference in priorities. At this most difficult economic time, the shadow Chancellor thinks that the right priority is more inheritance tax cuts for millionaires. If he wants to abandon the policy at the Dispatch Box, I am sure that many people, including some on his own side of the House who are probably more sensible, would think that was the right thing to do. I give him that chance: he can now say that it is an aspiration rather than a firm pledge. Funnily enough, he does not want to do so.

Let me move on to the hon. Gentleman’s other tax priorities. I think that the Conservatives are still committed to a married couples allowance—presumably another uncosted commitment that they have no clue how they would fund. We are very clear about our priority: we think that the right way to support families in the tax system is to support children, and that is what we are doing.

Mr. Osborne
Will the right hon. Gentleman confirm that his changes, or cuts, to inheritance tax introduced a recognition of marriage into the tax system?

Edward Miliband
No, it was correcting an anomaly in the tax system regarding the position of married couples compared with other couples. That is the explanation. If the hon. Gentleman wants to abandon his married couples allowance today, I am happy for him to do so. I think that it is right to support children through the child tax credit.

The other problem for the shadow Chancellor arises from his proposals on tax credits, which have not got much attention. He says that he wants to cut the number of people who get tax credits. When he was on the “Today” programme a few weeks ago, having trouble finding what areas he would cut, he said:

“We raised the question, for example, of whether in-work benefits, tax credits, should go to people on incomes of over £50,000.”

Presumably, he wants to cut tax credits for those people.

Mr. Walker
rose—

Edward Miliband
I will give way in a moment, but this is a Conservative policy to which I should like wider attention to be given, as it is significant. Not only is the shadow Chancellor going to go into the election saying that he would take money away from people, but to cut the level of tax credits he would either have to cut the overall rate, which would affect everyone, or raise the taper in the tax credit, which would worsen work incentives. Those are the two ways in which he could take money away from people through tax credits. That is another policy that he was hoping not to talk about.

We have a completely different set of priorities. Although the shadow Chancellor claims a modernising face, the truth is that on inheritance tax, on the married couples allowance and on tax credits, he does not present a modernising face at all.

Mr. Walker
Could the Secretary of State tell the House how many billions of pounds in tax credits have been overpaid in the past five years, how much of that overpayment has been recovered, and how many billions have been lost as a result of overpayment?

Edward Miliband
That says it all, really. There were overpayments in the tax credits system. Some of that is to do with the design of the system, in that it is a flexible system that responds to people’s circumstances. As a result, as my right hon. Friend the Chancellor said yesterday, hundreds of thousands of people have seen their hours reduced and their income go up by up to £35 a week. That would not have happened if we had followed the advice of the Conservatives, or if the system had not been designed as it is. We know what their hidden agenda is—it is to cut tax credits, and that is what they would do if they were in government.

Mr. Weir
rose—

Edward Miliband
I have already given way to the hon. Gentleman.

The Conservatives were not supporters of the tax credits system in the first place—they thought it was a bad idea. They do not want to have the courage of their convictions and say that they would abolish it, but that is the reality.

The truth about this Budget is that we have shown that we have a plan to get our economy out of recession—unlike the Conservatives. We have a plan to build our economy for the future—unlike the Conservatives. In addition, we are the people who will—to use the words that the shadow Chancellor claims that he wants to use but will not be able to—stand up for the many, not the few. That is why this was the right Budget for Britain. We know that the Conservatives have no plan to get our economy out of recession if they are ever in power. We know that they have no plan for the future. We know that what they offer is tax cuts for the few and spending cuts for the many. That is why the House should vote for this Budget next week.

14:10:00

Martin Horwood (Cheltenham) (LD)
This Budget, like the previous one, was widely hyped as a green Budget. The Secretary of State himself, who knows that I give him credit when it is due, last week told The Independent on Sunday that it would represent a

“massive greening of the Government.”

If green words, green targets and green titles were enough, that would have been true, and perhaps he could have taken the credit. But they are not, it is not, and on this occasion I am afraid he cannot.

The background could not be more serious. Despite the scepticism still being expressed from the Conservative Benches today, the intergovernmental panel on climate change’s 2007 assessment painted a deeply worrying picture, stating that any more than 2° of global warming would usher in higher and higher risks of massive species extinctions, droughts affecting billions of people, a loss of food production and increases in deaths from diseases and the physical risks of heatwaves, droughts and floods.

Yet as we warned from these Benches at the time, even the IPCC is an inherently conservative, consensual body with a built-in time lag in its use of data. The latest data suggest that ice sheets in Antarctica and Greenland might be melting faster than predicted by the IPCC, and the same appears to be true of mountain glaciers. Sea levels will therefore rise faster than expected, making floods and storm surges much more dangerous and threatening the homes and lives of millions in coastal communities worldwide. The latest data on Arctic sea ice show its likely summer disappearance in just a couple of years’ time. The IPCC predicted that that might happen by the end of 21st century. Some 80 years earlier than expected, the summer Arctic ocean will turn into a dark, heat-absorbing sea and accelerate the melting of permafrost on nearby continents. The latest data on that show that it will in turn release far more methane and carbon dioxide into the atmosphere than previously thought.

More such possible feedback mechanisms are being revealed in study after study. The clear risk is now of global warming of not 2° but 3° or 4° above pre-industrial levels, with almost unimaginable consequences for human civilisation. In theory, we could one day have to evacuate large parts of Africa, Asia, America and the Mediterranean region, which would probably become uninhabitable. Realistically, we would face social and political upheaval, conflict and economic collapse on a scale that would make the current global downturn look like a vicarage tea party. My children, Maya and Sam, are seven and nearly five, and that is not the world in which I want them to live their lives.

The December report of the Committee on Climate Change rightly set out the challenge, stating:

“To contain that threat, the world needs to cut emissions by about 50 per cent. by 2050, and to start cutting emissions now. A global agreement to take action is vital. But a global agreement will not be possible unless the countries of the rich, developed world provide leadership.”

We might feel a little less rich than we did two days ago, but we still cannot put that off. We have just seven months to demonstrate that leadership before the critical Copenhagen summit. We need to show continued commitment to decarbonising our economy so that we have some chance of convincing developing countries that we believe in convergence around what the Committee on Climate Change called a “sustainable global average” of per capita emissions, and that we believe that sustainability is compatible with a high quality of life. Of course, we have to show leadership so that we can persuade our fellow economies in the richer world to play ball too. In Kyoto, remember, we allowed a global deal to be watered down for American and Australian Governments who then failed to deliver ratification. Times and people have changed, but initial pronouncements by Mr. Obama’s climate change envoy, Todd Stern, that the reduction targets agreed in Bali are just “not going to happen” are pretty depressing.

The Secretary of State will claim that green measures in this Budget, the carbon budgets announced yesterday and the carbon capture and storage announcement that he has just made demonstrate the necessary levels of leadership. However, this is the Government of Gordon “Read the small print” Brown. Their environmental record so far is, to quote the same newspaper article that quoted the Secretary of State, “mainly hot air.” In just four years, we have all been able to contribute to a grand total of 91 different consultations relating to sustainable energy in one way or another, yet the proportion of taxation derived from behaviour-changing green taxes is actually falling. Green measures formed only 6 or 7 per cent. of the Government’s supposedly world-beating stimulus package, and one study suggests that that package overall could well help to push carbon emissions up, not down.

Mark Lazarowicz (Edinburgh, North and Leith) (Lab/Co-op)
May I clarify one point? I assume that the hon. Gentleman’s party will support an increase in fuel duty as part of the move towards green taxation.

Martin Horwood
I am grateful for the opportunity to clarify that, ideally, we would abolish fuel duty, and we have suggested a number of fairer ways of taxing motorists. One of the most innovative is a showroom tax, which would place a much higher duty on the most polluting brand new vehicles, so that I am afraid those hon. Members who want to spend their increased salaries next week on Porsche Cayennes would face a much higher bill. That is our approach to that taxation—we need a much fairer system.

Mr. Bone
I am sorry to interrupt the hon. Gentleman’s well thought out speech. The Government say that the car scrappage scheme is a green measure, but surely so much carbon dioxide is used in the production of a new car that it is actually an anti-green measure.

Martin Horwood
The hon. Gentleman makes a valuable point. If it ends up stimulating the more frequent purchase of new vehicles, it could well contribute to carbon emissions. Once again, it may be more of a prop to the car industry than a genuinely well thought out green measure. Perhaps more research and analysis needs to be done on that.

As I said, the Government’s record has been said to be “mainly hot air”, and some of their practical programmes sound a lot like some of the economic stimulus programmes. The four-year-old marine renewables deployment fund has yet to part with a single penny. The low carbon buildings programme has taken household grants for renewable energy to a five-year low. As we heard in questions earlier today, the office for renewable energy deployment has not been set up as such. The implementation of the carbon reduction commitment is threatening to close on-site renewable energy at companies such as BT. The Government’s first attempt at a carbon capture and storage competition did close carbon capture and storage projects, and the National Audit Office has recently concluded that Britain’s participation in future phases of the EU emissions trading scheme might result in hardly any reduction in real UK carbon emissions.

To give him his due, the Secretary of State made a string of important concessions when he took office last year, from the 80 per cent. target for greenhouse gas reduction to the Climate Change Act 2008 and to the promised introduction of feed-in tariffs for renewable energy in the Energy Act 2008, but even those were relatively easy to concede in the short term, just like the Government’s stimulus package, because they are putting off all the really tough decisions.

For years, Ministers cheerfully claimed to be on target to meet their Kyoto greenhouse gas reduction targets, despite knowing full well that they had been met years previously because of the so-called dash for gas in the power industry. That was made quite clear in Sir Nicholas Stern’s report to the Government. With a cool economist’s eye, Stern also pointed to another successful example of carbon reduction in a major economy—Russia’s reductions in the 1990s, achieved through the spectacular collapse of its economy. Come to think of it, perhaps that was the bit of the Stern report that the Prime Minister did read. Let us hope that neither he nor the Secretary of State attempts to make similar claims in future that the inevitable fall in greenhouse gases that will result from recession are anything to be proud of. Instead, we should be wary of the false message that those possible reductions could send. They could mask a dirty but rather shrivelled economy that will be just as dirty or even dirtier when it reflates. If we have started to build a third runway at Heathrow and an unabated coal-fired power station at Kingsnorth in the meantime, that outcome seems pretty likely.

If the Department for Communities and Local Government ignores the Campaign to Protect Rural England, Friends of the Earth, the Environmental Audit Committee and tens of thousands of public objections to its regional spatial strategies—up to 35,000 in my own south-west region alone—it will wake up to see any revival in house building taking place first all over an area of England’s green belt the size of Birmingham. Much of that will be prime local, food-producing agricultural land, while a million properties lie empty elsewhere.

The regional spatial strategies assume an annual year-on-year growth forecast of 3.2 per cent.—that is plus 3.2 per cent., a fantasy assumption that makes even the Chancellor’s growth forecast for the economy as a whole look pessimistic. Incidentally, the Government’s reply to the Environmental Audit Committee’s call for the suspension of regional spatial strategies on environmental grounds was due in January, but I understand that the Committee is still waiting for a reply. Perhaps the Secretary of State will lend the Minister with responsibility for communities a hand.

Even if his Department does not have that much clout across Government, thank goodness this Secretary of State is at least listening to the Committee on Climate Change. The committee has provided clear advice that we should commit to a greenhouse gas budget that represents a 34 per cent. reduction by 2020, which may give us a chance of challenging other policies. We obviously welcome the Government’s acceptance of that target, even if it is comparable to the Chancellor’s decision not to cut pensioners’ winter fuel allowances or the decision not to beat one’s mother—correct, obviously, but anything else would be unthinkable. Let us make it clear that 34 per cent. is the minimum interim target recommended by the committee, assuming no ambitious global deal is struck in Copenhagen.

Liberal Democrat Members also welcome the committee’s recommendation of a tougher 42 per cent. reduction target, which is compatible with an EU-wide cut of 30 per cent. by 2020. I would be interested to hear why the Government have not agreed to that recommendation. I realise that the global deal has not yet been struck, but the Climate Change Committee and the EU have made working assumptions and set intended targets, so why are the Government not doing likewise? Whatever the carbon budget, the test is whether we produce the policies and actions to deliver it.

Mr. Bone
I am listening carefully to the hon. Gentleman’s well-crafted speech. Does he support the Government’s decision, which is listed on page 173 of the Red Book, to remove the biofuel duty differential, which will increase the cost to people who use biofuels—I declare an interest, because my car is powered by biofuel? Some £1 billion will be raised from people who are trying to save the environment.

Martin Horwood
I had not spotted that item, and I am grateful to the hon. Gentleman for drawing it to my attention. There are, of course, many bear traps in the area of biofuels. Unless we implement sustainability criteria, we could contribute to global warming rather than prevent it.

The Climate Change Committee says that aviation must face an appropriate cost for carbon to provide an incentive for supply-side abatement and demand constraint. The background to the third runway decision was a fiddled version of the shadow price of carbon, which deviated from Sir Nicholas Stern’s proposed formula and, specifically, his discount rate. Perhaps the Secretary of State should seek the committee’s advice on the appropriate cost of carbon and how exactly one can constrain demand for aviation while building extra runways at our biggest airports.

On carbon capture and storage, we heard the Chancellor’s statement yesterday and have heard and read the Secretary of State’s announcements and documents today. The announcements sound great—a bigger, better competition and an apparent commitment to all coal-fired power stations being 100 per cent. retrofitted with carbon capture and storage by 2025, but the vital escape clause is that it is

“subject to the technology being ready”.

If it is not ready, the unabated power station will not be shut down and will continue to belch out far more greenhouse gases than any available alternative. In the accompanying document, much is made of carbon capture-readiness. A friend once told me that carbon capture-ready is a bit like paving one’s front garden and declaring it Ferrari-ready—aspirational, but no real guarantee of success. How right she was.

Lord Smith, chairman of the Environment Agency, the Government’s own environmental advisers, was also right. The agency rejected the idea of building coal-fired power stations that can be fitted with CCS technology later, claiming that it would be

“insufficient for the climate change challenge that we face”.

There are some other genuinely welcome steps in the Budget, of which the extra incentive to offshore wind energy through increased renewables obligation certificates is one, but there are also some strange steps in completely the wrong direction. Was the push to exploit new oil and gas reserves the Secretary of State’s idea, or has big oil been talking to the Secretary of State for Business, Enterprise and Regulatory Reform? Does the Secretary of State for Business, Enterprise and Regulatory Reform carry more clout with No. 10 and the Treasury than the Secretary of State who is here today? I suspect that he might. It all sounds a bit more Bush than Obama.

A great deal was missing from the rest of the Budget, such as an admission that the Government have got some things plain wrong. For example, it is absolutely irresponsible to waste £1 billion a month on a VAT cut that hardly anyone has noticed. The Budget also lacks any serious measures to help us adapt to climate change. I notice in the detail, because it affects my constituency in particular, that the £800 million flood budget is being supplemented by a £20 million increase, although the increase will be brought forward only from next year, when there will presumably be a compensating cut. The Budget does not include a scheme to compensate those communities located in counties such as Norfolk that face much faster than expected coastal erosion, perhaps in large part due to the action of climate change.

Landfill tax keeps increasing, placing a burden on local authorities, which might be acceptable if there were corresponding help for some of the programmes that have been cut drastically in recent years, such as the national industrial symbiosis programme, the waste recycling action programme, Envirowise, the Carbon Trust, the Energy Saving Trust and the small and much neglected Partnerships for Renewables. The latter was set up to help public sector bodies deliver renewable energy locally at no cost to them. The scheme is exciting and innovative, but it has had precious little support so far.

Mark Lazarowicz
The hon. Gentleman is, like me, a member of the Environmental Audit Committee, which proposed an increase in landfill tax, but he seems to be suggesting that landfill tax should not be increased. Will he clarify Liberal Democrat policy on that issue, too?

Martin Horwood
The hon. Gentleman is, of course, correct. I am happy to clarify the policy. I am not saying that we should not increase landfill tax, but if we place such burdens on local authorities, we must give them the corresponding support to develop recycling; otherwise the result will be exactly what we face in Gloucestershire, where the Conservative-controlled county council is pursuing incineration, which will contribute toxic fly ash to the waste disposal site at Wingmore Farm near my constituency. We do not want to force local authorities in that direction. I do not necessarily disagree with an increase in landfill, but we must have compensating support for local authorities to enable them to meet that in an environmentally responsible way.

Where is the investment in railways? Last year, the Office of Rail Regulation turned down millions of pounds of railway schemes. One of the schemes would have been built near Doncaster, and the Swindon to Kemble line would have improved railway services to the whole of Gloucestershire and helped reliability for the whole network in the west country. In our “Green Road out of the Recession”, we suggested as an alternative to the £12.5 billion VAT cut that the money might have been better spent delivering almost the entire list of projects turned down by the Office of Rail Regulation for lack of funds. That would have provided not only a fantastic short-term stimulus, but support for business and local economies, which would have been a long-term investment in this country’s future. It could have been extended to include high-speed rail to Scotland or Wales and the west country. There could have been more investment in innovative ideas such as ultra-light rail, which would work in not only urban areas, but mixed urban, rural and suburban areas such as Gloucestershire. Instead, we have had the very hyped announcements on electric cars—a very new Labour idea. The Liberal Democrats suggested years ago that the EU might be crucial in directing the whole of the new-car market towards electric and zero-carbon vehicles. However, we also said that a short-term investment in the railways would do much more to reduce CO2 than would subsidies to the car industry for vehicles that, although more efficient, would still run on fossil-fuel powered electricity for years to come.

Where was the investment in housing? The Chancellor announced a few hundreds of millions of pounds for energy efficiency in housing, but if we had not been wasting money on cutting VAT we could have invested billions in providing energy efficiency and insulation for a million homes for some of the least well-off families in the country. We could also have subsidised investment in energy efficiency for a million more.

While the Liberal Democrats and the Government argue about how the money for stimulus measures should be spent, at least we agree that there had to be stimulus measures. The Conservative party could not pay for any of the green stimulus that we propose, because it would not have had any sort of stimulus package. Perhaps its interest in the environment is waning anyway, as it is unashamedly pro-nuclear and pro-incineration, and many of the interesting proposals from its quality of life policy group never made it into party policy.

There is, however, a bigger picture. Do we need to look more fundamentally at how we measure the quality of our economy and society? The hon. Member for Brent, North (Barry Gardiner) made a speech yesterday that might not have been widely noticed but which I consider to be very important. In it, he said:

“What if today’s financial crisis were something more fundamental than merely a serious and deep recession? What if 14 September 2008—the date on which Lehman Brothers was allowed to go belly up—represented the point at which the whole architecture of a consumption-led, growth-based economy collapsed? Perhaps this crisis is telling us that a system predicated on limitless growth must inevitably hit boundaries—boundaries that are not only economic, but ecological.”—[Official Report, 22 April 2009; Vol. 491, c. 298.]

It has been a Liberal party and Liberal Democrat theme for many years that the environment contains the economy, and not the other way around. Will recovery without clear environmental performance indicators and the recognition of constraints on well-being lead us straight back to the obsessive boom-and-bust model perfected by the Conservative party and executed with rash panache by the Labour Government over the past decade? We need a new model of sustainable prosperity that allows us to meet people’s aspirations for a decent quality of life, decent homes and a clean environment in a truly sustainable way.

14:32:00

Mr. Clive Betts (Sheffield, Attercliffe) (Lab)
Madam Deputy Speaker, may I begin by offering an apology to the House? I have a long-standing appointment at 3 o’clock, and I intend no discourtesy either to you or to hon. Members who speak after me if I have to leave at that time. However, I shall of course return to the debate in due course.

I shall not deal too much with the bigger picture of the Budget: instead, I want to focus on some of the particulars. My right hon. Friend the Secretary of State for Energy and Climate Change amply illustrated the clear divide between the two sides of the House. We on the Labour Benches are looking to target measures to help the economy in general, firms and individuals through what is clearly going to be a very difficult time in the next few years. The Opposition offer no hope at all, only totally inappropriate cuts.

I have the honour of representing in this House a constituency in the city of Sheffield, where life is becoming difficult for many individuals and companies. However, it is interesting to note that the success of our local economy during the period of Labour Government has meant that, although unemployment is starting to rise in Sheffield, that is not happening as quickly as it is nationally. That is completely different from the city’s experience in the 1980s, when our economy was based very largely on steel and engineering. The collapse of those industries had a devastating and dramatic effect, but we now have a much more diversified economy, with a range of different industries. They include education and health provision in the public sector, as well as firms in the high-tech, financial and leisure-related sectors. That diversity certainly holds us in better stead to come through what nevertheless will clearly be a difficult period.

Mr. Graham Stuart (Beverley and Holderness) (Con)
I am glad to hear that unemployment is not rising in Sheffield as quickly as it is elsewhere. We in the East Riding of Yorkshire also have a diversified economy, yet we have seen a doubling of unemployment in the past two years. My constituents are suffering from what is the fastest rise in unemployment in the region since the second world war.

Mr. Betts
Of course, the rate at which unemployment is rising depends on the base from which it starts. I can comment with particular knowledge about my city of Sheffield, and that is what I will do. As I have pointed out, we certainly benefited from the period of a Labour Government and their actions.

Despite the fact that we will have problems—people in Sheffield will lose their jobs and we should recognise the individual trauma that that causes them and their families—many companies are nevertheless doing well, and we should not forget about them. Nor should we forget about the Advanced manufacturing park, which is located just in Rotherham but works with the university of Sheffield. Through that partnership we are now working to redress a long-term British problem, which is that we do well in research and invention, but not so very well in innovating and extending that research and invention into products. That is what the Advanced manufacturing park is all about, and its work with Boeing and a number of other high-tech companies will spin off into jobs for the future.

Then there are companies such as Forgemasters, which had an appalling experience with the floods last year. However, Forgemasters took on 40 new apprentices only a few months ago and has order books for the future. The company is now looking for serious investment and exports most of its products throughout the world. Forgemasters will be a key player in the development of our nuclear industry, because it has the capacity to produce some of the most important parts for nuclear plants.

The other day I went to a firm on the edge of my constituency, just in the constituency of my right hon. Friend the Member for Sheffield, Central (Mr. Caborn), called Davy Markham, which is also a success story. A management buy-out of a firm in difficulties a few years ago, Davy Markham now has an order book for months ahead and is exporting most of its work. The managing director said to me, “I can take on any skilled machinist who walks through the door, because we are successful and producing products that are needed.” Davy Markham makes massive machining products for turbines and other parts. That is a niche market, but the company is a success story.

However, we should also learn the lessons for those companies from what happened in the past. One of the problems for those firms is the legacy of the lack of training for so many years after the recessions of the 1980s, the effects of which still lingers today. We took away a swathe of skilled operatives and did not train any more. Therefore, firms such as Davy Markham are still suffering today from a shortage of experienced, skilled operatives, even though they run their own training schemes. We must ensure that the recession of the day does not leave for the future the sorts of legacies that we suffered from after the recessions of the 1980s. I therefore welcome the help being given to businesses through capital allowances, the deferment of business rates and the strategic investment fund. All are important to ensure that our successful high-tech firms with export markets are sustained for the future, and helped and encouraged to train the people who will be needed when the recovery comes.

I also welcome the measures taken on the environment. Those on carbon capture, offshore wind farms and combined heat and power are all important moves to sustain those industries and ensure that we fulfil our international climate change commitments. I also hope that some of the measures that we have taken to support industry will help to sustain and develop firms in the green transport sector, which is something that I am particularly keen on. Indeed, I have two ministerial meetings arranged with two companies in my constituency that have some very interesting proposals.

One of those companies is called ITM and is developing ways of producing hydrogen much more cheaply than has been possible in the past. The firm has developed a refrigerator-sized unit for domestic properties that can produce hydrogen that people can then put into their cars. That is an interesting development, because it means that we do not need a great network of sites throughout the country; rather, people can use the unit in their own homes. The unit may not yet be commercially viable, but the research, the invention and the innovation are there, and it is absolutely fascinating.

The Government are looking at help for electric cars, but if we are to help to develop green transport in the future, hydrogen-powered cars will probably be a much more exciting and relevant possibility. When Jeremy Clarkson can welcome an environmentally friendly car as a real possibility on “Top Gear”, we are perhaps making real progress. If we can produce an environmentally friendly car that people still enjoy driving, that must make success in tackling climate change a real possibility. I hope that we will consider helping firms such as ITM and seeing how they can be encouraged and helped to produce products that will be important for our economy and our export potential for many years ahead, if we can become a world leader in producing them.

In its ideas for the production of hydrogen, ITM is looking to link in with offshore wind farms, which will certainly be an important source of energy in the future, although they produce energy simply when the wind blows, which is not always when that energy is needed. ITM is looking at the possibility of turning the energy produced by offshore wind farms into hydrogen, storing it under the North sea and using the pipelines from the North sea as a means of bringing it onshore. It is a concept at this stage; it is an idea, but it is exciting and interesting and, again, something in which we have the potential to become a world leader. I hope that firms that have such ideas will be assisted so that those ideas are implemented in this country as a first.

I also intend to have Transport Ministers meet with another firm in my constituency called Magtec. It is developing an interesting electromagnetic motor that can be attached to a conventional heavy goods vehicle or bus. The firm believes that it has the technology, and it works; there are buses running around in Denver in the United States with the original form of the technology on them. It says that it can achieve a 40 per cent. fuel saving on an HGV or a bus. It is a practical proposal. The technology is there; it works. The firm just needs to convince some of the bus manufacturers that its product is the one that ought to be used and developed.

Magtec has just taken on four more skilled engineers and technicians to help it with this work. It is a small company, but again it is looking to grow, even in the current difficult circumstances. Such companies are growing in precisely the industries that we ought to be encouraging and assisting. I hope that they can have access to some of the measures in the Budget to help them through what is obviously not an easy time for any company.

The hon. Member for Cheltenham (Martin Horwood) referred to rail. I certainly support rail transport, and I hope that, whatever problems we have with future Government finances, we will maintain our commitment to invest in rail, especially where it can lead people to stop using internal air transport and where we can switch from diesel to electrified rail systems. I have a constituency interest in two particular issues. I know that a working party that includes Transport Ministers is looking at the potential electrification of the Midland main line. That certainly would be welcomed in Nottingham, Derby, Sheffield and many other places. On the line north of Bedford, we hope for an early announcement and a commitment that the scheme will go ahead.

In the slightly longer term, we are looking for strategic decisions on the high-speed rail network. I raised that issue with the Transport Secretary in questions a short time ago. I argue strongly that, as well as a line to Birmingham, we can take a line off from Rugby—the old Great Central line—and run it through between Nottingham and Derby up between Sheffield and Rotherham and on to Leeds. There is no reason why we should think simply about one line. A line to Leeds via Nottingham and Derby and Sheffield and another line going up to Manchester seems to provide an entirely sensible system if we then have a proper link through the Woodhead tunnel linking the west of the country with the east. The possibilities for rail are real, and I hope that the Government remain committed to them, because their development would be good for British industry, for the travelling public and for the environment.

I welcome the extra money for the Warm Front programme, but tenants who live in social housing are still at a disadvantage because the work permitted under that programme is available to owner-occupiers and private tenants on particular benefits, but not to social housing tenants. It is not just a matter of insulation—often houses in the social housing sector are well insulated—but often a problem with old and antiquated boilers. If social housing tenants had assistance through the Warm Front programme, we could do an awful lot to make their homes more energy efficient and save those tenants money.

It is absolutely right that the Government are targeting help on unemployed young people and the long-term unemployed. Again, I go back to the 1980s in Sheffield. We are still suffering today from the problems caused when the breadwinner of families became unemployed in the 1980s, never got back into work and invalidity benefits were seen as a substitute for jobs. As a result, one generation after another has remained unemployed. We have to recognise that long-term unemployment is a major social problem as well as an economic one, and we must ensure that we focus on those people. It is often easy to forget about them. With more people becoming unemployed, those who have been unemployed the longest and who perhaps have the fewest skills are often forgotten about altogether because they are the hardest to deal with. We must not let that happen now.

When people lose their jobs, it is also important to ensure that they do not lose their homes as well. The Government have already taken steps to ensure that people who end up on income support get help with their mortgage payments after three months, rather than nine months. That was a good step, as is the home owners mortgage support scheme that was announced this week. That scheme will be important, because it is not usually the whole family that goes on to income support. Instead, one family member might become unemployed or go on to short-time working, but the family as a whole relies on both people working full time to support the mortgage. That is why our support for home owners needs to become more flexible in enabling them to keep their homes. When one member of a family becomes unemployed, the family as a whole does not get income support, and it is going to struggle to pay the mortgage. The home owners mortgage support scheme therefore represents an excellent step forward.

In questions earlier this week, I raised the issue of private tenants with the Housing Minister. More people are going to get into difficulty when the owner of a property—sometimes on a buy-to-let mortgage, but sometimes not—defaults on their mortgage, and the private tenants, who have paid their rent and done nothing wrong, suddenly find that their home is at risk. I know that the Government have an agreement to extend the period of notice involved, and I have some sympathy with the mortgage lenders in this regard. When they offer a buy-to-let mortgage, it is clear to them that tenants will be in the property. Unfortunately, however, some home owners with an ordinary mortgage subsequently let their property without telling the lender, which can lead to real difficulties. We have to take that issue on board, and I was pleased that the Housing Minister recognised that that problem still exists and that the Government need to introduce further measures.

I also welcome the help for building more homes, for buying up empty houses, including those on sites where private developers have not been able to sell, and for encouraging local authorities to begin building programmes. We must think about the longer-term issues as well, however. The Government have set a target for 40,000 units of social rented housing to be built each year, but that target is unlikely to be hit, even with this extra help, for the simple reason that section 106 agreements are no longer coming to fruition because the private schemes that would have delivered them are not being built.

Also, housing associations are in difficulties because most of them rely on a mix of funding for their schemes. They get some money from the social housing grant and some from building houses for sale on the same site as their rental properties, which involves cross-subsidising. As there is now greater uncertainty about whether those houses will be sold, the housing associations cannot get private finance and many of their schemes are simply not happening.

There is therefore going to be a real problem hitting the 40,000 target, even with these extra measures. If there is to be any chance of moving forward on building social housing for rent at the moment, the Government must make it absolutely clear that they will provide the money to local authorities that are prepared to provide their land for free in order to make these schemes happen. There is a challenge for local authorities up and down the country to come into partnership with the Government and to get social housing grant, but they then need to make that grant go further by putting their land in for free in order to get homes built in their communities.

Local authorities often moan about the shortage of housing, and there is a real shortage up and down the country. That problem becomes more stark when people cannot afford to buy or cannot get a mortgage. More people are therefore going on to local authority waiting lists, and there is a real shortage of rented housing. This is certainly true of my own constituency; I get people contacting me about this problem almost every day. However, local authorities must be prepared to step up to the mark and recognise that this is a priority for them as well as for the Government.

I have often said to the Government that we must consider the longer-term issues that will apply when we come out of the recession. The fundamental demand for housing, either for purchase or for rent, has not gone away. One of my real worries is that we shall now go through a period of no training for skilled workers for the building industry. It was only a year ago that we were welcoming people from the Czech Republic, Poland and many other places to help us to sustain our house building and to carry out home improvements through the decent homes programme, because we had a shortage of skilled workers. We could now have three or four years in which fewer homes are built, with people being laid off and drifting out of the industry, and no one being trained.

Once demand returns, however, there could be a real problem if we go back to the old housing inflation. Demand will not have gone away, but we will have had a period without adequate supply, in which people have not been trained and others have been lost to the industry. When demand comes back, the resulting shortage of capacity could lead to another sharp upward spike in house prices. How we cope with that and retain people in the industry—we need to retain people in skilled manufacturing jobs as well—is a real challenge.

I am a little disappointed that the Budget paid no attention to the need to offer some help for short-time working in various industries, which has happened in many continental European countries, because that is one way in which we might have been able to keep more skilled people in manufacturing and construction. If the Government had assisted with that, we might have been able to retain more skilled workers. That challenge still has to be met.

No one likes paying more at petrol or diesel pumps for their fuel—an inevitability in current circumstances. One issue people have raised with me—I do not have an the answer for the Secretary of State for Energy and Climate Change—is that they should be buying diesel cars because they are more fuel-efficient, yet diesel is more expensive, quite a bit more expensive, than petrol in this country. In many countries on the continent, diesel is much cheaper than petrol. Why cannot we offer diesel at the pumps for at least the same price as petrol? Why do we have this price differential, which encourages people to buy less fuel-efficient cars? The Government should have a word with the industry about that with a view to mitigating some of the extra costs.

On the beer tax, I know that the Government have to raise money, but there is a difficulty with their proposal. Clearly, we have a problem with binge drinking, which is mainly about crates of cheap lager from the supermarkets getting into the hands of young people, and I am sure that we have all heard complaints from our constituents from time to time about that sort of activity. However, we face a fundamental problem in terms of the demise of the British pub as a community institution, so carrying on regardless putting up the beer duty will have an impact. The problem is not just one for the Government. The other day, I met a group of tenants in my constituency who work for Enterprise Inns; they did not point their fingers at the Government, but said that, in their calculations, Enterprise Inns could make a pound a pint on the beer it sold, so perhaps putting 2p on beer duty was not the real issue. Nevertheless, the Government need to be sensitive about this point. Yes, of course we are against binge drinking; yes, of course we want sensible measures to deal with it; but if that means putting at risk community institutions such as pubs, we need to be very careful indeed. I urge the Government to think again.

Martin Horwood
I am speaking more from a constituency point of view than as a Front Bencher, but I strongly agree with what the hon. Gentleman says about traditional pubs. Does he agree that having a differential duty that is more generous to beer and encourages drinking in traditional family pubs would actually create a social environment that militates against binge drinking, which is an important factor in the wider issue?

Mr. Betts
I think it does and I have written to my hon. Friend the Exchequer Secretary to say that a differential tax—on beer sold in supermarkets as opposed to beer sold in pubs—would be very helpful. It may well be that we cannot do that, but it is an issue that needs addressing.

The Exchequer Secretary to the Treasury (Angela Eagle)
On that very point, we have looked at this matter and I am afraid that EU directives work in such a way as to make it impossible to tax the same item differentially, according to where it is sold. That is simply not possible.

Mr. Betts
I thank the Minister for that explanation, and I know that she has also written to me about it.

Mr. Weir
Does the hon. Gentleman think that the Scottish Government proposal to introduce minimum unit pricing, which would deal with the problem of cheap deals in supermarkets that fuel binge drinking but at the same time keep prices reasonable in pubs for more civilised drinking, may be another way round the problem?

Mr. Betts
I am not absolutely convinced of the case for minimum pricing, as there are some difficulties with it. All I am saying is that there is problem about the future of pubs that is worthy of debate across Government to see whether some way forward can be found.

Finally, I should like to discuss one part of my constituency that has the potential for the major regeneration that other parts of my constituency have already enjoyed. It is around the canal in Sheffield, to which British Waterways is very committed. It is working with local people, and David Slater, who has worked closely with me and the council on these matters, is involved. British Waterways is a key part of the regeneration, so we were a little concerned that in stretching its assets, the Treasury might be looking at fire sales of some property. I hope that I am receiving signals of reassurance that British Waterways will not be forced to sell off much of the land around the canal. That may be necessary at some point in the future, but British Waterways has a very good track record of sensitively developing that sort of land and the surrounding buildings, so gaining maximum value for local communities, stimulating wider regeneration and using such properties on the land appropriately. I am not sure that it is a good idea simply to sell the land off to private speculators who may not develop it in the near future, and may develop it badly when they eventually do develop it. I hope that the Government will reassure us that British Waterways will be assisted to develop it properly.

I have tried to cover a number of points. I support the Budget and the help that it will give the economy in general and, in particular, my constituents, who face a difficult time. I believe that the Government’s strategy of providing assistance rather than cuts during the current recession is right and appropriate.

14:55:00

Angela Browning (Tiverton and Honiton) (Con)
Let me begin by saying something about personal debt. Many people throughout the country are extremely worried about their personal finances during what will be—notwithstanding the Chancellor’s announcement yesterday—a long and deep recession. They are worried about their jobs and their housing problems, and elderly people in particular are worried about what will happen to the income on which they rely from investments, especially building society and bank savings accounts.

We know that even before the recession started, the savings ratio had halved under the stewardship of this Labour Government. That should have sounded a loud warning bell to Ministers, but they were very tardy in attempting to do anything about it. When people lose the incentive to save—to put money aside for a rainy day, or perhaps to fix the roof while the sun is shining—it is a very serious matter, not just for them personally but because it changes the culture in the country. It affects people’s feeling that they have a personal responsibility to put money aside.

For many years, I have been concerned about the way in which the younger generation—by which I mean young people of working age, many of them bringing up young families—have taken account of the experience of their mums and dads, who have suffered under this Government as a result of the erosion of their pensions. The former Chancellor’s hundred-billion-and-counting taxation raid on pension funds means that many people now do not have the funds that they expected to receive. All too often, their adult children think of what has happened to mum and dad and ask, “What is the point of putting money into a pension?”. That should be a worry for us all, and for them in particular, but the Government do not appear to have recognised that the problem has been building up over many years. Now that we are experiencing this appalling recession, the problems of pensioners and those about to retire are particularly acute.

The Government had an opportunity yesterday to remove the basic rate of taxation on people with investment income, but failed to take it. Although I welcome the Chancellor’s announcement of an increase in the tax-free amounts in personal individual savings accounts, many people on fixed incomes, especially the pensioner population—a great many pensioners live in my rural Devon constituency—do not necessarily have the capital to put into an ISA. They have depended on interest on which they have drawn regularly to pay essential household bills, including bills for utilities such as fuel, and they feel extremely vulnerable now that interest rates are falling while they continue to be taxed on their income if the aggregate is above the tax threshold. Price reductions do not necessarily help them. In February this year, the Institute for Fiscal Studies estimated that the poorest pensioners—those over the age of 80—faced an inflation rate of 6.7 per cent., more than four times the rate affecting the general population, because of the types of products and services on which the very elderly rely.

We have had many debates in this House about the costs of the various baskets of items that represent the retail prices index, for example, or the real rate of inflation. Members do not need me to explain all the specific individual needs of the over-80s, but their purchasing pattern is very different from that of the rest of the population. Interest rates have fallen, and those with modest savings who rely on interest rates to supplement their income have been hit particularly hard. Therefore, I regret that the Government did not take the opportunity to adopt what was a Conservative policy. They have adopted Conservative policies in the past, such as on inheritance tax. Had they done so on this occasion, I promise that I would not have stood here today and said, “You’ve pinched one of our policies”; instead, I would have warmly welcomed the abolition of the 20 per cent. tax rate on investment income for basic rate taxpayers.

Ms Sally Keeble (Northampton, North) (Lab)
This is an important point, and all Members will have encountered constituents who raise such concerns. Does the hon. Lady agree that it is important that people with modest savings whose income from those savings has decreased should look at the changes to the capital arrangements for pension credit? It is, of course, just the income that is taken into account, but nevertheless a raising of the threshold will have a huge impact, and some people might look at pension credit as being a sensible way of supplementing their income in the current difficult circumstances they face, even if they do not like claiming benefits.

Angela Browning
The hon. Lady raises a good point, and that will help some pensioners, although not all. She also points to an issue that I hope the Government will take very seriously. Will they, through various agencies such as the citizens advice bureaux and Age Concern, redouble their efforts to ensure that anybody who is entitled to a state benefit, whether means-tested or not, is encouraged to apply for it and is assisted in obtaining it as soon as possible? I have held surgeries with my own CAB offices to encourage pensioners to apply for various benefits that they were entitled to but did not know they were entitled to, or—to pick up on the point the hon. Lady raised—were entitled to but resisted because they feel means-tested benefits are demeaning. They find the form-filling rather difficult and some of the questions are very personal and can put many of them off.

I have referred to the over-80s. They are members of the generation above mine. It is the generation that lived through the second world war. I am a baby boomer; I was born the year after the second world war ended. I am, because of my age, very familiar with the age group that is one above my own. They are a very proud and independent people and they will not come forward voluntarily to apply for benefits. Nevertheless, I think that we as Members of Parliament, and certainly the Government, should do all we can to make the process as dignified and simple as possible. In this recession, there is an enhanced opportunity for the Government to do all they can to make sure the statutory bodies, voluntary services and charitable agencies encourage more people who are entitled to apply for such benefits to do so. Nevertheless, there was something that the Government could have done yesterday, and I very much regret that they did not take that opportunity.

I began by talking about personal debt. As I represent a rural constituency where communications might not be as good as in a city or large town, I am concerned that a lot of people living in small isolated communities do not always receive information and do not get to know about things as easily as those in urban areas. There is an issue to do with people who loan money—the loan sharks if I may call them that. I am sure all Members have had to deal with constituency casework where people have clearly been taken advantage of—often some of the very poorest people who are truly on the margins in terms of their financial viability. I urge the Government, particularly at this time, when people are going to find the coming years extremely difficult, to ask the Office of Fair Trading to look again at better regulation of the consumer credit market.

In some parts of the country, credit unions do an excellent job, but they, too, are not as easily available and known about in rural communities as they are in city centres. When they were first introduced, they were located in areas where it could be clearly identified that the population there might well benefit from them. Of course, in rural areas, people are scattered about and do not form a hub. None the less, there are outreach services and statutory agencies that can act on their behalf.

I ask two things of the Government on behalf of people who are on very low incomes, including not only pensioners, but those of working age. Will the Government ensure that the consumer credit market is properly regulated? Will they examine how we can roll out credit unions in a more unified way, particularly in the rural parts of the United Kingdom, because I am sure that they will be needed? They will solve a lot of problems for people who might otherwise be seriously taken advantage of.

The other loan sharks that I wish to mention are the banks. They have had a bad press and, like everybody else, I wish to see the credibility of the British banking system restored in a way that allows us to have trust in it, both as personal bankers and, on a much broader level, in terms of its importance as a national institution. I fear that we still have some way to go and the process of restoring confidence will go far beyond this recession.

The Financial Services Authority has clearly failed. We have had debates in the House about how the rules have been changed, how the role of the Bank of England has been changed and how powers have been divested to the FSA. It is essential that the regulation of the financial institutions in this country is clear and transparent, and that it works. When we have debates about regulation and I speak from the Conservative Benches, very often people say, “You always want a light touch. You always want less regulation, not more.” I believe that we have got it totally wrong in this place when it comes to regulation. I often find that regulation hits in the most top-heavy way areas where a light touch is needed, and we over-regulate in areas that need a light touch. However, in areas where proper regulation is needed and needs to be enforced, for some reason we get it wrong.

We should all ensure that any proposals that come forward, as I hope they will, to make changes to regulation and the way in which the FSA works are not unduly top-heavy for the sake of it. Very often this is simply a matter of common sense; it is a question of saying, “Where does the regulation need to fall? Is it transparent? Will it be easy to monitor to ensure that it is working properly?”. In asking the Office of Fair Trading to regulate the consumer credit market, I am not asking for a lot of top-down regulation just because things have all gone pear-shaped; I am asking for regulation that works and regulation that will genuinely restore the banking institutions of this country.

Adam Price
May I just give the hon. Lady an example of the imbalance in the FSA, to which she has referred? Independent financial advisers have been massively over-regulated by the FSA, whereas it has taken a cavalier light-touch attitude to the huge international corporations of the banking sector.

Angela Browning
I am grateful to the hon. Gentleman who, as ever, has put his finger on an example that I wish I had thought of. It is a classic.

When we first introduced the regulation of financial services in the mid-’80s, before I was elected, it seemed on the face of it that there was a very sensible way forward. Financial advisers, whoever they worked for—even if they were linked to a financial institution but were working independently—would carry out an analysis of somebody’s financial needs. In giving best advice, as it was called at the time, they would need to ensure that the product that they were selling was right for that person and that they could afford to pay the premiums or put capital in. The advisers were regulated and checked to ensure that they did so. All of a sudden, out of the blue, every department store, every chain store and every bank could market products through the post, over the phone—and now over the internet—without the same criterion of best advice applying.

The principle of best advice was right but, for some reason, it went wrong, and there were loopholes in it. I do not think that the answer is over-regulation. It is common sense to ensure that there is a level playing field wherever we regulate. If we do not have that level playing field, people will take advantage. When they take advantage by selling their products, however they sell them, the person who loses out is usually the poor investor who puts their money on the line.

Let me move on to something else. I realise that today’s debate is going to consider housing, in particular, and I want to touch on one aspect of that—that is, park homes. We have an all-party group on park home owners, of which I am a member, and I know that a few years ago the Government made some changes to the anachronistic rules that govern the purchase and sale of park homes. In a recession, park homes offer a wonderful opportunity for low-cost housing.

There are several park homes in my constituency, and although they are not exclusively occupied by pensioners, many people who have not owned their own home or have owned a very small home move to a park home when they retire—that releases a lump sum, too—so a lot of elderly people live in them. Will the Government look again at the rules that apply to the sale and purchase of park homes, as they missed the opportunity to do so yesterday? There is no doubt that we still have what I would regard as restrictive practices in this area.

I understand that site owners are business people who need to make a profit. Nobody is suggesting for one minute that they do not have a material interest in the sale and purchase of park homes. However, the way in which people are obliged to purchase a new home from a particular supplier and the way in which a cut of the sale price goes back to the park home owner is anachronistic in this day and age. I want the Government to think of the recession as an opportunity to look favourably on park homes and consider them as a way of providing more low-cost housing. Such housing would be more readily provided by park homes than by the construction industry, which seems to be moribund. If the Government plan to help the construction industry, I hope that they will equally consider the park home industry, provided that they take a fresh look at the way in which people who purchase homes from site owners are treated under the regulations.

We have heard a lot about helping people on low incomes with energy costs. I have been in correspondence for nearly a year with various Ministers—I received yet another reply today, which was very negative—on the subject of those park home owners who are on sites where the landlord provides the fuel, which is usually liquefied petroleum gas and is often metered. The landlord sells the fuel to all the people on the site, and they are locked into a pricing regime over which they have no control whatsoever. It seems that just about everybody else has the opportunity to shop around, to change supplier and to get the best deal that they can, yet these people are locked in. I have had a letter from a Minister yet again today to say that the Government have no intention of changing the regime. I do not believe that it would be that difficult to change it, and I ask the Financial Secretary to the Treasury, to look at that, as well as at the issue of the selling and purchase of park homes.

Mr. Graham Stuart
My hon. Friend is making a powerful point on park homes. Through her, may I make the point to those on the Treasury Bench that many people on low incomes live in park homes for most of the year? They may be paying rather a high price for the fuel that heats those homes, which are often poorly insulated. When I go into many of my constituents’ park homes, I find them there with many plugged-in electric heaters, and that costs them a fortune. They often have historical industrial conditions such as emphysema. It is important that the Government take seriously the insulation and the standard of those homes to ensure that those people, who, as I say, are often on low incomes, do not find that most of their money goes on keeping themselves warm.

Angela Browning
I am grateful to my hon. Friend for that. I know that the all-party group on park home owners has made representations to Ministers on those issues. We are talking about low-cost initiatives that would make a difference. They would not necessarily affect the Treasury figures—particularly not the changes to the regulations that I asked for—but would certainly help a lot of people. They might encourage more people to buy and live in park homes at a time when low-cost housing is absolutely essential.

I started on the subject of debt, and I will finish on the subject of debt, but I shall move from personal debt to the national debt. I referred to the fact that I am a baby boomer, born in 1946. I still have an identity card, and I remember when rationing ended for sweets. I have lived through the Attlee, Wilson, Callaghan, Blair and Brown Governments, and as my right hon. Friend the Leader of the Opposition said yesterday in the Budget debate, we always end up with the same situation at the end of a Labour Government. They leave the country bust. Nothing in the Budget, or in what has been said in the debate so far, makes me think that the situation will be any less serious when it comes to the inheritance left by this Government; in fact, it will be a great deal more serious.

I mentioned the generation of those who are 80 and over, and I mentioned the savings culture. There is a culture in the British spirit that says that when we are up against it, we will go without certain items to make sure that we get things right. We saw that in the wartime spirit in the second world war, and we have seen it on other occasions. The British public are intelligent enough and tough enough to know that we are going into a period of great austerity. They want honesty from their politicians and their Government. If there are difficult choices to make, they want to see those choices clearly laid before them.

Yesterday’s Budget was dishonest. It deferred until after the general election a lot of tax cuts and swingeing impositions on people who are not the wealthiest in the country. The Government may argue, “It’s until the downturn picks up,” but nobody believes that the downturn will pick up by the end of this year, and we have heard all the independent evidence that corroborates the view that it will not pick up. None the less, I think that people will understand it if politicians stand up and say to them, “No, sorry, we cannot afford it,” or “Yes, it is our intention to do or provide certain things with your taxes, but because of the situation that we are in, the imperative must be to get the economy of this country back on to a stable footing.” We are old enough to know what happens if we do not.

If we do not get the economy back on to a stable footing and we go into a period of what I would describe as funny money, in which the whole economy collapses and the currency is a paper currency only, that will a very serious situation. It is about time that the Government treated the British population as grown-ups. Instead of kicking things into the long grass when action is needed now, the Government should grasp the problem, which is with us today and will be with us for a very long time.

The Financial Secretary is a reasonable and honest man, so I am sorry to have to direct these remarks to him rather than to some of his colleagues. None the less, both he and I understand what collective responsibility means. The Government are leaving it far too late to take the right action to restore the economy of this country and that is a grave disservice to the British people. They have been through trials and tribulations in their history and they will not baulk at understanding that we are in a serious situation that calls for serious measures. The Government must rethink what they have told the House over the past 24 hours, because it will clearly not solve the problems.

Martin Horwood
If by serious measures the hon. Lady means public spending cuts, can she be more forthcoming than her hon. Friend the Member for Tatton (Mr. Osborne) was on the radio this morning when he failed to identify a single substantial savings cut? If the hon. Lady is worried about the recovery not happening next year, can she explain whether those cuts would go ahead under a theoretical Conservative Government, if the recovery was not occurring by then?

Angela Browning
I am sorry that the hon. Gentleman chose to ask that question—it was so Lib Dem. I hope that we will have a Conservative Government because that is the only hope for the country. I shall not be part of that Government because I am retiring, but I and the British people understand that when we are up against it, we cut our cloth accordingly. Anybody who does not understand that simple concept will never solve our problems.

15:21:00

Laura Moffatt (Crawley) (Lab)
It is a pleasure to follow the hon. Member for Tiverton and Honiton (Angela Browning). I agreed strongly with all her comments about debt and the role of park homes, but of course we parted company at the end of her speech when she started to talk about just a quarter of the last century when Labour Governments were in control. My recollection is that those Governments had to redress the appalling lack of investment in our public services—in our hospitals and in our schools, where children were taught in leaky school buildings with outside toilets. If there was a price to pay, I think it was one worth paying.

When the debate started, I became depressed. I enjoy the cut and thrust of debates in the Chamber, but there were times when there was inappropriate guffawing from Opposition Members at what was meant to be a serious contribution to efforts to get the country out of the most appalling global difficulties. Then I heard the shadow Chancellor planning the Conservative poster campaign by saying that Crawley would be a target for the Conservatives’ inheritance tax and tax credit plans. Frankly, I hope they do that, because none of my constituents will benefit from their inheritance tax plans, whereas 10,500 families will be badly affected by their plans to cut tax credits. Such an Opposition campaign would be a very positive move.

I shall concentrate on how we can reduce carbon output in the power we use. We desperately need to do that as quickly as we can. Earlier, we heard an incredibly heartening statement about the carbon capture and storage scheme. It will certainly be heartening in my constituency, where the company Doosan Babcock, which is developing many of the new technologies, has its headquarters. It was interesting to hear Members say that the statement had come far too late, because in fact the technology is untested. It is very new. We are the first country to commit to such investment at that level and I am delighted that we are doing so. I certainly hope that the effort, investment and research that Doosan Babcock has put into carbon capture and storage will pay dividends for the company in the future.

The reason why I take an interest in such matters is that just a few short steps away from Doosan Babcock’s headquarters is another company, of which Members may be aware, called Ceres Power. It appears that Ceres Power is one of those companies that could offer the answer to many of our home power needs. It has developed a brand new fuel cell—a very interesting technology, in which many people throughout the world are hugely interested.

It is great that in my constituency there are two companies with very different ways of trying to reduce our use of power and our carbon output—one an older technology that uses the very best research to deal with coal burning, and the other a fuel cell that holds enormous potential. Both received a good lift and encouragement from the Budget, and I am delighted about that. When I revisit those companies, I will be able to hold my head up and say that this Government are serious—particularly given the strategic investment fund, which I hope will take those new technologies further along the line. They have already had plenty of money from the Government to continue their research, but I sincerely hope that they will be able to move to the next phase and, for example, put fuel cells in people’s homes, so that we can genuinely see that they work. I see the Budget—particularly proposals to try to reduce our carbon output—as adding to a jigsaw of other measures and building on work that has been going on for a long time to ensure that we continue to play a world-leading role in those technologies. It is a pleasure to represent a constituency that is taking part in such activity.

I shall focus the majority of the rest of my speech on housing, which has truly become one of those subjects that occupy not only people who go to advice surgeries, but young people, for whom access to housing has become a critical issue. It is the key to answering many problems as we try to tackle the global downturn. It is difficult to look at any one subject in isolation, but, if we encourage housing development, as I expect the Budget to, many other issues—education, training, job opportunities for people—will become part of the whole package. There is also an opportunity to ensure that the proposed homes are the best in terms of environmental soundness and liveability for families. That is why I was delighted by the release of the new money.

Central to all that development is the fact that we must allow our local authorities to play a part in developing housing. We tend to bandy about “affordability”, and the Library had a good stab at trying to define it. I find it extremely difficult, however, to sit in my surgery opposite a lovely young couple who have recently married and are saving furiously but have nowhere near enough for the price of a small flat in my constituency—even though, thank goodness, the amount that can be borrowed has been reduced to three times a person’s salary. People in the south of England face problems of affordability and they will find it extremely difficult to access housing, even with the new HomeBuy scheme and access to shared equity programmes, but attempts to tackle scarcity, which is at the heart of the housing problem in the south-east, will assist those young people enormously.

We are fighting tooth and nail for a university centre in Crawley, because, again, it is part of the jigsaw of keeping our young people in the town and giving them the education that they deserve and the job opportunities that they so badly want. No measure can be taken in isolation, but we have to make sure that we can house people decently. I am extremely pleased that my right hon. Friend the Minister for Housing is now giving serious consideration to allowing local authorities to play their part in developing housing projects within our towns and communities. They are key to most of the things that happen; they understand how a community needs to exist and know that housing development without any of the services that make houses decent places to live does not reflect how we want to develop in the future.

I am extremely lucky to be associated with the post-war Labour Government who decided that people who had been in the war and families who had suffered should have the opportunity to come into homes in a lovely community such as Crawley. Such places have neighbourhoods with pubs, shops, churches and community centres. Local authorities must be at the heart of the decision making and they must be able to develop housing in the way that we believe is right and proper. People deserve to live in homes with an environmental rating of at least “very good” so that they do not spend most of their money on fuel and so that they can be proud of their new homes for many decades.

I hope that you can see, Madam Deputy Speaker, that I am keen for local authorities to play their part and get access, so the extra £100 million for local authorities to develop their housing was very welcome. We also have to consider the quality of the services offered by those local authorities into the future. Before we allow Government money to be placed in the hands of a housing authority, we must make sure that it is held in the highest regard. I shall press Ministers to ensure that, as the scheme goes ahead—I certainly hope that Crawley borough council will take advantage of it—the highest-quality local authorities are able to take part.

Another part of the jigsaw is the negative subsidy of many local authorities. I applaud and support those who have bought their council homes, but in Crawley, where there were more than 20,000 council homes, fewer than 8,000 are left in the control of the local authority. I want the local authority not to give up the principle of having a housing pool, but to be allowed to use more of the money to continue to build new homes and to improve the homes of existing tenants to the decent homes standard.

There are lots of competing arguments. The one thing that stops me from being flippant or taking part in all the shouting and jeering today is that tomorrow I will probably have to sit in front of a hard-pressed business man who is trying to hang on to his business, which employs fewer than 10 people in these difficult times; I will look into the eyes of a man who is working hard and trying to find out what the Government can offer. There are numerous schemes to help him, particularly the ability of Her Majesty’s Revenue and Customs to delay payments. That is incredibly welcome for many companies. There are also hard-pressed families who have difficulties with mortgage payments and are looking to see how they can be helped. The Budget certainly allows such help. However, it is difficult to be jolly at a time such as this.

Mr. Graham Stuart
It is indeed hard to be jolly at a time such as this. If they are still in work, the hon. Lady’s constituents will go through the week with the worries that she has described. They may well go to their local bingo hall on a Friday night to have a little bit of fun and let their hair down. Will she sympathise with them when they see that bingo duty has been put up in this Budget and that in the next three years £105 million extra will be taken from bingo players? That is more than the amount that the Government are putting into housing.

Laura Moffatt
I thank the hon. Gentleman—I think—for that intervention. At times such as this, when families are facing a difficult time, knowing that we now have a scheme to enable them to keep their home is something that they will appreciate much more than levels of duty.

The Financial Secretary to the Treasury (Mr. Stephen Timms)
My hon. Friend will be able to reassure her bingo-playing constituents that we have relieved stakes of VAT and that, overall, the announcements in the Budget on the taxation of bingo are welcome to the industry.

Laura Moffatt
That is great to hear; I am glad that my right hon. Friend has answered the question for me.

It is important for our constituents to know that they have a Government who are here for them—a Government who are prepared to put money on the table to keep them in their homes and in their jobs and to get them through the most difficult times. I am extremely proud that I am part of a Government who are prepared to do that.

15:35:00

Mr. Michael Fallon (Sevenoaks) (Con)
I remind the House of my interests recorded in the register.

This year’s Budget had to meet three crucial tests: to focus real help on those hardest hit by the recession; to start to rebalance our economy and put it back on a path towards sustainable growth; and, of course, to put the public finances back under control. Some of the Budget’s measures to give real help to the hardest hit are welcome, particularly those to help people back into the labour market as quickly as possible. However, I do not think that the Minister needs reminding that what really matters is that help is real—not just announced, packaged and put up on a website, but working on the ground and getting through in our constituencies.

The two groups who obviously need help are home owners, as the hon. Member for Crawley (Laura Moffatt) said, and small businesses. Home owners who may be facing redundancy, through no fault of their own, are still unable to access the help that the Government announced on 3 December—four months ago—and then re-announced earlier this week. It is still not clear exactly who will be eligible or which banks and building societies are participating. That delay has been scandalous because people being made redundant now are already falling behind with their payments.

Let me give an example from my constituency. A couple living in a village close to mine have both been made redundant—the husband in September and his wife at the end of January. She has been able to find a small part-time job, but because they have some savings they are being told by their lender that they are not entitled to anything more than a three-month payment holiday. I quote:

“In fact we have been advised by several people that NOT ONE of the banks/mortgage companies that have ‘signed up’ to the scheme have helped anyone. In fact one broker was informed by the Halifax that they would only give mortgage holidays to people who were going on holiday as they had a job!”

It is time that we got this scheme actually working rather than constantly being re-announced. I hope that the Minister will inform me exactly which lenders are participating and what the qualifying criteria are.

Small businesses in my constituency are so confused about the various schemes that have been announced that they are writing to me, here in the House, asking that I write on their behalf to the banks or to Ministers to sort things out. The good news is that when I do get involved, I generally find that the banks respond quite well. However, local branch managers do not seem to be fully aware of how the schemes should operate, so the help is not getting directly through to the companies that need it most.

I hope that the Minister winding up the debate will assure us that all the schemes that have been announced are now working—including the working capital scheme, which does not seem to be working at all—and yielding results in our constituencies. It is essential that, as the pain continues this year, we try to protect the two groups I have mentioned.

Secondly, the Budget was an opportunity to begin to rebalance our economy. If we have learned anything over the past 10 years, it is that it is not enough to depend on a highly leveraged financial sector, an over-extended private housing market and an ever-expanding public sector. That simply does not give us the investment that we need in new industries or the all-round performance that we need as one of the world’s larger economies.

Roughly every year, I ask the Library to rank our country’s gross domestic product per head against all 50 American states. Over the past six or seven years, the answer, surprising as it might be, has been about the same. This country now ranks 45th, coming ahead of only Mississippi, Arkansas, West Virginia, Idaho and South Carolina. On GDP per head measured in purchasing parity terms, this country is actually poorer than Oklahoma, which is some achievement after 10 years of ever-increasing public expenditure and the so-called investment strategy of this Government.

Why is that? It is because the three sectors that I mentioned—the highly leveraged financial sector, the overheated housing market and the ever-expanding public sector—have all been fuelled in exactly the same way: by debt and excessive borrowing. The levels of borrowing are simply unsustainable, as we have seen in the banking crisis, and are beginning to unwind, and as they do so we begin to see the damage that has been caused by our overdependence on those three sectors. We see how reliance on debt and leverage has crowded out investment, equity and savings as a basis for the commercial markets, and how our obsession with driving up home ownership even among those who could not afford it—we have all been guilty of that—has crowded out the development of a broader rental market. We have seen how the inflation of the public sector has caused growing resentment among those who are not entitled to the special working practices, protected pensions or early retirement enjoyed by those in the public sector.

I would have liked this Budget to encourage other things. For example, I would have liked it to encourage equity rather than debt and to look again at how we can back early years funding for the new companies to which the hon. Member for Sheffield, Attercliffe (Mr. Betts) referred. This country is not as good at that as the United States. We need to look again at venture capital trusts and how they can be developed, for example by allowing them to invest in secondary markets, as the London Stock Exchange suggested in its Budget submission. Of course, we need to look again at having more and better applied industry-driven research to turn a handful of clusters into serious, knowledge-driven business communities, as has been done much more successfully in the valleys of California and elsewhere.

Thirdly and finally, as my hon. Friend the shadow Chancellor and others have said, this Budget has failed to get the public finances back under control. The deficit that has been announced for the next two or three years is of course appalling, but it is important to understand that a large part of it is structural and has nothing to do with the huge sums that have been put aside to bail out the banks, or the way in which stabilisers kick in and welfare rolls grow during the recession. We have inherited that structural deficit from the boom years.

Mr. Robert Goodwill (Scarborough and Whitby) (Con)
Does my hon. Friend agree that the problem has been exacerbated by the fact that this Government have failed to distinguish between true investment, which yields a return, and spending through taking on increased debt, which is difficult to justify?

Mr. Fallon
My hon. Friend is right. The word “investment” has been stretched far too wide.

This Government have not balanced the Budget since March 2002, which is seven long years ago. In the March 2003 Budget, they said that they would balance the Budget by March 2006. Two years ago, in the March 2007 Budget, the forecast slipped to March 2009. Three years ago, they forecast that we would be back in surplus this year. Last year, the forecast was pushed out further to 2011. In the pre-Budget report, it went out to 2015, and yesterday, as I understand the Red Book, it was forecast that it will be 2017-18 before we are finally back in surplus.

The Government have consistently mismanaged public expenditure. They have overestimated revenues and failed to get proper control. There was a time when the job of the Treasury was to control spending. In the past seven or eight years, the Treasury has been directing spending and failing to control it. Now we are told that the remedy lies in even more efficiency savings, despite the fact that the National Audit Office has fully scored only around a quarter of the efficiency savings so far claimed.

As my hon. Friend the Member for Tiverton and Honiton (Angela Browning) eloquently explained, if the economy goes on shrinking, government cannot go on growing. We have to start taking out costs and reducing layers of bureaucracy. We must do what businesses across the country have been doing and what households across the country are now having to do, which is, as my hon. Friend has said, cut our cloth according to our means.

The private sector has already outsourced back-office functions, cut layers of middle management and streamlined procurement. Those things have still not happened in central Government, local government, the health service bureaucracy and education bureaucracy. The perfect indictment of the Labour years is what sadly happened at North Staffordshire hospital. While patients were dying and others were drinking out of vases, three quangos—Monitor, which costs £13 million a year, the Healthcare Commission, which costs £76 million a year and the Audit Commission, which costs more than £200 million a year—were writing letters to each other. That was the failure of North Staffordshire hospital—a failure of the culture of ever-inflating quangos.

If we are to maintain the credibility of our currency and reassure overseas investors, we must repair the damage done to our public and private finances over the past few years. We must put our public finances back in order, which involves reducing borrowing and the increase in spending. If we do not do that, we will end up with more cases such as North Staffordshire hospital and we will have to cut programmes for the most vulnerable. If we do not do it, in the end the IMF will have to do it for us.

15:49:00

Mark Lazarowicz (Edinburgh, North and Leith) (Lab/Co-op)
Like the Secretary of State at the beginning of the debate, I was encouraged by the opening remarks by the shadow Chancellor, because I thought that we were at last going to get an inkling of the Conservative way forward in the current financial circumstances. The shadow Chancellor started quite well and indicated that he had five points. For the next 24 minutes of his speech, I was waiting to go through those five points to examine his solutions. First, he told us that we must analyse how we got here, which is fair enough—I probably disagree about how we got here, but such an analysis is a good place to start. He referred to some relatively minor movement of spending priorities that he said were fiscally neutral and would presumably make no overall difference, therefore, to the general strategy.

I might have miscounted, but the shadow Chancellor seemed to get to only three of his five points. His final big point that I noted was that there should be a national debate about how we tackle an age of austerity. We all recognise that the economic situation is very serious: the Conservatives say that it is one of drastic seriousness yet, at a time when urgent action and policies are called for, the central point of the Conservative shadow Chancellor’s policies is a call for a national debate about the age of austerity.

That reflects the fact that Conservative Front-Bench Members are, to put it bluntly, too frightened to put forward any policies. They recognise that the public would not like what they heard if the Opposition were to follow through the logic of positions such as that taken by the hon. Member for Sevenoaks (Mr. Fallon). I give the hon. Gentleman credit for the honesty of his arguments today, but anyone who heard them could not but conclude that his recipe for recovery from the current crisis involves massive cuts in public expenditure that would affect large numbers of public services. We all heard what he said about the need for much more outsourcing in elements of the public sector such as housing, health and education, and I am sure that we will all eagerly enter into debate about those matters in the months to come.

Conservative Front-Bench Members may not have put forward many ideas today about how we can get out of the current situation, but other people have done so. I am glad to say that the Chancellor has been listening, and that he has implemented many of the more constructive proposals. Many people, organisations and MPs—and I was certainly one of the latter—have urged him to establish a programme for green jobs, arguing that such a programme would allow us to link the need to tackle the challenges of climate change with the need to provide jobs here and now for people facing unemployment.

We suggested that a fund be set up to help local authorities and voluntary organisations provide jobs with an emphasis on tackling environmental concerns. Therefore, I strongly welcome the plans announced yesterday for funds to provide 100,000 new jobs in socially useful activity, to be delivered through councils and voluntary groups. I welcome in particular the commitment that at least 10,000 of those jobs will be in the green-job sector. When the Government do something for which one has been calling for some time, it is right to recognise the fact. I am certainly glad that the Government have responded in the way that they have, as that will allow us to tackle some green issues and at the same time provide jobs here and now for people who need them.

I look forward to finding out more about the proposals shortly, and believe that the concept can be built on and developed. The voluntary sector in particular can play a major role in delivering these jobs as quickly as possible. Even more than local authorities, voluntary organisations can move quickly and come up with sensible and practical schemes that will deliver lasting benefits to local communities.

Mr. John Hayes (South Holland and The Deepings) (Con)
The hon. Gentleman is making a case for the innovative industries, particularly in respect of what he has described as “green jobs”. However, he will know that one feature of previous recessions has been that businesses tend to cut their investment in training and research and development. The Government’s response has been relatively unsuccessful: the R and D tax credit and the Train to Gain schemes do not seem to be reaching small and medium-sized enterprises. My hon. Friend the Member for Sevenoaks (Mr. Fallon) spoke about venture capital for early-years and start-up businesses. Why did the Government not do more in that regard in the Budget?

Mark Lazarowicz
If the hon. Gentleman looks in more detail, he will find, for example, that the pledge for 16 to 24-year olds is that every one of them facing long-term unemployment will have the opportunity to take up training. That is precisely the sort of positive measure that the Budget contains.

The proposal to create 100,000 new jobs, many of them green jobs in socially useful activity, is one that I certainly welcome. However, I would ask the Government to consider the possibility of extending the scheme even further, to involve more than just younger workers. I understand that there are proposals in the Budget for 50,000 jobs in the programme to be concentrated in those areas of highest unemployment, which is obviously right and proper. However, we have an opportunity to spread the scheme throughout the entire UK once it is up and running, which is something that I would strongly endorse. I look forward to the Government coming up with the details of those proposals, so that they can be put into effect and make a difference to our communities as soon as possible.

I would also emphasise that it is important not to assume that those environmental jobs are only those that involve clearing up rubbish or physical construction or work in that type of environmental project. Such work is of course important and valuable to the community, but there is a host of other green jobs that could be provided and which would make use of the wide range of talents and skills of those who find themselves without work in the current downturn. For example, there is interest in environmental education among those in every age group. Work is also to be done in promoting green travel plans for employers and employees. There is also a need not only to install energy efficiency and conservation technology, but to advise people on how to go about saving energy in their daily lives.

Those are just some examples of a wide range of green jobs that could be made available through the development of the scheme that has been referred to in the Budget papers. Such jobs will clearly not fill the gap for everyone who is made unemployed in the current downturn, but they can certainly help to tide people over in the current difficult period. Again, let me emphasise that they are jobs that could come on stream in months, and in some cases perhaps weeks, which is what we need. We need to provide people with jobs soon, because they will increasingly feel the effects of the recession in their communities. Action of that type is therefore needed.

It is certainly the case that many of the proposals for a low-carbon economy can have relatively quick impacts on employment. However, as I am sure the Minister would be the first to acknowledge, other proposals would take a lot longer to have an effect on jobs, because they require investment programmes that would take some time to result in large numbers of jobs. It is therefore important to consider ways of trying to produce employment opportunities in the short term, as well as in the medium and long terms.

That said, the proposals for a low-carbon economy in the Budget as a whole are important, wide-ranging and very much to be welcomed. They have also had a positive response from many in the renewables and low-carbon sector. I would like to pick out a few quotations from those in the sector who have responded to the proposals. The general manager of Sharp Solar UK said:

“This was a good day”

for solar power. The British Wind Energy Association said:

“With this boost we should see the UK speeding the progress towards exploiting our massive indigenous wave and tidal energy potential.”

The chairman of the BWEA said:

“This package of measures deserves a welcome from our industry, and is in line with proposals that we have been working through with government. It addresses the short-term economic hurdles we faced due to the fall of the £ against the €…It also restates the Government’s long-term commitment to the renewable energy sector, and should enable us to unlock up to £10bn of private sector investment in wind and marine energy projects over the coming few years.”

I could continue at length, but finally I will quote the Combined Heat and Power Association, which says that the Budget

“marks a major step towards establishing a low carbon industrial base in the UK,”

which could help to deliver up to £10 billion of investment in new CHP plant over the next few years. That is the reality of what people out there in the renewables industry and the low-carbon sector think of the Budget. It is also the kind of message that we should be hearing, not some of the negative messages that we have heard from some Opposition Members today.

I believe that my right hon. Friend the Chancellor was absolutely right to place a major emphasis in his speech and in his proposals on the longer-term economic and industrial strategy, with a focus on the low-carbon economy, as well as on dealing with the immediate economic and financial pressures. He was right to do that for two reasons. First, there are short and medium-term economic and employment benefits to be had from investment in the low-carbon economy. In my constituency, that is particularly relevant because we have had a major reliance on the financial services sector for a number of years. Much of the financial services sector in Edinburgh, as elsewhere, is still doing well, but some of what is happening in the banking sector is bound to have an effect on the local economy, and that will obviously be the case in other areas where the financial services sector has been important.

Fortunately, in my community and other areas where financial services have been important we also have a strong and growing energy and environmental sector. There are many companies big and small in the renewables sector that are well placed to gain from domestic and international opportunities in the low-carbon economy. There may even be expertise in the banking and financial services sector that could be used in the low-carbon economy. For example, there are interesting proposals for a green bank to use expertise in providing finance for long-term investments in low-carbon technology. That could represent part of a shift in emphasis in banking away from short-term speculation and playing financial markets to longer-term strategies and investment in the real economy, which certainly deserves every encouragement.

The shocks that we have seen reverberate throughout the world economy triggered by the mortgage and banking crisis in the USA have certainly underlined how interlinked and fragile is the structure of the world economy. I am in no doubt that, in the long term, returning to business as usual in the financial and wider economy is not a viable strategy to prevent future turbulence and shocks. While in the short term we are right to seek a global stimulus to bring back economic growth, we certainly cannot expect business as usual to return.

Mr. Hayes
The hon. Gentleman makes the case that we should be more economically diverse. He makes a persuasive case that there has been too great a concentration on financial services in Edinburgh and elsewhere. Yet the Chancellor told us yesterday that one of our “underlying strengths” was that we were already a diverse economy. How does the hon. Gentleman reconcile that with his own analysis?

Mark Lazarowicz
Clearly, we have to diversify more. There should be no dispute about that. We still have many good companies in my constituency in the financial services sector, which have many strengths and employ many people with skills and expertise, but clearly we want to diversify. Just as in the past not too many people criticised the strength of our financial services sector, it would be wrong for anyone now to dispute the fact that we need to diversify to reflect the lessons that we have all learned from what has happened in the past few months and years.

The situation is clearly going to change in the future, and we have to recognise that there are plenty of other destabilising factors out there in the world that could easily trigger similar economic upsets. They include the demand for resources—energy and food—and environmental pressures, leading to the spread of deserts and an increase in flooding, which we were rightly warned earlier would accelerate as a result of climate change. Some suggest that some of those factors may have already played a part in triggering the current crisis. Certainly, they have every potential for doing so in even more dramatic ways. Those underlying issues must be addressed by the world community with every bit as much urgency as the economic and financial crisis.

The Government, and the Prime Minister in particular, have sometimes been criticised for focusing on the wider issues too much. Many of us remember the sneering comments from some Conservatives from time to time at the Prime Minister’s efforts to achieve a worldwide consensus. Reference has been made to the G20, for example. I am glad that the Prime Minister recognises the importance of tackling the wider issues. He will certainly have the support of Labour Members and many people in the country if he and his Government continue to devote considerable efforts to bringing about international agreement and action to tackle the underlying issues.

16:04:00

Adam Price (Carmarthen, East and Dinefwr) (PC)
The hon. Member for Edinburgh, North and Leith (Mark Lazarowicz) must be one of life’s eternal optimists. Perhaps that is no bad thing, given that he has a majority of 400. There are some points of light in the Budget, but I got the impression from listening to him that the problems that we face could almost be micro-managed away. That cannot be right. We are in the midst of one of the most severe economic downturns that we have ever faced. It might not turn out to be a great depression—that risk might have been averted at global level—but it will certainly be known as the great recession.

My criticism of the Government is that the Budget does not contain the kind of bold, confident thinking that we have seen from the Obama Administration in the United States. It contains hints of the things that the Government think are important. There is a nod in the direction of dealing with child poverty, for example, and a gesture towards greater progressiveness in the income tax system, but even these are not grasped firmly. I am left with the overwhelming feeling that the Government have run out not only of cash but of political capital and self-belief. I applaud some of the things that they have done, but the figures are so nugatory and limited that their effect will be negligible, given the scale of the overall challenge that we face.

A more fundamental charge can be made against the Government, although it cannot be made lightly: in many ways, this is a dishonest Budget. I understand why the Government might believe that being honest, open and up front with the electorate at this time could risk driving us further into a depression. If you like, this is the beneficent lie—the white lie—that the Government feel that they have to tell to put a positive gloss on the economic situation that we face. I understand the argument that they are in the business of perception management, but I believe that things have been done for political reasons. As the hon. Member for Tiverton and Honiton (Angela Browning) suggested, the Government need to treat the electorate as adults. We can see a sleight of hand at the heart of the Budget statement, which is unforgivable, and I think that the electorate will see through it. That expresses itself in a number of different ways. Earlier, the Secretary of State suggested that this was a case of “We say cuts, they say efficiency savings; let’s call the whole thing off”. The electorate probably will, soon.

In Wales, the Labour Finance Minister has confirmed that changes announced in the pre-Budget report and the Budget will mean that the £416 million that the Labour-led Welsh Assembly thought was available for public services will no longer be available. The Minister on the Front Bench might find that amusing, but many people, including Labour Assembly Members—and people who have hitherto been Labour voters—will not find it amusing when those measures result in cuts in public services. The Labour First Minister—the leader of the Labour party in Wales—has said that he cannot give any guarantee that there will not be public sector job cuts or cuts in the quality of public services as a result of the changes made in the Budget.

The Barnett formula means that, regardless of any efficiency savings made in Wales or Scotland, we have no choice about this. The changes will affect the bottom line there. The Government’s report on the operational efficiency programme praises the efficiency savings programme in Wales. On page 34, it refers to Value Wales and to the savings that have already been made. The First Minister in Wales told the Prime Minister that one would need to be the Archangel Gabriel to find any further efficiency savings in the Welsh Assembly Government. They simply are not there, as what the devolved Administrations by and large do is focus on health, education and public services; there are no armies of project managers and other non-jobs that may abound here in London.

I find it curious for a Government suddenly to find all these efficiency savings when they have been in office for 12 years. Is it an admission of their inefficiency and the lack of productivity in the public sector? If these are genuinely efficiency savings and not cuts, why have they not been found up until now? Why did the Government, by their own admission, waste public money while the economic situation was far better than the one we face at the moment?

The other element of dishonesty is, as we have heard, in the growth figures. We may have averted an L-shaped depression, but we are in the middle of a classic U-shaped recession, which is going to continue for some time. Nobody believes that this is a V shape and that we are suddenly going to bounce back from the worst fall in economic output in the post-war period. It has never happened—not once in the post-war period—that we have bounced back to a reasonable level of growth in the second year. That is clear if one looks at the Government’s own table on page 200 of the Red Book. All the post-war recessions have involved either a second year of output reduction or minimal and negligible growth, which happened in the early 1990s. The British economy has never bounced back, as I say, in the second year. Nobody believes that.

Mr. Bone
The hon. Gentleman makes a good point. Will he expand on it, because the depth of this recession is much worse than the previous one, making it even more unrealistic that we will bounce back?

Adam Price
Absolutely. This recession is much deeper than all the other examples that are cited. The other factor, of course, is the global economic outlook, which was different in the 1990s—the example most often cited by the Government as the comparator for this recession. If anything, this recession is closer to what happened in the 1980s. The three great drivers of economic growth in the UK— exports in the global economy, financial services and the housing boom—have all gone, so where is the basis for this projected incredible growth? Suddenly, it appears, after next year we are going to re-enter the golden days and a halcyon era will be born again. That is the only way anything close to the Government’s projections on tax revenue will be realised.

Mr. Hayes
The hon. Gentleman is making a studious argument and he is right. Does he accept that growth over the last 12 years was predicated on two bases—first, borrowing, both Government and personal; and, secondly, state or Government spending—and given that neither will apply, the economy cannot possibly bounce out of the recession in the way the hon. Gentleman describes?

Adam Price
The hon. Gentleman has put his finger on it. There is a structural demand gap and an output gap in the British economy, and the loss of the financial services sector means a once-and-for-all loss of about 2 per cent. of non-inflationary economic output, which will certainly have repercussions for many years to come. It is absolutely right that the public sector was a major driver, but that will not be there either.

One feasible scenario is that we could face a double-dip recession, which is what happened in America in the 1980s. There was a recovery in 1980-81, but the effect of the fiscal stimulus America had embarked upon fell off, taking the country back into recession in 1982. A double-dip recession is as likely as any other scenario, because the growth in public sector spending is falling.

Mr. Hayes
The point that I was making, which I think the hon. Gentleman accepts, is that the basis of economic success over the past 12 years was flimsy. The case that he seems to be making is that the response to the recession must not be equally flimsy. In other words, if we invest in infrastructural improvement, we can shorten the recession and make it more shallow, but if our response to it is flimsy, like the one in the USA which he described, the recovery is likely also to be temporary.

Adam Price
I am one of those who say that if we are to rip up the public balances, we had better make sure that we do it with a comprehensive strategy in place. We have not seen such a strategy from the Government. I advocate a radical fiscal expansion on the Obama model, which is based on long-term investment in the economy. David Blanchflower has made a similar point, as has the National Institute of Economic and Social Research. We have not seen that from the Government; nor have we seen the Conservative line of retrenchment and a more targeted approach. What we have seen is something in the middle, which amounts to nothing at all.

Angela Eagle
The hon. Gentleman has been brandishing the Red Book. Would he care to look at page 28? Box 24 contains a chart entitled “G7 average annual effect of discretionary measures and automatic stabilisers”. That is the fiscal stimulus to which the hon. Gentleman is referring. On the chart, the United Kingdom comes second.

Adam Price
If we add up the figures, we may find that I am wrong, but the pre-Budget report mentioned a stimulus of about £21 billion. According to my analysis, the maximum in terms of active stimulating measures in the Budget is not much more than an additional £5 billion. That does not compare with the £820 billion to which the Obama plan amounts in toto, and it is a fraction of what others have demanded. David Blanchflower called for a £90 billion stimulus in the Budget, and the NIESR called for a similar figure—£50 billion or £60 billion. Even the Sustainable Development Commission called for a £30 billion green new deal.

The hon. Member for Edinburgh, North and Leith quoted some positive comment about green jobs in the Budget, but most people in the sector have been desperately disappointed by the lack of delivery. According to Friends of the Earth:

“The Government has squandered a historic opportunity to kick-start a green industrial revolution”.

Even Jonathon Porritt of the Sustainable Development Commission has said that the scale of Government investment

“is not going to put us on track to achieving the extremely ambitious targets of the Climate Change Act”,

and the Campaign for Better Transport has observed:

“The Budget is a missed opportunity on transport.”

We have not seen the green new deal. Once again, the Government’s rhetoric is not backed up by reality. We are not seeing in this Budget anything like the stimulus that is needed to counteract the difficulties that we face. In this so-called Budget for jobs, I see nothing that is likely to deliver a significant number of new jobs in any part of the United Kingdom.

There may be difficult times ahead. It is possible that we shall experience a further round of financial shocks at a global level. Some hedge funds may collapse. What is the Government’s strategy for dealing with that? What if there is a fully fledged financial crisis in some of the eastern European economies? What will be the effects on the economy here? I certainly do not have any confidence that the Government have a comprehensive strategy to get us through the next few years.

The final dishonesty is to do with tax. People say that new Labour is dead because the Government have finally embraced the idea of a progressive income tax system, but I think the Chancellor was hoisting a white flag yesterday, not a red flag, because this was a defeatist Budget. It is almost as if they have given up, because not only is the cupboard bare financially, as they believe, but it is bare of ideas as well.

I welcome the fact that the Government have finally come round to the idea of tax justice, but to give the impression that raising the tax on the 1 per cent. of taxpayers who earn more than £150,000 will do anything to close the massive deficit that we face is deeply and utterly dishonest. The Government must be honest with people. It is my understanding—I would be happy for Ministers to correct me if I a wrong—that 60 per cent. of tax revenue comes from income tax, national insurance and VAT, which are paid by most people—or everyone, in the case of VAT. Therefore, everyone will have to contribute more to close the Budget deficit; otherwise that will be impossible.

There is an obscure theorem in economics called Ricardian equivalence, which suggests that in a perfect world of perfect information and perfect markets, a Government do not have to say that they will raise taxes because, in the current situation, people will read the Red Book, see how much the deficit is, and realise that it is inevitable that they will raise taxes. However, most people might not have the time to plough through the 280-odd pages of the Red Book in the way that we Members do, and it is important that the public realise that we will be paying for the mistakes that have been made in economic policy and the management of the public finances for many years to come.

This great recession will cast a long shadow. Unemployment continued to rise in Wales from the early ’80s right up until 1986, and the Welsh economy did not begin to pick up again and emerge from that lost decade until the early ’90s. I fear that we are facing a similar situation now. The Government have not been honest with the electorate—or possibly even with themselves—about the scale of the challenge we face both in terms of the economy, unemployment and growth and in terms of defending public services, because of the economic hole that I believe the Government have, in part, dug for this country.

16:23:00

Ms Sally Keeble (Northampton, North) (Lab)
The hon. Member for Carmarthen, East and Dinefwr (Adam Price) made an interesting speech, but I do not agree with him that the Government have not been honest or bold. If he wants to compare us with the United States, the tables in the Red Book that have been referred to show that the Americans did implement a large number of discretionary measures, but that was because their automatic stabilisers were so small that they had to have a much bigger discretionary package to deal with the pressures they were facing as a result of the same global recession that we have experienced. Our discretionary package is smaller because our automatic stabilisers are larger—by and large, in line with those of our European partners, with whom our welfare packages and tax systems are also much more closely aligned. The hon. Gentleman is therefore wrong to say that we have acted differently from the Americans. We have dealt differently with some of the macro problems to do with the banks’ toxic assets and cleaning up their balance sheets, as well as getting cash flowing again.

Adam Price
But does the hon. Lady accept that some key commentators, not least Nouriel Roubini, the so-called “Dr. Doom”, who more than anyone else predicted the worldwide financial crisis, have been critical of the level of the fiscal stimulus in Europe as a whole? The point has been made by a number of US-based commentators.

Ms Keeble
An active debate on the fiscal stimulus took place some time ago, but when one looks at the figures, one finds that the packages that most countries have come up with are roughly similar, give or take a bit. After all the hullabaloo caused when Germany said that this country was doing the wrong thing, the package it has come up with is not dissimilar to ours. I also think that there is a lot of wrongspeak about whether people predicted the crisis.

Angela Eagle
On the fiscal measures alone in this financial year, 2009-10, does my hon. Friend agree—I think that she is making the point very well—that fiscal support worth 4 per cent. of gross domestic product from measures announced in the Budget, combined with what is in the pre-Budget report and the operation of the automatic stabilisers, will make the fiscal expansion in this country one of the largest overall in the G20?

Ms Keeble
Yes, indeed. Giving way allowed me to pick the Red Book up. If one looks at what Germany did, one finds that its discretionary measures were actually larger than ours. Given all the debate that took place and all the criticism that the Chancellor and Prime Minister faced from the Germans, one would never have expected that.

The hon. Member for Carmarthen, East and Dinefwr is also wrong to say that people predicted the crisis. Some hon. Members, particularly the hon. Member for Sevenoaks (Mr. Fallon), who is not in his place but with whom I serve on the Treasury Committee, have listened ever since 2005 to various people, almost all of them men in grey suits, talking about the economy. I did not hear any of them say that we were heading for the biggest ever cataclysm. The only people who were predicting the crisis were the people who have always predicted the collapse of capitalism, and they are to be found in the Socialist Workers party and the Liberal Democrats. Everybody else failed to spot it.

Even at the end of 2007, after the collapse of Northern Rock, people were saying that the situation was difficult but it would get better in the spring. It was not until the collapse of Lehman Brothers that it became absolutely clear that a domino effect was taking place and that we were into something that we had not seen before. The first person who publicly called it, much to my irritation, was the Chancellor on that infamous weekend that he spent in Scotland with that Sunday Times journalist.

Mr. Hayes
I certainly do not wish to claim that I predicted the crisis—it would be an unwise Member who did so—but the hon. Lady has to acknowledge that real doubts were expressed by Conservative Members and others about the level of personal debt and, in particular, the dependence of economic growth and prosperity on borrowing. I, like others, argued that the collapse in the savings ratio over the period of this Government was extremely dangerous and jeopardised the future of the economy. That point was continually made, was it not?

Ms Keeble
The hon. Gentleman is absolutely right about the arguments that were made about personal debt, but what was not predicted was the drying up of the wholesale market, the impact on and collapse of Lehman Brothers and then the extent to which the UK retail banks were exposed to the risks involved in Lehman Brothers. I did not hear anybody calling that set of circumstances, despite my having listened and listened. The angst about the level of personal debt is real and a very important discussion took place on whether that should be limited, but one cannot extrapolate from that predictions of what has actually unfolded.

Dr. John Pugh (Southport) (LD)
Is it not a strange irony, that although practically nobody predicted the present situation, everybody seems capable of predicting where we are going now?

Ms Keeble
While things were going well, everybody wanted to believe that that was going to continue—

Mr. Bone
No.

Ms Keeble
A lot of people did. It is now really important to learn the lessons of what happened and to work out not only how to prevent it from happening again, which is not the subject of this debate, but how to build our way out of the difficulties that we have experienced. The Government have been very bold—some might say excessively bold—in what they have done through the asset protection scheme and the asset purchase facilities that have been extended. We do not know exactly what the outcomes will be, but such schemes are one way to get the financial markets moving, to get credit flowing and to get things moving again.

The Government have also been bold in picking up some of the immediate pressures and dealing with them in this Budget. The hon. Member for Carmarthen, East and Dinefwr was a bit unfair on this point. He and I were at the same presentation by David Blanchflower. The fiscal stimulus package that he wanted was not huge, and its main focus was a measure to deal with what happens to young people who miss out. The focus in the Budget on the opportunities for 16 to 24-year-olds is very important, even though it is perhaps more modest than David Blanchflower might have liked. I want to see the detail of these provisions because I want quality schemes to be provided, unlike the youth training schemes, youth opportunity schemes and so on that we saw before. The Budget has dealt with some of the issues raised by David Blanchflower in type, if not in scale. The hon. Gentleman and I have both pressed the Government to deal with those issues, too.

Let me talk a bit about housing and about the elephant in the Chamber—the shape of public services and how we fund them. That is a major issue, and we all have an interest in its resolution. I am keen to see improvement in the housing market in terms of people’s ability to buy houses and the availability of mortgage finance; I also want the supply of housing to be improved. I am pleased that the Budget has dealt, to an extent, with both those points. More money is being put in, particularly for new builds, which are extremely important, through local authorities and in conjunction with the private sector, in order to ensure the provision of a range of housing and tenures. Again, I want to see the details, because it is important that there should be some qualifications and some clarity about what will happen. I hope that guidance will be given on the cost per unit and so on, as well as specifications for the number of units.

I hope that when money is provided to local authorities to enable them to build, they will be given clear guidance on how procurement should work. My local authority is spending money on getting housing up to standard—it is not building new housing, but carrying out refurbishment—and the procurement is being done in such a way that, so far, all the local firms have been excluded from the tender list and have been unable to bid for work. Particularly during a recession, it is extremely important not only to get the houses built and to obtain good value, but to support small and medium-sized local businesses, so that we retain across the country a good range of skilled workers and people who can win and manage building contracts.

I hope that when the money is provided to local authorities, they are given clear guidance on two points. The first is on having local labour clauses, so that there are no arguments about whether the jobs are being given to British workers, and so that there is clarity about what is expected in terms of making sure that local unemployed people and local young people coming off apprenticeship schemes get the chance of a job. Secondly, local building firms should clearly be given the opportunity to compete for contracts with the very big contractors on a level playing field. Particularly at present, some of the big building firms will try to keep themselves going by picking up public sector work, and the pricing will be very competitive. Unless we make sure that we support small and medium-sized building firms and enable them to keep going, we might find that when the upturn comes, we have the brickies and the plasterers, but not the contract managers and the people who can look after the range of types of contract that we will need.

On the mortgage side, in what may be a hidden part of the Budget, the proposals include those for the mortgage rescue scheme, which is in place now. Four of the big building societies are signed up to it and a number of other building societies are providing similar programmes. It is vital that the money starts flowing again for the provision of mortgages. The most recent figures from the Council of Mortgage Lenders show that there have been improvements. It is important that that continues and that institutions continue to provide the financing for new building schemes in the private sector.

I have been dealing with a case in my constituency in which HBOS reviewed a loan facility provided to a local small or medium-sized developer and withdrew it. As a result, a residential unit, which was to have provided social housing, has been mothballed purely because of a lack of available financing. I ask my hon. Friend the Exchequer Secretary to make absolutely sure that banks that have received public funds stick to their obligations to maintain their 2007 lending levels, and that we get reports quarterly, not just annually. That way, we can be absolutely certain that the banks that the public bailed out are now supporting the public by providing the lending that is needed for recovery.

Mr. Hayes
While the hon. Lady is on the subject of housing—I know that she shares my interest in that subject—will she say a word about HomeBuy? The Government announced £80 million for the HomeBuy scheme, and the estimates that I have suggest that that will help roughly 10,000 buyers. However, given that, even in very bad times, there are about 10,000 applications for mortgages each month from new buyers, is that not an extraordinarily marginal proposal by the Government? Does she see shared equity as a critical way of helping new buyers on to the ladder, as we have done for many years?

Ms Keeble
There are quite a few measures that will help people in different sectors of the housing market, of which HomeBuy is one. It is not a huge scheme, just as the mortgage rescue scheme is not huge. There is a range of different measures targeted to support different groups of people. Furthermore, although it might sound cruel, the reduction in house prices will help first-time buyers, and the Building Societies Association projects that that reduction still has a bit further to go. Figures that have come out show that the cost of housing as a multiple of income is at its most favourable level for first-time buyers for a long time.

The group about which I am most concerned, to which a lot of people in my constituency belong, comprises those who lose part of the family income, but who still have half a job, or work some hours. They do not qualify for the income-based jobseeker’s allowance and so do not qualify for the support for mortgage interest payments. They are the people who will probably have the hardest time in the coming months, which is why I ask the Government to look again at that measure.

Mr. Hayes
But the whole point is that what we actually need is a more fluid housing market, where people—for example, those in local authority housing who want to own their own home—can get on the ladder through shared equity, freeing up social housing for the 4.5 million people who are, I remind the hon. Lady, on local authority housing lists. As she will know, that is a 73 per cent. increase since 1997.

Ms Keeble
I agree, but what will help greatly is the increase in supply that the Government are providing through the Budget. That is really important and will be one of the measures that improves the housing market.

Before I make my main point about the shape of services, I want particularly to welcome the proposals to allow grandparents’ care for their grandchildren to be counted towards their pension. That is a really important scheme, which will give practical help to many women who have already taken time out of work to look after their children. It also sends out important signals about support for the family and about our understanding of what people want in terms of caring for their children. I pass on my thanks for that.

One of the big issues we all have to face is that, even without the recession, there were real questions about the future direction of public services and their provision. Because circumstances have changed in the years of Labour Government, people have become used to a different standard of living and different standards of service. Those questions will become more acute now that spending is tighter. As a number of Members on both sides of the House have said, we have to make sure that public spending counts and is even more effective than it has been so far. We need to look at how we provide services and think about not just how we cut, but how we reconfigure. By any measure, cutting services year on year until 2015 would probably destroy the morale of everybody who came into public service, because, by and large, they do so to make sure that public services are provided.

During the lifetime of the Labour Government, people have got used to having more choice of service and more control over the type of service they receive, which is all to the good, but it has profound implications for the range of our delivery agencies. There are many tiers of local government and there are different types of quango and semi-quango and arm’s length delivery agencies. We need to take a hard look at them, so that we can have not necessarily a smaller state, but certainly a flatter one without so many quangos and hierarchies of structure. For example, I know of one town where there are two chief executives sitting across the road from one another—I suspect my colleague on the Conservative Benches, the hon. Member for Wellingborough (Mr. Bone), knows about them too. Each of those executives draws a large salary and each has a large bureaucracy serving exactly the same community. We need to give some thought to how such services are delivered in the future, while of course maintaining the democratic commitment.

The one service that the public want to access most acutely is probably the health service, where public pressure for access to drugs such as Herceptin and treatments such as in vitro fertilisation has driven the provision of services, rather than the local purchasing authority. It is all to the credit of the Labour Government that people have got used to a standard of public service that is light years ahead of what they were used to—now, people complain if they have to wait two months for an operation, whereas previously they had to wait two years.

Looking at the way in which a new configuration of services might work and the savings that it might produce, I refer my hon. Friend the Exchequer Secretary to the Treasury to an interesting report—I have already mentioned it to her briefly—by PricewaterhouseCoopers on bridging the fiscal gap. It considers two models: one would make cuts, but PWC finds that completely unacceptable, because it would mean a level of cuts that we had never seen in the public sector; and the other would raise taxes, combining a 2 per cent. rise in VAT, a 1 per cent. rise in all national insurance contribution rates and a £5 billion increase in green taxes, which, again, would test public patience past breaking point.

The report also considers the savings that could be made by reconfiguring public services in a way that maintained front-line services but changed some back-office functions. For example, over the time scales in the Budget, there are projected savings in back-office operations and IT of £8 billion, in collaborative procurements of about £24 billion, and in properties and facilities of about £5 billion. Those figures are indicative, but they certainly posit that, if we think carefully about the services that the public want, the way they want to access them and how they are provided, in a very different world where people want more say and do not want people to purchase for them—in other words where purchasing power is with the public, not with an institution—we can maintain the quality and quantity of public services to which people have become accustomed and still make sensible savings that chime much more with the public mood than heavy tax rises or public spending cuts ever would.

Angela Eagle
My hon. Friend is right to point to the potential savings from collaborative procurement. Some of the work of the operational efficiency programme, the results of which were published the day before the Budget, demonstrate that there is up to a 200 per cent. difference in the price per therm that Departments pay for electricity and gas. Does she agree that such differences must be driven out? Those are potential efficiency savings that would not impact on the front line.

Ms Keeble
I completely agree that there is scope for efficiency savings. It points to changes to the way in which services are provided, so that, instead of having multi-tiered delivery agencies between a Department and the public, the public have much more direct control over the way in which services are provided. That involves much careful thought about service design, implications and ensuring equal access for disadvantaged groups that do not have the same clout as others. It also means ensuring that the people who work for such agencies—an awful lot of whom are women—do not suddenly lose their jobs. Given the current situation and attitudes towards public services, it is important that we think carefully about how our polices are designed and how services are provided. We should not just think, “Let’s take a standard model, chop a bit off there, put a bit of tax on there and roll it forward for the next 10 years to a time when, perhaps, the public finances will be balanced again.”

The Government have taken some big and important steps towards getting the economy moving again, and in the Budget they have introduced a range of important measures, particularly on housing. I welcome them and look forward to seeing them make a real impact in the community.

16:49:00

Mr. Peter Bone (Wellingborough) (Con)
It is a great pleasure to follow the hon. Member for Northampton, North (Ms Keeble). She made some very good comments about house building and I can relate them to my constituency. One of my constituents, a builder, cannot get on the tendering list, although I am sure that he would be as cheap and efficient as some of the other builders.

Let us not be under any illusion: this Labour Government have destroyed our economy. It does not matter whether we are talking about new Labour or old Labour—there has been a tax and spend approach, which has increased unemployment. Every time a Labour Government have been thrown out, unemployment has been higher than when they came in—and it will be just the same with this one. We can talk about the global financial crisis and its far-reaching effects on world economies, but the United Kingdom is in a far worse position than most. In fact, our country has the worst public finances in the G20. Under the Prime Minister’s stewardship, our country is now in the longest recession since the second world war.

In my constituency, unemployment is more than two thirds higher than it was in 1997. That is not a mistake; it is 67.1 per cent. higher than it was in that year. That is the dire consequence created by the man who spent and spent and never planned for the future economic stability of this country. He is the man who has created the fastest rise in unemployment.

Let me put the issue in the context of families in my constituency. At the end of March 1997, under the Conservative Government, unemployment in my constituency was 1,938—one thousand nine hundred and thirty-eight families were looking at a bleak future. At the end of March 2009, after 12 years of Labour rule, the figure had increased to 3,239, so three thousand two hundred and thirty-nine families—67 per cent. more—were facing such a future.

The Prime Minister built his boom on excessive and increasing borrowing. For 12 years he presided over the lending of billions to individuals against inflated house prices and he has allowed the banks to lend at the most extraordinary level of leverage. His Government borrowed and borrowed with no thought of how his boom would ultimately lead to bust. In this Budget, the Government are to borrow an incredible £175 billion this year and another £173 billion next year—£348 billion in the next two years alone. That assumes that the forecasts are correct, but given that the Chancellor’s forecasts have a record of being far too optimistic, no doubt the Government will borrow even more.

The whole thing is rather like a huge balloon that constantly expanded through borrowing. The balloon grows and grows, and as long as borrowing increases the balloon continues to expand. However, eventually something pricks it and there is a huge explosion. The borrowing stops, the balloon bursts and economic growth pours out. When a balloon is pricked, the air does not come out slowly—it gushes out. That is why the recession has been so sudden, sharp and severe.

It is hard to believe that John Major’s Conservative Government were thrown out in 1997 because of any mismanagement of the finances. In fact, the economy was growing in 1997. This year, however, the Government are predicting negative growth of 3.75 per cent. of gross domestic product. How do those figures translate to the situation in Wellingborough? I have already said that unemployment there is two thirds higher and that we are in the longest recession since the war. Yet the Prime Minister is still here and the Government stagger blindly along, rather like a rabbit caught in the headlights of a car.

So what is this incompetent Government’s solution? It is to borrow even more. We are told in the Budget forecast that public sector borrowing will be 12.4 per cent. of GDP this year, and 11.9 per cent. of GDP next year. In 2013-14, on the Government’s own hugely optimistic forecast, public sector net debt will rise to an incredible 79 per cent. of GDP—in other words, twice the golden rule’s upper limit of 40 per cent. They decided not to fix the roof when the sun was shining, but, worse still, when they found there was a problem, they sent in a cowboy trader to fix it. They did not call in Trotters Independent Traders—although Del Boy might have done a better job—but Darling and Co., who, like all cowboy traders, said, “Well, guv, the problem’s a lot bigger than we first thought—it’s going to cost a lot more to fix”, and left the problem in a worse state than it was originally.

The Institute for Fiscal Studies stated in “The Green Budget 2009”:

“Labour entered the crisis with one of the largest structural deficits in the industrial world and a bigger debt than most OECD countries, having done less to reduce debt and—in particular—borrowing more than most since 1997.”

The Prime Minister’s beleaguered quest to throw money he has taken from hard-working taxpayers at trying to fix problems has left this country with an unprecedented amount of debt, which is predicted in the Budget to rise to an extraordinary £1.4 trillion. I believe that he will not be satisfied until he leaves this country bankrupt.

The Prime Minister wanted a huge second financial stimulus at the G20 summit. In fact, he travelled round the world—I remember him missing Prime Minister’s questions because of it—to encourage everyone to adopt that second stimulus, saying that it was absolutely vital; only the courageous decision of the Governor of the Bank of England stopped this. Effectively, he tore up the Prime Minister’s cheque book and cut his credit card into pieces. It is unique for a Governor of the Bank of England to disagree so publicly with a Prime Minister, and he would not have taken such a step unless he thought that our economy was in the gravest peril. One auction of Government gilts has already failed; if the Prime Minister had had his way, that would have become a regular occurrence. The IFS says that there is a £39 billion black hole in the public finances. For families in Wellingborough, and across the country, that is equivalent to a tax rise of £1,250, or 8p on income tax.

That is what the Prime Minister has left us with, and it is quite different from what he said in his speech to the CBI in 1997:

“The British economy of the future must be built not on the shifting sands of boom and bust, but on the bedrock of prudent and wise economic management for the long term. It is only these firm foundations that we can raise Britain's underlying economic performance.”

He has done just the opposite. In 2002, he said in his speech to the TGWU conference:

“There will be no return to the short-term lurches in policy that would put long-term stability at risk. No relaxing our fiscal disciplines”.

Again, he has done exactly the opposite.

I would like to talk briefly about how the Prime Minister’s actions have affected my constituents. The Bank of England’s base rate is 0.5 per cent., yet the APR on credit cards is rising, not falling. Some banks are sending out special promotional offers—I am sure that Members have seen them—claiming to charge 0 per cent. for six months. In fact, the small print says that there is a 3 per cent. flat fee to start with, and that after the six-month period the normal variable rate will apply. One would think that with the base rate at 0.5 per cent., the variable rate for credit cards should be falling, but instead it is rising. Banks, including the nationalised banks, are raising their interest rates to between 20 and 25 per cent. At a time when the base rate is at its lowest, people in my constituency are being asked to pay bumper credit card interest rates.

Apparently, I am a valued customer of the Royal Bank of Scotland, because it sent me a rather glossy promotional booklet saying:

“An exceptional card. Impressive benefits. Too good to miss? Find out more.

With an RBS Black Card you can look forward to a level of personal attention and exclusive benefits that are second-to-none.”

So I thought I had better look at the small print, and it certainly is an exceptional card. Its APR is 51.8 per cent. a year—and that is from a nationalised bank. I kindly turned down the offer.

I am afraid that the situation for businesses is even worse. The Bank of England reduced the base rate to 0.5 per cent., the intention being that the cost to businesses would fall. Unfortunately the reverse is happening, and the nationalised banks have been particularly damaging. Instead of providing more facilities and cutting interest rates, they have actually increased interest rates, imposed extra fees and cut facilities. It is almost as though the banks saw a way of making excessive profits out of companies following their previous ghastly mistakes. I am talking about existing, established and respected businesses that are fighting the recession but are fundamentally sound.

Ms Keeble
The chamber of commerce that covers the hon. Gentleman’s constituency and mine hosted a small meeting for me and some businesses at which it complained about charges going up from £100 or so to several thousand pounds. It is a major problem for businesses right across our area, especially the smaller ones.

Mr. Bone
I am grateful to the hon. Lady, who shares my concern about that.

I wish to refer to a specific instance in my constituency. There is an international company headquartered there, with a turnover of £170 million a year and 248 employees. It has a £16 million loan, which it is not seeking to extend. Its bank is one of the nationalised banks, and the rate is linked to 1 per cent. above base rate. If the Government’s policy was working, interest rates for that company should fall. But what has this nationalised bank done? It has said, “Oh, no. You’re not going to have 1 per cent. over base, you’re going to have 4 per cent. over LIBOR.”

The company has already had to lay workers off because of the recession. The hike in interest rates means that it will pay an additional £640,000 a year, and to cover that it would have to lay off 20 people. The only way in which it could cover the increase imposed by the nationalised bank would be to lay off 20 people in the research and development department. Although that would cover the costs in the short term, it would greatly damage the future of a leading local company in a field in which it is imperative to remain at the forefront of development. The research and development department is at the cutting edge and does groundbreaking work. It is developing products for use in wind farms and products that reduce weight for transportation—two areas that the Government want to promote. Job cuts to the department would be a huge loss.

On top of the significant extra cost that the company faces during the recession, the bank is charging unjustified fees. For example, it has demanded that the company’s budget projections are audited at a cost of £25,000. In effect, it is imposing a £25,000 fee that will merely prove that the company’s projections are right. We are not talking about a new company or a fly-by-night company; we are talking about an international company that has been in existence for a long time and is extremely well known.

The Government have announced a number of schemes to help businesses through the downturn, but that company has not been able to access any funds. It appears that a successful, innovative and respected company based in the UK does not qualify for that money. Lots of money that is inaccessible to businesses is sloshing around quangos, and numerous Government schemes, most of which are not even operating, have been announced. For example, only one agreement has been signed as part of the working capital scheme, which Lord Mandelson announced in January and which was said to be “going live” on 16 January 2009.

The position looks even more pitiful if we compare it with the practical help being provided abroad. In France, research and development operations are being encouraged through a scheme that covers 50 per cent. of the cost of staffing research and development projects. That practical help will ensure that those companies come out of the recession with a bright future. It is not surprising that the company in my area is having seriously to consider expanding its research and development project abroad, despite having a firm preference to locate it in the United Kingdom. Surely the Government should be encouraging successful businesses to remain in the UK and not to go to France. Let us not forget that the company in my constituency is a well established, international company that is based locally and at the cutting edge of its field. Instead of receiving help and support in the recession, it is being punished by a nationalised bank and this Government. The schemes that have been implemented are simply not working, and the help that is available overseas is threatening to encourage companies from this country to relocate abroad. The Government’s policies are failing. They are failing the company in my constituency; they are failing thousands of companies across the country; and they are failing the British people.

17:08:00

Mr. Mike Weir (Angus) (SNP)
I came along today hoping to discuss the environmental and energy aspects of the Budget, which, to be fair, includes some quite good measures in that respect. Unfortunately, we were treated at the outset to a Punch and Judy show between Front Benchers on the question of cuts. Whether one calls it an efficiency saving or a cut, the effect is the same at the end of the day—there is less money for services. The Government are going to cut £1 billion from the Scottish budget over two years. The problem, other than that they are cutting money, is the danger of choking off a recovery, should it start to happen—nobody believes that it will start in the next few months.

We must look at, for example, what President Obama is doing. The state of Maryland has a similar population to that of Scotland. It will receive £2.6 billion in extra funding supporting 66,000 jobs over the next two years rather than destroying jobs with budget cuts. The Government need to look again at what they are doing in that regard. The problem is not confined to Scotland, as the First Ministers for both Wales and Northern Ireland have made similar points.

During the initial exchanges between the Front-Bench teams, the Secretary of State said that people on short-time working were being helped by tax credits. I accept that, but a loophole exists that I have taken up with the Financial Secretary to the Treasury. He was here earlier and I hoped that he would return to the Chamber to hear me make the point again, as I am still waiting for a response.

Many people in my constituency put on short time have ended up working for fewer than the minimum hours required to qualify for tax credits. For those who do not have children, that minimum is 30 hours. People are facing a double whammy—losing wages and also their tax credits—and that is causing a great many problems. I have asked the Treasury whether there is any scope for treating people whose hours have been cut as though they were still working the minimum number, as that would both avoid the double whammy that I have described and help them out of what is a difficult situation.

I appeal to the Exchequer Secretary, who is on the Front Bench at present, to give consideration to that proposal. The problem is serious, and it is getting worse as short-term working increases. Many firms are trying to hold on to people and skills rather than making them unemployed, and the proposal that I have made would be a way to help them out in that regard.

I turn now to the environmental element of the Budget. It makes a good start in some areas, although it remains well below what is known as the Stern test, which is that 20 per cent. of fiscal stimulus should go towards green initiatives. It compares unfavourably with South Korea, for example, which has achieved a rate of 82 per cent.

The Budget has made progress in respect of carbon capture and storage—a subject in which I have had an interest for many years. It is possible that I have bored successive Energy Ministers about it—

John Robertson (Glasgow, North-West) (Lab)
indicated assent.

Mr. Weir
I see the hon. Member for Glasgow, North-West (John Robertson) nodding at that, but there was a good chance that Scotland could have been well ahead with carbon capture and storage through the Peterhead plant. However, Government indecision dragged on and eventually they decided not to back it, with the result that the project went to Abu Dhabi. That proved to be a disaster, and a great disappointment for the CCS industry.

Since then, the Government have set up a competition that the earlier statement on carbon capture suggested was still grinding on. The Budget papers reveal that £90 million has been allocated to fund companies in that competition to undertake detailed preparatory studies for CCS schemes, with £60 million transferred from the existing transport budgets. I understand that the purpose of the studies is to reduce the technological risk associated with CCS projects and to give greater clarity on costs, but I wonder whether it will merely lead to yet further delays. I am not sure how that interacts with the announcements about CCS made in today’s statement for, although it seemed to move things forward, it also left a lot of unanswered questions.

We are very keen, especially in the Scottish context, that the Forth basin and the Longannet plant in particular should be part of the CCS project. As I mentioned in connection with the earlier statement, Scotland has some of the largest carbon storage reserves in Europe in the North sea’s saline aquifers and depleted oil and gas fields. It also has the skills from the North sea oil and gas industry to access them, something that will be very important in the development of CCS.

The Budget also makes some tax changes to the petroleum revenue tax and those governing the use of installations for other purposes, both of which are designed to help the development of CCS. However, the Energy and Climate Change Committee, of which I am member, has been conducting an investigation into the oil and gas reserves of the North sea and one company raised a slightly different problem with me. It had a licence for exploration for one part of the North sea. It decided that it was not economic to use that licence for oil exploration, but it thought that it would be possible to use it for carbon capture and storage, which may have had the benefit of extracting some oil from that area by pumping out the carbon. However, the company tells me that the licence conditions do not allow it to use carbon capture and storage technology, which means that it has to surrender the licence. The Government should look into whether there is any scope for giving a bit more leeway. Carbon capture and storage can also have quite a long lead-in time. Total has launched a scheme in the south of France, but there is a two-year period in which it will be looked at before a decision is taken on whether it is commercially viable, so we need to get moving as quickly as possible.

There are other things that might stand in the way of carbon capture and storage. In questions this morning, I raised the balancing charges being proposed by Ofgem and the National Grid Company with the Minister of State, Department of Energy and Climate Change. Those charges may impact on Scottish generators’ ability to invest in new plant, and in carbon capture and storage in particular. The Minister kindly said that he was prepared to meet me to discuss the issue. I will be taking up that invitation, because it is important that we look into the matter.

Transmission charges have long been a problem with renewable generation. It would be dangerous if we did not sort the issue out or if we imposed new charges that affected the ability of Scottish generators to develop carbon capture and storage, especially given that Scotland is nearest to many of the possible storage places. The Government need to look at the issue in the round and not put carbon capture and storage up against the competition without looking into its distribution and the investment that could come from energy companies.

There is also the question whether the Government are considering transferring the carbon to the offshore field or wherever it is ultimately to be buried. Is the intention to build a transmission network for the carbon, once it has been captured, or is it intended to be stored on site? Significant investment will be required if the carbon is to be transferred in order to be eventually stored. The Government also said that we would look into pre and post-combustion, which is welcome.

I also welcome the move to allow greater help for offshore wind energy. However, I noticed that there seemed to be no mention of wave or tidal energy, both of which can be very important. Again, both may be some way from commercial application, but we need the investment to get them up and running, and to strengthen the grid so that they can be fed in. I would like to ask the Exchequer Secretary whether there are any plans to extend the help for offshore wind to wave and tidal power, with a view to moving them forward. As she may know, the Scottish Government have launched the Saltire prize to try to bring that development forward, which has generated a great deal of interest from all over the world.

Angela Eagle
Because wave power is further behind than wind power, there is £405 million for technology transformation, which is aimed at things such as wave power. However, the support through renewables obligation certificates, to try to ensure that the existing potential in offshore wind comes about, is—to use the oil analogy that the hon. Gentleman has been using—further upstream. I hope that that gives him some reassurance.

Mr. Weir
I thank the Minister for that explanation, which clarifies the matter slightly. I promised to allow the final Back Bencher in, so I will end on that point.

17:19:00

Mr. Charles Walker (Broxbourne) (Con)
I thank the hon. Member for Angus (Mr. Weir) for allowing me in. I would have given him a couple more minutes before getting even more fractious in my seat.

I listened to the Budget yesterday in stunned silence. The figures were enormous. When I left here I went on a sort of comfort-eating crusade. Thank gosh I do not smoke or drink or I would have been a mess by midnight. No slice of carrot cake in the precincts of the House of Commons was safe, and when I had worked my way through the various tea rooms, I got home and raided the fridge. I was just trying to come to terms with the enormous figures that had been put before me, and I thought that if I ate, somehow things would become clearer. I put my svelte figure under huge stress last night, but this morning I was back to the muesli.

I understand that over the next five years we shall have increased the national debt by £703 billion. It will probably be more than that, but right now the Government are telling us £703 billion. Our total debt will be well over £1 trillion. There are 12 zeros in a trillion. I have only 10 fingers and thumbs. There are more zeros in a trillion than I have digits. This is an enormous sum of money. The real concern that I have is that I will not be able to pay it back. Personally, Charles Walker will not be able to pay this money back. My peers will not be able to pay it back. Members of Parliament will not be able to pay it back. People of working age will not be able to pay it back. Our children will not be able to pay it all back. Our small children will have this debt around their necks. Even our grandchildren will struggle with the size of this debt. It is truly an enormous sum of money.

Indeed, we may well find ourselves—we do find ourselves—borrowing to fund our borrowings. We will be borrowing money to pay money back on the gilts that become due in any certain year. Every year, a little more than 30 per cent. of income tax receipts will go to fund our borrowings—£43 billion a year. When our constituents pay their income tax, £1 in every £3 will go towards funding the debt mountain. This is a huge sum of money; a frightening sum of money.

I do not want to be churlish because I know that there are many good people in the Government who work hard on behalf of this country. They do not always get it right and they have not got it right this time, but I do not question their integrity for a moment. We were told by the then Chancellor, who is now the Prime Minister, that the Government would borrow only to invest, that he would spend only to invest, but in reality Governments only borrow and spend, however you dress it up. They can borrow prudently and spend prudently, or they can borrow foolishly and spend foolishly. Now, the Government are not borrowing prudently. They are borrowing huge sums of money to bail themselves out of the enormous financial mess that they have got the country into.

I personally blame the previous Prime Minister, Tony Blair. He had this enormous mandate when he came to power in 1997 to reform this country and make real changes to our public services. He allowed the brooding presence in No. 11 to limit his ambitions and aspirations for this country. If only, perhaps in 2000, the Prime Minister of the day had walked over to No. 11 and said, “Do you know what? You are beginning to really annoy me. You are a very, very negative influence on this country. You are bad for my karma, and I am going to make you Foreign Secretary. Then I am going to make you Home Secretary to finish you off very quickly.” But he never had the courage to front up Gordon Brown, the now Prime Minister, and now we find not just ourselves but generations to come burdened with his foolishness.

One in every £4 that the Government will spend this year and next year and the year after will be borrowed. No family or home could operate on that basis for any length of time, and I really fear desperately for the future of this country if we have yet another year of this Labour Government. They have no credibility or authority left. That is not necessarily their fault, and it is not necessarily a bad thing. All Governments come to the end of their natural life. We have a democracy in this country, and the democratic wheel turns. After 12 years, the public have had enough of new Labour. There is nothing that the Government can do between now and June next year that would enable them to win a general election, so I say to them: “Have the courage to go to the nation now. Go to the nation in June. Let’s get this over and done with. You will be beaten in June, but the defeat will be far less severe than if you wait until next year. So, do yourselves and your colleagues a favour: go to the nation now.” I did not want this to be a partisan speech, but perhaps it has been slightly so. I do not want to attack anyone in the Government personally, beyond the Prime Minister.

I shall conclude by expressing my concerns about the Chancellor’s forecasts. Everyone thinks that they are wildly optimistic, that they are not grounded in reality, and that the Chancellor painted slightly too rosy a picture of the public finances. I am concerned that he perhaps failed to level with the country yesterday, and that he was perhaps not—I shall not say “honest”, because I do not want to force you to stand up and ask me to apologise, Mr. Deputy Speaker. The Chancellor is a very decent man, and he really did not want to tell the country quite how bad things were going to be. Thank God that we have the International Monetary Fund, however. A couple of hours after the Budget, it told us how bad things were going to be. It gave us the real picture and told us that there were hard times ahead. I agree with my hon. Friend the Member for Tiverton and Honiton (Angela Browning) who, in her thoughtful speech, said that the British people were very resourceful and brave, and that they were able to face down a challenge. They are up to the challenge, and it is time that all politicians were honest with them and with their constituents.

The money is running out. I wish that it were not. I would like to spend money as though there were no tomorrow, but those days are behind us. We are in for a very difficult number of years, but I would far rather that the years ahead were difficult for me and my generation than for my children and grandchildren. We must all take collective responsibility for the current financial crisis. I enjoyed house prices booming, and I enjoyed cheap credit to the maximum. We have had the good times, we have had the very best times, and we must now face up to our responsibility to ensure that we leave our children and grandchildren a safe economic legacy. We must leave them an economy that will allow them to prosper and to have the best chance to enjoy the things that we have enjoyed. That means us making sacrifices now—not next year, not three years down the road, but now.

17:28:00

Mr. David Gauke (South-West Hertfordshire) (Con)
We have had a fascinating debate this afternoon, with a number of thoughtful contributions. I should like to highlight one or two of them. My hon. Friend the Member for Tiverton and Honiton (Angela Browning) made some important points about the role of savings in our society and the falling savings ratio. She also made a point that she made last year, and I feel that I must correct her again. She claimed to have been born in 1946, but I think that she is misleading the House. She must have transposed those last two numbers. She made that claim in her very valuable speech last year, and she has done it again today. I do wish that she would stop doing it.

My hon. Friend the Member for Sevenoaks (Mr. Fallon) made a thoughtful speech in which he highlighted three requirements for the Budget. He said that it should help the hardest hit, rebalance the economy and address the public finances. He detailed how this Budget and this Government had failed on all three fronts. In particular, he highlighted the schemes that the Government had announced and re-announced, and noted how little they had achieved.

The hon. Members for Crawley (Laura Moffatt) and for Northampton, North (Ms Keeble) highlighted housing issues and the hon. Member for Northampton, North particularly addressed issues connected with the schemes. The hon. Member for Edinburgh, North and Leith (Mark Lazarowicz) expressed his excitement about the Budget’s green proposals, although I think most of them were based on pre-publicity rather than what is actually deliverable. Even the Secretary of State for Energy and Climate Change said relatively little about the green proposals, most of which were, like the electric car proposal and as I said, more about gaining publicity beforehand than any kind of delivery.

The hon. Member for Carmarthen, East and Dinefwr (Adam Price) began his speech—an excellent speech, I have to say—by stating that the Government had run out of self-belief. He then made a persuasive case to show that the Government were entirely justified in running out of self-belief.

My hon. Friend the Member for Wellingborough (Mr. Bone) raised a number of important constituency issues. As he has done with some tenacity, he detailed the increasing unemployment levels in Wellingborough—something that the Prime Minister, thanks to my hon. Friend’s many interventions, also follows very closely.

The hon. Member for Angus (Mr. Weir) highlighted some of the Budget’s environmental issues, while my hon. Friend the Member for Broxbourne (Mr. Walker) revealed how he sat in stunned silence during the Budget speech. If my hon. Friend’s stunned silence demonstrates anything, it underlines the magnitude of the difficulties this country faces.

It would be remiss of me if I failed to say a few words about the Secretary of State for Energy and Climate Change. He began by criticising my hon. Friend the shadow Chancellor for spending most of his speech criticising his opponents, and then proceeded to deliver a speech almost entirely devoted to criticising his opponents. I have to say that his speech appeared to be a rehearsal, or perhaps an audition, for one day being shadow Chancellor. I am not sure whether that is his aspiration.

Mr. George Osborne
His ambition might be higher.

Mr. Gauke
I, for one, believe that the right hon. Gentleman’s ambition should be higher. I think the Labour party could do a lot worse—I genuinely mean this—than make the right hon. Gentleman its leader. In fact, it is doing a lot worse, so perhaps he should consider this course sooner rather than later.

This Budget is, as right hon. and hon. Members have argued in today’s debate, essentially about the issue of borrowing and debt and the state of the public finances. We have seen a spectacular deterioration in our public finances. Just a year ago, in the 2008 Budget, it was anticipated that we would need to borrow £38 billion this year—a not insignificant sum in itself. Now, however, we are looking at a figure of about £175 billion—the highest level of borrowing in our peacetime history. As the IMF has made clear, we have the highest deficit in the G20.

The figure for debts—an area where we were relatively better placed than many of our competitors—is also pretty frightening. In the early years of this Government or up until relatively recently, it is true that debt fell as a percentage of gross domestic product from 42 per cent. to 36 per cent. As the Institute for Fiscal Studies, and, indeed, my hon. Friend the Member for Wellingborough pointed out, it has fallen less than in the majority of OECD countries during those years, but it is now rising more quickly.

Let us not forget the sustainable investment rule, which says that debt should be no more than 40 per cent. of GDP. We have learned from the IFS today that such is the state of our public finances that the rule is unlikely to be met until 2032. In fact, we are going to see a doubling of the figure in the sustainable investment rule level up to just below 80 per cent.—overtaking in the process the debt levels of France and Germany. Those figures are based on what the Government provided yesterday, yet the real concern persists that what we heard yesterday was an underestimate. Within an hour of the revealing of the Budget figures, the International Monetary Fund predicted that growth would be worse in 2009 than the Government’s projection, and that we would still be in recession in 2010.

Conservatives and, I am sure, Members in all parts of the House hope that the Government’s figures will be proved right and the IMF’s will be proved wrong, but the Government’s claim that growth in 2011 will be at 3.5 per cent. is clearly unsustainable. As my right hon. Friend the Leader of the Opposition said yesterday, that is a trampoline recovery. Independent forecasters whose views were published by the Treasury only a month or so ago predict growth at such levels as 2.2 per cent. and 2.6 per cent. in 2011, 2012 and 2013, not 3.5 per cent. It appears that after many years of the Prime Minister’s promising that there would be no return to boom and bust, it is the Government’s aspiration and hope to return to boom and bust, with another boom in 2011.

Let us look at the small print of what was published yesterday. Paragraph 108 on page 26 of the National Audit Office’s “Audit of Assumptions” states:

“The Treasury has reduced its trend assumption further for Budget 2009, incorporating a permanent reduction in output totalling around 5 per cent, phased in between”

the third quarter of 2007 and the third quarter of 2010. What that means is that the productive potential of the United Kingdom has taken a permanent hit of 5 per cent., yet the Government still think that growth of 3.5 per cent. will be possible in 2011. As the hon. Member for Carmarthen, East and Dinefwr pointed out, there is no historic precedent for that sort of recovery from a recession.

The significance of that is twofold. It makes the claim for growth in 2011 less credible, and it reveals that much of the £175 billion deficit—£140 billion, according to the Institute for Fiscal Studies—is structural. Given the current projections, we are not likely to be able to grow our way out of a recession unless serious measures are taken.

The test of the Budget is whether it represents a credible route out. As we heard from my hon. Friend the Member for Sevenoaks, the Government’s record on projecting the public finances is so grim that they consistently overestimate the position, yet even according to these projections we shall have to wait for many years. For the last eight years or so, the Government have tended to say that the Budget will balance in about two years’ time. In last year’s pre-Budget report the period was extended to six years, and, in this year’s Budget, it was extended to eight. Those are hopelessly optimistic assumptions.

Yesterday the Government had an opportunity to explain how to restore the public finances, and they failed to do so. What did we get? We got their proposal to alter their own spending plans in 2011. In 2010, they will still be increasing spending, although they believe that the economy will be growing. As my hon. Friend the Member for Tatton (Mr. Osborne), the shadow Chancellor pointed out, if we use the methodology that the Government have used against us for many years, any reduction of announced spending constitutes a cut. We see this as a cut of £84 billion.

That is not just a pedantic point. At the last election, the Government managed to reach a figure of £35 billion on the basis of an alteration in our announced spending plans. We heard the statements made by Labour Members at the time. The current Chancellor said that it was the equivalent of sacking every teacher, doctor and nurse in the country. Over the past 10 years, the central argument has been that the Government could always afford these big increases in public spending: increases of 4, 5 or 6 per cent. We have argued against that, and in doing so have been portrayed as slashers and burners of public services. We could not afford those increases then, and we cannot afford them now. The question now is how we can deliver quality public services in an age of austerity. The Government, however, continue to search for the old dividing lines, trying to pretend that we are the party that cuts public spending while they are entirely different.

What is the Government’s approach to bringing down the deficit? Let us look at tax. They have tried to highlight one issue above all others: the 50p rate. That has the singular achievement of being cynical in at least four respects. First, it is a breach of a manifesto pledge. The Secretary of State for Energy and Climate Change was very keen for the shadow Chancellor to intervene on him, and I am perfectly prepared to let the Secretary of State intervene on me to say whether he denies or accepts that the Labour party’s last manifesto stated that it would not raise the basic or top rates of income tax in the next Parliament and therefore that the policy announced yesterday is the clearest and most blatant breach imaginable of a manifesto pledge.

Secondly, it is cynical because it is a distraction from other taxes. In truth, even before the next general election, most of the taxes imposed will apply across the board, such as the fuel duty increases, and the increases in the cost of alcohol and tobacco. However, the really big tax increase will happen after the next general election. As soon as the election is over, Labour will increase national insurance contributions, affecting everyone earning more than £20,000 a year.

Mr. Betts
The hon. Gentleman was talking about manifesto commitments. Will the Conservative party put in its manifesto that immediately after it wins the next general election—if it does—it will reverse the 50p income tax rate? Also, as he has described a black hole that he believes exists in the public finances, will he come clean and spell out precisely the cuts in public expenditure that he would make if he got into power?

Mr. Gauke
The Labour party has announced—under, I suspect, the same methodology that it used at the last election—£84 billion-worth of cuts. The Conservative party position is that our priority will be to try to tackle the tax increases introduced by the Labour party that will affect the many and not the few. Therefore, there is no commitment here to reverse that particular tax rate—but whether we can reverse it or not, the fact remains that it is a cynical policy.

That point brings me to another reason why this tax rate is so cynical. One can see what happened here. As the Government sat down in No. 11 Downing street—or, more likely, No. 10 Downing street—the thinking was not, “How are we going to bring in some tax increases that are good for the UK economy and will not damage its productivity?” Instead, the thinking was more, “What can we do to put the Conservative party in a difficult position?” That is the way that this Government work.

The fourth reason why the policy is cynical is that it will not raise the amount of revenue that has been claimed. We do not dispute that it will raise some revenue, but as the IFS has stated today, no account has been taken of the fall in indirect consumer spending that will result from this tax increase, so the Government will not raise as much money as they claim.

Let me return to the issue of how this Government operate: they are not thinking about what is best for the country; they are not thinking about addressing the fiscal crisis that we face; the way they operate is all about political positioning and trying to damage their opponents. This is all of a piece; it is consistent with the way that this Prime Minister has operated throughout his career. Even when dealing with his own party colleagues, he blocked public services reform because it suited his own internal party position. As Chancellor of the Exchequer, he abolished the 10p tax rate to try to wrong-foot the Leader of the Opposition. It is no wonder there is an atmosphere within Downing street that leads people to believe that there are no limits on what can be done to put pressure on their opponents, as we saw over Easter and in the McBride affair.

This is a Budget that fails to address the long-term needs of the country and ducks the big issues—it is a cowardly and dishonest Budget. Tony Blair’s speechwriter yesterday described it as a Budget of a Government preparing themselves for opposition. The Government have neither the ability nor the desire to govern responsibly, and it is time that they made way for those who can.

17:45:00

The Exchequer Secretary to the Treasury (Angela Eagle)
We have had an interesting, at times thoughtful, sometimes amusing and sometimes vitriolic debate this afternoon. I shall first mention a few of the contributions that we have heard.

My hon. Friend the Member for Sheffield, Attercliffe (Mr. Betts), who welcomed the support in the Budget, particularly to prepare for the upturn, gave many examples of companies in his constituency that are preparing for just that. He also rightly pointed out our determination to lead in environmental technology.

The hon. Member for Tiverton and Honiton (Angela Browning), who always makes thoughtful speeches, particularly about retired people, talked about loan sharks and banks in the same breath. We all share her desire to see the standing of financial services and UK banks return from its present point to somewhere reasonable. She also wanted cuts in taxes on investment income, which is a feature of what we hear from the Opposition. They scaremonger about the size of the debts that face us after what is a global shock and then complain about anything that we do in terms of fiscal consolidation to try to raise money and restore the sustainability of the public finances. They always make the basic argument that the deficit is too large and then complain when we try to raise money to shift it.

My hon. Friend the Member for Crawley (Laura Moffatt) again demonstrated her commitment to and experience in housing, and she particularly welcomed the fund that will allow local authorities to build. She emphasised the importance of housing—we share that view—and particularly wished to ensure that we deal with some of the existing shortages. The Budget contains modest but important measures in that regard, despite the problems that we are experiencing in the public finances.

The hon. Member for Sevenoaks (Mr. Fallon) made his usual robust speech. We have shared many years of experience serving on the Treasury Committee and I continue always to enjoy his contributions. He talked about the structural problem of debt, but when we have had a shock of the sort that we have seen in the global financial system, which, without being predicted—my hon. Friend the Member for Northampton, North (Ms Keeble) mentioned that point in her extremely good, thoughtful and interesting presentation—shifts our tax receipts in such an unprecedented way, it is not surprising that a structural deficit occurs. We have to think very carefully about how to restore some of that tax funding, and I believe that the approach that my right hon. Friend the Chancellor took in his Budget will begin to do that.

The hon. Gentleman, in line with a lot of his party, said that the public sector was too big and has to be cut, but he did not explain quite how he would like to see it cut. I thought that my hon. Friend the Member for Northampton, North made much more interesting comments on the efficiencies that can be driven through the public sector—we have made a beginning on that with the operational efficiency programme—and how collaborative procurement, shared services and a different way of delivering public services are beginning to give us the chance to transform how our services are used. She described this as a “flatter” public service, more driven by its users than providers, and she offered us some important and interesting insights into what the future will be if we can do that in an appropriate way, while protecting front-line services. That is the important difference between the two sides, it seems to me. The question is whether we should slash and burn in the middle of a recession, or take a careful and focused look at how we can deliver real service efficiencies while protecting those on the front line.

The hon. Member for Carmarthen, East and Dinefwr (Adam Price) at least admitted that the Government have put in effect policies that might have—I am quoting him—averted a recession—

Adam Price
A depression.

Angela Eagle
Indeed, a depression. After that, his contribution went downhill. We probably do not agree on much more. He is at least in favour of a fiscal stimulus, and we had some discussion about the size of that. Of course, that puts us on the same side of the argument, against those who said that we could not afford a fiscal stimulus. The Opposition voted against the fiscal stimulus that was a centrepiece of the pre-Budget report. They would have put us in a position where we would have been unable to bring forward the £3 billion of investment that was already planned, as my right hon. Friend the Chancellor announced. We would not have been able to stimulate the economy in order to support people now.

The hon. Member for Wellingborough (Mr. Bone) made his usual trenchant remarks. I hope to see him in the Committee on the Finance Bill, so that we can carry on our jousts there. Naturally, I do not agree that the Labour Government have destroyed the economy. He needs to take into account what is going on outside the country. We have had a massive unexpected global banking shock, which has created the first synchronised global downturn and decrease in world gross domestic product since the first world war—[Interruption.] It does not say that anywhere; I am just describing what is happening in the world economy.

I know that it suits the Opposition to pretend that all these problems and the sudden huge shock in our financial services have somehow been generated internally in this country, leading to the deficits that the Opposition go around the country trying to scare people about, but the circumstances of the credit crunch and of events in the global international financial system are unprecedented. Inevitably, those circumstances have had a big effect on all economies in the world, both advanced and developing, and we face major economic challenges as a result. I would have thought that, just once, an Opposition Member might acknowledge that that is going on, instead of peddling the view that all the problems were internally generated in No. 10 and No. 11 Downing street—that we could all have foreseen them somehow and that we have deliberately got ourselves into a situation where we have to deal with a borrowing requirement of 12 per cent. of GDP. If the Opposition were being more honest, rather than talking in their slogans for the forthcoming general election, they would acknowledge that we have been affected by an unprecedented global situation and that we have to recover from that.

It is important that we acted to shore up the banking system. That was essential, but it was done at a cost. Initially, the Opposition opposed our action, then they were in favour of it, then they opposed it again. Their thoughts on what we should be doing to save the global banking system seem to change from one day to the next. They spent years acknowledging that financial services were a major part of our economy and that we are an open and trading economy, but they now blame the Government for the fact that the global downturn is having a greater effect on our economy than on some more closed economies. That is true, because ours is an open economy that had a comparative advantage in financial services. That is why we have been hit more severely than some economies. Japan and Germany, neither of which have large financial sectors in the same way as we do, have been hit even harder because they manufacture and export. They are being hit by the same sort of global slow-down—the stalling of the economic engine—that was the result of the credit crunch.

We have to get the world economy through the present problems, and we have to get this country through the challenges that we face, so we acted to shore up the banking system, despite the Conservatives’ less-than-helpful approaches. That was essential, but it had a cost. We acted in the pre-Budget report to provide real help for people and businesses, and that included the fiscal stimulus that the Conservatives voted against. A tax cut for the 22 million basic rate taxpayers will go into their pay packets this April. The Conservatives have to explain to the people of this country why they voted against it. They have to explain why, when things are so challenging and difficult, their priority for expenditure is to spend £1 billion on giving £200,000 each to the 3,500 richest estates in the country. Our priority is giving a tax cut to 22 million basic rate taxpayers. They have to explain why they refused to change their mind about that when they had the chance to do so—the shadow shadow Chancellor, in his usual way, suggested that perhaps they should change their mind about the policy. They have to explain why it continues to be their priority.

The Conservatives also have to explain what they will do about the increase to a tax rate of 50 per cent., which we have had to introduce to deal with the unprecedented situation that we are in. They have to explain why the Mayor of London today announced that he was against it and that the Conservative party should vote against it, when the Conservative Front Benchers are being rather coy about their view. The Conservatives have had much fun talking about potential leadership challenges in our party—they even tried to provoke my right hon. Friend the Secretary of State for Energy and Climate Change, who is doing a fantastic job where he is, to join the next leadership contest—but the Mayor of London is stalking the leader of the Conservative party before the latter has got anywhere near the gates of No. 10. He announced that he might not even bother to stand for a second term as Mayor, and that he might be looking for a seat in this place, so that he can see whether he can cause a leadership election in the Conservative party.

Angela Browning
I am sorry to take the hon. Lady away from Boris, but could I bring her back to inheritance tax? We have repeatedly heard from Ministers this afternoon about the £1 billion that the Conservatives would spend on inheritance tax, but if she looks in her Red Book she will see that on the back of the announcement that her Government made following the Conservative party conference, in which they set out their own change to inheritance tax, tax revenues and receipts to the Treasury have exceeded £1 billion. That is the result of her party’s policy.

Angela Eagle
The interesting point is that the Conservatives’ stated priority—indeed, it has been restated, including last night by the shadow Chief Secretary to the Treasury on “Newsnight”, despite the attempts of the shadow shadow Chancellor to get the party to ditch the policy—is to give £1 billion of revenue, at a time when fiscal consolidation is really important, to 3,500 of the most well-off people in the country. It is truly a Conservative millionaire’s manifesto, and they keep confirming the policy.

The Budget prepares the economy for the recovery. It ensures that we will be able to protect investment at this most difficult time, so that when recovery comes, we will be best placed to make gains as rapidly as possible, and to restore the prosperity and the balance of our economy following this unprecedented global economic shock. We will always seek to protect the most vulnerable, which is why we announced policies worth nearly £3 billion to protect the unemployed and give a jobs guarantee to 16 to 24-year-olds. We will do those things. We will protect investment. We will be able to rebuild our economy and our public services on a firmer, fairer footing. The alternative, as we have seen—

18:00:00

The debate stood adjourned (Standing Order No. 9(3)).

Ordered, That the debate be resumed on Monday 27 April.

Business without Debate

Delegated Legislation

Ordered,

That the Motion in the name of Mr. Pat McFadden relating to Financial Assistance to Industry shall be treated as if it related to an instrument subject to the provisions of Standing Order No. 118 (Delegated Legislation Committees) in respect of which notice has been given that the instrument be approved.—(Chris Mole.)

rEGIONAL SELECT COMMITTEE (NORTH EAST)

Ordered,

That Mr. David Clelland be discharged from the North East Regional Select Committee and Mr. Denis Murphy be added.—(Chris Mole.)

 Controlling Urban Seagulls

Motion made, and Question proposed, That this House do now adjourn.—(Chris Mole.)

18:00:00

Mr. Don Foster (Bath) (LD)
Given the current financial crisis, using even a small amount of parliamentary time to debate the problems caused by urban seagulls might seem bizarre. However, while we rightly devote much of our time to the financial crisis, we should not lose sight of other issues, especially ones that cause significant problems to many people and cost individuals, businesses and local councils a great deal of money.

I am particularly grateful to Mr. Speaker for giving me the opportunity to raise the issue. I pass on huge thanks to the Under-Secretary of State for Environment, Food and Rural Affairs, the hon. Member for Ogmore (Huw Irranca-Davies), who is not in the Chamber because, as he has explained to me, he is on important departmental business. I am, however, delighted to see on the Treasury Bench the hon. Member for Bishop Auckland (Helen Goodman), who I am sure will be a worthy substitute.

I have received numerous complaints in my Bath constituency about urban seagulls. Mr. Henry Brown, chairman of Bath Residents Associations, wrote to me recently about the serious health and safety problems caused by seagulls in Bath. He referred to faeces deposited on tables, chairs and other furniture outside catering premises creating a health hazard; stone pavements and steps rendered slippery by freshly deposited faeces creating safety hazards; aggression towards pedestrians in public spaces and gardens, which is extremely frightening; and the pecking open of refuse sacks, which leaves debris and encourages other vermin, creating further health problems.

A search through local newspapers across the country shows that Bath is not alone. For example, in August last year, the Daily Mirror reported:

“A terrified woman in Fraserburgh, Aberdeenshire was left drenched in blood after a seagull protecting its young dive-bombed her. Jean Wemyss, 68, had to have a one-inch gash in her head glued after the attack. ‘It felt like someone had hit me with a rock. There wasn’t a stitch that wasn't covered in blood.’”

Such results from a bird attack might seem exaggerated, but with a wingspan of four and a half feet, an adult body weight of about 2 lb, a long, vicious beak, a flight speed of 40 mph and sharp claws that are swift to draw blood in an attack, each bird represents an impressive threat as it hurtles through the sky.

The newspapers have hundreds of similar stories—from attacks on people carrying food to birds swooping on bike riders, causing accidents. The headlines illustrate the problem: “Raging Gull”, “Pensioner’s Horror At Gull Attack”, “Hitchcock’s Vision Rapidly Becoming Terrifying Reality” and “Vicar Has To Wear Hard Hat To Church After Seagull Attack”.

As well as the birds attacking people, urban communities increasingly have to deal with their ear-splitting noise, the mess gulls’ excrement makes on rooftops, pavements, cars and windows and the damage they do to buildings—even pulling away lead flashings. It is no wonder that in January the Daily Mail ran a story with the rather lengthy headline, “They’re noisy, filthy, violent…and they’re moving into a street near you. No, not marauding teenagers, but the seagulls invading Britain’s inland towns by their thousands.”

Before world war two there were no urban seagulls, but the growth of urban landfill sites offered a whole new source of food, especially after the Clean Air Act 1956 put a stop to landfill operators burning rubbish on site. With so much edible waste going into landfill, the large gulls were quick to take advantage. Plenty of food meant plenty of offspring, and previously small, wild populations grew rapidly to the tipping point where their colonies were overgrown. The overspill came to our towns, which have fewer predators and little disturbance. Towns are 4 to 6° C warmer than the surrounding countryside, and street lighting enables gulls to scavenge at night as well as during the day. Gull expert Peter Rock wrote to me, saying:

“Three years ago, I estimated that we had 130,000-180,000 pairs of gulls nesting on rooftops in the whole of Britain and Ireland. It’s quite clear that the growth of these urban colonies has been startlingly high. I estimate that by 2019”—

10 years’ time—

“we could have over a million gulls nesting on our rooftops. And by then urban gulls will outnumber wild gulls. Once settled in, gulls virtually never return to the wild. They are urbanised for life—a very long time, considering that the average seagull lives to 20 years, and the record is 35.”

In my constituency, our seagull colony has doubled in size in just six years, and we now have more than 850 breeding pairs. When non-breeders are added, it means that we already cope with 2,500 seagulls, and the numbers continue to increase rapidly. Other places are in an even worse position. With gull populations expanding rapidly, the problems, previously perceived as little more than an irritation and often with a great deal of mirth, have, instead, become very costly indeed. Repairs to damage, clearing up fouling and mess, nest clearance and so on are obvious areas of expense, but gull noise elicits the vast majority of complaints, affects tourism and the resource from it, causes sleep deprivation in the work force and distresses hospital patients. Attacks from aggressively protective parent birds deter shoppers, with obvious effects on local economies.

A plethora of pest control equipment and deterrence systems has been deployed during the past decade, involving very large sums of money. Looking across the roofs of any town where gulls breed, we see nets, strings, spikes, tensioned wires and even plastic models of owls and helium-filled balloons, and we hear loudspeakers broadcasting distress calls. Birds of prey are sometimes flown, as they are over this Palace, to try to deter nesting, but, despite those interventions, populations have grown rapidly. The gulls have taken everything thrown at them in their stride, and even more recently developed methods do not seem to be working.

Some councils are deploying the method that Peter Rock suggested some years ago, whereby eggs are coated in oil to prevent hatching. Bristol city council, for example, is spending £30,000 a year on certain measures. But, while egg oiling and, latterly, egg replacement can help calm sensitive areas, it does not seem to reduce populations. Rock now says:

“It’s just not effective enough; it may simply move the problem around.”

Indeed, it is increasingly clear that the solutions that have been tried so far merely move the problem somewhere else. My local council spends thousands of pounds each year on such measures in Bath city centre, but it admits that

“it is noticeable that in the last few years there are more complaints coming from areas outside the city centre where there were previously no problems”.

In short, we seem no nearer to an effective solution than we were a decade ago.

The Government have a responsibility to ensure that appropriate research is conducted to help identify solutions. After all, the Department for Environment, Food and Rural Affairs is spending £2 million on the urgent eradication of the ruddy duck. Should it not also research some effective means at least to ameliorate the seagull problem? We certainly know a great deal about the biology of gulls, but most of our knowledge comes from studies of wild colonies. We know which species of fish that they prefer, but that casts no light on the situation in our towns. We know almost nothing about what makes urban gulls so successful, so, if we are to manage this issue properly, we surely need to find out.

We also need to know about issues such as site fidelity, breeding success, foraging strategies, foraging distances, time-energy budgets, chick growth rates, dispensing with migration, survival rates and much more. Most of all, we need to know about how and where urban gulls get their food, what it is and what, in particular, they provide for their offspring. Knowing how and where urban gulls obtain food will enable appropriate and efficient control of food supplies.

Experts are ready and willing to do the work. I know that Bristol university, for example, can be ready to take on preliminary work this season and start fully in 2010. But despite the urgent need for research, at the beginning of this month the Under-Secretary of State for Environment, Food and Rural Affairs wrote to my hon. Friend the Member for Northavon (Steve Webb) saying:

“My department has no plans to fund research into the urban gull population.”

I hope that, following this debate, the Department will rethink the issue.

Action is also needed on a number of other fronts. Even if research identifies new solutions, it is unclear how the law will allow them to be used. At present, action against seagulls is allowed via a general licence. This includes a licence that allows the taking and killing and the damaging or destroying of eggs and nests of certain seagull species for the purpose of preserving public health and safety; a general licence can also be issued in respect of ensuring aircraft safety.

At present, such a licence does not allow such activity in respect of nuisance, such as that caused by the noise of seagulls, or damage to property. Given that the vast majority of complaints about seagulls involve nuisance and damage to property, surely there is a case for reconsidering the conditions that surround the issuing of general licences so that those factors are also taken into account? Natural England is currently reviewing the general licence provisions and I hope that the Department will encourage it to take the point on board. The review is already also considering whether to have tighter restrictions on the issuing of general licences in respect of one type of gull—the herring gull.

However, were a distinction to be made between herring gulls and lesser black-backed gulls in terms of what is allowed to be done to limit the numbers, all measures such as egg replacement would simply have to cease, because even experts cannot distinguish between the eggs of the two species. I was therefore pleased to read in a note that I received only today from Natural England that the organisation now appears to recognise that in urban areas

“the control of the Herring Gull population may be desirable”.

No final decisions have been made, but it seems that the proposal will be to continue the current general licence terms for urban areas. I hope that the Department will oppose any tightening of the restrictions.

In summary, urban seagull problems have to be resolved. We need research to help us identify effective control measures and greater clarity about the rules allowing such measures to be undertaken. We certainly do not need any moves that will make tackling the problem more difficult. The neighbourhood environment manager of my local council summed it up in an e-mail that she sent me today:

“In terms of help, I feel that local authorities have limited scope to act and are working on their own initiative, when really the problem is regional, even national. There needs to be national commissioned research on the problems created by urban gulls which can lead to actions that local authorities can take together in a co-ordinated way. There is a frustration that nationally the problem is not taken seriously enough. However, at a local level it is an issue that the public feel very strongly about.”

Too many people have lived for too long with the menace of the urban seagull. I hope that we can hear tonight what help the Government have to offer.

18:14:00

Helen Goodman (Bishop Auckland) (Lab)
I congratulate the hon. Member for Bath (Mr. Foster) on securing this debate and thank him for agreeing to go ahead with it even though the Government are able to field only a reserve team. The Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for Ogmore (Huw Irranca-Davies), to whom the hon. Gentleman says that he has spoken, sends his apologies for not being able to listen in person. He cannot be here because he is at the Agriculture and Fisheries Council in Luxembourg.

The hon. Gentleman set out with characteristic vividness the problems caused by urban gulls. The Government recognise that gulls can be problematic when found in high density in urban areas, such as Bath. We also recognise that measures need to be taken to mitigate such problems. I was interested to hear his statistics and the fact that in Bath the breeding population is now estimated at between 800 and 900 pairs. However, the suggestion that there are between 130,000 to 180,000 pairs of urban gulls is unrealistic. The Joint Nature Conservation Committee estimates, which are based on the seabird colony register census in 2002, show that there are probably some 30,000 pairs of gulls in urban areas out of a total breeding population of 370,000.

The hon. Gentleman asked if more research could be done into the behaviour of urban gulls, but the scientific advice from the Department for Environment, Food and Rural Affairs and Natural England is that it is not clear what further benefits new research into gull behaviour or movements would bring. Gull behaviour is influenced primarily by the need for food and for safe nesting and roosting sites, regardless of where they may be. Gulls will scavenge and exploit food supplies on the coast as much as inland. Research funding, especially in the present financial circumstances, must be targeted at problems where there are no, or insufficient, solutions, but that is not the case for gulls because a range of well-tested measures, some of which have been researched extensively, can be used to overcome the problems, including adult bird removal, oiling or pricking of eggs—which the hon. Gentleman mentioned—nest destruction and the proofing of buildings. He draws a comparison with the ruddy duck, but that case is different because the ruddy duck is threatening the extinction of white-headed ducks. Nevertheless, DEFRA has commissioned research into the use of immuno-contraceptives in a range of species, including birds. That research is still at an early stage, however, and we do not want to wait for further results before continuing with effective action now.

The hon. Gentleman asked about the legal status of gulls. As he knows, all wild birds are protected under the Wildlife and Countryside Act 1981. However, in some circumstances it is possible to apply for a licence from Natural England to take measures to control problem bird species where there are no other satisfactory solutions. There are several specific purposes, defined in law, for which Natural England may grant licences, including preventing the spread of disease, preserving air safety, the conservation of wild birds, and preserving public health and safety. As he noted, nuisance and damage to property are not legal purposes, but the Government’s view is that the problems he has raised fall fairly and squarely within the category of public health and safety.

A build-up of gull populations to problem levels is usually the result of the presence of readily accessible food and/or the availability of attractive habitats for roosting or breeding. While licensed control of bird populations can provide temporary relief, the elimination or reduction of those factors will provide the long-term solution. Access to readily available nutritious food is the single most important factor in boosting gull populations. If that can be denied, the problem may be resolved without recourse to other measures. The Government urge all local authorities and individuals to help address that problem by, first, avoiding the spillage of foodstuffs; secondly, keeping food storage areas secure and bird-proof; thirdly, ensuring that disposal and waste facilities are kept clean and tidy; and fourthly, limiting or preventing the deliberate feeding of birds by the public.

I am not sure whether the hon. Gentleman is aware that local authorities in Devon and Cornwall have had good results by using hessian sacks for rubbish disposal to deter gulls from accessing food. The gulls find it more difficult to deal with hessian sacks than with plastic sacks. I understand that it is proposed to trial the use of hessian sacks in Bath as well, to reduce the availability of food to gulls. If there are lessons to be learned from that, we will look into new techniques that may be more successful than those that are being used at the moment.

The licensing authority, Natural England, sets conditions to ensure that the licences that it issues, including general licences, are appropriate and take account of the risk of the activities licensed and the conservation status of the species concerned. The hon. Gentleman understands that although great black-backed and herring gulls may cause problems locally, there are concerns about the conservation status of those species at national level. As a member state of the European Union, the UK has an obligation to conserve wild bird populations, and Natural England was absolutely right to take that into account in its consultation on general licences. I emphasise, however, that we are taking that action not simply because we have a legal obligation to do so but because we are concerned about the wild bird populations.

There has been a greater than 50 per cent. decline in the breeding population of the herring gull since 1969 and a greater than 50 per cent. decline in the wintering population in the past 25 years. As a result, the herring gull is now listed as a biodiversity action plan priority species and meets the qualifying criteria for a red listing as a bird of conservation concern. The great black-backed gull is a scarce breeding species in England, with a breeding population of only 1,500 pairs. The wintering population of the species has declined by between 25 and 50 per cent. in the past 25 years, so it will be moved from green to amber listing as a bird of conservation concern.

It was for those reasons that Natural England consulted on amendments to general licences. It proposed that the herring gull would be removed from almost all general licences, the exception being that it proposed to continue to allow the destruction of the nests and eggs of herring gulls for the purpose of preserving public health and safety. That proposal recognised the need to mitigate the problems that herring gulls can cause in urban situations and meet the need to provide a licensing regime that is not overly burdensome. For great black-backed gulls, a general licence will be available only for the purpose of preserving air safety.

I stress that although the consultation proposed a reduction in the available general licences, it will still be possible to apply for an individual licence to control those species where they are causing problems. That option is, of course, open to local authorities. Natural England’s proposals were aimed at striking the appropriate and proportionate balance between protecting species and mitigating negative impacts in areas where species may be over-abundant. None of the changes that Natural England is proposing will prevent cities such as Bath from continuing to deal effectively with their urban gull populations.

Question put and agreed to.

18:23:00

House adjourned.