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Jonathan Evans (Cardiff North) (Con)
1. What recent discussions she has had with ministerial colleagues on encouraging the relocation of businesses to Wales.
The Parliamentary Under-Secretary of State for Wales (Mr David Jones)
Before I answer my hon. Friend, I am sure that the House will want to join my right hon. Friend and me in expressing condolences to the family of the right hon. Lord Walker of Worcester, whose death at the age of 78 was announced earlier this morning. A distinguished Member of the other place and a former Secretary of State for Wales, he was a good friend to the Welsh people.
My right hon. Friend the Secretary of State and I are committed to attracting more inward investment to Wales, as we believe it will be a key driver for future economic growth.
Jonathan Evans
First, may I associate myself with what my hon. Friend said about Lord Walker? May I also take the opportunity to welcome my hon. Friend the Under-Secretary and my right hon. Friend the Secretary of State to their new responsibilities and to wish them well in the challenges that lie ahead?
Given the recognition even by the First Minister both in an interview on “The Andrew Marr Show” and during the Welsh Labour conference this year that there are not enough private sector jobs in Wales, does my hon. Friend agree that success depends on driving up private sector jobs in the Principality in the future?
Mr Jones
Yes, my hon. Friend is entirely right. The private sector is the key to future growth in Wales, which is why yesterday’s Budget announced a major package of corporation tax reform that is aimed at making Britain—and, of course, Wales—one of the most competitive parts of the G20. In particular, the exemption of up to £5,000 of employer national insurance contributions for each of the first 10 employees, which applies outside London and the south-east, will be of benefit to Wales.
Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC)
May I associate myself with the condolences expressed to the family of the late Lord Walker and also congratulate the right hon. Lady and the hon. Gentleman on their appointment to their posts?
Yesterday, there was a recognition by the Government of the need to grow economies outside the south-east of England. We have argued long and hard about the overheating of the south-east and its cost to the north of England and Wales. Will the Minister consider the idea of either regionalising corporation tax according to gross value added or devolving it altogether to the Welsh Assembly so that the needs of business can be met and real support provided for it?
Mr Jones
I am glad to hear that the hon. Gentleman welcomes the announcements in yesterday’s Budget. The announcement of the exemption of up to £5,000 of national insurance contributions for new employment outside London and the south-east will certainly be of benefit; to that extent, it is a major departure, which I am sure that the entire House will welcome.
Philip Davies (Shipley) (Con)
2. What recent discussions she has had with the First Minister on the proposed referendum on the law-making powers of the National Assembly for Wales.
Mr Andrew Turner (Isle of Wight) (Con)
8. What recent discussions she has had with the First Minister on the proposed referendum on law-making powers of the National Assembly for Wales.
The Secretary of State for Wales (Mrs Cheryl Gillan)
May I also echo the words of my hon. Friend in recognising the tremendous work that the right hon. Lord Walker of Worcester did in this House as one of my predecessors as Secretary of State for Wales from 1987 to 1990? I am sure that all our thoughts are with his family at this sad time.
I have had regular discussions with the First Minister on the proposed referendum on the law-making powers of the National Assembly for Wales.
Philip Davies
Given that so few people in Wales actively voted for the National Assembly in the first place, will my right hon. Friend consider having a turnout threshold for any referendum on whether to give the Assembly more powers so that at least a respectable number of people vote before we make any constitutional changes?
Mrs Gillan
I do not know whether my hon. Friend is aware of it, but there was a threshold of 40% for the previous referendum. I am afraid to tell the House, however, that I am bound by the Government of Wales Act 2006, in accordance with which there is no threshold, but a simple majority. It is therefore important, I believe, that the electorate in Wales uses its right to vote on an important issue. I hope that when the referendum is run, they will turn out in numbers.
Mr Andrew Turner
What progress has the Secretary of State made on the question for the referendum?
Mrs Gillan
No work was done in the Department on the question prior to the general election. I am pleased to tell the House, however, that the project board has produced a question and a preceding statement for the referendum on law-making powers for the National Assembly for Wales, and I am sending it today to the Electoral Commission for the 10 weeks that it needs to carry out its work in proving that question. In the short time I have been in the office, I think I have achieved more than my predecessor did in the time from 17 February, when notice was given to him that a referendum was required.
Paul Murphy (Torfaen) (Lab)
May I congratulate the right hon. Lady on her new job? Despite what the London commentariat say, it is a very important job indeed. She will know that, during any referendum, the question of Members of Parliament from Wales will be an issue. Will she confirm that she agrees with her previous statement that there should be 40 Welsh MPs?
Mrs Gillan
I thank the right hon. Gentleman for his warm welcome. When I dealt with him from the other side of the Dispatch Box, I always found that his courtesy was unfailing. He refers to the potential boundary changes and the reduction of the number of MPs—I am sure that no one outside the House will be arguing for more highly paid politicians. However, I take very seriously the representation of Wales in the House, and nothing will be done in reducing the number of MPs that will disproportionately affect the share of voice that Wales has in the House and at Government levels.
Susan Elan Jones (Clwyd South) (Lab)
Would the Secretary of State like to campaign for a yes vote in the referendum, or will she consult the electorate of Buckinghamshire first?
Mrs Gillan
I am very proud to be the first woman to occupy the position of Secretary of State for Wales, and I was born and brought up in Wales. It is singularly important that the people of Wales decide on the referendum and the outcome, and I will campaign for neither a no vote nor a yes vote. I and my Minister will remain neutral, which is the proper thing to do. The hon. Lady needs to familiarise herself with her own party, as I believe that there are split views in the Labour party as well.
Mr Mark Williams (Ceredigion) (LD)
The Secretary of State will be aware that some of us on these Benches will campaign with great enthusiasm for the referendum, and were disappointed that the referendum that we hoped for in October did not come about. Does she think the fact that it did not occur reflects on the inactivity of the previous Government? Furthermore, in welcoming her news about the question, may I ask whether the Government will make a speedy commitment to a referendum in the spring of next year?
Mrs Gillan
I thank my hon. Friend for that question. As we said in the coalition agreement, and as I said before the election, I am determined to allow the people of Wales to decide in a referendum. It is only polite to accede to the request of the Assembly, which, after all, voted unanimously for a referendum, and I am sad that the previous Secretary of State commenced no work on the question and confined himself to work on the order that we will eventually lay before the House. I am pleased to confirm that I am sending the preamble and question to the Electoral Commission.
Mr Speaker
May I just gently ask the Secretary of State to face the House rather than having her back to the Chair? That would be very helpful.
Mr Peter Hain (Neath) (Lab)
May I join in the commiserations to Lord Walker’s family on his death?
May I congratulate the right hon. Lady, especially on being the first woman Secretary of State for Wales? However, as accounts given to the media have traduced the truth, I must ask whether she is aware that as Secretary of State, on Monday 10 May, in the Wales Office, I specifically asked and received an assurance from senior officials that work I had put in train months before would have enabled a referendum to be staged this October. Before she answers, may I remind her that whatever she has been saying to the media, she must not mislead this House, especially as she will not have seen the official papers detailing my preparations for the referendum?
Mrs Gillan
I thank the shadow Secretary of State for his welcome. I cannot comment on the advice received by the former Administration; however, I do have access to documents that have indicated to me that no work was done on the question before the general election. If the right hon. Gentleman wishes to have a discussion with me about the matter, he is quite able to do so, but no work was done by the Department. The only work carried out was on the order that was to be laid before the House. This was the first question that I asked when I walked into the Department.
Roger Williams (Brecon and Radnorshire) (LD)
3. What recent discussions she has had with the Chancellor of the Exchequer on the findings of the Independent Commission on Funding and Finance for Wales.
The Parliamentary Under-Secretary of State for Wales (Mr David Jones)
My right hon. Friend the Secretary of State has discussed the issue of funding for Wales with the Chief Secretary to the Treasury, and also met the hon. Gentleman last week to discuss the subject. I hope that the hon. Gentleman found that helpful.
Roger Williams
I welcome the Minister and the Secretary of State to their posts.
Notwithstanding the review that has been promised after a successful referendum, there is clear and understandable concern about the difficulties that will be faced in Wales because of the necessary measures being taken to reduce the deficit. Will the Minister commit himself to a dialogue with Gerry Holtham and with Treasury colleagues to ensure that Wales is given a fair deal, given its historic levels of underfunding and the severe pressure put on the Welsh Assembly Government?
Mr Jones
The Government are committed to ensuring that Wales is properly funded, but it is clearly right for the Treasury’s energies to be concentrated on tackling the deficit left behind by the Labour party. We will certainly give careful consideration to the Holtham commission’s final report, which is to be published this summer. My right hon. Friend the Secretary of State has already met Mr Holtham, and intends to have further meetings with him.
Mr Peter Hain (Neath) (Lab)
Do the Minister and the Secretary of State recall that last November the Treasury was persuaded to accept an historic reform ensuring that Wales was not disadvantaged under the Barnett formula? Why are they not ensuring that the agreement to protect the Welsh Budget is implemented? On Barnett, the Chancellor promised on 12 February 2010 to
“move on it pretty quickly, as soon as a new Government is elected.”
How on earth can the Secretary of State and the Minister have allowed that pledge to be dumped in the long grass? Instead of capitulating immediately to savage cuts, why do they not stand up and fight for Wales as their Labour predecessors did?
Mr Jones
Having read the so-called pledge that the right hon. Gentleman received from the Treasury, I think it fair to say that it was almost meaningless. As he knows, the Holtham commission is due to report substantively next month. My right hon. Friend and I intend to have further discussions with Mr Holtham, and it would be wrong to pre-empt his decision.
Greg Hands (Chelsea and Fulham) (Con)
4. What discussions she has had with the Secretary of State for Defence on marking Armed Forces day in Wales in 2010.
The Secretary of State for Wales (Mrs Cheryl Gillan)
Let me begin by paying tribute to the brave Welsh men and women serving in our armed forces throughout the world, particularly in Afghanistan. They are doing a very difficult job, and I am sure that all Members present will join me in thanking them for their bravery and dedication.
I am delighted to be attending the national Armed Forces day event in Cardiff this Saturday, along with my right hon. Friend the Secretary of State for Defence, His Royal Highness the Prince of Wales and the Duchess of Cornwall. My hon. Friend the Minister will also be attending the north Wales event in Caernarfon in July.
Greg Hands
The Secretary of State will know that the whole country is looking forward to Armed Forces day. Last week we were delighted when the Prime Minister and the President of France met veterans at Royal hospital Chelsea, in my constituency. Can the Secretary of State tell us what specific proposals there are to involve veterans in the ceremonies in Cardiff on Saturday?
Mrs Gillan
We should be very proud that Cardiff was chosen for this year’s Armed Forces day celebration. On Monday, when I attended the ceremonial Armed Forces day flag-raising event at Cardiff castle, I was privileged to have several conversations with some of our veterans who were present, representing veterans from all over the United Kingdom. I understand that they will play a prominent part in the ceremonies on Saturday.
Owen Smith (Pontypridd) (Lab)
May I ask the Secretary of State to reflect on the impact of yesterday’s Budget on us in Wales, and in particular on public sector workers? Already 250 jobs have left my constituency. How many public sector jobs does the Secretary of State expect us to lose during the current Parliament?
Mrs Gillan
Well, I thank the hon. Gentleman for that question, but I find it hard to make a linkage to—
Mr Speaker
I am sure it will not be beyond the ingenuity of the Secretary of State somehow to respond in order, although I accept that this is a testing one.
Mrs Gillan
I am not sure how I will make that linkage to Armed Forces day, but I would say that for those who are low paid in the public sector I was delighted to see that the Chancellor had chosen not to freeze their pay for two years and to give them an increase of £250 in each year, which I am sure the hon. Gentleman would welcome. I also welcome that our Prime Minister went to Afghanistan and announced the doubling of the pay for our brave soldiers when they are serving on our behalf overseas.
Alun Cairns (Vale of Glamorgan) (Con)
Does my right hon. Friend agree that one of the best tributes we could pay to the armed forces would be to offer them the best training—world-class training—and that the proposed defence technical college for St Athan could well offer that training? What discussions has she had with the Secretary of State for Defence about this project, and about the delays caused by the last Administration?
Mrs Gillan
May I welcome my hon. Friend to his rightful place in the House, representing the Vale of Glamorgan? He knows what a strong supporter I am of the case for the training college at St Athan, and all I can say is that this is yet another example of how the Labour party did not stand up for Welsh interests. Labour did not get on with this project when it had the opportunity to do so when it was in government. May I also remind my hon. Friend that planning permission for this project was granted by a Conservative-led local authority back in 2009?
Huw Irranca-Davies (Ogmore) (Lab)
6. What recent discussions she has had with the Prime Minister on the representation of the interests of Wales in Cabinet Committees.
The Secretary of State for Wales (Mrs Cheryl Gillan)
I have regular discussions with the Prime Minister and Cabinet colleagues on a range of issues affecting Wales.
Huw Irranca-Davies
May I add my congratulations to the right hon. Member for Chesham and Amersham (Mrs Gillan) and her ministerial colleague on their elevation to the Government Front Bench, but will she confirm that the previous Secretary of State sat on as many as a dozen Cabinet Committees and his ministerial colleague sat on up to a dozen as well, and in the light of that—and of the delay in the referendum date, as well as the appointment of a lovable rogue whom I like very much indeed but is an arch devo-sceptic as Chairman of the Select Committee on Welsh Affairs, and the attack on Welsh MPs—will she tell us why this is not telling the Welsh that they—
Mrs Gillan
Oh dear me. I think the hon. Gentleman needs to catch up with the procedures of the House because I believe Select Committee Chairmen are now elected. That has nothing to do with the Government. Perhaps if the hon. Gentleman had spent less time sitting on Committees he would know about the changes that were made in the House. I must remind him that what impresses the electorate is not the number of Committees a Member sits on, but what they do for Wales. We have already done more for Wales in the five weeks we have been in office than the previous Administration did over 13 years. The hon. Gentleman might also like to note that we have reduced the number of the Committees that he sat on in his ministerial capacity to 11. It is better to have a small set of fully functioning Committees where relevant people continually discuss related issues than for Members to be able to boast that they are sitting on a lot of Committees.
David T. C. Davies (Monmouth) (Con)
May I also give a warm welcome to the Secretary of State for Wales and say, as somebody who might well be chairing a Committee, that I am sure that the vast majority of people in Wales will want us out and about in Wales trying to put right the problems that the Labour party created rather than sitting around in Committee Rooms?
Mrs Gillan
May I congratulate my hon. Friend on securing his new position on the Welsh Affairs Committee? I wish him well, and I hope he will bring education about devolution to this House, because I remember reading the last Select Committee report, which said that it was disappointing that, even after 13 years of the previous Administration, the Welsh Affairs Committee had found that
“Whitehall has not fully engaged with the complex nature of the devolution settlements.”
The ignorance of devolution arose under the last Government, and I hope my hon. Friend will, through the good offices of his Select Committee, put that right.
Mr Wayne David (Caerphilly) (Lab)
I congratulate the right hon. Lady on her appointment as the Secretary of State for Wales. As my right hon. Friend the Member for Neath (Mr Hain) has said, she is the first woman Secretary of State for Wales. However, she follows a time-honoured tradition of Conservative Welsh Secretaries who represent English constituencies. She represents Amersham and Chesham, or is it Chesham and Amersham? Anyhow, it is somewhere in Buckinghamshire. Could the Governor-General, or should I say the Secretary of State for Wales, tell me how many times she has visited Wales since her appointment?
Mrs Gillan
I do not know whether I should welcome the hon. Gentleman’s remarks or just feel sorry for him. I have lost count of the number of times I have been in Wales since I was appointed, but I think it is about nine or 10 already. If that is the best he can do for a question—to ask how many times I have been on a train—when we are facing such economic troubles in this country, then I do feel sorry for him, which was my first emotion.
Mr David Hanson (Delyn) (Lab)
7. When she next expects to discuss with ministerial colleagues the situation of manufacturing industry in Wales.
The Parliamentary Under-Secretary of State for Wales (Mr David Jones)
My right hon. Friend the Secretary of State has discussed various aspects of the Welsh economy, including manufacturing, with ministerial colleagues and will continue to do so in the coming weeks and months.
Nick Smith (Blaenau Gwent) (Lab)
Would not jobs and manufacturing in Wales be helped by a decent employment initiative? The future jobs fund has provided 500 jobs in Blaenau Gwent in recent years. It has had a terrific impact in an area with high unemployment of nearly 12%. Will the Minister or the Secretary of State please visit Blaenau Gwent? I invite them to come and find out about employment in my borough.
Chris Bryant (Rhondda) (Lab)
9. What recent discussions she has had with the Secretary of State for Defence on the proposed defence technical college at St Athan.
The Secretary of State for Wales (Mrs Cheryl Gillan)
This proposal is being considered as part of the strategic defence and security review, which was debated in the House on Monday. The review is due to be completed by October and I will ensure that the Secretary of State for Defence is made fully aware of the importance of our armed forces to Wales.
Chris Bryant
I do not feel sorry for the right hon. Lady; I welcome her wholeheartedly to her post. However, she gave a rather partisan answer to the earlier question about the defence technical college in St Athan, and I urge her to recognise that this issue has involved a cross-party alliance in Wales. All the political parties in Wales have been supporting it, so will she meet a cross-party group of MPs so that they may put the arguments strongly? This is about protecting our armed forces, particularly the soldiers from Wales, who deserve the best training they can possibly get.
Mrs Gillan
I congratulate the hon. Gentleman on having raised this matter not once but three times in the past week or so. I have read the replies to him from both the Secretary of State for Defence and the Prime Minister. The Prime Minister said:
“Everyone who has spent time in south Wales with the military knows that there is an incredibly strong case for the St Athan defence training establishment.”—[Official Report, 2 June 2010; Vol. 510, c. 430.]
I would be delighted to meet a cross-party group to discuss the future of St Athan. The hon. Gentleman will know that it was one of the first things that I signed up to when I was appointed as shadow Secretary of State for Wales. I will not demur from that support.
Mr Peter Bone (Wellingborough) (Con)
10. What her most recent estimate is of the level of public expenditure per capita in Wales in 2010-11.
The Parliamentary Under-Secretary of State for Wales (Mr David Jones)
The latest public expenditure statistical analysis published by the Treasury in April included data up to 2008-09, in which identifiable public expenditure per head on services for Wales was £9,209 while the UK average was £8,206.
Mr Jones
My hon. Friend is entirely right. The former Government seemed to regard it as a matter of success that they spent money that the country could not afford. We recognise the need for Wales to be properly funded, but yesterday’s Budget statement provides a firm foundation for good-quality jobs in Wales.
Kevin Brennan (Cardiff West) (Lab)
May I join the Secretary of State in paying tribute to Lord Walker? I do so genuinely, but I am led to reflect on the fact that, since 1987, the Conservative party has not had a shadow Secretary of State or Secretary of State who represented a Welsh seat.
On the issue of law-making powers for the Welsh Assembly: after the boundary changes, what is the Secretary of State’s opinion of how many Members the Assembly ought to have?
Lisa Nandy (Wigan) (Lab)
Q1. If he will list his official engagements for Wednesday 23 June.
The Prime Minister (Mr David Cameron)
I am sure that the whole House will wish to join me in paying tribute to Marine Paul Warren from 40 Commando Royal Marines, who died on Monday, and to the member of 40 Commando Royal Marines who died yesterday. We should constantly remember, and show our support for, the services and sacrifices made on our behalf by our armed forces and their families.
This morning I had meetings with ministerial colleagues and others. In addition to my duties in this House, I shall have further such meetings later today.
Lisa Nandy
The coalfield communities regeneration programme breathed new life into places such as Wigan after the devastation caused by the pit closures in the 1980s. Michael Clapham’s review is very welcome, but the decision to freeze the funding will devastate our economy all over again. Can the Prime Minister reassure my constituents that he is not simply seeking to close down the coalfields all over again?
The Prime Minister
Of course I can give the hon. Lady that assurance. Let me first of all congratulate her on her election to this House, and say how much we want to make sure, in spite of the difficult decisions that we have had to make in the Budget, that we go on helping and regenerating communities that face difficulties. I have visited the site in Wigan where the new Lads and Girls club is to be built. That is the result of excellent joint work between the private and public sectors, and we need many more projects like it. We will have more to say about that next week.
Simon Hart (Carmarthen West and South Pembrokeshire) (Con)
Q2. The Prime Minister will be aware of the vital contribution of the 23,000 Territorial Army and other reservists who have fought in Afghanistan, Iraq and the Balkans in the last six years. So far, 22 have lost their lives in those operations, and the ones who survive are twice as likely to get post-traumatic stress disorder than their regular counterparts. What recognition and support can my right hon. Friend give to the thousands of employers who routinely allow staff to volunteer, train and engage in reservist activity and who, by doing so, are critical to our military success in those operations?
The Prime Minister
My hon. Friend is absolutely right to raise the contribution that our Territorial Army plays in serving our country. He is also right to remind us how many people have served in Iraq and Afghanistan. There are some 600 volunteer reservists serving today. Standing up for our armed forces is not just a Government responsibility: it is a social responsibility, and something that we should all do. We should pay tribute to those businesses that help people to volunteer and take part. We should remember their service in doing that as well.
Ms Harriet Harman (Camberwell and Peckham) (Lab)
May I join the Prime Minister in paying tribute to Marine Paul Warren from 40 Commando Royal Marines, who died on Monday, and to the member of 40 Commando Royal Marines who died yesterday? They fought with bravery and they died in the service of their country.
The Chancellor announced yesterday that the Government will bring forward relinking the basic state pension to earnings to 2011 rather than 2012. Can the Prime Minister tell us how much money the Treasury has set aside to pay for that next year?
The Prime Minister
Actually, what the Chancellor did yesterday was more complex than that. He said—[Interruption.] This is an extremely important point, and hon. Members will want to listen. We have a triple lock in place to make sure that the pension upgrade is at the highest level possible. Next year, therefore, because of what we expect will happen with the retail prices index, the pension will be upgraded and increased along with it. When the right hon. and learned Lady gets to the Dispatch Box the next time, will she confirm that Labour’s plans were to uprate benefits by less than the consumer price index?
Ms Harman
There was nothing complicated at all about the question, but it was one that the Prime Minister did not seem to want to answer. The answer is that the Government have not set aside a single penny for that big promise to pensioners. Next year prices are due to go up more than earnings, so bringing forward the earnings link by a year does not give pensioners anything extra. But although pensioners get nothing from that change we all know they will pay more in VAT. The Chancellor promised to provide help for pensioners. I am sure that pensioners, including those in the Southwark Pensioners Action Group, or SPAG, which the hon. Member for Bermondsey and Old Southwark (Simon Hughes), knows well, will want to know: are pensioners better off or worse off as a result of the Budget?
The Prime Minister
I have to say to the right hon. and learned Lady that there is a danger in asking the second question without having listened to the first answer. The first answer is that the pension will be uprated by RPI, which is likely to be higher than earnings next year. In terms of how much money we are putting into the state pension system—[Interruption.] How much, they ask? We are putting in £1 billion over the Parliament—£1 billion. What a contrast. In 13 years, Labour never linked the pension back to earnings. We have done it in two months.
Ms Harman
The Prime Minister is not being straight about this. We know that there will be no increase in the pension from linking it with earnings a year early. A pensioner will not benefit from the cut in tax from raising the personal allowance either, because they do not get that if they are over 65, but they will pay more VAT. The Chancellor promised to help pensioners. Will the Prime Minister not admit that pensioners will be worse off under his Budget?
The Prime Minister
Perhaps I could recommend to the right hon. and learned Lady the Budget Red Book, although in her case I suspect it is the unread book. If she looks at page 41, she will see £1 billion going into the state pension system in this Parliament. What a contrast. We all remember the 75p increase for pensioners. Under our triple lock system, that can never happen again.
Ms Harman
Page 41, table 2.1, item 48 states:
“Basic State Pension: introduce triple guarantee”.
Money set aside: zero. The Prime Minister is not being straight about his promise to pensioners.
Can I ask the Prime Minister about families with children? Families with children, with an income of less than £40,000, may be breathing a sigh of relief that they still have their tax credits, as that was on the news last night. But is it right? Can he confirm that—as he promised in the election—families on less than £40,000 will not lose their tax credit?
The Prime Minister
What we are doing is making sure that the less well-off families get the most money. What a contrast again. Since 2004, child poverty went up by 100,000 under a Labour Government. In this Budget, child poverty does not go up by a single family.
Ms Harman
Once again, the Prime Minister is not answering the question. The truth is that, despite the Chancellor’s promise, the Budget small print shows big cuts in eligibility for tax credit. The Prime Minister promised that no family on less than £40,000 a year would lose child tax credit. Will he admit that that is not the case? Will he admit that there are families on a joint income of £30,000 who will lose all their tax credits?
The Prime Minister
The point that the right hon. and learned Lady has got to address is who left us in this mess. Who left a budget deficit of £155 billion, with absolutely no proposals to deal with it? Who put forward—[Interruption.]
Mr Speaker
Order. I apologise for interrupting the Prime Minister. This level of barracking is unacceptable, and I can tell the House that it is detested by the electorate. It must stop.
The Prime Minister
Thank you, Mr Speaker.
Who put forward £50 billion of cuts, without outlining a single penny piece? The whole country can see what is happening here: one party put us into this mess; two parties are working together to get us out of it.
Ms Harman
I think that what the electorate detest is broken promises, and people will want to know how the right hon. Gentleman’s Budget will affect them. He was not straight with pensioners. He was not straight with families. He was not straight on VAT. When the Chancellor got up to present his Budget, he proclaimed:
“I am not going to hide hard choices…in the small print of the Budget documents. The...public are going to hear them straight from me, here” —[Official Report, 22 June 2010; Vol. 512, c. 167.]
Is not the truth that that was his first promise and that he broke it even before he sat down?
The Prime Minister
The right hon. and learned Lady talks about broken promises. We remember, “No more boom and bust.” What happened to that promise? We remember, “Prudence with a purpose.” What happened to that one? We remember, “We’ll protect the poorest,” when Labour took away the 10p tax rate. The fact is that the Labour party has got absolutely nothing to say about the biggest problem facing this country, which is the massive budget deficit. It might be adopting Greekonomics, but we are sorting out the problem.
Paul Maynard (Blackpool North and Cleveleys) (Con)
Given the size of the structural deficit that we have inherited, how many apologies has the Prime Minister received from Opposition Members for what they have left behind?
The Prime Minister
First, may I welcome my hon. Friend, who, I know, will speak with great passion for his town of Blackpool? We should congratulate it on its footballing success recently. On that note, I am sure that the whole House will want to show its support—[Interruption] yes, including all Members—for the England team this afternoon in their key game.
I have not yet received a single apology for the appalling mess that we have been left, but at some stage, the Labour party will have to wake up and realise what a mess it made of the British economy.
Ms Karen Buck (Westminster North) (Lab)
Q3. Will there be fewer police officers at the end of this Parliament compared with the number that we have today?
The Prime Minister
What we want to do— [Interruption.] Opposition Members have got to start getting serious about the task that we face. We want to do everything that we can to keep police officers on the streets, to have money going into our schools and to keep up spending on our hospitals, and the only way that we are going to be able to do it is if we deal with the problems of excessive welfare spending. So if hon. Members want to see police on the streets and if they want to see well-funded schools, they have got to back us on housing benefit and on welfare reform. That is the way that we can keep spending up.
Christopher Pincher (Tamworth) (Con)
Will the Prime Minister join me in congratulating the Daily Mirror on highlighting the terrible 172% increase in unemployment in Tamworth during the recession? Further, will he encourage that august journal to place the responsibility for that grizzly legacy squarely where it lies?
The Prime Minister
I thank my hon. Friend for his question. I think that I am right in saying that it was in Tamworth that I came face to face with the Daily Mirror chicken, which was one of the most enjoyable episodes of the election. He is right about the unemployment figures, and one of the most important things that we have got to do is to introduce our work programme, which will be the biggest, boldest scheme in the history of this country to get people back to work. That is what needs to be done, and that is the best route out of poverty.
Chris Evans (Islwyn) (Lab/Co-op)
Q4. A 25% cut in public spending in Wales, together with a hike in VAT, will hit Wales especially hard. Does the Prime Minister now accept that he and his Liberal friends have let Wales down?
The Prime Minister
I do not accept that at all. The worst thing for Wales would be to continue with the budget deficit and rising debt, and to see our economy slide down. The choice in terms of the Budget is the road to recovery from this party, or the road to ruin offered by the Labour party.
John Thurso (Caithness, Sutherland and Easter Ross) (LD)
Is the Prime Minister aware of the interesting progress in the European project for fusion research, of the opportunity for a materials testing facility to come to the United Kingdom, and of the suitability of Dounreay to deliver that work? Will the Government support such an application?
The Prime Minister
My hon. Friend speaks with great knowledge about scientific issues. It is important that we lead in such areas. His constituency, with Dounreay, obviously has a huge technical edge, so I shall take his representations seriously.
Pamela Nash (Airdrie and Shotts) (Lab)
Q5. I am sure that the Prime Minister is aware of the send my friend to school campaign, in which my young constituents at Victoria primary school in Airdrie are involved and about which they will be writing to him this week. The campaign aims to ensure that the Government direct the £8.5 billion that was committed by the previous Labour Government towards universal primary education by 2015. The matter will be discussed on 7 July at the education summit in South Africa, which is tied in with the World cup. Has the Prime Minister personally spoken to President Zuma and other African leaders about their pledges, and will he confirm that a review of the Department for International Development’s funding will not compromise our pledge?
The Prime Minister
First, I welcome the hon. Lady following her election; I think that I am right in saying that she is the youngest Member of the House of Commons. She is quite right to talk about the millennium development goals and aid spending. It is good that it is common cause across the House of Commons that, despite the difficult decisions that we will have to take, we should meet the target of 0.7% of gross national income. We are committed to doing that, which means that we can continue to support the poorest people in the poorest countries. We will be addressing such issues this weekend at the G8 in Canada.
Graham Evans (Weaver Vale) (Con)
Q6. Yesterday, there was support on both sides of the House for raising the income tax threshold by £1,000. Does the Prime Minister agree that a Government who do that have to explain where the money is coming from?
The Prime Minister
My hon. Friend makes a good point. I noticed yesterday that everyone in the House supported the idea of raising the income tax threshold so that we take 880,000 people out of tax altogether. If people are going to support such a pledge, which could cost as much as £4 billion, they have to say where the money is coming from, but so far we have not heard about one penny piece of one saving from any Labour Front Bencher. In terms of Labour’s election for leader, it does not matter who that is, because they are not giving any figures to show where they would find cuts. Until they do that, they simply will not be taken seriously.
Mr David Crausby (Bolton North East) (Lab)
Q7. The building work for the new £20 million maternity supercentre in Bolton is pretty well finished, but may I be assured that the Government’s decision to review the making it better programme in Greater Manchester will not affect the expansion, and particularly the funding, of Bolton’s Princess Anne maternity unit?
The Prime Minister
Absolutely nobody is proposing closing the new unit that has been set up. The hon. Gentleman will know that decisions that were taken about Greater Manchester in the previous Parliament caused a huge amount of pain in that vital part of our country. My right hon. Friend the Secretary of State for Health is asking the NHS to ensure that we meet the needs of patients locally, instead of just conducting top-down reviews that lead to the closure of much loved units.
Andrew Selous (South West Bedfordshire) (Con)
Will my right hon. Friend tell the House what discussions he has held with the US Administration to ensure that BP remains a strong and viable company?
The Prime Minister
I am grateful to my hon. Friend for raising that point. I have had two discussions with President Obama so far, including a very good telephone call last night. I made the point, especially in the earlier phone call, that of course BP wants to pay for the clean up and to stop the oil gushing into the gulf, and recognises that it must pay money in respect of fishermen and others who have lost their livelihoods, but we want to ensure that the company remains strong and stable for not only our benefit, but the benefit of the United States. I believe that 40% of the company’s shareholders are in the US, while 39% are in the UK, and it employs more people in the US than it does in the UK, so it is in all our interests that it is strong and secure in the future.
Helen Goodman (Bishop Auckland) (Lab)
Q8. Yesterday, the Chancellor of the Exchequer told the House that, in April 2012, there would be no more children living in poverty than there are today. Unfortunately, two thirds of the cuts in tax credits and benefits come after that date. Will the Prime Minister give the House his forecast of the number of children who will be living in poverty by the end of the Parliament?
The Prime Minister
What I would say to the hon. Lady is that, for the first time in any Budget—certainly since I have been in the House—we have actually published the distributional tables on what happens to income. Labour never did that; we have done it for 2012-13. As for what happens towards the end of the Parliament, I am pleased to say that there will be at least another three coalition Budgets, which we look forward to introducing, to make sure that we go on to protect the poorest in our country.
Mr Peter Bone (Wellingborough) (Con)
In the closing days of the previous Parliament, Anthony Steen trafficked through the House the Anti-Slavery Day Act 2010 to highlight the problems of human trafficking. The Government are required to announce a day for anti-slavery day. What progress has been made on that front?
The Prime Minister
My hon. Friend makes a very good point. I admired the work that Anthony Steen did. We have not set a date and he gives me an important reminder that I must get back to my office and make sure that we do.
David Cairns (Inverclyde) (Lab)
Q9. For more than 20 years, Sky News has provided an excellent source of impartial news and analysis. Can the Prime Minister give a guarantee that, whoever ends up owning BSkyB, it will not be allowed to turn into Fox News, and that there is no room here for shouty, reactionary propaganda passing itself off as fair and balanced news?
The Prime Minister
The very idea of shouty, reactionary propaganda being passed in the House of Commons is an appalling thought. As I am sure we all recognise, these are matters for my right hon. Friend the Secretary of State for Business, Innovation and Skills, who will be looking at them very closely.
Matthew Hancock (West Suffolk) (Con)
Can the Prime Minister confirm that, until yesterday’s Budget, the benefits for some of the poorest in society were to be increased at a rate less than inflation, and therefore cut in real terms?
The Prime Minister
My hon. Friend makes an excellent point. The Labour Government’s plans were to increase benefits by less than consumer price inflation next year. They left a £300 million—they do not know this, the dupes behind the Front Bench—[Interruption.] I think dupes is an accurate description of what I am looking at. There was a £300 million black hole, and you do not have to be a “Star Trek” fan to know that when you are in a black hole, you should stop digging.
Fiona Mactaggart (Slough) (Lab)
Q10. In the interests of informing the dupes behind either Front Bench, and in response to his answer to my hon. Friend the Member for Bishop Auckland (Helen Goodman), will the Prime Minister agree to publish the tables for the years following the one that has been published in the Red Book, which is very welcome, so that we can advise him on how to improve the impact of his policies on child poverty?
The Prime Minister
What a pity the hon. Lady never made that point in 13 years of Government. Where were the distributional tables in the Budget after Budget that we—the poor dupes who were sitting at the back—had to listen to the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) give over and over again? We have published the table for the first time. Between now and the years the hon. Lady talks about, there will be further Budgets, where we will make further progress in helping the poorest families in our country.
Dr Julian Huppert (Cambridge) (LD)
Does the Prime Minister agree with several generals, many members of the public and me that Trident should be included in the strategic defence and security review? Does he agree that if there is a case for retaining it, that would come out in the review; and if there is not a case, it should not be kept?
The Prime Minister
My hon. Friend will know that that matter was carefully negotiated in the coalition agreement between our two parties. My view is clear: Britain should retain the nuclear deterrent and we should always keep that insurance policy against great danger. Although I think that there is a case for looking at the costs of the Trident system and seeing how we can bear down on them, I do not believe that we should have the wider review that he suggests.
Dr William McCrea (South Antrim) (DUP)
Q11. Yesterday, we were told that resolute action was necessary to deal decisively with our country’s debt. Does the Prime Minister believe that it is acceptable that Members’ allowances are being paid to Members of the House who neither take their seats nor participate in the work of the House? When will that injustice be remedied, as he promised before the election?
The Prime Minister
The hon. Gentleman makes a good point. My views about this issue are on the record, and they have not changed. I would like to see if we can make the argument. There is not a case for Sinn Fein Members not to take their seats. I think that at the moment we let them off the hook, so I would like to re-examine the argument and see if we can find a new way of doing this.
Guy Opperman (Hexham) (Con)
Q12. Saturday is Armed Forces day. In my constituency of Hexham in Northumberland we have hundreds of Royal Artillery servicemen who have recently returned from Afghanistan and will receive the freedom of the town. When they are off duty, they will receive multiple discounts from dozens of stores, restaurants and pubs that are doing their bit locally. Does the Prime Minister agree that it is everyone’s duty, not just in the House but all around the country, to go the extra mile and show the gratitude that we all have for our brave troops?
The Prime Minister
I very much agree with my hon. Friend. As I said earlier, this is something that the whole country needs to do, not just the Government. Yes, we have our responsibilities to make sure that we are living up to the military covenant and are doing all that we can for our armed forces and their families, but it is something that communities, individuals and businesses can do, too. I understand that in Hexham, there will be a nine-hour forces celebration. When those servicemen and women are off duty, there will be discounts, as he said, from restaurants and pubs, so I expect that it might get a bit lively, and I am sure that he will join in the fun.
Angus Robertson (Moray) (SNP)
A consequence of yesterday’s Budget and VAT rise is £26.5 million of new overheads for the NHS in Scotland. Having promised to ring-fence health spending, will the Treasury now cover those costs, or will this be another broken promise, just like Lib Dem opposition to a VAT rise before the election?
The Prime Minister
Of course, our action on national insurance contributions has saved the NHS money, which would not be available under a Labour Government. The point I would make is that that benefits Scotland. The fact that we are protecting the NHS and NHS spending means that money will be available in Scotland as well. The shadow Health Secretary has said that health should not be protected, and that the NHS should be cut. That is now, take note, the official position. The Leader of the Opposition is nodding—cutting the NHS is now official Labour policy.
Dr Julian Lewis (New Forest East) (Con)
Q13. What the military purpose is of routine foot and vehicle patrols in Afghanistan.
The Prime Minister
I thank my hon. Friend for his question. We are conducting a counter-insurgency operation in Afghanistan. He asked specifically about the military purpose of routine foot and vehicle patrols in Afghanistan. If we are going to win the counter-insurgency and succeed in what is called “war amongst the people”, we have to be among them, protecting them from the insurgents. That is how we are going to create a more stable and peaceful Afghanistan, from which we will be able to return, leaving the Afghan forces in control.
Dr Lewis
Does the Prime Minister accept that there are other ways of fighting counter-insurgencies that do not involve sending out uniformed personnel along predictable routes, day after day, to be sniped at and blown up? Will he request that his military advisers focus on long-term strategies that could achieve our strategic aims without having to pay such an unnecessarily high price?
The Prime Minister
I know that my hon. Friend takes a close interest in these matters, and I have arranged for him to meet senior officials and military advisers, so that he can explore his ideas with them. All that I would say is that the team that President Obama has put in place, and the team that we have in place of military and civilian leaders, have brought great impetus to the campaign. It is difficult to see, if we are trying to fight a counter-insurgency, how we can do so without having a number of active patrols to protect the people from the insurgents.
Mr Speaker
Order. I gently remind the House that this is a closed question on Afghanistan. Does anybody wish to come in? No. I call Mr Jonathan Evans.
Jonathan Evans (Cardiff North) (Con)
Q14. Bearing in mind the Opposition’s claim that in Europe, Britain is now isolated, will my right hon. Friend indicate how on earth he managed to secure both French and German agreement to the announcement in relation to the bank levy in the Budget yesterday?
The Prime Minister
My hon. Friend makes an excellent point. In the Budget yesterday, my right hon. Friend the Chancellor announced unity between the French, the Germans and the British on introducing a bank levy. The one group of people who are isolated, and who say that we have to wait for the rest of the world before we can ask our banks to make a proper contribution, are the Opposition. Once again, they have no proposals to fill the enormous black hole that the Government are getting to grips with.
Mrs Anne McGuire (Stirling) (Lab)
The Office for National Statistics reported that while the richest 10% spent £1 in every £25 of their income on VAT, the poorest 10% spent £1 in every £7 of their income on VAT. How, then, can the Prime Minister justify his oft-repeated refrain that we are all in this together?
The Prime Minister
What I would say to the right hon. Lady—it is an important point and the Red Book sets it out—is that the richest 10% will pay in cash terms 15 times as much in VAT as the poorest 10%. The important point to take into account and look at is the Budget as a whole. In the Budget as a whole, we can see that the richest pay the most both in cash terms and as a percentage of their income. What we have done, by massively increasing child tax credits, is to ensure that there is no increase in child poverty. What a contrast that is with the figures since 2004. The Labour party put up child poverty by 100,000. That is the difference.
Transfer of Post Office Facilities (Viewpark, North Lanarkshire)
(13 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text
Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)
Madam Deputy Speaker, I have been asked to present to the House this petition from a large number of constituents concerning the transfer of post office facilities at Viewpark in north Lanarkshire.
The petition states:
The Petition of residents of Coatbridge, Chryston and Bellshill constituency and others,
Declares that the proposed transfer of Post Office facilities from Market Place, Viewpark to Old Edinburgh Road, Viewpark is unacceptable for social, economic and community reasons.
The Petitioners therefore request that the House of Commons urges the Government to take all possible steps to prevent the proposed transfer of facilities.
And the Petitioners remain, etc. [P000838]
St George’s Day (Public Holiday)
(13 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text
Jessica Lee (Erewash) (Con)
I am grateful, Madam Deputy Speaker, for the opportunity to present this petition. There are no fewer than 2,481 signatures on a petition urging the Government to consider making St George’s day a public holiday. I am grateful to the company, George’s Tradition, which is an award-winning fish and chip chain based in Erewash and surrounding constituencies, which has collated the petition.
England is one of the few countries without a public holiday for its patron saint. Indeed, the House will be aware that in Northern Ireland, St Patrick’s day is a public holiday, and in Scotland, St Andrew’s day is a voluntary bank holiday. It is a wonderful opportunity to celebrate a country’s traditions and heritage. I cannot let the petition pass—
Madam Deputy Speaker (Dawn Primarolo)
Order. The hon. Lady is presenting a petition, and she is allowed to say, according to the procedures of the House, a few words, but she cannot make a speech, and I fear that she is drifting into doing so. If she can make her remarks crisp in presenting her petition, I should be grateful.
Jessica Lee
I shall do so. Thank you, Madam Deputy Speaker.
Turning to the prayer, the petition states:
The Petitioners therefore request that the House of Commons urges the Government to bring forward proposals to make St George's Day a public holiday in England.
Following is the full text of the petition:
[The Petition of residents of the Erewash constituency and others,
Declares that England is one of very few countries in the world that does not have a public holiday to celebrate its national day; notes that St Patrick's Day is bank holiday in Northern Ireland, and that St Andrew's Day is a voluntary public holiday in Scotland; and further declares that everyone who is part of England should be able to celebrate its traditions, its history, its heritage and the English way of life with a public holiday on St George's Day.
The Petitioners therefore request that the House of Commons urges the Government to bring forward proposals to make St George's Day a public holiday in England.
And the Petitioners remain, etc.]
[P000839]
The Vice-Chamberlain of Her Majesty's Household (Mr Mark Francois)
On a point of order, Madam Deputy Speaker. On a technical matter, we should like to request that the order for resuming debate on the Budget refer to “tomorrow” and not “Monday next”. I hope that, with the approval of the Chair, that can be accepted.
Madam Deputy Speaker
Thank you for that point of order, which is extremely helpful to the House. I understand that it is within my powers as Chair to accept that request. The record will be corrected.
Speaker’s Statement
(13 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text
Mr Speaker
Under the Order of the House of 15 June, I will now announce the determination of the party make-up of the Backbench Business Committee, which will be elected on Tuesday 29 June. Four members shall come from the Conservative party, two members shall come from the Labour party, one member shall come from the Liberal Democrat party. These proportions—[Interruption.] Order. These proportions reflect the proportions of parties in the House. It follows, of course, that nominations may be received only in respect of members of those parties.
Points of Order
(13 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text
Ian Lucas (Wrexham) (Lab)
On a point of order, Mr Speaker. Is it in order to describe Members as dupes—[Interruption.]
Mr Speaker
Order. The hon. Member for Cardiff West (Kevin Brennan) is in danger of becoming over-excitable, and I know that he would not want to be. Let me respond to the point of order from the hon. Member for Wrexham (Ian Lucas). What he has raised is not a point of order—
Mr Speaker
Order. I require no help from the hon. Gentleman. It is not a point of order; it is a matter of taste, and we will have to leave it there.
Kevin Brennan (Cardiff West) (Lab)
Further to that point of order, Mr Speaker. In the light of your ruling, could we rename the session that we have just had, “Prime Minister’s Tantrums”? Is it not more accurate to describe the Liberal Democrats, rather than Opposition Back Benchers, as dupes?
Mr Speaker
There is nothing disorderly about the remark that the hon. Gentleman has just made, but unfortunately his attempted point of order suffered from the disadvantage of not being a point of order. However, he has made his point very clearly, and it is on the record. I have a hunch that he knew that before he got up to speak.
Pete Wishart (Perth and North Perthshire) (SNP)
On a point of order, Mr Speaker. Given your statement on the Backbench Business Committee, does that mean, therefore, that we in the smaller parties are excluded from it? In a Committee that is designed to increase accountability and democracy in the House, how can that be right?
Mr Speaker
I am grateful to the hon. Gentleman for his point of order, and I recognise that he and other Members will be dissatisfied with the situation. However, what I want simply to say to him is twofold: first, the Committee is being constituted in accordance with party strength in the House; and, secondly, we are operating in accordance with the Standing Orders of the House by doing it that way. Not to proceed in that way would require us to revisit Standing Orders. Now, whether we should do so or not is a matter for the House to decide, but I am stating the factual position to the hon. Gentleman and for the benefit of the House.
John Robertson (Glasgow North West) (Lab)
On a point of order, Mr Speaker. I wonder whether I could have your guidance on how Back Benchers in the Opposition parties with only two Members on the Committee can get a fair hearing when there are five Members from the Government Benches.
Mr Speaker
The operation of the Committee is a matter for Members on the Committee and for its Chair. I am sure that the hon. Gentleman has every confidence in the capacity of his colleagues to discharge their responsibilities on the Committee, and I am sure that he would not have wanted to suggest otherwise.
Mr Nigel Dodds (Belfast North) (DUP)
Further to the point of order asked by the hon. Member for Perth and North Perthshire (Pete Wishart), Mr Speaker. Referencing your previous admonition to the House about what the public think outside, as opposed to Members inside, is it not ridiculous, and will it not seem so to the public and to the people we represent in the smaller parties, that we are excluded, by whatever device, from the Backbench Business Committee, and from other Committees in this House as well? Would you, Sir, be open to a consideration of how we may meet to discuss how the smaller parties can be properly represented in such Committees in this House?
Mr Speaker
I understand the hon. Gentleman’s point, and I understand his frustration, but I have already ruled on this. The House can always look at these matters. I would gently say to him that it would be unwise for the Chair to speculate on the ridiculous.
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
Further to that point of order, Mr Speaker. Could you tell me, and the House, why some Back-Bench Members are more equal than others in respect of membership of the Committee?
Mr Speaker
I am a little concerned that the hon. Gentleman is trying to continue the debate. I cannot believe, knowing his normal regard for order, that he would do that, but I have a worrying hunch that he might be making a first attempt. He has made his point, and I think that we will leave it there.
Ways and Means
(13 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text
Budget Resolutions and Economic Situation
(13 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text
Capital Gains Tax (Rates)
(13 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Speaker
Before the shadow Chancellor rises, may I appeal to hon. Members who are leaving the Chamber to do so quickly and quietly so that we can hear him? I call Mr Alistair Darling.
Mr Alistair Darling (Edinburgh South West) (Lab)
I welcome the opportunity to open the second day’s debate on the Budget. There are two tests to be applied to this Budget. The first is what it does to ensure that we can secure the recovery and get long-term sustainable growth, and therefore support jobs. The second is what it does in respect of fairness and, in that context, what it says about the promises made by the parties that now comprise the Government.
I expect that over the next few days many points of detail will be explored, but I want to look at some of the bigger issues, especially the context against which this Budget needs to be judged. Before I do that, I welcome the Secretary of State for Business, Innovation and Skills to his place. I have not had an opportunity to cross swords with him in this Parliament, and I look forward to doing that and to hearing what his views are now as opposed to what they were a mere seven or eight weeks ago.
I want to start with the context in which the new Government made their decisions on this week’s Budget. Yes, that context has to be the need for us to reduce our borrowing—no one disputes that, although there are very live and real arguments about how fast and the extent to which the deficit ought to be reduced. However, I believe that it must also be seen in the context of growth. For some, like the Business Secretary, what I have to say will not be news because, after all, he largely agreed with the approach that I took during a lot of the last Parliament. However, he seems to have become rather more forgetful in the past few weeks, so a reminder may be useful.
On 28 April, which the right hon. Gentleman may now regard as being ancient history, but for most of us does not seem that far away, he said:
“The deficit problem is easier to solve if there is growth. That is why the next government has to recognise the fragility of the economy and not take action which would precipitate a double dip recession leading to more unemployment and even bigger budget deficits.”
I agree with the sentiments behind his statement. He was right on 28 April, and my guess is that he will still be right on 28 June, but I cannot understand why he has changed his mind in the intervening period. Growth is slightly stronger than before the general election, because at that time we thought that it was just 0.3% in the last quarter. However, although it has improved, it can, on no view, be said to be anything other than pretty modest and pretty fragile. I believe that the measures announced in the Budget yesterday present a risk of derailing that recovery, and worse, of giving rise to a situation in which our economy simply bumps along the bottom for a number of years. In that way, we would not get the growth that we need, and we therefore would not get the jobs. Worse still, of course, we would not have the funds to reduce our deficit and, therefore, our debt.
The past three years have been tough for businesses and families throughout our country and, indeed, many are still experiencing the problems that arose because of the recession. However, as I said, we have seen a return to growth, but it is only 0.3% in quarter one; unemployment has stabilised and begun to fall; and tax receipts are higher than expected, which is why our borrowing is £11 billion less than I forecast in March. All those improvements are a direct result of the action that the previous Labour Government took.
Throughout this debate and for some time to come, doubtless we will hear the now familiar mantra that everything that is wrong and all our problems are confined to one country alone—ours—and that they are due solely to the actions of the previous Government. Like any Government, we got some things right and some things wrong, but I am absolutely certain that the action we took to stop this country tipping from recession into depression was right, as was the action we had to take to stabilise the banking system. I will not yield to anyone who says we should have done differently. We needed to stabilise the economy and to keep people in their jobs and homes. We took that action because we do not believe that in such a situation people should be left to sink or swim. Those actions were taken largely with the support of the Liberal Democrats when they were in opposition, but everything has changed in the past seven weeks.
Mr Darling
I will give way to someone who is perhaps an unreconstructed member of the Liberal Democrats, especially one who represents a constituency in the north of Scotland that may be the subject of change because of his leader’s determination to reduce the number of constituencies, particularly in his neck of the woods.
John Thurso
I am grateful to the right hon. Gentleman for those kind words, but I suspect I would be out of order if I responded.
May I bring the right hon. Gentleman back to the point he was making and remind him that when the Northern Rock crisis hit, my right hon. Friend the Business Secretary immediately proposed that nationalisation was the correct way forward, and that the Government whom the right hon. Gentleman represented prevaricated for six months before taking that action?
Mr Darling
The hon. Gentleman raises an interesting point. He is right that the right hon. Gentleman called for nationalisation at an early stage. The current Chancellor, however, was dead against that. I imagine that if that situation arose now, the Chancellor’s view would prevail and the Business Secretary would have to do what he is told. The hon. Gentleman is absolutely right that at the time I agreed with a lot of what the Business Secretary was saying. For reasons that I will not go into just now because of the various legal requirements and other considerations, we did not nationalise Northern Rock until February 2008, but we were absolutely right to do so then. The Chancellor still thinks that we were wrong, but I am glad to say that the current Secretary of State for Justice believes that our action was right. The action we took, whether in relation to Northern Rock, the rest of the banking system or the rest of the economy, was critical.
Ms Karen Buck (Westminster North) (Lab)
While we are reflecting on recent history—the Chancellor yesterday spoke of the levels of debt prior to the economic crisis and blamed a long history of alleged Labour overspending —will my right hon. Friend speculate on why the Conservatives supported the Labour Government’s spending plans right up to the end of 2008?
Mr Darling
The Conservatives did so because they thought it expedient, but at the end of 2008, they decided to change tack. In all we heard yesterday, the Chancellor did not explain why, if everything was going wrong and we were spending too much in the previous few years, he was quite happy to support such spending right up until the end of 2008.
Mr David Evennett (Bexleyheath and Crayford) (Con)
I am listening with great interest to the right hon. Gentleman’s exposition of what the last Labour Government did. However, if everything is so good, why is our economic and financial position so much worse than those of our competitors after his tenure as Chancellor of the Exchequer?
Mr Darling
It is largely because we have a very large financial sector that contributed about 25% of all our corporation tax receipts. When the banking crisis hit, those receipts fell. There is something in the argument that has been advanced on both sides of the House in recent years—although, perhaps in retrospect, sadly not as much as it might have been over the past 30 years —that our economy has become dependent on the financial services sector, particularly on tax receipts. I think we would all like to see that rebalanced. Of course, there is a big question about how we do that, and I cannot for the life of me see how cancelling the help to Sheffield Forgemasters, for example, will go anywhere towards helping that rebalancing. However, I shall come on to that in just a moment.
At the moment, our recovery is fragile. What makes matters worse is that the position in our main export market, Europe, is extremely worrying. I am far less optimistic than I was in March about what is likely to happen in the European Union economies over the next year. Growth in France has fallen back; in Germany, it is pretty flat—just positive; other countries have tipped into recession; and Spain has unemployment over 20% and other well-understood problems. On top of that, whereas the predominant view certainly until the beginning of this year was that we had to support our economies to ensure that we established growth, the Chancellor is right that he can pray in aid the change of view among some of his counterparts, such as in Germany, which is now pursuing policies to reduce the deficit that will impact on demand, not just in that country but within other parts of Europe as well. Germany is our major trading partner. If demand there is suppressed, and if taking large sums of money out of our economy here has the effect I suspect it will have, the result will be reduced demand, which will affect business confidence, its propensity to invest and, therefore, our ability to grow and generate the receipts we need to get our borrowing down. That is a real concern.
There is no doubt that, over the past few months, the balance in the approach has moved away from what one might characterise as the Keynesian towards the more orthodox. I, for one, think that that is a profound mistake.
Huw Irranca-Davies (Ogmore) (Lab)
Does my right hon. Friend share my worry about the much-cited examples of the quite savage cuts agendas in Canada, Sweden and elsewhere? They were done against the backdrop of growing export markets, monetary policy and currency devaluations. His analysis of what is happening in the eurozone at the moment should fill us with caution, if not dread, because if the Chancellor’s judgment is wrong, this country is going to hell in a handcart.
Mr Darling
My hon. Friend’s point about Canada is an important one. Yes, Canada reduced its deficit quite dramatically. As a result of that country’s provincial set-up, a lot of the action was taken by the provincial governments rather than the national Government. It was taken, however, an the back of a growing US economy. Given the relative size of the Canadian economy compared with the US economy—it is much smaller than the Californian economy alone, for example—there is no doubt that the Canadians could do things on the back of their next-door neighbour’s rising prosperity. Our problem is that our next-door neighbours, the EU, are not in the same position at all—indeed, quite the reverse. Equally, when Sweden was going through a similar exercise, it was helped by the fact that the economy of much of Europe was growing at the time.
Sajid Javid (Bromsgrove) (Con)
Does the right hon. Gentleman agree that he should also consider the example of Spain, of which I am sure he is more than aware, when talking about our EU neighbours? Despite having a lower debt-to-GDP ratio than us and a lower budget deficit, it is on the verge of a sovereign debt crisis. Its banks have been frozen out of the borrowing markets for the past three weeks, and it has reportedly held emergency meetings with the International Monetary Fund, the EU and others to try to arrange a bail-out package. Does that not make what we had to do yesterday even more critical?
Mr Darling
There is another difference, of course. Official unemployment in Spain is more than 20%. The Spanish construction industry is in dire straits. A lot of Spain’s smaller banks, which are heavily tied to that industry, are finding things difficult. There is a world of difference between the Spanish economy and our own, just as there is a world of difference between the Greek economy and our own.
Just about every day in the run-up to the election, the hon. Gentleman’s party was anxious—desperate even—to compare our economy with the Greek economy. To his credit, the Secretary of State for Transport—he is not here today, but I made this point to him when we were debating on the television last night—said that Britain was nothing like Greece. The idea that we are in the same position as Greece or Spain is complete nonsense. Our economy is much larger and much stronger, and our ability to service our debt is much greater. The average maturity of our debt—as the hon. Gentleman knows, I assume—is 14 years, whereas in Greece the average maturity is three years and in continental Europe it is about five years.
Of course we have to get our borrowing down and ensure that we can get debt down as well. No one would disagree with that. The question for us is how do we do that in a way that maintains growth, so that we can ensure not only that we get growth in our economy and that we do not damage our future prospects, but that we do so in a way that is socially and politically fair? That is the difference, but to compare us with those smaller countries is, frankly, ludicrous, as many in the hon. Gentleman’s party realise.
Andrew Bridgen (North West Leicestershire) (Con)
Did the right hon. Gentleman really believe that the previous Government had ended boom and bust, and is that why he put no money away for the rainy day that has now arrived?
Mr Darling
The hon. Gentleman was not here in the last Parliament, but I was asked that on numerous occasions. No Government can ever eradicate economic cycles. They have been around for years, and I expect that the current Government will find that they will be around for years as well. What I would say to the hon. Gentleman is this. Just before we went into this crisis, we had the second lowest debt level of the G7, behind only Canada, and although we had a structural deficit, it was much smaller—[Interruption.] Yes, we were borrowing to build schools and hospitals, but when they were sitting here on the Opposition Benches, Conservative Members used to call for more spending on schools, hospitals and the police, not less.
The point is that whatever we do, when we get that borrowing down, we have to ensure that we do it in a way that does not damage the fabric of the economy. Indeed, the Secretary of State for Business, Innovation and Skills said that he was
“very much opposed to the Conservative approach of rushing into cuts…regardless of the condition in the economy. That’s not sensible.”
He was right then and he would have been right now, but he is pursuing a different policy.
Mr Darling
No, I am going to make some progress.
The current context is a fragile recovery, with growth in Europe sluggish. Crucially, however, we cannot assume, as the Government seem to, that it is axiomatic that if we cut back on public expenditure, the private sector will come in and take its place. That is not guaranteed at all. We have seen that in Japan and other countries. Indeed, the private sector often relies on public sector spending in many ways, whether through investment and support or directly, because it supplies goods and services to the public sector.
As I have said, borrowing is too high and we need to get it down. As I said to the hon. Member for Bexleyheath and Crayford (Mr Evennett), our receipts from income tax and corporation tax fell, as did our stamp duty receipts when the housing market went down, but that would have happened—indeed, it did happen—to every other major economy. We are not talking about something that was confined to the United Kingdom. Of course, as unemployment goes up, social security spending goes up as well. Indeed, it is interesting that if we look at what has happened to other countries across the world, we see that the deficit this year in this country is about the same as it is in the United States. If we look at debt and the IMF comparisons that were published in 2009, we find that our debt was less than that of Japan, Italy, Germany and France, and, looking ahead to 2015, it will still be less than that of the United States, France, Italy and Japan.
The idea that we are talking about a particularly British problem simply does not stack up. It is not true, but it is used as a convenient excuse for what the Conservative party always wanted to do. The truth is that the Conservatives supported our spending plans right up until the end of 2008—the hon. Member for North West Leicestershire (Andrew Bridgen) might want to consider this point. Indeed, when the now Prime Minister was challenged—I think by some right-wing newspaper—as selling the pass, he said that those spending plans were “tight”. That was the word he used. He said:
“This is why we are sticking to Labour’s spending totals. Taken alone, these are tight.”
That is what he said in 2008, but now the Conservatives turn around and say that what happened would not have happened if they had been in power for the past five years and that things would have been completely different.
Let us be clear: we all want to see borrowing come down, and we need to ensure that that happens. It is also clear that we need to understand the consequences of what we are doing, so that we do not damage our economy or damage the social fabric of this country. However, to suggest that we should not have done anything to support our economy as we went into recession or that we should not have stepped in to prevent the banking system from collapsing—and it was hours from collapsing—is simply nonsense, frankly. Indeed, if we had not done what we did, the cost, in terms of increased borrowing and higher debt, would have been far higher even than it is today, so that argument simply does not stack up.
We need a sensible plan to get borrowing down, but if we get this wrong we will cause major problems, given the scale and speed of the Government’s action. Again, the Business Secretary said a few weeks ago that
“it would be foolish to rush in significant cuts now which take the economy down even further, which lead to an even bigger deficit problem”.
He was right when he said that, yet the view of the Government of whom he is now a member is rather different. To be fair to the Chancellor, he has been consistent. He has wanted to take this risk for some time, and he is now taking it in great style. Even better, from his point of view, is that he has got the Liberals to front it up. No wonder that, once they are out of this Chamber, Conservative Members are laughing at the very idea of getting the Chief Secretary to the Treasury fronting up the cuts last week in his boss’s constituency. That is indeed new politics; I just wonder how long it will last. All I can say is that if things get better, there is no way that the Conservatives will allow the Liberals to front up any good news when it comes.
I am concerned at this time that we run the risk of derailing the recovery, which is why I took a different view. I thought that we should halve borrowing over four years, rather than go further and faster. Looking at the Office for Budget Responsibility’s forecasts published yesterday, I am concerned that it has downrated the growth forecast for this year, which it published a week before, from 1.3% down to 1.2%, and that it has downrated growth in 2011 from 2.6% to 2.3%. The OBR therefore recognises that growth is going to be suppressed as a result of what is being done.
Mr Tobias Ellwood (Bournemouth East) (Con)
Will the right hon. Gentleman give way?
Mr Ellwood
I am honoured that the right hon. Gentleman has taken the time to give me tuppence-worth of his attention. Will he comment on whether he supports the creation of the Office for Budget Responsibility, bearing in mind his own predictions? In March he stated in this place that the growth forecast for 2011 was 3.25%, but now the Office for Budget Responsibility says that the forecast is 2.6%.
Mr Darling
I am glad that I gave way to the hon. Gentleman, because the last time we touched on whether I supported the creation of the OBR, I think that the Chancellor said that I had always opposed it. However, I was careful before the election, and I think that I am right in saying that I did not oppose it as a matter of principle. The present Government decided to set up the OBR. If it works, it is worthy of support, so we will support the legislation in principle, but we will look at the detail. One interesting question is whether the OBR should be responsible to the Treasury or to Parliament—to this House in particular.
Mr Darling
Let me come to the forecasts. Forecasting, as I am sure the hon. Gentleman knows, is an art rather than a science. Let us just see, because as I understand it, the OBR is being advised by exactly the same civil servants who advise the Chancellor, and who advised me a few months ago. However, I note that when Sir Alan Budd announced the OBR pre-Budget report a week last Monday, he said that one of the reasons why he had changed his estimate was recent developments, including what is happening in Europe. As I said earlier, I am less optimistic now than I was three months ago about what is likely to happen to growth.
Mr Darling
No, I think I have dealt with that point.
There will be some people who argue that the private sector would see faster growth and job creation if there was a swift consolidation that supported looser monetary policy. However, with inflation down, interest rates at 0.5% and bond yields coming down—they were coming down before the election, as well as after it—there is no evidence of suppressed private sector demand, so that argument does not stack up. I am concerned that we may see a situation when there are not the right conditions or the right confidence to bring forward business investment. I am happy to welcome the proposed reduction in corporation tax rates and other business help, but what governs whether businesses come forward with investment is whether they are confident that the economy is going to be growing so that people will buy their goods and services. That is what I am concerned about.
I am also concerned that the Office for Budget Responsibility forecast shows employment taking a hit of about 100,000 compared with what we had forecast previously. The Chartered Institute of Personnel and Development foresees unemployment rising and sticking around 3 million for this entire Parliament. The history of Japan in the 1990s—and, indeed, our own history back in the 1930s—provides a lesson in what happens if we get all this wrong. Wherever we sit in this House, we should all be concerned about rising and persistent unemployment. Not only is it an economic waste; it is also a social catastrophe, as we have seen on many occasions.
Mr Darling
I shall give way to the hon. Gentleman, not least because I had the pleasure of visiting what is now his constituency during the election campaign, and I can see that my contribution there did not quite work out.
Jacob Rees-Mogg
I thank the right hon. Gentleman for giving way—and, indeed, for visiting North East Somerset, where he will be welcome again. He has mentioned Japan, and what Japan got wrong. What it got wrong was massive overspending, as a result of which it is now forecast to have a debt to GDP ratio of 246%. Surely that overspending is exactly what we need to avoid.
Mr Darling
What Japan got wrong was snuffing out a recovery at a very early stage and never really getting over it. As the hon. Gentleman knows, the Japanese have had complete stagnation for a long period now. The debt is just going up and up, and understandably they are very concerned about it. The new Prime Minister was the finance Minister until a few weeks ago, and understandably, he has huge problems on his hands.
The tests we need to apply to the Budget relate to growth and jobs, which I remain very concerned about; there is a substantial risk there, and I would like to have heard more said about policies to promote growth so that we do not end up with years of very sluggish growth at best or, even worse, bumping along the bottom for some years.
I have said that one of the tests that needs to be applied to this Budget is its fairness and another relates to the promises made about it before the election. Where better to start, then, than with VAT? During the election there was a lot of discussion about that. The Conservatives, like ourselves, said that they had no plans to raise VAT. I remember having a discussion with the Chancellor when he announced his plans not to go ahead with at least some of the national insurance increases, and he said that he would fund that from efficiency savings. I remember saying that I thought that was highly doubtful, and that they would have to raise money from another big tax. Sure enough, VAT is going up.
Interestingly, for some reason, not much was said about efficiencies yesterday, although they loomed very large during the election. We now know that “no plans” on the Tory side meant exactly what Geoffrey Howe said in 1979 when he said he had “no intention” of doubling VAT. Of course he was factually right, as it only went up from 8% to 15%. It was the same with John Major when he was Prime Minister in 1992, and said he had “no plans” to raise “extra resources from VAT”: of course, VAT went up. Even last year, the Prime Minister said in opposition that putting up VAT was regressive. He said:
“You could try, as you say, put it on VAT, sales tax, but again if you look at the effect of sales tax, it's very regressive, it hits the poorest the hardest. It does, I absolutely promise you.”
I assume he was not absolutely promising to do that, but was trying to point out to the questioner that he thought that VAT was regressive. Yet here we have it—VAT going up to 20%, as I always suspected would happen.
What I find even more curious is how on earth the Business Secretary can back this proposal. He cannot have been unaware of the Liberal campaign which spent two days dealing with the “Tory VAT bombshell”. We saw the posters all over the country. They said a Tory Government would come up with “a secret VAT bombshell”, but the only secret appears to be that the Liberals intended to vote for it when it was introduced. The hon. Member for Bermondsey and Old Southwark (Simon Hughes), who is no longer in his place, said last week that he thought VAT was
“the most regressive form of tax”
in that it “penalises the poor”. When the Business Secretary said during the election that he would
“hardwire fairness back into national life”,
did he have this in mind?
I see that there are, wisely, only four Liberal Democrats in the House at the moment; the others are no doubt explaining to their constituents why it is that when they said, “Vote for us and keep the Tories out,” they completely misunderstood the position. It seems to me that this is not just a broken promise, as there are real issues at stake. I was criticised for what I did with national insurance, but I wanted to ensure that pensioners would not have to pay the increased tax and I wanted to protect people earning less than £20,000—of course, that has not happened.
Phil Wilson (Sedgefield) (Lab)
The Chancellor keeps saying that we are all in this together, but the headlines in The Financial Times today suggest otherwise. Under the headline, “Well paid breathe collective sigh of relief”, the article quotes someone from RBC Wealth Management saying:
“Many high earners will be breathing a sigh of relief.”
Does that not prove that we are not all in it together?
Mr Darling
My hon. Friend makes a fair point. It is interesting that the Liberal Democrats promised us that if they went into coalition they would get something in return on capital gains tax. They wanted a 40% CGT, yet they appear to have settled for 28%.
The Chancellor of the Exchequer (Mr George Osborne)
That is 10% higher than under Labour.
Mr Darling
The Chancellor says it is 10% higher, but when I raised capital gains tax to 18%, I remember the angry campaign waged against it by Conservative Members. They said that 18% would discourage enterprise and was a terrible thing, but they seem to have changed their minds on that absolutely and completely. By the way, we are not going to oppose the increase in capital gains tax; especially when there is a higher 50p rate of tax, sooner or later action would have to be taken to stop the real risk of leakage. As I think the Chancellor said yesterday, the real gain from raising capital gains tax comes from income tax receipts. The position of the Liberal Democrats, however, was quite different.
There are other areas, too, where questions of fairness will be raised. Where in the manifestos of either of the political parties that form the Government was it said that they were going to index benefits to the lower inflation index of the CPI—the consumer prices index—which takes about £6 billion away from people whose income, generally speaking, is not that great? Where was it said in their manifestos that they were going to cut more than £100 in relation to child benefit, or to freeze that benefit for three years? Other changes also deserve very close examination. Everybody knows that housing benefit is in need of reform, as is the disability living allowance, but as we all know, these are complicated, difficult and sometimes controversial issues. It will be interesting to see whether the coalition Government can deliver all the things they promised yesterday.
Geoffrey Clifton-Brown
The shadow Chancellor said that action would have had to be taken on the CGT rate sooner or later, but I cannot remember him criticising his predecessor when the Labour party reduced CGT from 40% down to 18%. Is he now saying that that was the wrong thing to do, or not?
Mr Darling
I am not saying that, and I am bound to say that I do not remember anybody—and certainly not the Conservative party at the time—criticising the reduction of CGT down to 10%. It was believed that it would help and encourage entrepreneurship—[Interruption.] The hon. Gentleman might like to have a long look at that, but I am sure that many arguments can be mounted both ways. As he knows, I made changes in 2007; I remember that the Conservative party’s complaint then was not about the reduction of CGT, but about my increasing it to 18%. As I said, with income tax rates at 50%, it is sensible to keep an eye on this.
I believe that people will find it difficult to characterise a number of measures announced yesterday as fair. On tax credits, the Chancellor said that the Government were going to start to taper away tax credits from household incomes of over £40,000, but that is already true now. In the following year the threshold goes down to £30,000. As we always said during the election—when it was denied—people on incomes as low £15,000 will be affected. Look at table A.5 on page 64 of the Red Book: it is there; it is all set out. It shows that cuts in entitlement to tax credits go far further than the right hon. Gentleman set out yesterday.
I think that the Liberals will have some difficulty in characterising these things as “progressive cuts”. I understand that the leader of the Liberal Democrats points to the table published in the Red Book, which makes it look as if people at the top end are bearing a fair share of the reductions and tax increases, but it shows that only because the Government have published a table showing measures yet to be introduced, including our national insurance increases. The top decile will be paying more because of measures that I, not the Chancellor, introduced. It is slightly disingenuous of the Prime Minister to give the impression, as he did at the end of Question Time, that what the Conservatives are doing is redistributive and fair. That is not the case.
Mr Edward Timpson (Crewe and Nantwich) (Con)
The shadow Chancellor has told us that he supports the rise in CGT. Does he also support the rise in the personal allowance by £1,000, the re-linking of pensions to earnings and the freezing of council tax? If he does, why were they not in his last Budget?
Mr Darling
Our policy, as the hon. Gentleman will know, was to restore the earnings link from 2012. I can see that bringing that forward to a year in which earnings are likely to be very low had a political attraction. I think that was the subject of exchanges at Prime Minister’s Question Time, and it will not have the cash effect that is thought. As for personal allowances, I am in favour of taking people out of tax if at all possible, but the same people who are being taken out of tax will be paying increased VAT.
Chris Leslie (Nottingham East) (Lab/Co-op)
Further to the intervention of the hon. Member for Crewe and Nantwich (Mr Timpson), will my right hon. Friend expose the nonsense of the supposed council tax freeze announced by the Government and the small amount of money given to local authorities at the 2.5% level? Is not the rug being pulled from under local government through swingeing cuts to grants? How on earth are local authorities supposed to plan ahead and make their budgets? Surely they will not be able to do that until they see the spending review.
Mr Darling
I noticed that the spin on Tuesday morning was that council tax was to be frozen in England next year. By the time of the speech, however, the Chancellor was saying that if local authorities did certain things, he would see what he could do to help them, which is not quite the same.
Let me put some questions to the Secretary of State for Business, Innovation and Skills. On the Chancellor’s proposed levy on the banks, will the Secretary of State tell us precisely what the French and German Governments propose to do? I, too, had discussions with my French and German counterparts, but it was not always clear that they were proposing to do precisely what we might have done. Things have clearly developed, and I would like to know what those developments are.
The Chancellor announced measures to help development outside London and the south-east. He mentioned regional funds and other help, so will the Business Secretary give us further details? The Chancellor also mentioned that he wanted to change the approach to pensions tax relief. He made the point that the Labour Government had had a number of discussions; legislation went through on the nod, I think, just before Dissolution. Does the Chancellor’s alternative mean reduced annual allowances? My recollection is that that would affect far more people than we proposed to affect, and is therefore less progressive?
People are right to be concerned about the overall thrust of the Budget in relation to the effect on growth and jobs. Yes, we need to get borrowing down—we all know that—but we must do it in a way that is sensible and will result in us coming through all the problems and being able to grow and secure jobs in the future. The Budget also fails the fairness test. Over the next few weeks and months, we will consider yesterday’s announcement and, equally importantly, the cuts to departmental spending. The Business Secretary’s Department is not protected. Perhaps he will say what the effect of a reduction of a quarter in his budget would be, given that he is responsible for science, universities and business support.
We will return to those big questions. Like all Budgets, this one will be judged in the fullness of time. We are coming through a difficult period, and the action taken by the Labour Government was totally justified. We must be careful not to derail that effort and end up undoing all the work done over the past few years.
The Secretary of State for Business, Innovation and Skills (Vince Cable)
This is the first opportunity that I have had to debate with the shadow Chancellor from this side of the Dispatch Box. May I start by paying tribute to him? I have always said publicly, and am happy to continue to do so, that in many respects he was one of the people who emerged from the wreckage of the previous Government with an enhanced reputation. He did so for two reasons. First, he inherited an enormous banking crisis that was in part the result of the naivety and negligence of the treatment of banking before he became Chancellor. He dealt with it decisively in the autumn of 2008, through liquidity and part nationalisation, and I reassert that he deserves credit for that. Secondly, he has at his core a strong element of honesty and integrity, which occasionally involves him blurting out the truth. There was the famous occasion when he came back from a holiday in the Hebrides and uttered the blasphemous four-letter word “cuts” for the first time, much to the annoyance of his next-door neighbour in Downing street.
The question to which the Government have wanted an answer is this: why were we left £50 billion of cut commitments without any explanation of what they were going to be? On 12 June, the shadow Chancellor gave us an insight into what had been going on. He said:
“I wanted to show more examples of what we could cut, and more examples of what we could switch. But there was a more limited appetite for that than you might think.”
It was not just the appetite of his then next-door neighbour, who is now being blamed for everything, that was limited. I think that there was a limited appetite here and there, and as a result we have been left with the responsibility of spelling out what those painful cuts are.
There is another comment which is not a direct quote of the shadow Chancellor, and he might not even have said it, but let me give it to the House, as I think it reflects quite well on him. He is said to have made an insightful observation on the nature of sovereign debt crises. Apparently, he told the Cabinet, “The ice seems solid the moment before it cracks.” That captures beautifully the dilemma that the Government now face with a sovereign debt crisis in the background. I wish to return to that issue, but first I will briefly answer the technical points that he threw in at the end of his speech.
As I understand it, the French-German proposal is a balance sheet levy similar to what is happening here. The proposals relating to regional rebalancing, which are an important part of the Government’s proposals, have two elements: £5,000 relief from employer national insurance contributions for new companies with up to 10 employees outside the east, the south-east and London, and a fund that will be distributed on the basis of bids received for good projects, especially those with a high-technology and environmental component. The details on that will emerge in due course.
Angela Smith (Penistone and Stocksbridge) (Lab)
Why, if the Government are so keen on rebalancing the economy regionally, did they turn down the loan to Sheffield Forgemasters?
Vince Cable
The hon. Lady knows the reason; it has been explained several times. A lot of questions had to be asked about the affordability, value for money and risk of that project. What was a very highly geared project promised extraordinary rates of return to the private promoter. We looked carefully at all the evidence, and the project clearly had positive aspects, but we decided that in the circumstances of a Government with highly constrained public finances, we could not support it.
Vince Cable
I have answered the question; I do not want to pursue it.
Were the private promoters able to take the project forward, we would be delighted, because as a commercial project it has many attractions. However, the Government could not commit large amounts of money to such a project.
The shadow Chancellor made a series of challenges, which I will take systematically. He asked why we, and I personally, have endorsed austerity policies and especially quick cuts; he asked about the issues around fairness and value added tax, with which I will deal; and he asked about the important economic question of how we get growth emerging from a period of austerity, and I will try to answer that. First, however, let me explain why I changed my mind—for I did change my mind—about the necessity for early action on the budget deficit. Let me describe the sequence of events, because I think that it is quite important.
As the shadow Chancellor knows, because he was still Chancellor then, when the election took place there was, in the background, a major sovereign debt crisis in Europe. The day after the election, when there was a hung Parliament, the then Prime Minister suggested to me, I think for reasons for courtesy, that I talk to some senior officials in the Government and the governor of the central bank about the existing situation, in order to obtain their assessments of what was going on. I did so. The leader of my party talked to the governor, and I have talked to him since.
The advice that I received, uncompromising and unequivocal, was that the incoming Government, whoever they were—we did not know who they would be at the time—would have to act immediately and decisively on the budget deficit, because there was a serious threat to this country. I took that advice, but was left with a nagging question. The former Chancellor was presumably receiving the same advice. What would he have done? Was he proposing to disregard it? The line of policy that he is developing now suggests that he would have liked to disregard it, but was he going to do so, or was he going to be responsible, accept the advice and act on it? Because he is a responsible and serious man, I think he would have accepted it.
We now know, because the figures are becoming clear, that in the current financial year, when, as the shadow Chancellor said, the economy was fragile, he was introducing a fiscal tightening of £23 billion. The new Government have introduced a tightening of £6 billion. The last Government did not announce that fiscal tightening—it emerged in the small print from the Institute for Fiscal Studies—but the shadow Chancellor did it, and he clearly did it with good reason. The problem was that it was never clear what the Government were doing, it was done in a very chaotic way, and some Ministers—including Lord Mandelson, my predecessor—plainly wanted to support the Chancellor and to act in the public interest, and got on with those cuts. When I entered the Department, people such as further education lecturers and scientists were being made redundant as a result of the measures that had already been initiated by the Government in response to the crisis that they knew existed.
Chris Leslie
The right hon. Gentleman may well have had his damascene conversion, for who knows what reasons, but does he not owe an apology to the millions of people who thought when they voted Liberal Democrat that they were voting for a pro-growth strategy and against these massive cuts? Should he not apologise to his own electors?
Vince Cable
No; we are trying to deal with the problem that the hon. Gentleman and his colleagues left behind.
Mr Darling
Since the right hon. Gentleman referred directly to me and to advice and discussions that I may have had, let me say to him that there has never been any argument in the House about the fact that we needed to reduce borrowing. The discussion was always about when the reduction should start—before the election, he and I were on the same side on that—and about the extent to which, and the speed at which, it should take place.
As for Greece and the sovereign debt crisis, I am sure that the right hon. Gentleman will also have been advised that the real problem was that the rest of the eurogroup took far too long to do what was necessary to support the Greek Government. Had they done it in February, when the problems first became apparent, some, although not all, of those problems might have been avoided. As it was, they were allowed to become acute. No one is arguing that we did not need to reduce our borrowing, but we were not in the same position as Greece.
Vince Cable
I know that we were not in the same position as Greece. I was not talking about what the Greeks and the eurozone needed to do; I was talking about what we needed to do, and the advice that we received.
There is an evidence base to look at. It is true that, as the shadow Chancellor said in his speech, the cost of borrowing in terms of bond yields was starting to fall under the last Government. That is because markets are driven by expectations, and they expected a change of Government. Since the election, however, and since this action was taken and announced, the cost to the United Kingdom of borrowing, in terms of bond yields, has fallen by 20 basis points. In Greece it has risen by 170 basis points, or 2% in ordinary language. It has risen by 94 points in Ireland, by 95 in Portugal, and by 65 in Spain. Spain is a serious, big country: we are not talking about tiny, peripheral economies. It is a serious country, which was caught up in the financial firestorm that we have had to head off from here. That was the basis on which we made decisions.
Let me now develop that immediate question into the broader issue of the Chancellor’s Budget and the magnitude of the task that we had to undertake. There is, of course, a difference between the problem of the deficit and the problem of the debt. There is a public debt problem, which is growing rapidly, but as the Chancellor has pointed out and as I have often pointed out myself, it is not greatly out of line with what is happening in many other countries, or with what has happened historically. The real problem for the United Kingdom is the massive level of public borrowing. That is why markets are important. The deficit in the last financial year was 11% of GDP; in the current financial year, it is 10.5% of GDP. That money—£155 billion—must be borrowed. My views on that, on how it should be dealt with, and on the kind of radicalism that is needed had nothing to do with the formation of the coalition. My views were set out a year ago, when I wrote a pamphlet which did, indeed, bear a strong resemblance to what the Chancellor produced yesterday in terms of scale, scope and speed.
Let me tell the shadow Chancellor why I feel strongly about the need to act in such a decisive way in terms of fiscal policy. There are two reasons. First, I saw the disaster unfolding under the last Government, when they were overtaken by a major financial crisis for which they were not prepared and to which they had massively contributed. Of course there is a global problem—we know that—but its impact has been much more serious in this country than elsewhere. That is because the Government allowed household debt, in relation to income, to rise to the highest level in the developed world; because they acted and planned on the assumption that house prices rise for ever, although we know from the evidence that they go up and down roughly every 17 or 18 years, as they have done for the last 300 years; and because they created, encouraged and fostered an almost Icelandic dependence on major international banks, the combined magnitude of whose balance sheets represented 400% of our economy.
The Government allowed that to happen. Some of us warned about the dangers, and they took no notice: they said that we were scaremongering. But the crisis hit them, and, having experienced it once, we on this side of the House are determined that such a financial crisis should not happen again as a result of sovereign risk. That is why we are decisive, and why we feel that we need to act.
Chris Leslie
If what the right hon. Gentleman says about the banks is true, why has the Budget been quite so lenient with them? Why has it taken only £1 billion from them, when the rest of the country is having to pay £14 billion as a result of the measures in the Red Book? What will his Department do to prevent the banks from passing even that £1 billion on to their customers?
Vince Cable
That was a very strange intervention. It may reflect the fact that the hon. Gentleman—whom I respect a great deal—has rejoined the House following the election, and may not be familiar with the arguments that led up to it. He will know, however, that the last Government were going to phase out their bonus tax. We have reintroduced a stable system of taxation on banks, the incidence of which will increase over time. Of course, many things need to happen to the banking system. We will discuss, as colleagues, how we should deal with such matters as bank lending, on which there is an outrageous record of bank dysfunctionality.
Phil Wilson
It seems to me that, to rectify the problems, the right hon. Gentleman has signed up his party to a Budget that represents a massive gamble for the country. What happens if it fails? What is plan B?
Vince Cable
The hon. Gentleman says that a gamble is being made. Certainly there is a risk. There are risks in tightening fiscal policy too quickly, but there are also risks in doing nothing, or in doing less. We have had to balance those risks, and we have concluded that we must act.
Since the questions are coming from Labour Members, let me now give the other reason why I feel strongly about the need to act decisively in the way in which the Chancellor acted yesterday. Thirty years ago, as an adviser, I occupied the office that I now occupy as a Minister. It was the end of a Labour Government who had chosen to ignore the build-up to a major financial crisis. As some people will remember, the painful measures—the taxes, welfare cuts and spending cuts—were not taken by choice. They were imposed from outside by the International Monetary Fund. Because I was there at the tail-end of that Government, I saw the consequences, not the least of which were the massive divisions that opened up. People in the Government such as Denis Healey, Roy Jenkins and my boss, John Smith, believed that the Government had to be responsible, but there were a lot of others—I sense a growing echo of this feeling on the Opposition Back Benches today—who said, “We don’t need to do anything, we can fight the gnomes of Zurich and drive them underground, we can ignore the rest of the world and we do not need to act.” It was a disastrous alternative strategy, and the Labour party is in great danger of returning to that territory.
That is why I have come to the same position as the Chancellor of the Exchequer. We come from different political traditions; I do not try to hide that. As it happens, my role models as Chancellor of the Exchequer include Sir Stafford Cripps and Roy Jenkins, because they understood the need for sound public finance and they combined tough action on budgets with fairness. That is the tradition that we have continued.
Let me list some of the measures in this Budget with which I am proud to be associated. There is the lifting of the tax threshold by £1,000, towards the £10,000 mark. There is the action on capital gains tax, which is not just a tax-avoidance measure, but is about fairness. We have acted on public sector pay not just by freezing some salaries but by giving special help to people on low pay in the public sector. We have introduced the bank levy. We have done what the Labour Government failed to do in 12 years and introduced a triple-lock to protect pensioners—the shadow Deputy Leader of the House, the hon. Member for Worsley and Eccles South (Barbara Keeley), could not quite get her head around what the triple-lock is—and in addition supported pensioners through improved pension credit, which is a major cost on the budget going forward. We took action to head off any increase in child benefit, too.
Let me read a comment on child poverty made not by a politician, but by Barnardo’s, one of the leading charities. Yesterday it said:
“There’s some pain in this Budget for the poorest families, but we recognise the government has done what it can to protect the most vulnerable.
Our calls for child tax credits to be redirected away from more wealthy families to the poorest have been heard—an action we highly commend.”
Huw Irranca-Davies
I do not doubt the right hon. Gentleman’s motives during his journey over the years and the past few weeks, but does he give credence to the fact that there is an alternative that could minimise the risk to his communities and mine? It is not to do with rejecting an agenda of cuts, efficiencies or reprioritisation; it is to do with timing. It is not just me saying that, or the “dupes” on the Labour Benches. Paul Krugman, “Danny” Blanchflower, Will Hutton and many other economists are saying, “Minimise the risk; just delay, and make the decisions at the right time.”
Vince Cable
I think that the gentlemen to whom the hon. Gentleman refers are mostly talking about competitive deflation in the world economy, which is, of course, absolutely disastrous. The Chancellor referred in his speech yesterday to the fact that other countries that are in surplus have to do the opposite of what we are doing in terms of fiscal consolidation. The Chancellor made that very clear in relation to action to be taken by the Chinese and action that should be taken by countries such as Germany. Of course we understand the wider context.
Let me return to the criticisms about value added tax. The shadow Chancellor put the question in a personal way when he asked why I was supporting the increase in value added tax. The three of us—the shadow Chancellor, the Chancellor and myself—went around the television studios during the election campaign; we were the three Chancellors, a bit like “The Three Tenors”. We had our several encounters and each of us was asked time and again, “What do you think about value added tax?” As I recall, all three of us gave an identical answer: “We have no plans to increase value added tax, but we have not ruled it out.” The reason why we are now having to confront the matter is that there is a bigger structural deficit than was appreciated and action had to be taken. That could have been a tax measure, or it could have been a spending cut. Is that what Labour Members are saying? Do they want more cuts in spending? Do they want another tax? What do they want?
Mr Darling
I was just wondering what impression the Liberal Democrat poster about the Tory VAT bombshell was meant to give.
Vince Cable
Anybody who read my comments on tax policy over the past year would, I think, hardly imagine that there was a surprise or a bombshell, because I said on many occasions that if taxes had to be increased, it made much more sense to tax expenditure than income or corporate income or employment. That was my view, and I expressed it on many occasions.
Andrew George (St Ives) (LD)
I wish to associate myself with many of the measures that we as Liberal Democrats can take pleasure from in the Budget, including the increases in personal allowance and in pensions. On VAT, to what extent does my right hon. Friend accept that we could have explored alternatives, including increasing capital gains tax still further or increasing the bank levy to ensure that the balance of tax increases was more proportionate?
Vince Cable
The Government did look at the possibility of raising capital gains tax further. They did serious analysis and the conclusion was that it would not raise any more revenue. That was the problem. It certainly would not have raised anything remotely like £10 billion. That is why we cannot evade this issue.
Let me turn to the central concern about value added tax, which is expressed on both sides of the House: the worry about regressiveness. I checked back on what independent analysts were saying about value added tax and its income distribution effects. It is worth looking at the work of the Institute for Fiscal Studies, which has conducted a distributional analysis based on expenditure. It came to the conclusion—this is its word, not mine—that value added tax was fairly “progressive” because of the exemptions that are given for zero rating, as food, children’s clothing and other essentials are key items in the expenditure patterns of poorer people. [Interruption.] The top 10% of the population pay three times as much in value added tax as the bottom 10%. [Interruption.]
Opposition Members are expressing righteous indignation about what they regard as regressive measures. Let me tell them which is the most regressive tax: it is council tax. Do they remember what happened to council tax under the Labour Government? On average, it went up 70%. Taking into account rebates, for the poorest 10% of the population it rose by 93%. It is the most regressive tax of all, yet they lecture us in this sanctimonious way about regressive taxation. They have no basis for doing that.
Finally, let me turn to the crucial issue of growth, which the shadow Chancellor raised. He is right that growth does not happen automatically; of course it does not. How do we proceed from the austerity that has to happen—from cuts in public spending—to growth in business investment and net exports, which we want to see? That is a genuinely important question, to which there are no simple answers. The perfectly fair point has been made that there are risks involved here, just as there are risks, which we judge to be bigger, in doing nothing, so let me try to answer this question seriously. If we are going to get growth, it will come partly through demand and partly through supply. How do we sustain demand? Essentially, we do so through monetary policy. That is what happened under the last Government. The reason why the economy kept on going through the recession was not Government fiscal stimulus. That was trivial, and it has now been withdrawn anyway. It was not for that reason; it was because we had very low interest rates, the expansion of money through quantitative easing and, of course, a big devaluation.
Those factors drove the economy in terms of demand and they will continue to do so. There is a reason for believing that that is what will happen: the Governor of the Bank of England called for this Budget and has now got it, and he has every reason to understand the need for monetary policy to support recovery.
Liz Kendall
The right hon. Gentleman says that the Budget will increase growth, but the Office for Budget Responsibility says in the Red Book, at paragraph C.18, that
“economic activity is weaker than in the pre-Budget forecast…this reflects Budget measures which restrain government spending and real household disposable income, holding back consumer demand.”
Does he agree with the OBR or does he now admit that the Budget will not increase growth?
Vince Cable
That was not on the point I was speaking about. I know that the hon. Lady is a new Member, but I am sorry that she felt the need to read out her question in the way that she did. Nevertheless, there is a very simple answer on page 94 of the Red Book. It is a technical point made by Sir Colin Budd, who drew up this part. These issues are not comparable. Had the Labour plans been implemented, interest rates would have been higher than they now are, which would have dragged down the rate of growth and pushed up the level of unemployment beyond what it is. That is the distinction he makes. He also refers to the fact that there is a basic confusion. I noticed that the Chancellor did not repeat the point in his speech, but it was raised yesterday. That explains the hon. Lady’s genuine misunderstanding.
In addition to issues about how to stimulate demand, there is an issue about how to get business investment moving—how to get supply, and an understanding of the supply side of the economy. A lot of the Budget’s stronger points were about that issue. The Budget was about creating a tax environment within which business is confident to invest. It is about doing the things that my Department is now starting to do in conjunction with the Cabinet Office, such as looking at the 20,000-plus additional regulations that were built in by the last Government and which are shackling small business. It is about addressing the issue of bank credit that was lamentably neglected by our predecessors, and investing in things like apprenticeships, which we have started to do even within our few weeks in office.
Geoffrey Clifton-Brown
On investment, will my right hon. Friend say a little more about the Chancellor’s words yesterday on enlarging the enterprise finance guarantee scheme, which would help 2,000 small businesses? Some 90% of our economy is made up of small and medium-sized businesses. I have had two meetings with business representatives since the election, and they all tell me that one of the major problems is bank lending to good, viable businesses—particularly those that are exporting around the world. I am sure that those are precisely the sort of businesses that my right hon. Friend had in mind as those which will give us the private sector growth that we require.
Vince Cable
The hon. Gentleman is right, and it is the problem of credit supply to the small and medium-sized business sector that has the greatest potential to disrupt the recovery. That is why the Chancellor included in yesterday’s Budget the finance guarantee, and why we now have to work on why banks that were rescued by the taxpayers do not lend to the good companies that the hon. Gentleman describes, which are solvent, have good order books and will contribute to recovery. That is a major task that the Government now have to undertake.
Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)
The right hon. Gentleman talks about the importance of investment and about being fair to regions. The Northwest Regional Development Agency has played a critical role in setting up investment funds for businesses in the north-west and was key in setting up the centre of scientific excellence at Daresbury, which has been responsible for retaining skills in the north-west and for developing science-based businesses. Why does he want to abolish it?
Vince Cable
I have met the Northwest Regional Development Agency and I have suggested to it that under the new structures that will be created—the local enterprise partnerships, and local businesses working with their local councils—it will have an opportunity to bid for status in order to carry forward useful projects that support development on the ground. There will be a change—those RDAs are going to be restructured—but there is a role for that kind of innovation locally.
The shadow Chancellor talked at some length about the need for growth. He is right that we need growth, but it has to be sustainable. We had a decade of what seemed at the time, at least to some Labour Members, to be strong economic growth. I am sure that hon. Members will remember, as I do, all those Budgets in which the then Chancellor told us that we had achieved the highest rate of growth since the Hanoverians—I think it was even the Roman empire on one occasion—and talked about a boom in employment. But the house was built on sand and it was all a mirage. It was not sustainable. It was based on levels of personal debt and Government borrowing that could not be sustained; it was also based on a housing market that could not be sustained and on a fragile banking system. We have to restore growth, but it has to be sustainable. That is what the Budget was about.
Jon Trickett (Hemsworth) (Lab)
May I congratulate you, Mr Deputy Speaker, on occupying the seat that you now do, as this is the first time I have had the opportunity to do so?
The Business Secretary speaks with great authority and I noticed that the House listened to him with great care. I was particularly interested in the justification he gave for the reversal of his position on cuts. I listened to the two points he made on that with great care, but I was not convinced. First, he said that after the election, he was asked to get a briefing from senior officials. He then went on, in a way that I thought was not totally honest and that was certainly a form of elision, to talk about the situations facing this country and countries in the euro.
The then Opposition parties were offered briefings before the election. I assume the Lib Dems were briefed on the situation facing this country regarding the sovereign debt and other such matters, so it can hardly have been a surprise to the right hon. Gentleman to find that the circumstances were as they were. I find rather surprising the suggestion that he was surprised to discover—after the election, during the period when he was negotiating entrance into office for himself and his colleagues—that the situation was suddenly much worse than he had previously understood it to be.
There was a deliberate elision of the sovereign debt crisis being faced by Greece and Spain and the situation in the United Kingdom. The truth is that in Greece there is a 4% decline in gross domestic product—there is a collapse in output—and that in Spain more than 20% of people are effectively unemployed. Those two economies probably cannot sustain the debt they have incurred, but that does not in any way apply to the UK. I would be surprised if the Governor of the Bank of England had told the right hon. Gentleman, in what would have been a blinding revelation in the middle of the negotiations to enter into the coalition, that some kind of sovereign debt crisis was operating in the United Kingdom, given that the Bank of England’s quarterly bulletin, published the other day, refers to an increase in the flow of investments into UK bonds.
The structure and age of our debt is not in any way comparable to the situation in Greece or elsewhere. I therefore conclude that the meeting which the right hon. Gentleman no doubt had with the Governor and others came at a very convenient time, and that the abandonment of the policy that he and others had, to their credit, shared—that we should not cut further at this time—was linked more to the political opportunities that were opening up, given the nature of the election, than to the sudden discovery of a change to the situation facing this country that, rather conveniently, occurred 24 hours after the election.
I want to make a number of points about the Budget and the current situation that we are facing. I listened carefully to the analysis by the Business Secretary of how the crisis came about. From the implications that could be read into his speech, it seemed to me that there was a difference of view between him and Conservative members of the Government as to how the situation arose.
For the Conservatives, it is clear that the problem facing the country is almost ideological in nature, being one of government rather than of the markets. They believe that the problem lies with the state, which should be reduced, and not with the markets, which collapsed. I note that the right hon. Gentleman said that the crisis was global in character and that it was brought about by the collapse of the banks, and I want to refer once more to the question of bonds.
The credit rating agencies have been widely publicised for their judgments about the state of the UK economy, but those same agencies were happy to give triple A ratings to Freddie Mac and Fannie Mae, and to some of the other banks and investment firms in the US. It is odd that much of the media now seem to rely on the judgments of those agencies as to the UK’s status in the bond markets—but speculating on that would take me away from the narrative thrust I am trying to develop and the points I want to make.
The Business Secretary referred to the collapse of the banks, but I think the judgments made in the Budget reflect a different analysis by the Chancellor. That much is clear from how the burden will fall: of the £40 billion fiscal tightening being proposed, it looks as though £13 billion will be achieved by raising VAT—and I shall return to that point in a second—and £11 billion by an attack on welfare. In contrast, £2 billion is being raised by the banking levy, and I believe that that reveals the priorities of this Conservative-led coalition: £24 billion is to be saved through reducing welfare expenditure and raising VAT, and only £2 billion will come from the banks.
The truth is that, in a constituency like mine, the Budget will hit people very hard. I represent some of the poorest people in the country, as do many other hon. Members. It will not have escaped them that the burden of the changes introduced yesterday will fall particularly heavily on the poorest, and on hard-working people more generally.
The right hon. Gentleman made a case for the rise in VAT, but the Chancellor said on television this morning that he had faced a choice, between raising income tax or VAT, and that he had made a judgment. Personally, I reject the idea that we should impose further fiscal tightening in the current financial year but, be that as it may, the Chancellor made it clear that there was a choice.
The Government’s choice—the Business Secretary’s fingerprints are on it as much as anyone else’s—was to raise VAT rather than income tax. However, about £1 of every £7 that poor people spend goes on VAT, while for the rich the figure is about £1 in every £25. It is a highly regressive tax, compared with income tax. If a tax is to be increased—and I am not saying that that would be my option—it should not be VAT. The fact that VAT has been raised reveals the Budget’s regressive nature and character, and reflects the right-wing agenda being elaborated by this Government.
John Mann (Bassetlaw) (Lab)
My hon. Friend has referred to the welfare cuts, including to disability living allowance, that have been outlined although not specified at all. People on DLA—in his area, in mine, and elsewhere in the country—come predominantly from a manual working background. Does he share my concern that it is precisely their inability to do manual work that will be a problem when their allowance is cut? The people involved are not the intellectual office workers of the future.
Jon Trickett
I wonder whether the Business Secretary and some of his colleagues came into politics to restrict welfare benefits for the disabled.
People in our areas have reason to fear other elements of the Budget, apart from the VAT hike. Public sector pensions are going to be cut, and the Government will accelerate the rise in the pension age. We know that they are going to cut 25% of departmental expenditure, that there is to be a freeze on child benefit, and that there will effectively be cuts in housing benefit. All those proposals will affect the communities we represent.
I remind the House that it was Mrs Thatcher who stole milk from schoolchildren; now, it is this Government who will take money from poorer mothers. Let me list the effects the Budget will have on mothers, especially those in poorer communities, as it seems they are to be targeted.
According to the TUC, the announcements made yesterday show that poorer mothers will lose about £1,200 a year. From April next year, the Sure Start maternity grant will be available for the first child only. The £500 maternity grant available for poorer mothers having their second child is to be withdrawn, and that is a disgrace. The health in pregnancy grant—a universal grant worth £190 that was available to all mothers to promote child and maternal health and engagement with health services—is being abolished.
The baby element of tax credits is also being cut. That was an additional payment of up to £545 a year for families with a child aged less than one who were in receipt of tax credits. The previous Government’s introduction of a new toddler tax credit would have provided an extra £200 a year for children aged one or two, but that has been cut too.
As we know, child benefit has been frozen for three years, and that obviously amounts to a cut in real terms. Finally, the child trust fund worth £250 has also gone. That may not affect members of the Cabinet much, given that there are 22 millionaires sitting around that table, but I assure the House that £250 can make a difference to children and families in my area.
Whatever my differences with them, I do not believe that people who joined the Liberal Democrat party went into politics to attack poorer mothers, but that is what this Budget does. That is what they will be faced with voting for in a few days, and I ask them to consult their consciences—never mind their party members—to determine whether that is the right thing to do.
Earlier, I said that it would not be my priority at this time to go for further fiscal tightening, given the fragility of the economy and the lack of demand elsewhere in the world. However, that is not simply my view; it has also been expressed by people who are very significant indeed.
The House will be aware of President Obama’s letter to the G20, but hon. Members may not know that KPMG chief economist Andrew Smith has described yesterday’s Budget as a “kill or cure” Budget. I note that the same phrase was used in today’s Financial Times headline, and there is at least a risk that we might kill the recovery. It is quite extraordinary to see KPMG make such a statement, and Andrew Smith, its chief economist, went on to say:
“The aim is to eliminate the structural deficit over this Parliament, but it risks choking off the recovery. There is no guarantee that private demand will rebound just because the government retrenches.”
John Philpott, of the Chartered Institute of Personnel and Development, said that we would see unemployment rise to 3 million for the rest of this Parliament.
Dr John Pugh (Southport) (LD)
Can the hon. Gentleman refresh my memory? In the last Parliament, did he vote for £40 billion of unspecified cuts?
Jon Trickett
I am talking about yesterday’s Budget and I shall continue to do so. If the hon. Gentleman does not like it, he should think about whether he will vote for it next Monday and Tuesday.
Paul Krugman, the Nobel prize-winning economist, asked how hard it could be to understand that Governments can save economies rather than destroy them. It is not too hard at all, yet as he said:
“All around the world…politicians seem determined…to short-change the economy”.
A consensus has emerged in the media about the need for cuts, which is infuriating sometimes, because there is a counter-consensus that has not been properly heard, represented by many people on the Opposition Benches and by leading economists, President Obama and others: we are taking a huge risk with the future of our economy.
Two million private sector employees work for companies that are dependent on Government contracts—Sheffield Forgemasters has already been mentioned. Further damage will inevitably be done to the private sector by cuts aimed at the public sector. When we look at the performance of the private sector we see that it, rather than the public sector, has brought about the reduction in gross domestic product, especially in investment. People may not like to use the word, but if there is a strike going on at the moment, it is not the BA strike but the investment strike in the private sector. We can understand why it happened, but none the less, £6 of every £10 of the reduction in GDP is down to one factor alone—the decline in private sector investment. It is not clear to me how cuts now will suddenly lead to growth in private sector investment, nor have the Government explained how that might happen. Furthermore, the Red Book shows a decline in public sector investment from £47 billion in 2008-09 to £21 billion, which is less than half that amount, by 2014.
I am troubled both by the assault on poorer communities, which is what the Budget really amounts to, and by the underlying economic philosophy that by reducing the state the private sector will flourish. The reverse is true, as we know from the great economist Keynes and from what happened in the great depression of the 1930s. Recovery in the United States was not brought about by slashing public expenditure, but above all by the new deal. Roosevelt’s great adventure rebuilt the American infrastructure and economy. The private sector was able to revive through expenditure, not cuts.
With those reflections, I turn to the politics of the Budget. The election gave no legitimacy for the course the Government have set. The vast majority of people who voted for the Liberal Democrat party did so on the basis that there would be no further cuts in this financial year, and no increase in VAT. The Conservative party did not achieve a majority and did not significantly increase its vote, in terms of the total numbers of people who voted. On the other hand, it is also clear—I would not claim otherwise—that Labour did not win the election either, but looking at the combined votes for Labour and the Liberal Democrats, for a policy of careful financial management, we see that a vast majority voted for that objective.
My conclusion is that there is no democratic legitimacy for the Budget. When the Secretary of State for Business, Innovation and Skills described his conversion on the road to Damascus on the day after the election, his argument was much less than convincing. It feels as though there has been an attack on middle-class and working-class families and on those dependent on welfare. Inevitably, there will be resistance both in the House and outside. When people reflect on the fact that an extreme Thatcherite Budget has been agreed and will be forced through the House without the legitimacy of an elected parliamentary majority, there will be outrage.
It is for the Labour party, particularly our leadership, to reflect carefully on how we respond to a Budget from a Government who were not elected with a majority, and who propose to impose savage cuts on the living standards of poorer people. Resistance will emerge. The Labour party will want to react responsibly, but we will—at least we should—place ourselves alongside people and communities who are resisting the cuts. I very much hope we shall be doing that in the coming weeks and months.
Mr Deputy Speaker (Mr Nigel Evans)
Order. I know that the House will wish to observe the conventions associated with maiden speeches.
Andrew Jones (Harrogate and Knaresborough) (Con)
Thank you, Mr Deputy Speaker, for the opportunity to speak today. It is a great honour to address the House for the first time and it is with some trepidation that I follow the excellent maiden speeches of so many Members.
I pay tribute to my predecessor, Phil Willis, who served with great distinction for 13 years and built up a significant, thoroughly deserved personal reputation as a fine, hard-working constituency MP. I wished Phil a long and happy retirement, which may have been a little too early, because as soon as I had done so he was made Lord Willis.
I am only the fifth person to represent the constituency since it was created. One illustrious predecessor is the hon. James Ramsden, who became the MP nearly 60 years ago and was our country’s last Secretary of State for War. James once confided to me that there were not many of “us Macmillan’s Ministers” left now. I have not checked, but I think James is a member of a very small club.
Further back we had some rotten boroughs—the need to equalise constituency size goes back a long way—and over time they were represented by three Prime Ministers. However, the most famous political figure, if I may call him that, with links to my constituency is someone who played a big role in the history of this place: Guy Fawkes, who spent his childhood in the village of Scotton.
When I first arrived here, Members were introducing themselves to each other and asking where they came from. As soon as I said that I came from the Harrogate and Knaresborough constituency everyone said, “Ah, lovely part of the world.” They were right. The Harrogate and Knaresborough constituency is Yorkshire at its very best. I am proud to represent such a beautiful area, with its mix of historic towns and villages and rolling countryside.
Knaresborough is by far the older of the two principal towns, and is a very pretty market town with a marvellous natural setting. It has a river and a gorge, a castle and a crag, and a fascinating history. Earlier this year, there were great celebrations on the 800th anniversary of the first award of Maundy money, which took place in the town. I am always struck by the real community spirit in the town, perhaps best exemplified by the annual Knaresborough bed race, which is organised by the Knaresborough Lions and took place only a few days ago.
Harrogate is a spa town, perhaps most famous for its gardens and tea rooms. A regular winner of the Britain in Bloom competition, it is true that the gardens are beautiful, and Betty’s tea rooms are justifiably famous for their quality. They are a Yorkshire institution. I should perhaps confess that I have a lot of knowledge of that company, having worked for it, so there is a direct interest. But there is more to Harrogate than that. The quality of life there is very high, based on a robust local economy, which has a mixture of quality companies that operate in a diverse mix of sectors, including one of the UK’s largest conference centres.
Many hon. Members will have visited conferences at Harrogate and so will have experienced the transport links, which are poor, especially the rail links. Only 18% of the 350,000 visitors per year to the conference centre travel by rail. More direct trains between London and Harrogate would be far more convenient for visitors to the conference centre, thus boosting business and having a beneficial effect on the broader business community. I will be working to highlight that and to fight for improvements, although I am under no illusion how difficult that will be, given the appalling state of the public finances inherited from the previous Government.
Our public services are good, with motivated public servants delivering quality health care, education and other services, yet over the past couple of years, I have started to receive calls from people who work on the front line of those services to highlight the bureaucracy that they have to endure and, interestingly, what they see as the waste of public money. Contributions from those who deliver services on the front line will be absolutely crucial in ensuring that we make the right decisions in the changes ahead.
One of the reasons for the high quality of life in Harrogate and Knaresborough is the quantity and range of community groups and social enterprises. I have been particularly impressed on my visits to social enterprises such as Paperworks, Claro Enterprises, Horticap and the Little Red Bus. Numerous voluntary groups do so much to add to the quality of life in our area, and there are 400 charities registered. I have seen the difference that volunteering and social enterprises make, and I welcome the Government’s support for the third sector.
Harrogate is also the home of Army foundation college, where our junior soldiers train before being sent to their regiments. It is a fine organisation. It does great work with the 16 and 17-year-olds who join it from a very diverse set of backgrounds, yet all leave with pride and confidence in having made great achievements. I am always conscious that, whenever we hear of a casualty in Afghanistan, there is a high likelihood that that person spent some time training in my constituency. The junior soldiers whom I have met at the foundation college are a credit to our forces, and I strongly welcome the Government’s support for our forces.
One thing that I often hear about my constituency is that it is very affluent—parts of it are, that is true—but there are pockets of poverty, which are sometimes overlooked: perhaps pensioners living on fixed incomes, or people who live in rural areas or who work in the hospitality industry, where incomes are often very low. It may surprise hon. Members to know that the average wage from jobs in the area is £440 per week. That is less than both the regional and UK average.
I mentioned earlier that Harrogate and Knaresborough is the best of Yorkshire. In my constituency, we have one of the most desirable areas to live, a successful and diverse economy and an engaged community, yet one of the lessons of the recent election was that people fear that what they have may be under threat. I heard comment after comment from people fearful of the scale of debts facing our country, knowing that the action to deal with them would not be easy. People have understood that the need to tackle the issue was urgent, but that there would be better times ahead when the consequences of the previous Government’s debts are dealt with.
There is a lesson from Harrogate on the benefits of clearing debts. The local council has been active in repaying its debts, keen to clear liabilities and save taxpayers paying for interest. Paying interest does not appeal to Yorkshiremen and women—we are famous for liking value. Paying interest is using funds that could be put to better purpose. In this case, I believe that the money that is being saved will be used to expand the local recycling service. The contrast is stark: paying interest, or investing in environmental initiatives. In less than three years, the council will be debt free—the consequences of a good Conservative administration. It will take us far longer than that to clear the debts that we have inherited.
It is crucial for us all to get our economy moving, and I support very strongly the Government’s efforts to create the right environment for businesses to thrive. The cuts announced yesterday in corporation tax rates, with the expansion of entrepreneurs’ relief and the small business relief, mark a clear change of direction on business taxation, and that will be very welcome in Harrogate and Knaresborough.
My right hon. Friend the Chancellor said that it was important to say that Britain is open for business. Well, I will be highlighting the fact that Harrogate and Knaresborough is open for business.
A further part of the right environment for business is the emphasis placed on education and skills. In Harrogate and Knaresborough, we have excellent primary and secondary schools. We also have Harrogate college, which is launching a business school tomorrow.
I have already met the representatives of rail operating companies and local education providers, because I know how critical it is to have a robust business sector, built on adding value. That is my background before I joined the House.
The trust placed in me by the people of Harrogate and Knaresborough is a great honour, and I take that trust very seriously. I pledge to use my time here to speak up for my area and everyone in it.
Diana R. Johnson (Kingston upon Hull North) (Lab)
May I welcome you to your new position, Mr Deputy Speaker, and thank you for calling me so early in the debate?
I pay tribute to the hon. Member for Harrogate and Knaresborough (Andrew Jones). I am very pleased indeed to follow a fellow Yorkshire MP making his maiden speech. In particular, he talked about some of the best traditions of Yorkshire—first, the community spirit of Yorkshire people and, secondly, the great Yorkshire institution of Betty’s tea rooms. I am sure that hon. Members on both sides of the House will appreciate the fact that people can get a good cup of tea and a good piece of cake at Betty’s tea rooms.
I wish to comment on one of the other contributions to the debate. The Secretary of State for Business, Innovation and Skills made quite an attempt at explaining his about-face in respect of what the Liberal Democrats fought the general election on and how he now comes to the Dispatch Box to defend the vicious and savage cuts in the economy. He is obviously a distinguished and well-thought-of economist, so it was rather strange that he did not pick up before that the position was so bad that he would have to change his party’s policy. He was seen as brilliantly forecasting some of the problems in the economy during the previous Parliament and he has been given great recognition for some of his forward-thinking views, but he was not able to pick that up in the weeks before the election. I was rather taken aback by how out of touch he claimed to be and by how he had to have the meeting to explain the current economic situation and to change his party’s policy.
I was also very surprised indeed to hear a Liberal Democrat try to argue that VAT is not a regressive tax. I have never heard anything like it, and it took my breath away when I recalled that my Liberal Democrat opponent in the general election made it clear on every hustings where I appeared with him that increasing VAT was not something that the Liberal Democrats would support. He constantly attacked the Conservatives for the fact that, whenever they have been in government, they have always put up VAT.
The main reason that I wish to speak in this debate is the growing anger—not only in my constituency of Kingston upon Hull North, but in vast swathes of the north of England—at the coalition’s policies so far announced and those in the Budget statement yesterday. Many of the policies that the coalition Government have proposed to the British people have no mandate—obviously, the deal was done after 6 May—and the electorate, particularly Liberal Democrat voters, feel misled, betrayed and disfranchised. When I talk to people in my constituency, they tell me that they did not vote for many of the polices proposed in recent weeks and yesterday. In fact, they feel that they were not given the opportunity to vote on the very policies that the coalition Government have proposed. As I have indicated, the Liberal Democrats sought election clearly on the mandate that they would not let cuts come during this financial year and that they were against VAT increases, but look at them now.
John Thurso
May I reassure the hon. Lady that I have spent a great deal of time talking to my constituents since the Government were formed and that the only thing that they wish to express is their overwhelming relief that the Labour party is no longer in government?
Diana R. Johnson
If the hon. Gentleman talks to the electorate in Yorkshire, he will find they express a different view. He might also find that the views of his electorate have changed considerably since they heard the Budget.
Angela Smith
To underline that point, I am sure that my hon. Friend understands the feelings of the people of Sheffield. They write to the local newspaper every day to say that the Deputy Prime Minister will pay the price.
Diana R. Johnson
That is absolutely right. We have seen a political blind date, but we should not worry because it is clear that Dave agrees with Nick, and that Nick agrees with Dave, so perhaps it will be okay in the end.
There are a few measures in the Budget that I can support, such as the change to capital gains tax and the bankers levy, although I am surprised that the levy will raise only about £2 billion because I think we could raise much more. However, the broad thrust of the Budget is very bad news for my constituents. Hull North will see more individuals out of work, with people’s opportunities wrecked and a decline in their quality of life. The programme of fighting child poverty and inequality will go backwards, not forwards, and there will be big problems in health and housing. Most importantly, wealth creation and enterprise will suffer in Yorkshire.
I want to talk about four things in particular: the rewriting of the history of the economic situation by the Conservatives and Lib Dems; the dogma that drives the Budget; my constituency, and Yorkshire and the Humber; and Labour’s approach to dealing with the economic situation in which we find ourselves.
I am worried by the rewriting of the economic history of the recession and the falsification of the cause of the deficit. We know that the Prime Minister is familiar with airbrushing, and his deputy routinely airbrushes away more than 100 years of his party’s history when it suits him. The deficit was caused not by big government, but by big greed. Bankers and international speculators are at its root.
In 2006 and 2007, I was fortunate to be the Parliamentary Private Secretary to the then Chief Secretary to the Treasury, my right hon. Friend the Member for East Ham (Stephen Timms), whom I was pleased to see back in the Chamber today. During that time, early work was being carried out on the current 2008 to 2011 public spending period. We had enjoyed a decade of low inflation, steady growth and falling unemployment, and there was no serious deficit problem. At that time, the present Prime Minister and Chancellor used a soundbite about sharing the proceeds of growth. They also said that they wanted to match the Labour Government’s spending plans up to 2011, as they kept saying until the end of 2008.
We all realised at that time that the spending round would need to be tighter than the one immediately after the millennium, but the adjustment was not remotely on the scale of the deficit in the public finances that opened up from 2008. The events of the two years that followed came about because of the greed-fuelled banking crisis that tipped the world into the worst recession since the 1930s. It is wrong to airbrush out what happened, to blame the problem on big government, and to be oblivious to the fact that public services are important not just for fighting poverty and inequality, and for providing opportunity, but for an efficient, growing, modern economy. Since the middle of 2007, taxpayers have had to pay to rescue the banking system—and not just in Britain—but now hard-working families and public service workers are being asked to pay again because of the greed of the bankers and the speculators.
The Budget is driven by dogma, not good housekeeping. It cuts too early and too deep, and it will hold back growth, which my party saw as the main engine for cutting the deficit. We know that further cuts will follow, including departmental cuts of up to 25%, but I think that the coalition Government will make further cuts again and again, meaning that we have a spiral of cuts and debt.
When Labour was in office, the Chancellor berated our Government for not mending the roof while the sun was shining, but it now seems that he is up the ladder removing the slates as the storm clouds of a double-dip recession gather on the horizon. In Hull, we need public services and investment. They are important to the local economy. The coalition cuts, however, will harm our quality of life. The Tories said in the past—I think that they still say this—that mass unemployment is a price worth paying. The market zealots on the Government Benches who said for years that they wanted less regulation of the markets and smaller government are now getting their way.
Mr Ellwood
I am sad to hear the hon. Lady advocate a double-dip recession so early in a new Parliament. The public do not want to hear those sorts of words. We need to get behind the Government and allow the coalition to do its job. I would like to ask her who was responsible for allowing Bradford & Bingley to give away 125% mortgages? Who was responsible for removing regulations in the banking industry in the late 1990s and thus allowing banks to lend people money in ways that they did not understand and when the payments could not be afforded?
Diana R. Johnson
I remind the hon. Gentleman that Conservative Members vociferously argued in the House year after year that there should be less regulation of the financial markets. They criticised the Labour Chancellor and Government for the regulations that they introduced. The hon. Gentleman has a rather selective memory of his party’s position in the late 1990s.
I fear that Yorkshire and the Humber will bear the brunt of the majority of cuts that come out of the Budget. I am pleased that my hon. Friend the Member for Penistone and Stocksbridge (Angela Smith) is in the Chamber. She has been a powerful advocate for her city of Sheffield and wanted to ensure that the sensible arrangements that the Labour Government put in place for Sheffield Forgemasters went ahead. It is shocking that the coalition Government have refused to continue the process. Sheffield Members are making a strong case for the assistance, so it is a shame that the Deputy Prime Minister is out of step with his city colleagues.
Angela Smith
Will my hon. Friend comment on the fact that the investment offered by the previous Government was covered by an equity stake from Westinghouse, one of the world’s largest nuclear industry companies? Given that that stake reduced the financial risk to the Government, the earlier comments made by the Secretary of State for Business, Innovation and Skills were entirely incorrect.
Diana R. Johnson
I am sure that that is absolutely right. I must give credit to our civil service. Civil servants advise Ministers and respect the decisions that they make, but the civil service would have been clear if it thought that the assistance should not go ahead because public money would not be protected as fully as it should be.
I was surprised by the vague way in which the Business Secretary talked about the opportunities that his Department will make available in the regions. He cited just two examples: an incentive on national insurance contributions for small businesses and a proposed fund to be distributed in the regions. There were no details of the fund, however, and it is unsatisfactory that businesses and enterprises in Yorkshire and the Humber have to wait to find out what money might be available to them. That is not good government.
I am sorry that the Business Secretary is not in his place, but perhaps I will get some answers to my questions. First, in view of the cuts to Yorkshire Forward, the regional development agency, and the demise of Hull Forward, and given that the Liberal Democrat-controlled council in Hull does not have a great record on regeneration and moving quickly and effectively, how will we be able to promote investment in my city, which still needs public investment to go in, year on year?
Secondly, what will happen to opportunities for those not in education, employment or training with the end of the future jobs fund and cuts to university places? I have the great pleasure of the university of Hull being slap-bang in the middle of my constituency. I am worried about local youngsters in particular not being able to access their local university.
How will the region’s construction sector fare, with council house building schemes being cancelled, road schemes threatened and questions still to be answered about flood defence and protection work? Despite the promised good news on port ratings, will the Humber actually get the investment that the Labour Government had identified for the Hull port area and the use of the site for wind turbine manufacturing? That is under review by the coalition, which is worrying, because it might well put off businesses coming to Hull. With the Typhoon fighter project’s future uncertain, what will happen to the skilled jobs at BAE Systems at Brough?
I see other hon. Members from the Yorkshire and the Humber region in the Chamber. What about the reduction or elimination of the Humber bridge tolls, which we were so close to achieving under the previous Government? Those are all questions that will affect the economic viability of Yorkshire and the Humber, and I want some answers.
Andrew Percy (Brigg and Goole) (Con)
I was previously a councillor in the hon. Lady’s constituency, so I consider her a friend. I was interested to hear that we were close to eliminating the bridge tolls. Exactly where had the money for that been identified? Will she confirm that the study started by the previous Government is continuing? To give the impression that nothing is happening on the Humber bridge tolls is not fair. I would very much like an answer to my first question, because some of us think that the previous Government started to talk about the Humber bridge simply because an election was coming.
Diana R. Johnson
The hon. Gentleman does a disservice to the fact that long before the general election, there was cross-party working by hon. Members on both sides of the House to make the economic case for reducing the Humber bridge tolls. He will know that the then Transport Minister, my right hon. Friend the Member for Tooting (Sadiq Khan), had decided not to allow the increase in the tolls and a review was being conducted of whether the toll could be reduced to £1. All I was doing was questioning what was going to happen, and I would be grateful if the coalition partners threw some light on the subject. I am sure that all hon. Members are keen to get a satisfactory resolution to that ongoing problem.
I have a few comments to make about what Labour would have done, had we secured a majority at the election. It is clear—the shadow Chancellor made it clear—that of course we need to get the deficit down. Before the election we had legislated to say that we would halve the deficit within four years, and in the Departments work was being done to identify where reductions could be made. I was in the Department for Children, Schools and Families, so I know that areas had been clearly identified, and my right hon. Friend the Member for Kingston upon Hull West and Hessle (Alan Johnson) told me that clearly identified savings had been put together in the Home Office. It is wrong to say that the Labour Government had not started work; however, we made it clear that we had to wait until the growth in the economy was secure.
A key issue that the coalition Government have to grapple with is the fact that just making cuts across the board is not the sensible approach. We need to think about what policies we can introduce to spend and invest now so that we can ensure that we save in future. One of the policies very dear to my heart is healthy free school meals, which piloted in Hull but was slashed by the Lib Dem council without the evidence being evaluated. I believe that there is an economic case to be made. Investing in children early on, making sure that they eat healthily and well and do as well as they can in their education, will reap benefits for us as a society later on. I was disappointed to see that the extension of the free school meals pilot has been abandoned by the coalition Government, as well as the extension of eligibility to those in receipt of working families tax credit, which would have made more families eligible to get free school meals for their children. That is very short sighted.
By cutting too deep and too early, we will risk jobs—jobs in Hull, jobs in Yorkshire and the Humber, and jobs nationally. We will have higher welfare costs and less tax revenue. Growth will be suppressed and I think that the deficit will be much worse.
Geoffrey Clifton-Brown
The hon. Lady has spent her entire speech carping about my right hon. Friend the Chancellor’s Budget. Can she not at least welcome the large regional fund that is to be set up, through which funding will probably come to her area and which may well benefit her constituents by providing jobs?
Diana R. Johnson
I do not know—there is no detail. We have had vague promises from Ministers about what the regions will get, but no detail. I cannot explain to business men and entrepreneurs in my constituency where the money is coming from to support and incubate their businesses. As far as I am concerned, this is all hot air. [Interruption.] Wait and see? Businesses in my constituency cannot do that. They need to know whether there is to be investment and support. If the coalition Government are serious about supporting the economy in the regions, they should have had their proposals and policies ready for yesterday’s debate and been able to explain what money is available to people in the north.
The welfare reforms and the tax changes announced yesterday will cause great problems in my constituency. Although basic rate taxpayers are promised an extra £170 a year in income tax allowance, that will be far outweighed by the VAT increase to 20% from 4 January next year. We have heard at length about the Lib Dem election campaign poster saying that there would be a Tory VAT bombshell, but the Deputy Prime Minister—bless him!—has done another U-turn that takes his party to a new level of opportunism. That regressive tax on growth will cost the average household £425 a year. That is without counting the other regressive changes in things such as housing benefit, child benefit and child trust funds and the disgraceful scrapping of the health in pregnancy grant.
As my right hon. Friend the Member for Kingston upon Hull West and Hessle told the Prime Minister and the Deputy Prime Minister—the self-righteous brothers—they are leading this Government and repeating the PR mantra, “We’re all in it together,” but some parts of our country will be altogether more in it than others. A party that has never been known for sharing wealth and opportunity fairly is very keen to share austerity with everyone.
This past month shows that we have replaced a one-nation Government with a coalition of the two oldest parties, representing the misconceived interests of the privileged classes in this country. My constituents in Hull North, Bransholme, Orchard Park and similar areas, who need public support and public investment to give them the opportunities that, through no fault of their own, they lack, will suffer because of this Budget and this coalition Government.
John Thurso (Caithness, Sutherland and Easter Ross) (LD)
I congratulate you on your election, Mr Deputy Speaker. This is the first time I have spoken with you in the Chair.
First, let me respond to the hon. Member for Kingston upon Hull North (Diana R. Johnson). The thrust of her speech was almost entirely, “It’s the banks wot done it,” whereas her party, although in government, did not have a great deal of responsibility. She is right in that the major part of the crisis was brought to a head by the irresponsibility of the banking community throughout the world, especially in the UK, but she is not right to ascribe the whole crisis to that one cause, because there are two more that must be taken into account. Probably the most important—it has driven many of the problems in the economy—is the imbalances in the world economy. I served on the Treasury Committee in the last Parliament, and even before Northern Rock, that was something to which Members from all parties were drawing attention. There is a major structural problem in the world economy, and because of our particular weakness in relation to the financial sector, we suffered more than others.
The second thing that has to be taken into account is the amount of debt in the economy. The point is extremely well made by the chart on page 7, which sets out that relationship, so that one can see the inexorable rise of debt in the financial sector in comparison with debt in non-financial companies and households. If I remember the figures correctly, over the past 50 years or so, the consolidated balance sheet of the financial industry has gone from roughly half of GDP to five times GDP. That is the core of the problem: at every level in society we have been living beyond our means, and it is necessary to deal with that.
I want to focus mainly on enterprise, growth and rebalancing the economy, but I should like to make one or two general points about the Budget as a whole. The right hon. Member for Edinburgh South West (Mr Darling) is not in the Chamber now, but having shadowed him as a Minister in several Departments in the last two Parliaments, and having dealt with him in the Treasury Committee, I have great respect for him, and I echo the remarks of my right hon. Friend the Secretary of State for Business, Innovation and Skills about his integrity. He was given a hospital pass when he accepted the keys to No. 11, and it is to his credit that he managed to stay on his feet. None the less there have been some significant mistakes, to which I shall allude.
Looking at the Budget as a whole, I ask myself two questions. First, how would I feel about the Budget if I were sitting in my old home on the Opposition Benches? Secondly, how would I feel about the Budget if I were sitting on the Government Benches supporting a wholly Liberal Democrat Government? We can all have aspirations. Let me answer the first question. I would feel extremely cross, deeply angry and irritated, because I would see a Budget that contained a mass of things for which I had just campaigned and which I had proposed to my constituents as things I wanted to do in government—so I would have been sitting on the Opposition Benches powerless, while whoever was in government was introducing all the measures for which I had fought. I would say to myself, “How on earth do I oppose that?” but I would not be able to come up with much of an answer.
Angela Smith
I wonder therefore whether the hon. Gentleman campaigned against Lib Dem policy in the election, and campaigned for massive cuts to the economy now rather than later.
John Thurso
As a matter of fact, given my experience on the Treasury Committee, I was extremely careful about what I said. I stated my preferences, but I also stated the principles underlying them; I shall come on to that in a moment. First, however, let me answer my second rhetorical question, which requires a little more consideration. The first thing that I would look at—this pertains to what the hon. Lady was asking—would be whether the deficit needs to be dealt with now in depth. I shall draw guidance from my experience as a member of the Treasury Committee and from my own experience of rescuing nearly bankrupt companies in the past.
In past three years or so on the Select Committee, I observed how often Members in all parts of the House were behind the curve in estimating the scale of the problem. When we looked at Northern Rock in our report “The run on the Rock”, it took time to perceive not only the scale of what happened at that institution but the fact that it was a precursor or early symptom of what was to come later in 2008. I remember the Governor telling us quite late in 2008 how this was a financial crisis that he hoped would not get into the real economy. Looking back, one has to say that that was a false hope.
Huw Irranca-Davies
I share the hon. Gentleman’s frustration, as many people were behind the curve, but one person who was not is “Danny” Blanchflower, the economist, who spotted it coming, identified it and sent out the warning signals. We, collectively, were not listening. He is now warning, “Cut hard and deep and you’ll send the recession backwards.” Should we listen to him?
John Thurso
We should certainly listen to “Danny” Blanchflower, for whom I have great respect. He gave evidence to the Select Committee on several occasions, and he is one of a number of voices that we should—[Interruption.] Absolutely—it was David Blanchflower’s nickname at the time. We should certainly listen to him, but we should also listen to all the evidence. He was, on that occasion, more right. I am not persuaded, having heard other voices, that he is entirely right now—but he does highlight a danger, and we should certainly not disregard that. Across the piece, as the hon. Gentleman acknowledged, we did not appreciate the scale of what was coming.
When I look at what was happening in the early part of this year, my instinct would be to cut the least possible, and to stimulate growth as much as possible. However, there comes a point at which we have to deal with what is before us, rather than what we hoped might be before us. It became clear during the election—and I remember making this point at an all-party hustings—that throughout Europe it was a very different ball game from the one with which we had all been dealing just three, four, or five weeks before, and that we needed to take that into account.
I am therefore predisposed to assume the worst, and to look hard at the core problem. The next piece of guidance derives from my experience of running companies in the hospitality industry. I am not for a moment saying that the relatively small companies that I ran bear comparison to a country, but some of the principles do. I remember taking over two companies that were essentially bankrupt. If the owning shareholders had not guaranteed the finance, they would have gone into administration. In both cases, my job was to turn them round, and I heard arguments about how I should get hold of money and invest it on the one hand, or how I should redress the costs of the company on the other.
When people do not have money—the piggybank is empty, and it is difficult to get money from the banks—they have no choice but to live within their means. I learned that by stabilising company expenditure, and forgoing some investment for the future, I could produce a more stable enterprise. It is the same with this country and the balance of risk. The risk, on the one hand, of failing to take action is that we seriously run out of money, our credit rating is reduced, our borrowing costs go up, and we end up spending far more on debt interest than on health, education or defence. Something would then be imposed on us, as happened with the Labour Government in the 1970s. The risk on the other side is that if we cut too quickly, growth will be stifled and we will take longer to come out of our current situation. Balancing those two risks, I believe that the risk is greater if we do not deal with the deficit, so it needs to be dealt with.
Secondly, is the Budget fair? My right hon. Friend the Secretary of State for Business, Innovation and Skills made an extremely good case for demonstrating that it is—in as much as any pain can be fair. I would far rather be standing here supporting a Budget that gave people lots of money. That would be lovely, but, as the Labour Chief Secretary to the Treasury said, there is no money. So we have to be prudent, and that means that we have to share the pain. The whole point is that everybody will suffer, but we have to ensure that the suffering falls least on the most vulnerable, and most on those who can afford it. Charts A1, A2 and A3 in the Red Book set out exactly how the suffering will fall, and it is perfectly clear from them that those at the bottom will bear the least pain and those at the top bear most.
In my constituency average earnings are £21,000, and table A1 on page 64 shows that after the Budget somebody on £20,000 will be £170 better off, given the amount of income tax and national insurance that they pay. They will pay £170 less than they would have done. Table A2 shows that they will receive £145 less in family tax credit, but when we put the two amounts together we see that they will still be £25 better off. That is not a large amount of money, but it makes the point that if we take the Budget in the round, including VAT, which nobody can deny is regressive on its own, we clearly find that the pain is shared, and felt less by those at the bottom than by those at the top. So I conclude that the Budget is fair.
I welcome the Budget. It is not one that I would have liked to have to support. I would have liked to see the coffers full, and to be able to be nice to people—but in the circumstance this is the right Budget, and it is fair.
Owen Smith (Pontypridd) (Lab)
Will the hon. Gentleman not also reflect on the fact that those tables do not capture the punitive effect of the forthcoming 25% cut in non-ring-fenced public services on people who most rely on benefits and public services? Those elements in the tables and in the Budget do not really take into account—in the round, as he puts it—the full impact of the cuts that we will see.
John Thurso
The hon. Gentleman makes a very good point. Broadly speaking, 20% to 25% cuts are going to be introduced in this autumn’s spending review, and we will need to look at that. However, I find it difficult to take lessons on that from a party that introduced £40 billion of cuts without a single centime being allocated to anything whatever. That is like a bankrupt father promising his children a sackful of presents at Christmas as the bailiffs wheel him out on Christmas eve: it is deeply irresponsible.
Let me turn to the specific measures. I absolutely must commend the Government on their commitment to consider a pilot scheme for a remote rural fuel discount, because year in, year out I made that proposal from the Opposition Benches and the previous Government compared it to the cost of beer and all sorts of other things. My friends in the Conservative party chose to wait and see what would happen, and I am delighted that they did so, because they now agree that my measure should be considered, for which I thank them warmly.
On enterprise, it is critical that we rebalance the economy. First, we must achieve a rebalancing whereby there is more private sector and less public sector. That does not mean that the public sector has to shrink; the private sector has to grow to support the public sector. Secondly, we absolutely have to move our economy away from an utter dependence on financial services, which delivered 25% of tax revenue three years ago, and towards manufacturing industries and technologies and skills-based industries throughout the regions of the United Kingdom.
I am glad that the Government will continue with and enhance the enterprise finance guarantee scheme. However, the scheme has one flaw, which I have highlighted many times: the Catch-22 situation whereby the banks that do not lend then decide whether to include an enterprise in the scheme. There must be some way in which the banks’ decisions can be reviewed.
I also commend my right hon. Friend on the action being taken to get non-bank finance into small and medium-sized businesses, but may I gently ask my friends who are now on the Front Bench to look at the papers that I wrote—they were in the Liberal Democrat manifesto—on enterprise funds, and consider whether some of those ideas might help to address how we get equity funding into small businesses? May I also stress the importance of the regional growth funds and express the hope that the details of them and how they will work will be brought forward quickly? The concepts of an infrastructure bank and a green investment bank should be brought forward as rapidly as possible, too.
Having looked at the Budget, I conclude that it is not one that I particularly like to see brought in, but it is necessary. There is pain, and it has to be borne, but the Budget is equitable in that the pain falls least on those who have least. Notwithstanding my personal regard for the shadow Chancellor, I really cannot take lessons from him or his party, having listened for nine years from the Opposition Benches to their boasts about the end of boom and bust. We now know that the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) was the father of all booms and the mother of all busts. That much-vaunted child, prudence, is lying battered, bloody and bruised in the gutter—and it is this Government who will take her out and restore to health.
Jim Shannon (Strangford) (DUP)
Thank you for calling me, Mr Deputy Speaker. May I, too, congratulate you on being elevated to the position of Deputy Speaker?
Before I came to the House today, I thought about what was I going to say, and I was mindful of that saying, “Whenever the clouds are on the horizon, you can either shelter from the storm or run with the wind.” I am conscious that this Government are doing more sheltering from the storm. The question for us, as elected representatives at Westminster, and for our constituents is: is there somewhere to shelter? That is what I shall comment on, but I am also conscious of the comments that I make. I always try to make constructive comments, because that is my nature, but I shall also underline some concerns that I, as an elected representative and MP, believe I am duty bound to mention.
In Northern Ireland, and in Strangford, which I represent, there is a very clear tightening of the belt. The marks are already there, and I just wonder how tight the belt will be by the time the Budget is eventually farmed out to all parts of the United Kingdom and all Departments. We in Northern Ireland are mindful of that in relation to the block budget.
I am very conscious also of the serious economic state that we are in. I am not ignoring it, and neither are the people of the United Kingdom. We all recognise that drastic measures need to be taken, but I have to ask: are they being taken in the right place and taken correctly, and will they adversely affect my constituents and, indeed, those of many other hon. Members who have spoken today? I recognise the need for health and perhaps international development to be ring-fenced, and that the Budget will not necessarily affect those areas. There is some talk about education, or at least some parts of it, remaining untouched as well, but in that case there will have to be cuts in other Departments.
I recognise that this House is very supportive and proud of the armed services as they fight in Afghanistan, Iraq and all over the world. Is a 25% cut in defence fair? The Prime Minister has given a commitment to the soldiers on the front line, wherever the war is taking place. However, if there is to be a 25% cut in defence, someone has to feel the pinch and the pain, and if it is not the soldiers on the front line—and it should not be—it has to be those at home. I am pleased that the cut will not affect the front line, but concerned about how it will affect other areas. Will it mean that commanders are pensioned off? Will it affect the MOD in buying equipment? The MOD will look for the best prices, as it probably should, but we do not want spending to be diminished in such a way that its position is undermined.
The cadet forces make a significant contribution across the whole United Kingdom, but particularly in Northern Ireland. It is very important for us in Northern Ireland to have cadet forces that bring the communities together. We have tried to achieve that for years, and we are now seeing the partnership begin to work better than it ever has before. Cadet forces, by their very nature, are drawn from both communities. There are more people from the Roman Catholic side of the community in the cadet forces in Londonderry, which the hon. Member for Foyle (Mark Durkan) represents, as well as in Limavady, Enniskillen and Strabane. That has come about because joining the cadet forces has been attractive to young boys and girls, who recognise that some day they will want to serve in the British Army and the other services, including the Royal Air Force.
I want to highlight lone parents. I welcome the fact that the Government want to encourage them back to work; I think we all want to do that. However, when they have the opportunity to do so, we want them to have the jobs to go to. It is great to have this support in theory, but how does it come about in reality? Do the people have jobs, and are there opportunities and options? I am not sure that there are. I am concerned about the Government’s position.
Mark Durkan (Foyle) (SDLP)
The hon. Gentleman makes an important point. Does he accept that many of us represent constituencies with large numbers of single parents who are doing valiant work as parents, and that for them the problem is not a lack of work ethic but a lack of work?
Jim Shannon
I thank the hon. Gentleman for his intervention; I wholeheartedly agree with his comments. It is all very well to have the theory of getting lone parents back to work, but if the jobs are not there, that theory is undermined. The Government must consider that.
In Northern Ireland, some 60% of jobs are in the public sector or public sector-dependent. I said this in my maiden speech a fortnight or so ago, but I will say it again because it is very important. I understand that the Government’s pledge is to increase private sector jobs and build up that area. However, before anything changes in the public sector, there has to be a private sector that fills the gap, so that those opportunities are there.
I turn to the 2.5% rise in VAT. In the area that I represent, there are a great many small and medium-sized businesses, which by their very nature create a lot of jobs collectively. Individually, that may amount to three, four or five jobs in a family business, but collectively they run into many hundreds, probably thousands. Although the rise is not going to kick in until January 2011, it causes great concern for the area that I represent, and specifically for businesses. Some small businesses may be hanging on by the skin of their teeth, and finding it very hard to get through difficult times, while looking ahead to perhaps another two, three or four years of austerity and the associated difficulties. Many businesses will try to absorb the VAT increase rather than pass on the extra prices, which they cannot do—not because they do not want to, but because they cannot do it in the competitive market that they are in. They have to try to take on large multinational businesses that have a bigger market and can therefore absorb such costs.
David Simpson (Upper Bann) (DUP)
Does my hon. Friend agree that one of the biggest hindrances for small businesses across the whole United Kingdom, including Northern Ireland, is the level of bureaucracy and red tape that they have to handle, as they are very much hands-on operations? The new coalition Government have promised to remove that, and we need to see the evidence very quickly.
Jim Shannon
I thank my hon. Friend. I wholeheartedly agree, and I can give examples. I represent a very rural constituency. A questionnaire was recently put out to the farming community asking people about the biggest problem they had. They said that it was red tape and bureaucracy. The same applies to those in the fishing industry and those who have small businesses. It seems to be coming at them left, right and centre. Europe has an influence as well. That issue must be addressed very soon.
Let me turn to the position of pensioners. As representatives, we have an opportunity to really feel for people and to see issues they face. My area, like many others, boasts an increasing population of elderly people, and will have its greatest ever number of pensioners in coming years. I am very conscious of how pensioners budget, and how they will cope with a VAT increase on the products that they buy just to keep living. That is extra money that they have to find. Has consideration been given to how the increase will affect pensioners specifically?
There has to be good news in everything, like the curate’s egg that is good in parts. It is hard to find enough good parts in this curate’s egg, but that is by the way. The fact that the income tax threshold has been raised by £1,000 is good news—I give credit where credit is due. It will benefit some households to the tune of £175, at least, and perhaps more elsewhere.
At the same time, however, there is a negative factor: child benefit will not rise for three years in line with inflation. People will say, “Well, that’s how things are, and that’s how it has to happen.” As someone who keeps his ear close to the ground and understands how these things work—I was not born with a silver spoon in my mouth, and I know how difficult it is for people to make do—I understand that the child tax credit and the working tax credit are critical. Many people visit my office and advice centre, just as they visit many other Members, and I can see what is involved in balancing the books and working out the weekly family budget. These people do not live beyond their means by any standard, but they require tax credits just to survive.
My provincial press today—I bought the papers this morning—gave five or six examples of people who will be affected. They included families with four children, single parents with two children, and some who are self-employed. Those people recognise the need for something to be done, but they do not feel particularly in tune with its impact on them. That concerns me, and I have to put it on the record. None of those half a dozen examples in the provincial press or the Belfast Telegraph involved people who would not feel pain over the coming period.
The Government encouraged people to take up tax credits, and they enjoyed a certain quality of life as a result. All of a sudden, that could change. I should like to say something about those in the middle class bracket. When someone is on £35,000 to £40,000 a year, we sometimes think they are doing all right, but half that income might go on their mortgage, and people’s hopes for their children and communities are in their houses. I am concerned about the impact on such families of reducing or freezing working tax credits or child tax credits over a three-year period.
The one great commodity over which international wars have been fought—there will probably be many more of them—is oil. The price of oil today is $77.55 a barrel, and prices for oil, diesel and petrol were at their highest three years ago, when a barrel cost $147. Who makes the extra money and extra profit, and how? Clearly, someone is making it. The hon. Member for Caithness, Sutherland and Easter Ross (John Thurso) referred to the concessionary fuel scheme in his area. I represent a rural area, so I would be keen to know how that works. Perhaps the Government should consider reducing fuel duty to enable people to get over the hard times much more easily than in the past. Elderly people struggle to fill their tanks with oil.
For the fishing industry at Portavogie, which is an important part of Strangford, fuel costs represent 60% of the boats’ running costs. A great many of those fishermen are having difficulty getting through the times they face at this moment. There is some talk about European funding, but there have been delays. The hardships that the fishing industry faces are critical, and it may not survive.
I welcome the Government’s commitment to reduce corporation tax from 28% to 24%, which is significant. Last week, I met bank officials in my town, and they outlined the measures they would like. By and large, the Government have reflected what the banks wanted. However, what the banks want is not always best, as we have seen over the past year or two. The reduction in corporation tax is good news. The Government have realised that businesses need that help. The Chancellor stated that that is the lowest rate in any major western economy and the best rate in the G20, but the Republic of Ireland’s corporation tax is 12%. As Northern Ireland has a land border with the Republic, I suggest that corporation tax should be looked at more sympathetically for us than elsewhere.
Businesses are very conscious of corporation tax. I have met a number of business people in my area recently. Pritchitt Foods in Newtownards is one of the largest employers in the area, and corporation tax is the biggest factor for that company in trying to make its business work. It is a go-ahead, progressive firm that creates significant employment in my area. It feels that the 4% reduction will go part of the way to addressing its concerns. I have asked the Government about this matter, and I understand that they will be making a statement in October about corporation tax in Northern Ireland. I look forward to seeing whether we can have a further reduction, which would help us. We also have the largest energy costs in the whole United Kingdom. I suggest that that also needs to be offset and considered.
I could not let this occasion pass without commenting on child poverty. Wearing my other hat as an Assembly Member in Northern Ireland, I had the opportunity to contribute to an inquiry on the underlying issues. Some 20% of children in Northern Ireland are deprived through poverty. What will happen to those who find themselves in child poverty over the next couple of years? There is some £80 per household for children in Northern Ireland, as against £600 in other parts of the United Kingdom, so child poverty will be much more important to us.
The next days and months will tell us clearly what impact the Budget will have. I am concerned that the welfare savings of £11 billion will devastate the poor. Will the Chancellor look seriously at that?
I think that England and Slovenia have been playing for 15 minutes—I do not know what the score is—and am mindful that some Members will wish to see what is happening, but I want to make one last point, on disability living allowance. When I read of the DLA changes, I was exasperated and deeply concerned, because I felt that they were a direct attack on those who can least face up to such an attack. There are some delays in relation to how the system will be run. Many of the cases that I have fought as an elected representative have been on behalf of those who need DLA—those who have mobility problems, who are getting over cancer operations or who have immobilising diseases. Such cases have involved those with heart problems, and many involve people who have extensive care needs.
Why target a section of the community who basically need that money more than anything else? Do the Government see savings? They may see savings, but I see the people and their needs, as a great many other hon. Members do. I ask the Government to reconsider, and to look carefully at whether they should pursue savings from those who receive DLA. Doing so will impact on a group of people who can least respond and deal with the financial implications. People who are on DLA focus on their health and how to get through the day, as do the people who care for them. If the Government add to that a financial burden by making it hard for them to receive their benefits, their health will be affected. I am not in the business of doing that, and I hope the Government are not.
I rest my case on that point, and I hope that my comments will be taken on board. The Budget delivers some things for us. I am not being critical of all of it, but I am critical of some measures. I ask the Government to take those matters on board. I hope that they will have some better ideas on DLA. We all have to work with the Budget—we cannot do so individually—but the Government need to take on board the needs of those who are less able to face the financial burdens that will come upon them.
Mr Tobias Ellwood (Bournemouth East) (Con)
I welcome you to your place, Mr Deputy Speaker. It is 20 minutes past 3, so I am surprised—but glad—to see you in your seat, because the England game against Slovenia has now started. I know that you have been to Slovenia many times, and it is great to see you here.
I pay tribute to the hon. Member for Strangford (Jim Shannon) on his passionate and balanced speech. I served in Northern Ireland and am aware not only of many of the challenges that hon. Members face over there, but of the opportunities. It is a pleasure to follow him, and I agree very much about the opportunities in the development and working of the cadets in bringing communities closer together. It is wonderful to see that initiative moving forward.
The hon. Member for Kingston upon Hull North (Diana R. Johnson), who has just walked out the Chamber, made an entirely negative speech. Yes, whichever party won the election would have faced challenges, but how can she stand there and simply demand more money for certain projects in certain parts of the country, without saying where it should come from? Labour Members have failed to understand the consequences of the election result. It was clear that nobody won, so why continue to look back at the manifestos of individual parties and ask, “Why are you now not doing this, or that?” We had to rise to the occasion and ask, “What is needed for the country?” We have to put aside our party differences and meet the challenge, which is to bring about stable government and leadership. The Liberal Democrats and the Conservatives were able to do that, but of course it meant a certain amount of compromise. So it is wrong to harp on about aspects of the manifesto and say, “Why haven’t you included this? Why haven’t you done that? You’ve gone against the people who voted for you.”
Huw Irranca-Davies
Does the hon. Gentleman accept that in the election there was a fundamental divide over the approach to the economic recovery, which was encapsulated in the manifestos of the two main parties that lost—the Labour party and the Liberal Democrats? The Tories did not win outright either, but those two significant parties both, at the time, agreed with Nick and Vince that we had to delay making the cuts until the recovery was ensured.
Mr Ellwood
I am grateful for that intervention because it gives me licence to underline the fact that, if we are to move into a coalition, there needs to be agreement, and it is a tribute to the parties and the leaders that in a short period they achieved something that, in countries such as Belgium, takes 100 days—forming a coalition grouping while all the horse-trading takes place. Yes, there are compromises and changes that were not expected during the election. However, according to the polls the country supports what we are doing.
Owen Smith
Does the hon. Gentleman think it a minor omission that, although the Conservatives’ manifesto said that they would not increase VAT, they have done exactly that and introduced an enormous, £13 billion tax? There was no mention of that before, so should we trust their manifestos in future?
Mr Ellwood
Rather than leave a curt note on the desk of the Chief Secretary to the Treasury, we have given an indication of the real situation in the UK. Again, I underline the fact that there are aspects of the coalition agreement we perhaps were not expecting—that should be understood on both sides of the House. I fear that it will remain a Labour tactic to go on about this, perhaps to try to drive a wedge into the coalition. That is dangerous, out of touch and wrong, because the nation said to us, “We don’t support any one party outright”, but it approves of a coalition and the leadership, and the stability that they and this Budget are providing.
My hon. and good Friend the Member for Harrogate and Knaresborough (Andrew Jones) made an excellent maiden speech. He mentioned Guy Fawkes wandering through his constituency, and I am sure he will make just as big a bang in this place as Guy Fawkes did. I cannot mention Harrogate without also paying tribute to Betty’s tea rooms. Those of us who have gone there for conferences will appreciate the delicacies that Betty’s provides—I only wish that could be emulated here in the House. The hon. Member for Hemsworth (Jon Trickett), who also is no longer in his place, made the most Marxist speech I have heard in this place for many years. I was waiting to see how long it would be before Maggie was blamed for what has happened over the past 13 years—and that is what we got from him. I was astonished.
This emergency Budget is tough but necessary, difficult but unavoidable. It is not the time for timid steps in the hope that we can tiptoe our way out of recession. We needed a bold statement of intent, mapping out a clear route to recovery and invigorating confidence in our businesses and markets. That is exactly what we got. Three main themes run through the Budget and Red Book. The first is one of responsibility in reducing the deficit over the next five years, mostly through spending cuts but also, yes, through some tax rises. That is the price we must pay for Labour’s incompetence and legacy.
Economic growth is the second theme. Measures taken in the Budget are designed to support businesses and stimulate growth, which will help to generate jobs as businesses are able to expand. That will mean cutting red tape, which will free businesses, because removing red tape is the same as introducing a tax cut but without reducing public revenue. It also means preventing Labour’s job tax through a rise in national insurance, reducing corporation taxes and improving our infrastructure.
The third theme is fairness. Of course, we are in a period of austerity, but every part of society must make a contribution to paying off our debts. At the same time, however, we must protect the least well-off. Listening to some of the contributions from Opposition Members, one might think that no such initiatives were part of the Budget. However, we have ensured that those earning less than £21,000 in the public sector will not be subject to the pay freeze. We will see a £1,000 increase in the personal tax allowance for low and middle-income earners; and finally we will see a re-linking of the basic state pension and earnings—well overdue and promised for years by Labour, but never acted upon. We will also see a £2 billion commitment to child tax credits for the poorest families, helping to ensure that there is no increase in measured child poverty over the next few years.
These are the tough decisions we need to take. We have to do this to secure our financial markets and ensure that credit agencies do not lose confidence in Britain. If we do not, interest rates and inflation will rise, and that is what would lead to the dreaded double-dip recession. I am glad that our triple A rating is now secured, thanks to the Budget.
I will give the Labour Government their due: they acted promptly and expeditiously when the Northern Rock issue broke. But then what happened? We have been left with one of the worst economic inheritances imaginable. They racked up one of the biggest budget deficits in Europe. If that is not shocking enough, our borrowing amounts to unheard sums of money. They continued to live beyond their means, borrowing £1 for every £4 they spent, which led to the doubling of the national debt. I well remember Labour’s last Budget, in March 2010. I was sitting in this Chamber waiting for the leadership, initiative and guidance to take us out of this mess. It was the Labour Government’s last opportunity before the election to get us out of the mess they created, but it was more about the political, rather than the economic, cycle. The previous Chancellor went as far as announcing £40 billion of cuts, but he did not say where the axe would fall, so he managed to ring-fence a black hole, which was a first in this House.
Significantly, the Labour party really had nothing to say yesterday. The acting leader of the Labour party was almost like a rabbit in the headlights. Labour Members rolled out the same old line, which we have heard time and again—I am sure we will hear it again in the summation today—about “the same old Tories”, thereby exhibiting an insane refusal to acknowledge the scale of the economic crisis. We have seen Labour Members attempting endlessly to promote and fight a class war with the Conservatives. That is the direction in which they are now trying to take us, avoiding any notion of mea culpa or of taking responsibility for the mistakes made in the lead-up to the current crisis. That illustrates how out of touch the Labour party has become.
Labour continues to argue that we cannot rip the money out of the economy—through the cuts, the increases, and so forth—and also achieve growth, but I believe that we can. We need to give business and the private sector the space to breathe by reducing national insurance and corporation tax. Those are the measures we need to take. That is what will help us to avoid going into a double-dip recession, allowing our businesses to thrive and employment to grow. Labour’s tactic—I am worried about this, because I understand that the unions bankroll Labour to the tune of 60%—is to fight the public sector cuts. That is what we will see as things move forward: these astonishing arguments why, unlike any other part of our society, the public sector should somehow be ring-fenced and not have to share some of the economic pain we are experiencing.
The unions are clearly looking for a fight. I pay tribute to the nurses, doctors, teachers, train drivers—all those who work hard—but let us look at who is now taking over some of the unions: Dave Prentis from Unison, who has pledged to fight the cuts; Christine Blower from the National Union of Teachers, who has enthusiasm for industrial action of some form, as she has made clear; and Paul Kenny from the GMB. Then there is the Unite leader, Len McCluskey—we have all seen what he has done to British Airways—who is seeking re-election. If he gets re-elected, the consequence will be strike after strike, because the public sector unions—not the members, but the unions—do not recognise that we are all in this together.
Labour’s tactic is to blame the global downturn. We hear this all the time: “It’s not our fault; this is because of what happened right across the world.” However, as I pointed out in an intervention, yes, we are exposed—perhaps more than other countries—because of the size of our financial services sector, which is one of the biggest in the world. That is accepted, but we cannot get away from the fact that the previous Government changed the rules, making it unclear who was responsible for the City back in the late 1990s. That is why we got into the position where banks were lending money they did not have to people who did not understand the situation, and in ways that meant that they could not pay it back. That is what led to the current position.
We cannot blame Freddie Mac, Fannie Mae or the sub-prime market for the fact that, even up to about two years ago, Bradford & Bingley was offering mortgages of more than 125% to people who clearly could not pay them back. I remember when I was at university wandering into Midland bank, as it then was, and seeking a mortgage. I was told that I had to cough up one third of the price of the house. What happened to that rule? It went, and that is why we ended up with more money than houses were worth being lent to people who could not pay it back. That is a British problem, not an international one, and that is what led to the crisis we face now.
I repeat my earlier point: I think Labour are going to adopt the tactic of trying to drive a wedge between the coalition by saying, “The Lib Dems said one thing in the election and the Tories said another.” The nation will get bored of it. People want direction—they want leadership and stability—not harping back to what happened prior to the election.
Let us look at the numbers. Our focus is to try to balance the books by 2016. We will cut the structural budget deficit to zero in the next six years. That deficit represents the hole in the public finances that is not expected to be repaired by the economic recovery. That is why we need to take the initiative that we have. Let us look at what the shadow Chancellor has done. I asked him in an intervention whether he supports the Office for Budget Responsibility. I am pleased to say that for the first time, he placed it on the record that he does. However, it is difficult to take anything that he or anybody else on the Labour Front Bench says seriously, given that the OBR reviewed his figures and revised his growth forecast for 2011 from 3.25% to 2.6%.
Ms Angela Eagle (Wallasey) (Lab)
As the hon. Gentleman is talking about the Office for Budget Responsibility and its forecasts, will he have the good grace to note that its recent deficit forecasts are considerably lower than those in the March Budget because more money has been collected in taxes? The deficit that the hon. Gentleman is obsessing about is actually 2% of GDP lower than the forecast in the March Budget. Will he have the decency to recognise the other side of the coin, as well as this side of it?
Mary Macleod (Brentford and Isleworth) (Con)
The structural deficit is higher.
Mr Ellwood
As my hon. Friend the Member for Brentford and Isleworth (Mary Macleod) says from a sedentary position, the structural deficit is actually higher.
Let me deal now with total borrowing as stated by the Office for Budget Responsibility. This is now expected to fall by 2.1% of GDP by 2015, or by £37 billion, which is exactly half of what Labour were predicting, and to reach 1.1% by 2016.
Ms Eagle
I wonder whether the hon. Gentleman was listening to the question I asked him. Given that he is quoting one particular forecast from the Office for Budget Responsibility, will he have the good grace to say on the Floor of the House that the size of the current deficit is now 2% of GDP lower than we predicted in the March Budget? The situation in which we find ourselves is not a lot worse than we thought; it is better.
Mr Ellwood
The hon. Lady has put her point on the record. My argument is that it is difficult for us to take what the shadow Chancellor says seriously when he has been looking through rose-tinted glasses for the last 10 years. Time after time, either he or his predecessor, the former Prime Minister, came up with growth forecasts that were well out of touch with what was happening. That is what led us down the path of thinking that the economy was doing much better than it really was. [Interruption.] If the hon. Lady would stop talking, she would hear what I am saying. She must understand that if the previous Government had not kept on expressing the view that the economy was on the mend when it was not, they would have recognised the position and put in place corrections to stop the spending. The first point I made was the fact that her Government were living beyond their means, yet the hon. Lady still sits there and argues, without even having the grace or the courtesy to say sorry to the nation for the mess we are in.
Geoffrey Clifton-Brown
Is it not a bit rich for the hon. Member for Wallasey (Ms Eagle) to claim credit for the deficit not being as bad as we thought it would be when Labour had proposed £40 billion of cuts, but not one pound of them had been costed?
Mr Ellwood
My hon. Friend is absolutely right and makes a powerful point. Let us not forget that we are quibbling—well, not quibbling, but the hon. Lady is making an argument about pretty small sums of money if we consider that this country’s total debt is £932 billion. That is a record across Europe, it really is. It currently stands at more than 62% of GDP and is forecast to peak at 70% by 2013-14 and finally to start to fall in 2015-16. This is shocking; it is a cost to the taxpayer to the tune of £43.3 billion in borrowing alone. That is more than the defence budget—an outrageous position to be in. Any business presenting figures like that would be labelled bankrupt.
The OBR forecasts that the UK economy will grow by 1.2% this year and 2.3% in 2011—not what was predicted, as Chancellor said. Unemployment is forecast to rise to a peak of 8.1% this year, while inflation is expected to peak at 2.7% by the end of the year before falling back to the 2% target. What has happened is that we have put in the initiatives to ensure that we keep a cap on unemployment, a cap on inflation and, most importantly, a cap on interest rates. As the markets and financiers agree, if interest rates were forced to go up higher, that is what would lead to the double-dip recession.
Let me deal briefly with Europe. The Opposition now claim that we should not look over our shoulder at what is happening in Spain, Portugal or Greece, but I think it is wise to recognise the folly of what would have happened if Tony Blair had had his way when Labour were in power. I am still astonished that it has taken until, I think, last week to close the office of preparation for entering the euro. That is absolutely barmy. It is worth pointing out that if we had wanted to join the euro club, the maximum budget deficit would have been 3% of GDP in any year. In 2009, Greece’s budget deficit was running at 13.6%. We came in at 11.2%, so there are some similarities.
It is recognised that the eurozone is in a mess because of trading patterns. After joining the club in 1999, Germany’s exports to Greece increased by 133%, and the Germans are no doubt delighted about that. However, Greek exports to Germany increased by only 13%, so the system is one way. Not all those exports have been paid for, and that is probably why Germany feels obliged to help with the Greek debt situation. Part of the problem is also that the Mediterranean countries are not as open as they should be, and skewed the stats in order to join the club in the first place. That is why we were wise to stay out of the eurozone. With such huge fiscal disparities, the 16 economies that share the single currency face a massive reality check. In its current form, the euro could be finished.
Let me turn to specific Budget measures. I am pleased that the Office for Budget Responsibility has been created. I am also pleased by efforts to restore the pension link to earnings. My constituency has many elderly people, as does wider Dorset, and we have called for the measure for a long time. I also want to dismiss a myth from the election campaign that the Conservatives would get rid of winter fuel payments and free bus travel. Such scaremongering was completely out of order, and I am glad to say that the provisions are still in place.
Mr Ellwood
Here we go again. I give way to the hon. Member for Ogmore (Huw Irranca-Davies).
Huw Irranca-Davies
I thank the hon. Gentleman for raising that point, because I heard his party on many occasions in opposition deride winter fuel payments, child tax credits and child trust funds as a waste of money. Therefore, it was reasonable for us to scare the horses, and it was right that the Prime Minister was forced to do a dramatic U-turn.
Mr Ellwood
The hon. Gentleman makes an interesting point. We all understand that things are said in the Chamber that perhaps cannot be said outside. During the election, however, the Prime Minister, my right hon. Friend the Member for Witney (Mr Cameron), made it very clear that we had no truck with the idea of getting rid of the winter fuel allowance or free bus passes. He even said that in the debate with the then Prime Minister, and yet Labour still put out scaremongering leaflets. When we get into election mode, let us have a bit more honesty. Does the hon. Gentleman wish to intervene again or has he given up?
I also welcome the freeze on council tax, and I am pleased that Bournemouth borough council has met the rules on that. It is important that there is a relationship to encourage local councils to take more responsibility for their own matters, but to get rewarded for that by Government.
I am pleased with the initiatives on small businesses. They make up 90% of our economy, and we need to look after them. In places such as the south-west and Bournemouth, tourism is important—it is our fifth biggest industry—and we do not do enough to support it. Benefit will come from the lowest ever corporation tax—the main rate has been cut from 28% to 24%—and the cut in the tax rate for small companies from 21% to 20%. There has also been an expansion of the loans guarantee system, without which many good companies were frustrated in getting money from the banks. I am pleased that the Treasury Front-Bench team has realised that.
Fat government will also be reduced. A 25% reduction over the next four years will be very difficult, but government became bloated and far too centralised under Labour. I look forward to a much simpler set-up that gives more power to communities.
This Budget is the most dramatic and far-reaching since the war. Balancing the books must be a priority, but even in these tough times the Budget promotes a cultural shift in Britain, encouraging the individual, the family, the community and the country to take responsibility. Ensuring that the banking sector and financial services are better regulated to avoid a repeat of the economic downturn is long overdue. This Budget is an ambitious effort to reduce the nation’s borrowing and repair the damage created by the last Labour Government. Labour will no doubt claim that many of these radical measures can be avoided, while secretly knowing that, had they miraculously won the election, they would have had to implement the very same changes themselves.
Let me end by congratulating the Chancellor and his team on producing such a comprehensive and robust Budget. While recognising the difficulties that it will impose on the entire country, I believe that it is appropriate and overdue medicine to expedite Britain’s way to recovery.
Huw Irranca-Davies (Ogmore) (Lab)
I have enjoyed the debate very much so far. It has exposed a fundamental division between our approaches to the question of how to emerge from the recession. Although it has been said that ideologies are dead, I think that it has exposed a fundamental division between our ideologies as well. What those ideologies and those approaches mean to me are the impact on a single mother on a council estate in my constituency or a pensioner who has put a bit away in a house at the top of Maesteg, and it is the same across the country.
I thank the hon. Member for Bournemouth East (Mr Ellwood) for reminding me just how vast the gap is between the ways in which we approach and understand the task of resolving the present situation. He began by asking us again to be “all in this together”. I hope I shall be able to go some way towards explaining why I cannot join him in that mission.
I knew before the election that if we were unsuccessful and were not returned to government, we could expect this approach. I must say in fairness to the hon. Gentleman and his colleagues—including the right hon. Member for Witney (Mr Cameron), who leads his party—that they were frank and upfront. We were not given the detail, but they said that this was what they would do. However, while I have a great deal of genuine respect for Members on the other side of the House—I am not trying to embarrass them—I did not expect that they would end up on this side of the fence when the moment came, and their action has disappointed me. It has exposed a division that will last in the Liberal Democrat party for a generation, which, from my perspective, is greatly to be regretted. I should have thought that we would still have some allies, as we did before the election, along with all the economists who are still saying that this is the wrong action to take.
I must apologise for confusing David Blanchflower and Danny Blanchflower, especially as there is, I understand, a football match going on somewhere at the moment. I am not a great football fan, although I wish England all the best. Unfortunately, Wales has not been in a major competition for about 54 years.
Bob Stewart (Beckenham) (Con)
I just want to announce that the score is one-nil, and it is nearly half-time.
Huw Irranca-Davies
Well done England. Keep it going. I am sure that the hon. Gentleman will join me in wishing the Welsh team all the best in the repeat match against the All Blacks at the weekend.
I do not often get depressed in this place, but I was utterly depressed yesterday as the Budget statement approached, and not for the obvious reasons. First, I was depressed because we were sitting on the Opposition Benches. We will say what we can, and we will do our best to articulate a different vision of the best way forward and the practical measures that should be taken, but the truth is that we are now in opposition. Secondly, I was depressed because the members of the coalition appear to have closed their minds to any alternative argument. If they are right, and if in a year or two I see that my communities have not been damaged disproportionately by the measures that they are proposing, I will acknowledge that. However, I was surprised to note that—as has already been pointed out—the poverty commitment in the Budget extends for only two years.
Huw Irranca-Davies
In a moment.
The previous Government had a long-standing commitment to tackling poverty, and, although they were not succeeding in everything, they were doing a great deal to lift people out of it. That commitment could have been one of the fundamental principles in the Budget even in a time of austerity—a time of “We’re all in it together”—and not just for two years, but for the five years guaranteed by the 55% breakaway option. I hope that the hon. Lady will join me in saying to her Front Benchers, “Come forward with the figures that show that poverty is not going to increase for the five-year life of this Parliament.”
Claire Perry
Thank you very much for giving way, and I am looking forward to hearing what else you have to say. What you have said so far would, however, have much more credibility if you had not represented a Government who tried a different approach for 13 years, with high-falutin’ goals to reduce poverty to help your constituents, and who failed miserably in that. Is the hon. Gentleman truly saying that in his view there should be no cuts—that the broken economic model should roll on as before and that that is the way to repair the economy—or does he have some idea of where the cuts should have fallen?
Madam Deputy Speaker (Dawn Primarolo)
Order. Before the hon. Gentleman replies, may I just say to the hon. Lady, first, that interventions are supposed to be brief—I hope that all Members will take note of that? Secondly, on the use of “you”, may I remind the hon. Lady that her comments are not addressed to me in the Chair? Given that we have been back in the Chamber for quite some time now, I think Members need to come back to addressing each other correctly when putting questions.
Huw Irranca-Davies
My apologies, Madam Deputy Speaker, for not welcoming you to the Chair.
My answer to the hon. Lady’s second question is: absolutely not. None of us can resile from the fact that there will need to be not just efficiencies, but cuts and prioritisation of projects and spending, and that will hurt. My fundamental point, which I shall return to in some detail shortly, is about how we do it and when we do it; the timing of it.
I have to say that I could not disagree more with the hon. Lady’s earlier point, and neither could most of the child charities or the Joseph Rowntree Foundation. [Interruption.] Yes, we have had criticism for not going far enough, but I return to the remarks of the hon. Member for Strangford (Jim Shannon) about child tax credits. They can sometimes be complicated. I sometimes have constituents in my office who say, “Can you help me sort this out, because we have letters going back and forth?” I tell the hon. Member for Devizes (Claire Perry) this, however: none of my constituents would do without them because of the material difference they have made to them.
When I send my children to school, I know that if they come home and say they have a trip to go on and it will cost a fiver, a tenner or £20, I can say to them, “Don’t you worry. I’m on an MP’s salary; it’ll be okay.” I also know, however, that there are constituents of every Member in this House who will have to make the choice between putting groceries on the table and putting that money towards things such as school trips. So when the hon. Lady says this makes no difference, I can honestly say to her, “Go and look at the statistics. Go and look at the numbers of those who have been lifted out of absolute poverty under the previous Government.” If she shares this commitment—as I am sure she does—I tell her to put the pressure on the coalition Government to make it clear before the summer what their poverty targets are, and not for two years, but for five years.
Mr David Evennett (Bexleyheath and Crayford) (Con)
Will the hon. Gentleman give way?
Huw Irranca-Davies
I will make a little progress first, and then give way.
The question that we should be asking is: how does this country get itself out of the recession more quickly and in better shape, rebuilding manufacturing and the private sector, with minimum damage to society—to front-line services and vulnerable people and communities —and also while minimising job losses, because we have been there before? I have not always been an MP. I used to work in the private sector, and I went into lecturing. When I was a lecturer, three types of essay were put in front of me. There were the poor ones, and I would offer constructive advice and say, “You need to do this to get better.” There were the essays that were done very well, and even then I said, “You need to tweak and adjust and do better.” There were also the ones that had misunderstood the question. I noticed in the Budget statement yesterday that the headline issue was dealing with the sovereign debt crisis. That was repeated by the hon. Member for Bournemouth East today when he said that the priority is to ensure our financial status to ensure our credit status. Those things are vital, but surely it is at least equally important to avoid the situations that we had in the 80s and at other times. Measures such as the current proposals lead unnecessarily —this is a judgment issue—to greater unemployment than that mentioned in the Red Book. Such levels of unemployment would lead to greater damage to individuals and communities. I really hope that the Chancellor is correct in his approach and that the Liberal Democrats are supporting the right way forward, but I worry that we have seen this all before.
Let us look at some of the detail. The Government are going to adopt the consumer price index for the uprating of benefits and tax credits from April 2011. The effect will be that benefits and tax credits will diminish and wither year after year. On disability living allowance, the Government will introduce the use of objective medical assessments for all DLA claimants from 2013-14. I am waiting to see the detail on that, because extensive work had already been done by the previous Government on welfare reform, medical assessments and the test. The lack of detail is what worries me. Is this approach about using the stick or the carrot? If it is entirely about using the stick, I guarantee that we will be punishing people who are very vulnerable and who do not have a voice to object. If it is about using the carrot as well—our Government were focused on that and I think that the Secretary of State for Work and Pensions, who was looking into social mobility for the Government, suggested that measures should be more about using the carrot—where are those resources to come from? The worrying thing about this Budget is that we have no detail, and I should like to see that detail as rapidly as possible.
On tax credits, from April 2011, the second income threshold for the family element of child tax credit will reduce from £50,000 to £40,000, and from April 2012, the family element of child tax credit will be withdrawn immediately after the child element. Therefore, it is not just higher-rate taxpayers who will be hit by the measures; working couples could also be hit. The combined salaries of two people on low to middle incomes will take them out of that.
Let me touch on one other aspect of detail—the cost of housing benefit. Yesterday, the Chancellor used one example to illustrate how the system is broken. Various pieces of research could have shown another 100 examples similar to the Chancellor’s, but they would be examples of the extremes. Let me put a concern to the House. What will happen if the policy makes families homeless? What will happen when children are dislocated from their schools or their friends, or when vulnerable families are removed from social care packages and support as they flee to cheaper rent areas? Has any thought whatever been given to the effect of the policy on ghettoisation? Was there any discussion in the run-up to the Budget with organisations that represent the homeless, vulnerable families or children in poverty? I would really like to know that.
Steve Baker (Wycombe) (Con)
I happen to have worked personally with the Centre for Social Justice in the past couple of years, and I know that colleagues there have put enormous effort into all the areas that the hon. Gentleman has just listed. Of course the CSJ is independent, but the Secretary of State for Work and Pensions is now in the Cabinet. The hon. Gentleman should rest assured that the Conservative party has put enormous effort into all those things.
Huw Irranca-Davies
I thank the hon. Gentleman for his reassurance, but I will be reassured when I see the detail. I will be reassured when I see that this policy will not have the impacts that I have just laid out. We are privileged to be here and to be able to speak up for people. Let us speak up, as I am sure he would want to do, for those who could be disadvantaged by the unforeseen consequences of this response to Daily Mail headlines.
“Ending payments like the health and pregnancy grant and slashing child tax credits at a £40,000 joint income threshold is going to put pressure on families already struggling.”
Those are not my words, but those of Bob Reitemeier, the chief executive of the Children’s Society. He added:
“We are also concerned about the amount to be clawed back from the welfare bill over the next five years as the chancellor aims to find savings of £40 billion.”
Gingerbread, the charity for single parents, has said that families having a second child could be worse off by up to £1,200 a year. Chief executive Fiona Weir said:
“Having a baby puts the family finances under pressure. These cuts will really hit families with young children hard.”
The concerns are not mine alone, therefore, and I am genuinely not indulging in party politics. I will say well done to the Government if their proposals are right and they work, but my real fear is that they are acting prematurely and going in too hard, when there are alternatives that are not being considered and which I shall turn to now.
The Chancellor and the Business Secretary regularly cite the examples of Canada and Sweden when it comes to cutting deficits. However, I shall repeat until I am blue in the face that both countries acted against a backdrop of strong economic growth in their export markets. Unless I have missed something, that is not available to countries in Europe, or the eurozone.
Other positive elements in the case of Canada and Sweden were currency devaluation and the active use of monetary policy. However, in the first case we have been there and done that already with sterling and, in the second, hon. Members will know that our base rate is already low.
Without those three little helpers—those three legs of the stool—we do not get the economic support or growth that, under the plans being put forward by the coalition Government, are essential if we are to mitigate the worst excesses of the proposed cuts, beyond the Red Book. What we do get is all the pain of savage cuts, and absolutely none of the gain. That will go on for years.
In fact—I hate to say this, but I am not alone in doing so—we could well go backwards. If, in a year, we are slipping backwards or limping along like some invalid at the bottom of an economic cycle, it will not be because people such as me failed to stand up and make the opposing case. It is important that someone does that, alongside the economists outside the House.
Jacob Rees-Mogg
I am grateful to the hon. Gentleman for giving way, but I do not quite understand his logic. Two of the three legs of the stool to which he refers—the loose monetary policy and the devaluation—remain in place, to the benefit of British industry. It is only the third leg that is absent.
Huw Irranca-Davies
Indeed. Those two legs have been put in place already, but Sweden and Canada actively used both of them during the period of the cuts in order to make the cuts work. We can no longer do that, and we certainly do not have economic growth.
I put that to the Chancellor in this Chamber on two occasions last week. On the first, he dealt with what I said as a purely party-political matter, and swatted me down. I understand: we do that in this place. On the second occasion, however, he did not have an answer, saying merely that this was a matter of judgment—and that is what I am worried about.
This is a very important issue. All our funding for health, education, social services, local authorities, transport, and the attack on poverty is entirely dependent on one big macro-decision about how we go forward from this recession. If the coalition Government are right, I say good luck to them: they will get my praise in one, two, or five years. However, if they are wrong—and no one on the coalition Benches is willing to accept that there is even a scintilla of a possibility that they could be wrong—they must recognise that some people told them so in advance, and with good reason.
The scenario may have been different in the 1980s, but we saw the effect that the approach adopted by the Government had then. We saw it in a very personal way, as friends who used to have jobs became unemployed. They would knock on our doors asking to clean windows or do other odd jobs just to make ends meet. We knew what was happening, because our children went to the same schools, and that is why I ask the Government please to accept that there is an alternative.
What do others say? Economic commentators such as Will Hutton, Paul Krugman and David Blanchflower have all pointed out that the proposed cuts are about twice as extreme as those undertaken in Canada and threaten the recovery. The cuts seem to be motivated not by a good examination of the alternatives, but by ideology.
I return to my opening comments to the hon. Member for Bournemouth East. The Financial Times suggests that the emergency Budget will affect Wales—my home patch—disproportionately. I know that. As many as 50,000 to 60,000 jobs could be lost in the public sector, but that is not all. The knock-on effect of the loss of between 50,000 and 60,000 public sector jobs, in my constituency or in that of my hon. Friend the Member for Pontypridd (Owen Smith), will be the loss of jobs in the private sector and the loss of retail confidence. High street shops will go and the bottom will be knocked out of our communities. Unemployment, and regional inequality, will grow and grow.
Will Hutton points out:
“No country has ever volunteered such austerity. It is as tough a package of retrenchment as the IMF imposed on Greece, a country on the brink of bankruptcy.”
He noted that it took Sweden three times as long to carry out the same level of cuts as the UK coalition Government want to impose.
The economist David Blanchflower noted that the effects of the Budget will hit young people disproportionately, and that a double-dip recession is almost inevitable. A double-dip recession is the spectre in the room—a Government Member urged us not to use that phrase but it would be remiss of me not to mention it. Of the forthcoming comprehensive spending review, David Blanchflower says:
“If the young are first, I fully expect the disabled, the old and the weak to be the next target.”
There is an alternative way forward and I genuinely ask the Government to consider it. Will they also consider a new version of the Tobin tax, or Robin Hood tax—much derided for many years? It is good to see a bank levy, but it could have been more ambitious. An open letter to the Chancellor was signed by many Members, including our Green party representative, the hon. Member for Brighton, Pavilion (Caroline Lucas), Welsh MPs, cross-party civic organisations, Save the Children Wales, Christian Aid Wales, the secretary of the Public and Commercial Services Union Wales, the National Association of Probation Officers Wales and GMB Wales. It states:
“We are pleased that you support a bank tax, but a truly ambitious bank tax would mean those with the broadest shoulders bear the brunt of the cost of the economic recovery, whereas a rise in Value Added Tax or premature cuts to public services would hit the poorest hardest.”
That letter was genuinely cross-party. Some of the greatest advocates of that approach sat in the Liberal Democrat camp on the Opposition Benches, and we tried very hard to get a signature from a Welsh Liberal Democrat. It seems that the lines about premature cuts are now out of date.
I say to the Government, please be right. We often pull at the emotional heartstrings about the 1980s, but if the Budget damages my communities as I think it will, when there is an alternative, I shall certainly never forget or forgive, and nor will my communities, because we have seen it all before. I hope we are not seeing old-style 1980s Tory cuts. I hope that the measures that the coalition Government say will mitigate the worst excesses for the lowest deciles and quintiles are well judged, but I fear they are not. Why are the coalition Government not even considering an alternative way forward that minimises the risks to communities such as mine?
Geoffrey Clifton-Brown (The Cotswolds) (Con)
It is a privilege to make my first speech in this Parliament and to do so from the Government Benches. May I congratulate you, Madam Deputy Speaker, on your election? It is great to see you in the Chair. I also congratulate my hon. Friend the Member for Harrogate and Knaresborough (Andrew Jones) on a splendid maiden speech. He will obviously go on to represent his constituents with great poise and ability.
I should like to pay tribute to my new right hon. Friend the Secretary of State for Business, Innovation and Skills. Far from being the damascene conversion that Opposition Members have mentioned, his ability to meet the top officials in the Treasury and the Bank of England, study the evidence and conclude that he had been wrong in his assessment of how quickly we need to deal with the deficit shows a man of huge stature, to be honest. It is incredible that the shadow Chancellor, who must have been in possession of the same advice, came to a completely different conclusion.
Today’s debate has been fairly predictable, and I am certain that if Opposition Members were true to themselves they would say that they know perfectly well that, if they had been elected—God forbid—as the Government of this country, they would have had to take some pretty severe measures to deal with the deficit that we have inherited. I pay tribute to the coalition Government, frankly, for being as brave as they have been. This is an austere and difficult Budget, and every person—rich or poor—in the country will take pain. There is no getting away from that.
Owen Smith
Does the hon. Gentleman think that the volte-face performed by the Secretary of State for Business, Innovation and Skills reflects perhaps more on his inconsistency and shifting values, as opposed to the position adopted by Labour Front Benchers that has been consistent either side of the election?
Geoffrey Clifton-Brown
I rather wish that I had not given way for that intervention, but, frankly, it says more about the hon. Gentleman than about the Secretary of State for Business, Innovation and Skills, whom I regard as having the greater stature because of what he has done.
I am amazed that the shadow Chancellor can conclude that severe action did not need to be taken to deal with our deficit. If we had not begun to take such action, the international markets would have taken the lead. Spot interest rates and bond rates would rise sharply. The cost of financing the huge deficit that we inherited would rise substantially. Business failures would accelerate. Unemployment would rise. Ultimately, by not taking the action that we have taken, we would return to recession. I completely take the opposite view from that of Opposition Members, who have said that we do not need to deal with deficit in the way we have now done.
Those siren voices of the Opposition would have led us into greater trouble than we are in now. What we see from the Opposition is a legacy where the gap between the rich and the poor grew in their 13 years in government. I would be bitterly disappointed if the Government’s actions do not lead to the economy being immeasurably stronger in five years’ time. We can then start to reduce that gap and put money into poor communities, exactly as the hon. Member for Ogmore (Huw Irranca-Davies) wants us to do, so that we can start to benefit some of the poorest people in society.
It was a huge tribute to the Chancellor that he said time after time yesterday that he wanted to bring the bottom of this country nearer to the top, with some of the measures that underlie the Budget—for example, how he will deal with the state pension. Opposition Members had 13 years to deal with the state pension. More than 1 million pensioners had to go grovelling to the Government and to fill in huge forms to get pension credit. We have now promised that everyone will receive a pension increase linked to earnings, prices or 2.5%, whichever is higher. That is real promise. Pensioners can now look forward to receiving at least a 2.5% increase from 2011.
Angela Smith
I remind the hon. Gentleman that the Labour Government legislated to make the link between pensions and earnings possible in 2008, and that we were timetabled to introduce that in 2012. Will he confirm his Government’s intention to pay the winter fuel allowance next year at the same level as we paid it to our pensioners last year?
Geoffrey Clifton-Brown
I remind the hon. Lady that the Labour party won the election in 1997. The Labour Government had between 1997 and 2008 to do something about that, but meanwhile more than 1 million pensioners had to go through means-testing and fill out huge forms to get pension credit. A considerable number did not want to claim the credit, because they were too proud to do so, and they therefore lived in poverty. In the first few weeks of this new Government, pensioners have got a better deal than at any point under the 13 years of the previous Labour Government.
Gordon Birtwistle (Burnley) (LD)
Does the hon. Gentleman agree that the Labour Government’s 75p increase for pensioners a number of years ago, which was reduced to 50p after tax, was an insult not only to pensioners, but to the people of this country, which is supposed to be one of the modern countries of the world?
Geoffrey Clifton-Brown
I entirely agree with my hon. Friend. Many pensioners have told me exactly that—that it was an insult—so I hope that we can move away from treating our elderly people in such a way. As I have said before in the House—I remember raising this point with the then right hon. Member for Sedgefield during Prime Minister’s questions—the way in which a society treats its elderly people is a mark of that society’s civilisation. I hope that we will treat our elderly people with respect.
In an excellent, sober speech, my hon. Friend the Member for Caithness, Sutherland and Easter Ross (John Thurso) put his finger on an interesting yet under-mentioned aspect of our economic problems. It is demonstrated by the table on page 7 of the Red Book, which shows that private debt has doubled in the past 13 years. It is, of course, up to members of households to make their personal decisions, but it is also up to the Government of the day to regulate the totality of private debt. The level of private debt has become unsustainable, something on which I often chased the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) in Budget debates. As the Red Book shows, the savings ratio was lower by the end of the Labour Government than at any time since the 1950s. It is incumbent on any Government of the day not only to encourage savings, but to ensure that the savings culture exists in a stable regime in which inflation is not completely out of control. If we did not take the action outlined in the Budget, interest rates would rise, thus putting inflationary pressure on the economy.
Mark Durkan
Given the hon. Gentleman’s concern to ensure that the Government always encourage a strong savings culture, what does he think will be the impact of removing child trust funds and abandoning the saving gateway?
Geoffrey Clifton-Brown
No Government would willingly take such action, as my hon. Friend the Member for Caithness, Sutherland and Easter Ross said. My right hon. Friend the Chancellor had to set out a host of tough choices yesterday, but I do not think that the Budget was ideological. The hon. Gentleman has to be honest with himself when he thinks about ways to deal with the deficit. We should not underestimate the scale of the problem. This year’s public sector net borrowing requirement of £149 billion is almost the equivalent of the combined budget for health and education. The scale of the deficit explains why my right hon. Friend the Chancellor had to make really difficult and brave decisions, but by taking such action now, I hope that we will be able to return to a situation in which we can start to help some of the poorest and most vulnerable people in our society, which is what any responsible Government ought to be about.
We will get out of this mess by promoting growth in the private sector and rebalancing our economy. We need to get Britain innovating and making things, and to sell our goods and services to the rest of the world. All the calculations in the Budget are predicated on a rate of growth, and it is the private sector that will deliver that growth. By taking the right measures in the Budget and concentrating on the right things, we might be able to exceed the growth targets set out by my right hon. Friend the Chancellor yesterday. Labour Chancellors have been pretty bad at forecasting growth rates. My right hon. Friend, in line with the Office for Budget Responsibility, has given very prudent forecasts of growth rates. I sincerely hope that we will be able to exceed those forecasts.
Until the election, I served as the shadow Minister for international trade and development, and I know that the actions of the Chancellor in supporting exporters will be critical to how our country moves forward in the coming months and years. After all, in the years from 1996 to 2004, firms that were new to exporting achieved, on average, a 34% increase in productivity in their year of entry—the very fact of their going into exporting made them increase their productivity—and 60% of the UK’s productivity growth was attributable to exporting firms. It is therefore welcome that the Chancellor mentioned exports twice in his speech yesterday.
UK Trade & Investment is the Government’s arm that encourages exports and foreign direct investment. Its chief executive, Andrew Cahn, worked under seven different Trade Ministers in the previous Government. I hope that we will not have that revolving door in the present Government and that we will have consistency of Ministers, who will be able to look at our exports problem and achieve considerable improvement. In the years of Labour Government, UKTI’s budget was cut consistently.
Manufacturing accounts for more than half of our country’s exports. Labour Members will not like the figures I give, but they are absolutely true. In 1997, manufacturing employed 4.19 million people, but by December 2009, under Labour’s stewardship, that number had fallen to only 2.592 million. In other words, there had been a significant decline in the number of people employed in the manufacturing sector. That happened despite the value of sterling falling 24% between July 2007 and the present day. Perhaps one of the most devastating of figures pertaining to the period of Labour stewardship is on our trade deficit in goods, which has increased from £3.1 billion to more than £21 billion.
If Labour Members want to know the reason why we had our longest and deepest recession of our post-war history, it is that the Labour Government failed to support sectors of our economy that provide sustainable economic growth. If we are to exit the grips of recession, cushion the impact of austerity and have a sustainable future, exporters will be the engine room and will need to be given priority in the Chancellor’s thoughts and, indeed, across all Departments.
In his Budget statement, the Chancellor said that departmental budgets will be set out in the spending review later this year—quite rightly, he set a date for that of 20 October—with an average real reduction for unprotected Departments of 20%. Let me say to my right hon. Friend the Chancellor and my hon. Friend the Economic Secretary, who is on the Treasury Bench, that UKTI—our trade promotion body—is a rare thing: it is one of the few parts of Government that actually makes this country money. To meet the challenges of the future, to provide adequate support for our exporters and to attract FDI into this country, its budget must be protected, so that it can continue to support private sector growth and job creation in the UK.
We must also recognise that real reforms are needed to how we support our exporters and attract FDI to adapt to an ever-changing global marketplace. Those changes cannot be made without the correct budgetary support for UKTI, but the rewards for successful implementation are there. We appreciate the opportunities presented to us by having Europe on our doorstep and through our close relationship with north America. Currently, 70% of our exports go to the traditional developed markets of north America and the EU, but the financial support available for firms seeking to export to the wider and increasingly accessible world beyond that must be maintained, because estimates suggest that, by 2020, the EU and USA share of global gross domestic product will have declined to less than 40%. As was correctly identified—I tried to intervene on the shadow Chancellor—we have turbulence in our European markets and EU growth is expected to be sluggish for some time. That is why it is important that we pay due attention to rapidly expanding global markets elsewhere, which cost proportionately more to service than the easier markets of Europe and north America.
We must be proactive, not reactive. British firms must be backed to head for the second-tier cities in larger markets such as India and China. They must also look for unrealised potential in other countries first, before our competitors have won all the contracts. I looked at that problem around the world, and I found country after country where there was huge potential. The British were welcomed, our business men went out there and expressed interest, but somehow it was the Japanese, the Germans, the Americans and the Chinese who popped in and got the contracts. We must provide better support for our companies.
We must benchmark the performance of UKTI against the best of other countries, so that our trade efforts match or exceed those of our competitors. With our overseas network of embassies, we have a fantastic platform for developing British business, and we cannot afford to let departmental cuts affect their work. We need a widely respected senior figure—a FTSE ex-chairman —to go out banging the drum for the UK, selling the country around the world, and consistently to visit those markets to build up contracts.
Nationally, we must concentrate our efforts away from the regional structure introduced by the previous Government. What nonsense that was. Different regional assemblies had offices in the same city, such as Shanghai or Mumbai, all competing with one another for the same business. What a waste of taxpayers’ money, and what confusion it caused to those countries in which they were located.
Claire Perry
I am interested in my hon. Friend’s important proposal for a roving ambassador for British business. Does he agree that there might be potential to retread Sir Digby Jones in that role, particularly as he said yesterday after the Budget:
“I think that sign has gone up around the world saying that Britain is serious about sorting out its economic mess”?
Geoffrey Clifton-Brown
I am grateful to my hon. Friend. I know that she was upbraided by Mr Deputy Speaker a little while ago—it takes a long time to sort out parliamentary language, and references to “you” and the “hon. Gentleman”. She is absolutely right. I was modelling my remarks exactly on Digby Jones, who did a huge amount of work for this country, and spent an enormous amount of time travelling around the world. He had great, in-depth knowledge of huge sections of industry, having served as chairman of the CBI. We need to appoint someone of that calibre, who has the time, energy and availability to be able to do precisely that job.
As I said, the notion that RDAs should have offices around the world competing with one another led to a huge dilution of the UK brand. It caused confusion in the country in which they were located, and it did not serve our interests of attracting foreign direct investment to this country. I have no doubt that Ministers will abolish that structure rapidly, thereby producing much better results. I welcome the proposals for local enterprise partnerships, which are a huge step forward. We can help the private sector by not having a stratified structure of RDAs across the country. We need different structures in different parts of the country, to deal with the problems in each area. We must concentrate Government advice on business sectors, rather than on regions. It was complete nonsense that the Government’s car adviser was based in the north-east, unable to give advice to car manufacturers and component suppliers in Birmingham. We must concentrate on sectors, so that the automotive sector, for example, has a proper advice team in the Department for Business, Innovation and Skills.
We must try to support those sectors that the UK is good at, and see how we can improve their export structure. I say this with hesitation at the moment, but our oil sector was respected throughout the world. Our pharmaceuticals, defence and financial services sectors were respected throughout the world, too, and in line with Sir James Dyson’s recommendations, we must aim to become the No.1 high-tech exporter in Europe. We will do that by concentrating on the new, high-growth market sectors, such as those involving low-carbon and green technologies. Those are the industries of the future, and we ought to concentrate on them. We must also ensure that our universities and their basic research are world-beating, and that companies have the incentive to develop those world-beating ideas into products and services that we can sell in greater and greater quantities throughout the world.
Angela Smith
I appreciate what the hon. Gentleman says about the potential of our export and manufacturing sectors, but does he support nuclear power, nuclear energy and the supply of components to the nuclear energy industry as one of those sectors that are important for our future?
Geoffrey Clifton-Brown
I am very grateful for that intervention. I have always been a supporter of nuclear power, and I am one of the very few Members who have been to Chernobyl and survived, so I can see what goes wrong in the nuclear sector. However, with modern technology—I say this carefully—I can see that the nuclear sector has an important role to play in the range and mix of our power generation.
The Labour Government left us with another really dire legacy, however, because if we do not introduce nuclear power generation to this country I do not see how we can keep the lights going in the next 20 years—[Interruption.] The Liberal Democrats had different views, but they have looked at the problem and signed up to a nuclear power programme, and I congratulate them on that, because it is the right thing to do. We in this House should not come up with ideological dogma; we should all look at the facts and see what is the correct thing to do, which is—[Interruption.] It is all very well the hon. Member for Penistone and Stocksbridge (Angela Smith) pointing at the Liberal Democrats, but we in the Conservative party have had to swallow things that we do not like. We have looked at the facts and seen the correct thing to do. Therefore, I support nuclear power.
John Thurso
My hon. Friend will know of my long-term support for nuclear power, which I expressed often in the House in previous Parliaments. However, the critical thing is to be in favour not of nuclear power, but of a proper engineering and scientific-based assessment of how to ensure the lowest carbon energy, and if that leads us to nuclear, that is the correct answer.
Geoffrey Clifton-Brown
As always, my hon. Friend’s wise words are correct. Nuclear power is not only an efficient way of generating energy, but a clean way. We have to use the very latest technology to deal with the nuclear waste that is produced, but I am absolutely certain that if we adopt an open mind and let our scientists get to work, we will find better and better ways of dealing with the waste that nuclear power stations produce. I welcome my hon. Friend’s support on that.
Innovation and exports are just beginning to return, and I am sure that hon. Members from all parts, if they have listened to businesses in their constituencies, will have had that experience. I have a wonderful firm in my constituency, a small FTSE company called Renishaw. It is the world-beater in measuring technology—metrology—but unfortunately it had to lay off several hundred people during the worst of the recession. I am pleased to report to the House, however, that in the past month or so it has begun to re-employ people. That is good news, because we must all work hard on measures with regard to how we employ the maximum number of people in this country. There is nothing worse than people who want to work but are unemployed—and unemployed through no fault of their own. We should concentrate on the terrible figures for 16 to 25-year-olds not in education, employment or training—the so-called NEETs—who are without jobs at the moment, because we have inherited a shocking waste of young talent.
Dr Eilidh Whiteford (Banff and Buchan) (SNP)
In fact, in the 1980s youth unemployment was far higher than it is now. I share the hon. Gentleman’s concern that youth unemployment is a major challenge, but when I look around my own constituency at people who have never worked, they are almost all people who found themselves as young unemployed people 20 or 25 years ago. That is the real problem, and words are not enough—we need to find solutions.
Geoffrey Clifton-Brown
I think, without knowing the hon. Lady’s constituency backwards, that there are particular factors in her part of the United Kingdom as to why there was that rise in youth unemployment. We can argue about what happened 20, 30 or 40 years ago, but that is almost irrelevant. I am concerned about what the situation is today and what my right hon. and hon. Friends are going to do to deal with it, and I think that they have got some interesting and innovative ideas .
I have another example of a small company. It exports 300 sidecars a year to the Japanese market. We have heard about how difficult the Japanese market is. At our very best, our small and medium-sized, and even our large companies, are very innovative and very good at getting out there and exporting into some of the most difficult markets in the world. They just need a little more support, and then we can get more businesses exporting to the rest of the world. Chatham House recently reported that
“a combination of services and high end manufacturing places Britain in a strong position to meet the needs of the world’s emerging economies in ways that will enable it to sustain its strong comparative advantage”.
It is the small and medium-sized firms that will lead us out of recession. It is the private sector that will compensate for the jobs that are lost in the public sector. It is the private sector to which we must give the right climate and right environment, and then it will thrive.
We have not only the right fiscal environment, but the right environment for dealing with bureaucracy and reducing the amount of burdens that Government place on the private sector. We must give it the right incentive to export and the right tools to do the job. I believe that this Government will lead us out of recession and that we will have a very much stronger economy in four or five years. I look forward to holding the hon. Member for Ogmore to his word. When we have a stronger economy, and when we start helping the most vulnerable in our society, I expect an apology from him.
Angela Smith (Penistone and Stocksbridge) (Lab)
May I join those who have congratulated you on your election, Madam Deputy Speaker? If I may give the House an update on the score in the England match, it is still 1-0. I think it is no coincidence that I am surrounded by an unusually large number of Welsh and Scottish colleagues. Thank you, Madam Deputy Speaker, for allowing me to speak in this important Budget debate—the most important in more than 30 years.
Thirty years ago, in 1979, I was a young slip of a thing—only 17 or 18 years old—and I remember what I saw in the following years. I am not going to have a go at the record of the previous Tory Government, so those on the Government Benches can settle down. In areas such as South Yorkshire and northern Lincolnshire, we saw huge devastation of our economies. Those of us who know the Don valley—I know that the Economic Secretary knows it very well—from its origins up in the north of Sheffield and in Barnsley through to Doncaster will remember the devastation of that lunar landscape: that is the only term that could have been used at one point to describe the lower Don valley. We saw the flattening of Hatfield, where now we have the Meadowhall shopping centre, and the devastation—as in the valleys of Wales—caused to other south Yorkshire valleys such as the Dearne valley. Where there were the pits of Manvers, Wath and Cortonwood, we now have a Morrisons supermarket and a retail centre.
I well remember all that. I remember, too, the work that we have done since then to try to repair the damage. We have tried to diversify our economies in the north of England—in places such as south Yorkshire and northern Lincolnshire. To some extent we have succeeded. We have biosciences, sport and leisure, and retail—and we still have advanced manufacturing.
We were making progress, albeit very slowly, on reducing the gap in economic growth and prosperity between London and the south-east and places such as Yorkshire and the Humber, but what is happening now poses a new threat to our economy in the north. If we suffer significant damage yet again because of a return to recession, the fear is that that damage will be permanent and irreparable, and that we will be unable to move forward as we had previously hoped without even more funding—significant funding—from Government and Europe. That is the context to today’s debate. I agree with my hon. Friend the Member for Ogmore (Huw Irranca-Davies) that the impact of the Budget on individuals and communities must be at the forefront of our minds.
Unfortunately, the Budget is a wasted opportunity to help the British economy on the road to recovery. Instead of investment and the promise of future jobs, we have a Budget of cuts for the poorest and regressive tax increases—a Budget that risks our future. The race to austerity that the Government seem determined to follow belongs to a lesser-known branch of economics called ignorance economics, as Leslie Budd of the Open university calls it. As he correctly points out, although it is sensible to cut waste, the slashing of spending can do much more harm than good. That is what the Budget, with its massive cuts to public spending, will do.
Unprotected Departments could have real-terms cuts of 25% over the next four years. The key question is this: how many nurses, police officers, teachers and other civil servants will be thrown on to the scrap heap in the years and months to come? How fair is it that one of the significant cuts in the local government budget will be in the area-based grant? Sheffield Hallam is one of the richest constituencies in the country, and Sheffield Brightside one of the poorest. The gap has decreased in the past 13 years, but there is still a 14-year difference in life expectancy between those constituencies. The abolition of the area-based grant will hit Brightside, but it will not hit Hallam in any way at all. How can that be fair?
The pupil premium has been promised, but we are hearing that it will be based on the abolition of additional educational needs funding and vulnerable children’s grants. If we roll that funding up into a pupil premium, will it be distributed fairly, or will more of it go to the south of England at the expense of the north?
Although I welcome, and offer my support for, the increase in personal allowances from next April, it will be more than wiped out by the regressive increase in VAT to 20% from January next year. There is no rise in the personal allowances for over-65s, which will disappoint many of my older constituents—indeed, I received an e-mail on that subject just this morning. That gives the lie to the argument that the Budget is all about fairness. Although the confirmation of Labour’s policy of linking the state pension to average earnings is welcome—it builds on policies developed by the Labour Government—not increasing the personal allowance for pensioners in line with those for everyone else is just wrong.
It is obvious that the Prime Minister’s words before the election—never mind the Deputy Prime Minister’s words—that he had no plans for an increase in VAT were as worthless as similar words spoken back in 1979. I remember very clearly that in 1979 the Conservatives said they would not double VAT. The first thing they did on coming into office was increasing VAT from 8% to 15%. That was not quite double, but it might as well have been.
When there is a need to maintain demand in the economy, the Budget risks squeezing demand and creating a double-dip recession, which could be worse than the one that we recently experienced. Let us get rid of the myth that the public sector is bad and that only the private sector can get the economy growing again. The balance has to be right, as we in south Yorkshire know better than others; we know it all too well. However, the two sectors are interlinked. Private companies benefit from Government investment, which is why we brought forward the capital projects—to keep the economy moving and to keep construction workers in work. Ensuring that the private sector works with the public sector can give us growth.
Let us also demolish the myth that only by putting forward austerity measures will we see growth in the economy. The lessons of the 1930s show that not to be true. Although the 1929 crash dealt a massive blow to the global economy, it was the neo-liberal austerity budgets that followed that led to a vicious decline in international economic activity, leading to protectionism, a collapse in world trade and depression. My fear—it is shared, I think, by every Opposition Member—is that that is exactly where we will go. We have seen austerity measures introduced not just by the UK, but by Germany, Greece, Italy and Spain. The House ought to think carefully before going down that path. It was only after the new deal in America that growth started to return in the 1930s. Sadly, Government Members do not seem able to learn the lessons of that period in our history.
The current rhetoric from Government Members is, “Look at what Canada did!” It has been mentioned already by Labour Members that Canada’s actions in the 1990s to wipe out its sovereign debt were taken in a completely different context. Canada was able to reduce interest rates quickly, and had a route for its exports in a booming US economy, because the value of the Canadian dollar was allowed to fall. Interestingly, Canada once again has a large public debt and is not considering the reckless action that the Government are pursuing. Those options are not sensible or credible in the current situation.
Let us also bury the myth about Greece. The UK is not in the same position as Greece. In 300 years of national debt, the UK has never defaulted on its sovereign debt. The UK’s debt has a long time to run, with an average of 14 years to maturity—twice as long as most other European countries—which means that the UK needs to finance much less of its debt in any given year and, therefore, is much less sensitive to rising interest rates.
We hear from the Liberal Democrats that fairness is important, and yet they now say that it is right that public sector workers should see real cuts in wages, while capital gains tax rises by only 10% for higher rate taxpayers. They also say now that VAT should rise to 20%, which they once said would be totally unfair on the poor. The Liberal Democrat way now is that it is right to cut benefits by £11 billion for the poorest in our society. Where is the fairness in that? Members can use as many words as they like and whatever sophistry they like, but they will not persuade the British people of the credibility of their position if they say one thing one minute, and another thing the next, just because they have taken the reins of power.
Where is the fairness in freezing child benefit for the next three years—a benefit that is often the only one paid directly to women and mothers? When that is coupled with the reduction in tax credits, many of my constituents will see that this is not a fair Budget. It is a regressive Budget that I believe will get the reception is deserves.
Gordon Birtwistle
Does the hon. Lady agree that if the interest payments on our existing loans, which are approaching £40 billion a year, were half that amount, we would not be in our present situation, and we would be able to spend the money on the things that she is now suggesting?
Angela Smith
As I think I said earlier, equating the national economy to a household budget has already been declared by many respected economists to be ignorance economics. It has been discredited by respected economists throughout the world, including economists of the centre right in the United States who recognise the lessons of the 1930s and recognise that we need investment and public spending to bring back growth and jobs.
However, the question is whether the Budget is needed. According to the new body set up by the Government—the Office for Budget Responsibility, which I think we all support—the economy is in growth. OBR statements make it clear that the previous Government’s spending plans were credible and would have reduced the deficit gradually, over a four-year period. I believe, as I think everyone on the Labour Benches believes, that that was a sensible course forward. Therefore, it has to be said that the reason why the Government are pursuing this path is ideological dogma. They are cutting for the sake of cutting, in an ideological drive towards the small state. The language of the TaxPayers Alliance is alive and well in the corridors of power, but it is cloaked in the language of “Needs must”.
The prospect of a race to austerity is so worrying that President Obama’s Administration in the US have felt it necessary to write to the leaders of the G20 countries urging them to continue with the economic stimulus—something with which, as I have mentioned, many economists agree. Although the help for new start-up companies in the regions and the creation of regional development funds are welcome, those measures will be more than offset by the run-down of the regional development agencies, such as Yorkshire Forward, and the loss of no doubt thousands of public sector jobs. It has been said today in the Financial Times, but let me put it on the record, that the overall impact of the Budget, contrary to statements made yesterday, will be a 60% reduction in capital investment by the Government by 2016.
Let us not think for a minute that this is a Budget for investment. The Government have fallen at the first hurdle on that idea. With the £80 million loan to Sheffield Forgemasters, they had the chance to show that they were interested in investing in growth and exports, in state-of-the-art technologies and in UK manufacturing. However, they chose not to do that. The loan would have earned a 3.5% interest rate, and would have involved Westinghouse taking a stake in the company and giving a guarantee of forward orders. It would also have transformed Forgemasters into a major player in the nuclear castings sector. The loan was secured against the company and would have been part of a total package worth around £140 million, with £80 million from the Government on a loan basis.
That would have meant £140 million for Sheffield and UK manufacturing, allowing for the purchase of a 15,000-tonne press capable of making the pressure vessels at the centre of a nuclear power plant. To put things into perspective, the only other company in the world currently making forgings of a sufficient size for the international market is Japan Steel Works, which has recently tripled its capacity in order to make 10 pressure vessels a year. However, 11 new nuclear power stations were commissioned around the world last year, and the pace is accelerating, with 55 reactors in planning at the end of 2009 and more than 30 licence applications under active discussion in the US. Not only that, but with only one company in South Korea and two companies in China now intending to enter the business of making such forgings, any future project for building new nuclear power stations in the UK will have to import pressure vessels.
As my right hon. Friend the Member for South Shields (David Miliband) said last week on hearing the announcements, the champagne corks will indeed be popping in Japan and South Korea. The investment was not, as the Deputy Prime Minister would have us believe, set up in the dying days of the previous Government. I would testify anywhere, in any court in the land, that those negotiations had been going on for more than two and a half years, and they went through the most rigorous scrutiny possible. The scheme would not only have given value for money; it would have been of major strategic importance to the economic future of advanced manufacturing in the UK. Again as my right hon. Friend said, pulling the plug on that loan is a piece of gratuitous economic vandalism—but then again, what should one expect from a Tory party that almost completely destroyed steel making in south Yorkshire in the 1980s?
We heard a lot in the previous speech, by the hon. Member for The Cotswolds (Geoffrey Clifton-Brown), about the importance to the economy of an export-led recovery. I completely agree with what he said, so why did his Government not put the money into Sheffield Forgemasters, as that was all about exports, the future of UK manufacturing and the rebalancing of the UK economy? They turned down the chance to help this economy to recover. They failed the challenge on grounds of—[Interruption.] Well, tell me what the grounds were—ideology, dogma, pressure from Sheffield Forgemasters’ competitors to say no? We would like to hear about them.
If this is an example of the Government’s investment strategy, we should all be worried. For a relatively small loan that carried a commercial rate of interest, the UK would have had a company capable of being at the forefront of the supply chain for the nuclear power industry. It would have created jobs not only in south Yorkshire, but throughout the country. It would have led to high-value exports and secured the future of high-value steelmaking in the UK. Crucially, I know from working with Corus, Forgemasters and Fox Wire in my constituency how important it is for UK steel to stay ahead of the game when it comes to skills and advanced technologies. We cannot compete with China and the rest of the Asian economy on low-value steel casting and steel forging, yet we are giving that advantage to our foreign competitors.
It is also of interest to note that on the day the plug was pulled on the Forgemasters loan, the Department for Business, Innovation and Skills confirmed the building of a research ship for £75 million. There is nothing wrong with that investment, and I will support it, but the ship will be built in Spain because there are no longer any British yards capable of building it. The Tory Government of the 1980s decided that investment in shipbuilding was a waste of resources.
We should add to all this the fact that this Government have pulled the future jobs fund and slashed university places by 10,000. The hon. Member for Bournemouth East (Mr Ellwood) mentioned earlier that he had a relatively elderly constituency. Well, I have a lot of young people in my constituency, and they are worried about whether they will get the places they are looking for in the university system over the next five years or so.
David Morris (Morecambe and Lunesdale) (Con)
We are having a history lesson in here, but I think you would agree with me that every time there have been cuts like those in yesterday’s Budget, they have always been on the back of a Labour Government who have brought the country to its knees. I originate from an area similar to your constituency, and I lived in a community that was depleted by the miners’ strike. I saw exactly what it did to my community, but what has to be addressed here is the fact that that was then, but this is now. This country is on its knees as a result of the Labour Administration. You are in complete denial that this has happened. It has taken a coalition Government with a Conservative Prime Minister to try to put some equilibrium back into the country and into the politics of this House.
Madam Deputy Speaker
Order. I want to be helpful to the Chamber by explaining that when hon. Members make their contributions, they address the Chair. When hon. Members say “you”, they mean the occupant of Chair—and according to parliamentary convention, the Chair should not be blamed for everything. Also, interventions should be brief.
Angela Smith
Thank you, Madam Deputy Speaker. All that I would say about the hon. Gentleman’s intervention is that the recession was caused by the collapse of the global economy, and principally by the bankers. If the hon. Gentleman would like to come and have a look at the ex-mining and ex-steelworking areas of my constituency, I could show him how much progress was being made in repairing the damage and how much that repair is now at risk because of the policies pursued by this Government.
I fear the worst for the young of our country. The 1980s saw the creation of a lost generation, and we are still feeling the effects. I believe this coalition will create yet another lost generation. I fear for the poor, the sick, the unemployed, the elderly and the hard-working public sector. Now we are getting to know just what the “big society” is all about. It is about an ideological drive towards a US-style small state; it is about people being left on their own; it is about the poor and the disadvantaged being left to help themselves; it is a return to the days we thought had been left far behind when the previous Tory Government left office. The only surprise is that this time they are being aided and abetted by the Lib Dems. That just goes to show that, as we have always suspected in south Yorkshire, the Lib Dems are yellow Tories at heart.
Increasingly, when I look at the Lib Dems in government, I am reminded of George Orwell’s “Animal Farm”. The pigs, led by Napoleon, campaign for an overthrow of the old politics on the farm. Gradually, however, the pigs morph into the humans they once despised, and their slogan of “Four legs good, two legs bad” changes to “Four legs good, two legs better”. In Sheffield, we are all aware that our Napoleon has started walking on two legs. The Deputy Prime Minister is a Tory in all but name, and we fear the consequences of his betrayal for our economy, both regionally and nationally. He should hang his head in shame.
Mr David Evennett (Bexleyheath and Crayford) (Con)
May I welcome you to the Chair, Madam Deputy Speaker? I am grateful for the opportunity to contribute to this vital debate, which has been interesting and lively. I congratulate my hon. Friend the Member for Harrogate and Knaresborough (Andrew Jones) on an excellent, effective maiden speech, and I look forward to hearing more from him in the future. I also congratulate my hon. Friends the Members for The Cotswolds (Geoffrey Clifton-Brown) and for Bournemouth East (Mr Ellwood) on constructive, thoughtful and progressive speeches, which addressed the problems facing our country.
I am disappointed by the hon. Member for Penistone and Stocksbridge (Angela Smith) and some of her colleagues who seem to think that there is a right-wing ideological agenda. The Budget has a practical, realistic approach, from a coalition Government who are determined to get our country out of the economic mess in which the Labour Government left us. We will not forget that, and we will take no lessons from them about the situation in which we find ourselves. Many of us would prefer not to have to take some of the measures in the Budget, but the 13 wasted years under Labour have resulted in a real mess.
I am disappointed that the hon. Member for Ogmore (Huw Irranca-Davies) is no longer in his place, because his was a constructive and passionate speech. I say to him and to Labour Members, including those on the Front Bench, that most of us came into politics to improve the condition of everybody in society, not just one section of it. We are determined to look after the disadvantaged and to help the less well-off, the disabled, pensioners and those in real need, but to do that we must have a strong economy and money to invest in such services. It is regrettable that the Labour party destroyed our economy and the opportunities for many people. I agree with the comment that most Labour Members who have spoken seem to be in denial about the problems that they have created and the situation in which we find ourselves. They keep on with the mantra, “It is a world situation” and so on. Of course, there is a world recession, but it was made worse by the incompetence of the Labour Government and their failure to deal with the issues early enough and to take the necessary measures to ensure that we could weather the storm. The consequences are a disaster for the whole country. History lessons will not do when we have had 13 wasted years.
My right hon. Friend the Business Secretary made a progressive, rational and measured speech and explained to us all his thinking and how he has come to his decisions. We value that, because he has looked at the facts and figures and made a reasonable judgment accordingly. I also congratulate my right hon. Friend the Chancellor on a positive and constructive Budget in very difficult times. It was positive in its aims and objectives, based on fairness and reasonableness, and in its twin approach of dealing with the debt problems and planning for the future.
Having been a Member of the previous Parliament, I also welcome the Chancellor’s candour, openness and clarity about the situation in which the country finds itself. How different this was from Budget statements under the last Government. Those were all spin and propaganda, and Members had to leave the Chamber and read all the minutiae in the small print to find out what they really meant. Yesterday the Chancellor of the Exchequer was open and frank, telling the people about the problems and what needed to be done about them. He did not conceal the facts in the small print or hide them away in other paperwork.
After 13 years of Labour government, our economy has been shattered by mismanagement. We have a huge public debt and great unfairness in the tax system, and businesses, particularly small businesses, feel battered and bruised. We really do need a new approach and a new direction. Yes, the Budget is tough and austere, but it is also necessary and fair, and it is unfortunately unavoidable because of the position in which we find ourselves. We need a decisive breach with the past so that we can build facilities and services for the less advantaged and the most disadvantaged, such as those who are sick and will need more help in the future.
I want to concentrate on enterprise, pensions and training. As a Conservative, I believe passionately in lower taxation, and I am pleased that my right hon. Friend the Chancellor of the Exchequer also aspires to achieve that goal—when the time is right. When the time is not right, we must increase taxation, however hard that may be, in order to balance the books. I know that my constituents will appreciate my right hon. Friend’s approach, because after 13 years of Labour they feel that they have been over-taxed and over-regulated, and that there has been too much bureaucracy and red tape and not enough support for their business activities.
My constituents have experienced the problems of increasing unemployment and economic inactivity, and most of them feel that bureaucracy and taxation have been excessive. Regrettably, those problems must be addressed with vim and vigour. Local business men tell me that central Government support was inadequate during the recession, and that publicly owned banks were unhelpful when they applied for credit or assistance. They were cast adrift by a Government who said wonderful things in the House, but did not follow them up with real measures to help small businesses make the wealth on which our country depends. It was clear that action by the new Government was urgently required to deal with that on all fronts.
The Government have already cut £6 billion of spending because we cannot afford it. If we are to create jobs and growth, it is vital that we help the small and medium-sized businesses that are at the heart of our economy. We need to show that Britain is open for business, and attract firms into the United Kingdom. We need reforms of tax and regulation to make it less costly and bureaucratic to run or start a business. We need to shift the balance in our economy back towards private enterprise, rather than the public sector dependency that we saw during those 13 years of Labour government.
I agree with the hon. Member for Penistone and Stocksbridge that the public sector has a vital role to play, and that it can create wealth and opportunities. Most wealth, however, is created by the small and medium-sized businesses which pay the tax and allow us to spend the money that we need to spend on our vital public services. I am amazed at the increase in public sector pay and pensions over the past decade. We would surely expect the Prime Minister to have a higher salary than anyone else in the public sector, and when we see that people at the BBC and in some local authorities are being paid considerably more by the taxpayer for doing a less demanding job, we have to ask what has gone wrong.
We also need to deal with the problem of waste. The hon. Lady mentioned regional development agencies, an issue that I raised with the Prime Minister at Question Time last week. Although some RDAs have done a good job, others have wasted money in their bureaucratic way. We have heard about extravagances and expenses that have been in no way connected with the job that those people should have been doing, involving entertainment, offices abroad, novelty items or taxis, which were mentioned by my hon. Friend the Member for The Cotswolds. That profligacy is another Labour legacy that I am pleased to see the new coalition Government will take on.
The managing director of a lighting business in my constituency advised me that he thought the support for small businesses during the recession was
“neither adequate nor well advertised.”
He also said that
“there was nothing for a small business in our position or if there was, we didn’t find out about it.”
His business also had problems with the publicly subsidised banks. Higher banking costs were imposed on it, leading to its having to reduce staff to meet the cost of the charges. That is not the way to get a successful business developing and going forward. In addition to the problems in getting Government support and dealing with an over-complicated tax system, that managing director experienced a great deal more red tape and regulation, which in turn increased costs. That was a legacy of the last Labour Government: more regulation, more red tape and more costs.
I also received representations from a car manufacturing firm in my constituency. Its managing director thought the previous Government did a good job with its advertising. However, when it came to applying for assistance, his company found that support was not available. That is a terrible legacy. He said the investment company appointed to manage the capital for enterprise fund for the Government was interested only in venture capital parameters such as high rates of return. The company also alleged that it did not receive support from its bank. In fact, it suffered increased charges from very early in 2009.
Both those businesses will benefit from the measures announced in the Budget. The reduction in corporation tax will mean they have more money of their own to invest in their business, and either to take on new staff or extend the working of current staff. The Budget will bring benefit to small businesses in particular. They will welcome the lowest ever rate of corporation tax, which will fall from 28% to 24% during this Parliament. The tax rate reduction for small companies from 21% to 20% will also be welcomed, and the extension of the enterprise guarantee scheme will provide a real boost for small businesses struggling to get credit.
The Budget therefore contains a lot that is positive, contrary to what was suggested from those on the Opposition Benches, where all was doom and gloom. There is enthusiasm for enterprise to get things moving, which is very important for the future of the country, because we must get the debt down and the public finances under control before we can have economic growth. We must never forget that high levels of debt put an unfair burden on future generations. Our role is to look after the future and make sure that our children and grandchildren are not in hock to debt because we have failed to manage the national finances. This emergency Budget will go a long way to rectifying the situation for the future.
Action to stop Labour’s job tax by increasing the threshold for employers’ national insurance contributions by £21 a week will also be positive. As a result, the number of employees for whom employers pay no national insurance will rise by 650,000. That is another real, positive move to endeavour to ensure that we get ourselves out of the appalling mess we find ourselves in.
The second issue I want to raise is pensions and pensioners. I am delighted that the earnings link is to be restored after 30 years. We have to admit that sometimes the Conservatives made mistakes in government, and it was a Conservative Government who made the mistake of breaking the link. [Interruption.] It is no good the hon. Member for Derby North (Chris Williamson) laughing and smiling, because the Labour Government had 13 years to do something about that, but they did not do a thing. They sat on their hands and made nice noises, but action speaks louder than words. This coalition Government have already taken more action on pensioners than the previous Labour Government did in 13 years.
Mr Stewart Jackson (Peterborough) (Con)
Will my hon. Friend remind the House that when we broke the link in 1980 we had an inherited situation of huge debt—an economic basket case—as a result of a Labour Government spending beyond their means. Does he think that that sounds familiar?
Mr Evennett
Exactly. My hon. Friend makes a good point. It is history repeating, is it not? I am sure that pensioners in my constituency and across the country will be pleased by the triple lock, whereby the basic state pension will rise by whichever is the higher out of earnings, prices measured by consumer price inflation or 2.5%. That is good news. One would not believe on listening to the Opposition that there was any good news at all in the Budget, but there is. We will never have pensioners getting a meagre increase of 75p on the basic pension, as happened one year under Labour. That was an insult and the pensioners knew it. We will not allow that to be repeated.
Angela Smith
I will be one of the first to admit that the 75p increase was a mistake. Will the hon. Gentleman acknowledge that, under the Budget, the means of raising the money to bring in the link to earnings a year early might be raising the age at which women can claim the state pension?
Mr Evennett
It is nice to hear the hon. Lady admit that the Labour Government did something wrong. I do not think we have had one word like that today, and I have sat through the whole debate. One would think that Labour Members thought that everything they did was wonderful, but in their heart of hearts they know the truth: there were mistakes. We are endeavouring to rectify those mistakes to make sure that those who are vulnerable, such as the elderly, have the dignity in old age that they deserve, and we passionately support and believe in that.
Fairness is key in the tax changes. Far too many people on low incomes pay too much tax. When I was in this place under the Governments of Margaret Thatcher and John Major, people on low incomes paid low tax, but in the past 13 years, because of the policies of the last Prime Minister, including when he was the Chancellor of the Exchequer, Labour managed to push more people into tax than ever before—people on low incomes who should never have been paying the level of tax they were. Five or six weeks into office, this Government are already taking action in the Budget to deal with the awful situation of people on low incomes having to pay tax.
Geoffrey Clifton-Brown
My hon. Friend is making an impassioned and thoughtful contribution. There was no more cruel example of what he has just said than the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) abolishing the 10p tax rate, because that put so many poor people into paying not only a low rate of tax, but quite a high rate of tax, on relatively low earnings. In contrast, my right hon. Friend the Chancellor has taken a significant number of people out of the tax net altogether with this Budget.
Mr Evennett
That point is absolutely spot on. The Opposition’s crocodile tears on these issues are lamentable, because they did not do anything in government. They took away the 10p rate, as my hon. Friend has said, and they pushed people on very low incomes into paying tax when that was unfair. My right hon. Friend the Chancellor made it quite clear in yesterday’s Budget that fairness was the underlying key. It was about making sure that everyone pays a fair amount. Those on high incomes will pay more and those on low incomes will pay considerably less. Families, low earners and pensioners have to be a top priority.
In opposition, I was the shadow spokesman on further education and skills, and I believe that training and skills were one of the Labour Government’s greatest failings. Our society needs a well-trained work force who can adapt and take on board challenges, such as those facing small businesses, to make sure that they can get employment and worthwhile involvement in order to make something of their lives. One of Labour’s biggest failings during the recession was not properly investing in skills so that people who lost their jobs could reskill, upskill, retrain or find new jobs.
Mr Stewart Jackson
I thank my hon. Friend for giving way; he is being extremely generous. Did he see the figures published today that show the shameful legacy of 13 years of Labour government, which is that one in four of our 18-year old boys is a NEET—not in education, employment or training? That is the record of the previous Government.
Mr Evennett
I am grateful to my hon. Friend. It is a lamentable record that almost 1 million young people are classed as NEETs. That is a waste for them and their futures, and for their communities and our economy generally. Those young people have so much to contribute, but they cannot get on in life if they are not given opportunities because they are not trained and do not have the skills. If that is the case, they are unable to do something for themselves, or for their communities and our country generally.
Britain needs to grow stronger out of this recession. It will do so if it can invest in the skills that mean that people can adapt, develop and take advantage of the new jobs and opportunities that are coming along. This Budget will get rid of over-regulation and red tape, and I hope that it will allow businesses to expand and create the jobs that we need.
Regrettably, we are starting from a weak skills base, with 5 million people in this country classed as functionally illiterate and millions more struggling with basic numeracy and literacy skills. Those are really important reminders of Labour’s failure on skills, and they highlight the need for fresh thinking and new ideas. Those are not just figures: we are talking about real people, and we on this side of the House are just as passionate as Opposition Members about providing opportunities for young people to get jobs.
Some of Labour’s skills programmes are not working, with Train to Gain providing public subsidy for courses that some employers would pay for anyway. That does not represent getting value for taxpayers’ money, but the Budget shows that that is something that the Chancellor of the Exchequer and his team are looking at. This Government want to help people, but they also want to make sure that they are getting good value for the taxpayer.
Richard Harrington (Watford) (Con)
I thank my hon. Friend for giving way. The House should be aware that, although the statistics show that 550 young people are claiming jobseeker’s allowance in my constituency of Watford, there are plenty of training schemes. However, the problem—into which I am currently carrying out research—is getting young people to go on those schemes. Money is being spent, but I am afraid that that is happening in the usual irresponsible way that was sanctioned by the former Government. As my hon. Friend noted, the important thing is to ensure that the money is spent wisely, but that will require a lot of work.
Mr Evennett
I thank my hon. Friend for highlighting the point that I was making with a practical example from his constituency of how things have gone wrong and need to be rectified.
In view of the time and the fact that other people wish to speak, I shall draw my remarks to a conclusion. Yesterday, my right hon. Friend the Chancellor said that this was a Budget to show the world that Britain was open for business again, and I believe that he was right. The measures included in it will ensure that our country and all of its people are on the road—a rapid road, I hope—to recovery and prosperity.
This country has a potentially great future. What we need are the Government and the measures to encourage that development so that we can make progress along that road. I believe that we have that in this new coalition Government. I think that we are on our way, and that this Budget is an important step to ensuring the future progress and success of our economy.
Caroline Lucas (Brighton, Pavilion) (Green)
Thank you for calling me to speak, Mr Deputy Speaker, and it is good to see you in your new position.
The Government’s mantra is that this Budget is both unavoidable and fair, yet more and more evidence demonstrates that exactly the opposite is true. In reality, this Budget is neither unavoidable nor fair: instead, it is a massively failed opportunity to shift the economy into the greener, fairer direction that we need.
Devastating public spending cuts of the kind announced yesterday are not unavoidable. They are not some kind of economic inevitability, but an ideological choice. The reality is that there has been no public debate about the choice between tackling the deficit through cuts or through progressive and radical tax reform. Quite simply, that case has not been put.
That is hugely significant, because the fact that these cuts will have an enormous impact on generations to come means there needs to be a national consensus that they are the right way forward. There is not that national consensus; there is a growing sense of anger and disbelief about the scale of the cuts proposed, as well as a growing sense that the Government have been economical with the truth.
Let us be clear: we are not in the same position as Greece. Our cumulative national debt is not large by international standards. The structure of our debt is very long term—about 14 years. Much of this year’s debt will be sold to British-domiciled individuals and companies, so the international sovereign debt crisis has much less impact on us. Those are the truths of the situation.
Sajid Javid
The hon. Lady said that our sovereign debt situation is not as bad as that of Greece. We do not just have to use Greece as an example; other countries have faced drastic situations and austerity measures. It is not reasonable to look at the size of the debt as a proportion of GDP; we also have to look at the amount of debt we have been issuing, borrowing £3 billion a week to help fund it. I am sure the hon. Lady is aware that last year the former Government printed about £200 billion in cash and borrowed about £225 billion on the gilts market. The only other country with a similar policy was probably Zimbabwe, so I am sure she is not advocating that we continue in that way.
Caroline Lucas
I thank the hon. Gentleman for his contribution, but if the then Government had not done that our situation would have been an awful lot worse. Many commentators are saying that this is a time to be investing, not taking money out of the economy. Our current situation would have been much worse if we had not had that stimulus at that time.
Despite what the Government say, we are not all in this together. Some people had more responsibility for the crisis than others and some benefited more from the boom that preceded it. It seems to me that those who enjoyed the largest benefits should pay the highest price. We need progressive tax reform. Increasing the tax take from those most able to pay it and helping lower earners by reintroducing the 10% tax band now would be a good start, both in raising revenue and in addressing inequality.
If we are looking for ways to find more revenue, let us bear in mind the huge extent of tax avoidance, tax evasion and unpaid tax in the UK. The figures are truly staggering. Her Majesty’s Revenue and Customs admits that tax evasion and avoidance together come to almost £40 billion a year, and in November 2009 it admitted that £28 billion of unpaid tax was owing. Shocking as those figures are, some experts out there suggest that the total target for necessary action to collect tax due and owing could be more than £100 billion a year. Why do we not see more efforts to go after that kind of money?
There are a range of options for changing the UK tax rules progressively so that more than £40 billion of additional taxes could be raised each year by the end of the life of this Parliament. With tax-collecting efficiency savings, that would deliver more than £60 billion of tax revenues for the UK, thus preventing any need for cuts to public services.
I say that not because I think we should introduce all those tax measures—certainly not straight away—but to prove that we have a choice. Spending cuts are not the only way to address the deficit. Fairer taxation has never even been put to the public as an option. That is a betrayal.
Jacob Rees-Mogg
Is the hon. Lady aware that if the tax rises she proposes were introduced, we would have the highest ratio of tax to GDP that this country has had in 40 years—7% higher than the record achieved under Margaret Thatcher’s Government?
Caroline Lucas
We also have a country that is at its most unequal at any time since the second world war. If someone asked me whether I would like either progressive tax reform or a much more equal society, I know which I would choose, because so much evidence suggests that unequal societies are not just incredibly damaging for those at the bottom of the heap, which is fairly clear; they are corrosive for everybody in society. Books such as “The Spirit Level” have demonstrated just how corrosive inequality is for everybody in terms of health outcomes and general well-being. I am happy to say here and now that I would much rather see an equal society. Of course, that is something the coalition Government told us the Budget was all about. It was supposed to be a fair Budget.
What choices were made? Let us be clear again that they were political choices; they were not inevitabilities. It was a political choice to make effective cuts to child benefit, the child tax credit and child tax funds that, together, cost £2.5 billion. Those cuts could have been avoided if, for example, the Chancellor had chosen not to cut corporation tax. It was also a political choice to increase VAT—a tax that hits the poorest hardest and that both Government parties said they were not in favour of increasing.
Raising the income tax threshold as some kind of compensation does nothing for the poorest households that do not pay income tax anyway, since in any given year about one in four families contains no income taxpayer at all. Uprating future benefits and tax credits only in line with consumer price inflation, rather than retail price inflation, will have a dramatic effect in increasing inequality in society. If we add to that the severe cuts in housing benefit, which will have a devastating impact on areas where significant numbers of people depend on it, such as my constituency of Brighton Pavilion, we can see that the menu we are being served up is very damaging indeed.
Let us remember that the vast majority of people who claim housing benefit are pensioners, people with disabilities or who care for relatives, or hard-working people on low incomes. As the director of Shelter has said,
“If this support is ripped out suddenly from under their feet it will push many households over the edge, triggering a spiral of debt, eviction and homelessness.”
If we add to that—if that were not enough—the impact of swingeing public spending cuts, we see a hugely bleak picture. Unemployment will grow, and anyone who leaves school or college in the next five years faces a grim future.
Of course, meanwhile, the rich have been largely let off. That is why we have seen the coverage we have seen in the Financial Times and everywhere else, with people saying that they are breathing a sigh of relief because the Budget did not hit them as hard as they thought it might. The rich will hardly notice the VAT increase. The bank levy is puny—less than half the £5 billion to £8 billion originally predicted—and is a fraction of City bonuses. That is not unavoidable; it is a political choice. The Government could have introduced a Robin Hood tax to raise billions—they did not. That was another political choice.
Unprotected departmental budgets will be savaged. Local government will need to slash services if it is to freeze council tax. Public servants, who did nothing to cause the slump, are being asked to bear an unfair share of the burden. Again, one thing we can say for sure is that we are definitely not all in this together. People on middle and low incomes have done much worse than expected, and the rich have been let off much of what they feared, but we will all suffer from an economy that now has a very real risk of going into a double-dip recession.
Many Opposition Members have talked about the importance of listening to commentators, such as Noble prize winner Joseph Stiglitz or David Blanchflower, about the real dangers of that double dip. David Blanchflower is one of the very few people who saw the recession coming. We should listen to his warnings now. The economy is still fragile. Today’s measures will certainly slow recovery and could well stop it in its tracks. Even Martin Wolf says in today’s Financial Times that we should be printing more money, rather than taking it out of the economy.
I should like to suggest that the real way out of the crisis, as well as fairer taxation, is through a major Government investment in the green infrastructure that this country so urgently needs if we are to emerge stronger from the recession than we were when we went into it. My party has called for the introduction of a green new deal—a massive and sustained investment in energy efficiency and renewable energy generation, which would create hundreds of thousands of new jobs, as well as cutting carbon emissions and making our economy more sustainable.
Let me give an example. Greens on a council in the north of the country brought an idea to the table that was accepted by the council and is being rolled out. Essentially, they leveraged some money from the energy companies and matched it with some council funding, and they are now rolling out free insulation for 40,000 homes in that area. That is not only cutting emissions, but saving average families about £150 a year on their fuel bills and creating 200 jobs. That sort of programme needs to be rolled out country-wide.
What about green measures in the Budget—or, better, where are the green measures in the Budget? Let us remember what the coalition manifesto promised. It said that it was promising
“a full programme of measures to fulfil our joint ambitions for a low carbon and eco-friendly economy”.
Those ambitions cannot have been very high.
The coalition’s first Budget offered little more than a passing reference to the green investment bank, just a few lines about future reforms to the price of carbon dioxide and a renewed promise on energy efficiency, so where exactly is this famous full programme of measures? I searched in vain, but instead I saw old style, big picture macro-economics, with a 4% cut in corporation tax over the Parliament and a regional growth fund for new businesses from next April that will provide
“a stable economic foundation for private sector growth”.
I am not against that, but what kind of growth are we talking about? Where is any commitment to sustainability in the vision for growth? What about the commitment to the green investment bank, which is urgently needed to drive £2 billion into clean energy by 2020? Apparently, we are going to have to wait, as there was no particular urgency on the green agenda in the Budget.
We were told instead that the Government will put forward
“detailed proposals on the creation of a Green Investment Bank”
after the spending review, but we have heard that before. We are told that the Government are considering a wide range of options, but there is no confirmation of legislation and no mention of capitalisation. With nothing in the Budget on the green deal for households, we must wait for this autumn’s energy security and green economy Bill. The low-carbon industrial strategy already appears to have lost urgency and direction.
The Chancellor talked a great deal yesterday about the crisis of national debt, but he barely mentioned the much bigger and more dangerous crisis of climate change. When the coalition Government were formed, Ministers said they would be the greenest Government ever. As I pointed out at the time, that, sadly, would not be very difficult, given Labour’s lamentable record, but it does not look as though serious steps are being taken to make this a green Government either.
The Budget is economically dangerous, socially divisive and completely lacking in any kind of vision for sustainability. Tragically, an opportunity has been missed to introduce something genuinely progressive, such as a Robin Hood tax on financial transactions, measures to increase employment and cut emissions through a green new deal, and measures to introduce fairer taxation—in other words, measures to take us closer to the fairer, greener Britain that the coalition says it wants to achieve, but from which, after the Budget, we are further than ever before.
John Stevenson (Carlisle) (Con)
As a north-west MP, I welcome you to your new role, Mr Deputy Speaker.
I would like to think that a bit of history is being made today because, as the first Conservative MP to have been elected for Carlisle since 1959, I am the first Conservative from Carlisle to be making a maiden speech for 50 years. Since becoming a new Member, I have become conscious of the protocol that interventions, questions, answers and speeches should be short and to the point. I am sure that hon. Members will be pleased to hear that I shall follow that tradition.
My predecessor was a Labour Member, and although our politics, outlook and the way in which we do things are different, I acknowledge that Eric Martlew had the interests of Carlisle at heart. He came from Carlisle, he believed in Carlisle and he clearly did his best for Carlisle, and I do not think that more can be asked of a constituency MP.
I would like to cite two examples of Eric’s work. In 2005, when we had the great floods in Carlisle that were devastating for many people, he got heavily involved and managed to convince the Government to spend considerable sums on building flood defences. I am delighted to say that those flood defences are now almost complete. Eric also had a great interest in rail and was a member of the all-party group on the west coast rail line. During his years as a Member, the Euston-to-Carlisle train journey time dropped considerably. I am benefiting from that, in that my train journeys are half an hour to an hour shorter than they would have been. If the high-speed rail link is introduced, I would like think that that journey time will drop further.
If hon. Members were to get the train to Carlisle, I do not think that they would be disappointed by our great city. Our compact border city is welcoming and friendly, and in many respects it is a well-kept secret—it was so secret that it successfully avoided being mentioned in the Domesday Book. The city is just 10 miles from the Scottish border, and as a Scot who has been elected for an English constituency right on the border, I am delighted to report that border relations are good and we support England’s result today.
Carlisle has a rich heritage. Its castle was built by William II, and its cathedral, although small, dates from the 12th century. Of course, we have the world heritage site of Hadrian’s wall, which is a popular spot for people walking from the east coast to the west coast, as well as the Tullie House museum.
We also have an industrial heritage. In the past, we had railways and crane makers, and the builder Laing originated in Carlisle; today, we still have a lot of manufacturing, with Pirelli cars, Nestlé, Carr’s Milling and, with food manufacturing being a big thing in Carlisle, Carr’s water biscuits—a real favourite of mine. We also still have a strong building society—the Cumberland building society—and long may that continue to be the case. Sadly, we have lost Border Television, although probably the only thing that people remember about that company is that it produced “Mr and Mrs”. I hope that there will be a rebalancing of the economy. Carlisle may well benefit from that, because manufacturing is still very much a part of our local economy.
The most important thing is, obviously, people. I came to Carlisle 18 years ago and was made very welcome by the people of the city. I have lived and worked there, and there is no greater privilege than to become their representative. However, there are problems everywhere, and Carlisle is no exception. We have the legacy of the previous Government to deal with, and I believe that rebalancing the economy, improving education and helping the low-paid will be the key issues for Carlisle.
How are we to make those improvements? In my view, first, we must decentralise. It is important that we take decision making back to the communities and allow local people to make local decisions for themselves. Whitehall has a role, but that role has become far too big. We now have the opportunity to return power to local people. I genuinely believe that elected mayors offer a way forward, because they bring transparency to local decision making and make people aware of who is in charge of their local community.
The Budget has been described as tough but fair. I genuinely agree with that description and think that three things flow from the Budget. First, we must encourage business. The real recovery will come from the private sector and we can achieve that only through the changes to taxation, which I welcome, and, of equal importance, less regulation and less interference in business. That is how businesses thrive.
Secondly, and very relevant to Carlisle, we must look after the low-paid. I think that the Budget helps with that through the increase in the personal allowance and child tax credit, linking pensions with earnings, and the council tax freeze. The pay freeze does not affect the low-paid—those paid less than £21,000—in our public services.
Thirdly, we have the public sector. The public sector is still important—still vital to our economy and our communities—but it has to innovate, think differently and do things differently. Let me make one suggestion to Government Departments. Carlisle has a low cost base, housing is of good quality but relatively cheap and our industrial sites are cheaper than those in many other places. I therefore suggest that the Government should consider moving Departments from the south to the north. Doing so will save them money and help to regenerate parts of Carlisle.
The Treasury team and Ministers in other Departments have many difficult decisions to make in the coming months, but they will not go far wrong if they follow Carlisle city’s motto, “Be just and fear not.” If I follow that motto as the Member for Carlisle, I think I will have done okay.
Mr Deputy Speaker (Mr Hoyle)
Order. Before I call the next speaker, may I say to hon. Members that we are running out of time and quite a lot of Members still want to speak in this debate. I am therefore setting a 12-minute limit on speeches, so that we have time for the winding-up speeches as well.
Owen Smith (Pontypridd) (Lab)
Noted, Mr Deputy Speaker. I welcome you to your new position.
I congratulate the hon. Member for Carlisle (John Stevenson) on making an excellent maiden speech. I made my own only a couple of weeks ago and know that it is a nerve-wracking affair. He gave an extremely assured and insightful performance.
I want to nail a disgraceful canard, which has been repeated several times this afternoon, that Welsh Members present today are absolutely uninterested in the England football score. I assure the House that I am very interested in that. I wish England well and hope they go all the way, but, to be blunt, such is the seriousness of today’s debate that I had to forgo the pleasure of watching the game and instead sit in the Chamber throughout the afternoon, listening to the excellent speeches made by Members on both sides of the House. Far more seriously, there is another canard that I would like to try to nail: the belief that Labour Members have acted both before and since the election as if nothing needed to be done in the face of the economic crisis. We did act before the election, and made tough decisions to attempt to shore up the economy to make sure that there was not a more profound recession or, indeed, a depression as a result of the global economic crisis. I believe that we secured a better future for the country as a result of those actions.
Before the election, we acknowledged that we would need to tighten our belt and make post-election savings to redress the balance and to draw down the deficit. We certainly spelled out the fact that we would make cuts and savings of £40 billion. We did not spell out exactly where those cuts would fall, but neither did the then Opposition. They gave us the impression that they would do more, and they mentioned £6 billion of savings that they would make in efficiency cuts. We were not told about the specific measures that appeared in the Budget yesterday. We were not warned about the VAT rise that they have now deemed necessary, and we were not warned about the enormous and savage cuts that we expect in the autumn to public services. Those things were not spelled out by the then Opposition. If we had won the election—doubtless, many Liberal voters, both in my constituency and up and down the country, now wish that we had done so—we would have to make some tough decisions. However, I believe that we would make them in a way that was genuinely fair and informed by principles of social equity and economic justice.
I do not believe that the decisions announced in yesterday’s Budget meet those principles. Many people say that politicians are all the same but, like my hon. Friend the Member for Ogmore (Huw Irranca-Davies), we can no longer go on believing that there are not genuine ideological divides between the two sides of the House. Yesterday’s decisions clearly mark out the Government’s territory, and I contend that if we were in a similar position, the values that I have just outlined and which inform our politics would lead to a different set of conclusions that would not result in the poorest and the most vulnerable having to bear the pain and pay the price for paying down the deficit.
I commend the Secretary of State for Business, Innovation and Skills for the chutzpah with which he performed today’s volte-face. It was truly remarkable to see him stand at the Dispatch Box and defend this Tory Budget and Administration to the hilt. He bore eloquent testament to the old adage that there is no one as zealous as a convert. He invoked the name of Sir Stafford Cripps, the famously austere Labour Chancellor, who—this says a few things about austerity—was rumoured to get up in the morning and prepare with an ice-cold bath at 5 am before coming to the Chamber. I am not sure that the Secretary of State does that yet; perhaps he will move on to that. It was wholly unfair of him to invoke the name of Sir Stafford Cripps, because while the 1949 Budget was an austere Budget—he was right at least to imply that it was a Budget in which a Labour Chancellor raised the forerunner of VAT—the austerity of the measures that were recommended yesterday is such that even Sir Stafford Cripps would find them breathtaking and, indeed, eye-watering.
The scale of cuts proposed by the Government—25% in non-ring-fenced departmental budgets—was previously unimaginable in the history of Parliament. We have never seen cuts on such a scale.
We have heard invoked many examples—analogies—of other countries where similar cuts, or allegedly similar cuts, and programmes have been implemented, but today we have heard those analogies thoroughly knocked down. Canada and Sweden are two such examples. We know that Canada succeeded in implementing a programme of cuts which was half the size of what the Government now propose, and did so in twice the time. Government Members have repeatedly referred to Sweden, but again the very clear evidence of history is that Sweden tried to implement swingeing cuts of only 20% and did so over 15 years, not five. So we have something that is twice as draconian as what was done in Canada, three times as draconian as what was attempted in Sweden and, on many measures, more punitive than the extraordinary programme of cuts that the IMF has imposed on Greece—an analogy that even the Secretary of State for Business, Innovation and Skills acknowledges is not appropriate. Many Opposition Members have already outlined the statistics that underpin that contention.
I stand here as a Welsh Member fearful that my constituents will suffer disproportionately as a result of the Budget. The Financial Times stated earlier this week and the Manchester school of economics pronounced only this morning that, inevitably, parts of the country such as mine will suffer disproportionately. For all sorts of reasons, we have greater economic problems, relating to our post-industrial heritage, and a greater reliance on public sector jobs and spending, and I am deeply worried that currently there are no indications from the Government about how they will alleviate or offset that damage in areas of Wales such as my constituency.
As we look at the blizzard of statistics in yesterday’s Red Book and trade them across the Floor of the House, the human impact of those cuts is too often forgotten. I went back to my office yesterday evening to find several e-mails from constituents who are deeply worried about the proposals. I highlight the case of a couple, Phillip and Sandra Woods, who said that they were terrified that they would see an assault on the benefits that make their life liveable. They are severely disabled and rely on disability living allowance, jobseeker’s and employment allowances and housing benefit. For those people, who live on meagre amounts of money, hand to mouth, week to week, the Budget presents a horrifying prospect. Equally, they were right to point out their anger that so many Government Members castigate such people as part of the problem, as opposed to people who need to be supported in our communities.
I have one more human example of the cuts: the public sector workers at Companies House in my constituency at Nantgarw. They are relatively low-paid public sector workers, working in a Government Executive agency—sitting beneath the Department for Business, Innovation Skills—that is profitable. It is statutorily mandated to operate within its costs and to return to the Exchequer 3.5% per annum. I cannot understand the logic or fairness of what has happened to those people, because they are being asked to suffer 11% cuts. That means moving jobs out of my constituency, fewer jobs moving into Cardiff and the local management imposing a pay freeze that will not be offset by the £21,000 cut-off suggested by the Government yesterday. Companies House management, in order to meet their requirements of 11% savings, will have to freeze pay across the board and stop any staff promotion. Both measures are punitive and unfair, and when I meet the workers at Nantgarw I cannot explain why they should be asked to pay the price for a crisis that was made on trading floors and in bankers’ back rooms.
It is a shame that the hon. Member for The Cotswolds (Geoffrey Clifton-Brown) has left the Chamber, because he gave a paean of praise to UKTI earlier, and he ought to know that UKTI will be subject to that 11% cut. Far from its being protected, it too will be subject to serious cuts.
Why have we been told that we need to make these cuts? It is because of the false spectres that are being raised on the Government Benches, including the notion that our markets were in danger of pulling the rug out from under the economy and that we were about to have our triple A rating withdrawn by the very people who got all the ratings wrong, or certainly got their call wrong on where we stood in respect of sub-prime debt. Equally, we are being fed lines about the nature of the unaffordability of our debt that I suggest we should ignore.
I close with a plea that Government Members remember the human cost of budget cuts and look ahead to the comprehensive spending review, when we anticipate seeing even greater cuts implemented. They should think hard about how that will bite on ordinary working people in our communities in places such as Pontypridd, and think hard about what we can do to alleviate that and to implement cuts in the most sensitive and affordable manner possible.
Alok Sharma (Reading West) (Con)
I start by congratulating my hon. Friend the Member for Carlisle (John Stevenson) on his passionate speech and on speaking up for localism. That is something that Government Members strongly believe in, and I hope that we will see it acted out in the Government’s manifesto.
Having listened to Opposition Members during today’s debate, it is interesting that not a single one of them had anything positive whatsoever to say about this Budget; in fact, many of them have denounced it in no uncertain terms. There has been a great deal of shaking of heads and gnashing of teeth. What always happens in these cases is that Labour develops something called collective amnesia about why we are having to make these tough choices on public expenditure and on taxation. Let me therefore remind them, once again, why that is the case. I see that the hon. Member for Easington (Grahame M. Morris) is laughing, but he really should try to understand why this is happening. The reason is very clear. Under Labour, we have had the deepest recession on record and the longest recession of all the G20 countries. Under Labour, we have ended up with the largest deficit in Europe, and the national debt has doubled.
Let me quote what the co-chief investment officer of Pimco, the largest bond fund manager in the world, said in January 2010:
“The UK is a must to avoid. Its gilts are resting on a bed of nitroglycerine. High debt with the potential to devalue its currency present high risks”.
The trajectory under Labour’s plans is pretty clear. If we were to do what Labour is suggesting, we would have the potential loss of our triple A debt rating, higher interest rates, more business failures, and sharper rises in unemployment—everything that nobody, on either side of the House, wants to see. There has been a lot of talk about Greece. Perhaps Labour Members should look at what happens in a country such as Greece when it does not get to grips with its public finances and there is a loss of confidence by the capital markets.
In 1997, the Labour Government inherited a golden economic legacy. In 2010, what did Labour leave the current Government? Oh yes—a note from the former Chief Secretary to the Treasury declaring, “I’m afraid to tell you there’s no money left.” That is exactly why we are having to make these cuts. Let me absolutely clear about this, although Labour Members may not agree: out there—outside this House—very many members of the general public take the view that these public expenditure cuts are ultimately Labour’s public expenditure cuts, and that the tax rises are ultimately Labour’s tax rises.
Of course, the pied piper of Labour’s decade of debt—the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown)—has not been seen in the House for quite some time, but I hope he has had the chance to reflect on the damage his Government’s policies did to our economy, and that when he returns, he will say the one word we had hoped to hear from a Labour Member: sorry. I am sad to say that we have not heard it.
In the past four years, I spent a lot of time talking to businesses and business organisations in Reading, so I should like to spend the rest of my speech talking about the measures in the Budget for them, particularly small and medium-sized businesses, which are the backbone of our economy, save to make one point on public services. We can all agree that we want a world-class health service and the best schools for our children, and we want dignity and financial support in retirement for our pensioners, but to fund high-quality public services, we need a vibrant private sector to lead growth and recovery.
Businesses in my constituency in the past few years have invariably told me that they feel overtaxed, overburdened by red tape and regulation, and overwhelmed by a complex tax system. They want help in getting credit flowing. The base rate may be 0.5%, but that bears little relation to the spreads that businesses must pay when they go for bank debt. We need to get to grips with that. Above all, businesses want us to tackle national debt and to get some confidence back into the country. That is what we hope the Budget will do.
We talked about over-regulation and the tax system. Because of the previous Government, we now have the longest tax code in the world. According to the Federation of Small Businesses, small businesses spend seven hours a week filling out forms. According to the British Chambers of Commerce, new regulation since 1998 has cost British businesses almost £77 billion.
The Thames valley and Reading are relatively prosperous parts of the country, but the recession did not pass us by. Shops closed, businesses folded and people lost jobs. Labour Members say that Labour did a lot to help local businesses, but I can tell them that local businesses in my part of the world and the rest of the country got by because they helped themselves. They increased productivity and took pay cuts, and instead of people working five days a week, they worked four. There has been a lot of pain in the private sector.
Heather Wheeler (South Derbyshire) (Con)
My hon. Friend is absolutely right to draw attention to the fact that small and larger businesses have taken the hit. We hear so often from Labour Members that they are worried about what is happening in the public sector, but that sector needs to take a leaf out of the book of the private sector, in which people have taken 10% cuts and four-day weeks. That has not happened at all in the public sector. We are looking for an increase in productivity. A 25% reduction does not necessarily—
Mr Speaker
Order. I just very gently say to the hon. Lady that an intervention must be just that; it must not be a mini-speech.
Alok Sharma
Thank you, Mr Speaker.
On Government help for local businesses, during the height of the recession, I attended a meeting of more than 100 people from businesses in my constituency. That was when the then Business Secretary, Lord Mandelson, was parading all over the place to tell us about all the schemes he was introducing to help local businesses. When I asked those business people whether a single one of them had been able to access any of the funds that Lord Mandelson was talking about, two hands went up in a room of more than 100 people. Both those people had tried to access the funds, but found the process too complicated and gave up. The reality is that businesses were not helped by the previous Government. I am pleased that in the Budget the Government propose a lower corporation tax rate, simplifying the tax system, reducing red tape and getting credit flowing.
I am delighted that the main rate of corporation tax will be reduced from 28% to 24% over four years, which will end up being the lowest rate among the G7 countries. Local communities, businesses and business organisations in my constituency have told me that they are delighted that the small companies rate will go to 20% instead of the planned increase to 22%, as proposed by the previous Government. On the jobs tax, which was talked about during the election and which universally businesses were not happy about, I am delighted that under the Budget the negative effect of the employers’ rate rise in national insurance will largely be reversed by increasing the threshold for employer NI contributions by £21 a week above indexation. That means that the number of employees for whom employers will pay no national insurance will rise by 650,000.
We will see a simplification of the tax system. As the Budget Red Book makes clear, tax competitiveness is not just about rates and incidence of tax; predictability, stability and simplicity are also important. Like many Government Members, I look forward to the details of the proposed independent office of tax simplification. The key point is that local businesses want time to get on and do business, and not to get bogged down by red tape. I am delighted, therefore, that the Government have said that they understand that the volume and complexity of regulation can damage UK competitiveness. I am pleased, therefore, that we will have a one in, one out system for new regulations as well as the imposition of sunset clauses.
A number of small businesses in my constituency that I have talked to are keen to get a share of the Government’s pie when it comes to spending. Again, therefore, I am pleased that under the Budget the Government plan to promote small business procurement by publishing central Government tenders online from the end of the year. The final thing that many businesses want is credit to start flowing again, and I am pleased to see that recognised in the Chancellor’s speech and reflected in the Budget documentation. The Government recognise the need for banks to promote lending, especially to small and medium-sized enterprises. I am delighted that there is going to be an increase in the enterprise finance guarantee and the creation of the growth capital fund, which will help fast growing small and medium-sized businesses.
Several Members have also touched on the banking sector. It is important that the Government want to ensure that the banking system and the financial markets meet the longer-term needs of the economy, and I look forward, therefore, to the publication of the Green Paper on business finance before the summer recess. This is a tough but fair Budget. We have had to make so many difficult choices because of the legacy left to us by the previous Government. I am pleased that, as part of the Budget, the Chancellor has made every effort to protect the most vulnerable people, including pensioners. That is so important and the hallmark of a fair society. The Budget will focus on returning stability to our economy, on getting the country back on its feet and, over the coming years, on delivering strong growth to the economy.
Chris Williamson (Derby North) (Lab)
I congratulate the hon. Members for Harrogate and Knaresborough (Andrew Jones) and for Carlisle (John Stevenson) on making their maiden speeches today.
A week before the general election, the Prime Minister said:
“The test of a government is how it looks after the most vulnerable, not just in good times but also in bad”.
On April fools’ day, he told BBC News that the Conservatives’ plans did not involve an increase in VAT, and when speaking on “The Andrew Marr Show”, the Prime Minister also said that
“any cabinet minister…who comes to me and says, “Here are my plans” and they involve frontline reductions, they’ll be sent straight back to their department to go away and think again.”
That prompts the question: why did he not ask the Chancellor to think again about his dreadful Budget—a Budget that will result in the quality of life of Britain’s most vulnerable people being sacrificed on the altar of Tory dogma, a Budget that will result in massive reductions in front-line services, and a Budget that will lead to a colossal increase in unemployment? It is less than seven weeks since the Prime Minister made those solemn pledges, but the Chancellor’s proposal to increase VAT is making a fool out of him.
We must not forget the Deputy Prime Minister either, who said that he wanted to “hardwire fairness” into society. However, increasing VAT does not hardwire fairness into society; on the contrary, it short-circuits fairness, because it hits the poorest families twice as hard as the richest. Britain’s richest families spend just 7% of their disposable income on VAT, while the poorest spend almost 14%. How fair is that? The truth is that it is not fair at all. Cutting tax credits, freezing child benefit, slashing housing allowances, cancelling the help in pregnancy grant and chopping free school meals are not fair either.
No doubt the Liberal Democrat members of the coalition Government will point to the increase in tax thresholds that they wrung out of the Chancellor as evidence of their influence. However, the sad fact is that the meagre increase that they secured will make little difference to low-paid workers and will be more than offset by the regressive measures that the Chancellor announced yesterday. Worse still, many of the workers who might benefit from the modest uplift in tax allowances will end up losing their jobs if the Liberal Democrats vote through the Budget.
Of course, the Prime Minister and the Chancellor insist on repeating their quasi-egalitarian mantra, “We’re all in this together.” Needless to say, it is nonsense, and it has overtones of the infamous scene in George Orwell’s “Animal Farm” when the animals realise that the pigs have changed the seven commandments to read:
“All animals are equal but some animals are more equal than others”—
or, to put it another way, “We’re all in this together, but if you’re poor, you’re in it a lot deeper than others,” such as the numerous millionaires who sit on the Government Benches.
Increased unemployment will force more people on to state benefits, which will put pressure on the size of the national deficit, which the Chancellor claims to be so concerned about. However, unless he has a damascene conversion, I suspect that he will respond to the failure of his economic prospectus by making even deeper cuts in welfare provision, as happened in the 1930s and 1980s. No doubt he will try to justify his failure by repeating his Orwellian mantra, but the reality is that it will not be his former Bullingdon club colleagues paying the price of that failure. No, it will be Britain’s poorest people, who will be in it up to their necks.
Of course, the Tories have form on that. I saw what they did in the 1980s to proud working-class communities in constituencies such as mine all over the country. They caused mass unemployment, slashed welfare provision, decimated front-line public services and did not stop cutting until they were thrown out of office in 1997. They even used another Orwellian ploy: to blame the unemployed for being out of work, labelling them as “scroungers”. Indeed, I see that the Prime Minister was at it again over the weekend when he talked about “welfare scroungers”. The Chancellor joined in the Orwellian chorus with his “Ministry of Truth” description of his Budget as a “progressive Budget”.
Andrew Percy
I have a quick question for the hon. Gentleman. Can he tell us whether unemployment in his constituency was higher or lower at the end of 13 years of a Labour Government?
Chris Williamson
Unemployment certainly fell in my constituency in the 13 years of the previous Labour Government. I will tell the hon. Gentleman this as well: thanks to the measures that they put in place, poverty was reduced in my constituency, people enjoyed the national minimum wage and were able to get health treatment far more quickly than previously, and children were not taught in overcrowded schools, so let us have no more lectures from him.
Let us never forget that everything that I have described has only been made possible by the vacillating Liberal Democrats, who say one thing then do another. Less than seven weeks ago, the Deputy Prime Minister said that his party represented a new kind of politics, with fresh ideas. What we got was a party supporting reactionary right-wing policies instead. Fewer than seven weeks ago, he was apparently opposed to the self-same right-wing policies that he now endorses. This is what he told his party conference on 23 September last year:
“We know what happens when you simply squeeze budgets, across the board, until the pips squeak. We know, because we lived through it before, under the Conservatives. We remember the tumble-down classrooms, the pensioners dying on hospital trolleys, the council houses falling into total disrepair. We remember, and we say: never again.”
In an interview with Jeremy Paxman on 12 April this year, the Deputy Prime Minister said:
“Do I think that these big cuts are merited or justified, at a time when the economy is struggling to get to its feet? Clearly not.”
That is what he said at that time.
Millions of people who rejected the Conservatives’ right-wing policy prospectus were seduced into voting for the Liberal Democrats by the Deputy Prime Minister’s rhetoric. People actually believed that the Liberal Democrats represented progressive values. How wrong they were. People now see that the reality is very different from the Deputy Prime Minister’s rhetoric. People see that he is now so determined to appease his Conservative masters that he is even prepared to sacrifice his own constituents by opposing a Government loan to Sheffield Forgemasters.
That is nothing new. The Liberal Democrats and their predecessors in the Liberal party have assisted the Conservatives into power in four out of the last seven general elections. It is thanks to the Liberal party splitting the centre-left vote in 1983 and 1987 that Margaret Thatcher was able to secure two landslide election victories. Then the Liberal Democrats did the same thing in 1992, forcing the country to endure another five years of Tory rule. The truth is that they are not a progressive party at all; they are merely a collection of self-indulgent political loners.
All the post-war progressive legislation has been introduced by Labour Governments often in the teeth of fierce opposition from the Tories and sometimes the Liberals, too. Examples include the NHS, the welfare state, comprehensive education, equal pay, civil partnerships, the national minimum wage, Sure Start, the ban on fox hunting, and the Open university, to name but a few.
Chris Williamson
No, I do not have time.
Some of the country’s greatest progressive advances were brought about by Labour when the size of the national debt was far higher than it is today.
I heard Members of the coalition parties, including the Chancellor, eulogising the Canadian experience of cutting its deficit in the 1980s and arguing for the same approach to be adopted here, but their “Ministry of Truth” description of themselves as “compassionate Conservatives” imposing so-called caring cuts defies all reason. The reality of the Canadian experience saw increased homelessness, overcrowded classrooms, pension cuts and a drastic shortage of hospital beds. On one occasion, the Canadians even emptied a hospital and blew it up in a desperate attempt to save money. Is that really what the coalition parties mean by “caring cuts”?
By contrast, the US President has written to all G20 leaders begging them not to cut spending too quickly. Mr Obama says it is critical that
“the timing and pace of consolidation in each country suit the needs of the global economy”.
He adds:
“We must be flexible in adjusting the pace of consolidation and learn from the consequential mistakes of the past when stimulus was too quickly withdrawn and resulted in renewed economic hardships and recession.”
But the Chancellor just does not seem to get it. He is obsessed with implementing an approach that failed in the 1930s, failed in the 1980s, failed in the 1990s and is destined to fail again. He wants to implement an unfair budget that will hit the poorest hardest, undermine the economic recovery, destroy public services and increase unemployment.
David Blanchflower, one of Britain’s top economists, said today that he is
“now convinced that as a result of this reckless Budget the UK will suffer a double-dip recession or worse, not least because there is no room for interest-rate cuts, although lots of additional quantitative easing… from the Bank of England could soften the blow”.
Growth is the key to addressing the deficit, and the Budget is a wasted opportunity. The Chancellor has chosen to penalise the weak and the powerless, instead of making the rich and powerful individuals and institutions pay.
Jessica Lee (Erewash) (Con)
The lack of responsibility taken by Labour Members for the state of the country’s finances is breathtaking. The Labour Government left this country not with a small hole in the public finances, but with a yawning chasm, which this Government will have to sort out.
Chris Williamson
That irresponsibility is on the Government Benches, because David Blanchflower, an esteemed economist in this country who predicted the recession and who should be taken seriously, is now predicting a double-dip recession as a result of “this reckless Budget”. The hon. Lady ought to reflect on his words, rather than criticising Labour Members.
Rather than taking the appropriate steps against powerful individuals and institutions, to ensure that they pay a fairer contribution towards reducing the deficit, the Chancellor has chosen to penalise the weak and the powerless. The Budget has let down the great British public. I assure Government Members that it will come back to haunt them. We will certainly ensure that the British public know what this Government, and the Liberal Democrats in particular, have inflicted on them. When the next general election comes, the Liberal Democrats, who have been swallowed whole by the Conservative party in this Chamber, will live to regret the day that they put the Tories in power.
Mary Macleod (Brentford and Isleworth) (Con)
I am grateful for the opportunity to speak in this debate on a matter that impacts on the life of every person in the country, every minute of every day. I congratulate my hon. Friend the Member for Harrogate and Knaresborough (Andrew Jones) on his maiden speech, in which he spoke warmly about Yorkshire at its best, and said that his constituency was open for business. He took the words out of my mouth, because I was going to say that my constituency was open for business, and that shows how we need the whole country to be open for business after the Budget. My hon. Friend the Member for Carlisle (John Stevenson) also made his maiden speech, in which he spoke about regeneration. I am sure that he will be just and fear not in his time in the House.
This is a serious Budget for serious times. As my hon. Friend the Member for Bournemouth East (Mr Ellwood) reminded us, this is also a day when England were playing a serious game of football. On behalf of the House I congratulate our team on winning the game, and perhaps they will continue to win throughout the World cup.
I really do not know what planet the hon. Member for Derby North (Chris Williamson), who has just spoken, is on. He should be apologising for what the previous Government did to take the country to the brink of ruin.
Guy Opperman
The hon. Member for Derby North quoted some statistics at us about the degree of unemployment in his constituency. I am lucky enough to have the paper on unemployment by constituency from June 2010; handily, it was in my pocket as I walked into the Chamber. Without going back 13 years in relation to the Labour Government, let me say that the paper indicates that in Derby North in May 2005 there were 1,318 jobseeker’s allowance applicants, but that that has now gone up to 2,576—a significant increase, one might think, of 95.4%.
Mary Macleod
My hon. Friend is absolutely right. That proves that the Opposition are living on a different planet, and that they have not a clue about what they have really done to the country over the past 13 years.
This emergency Budget is very much about a plan for the future. We have shown that we are bold enough to make the tough decisions that need to be made. The Chancellor has been faced with a deficit of a size that we have never seen before. I commend his Budget and his determination to stick to the principles of responsibility, fairness and enterprise. Not acting to reduce the deficit is simply not an option. We are not in a position to decide whether to deal with debts or go for growth, as Labour would have us believe. We have seen from the recent crises in the eurozone that unless we deal with those debts, there will be no growth. This Budget is about achieving balance in our economy by paring spending to affordable levels and stimulating growth so that we can encourage business and enterprise.
Mr Tom Harris (Glasgow South) (Lab)
I hope that the hon. Lady will steer away from misleading the House into believing that the Labour Government did not wish to reduce the national deficit, because she must know that they proposed to halve it over a period of four years. Can she tell us with what part of that package she has so much difficulty?
Mary Macleod
The hon. Gentleman clearly has a very short memory of what the present Opposition did to the country. What we, as the Government, need to do now is address the present situation and, as we have done in the emergency Budget, come up with measures to turn it around.
Far from being reckless, as was suggested yesterday by the right hon. and learned Member for Camberwell and Peckham (Ms Harman), this Budget has shown that the Government are prepared to take on their responsibilities and make the tough decisions required. That is something that the previous Government neglected to do. We are putting the country first, and doing the right thing. What would be reckless would be to continue to allow debt interest payments to increase as they have been doing. The cuts that are coming are actually Labour cuts. We have inherited a mess far worse than we were told we would inherit before the election, and we are paying the bills for the last Government’s irresponsible actions. That is their legacy to Britain. If we carry on as we are, we may be paying about £70 billion in interest on our debt in five years’ time.
Huw Irranca-Davies
I said in my speech that no one could avoid cuts, efficiencies, choices, priorities and projects, but there is a choice to be made in terms of both timing and speed. I ask the hon. Lady to hesitate before saying that the proposals from the coalition Government are the only way forward. There are plenty of voices out there saying that there are other ways of doing this.
Mary Macleod
The hon. Gentleman spoke very movingly about the impact on his constituents. Let me reassure him that I believe that this is the right Budget for the future, and that his constituents will recognise that over the next five years. If we retain our current debt in five years’ time, however, we could be paying more in debt interest than on educating our children, policing our streets and defending our country, and that would be a disgrace.
The United Kingdom remained in recession for longer than the other G7 countries. Output declined for six consecutive quarters, and we now have the highest inflation in Europe. Continuing with business as usual simply is not an option, so we are faced with the task of making the unavoidable, and in some cases unpalatable, decisions that have been called for by the Governor of the Bank of England, the G20, and many in industry. Mervyn King has described the Government’s deficit reduction as “strong and powerful”. He said:
“I am very pleased that there is a very clear and binding commitment to accelerate the reduction in the deficit over the lifetime of the Parliament”.
The hon. Member for Caithness, Sutherland and Easter Ross (John Thurso)—I went to Lairg primary school, so I am very fond of his constituency—talked about the risks and pain associated with the Budget, but he also said that this was something that we had to do. I agree wholeheartedly with that. However, we have tried to do it in a way that spreads the pain that is so inevitable, while protecting those most at risk and establishing the conditions required to ensure future growth.
First, let us look at the impact on business. Businesses large and small have much to be hopeful about following this Budget. As in other constituencies, there are many such businesses in Brentford and Isleworth. They need a stable economic environment in which to prosper, and this Budget will deliver that. The cuts in corporation tax will benefit them greatly and encourage them to continue to grow their staff and expand their operations in the UK, and smaller businesses will appreciate the cut in the small companies tax rate from 22% to 20%.
However, let me tell Members what some of my constituents said to me when I spoke to them today. The chief executive of West London Business, who represents more than 800 businesses in west London, said:
“Overall we feel that this is a pro-business Budget and we are pleased with it: a key element is the reduction in corporation tax which is positive for all businesses; 89% of businesses in our area have fewer than 10 employees so they will be happy with the relief on national insurance payments for small businesses. Whilst CGT has increased, these are welcome allowances for business.”
I also spoke to Andrew Doggwiler of the Hounslow chambers of commerce. He said:
“It was a tough Budget with a lot of pain being shared around, aimed at reducing the public sector deficit and restoring the confidence of the international markets in the British economy…There are positives for business in terms of reduction in corporation tax rates, extension of the enterprise finance guarantee scheme and increase in the entrepreneurs’ relief, which indicates that the Government are keen to promote business success. The Government must continue to find ways to support businesses, particularly small and medium-sized businesses, as their success is the best way of ensuring a sustainable economic recovery creating long-lasting jobs and wealth.”
That is what businesses in the hearts of our constituencies are saying.
Owen Smith
I ask the hon. Lady to reflect on the views of others in business. Ernst and Young has already said that it feels the Government have not fully understood the long-term financial consequences of the cuts, by which it means the reduction in demand in the economy. May I also point to the view of an inward investor in my constituency, GE Aircraft Engine Services Ltd, which feels that the reductions in corporation tax will not offset the damage done to its ability to invest by the reductions in capital allowances that manufacturing relies on?
Mary Macleod
I understand what the hon. Gentleman is saying, but I have been in business for 20 years, and I could cite plenty of others, including Richard Lambert, director general of the CBI, and the OECD, which says the Budget is far-reaching and courageous, so we need to have a balanced view.
I believe very strongly in the enterprise-led economy that we have put in place, and we have the building blocks in place to support future industry. That is why I was pleased to hear that spending on many capital investment projects will go ahead. Naturally, I will put in a request for Crossrail, a much needed capital investment for London.
Secondly, we also have to tackle the excess costs. This Budget has tried to create the right infrastructure for the future, but it is vital that we tackle the excess costs within our economy and get control of the welfare state. I have received letters from, and spoken to, constituents who feel it is unfair that they have worked hard all their lives and have paid taxes and are living in modest circumstances, whereas others are not working and are being supported by the state in accommodation way beyond anything they could envisage for themselves. As the Chancellor said, some of these benefits have got completely out of control, and we must review these costs.
The Chancellor was also right to point out the waste that the benefits culture engenders, not only in a financial sense to the state, but in terms of the loss of talent from individuals themselves and the ongoing impact on self-esteem and stress on family life to which living in workless households can lead. I therefore welcome the proposals that the various welfare to work schemes will be combined and simplified to support people back into jobs. It is vital for the revised scheme to be as flexible and creative as possible, particularly when looking at ways to bring groups such as lone parents whose children are at school back into the work force.
Thirdly, I want to comment on departmental budgets, which will focus the minds of many of us here in the next few months. I certainly support the target of making savings of 25% in those budgets over the next four years. I have spent many years in business cutting costs in operations around the world and I feel that the 25% figure is challenging and tough, but definitely achievable and necessary.
Fourthly, I want to mention a group in our society who are often overlooked and about whom I am often reminded by my constituents—pensioners. We all know the facts about how many of us are living and thriving into old age these days, but after 13 years under Labour there are still 1.8 million pensioners living in poverty. Many of my retired constituents feel that the contribution that they have made throughout their lives to our economy and society as a whole is not recognised as they struggle to live on their pensions or, if they save money, as they are penalised by taxation policies that seem unfair. I am delighted that we will now be able to restore some of that respect for our older citizens by putting in place the link between pensions and earnings from next April, and through the triple-lock guarantee.
I met one of my spritely 70-year-olds the other day at a surgery. He asked for the Government’s support in helping him to go on working. He said, “I’m fit and well, I love my job, I’m perfectly able to carry on working and I want to be able to continue to do so.” I hope that I will be as energetic as him at his age, and I should like us to take people like him into account when we consider the future of the retirement age.
Andrew Percy
My hon. Friend talks about support for older people. Does she agree that one of the biggest costs for elderly people in the past 13 years has been the doubling of council tax that we saw under previous Governments? In north Lincolnshire, that was done year after year by the Labour council.
Mary Macleod
I agree wholeheartedly with my hon. Friend.
I commend the Government for their plan to increase the tax allowance to £7,475, and I should like to see that go further. Perhaps that level will rise in the next few years. In conclusion, this progressive Budget has set us off on a journey of change. It is well thought out and it gives us a route map for the next five years. I commend the Budget and the courage that it shows in doing what is right for the economy and the country.
Mr Gareth Thomas (Harrow West) (Lab/Co-op)
Yesterday’s Budget should be judged on three key tests. First, will it protect and enhance economic growth, and nurture an all too fragile recovery from the worst global recession since the 1930s? Secondly, is it fair and will the poorest and those least able to defend themselves be affected the least? Thirdly, less than two months after the general election, does it reflect the election manifestos of the coalition Government? On each of those tests, the Government’s Budget is found wanting.
It would be remiss of me not to congratulate the hon. Members for Harrogate and Knaresborough (Andrew Jones) and for Carlisle (John Stevenson) on their maiden speeches. The hon. Member for Harrogate and Knaresborough made a fluent and interesting maiden speech. Having initiated the first debate on social enterprises in this House, I welcomed in particular his interest in and support for social enterprises. He talked about his constituency being affluent and having excellent schools; perhaps at another time, he might acknowledge more generously the part played by the excellent work of the previous Government in that respect. The hon. Member for Carlisle also made a fluent and interesting speech, offering generous praise to his predecessor, Eric Martlew, who continues to be well liked on both sides of the House. I hope that the hon. Gentleman will forgive me for being unable to share his assessment that the Budget was, although tough, also fair, but I shall come to that later.
This is the Conservative party’s Budget—no one seriously thinks that the Liberal Democrats were the driving force behind it, despite the protestations of the Business Secretary and others—and to listen to the Conservatives, one would think that there had not been a global recession. One would think that there was not a need to protect families or to keep demand in the economy, and that the borrowing and other measures that the previous Government took to stimulate the economy were not needed. We took decisive action to invest in the economy and to create the demand that the private sector needed to minimise business failures and job losses.
As the shadow Chancellor made clear, the measures that we took were continuing to have a positive impact. There was a return to growth—fragile, yes, but it was a return to growth. Unemployment was stabilising and starting to fall, while tax receipts were up and borrowing was lower than expected. The Office for Budget Responsibility has made it clear that the measures taken by the last Government are the reason why the economy is growing now. Indeed, those measures were part of Government spending plans which, as the shadow Chancellor pointed out, the party opposite supported until the end of 2008.
The run-up to the Budget was marked by a remarkable level of dangerous scaremongering by the party opposite. The Chancellor has been marching from one television studio to another and, like Don Quixote, he has continued to tilt away at Greek windmills while the Chief Secretary and now the Business Secretary have been competing to be Sancho Panza, bobbing loyally along behind.
We are not remotely in the same position as Greece, yet time after time, Front Benchers and Back Benchers opposite have sought to raise the spectre of Greece to justify the approach behind the Budget. The truth is that this Budget puts at risk a fragile economic recovery. On the OBR’s forecasts, growth will be down this year as a result of measures in the Budget, and down next year too. Unemployment will be higher as a result of the measures in the Budget, which will cut jobs in the public sector and the private sector too because, as my hon. Friend the Member for Penistone and Stocksbridge (Angela Smith) noted, many companies supply goods and services to the Government. The OBR acknowledges that employment will drop by 100,000 as a result of this Budget, and it is true to say that many outside voices expect the figure to be higher still. With tens of thousands more on the dole queue and employment levels down, it is fair to say that this is a return to traditional Tory politics.
The Budget also fails the fairness test. It savages support for the poorest and most vulnerable. Child benefit will be cut, and tax credits reduced for families on low and modest incomes. Support for families with young children is being axed, and the VAT rise will hit the poorest hardest. The Conservative party promised not to balance the Budget on the backs of the poorest, yet they have done exactly that. The Financial Secretary may not yet be aware of the damning verdict of the Institute for Fiscal Studies on the fairness of this Budget, but it has said that it will
“hit the poorest hardest and…keep on hitting them more and more every year”.
The same point was made with considerable force by my hon. Friends the Members for Pontypridd (Owen Smith), for Ogmore (Huw Irranca-Davies), for Kingston upon Hull North (Diana R. Johnson) and for Derby North (Chris Williamson), and by the hon. Member for Brighton, Pavilion (Caroline Lucas).
Mr Thomas
Given the time, no. I apologise to the hon. Gentleman.
The Budget also breaks clear promises made to the British people by the coalition partners at the election. The now Prime Minister told Jeremy Paxman in an interview in late April that his party had “absolutely no plans” to raise VAT. He recognised then that VAT was regressive and that it hit the poorest hardest. He said:
“It does, I absolutely promise you.”
The Deputy Prime Minister agreed that VAT was “very regressive”. He went further, making fear of Tory VAT plans a memorable part of his election campaigning. Yet now, with the electorate having cast their votes, we have an immediate volte-face from the parties opposite.
As my right hon. Friend the shadow Chancellor made clear, in a classic effort to pull the wool over the public’s eyes, those on the Government Front Bench use Labour measures to try to pretend that this Budget is fair. The charts deployed in the Red Book to justify that fantasy claim fail to acknowledge the scale of benefit reductions that will not have worked their way through fully in the period covered. They certainly do not include the impact of looming cuts in public services that are likely to hit the poorest households the most, or of changes to housing benefit. I have a specific question for the Financial Secretary: will he publish charts showing the impact of the Budget not just in 2012-13 but in future in years, by income distribution?
It is not just Opposition Members who recognise the unfairness of the Budget. Robert Chote, the head of the IFS, has said:
“The Budget looks less progressive, indeed somewhat regressive, when you take out the effect of measures that were inherited from the previous government—when you look further into the future than 2012-13 and when you include some other measures which the Treasury has chosen not to model.”
Some Liberal Democrats—perhaps those such as the Orange Book Liberals—will be entirely comfortable with the unfairness of this Budget. Others on the Liberal Democrat Benches need to find the courage of the convictions that they had before 6 May to challenge their Front Benchers.
This is a Budget that puts economic growth at risk. It fails the fairness test. The poorest will suffer the most. The IFS analysis blows away the pretence that we are all in this together. It is a Budget of broken promises. On VAT both coalition parties broke election promises. It is a Budget that is overwhelmingly Thatcherite in tone and we will not support it.
The Financial Secretary to the Treasury (Mr Mark Hoban)
We have had a good debate about the impact of the emergency Budget on the growth of the British economy over the years to come. The contributions from my hon. Friends the Members for The Cotswolds (Geoffrey Clifton-Brown), for Bournemouth East (Mr Ellwood), for Bexleyheath and Crayford (Mr Evennett), for Reading West (Alok Sharma), for Brentford and Isleworth (Mary Macleod) and for Caithness, Sutherland and Easter Ross (John Thurso) were passionate and well informed. There were contributions from the hon. Members for Hemsworth (Jon Trickett), for Kingston upon Hull North (Diana R. Johnson), for Ogmore (Huw Irranca-Davies), for Penistone and Stocksbridge (Angela Smith), for Pontypridd (Owen Smith), for Derby North (Chris Williamson), for Strangford (Jim Shannon) and for Brighton, Pavilion (Caroline Lucas). The debate was thoughtful and informative.
I am pleased to see the right hon. Member for East Ham (Stephen Timms) in the Chamber—[Hon. Members: “Hear, hear.”]
Some maiden speeches were made. There were three in yesterday’s debate. My hon. Friends the Members for Dewsbury (Simon Reevell), for Bedford (Richard Fuller) and for South Northamptonshire (Andrea Leadsom) made excellent speeches about the impact the Budget will have on their constituencies and the challenges it will address. Today, we heard maiden speeches from my hon. Friends the Members for Harrogate and Knaresborough (Andrew Jones) and for Carlisle (John Stevenson).
My hon. Friend the Member for Harrogate and Knaresborough spoke about the challenges in Harrogate. He brings to the House extensive experience in business. As someone who has contributed to the coffers of his former employers, I know that Betty’s is well known for selling fat rascals, but my hon. Friend does not appear to fit that description. I am sure that he will be a great champion for his community.
My hon. Friend the Member for Carlisle talked about the border relationship. Having been born in Scotland but now representing an English constituency, it is heartening to see that not only the coalition Government but Members on both sides of the House who might not be automatic England supporters have supported the English team in its victory today. My hon. Friend spoke well about the need to rebalance the economy, which is one of the big themes of the Budget. I am sure it will be as effective in Carlisle as in the country as a whole. He will make a great advocate for his constituency in the House.
The emergency Budget addresses the most urgent task facing our country and our economy: to put in place a credible plan to reduce the record deficit we have inherited. As a result of the mess that the last Government left behind, the Government have to borrow £1 for every £4 we spend, which is increasing the national debt by £3 billion each week. We cannot afford to let that go on at a time when fear about the sustainability of sovereign debt is the greatest risk to the recovery of European economies.
Failure to deal with the deficit is the greatest threat to growth. Failure to act now would mean higher interest rates hitting businesses, hitting families and hitting the cost of repaying the Government’s debt. That would mean more business failures and sharper rises in unemployment, and would risk a catastrophic loss of confidence and the end of the recovery. The Budget takes action now to restore the confidence in the economy that is needed to underpin the recovery.
The hon. Member for Harrow West (Mr Thomas) quoted from the IFS report. Let me quote from Moody’s commentary on the Budget:
“The UK budget is supportive of the country’s AAA rating and stable outlook because it is a key step towards reversing the significant deterioration in the government’s financial position that occurred over the past two years…Successful implementation would return the government’s finances to a more sustainable trend…the budget plan addresses the major concerns surrounding economic growth.”
Rating agencies endorse the message behind my right hon. Friend’s Budget—to tackle the deficit and ensure that there is a sound platform for economic growth in the future.
A number of Members on both sides of the House raised issues about the impact of the Budget on the most vulnerable in society. Yes, there have been some difficult decisions about taxes and benefits, but let us not forget the £2 billion extra that we have provided for poorer families in receipt of the child tax credit, the £2 billion extra that has gone into pension credit over the lifetime of this Parliament and the 800,000 people who have been taken out of the income tax bracket by the £1,000 increase in personal allowances. That is evidence in our Budget of the coalition’s commitment to fairness, but we must also ensure that the economy is open for business.
We will open up Britain for business by creating a more competitive system for corporation tax, reducing the rate from 28% today to just 24% over four years. That will give us the lowest corporation tax of any major western economy, one of the most competitive rates in the G20 and the lowest rate that this country has ever known. However, the Budget is about supporting not just big businesses, but small businesses, too. We will cut the small companies tax rate by reversing the previous Government’s plans to increase the rate next year to 22% and cutting it to 20% instead, thus benefiting some 850,000 companies. As well as supporting businesses with lower rates, we need to give businesses certainty about the future, so we have published alongside the Budget a five-year plan to fundamentally reform the corporation tax system, with lower rates, simpler rules and greater certainty. Even with our reforms to capital allowances, the manufacturing sector will still pay less corporation tax under the Budget proposals that we announced yesterday.
A number of hon. Members, including the hon. Member for Kingston upon Hull North, talked about the regional impact. A number of hon. Members whose constituencies are outside the greater south-east spoke in the debate, too. As the economy recovers, we must restore the balance not only between the public and private sectors, but across the different regions of Britain. As someone who was born and brought up in the north-east, I am acutely aware that the gap between the greater south-east and the rest of the country grew significantly under the last Government. Between 1998 and 2008, for every private sector job generated in the north and midlands, 10 were created in London and the south. The Budget sets out a new approach that empowers local leadership, generates local economic growth and promotes regional job creation. As well as creating a new regional growth fund worth £1 billion that will be focused on projects in the regions that will help to stimulate economic growth, we will shortly announce a new tax scheme to help to create new businesses in those regions where private sector growth is not strong enough.
For the next three years, anyone who sets up a new business outside London, the south-east and the eastern region will be exempt from up to £5,000 of employer national insurance contributions for each of their first 10 employees hired—up to £50,000 for new start-up businesses. That sends a tremendous signal to those businesses about the importance that they will play in reviving the economy and stimulating economic growth in the future. The Treasury estimates that some 400,000 businesses will benefit, thus ensuring all parts of our country benefit from a more balanced and sustainable economic future.
Huw Irranca-Davies
Will the hon. Gentleman assure us that one of the greatest drivers of economic prosperity over the next few years—high-speed rail electrification, which we have heard about in the Budget—will extend beyond Bristol? We are always told that investment in the railway from London to Bristol benefits south Wales, but we cannot expect the Welsh Assembly Government, who have no tax-raising powers, to fund an extension to Llanelli.
Mr Hoban
That is a matter for the Secretaries of State for Wales and for Transport, but the hon. Gentleman has made his plea for more Government spending. At the last general election, he stood on a platform of about £40 billion in cuts. However, what marks this Government out from our predecessor is, of course, that my right hon. Friend the Chancellor of the Exchequer has said that there will be no further cuts in capital expenditure beyond those announced by the previous Governments and the projects that my right hon. Friend the Chief Secretary to the Treasury announced last week. The major difference is that we are prepared to make the investment to sustain economic growth in the future, but the previous Labour Government were not prepared to make that decision and had announced before the election savage cuts in capital investment.
It is not just corporation tax reform that is needed to ensure that the economy continues to grow in future. There is widespread concern, as has been expressed by hon. Members on both sides of the House, about the importance of credit flowing to the business community. Several hon. Members expressed concern about the number of businesses in their constituencies that had been refused credit. That was why my right hon. Friend the Chancellor announced the £200 million extension of the enterprise finance guarantee scheme, which will support £700 million of additional lending to small and medium-sized enterprises until March 2011, benefiting at least 2,000 small businesses. However, he announced in yesterday’s Budget that we will also bring forward a Green Paper before the summer recess on alternative sources of funding for businesses so that they are not reliant only on bank finance. I believe that that will make a major contribution towards ensuring that growth continues in this country.
I have talked about the reforms to introduce a more competitive corporation tax model in this country. In the context of the regional package, I have also talked about the schemes that will be set up to enable start-ups in regions outside the greater south-east to benefit from a national insurance holiday. Of course, one of the big changes announced by my right hon. Friend was our reform to national insurance contributions. We made it clear that we thought that Labour’s jobs tax would be damaging to the economy. We want to support the growth of Britain’s businesses that will create jobs for British people.
The House will know that the previous Government planned a tax on jobs through a 1% increase in national insurance rates. The Budget reverses that negative effect by increasing the threshold by £21 a week above indexation. In one move, we are lifting 650,000 employees out of the tax altogether. Of course, the measure will have a significant benefit for regions, too. For example, there will be a £150 million benefit for businesses in the north-east, which will help to improve competitiveness. Taken together, the measures set out in the Budget offer a stable and consistent platform for a private sector recovery. They provide the element of growth that is needed alongside our necessary measures to cut spending and increase taxes to restore Britain’s fiscal position.
I referred earlier to the number of hon. Members who contributed to today’s debate, but one thing was missing from all the speeches made by Labour Members. Not one of them uttered a word of apology for the deficit. We saw not a single sign of humility for the mess in which they have left the country, and they did not give a single credible idea to tackle the legacy that they left the people of this country. At a time when Governments throughout the world are taking serious measures to restore public finances and economic confidence, it is remarkable that the Labour party is stuck in the past, refusing to accept responsibility for the problems that it left the country and that the coalition Government inherited. Labour Members are stuck in a world of their own. The mainstream political debate across the world has left them behind. They are stranded and in denial about the scale of the problems that they left this country. It has been left to the coalition to lead the debate on tackling those problems.
The Budget pays the bills of the past and plans for the future. It takes the tough decisions that Labour ducked. Labour Members say that £40 billion of cuts were outlined in their March 2010 Budget, but not one of them has been able to say where those cuts would fall. Our Budget brings spending under control and tackles the deficit. It takes difficult decisions on curbing our deficit, but at the same time, the cuts in corporation tax—reducing the headline rate for large businesses and cutting the small companies rate to 20%—the reforms to our tax system that make Britain more competitive and the reversing of Labour’s jobs tax send a clear signal that Britain is once again open for business.
The Budget tackles the toxic legacy left by Labour. It will remove uncertainty from businesses and boost confidence. It is about the values set out in our coalition agreement—values of fairness, freedom and responsibility. It marks a radical change from the economic policies of the past, offering transparency where before there was opacity. It offers a change—
The Lord Commissioner of Her Majesty's Treasury (Angela Watkinson)
Monday next, Mr Speaker.
Mr Speaker
Monday next. We are grateful.
The debate stood adjourned (Standing Order No. 9(3)).
Ordered, That the debate be resumed tomorrow.
Speaker’s Committee for the Independent Parliamentary Standards Authority
(13 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Secretary, Office of the Leader of the House of Commons (Mr David Heath)
I beg to move,
That Mr Nicholas Brown, Bob Russell, Laura Sandys, Mr Charles Walker and Ms Rosie Winterton be appointed under Schedule 3 to the Parliamentary Standards Act 2009 as members of the Speaker’s Committee for the Independent Parliamentary Standards Authority until the end of the present Parliament.
The motion sets out the nominees for membership of the Speaker's Committee for the Independent Parliamentary Standards Authority, the composition and functions of which are defined in the Parliamentary Standards Act 2009. I remind the House that the Committee is a statutory body established under the Act, not a Committee of this House, which is why its members are being nominated by a Government motion.
There are five nominees, who will sit alongside three ex officio members. The first of those ex officio members is the Speaker. The others are my right hon. Friend the Leader of the House of Commons and the Chairman of the Standards and Privileges Committee. The nominees are drawn from recommendations from both sides of the House.
Mr Peter Bone (Wellingborough) (Con)
My hon. Friend is listing excellent members of the Committee and I am sure that it will be first class, but will the Committee have the opportunity to report to the House? Some Speaker’s Committees have a quarter-hour slot for question time in the House, and it would be most useful if that Committee reported to the House via one of its members. In that way, we could keep updated and ask some questions.
Mr Heath
I am grateful to the hon. Gentleman for that point. The duties and functions of the Committee are fairly closely defined by the Act. Its only functions are to ratify the nomination of IPSA’s chair and board members before they are put to the House, and to approve the estimate—a very important function—so there are perhaps limited requirements for reporting, but I think he makes a valid point. We have such an arrangement for the Speaker’s Committee on the Electoral Commission. I shall certainly take his suggestion on board and see whether an arrangement can be made for the Committee to be answerable to this House.
As I said, the nominees are drawn from recommendations from both sides of the House and I very much hope that they will be accepted by both sides. I commend the motion to the House.
Barbara Keeley (Worsley and Eccles South) (Lab)
I welcome the setting up in this Parliament of the new Speaker’s Committee for the Independent Parliamentary Standards Authority, as defined in the Parliamentary Standards Act 2009, amended by the Constitutional Reform and Governance Act 2010.
I add my support to the suggestion that we are reaching the point where we need some feedback. Hon. Members have raised a number of issues and having some sort of question time slot would be helpful. We know that the public want to have full confidence in our system here in Parliament, but it is equally important that Members of Parliament have full confidence in the system, and perhaps that is what we need to develop.
I welcome the nomination of those Members listed in the motion. I hope that it helps the House to move forward on this issue.
Question put and agreed to.
petitions
(13 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text
Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)
Madam Deputy Speaker, I have been asked to present to the House this petition from a large number of constituents concerning the transfer of post office facilities at Viewpark in north Lanarkshire.
The petition states:
The Petition of residents of Coatbridge, Chryston and Bellshill constituency and others,
Declares that the proposed transfer of Post Office facilities from Market Place, Viewpark to Old Edinburgh Road, Viewpark is unacceptable for social, economic and community reasons.
The Petitioners therefore request that the House of Commons urges the Government to take all possible steps to prevent the proposed transfer of facilities.
And the Petitioners remain, etc. [P000838]
Jessica Lee (Erewash) (Con)
I am grateful, Madam Deputy Speaker, for the opportunity to present this petition. There are no fewer than 2,481 signatures on a petition urging the Government to consider making St George’s day a public holiday. I am grateful to the company, George’s Tradition, which is an award-winning fish and chip chain based in Erewash and surrounding constituencies, which has collated the petition.
England is one of the few countries without a public holiday for its patron saint. Indeed, the House will be aware that in Northern Ireland, St Patrick’s day is a public holiday, and in Scotland, St Andrew’s day is a voluntary bank holiday. It is a wonderful opportunity to celebrate a country’s traditions and heritage. I cannot let the petition pass—
Madam Deputy Speaker (Dawn Primarolo)
Order. The hon. Lady is presenting a petition, and she is allowed to say, according to the procedures of the House, a few words, but she cannot make a speech, and I fear that she is drifting into doing so. If she can make her remarks crisp in presenting her petition, I should be grateful.
Jessica Lee
I shall do so. Thank you, Madam Deputy Speaker.
Turning to the prayer, the petition states:
The Petitioners therefore request that the House of Commons urges the Government to bring forward proposals to make St George's Day a public holiday in England.
Following is the full text of the petition:
[The Petition of residents of the Erewash constituency and others,
Declares that England is one of very few countries in the world that does not have a public holiday to celebrate its national day; notes that St Patrick's Day is bank holiday in Northern Ireland, and that St Andrew's Day is a voluntary public holiday in Scotland; and further declares that everyone who is part of England should be able to celebrate its traditions, its history, its heritage and the English way of life with a public holiday on St George's Day.
The Petitioners therefore request that the House of Commons urges the Government to bring forward proposals to make St George's Day a public holiday in England.
And the Petitioners remain, etc.]
[P000839]
The Vice-Chamberlain of Her Majesty's Household (Mr Mark Francois)
On a point of order, Madam Deputy Speaker. On a technical matter, we should like to request that the order for resuming debate on the Budget refer to “tomorrow” and not “Monday next”. I hope that, with the approval of the Chair, that can be accepted.
Madam Deputy Speaker
Thank you for that point of order, which is extremely helpful to the House. I understand that it is within my powers as Chair to accept that request. The record will be corrected.
Finsbury Health Centre
(13 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Emily Thornberry (Islington South and Finsbury) (Lab)
Finsbury health centre in my constituency is a grade I-listed, purpose-built community health centre. The building is famous internationally and was the proud product of Finsbury's Labour council in the 1930s. It is a unique and ground-breaking building, and a real palace of the people.
Finsbury health centre is the product of modernist architecture and socialist reforming zeal. The council’s 1930s socialist leader, Alderman Harold Riley, had ambitions of urban revitalisation in Finsbury. The council wanted to build a comprehensive health centre amid public baths, libraries and nurseries. In the end, only the health centre was built.
Along with Chuni Lai Katial, chairman of the public health committee, Alderman Riley proposed plans for a health service that brought together the borough’s disparate services. In the 1930s in Finsbury, lice, rickets, and diphtheria were common, and most residents suffered from poor housing and atrocious, vitamin-deficient diets. Whooping cough and TB were widespread and responsible for thousands of deaths, only 10 years before the national health service was founded. However, in 1938 the council approached Tecton, whose lead architect was Lubetkin, and that was the first municipal commission of a modernist design.
Lubetkin was born in Georgia in 1901 and watched the 1917 revolution unfold while he studied art in Moscow. His attitude was:
“Nothing is too good for ordinary people”,
and he applied that to all his designs. In the Finsbury health centre he wanted to create
“a language of architectural forms, which, being firmly based on the aesthetics of our age, conveys the optimistic message of our time—the century of the common man.”
Lubetkin’s vision was that the health centre should be like a club. He wanted to encourage people to use its services by making them feel comfortable using them. They can just “drop in”, Lubetkin later said, and in the Finsbury health centre he created a light, bright, open building.
The entrance had red columns, azure ceilings and chocolate brown floors, and glass bricks and walls were used to bring a light, airy feel. It was designed to contrast with the gloom of the surrounding slums, and the glass walls sparkled in the sun. In a phrase that we might not hear modern men use when describing a building, Lubetkin said that it was to be
“as beautiful as the hair of a beautiful young girl in the summer sunshine.”
The building involved contributions from many who went on to be leaders in design and construction. The concrete structure was devised in collaboration with Ove Arup, a concrete engineer who was to work a lot with Tecton and went on to design and engineer other concrete icons, such as the Sydney opera house. The health centre has murals by Gordon Cullen. They were whitewashed during the second world war, but I hope that one day they will be restored to their former glory. Indeed, they are in good nick underneath the paint. The murals encouraged healthy living, with slogans such as:
“Live outdoors as much as you can”
and
“Fresh air night and day”.
The health centre was an oasis for the people of Finsbury, who mostly lived in small, dark and badly ventilated slum tenements. For all the talk of its design, however, we politicians appreciate the other way in which it was entirely revolutionary: it was financed by public funds—a precursor to the national health service.
When the centre opened, it incorporated a TB clinic, a foot clinic, a dental surgery and a solarium. It had facilities for cleaning and disinfecting bed clothes, a lecture theatre and a mortuary. Today, the centre brings together GP services and other health provision, everything from community dentistry to physiotherapy and services for stammering children. Indeed, I should declare an interest, because my family use the dentistry services of Dr Mysa at the centre.
Although the centre was a precursor to the NHS, it continues to show the way and is the model for the inner-London hub-and-spoke polyclinics that we now talk about. The centre was in fact the first polyclinic, and it would be a great shame to see all the lessons learned from that great building, which has been used over the past 70 years, simply thrown away.
Despite the health centre’s illustrious history, it is under threat. Although Islington primary care trust has worked for many years on plans to repair and improve the building, it decided two years ago to throw away the buildings and start again. It is almost impossible to find space in south Islington and Finsbury to co-locate that range of health services, and the plan seems to be to re-provide only GP premises; all other services will be dispersed to other venues.
There is talk of trying to find another health centre, but those of us who know the area believe that that is more of an aspiration than a reality. We have a potential polyclinic in our midst, and we are simply giving it away. That is a step in the wrong direction, and if the centre is closed, my constituents, rather than moving towards integrated health care, face losing a pioneering and excellent example of integrated health care in a fantastic, beautiful and unique building.
Finsbury health centre needs many urgent repairs. It needs a lift, for example. It also needs modern wiring, new plumbing, windows that close and working heating and ventilation systems, but a lot of investment has recently been made, including in roofing, concrete repairs and a new wing. Islington primary care trust argues that, by using its LIFT—local improvement finance trust——partner, it could refurbish the health centre, but that it would cost £400,000 a year more than building new GP premises on an adjoining site, and that that is more affordable. However, that estimate is based on a stage 1 costing exercise by the LIFT company, and it was not carried out by an expert in historic buildings.
A great deal of work has been done to advance the argument for keeping the health services at Finsbury health centre. In May 2007, I wrote to the PCT urging it to keep the health centre. In March 2008, I met the chief executive and the chair of the PCT confirming that I was opposed to the PCT’s plan to sell it off. In May 2008, I had a meeting with the PCT, English Heritage and the London borough of Islington to try to bring the parties together. In June 2008, I met the Heritage Lottery Fund to lobby for funding for the health centre.
In August 2008, I chased the PCT over an application to EC1 New Deal for Communities to see whether it would be possible to get money from the new deal to pay towards the health centre. It would seem that, although there had been a previous application to EC1 NDC for funding for Finsbury health centre, neither EC1’s board nor the PCT could locate the minutes. In September 2008, I met the PCT again and pushed the argument that we should keep the health centre open. In November 2008, I asked the PCT to provide full financial details and lobbied the then Secretary of State for Health to retain the health centre.
In January 2009, I wrote to the Secretary of State again, pressing for Finsbury health centre to continue to deliver health services to my constituents. Between January and June, the local health scrutiny committee referred Finsbury health centre to the Secretary of State, who then referred it to the independent reconfiguration panel, which then referred it back to Islington for local resolution. There has been no local resolution.
There were further inquiries by the health scrutiny committee, and I met EC1 NDC again to ask whether it could provide some capital to put towards Finsbury health centre. I also met the PCT to that end. The health scrutiny committee has been unable to reach agreement with the PCT. We therefore think that the matter is likely to be sent back to the Secretary of State. That is why I have applied for a debate now, in order to flag up this extremely important issue and to put the new Government on notice.
Last year, Islington council’s health and well-being scrutiny committee referred Finsbury health centre to the Secretary of State’s independent reconfiguration panel because the PCT had failed to consult the public properly about the centre’s future. The reconfiguration panel referred the decision back to Islington for local resolution, and as things stand the committee has been unable to reach agreement.
Will the Minister indicate whether he will retain the independent reconfiguration panel and explain the next steps if a decision is referred back to the Secretary of State? I am very concerned that NHS Islington is allowing the health centre to deteriorate while a decision is awaited. English Heritage recently met NHS Islington to discuss the need for urgent repairs to prevent deterioration having a serious and detrimental impact on the centre. Those of us who use it regularly can see it deteriorate before our eyes. Such deterioration will result in the costs of repair increasing even further.
My constituents feel very strongly about retaining the health centre. Members of the Save Finsbury Health Centre campaign, some of whom are here today, have attracted a great deal of support from Islington and beyond, including internationally, in their fight for the health centre. Last January, we presented a petition of 1,850 signatures to the Department of Health; it now has more than 2,100 signatures. The area surrounding Finsbury health centre is a significantly deprived one, and the patients it serves are among the most vulnerable of those in Islington. I am very concerned that patients who access existing services at the centre will not continue to do so if those services are relocated.
Islington council’s health and well-being committee recently issued a report on the future of Finsbury health centre. It found that 30% to 40% of patients access more than one service at the centre. That enables them to make appointments for treatment on the same day, meaning that they are able to visit the centre on one occasion rather than several. The committee’s 93-page report provides a detailed examination of the future of the health centre and raises a number of concerns and recommendations. It examines the assumptions behind the PCT’s cost estimates and calls for a proper feasibility study of the cost of refurbishment and for future maintenance of the buildings to be undertaken by a competent specialist.
The evidence that the committee received shows a wide discrepancy in cost estimates and opinions on fitness for purpose given by several witnesses and NHS Islington. I have to say that whenever I have met NHS Islington it seems to come up with a new figure as to how much this would cost. The committee also found that NHS Islington had failed to factor in the significant cost of disposing of the site.
The committee considered the question of funding and found that there are new avenues to explore. A charity specialising in the restoration of historic buildings, Heritage of London Trust Operations, told the committee that it was confident of attracting funding for restoration. English Heritage made it clear to the committee that the social history of the building as a health care centre was vital to the listing, and that the possibility of accessing funds was much greater if the building were in its original use.
Finsbury has already seen its magnificent town hall sold off for a pittance by the then Liberal Democrat council and we do not want another part of our precious heritage sold off for peanuts. Will the Minister give his assurance that Finsbury health centre will continue to provide health services to my constituents and that no agreement to close the centre will be given if the decision is referred to the Secretary of State again?
Finsbury health centre started 10 years before the NHS and showed the way as to how we should look after people, particularly the poor. It is a fantastic building and a fantastic political achievement, and the people of Finsbury are immensely proud of it. We should not lose it now. If the Minister has time, I would appreciate him coming to visit the health centre with me, where I will introduce him to my dentist.
The Minister of State, Department of Health (Mr Paul Burstow)
I congratulate the hon. Member for Islington South and Finsbury (Emily Thornberry) on securing this debate on an issue that is clearly very important to her and many of her constituents, who have campaigned for many years. I thank her for taking the time for this debate, not least because it has educated me about some initiatives that were taken prior to the foundation of the NHS. Some of those were clearly inspirational and influential in shaping the ideas that informed the foundation of the NHS.
Earlier today, I had a look at the plans, so I saw for myself just what a huge beacon of hope a building of that sort would have been in the 1930s in the area that the hon. Lady describes. I understand the strong feelings that she has expressed and the powerful case she makes.
The hon. Lady asks for an assurance on the building. I will amplify the reasons for this in a moment, but such an assurance would prejudge the process, which I am sure she would not expect me to do in the House tonight. However, I want to be as helpful as possible. In setting out the case tonight, she rehearsed some of the important history—it goes back more than 70 years. Having seen the pictures and the plans, I share her view of the significance of the building, which clearly goes beyond the boundaries of the London borough of Islington.
The building’s design was ahead of its time. I am told that the centre was the first of its kind, and the hon. Lady outlined the many services that the centre has provided over the years. It was indeed a visionary endeavour.
Emily Thornberry
The point is that it was the first publicly funded health centre in the country. Although it was primarily funded by a local authority, that local authority showed the way to a future national Government.
Mr Burstow
Such initiative on the part of local authorities is perhaps something that we should applaud and learn more from for the future even today.
When I was preparing for the debate, it was drawn to my attention that the architect of the centre, Lubetkin, was involved in the design of the penguin pool at London zoo. I have had the pleasure of visiting London zoo with my children, so I recognise the range and scope of his designs. As the hon. Lady said, when the Finsbury health centre was opened in 1938, Lubetkin remarked:
“Nothing is too good for ordinary people”.
He was quite right too. The notion of the health centre as a palace of the people is important.
Lubetkin was ahead of his time, but that motto resonates today, because all NHS staff, not just those at the Finsbury health centre, take it to heart and practise it every day. They have played, and continue to play, an essential role in improving health within the London borough of Islington and elsewhere, and I can understand why the centre is viewed with such affection and passion by local residents, and why this matter has aroused such strong feeling.
I need, however, to rehearse some pros and cons. I understand that the future of the Finsbury health centre has been under discussion and debate for at least 20 years, and that more recently Councillor Martin Clute, the chair of the Islington overview and scrutiny committee, has played an important role in leading the debate about the relevant priorities. I am also told that the primary care trust and Islington council’s health and well-being review committee are continuing to find ways forward and to discuss this matter.
There are strong arguments on both sides, many of which the hon. Lady has rehearsed. For instance, we have to consider the view that what was state of the art 70 years ago may not be well suited to the demands and delivery of 21st-century health care. The PCT has told me, in briefings I have received, that there are real limitations to the centre in its current form. For instance, there are problems meeting statutory requirements on disabled access. In addition, reception and other patient areas are badly laid out and cramped, and the centre is in a poor state of general repair. Criticism could be levelled at the PCT for failing to make those investments, but nevertheless those problems remain. I am also told that it is proving difficult for the centre to provide patients with dignity and privacy, about which we should all be concerned. The hon. Lady has already told us about the status of the building. It is a grade I listed building, which inevitably places additional restrictions on what work can be done to rectify the problems I have identified.
On the other hand, the local health and well-being review committee has published a report questioning the PCT’s conclusions and has raised important concerns about access to health care for some of the most vulnerable groups in Islington.
Emily Thornberry
Lubetkin designed the building with the idea of flexibility in mind, as was highlighted to the PCT and Islington council when I was having discussions with English Heritage. Although it is a grade I listed building, there is a huge amount of good will in terms of what can be moved and how things can be changed within the building, because everyone wants, if possible, for the building not to be mothballed, but to continue to be a living, breathing building.
Mr Burstow
I hope we can find a way to preserve it as a living, breathing building and a testament to its history.
Finsbury health centre could be modernised, as the health and well-being review committee has said. The hon. Lady’s point about the co-location of services was made in the representations from the overview and scrutiny committee. However, the PCT would say that considerable financial costs are associated with that. It has estimated that the capital costs of £9.1 million to refurbish the health centre could translate into about £1 million a year over 25 years. By contrast, it says that the PCT could provide a new building somewhere else in the area and that the rent for that would be £600,000 per annum. On that basis, the NHS asserts that it would be paying a premium of £400,000 per year to keep the Finsbury health centre open.
I understand the trust has pursued various sources to fund the refurbishment, including the Heritage Lottery Fund, but these have not been available due to the eligibility criteria used. With this in mind, clearly there is an important issue that needs scrutinising about the costs and benefits of keeping the health centre open. Would that money be better spent on providing services to local people elsewhere rather than in the existing building? There is an opportunity cost here—contested perhaps, but a cost none the less.
On the Islington new deal committee, I understand that representations were made, about which the hon. Lady has talked, but I gather that they were rejected last December by the committee and the moneys not made available. However, I think that I can give her some hope in respect of announcements that the Government made a few weeks ago on the principles that we see being critical to how we reconfigure services in the future. That is clearly relevant to this controversial issue, because it is important that neither I nor the Secretary of State should be taking sides in the debate that is taking place locally. It is important that the matter is resolved locally and, only if it cannot be, that Ministers then become involved.
The issue should be resolved by the PCT and the local health and well-being review committee working with patient groups, clinicians and, more generally, the local authority to reach an acceptable solution. I recognise that change in the NHS has always been a problem, in terms of how it is handled locally. It has certainly been an issue in the past—I have seen that in my own constituency—and that is often why decisions have provoked the deep concerns and anxieties that the hon. Lady has described this evening. That is why the Government are determined to do things differently, in a way that gives MPs, the public and particularly clinicians the opportunity to shape the decision-making process. That is why the Government have already announced an immediate moratorium on all pending service changes. Indeed, we have required NHS London to look again at the entire Healthcare for London strategy.
The Secretary of State for Health has set out four crucial tests that all future service changes must now pass. First, they must have the support of GP commissioners. Secondly, arrangements for public and patient engagement, including local authorities, must be strengthened. Thirdly, there must be greater clarity about the clinical evidence used to underpin any proposals. Fourthly, any proposals must take into account the need to develop and support patient choice. The whole point is to ensure that all decisions that affect local communities are taken by local communities, with particular reference to what clinicians think is the best solution, based on robust clinical evidence. The point that the hon. Lady made about co-location needs to be considered in that regard.
What does all that mean for Finsbury health centre? It means inviting patients, GPs, clinicians and the local council to play a fuller role in deciding what should happen next, sharing responsibility for deciding on the best way to secure those important services. I understand that further local discussions are taking place between the PCT and the health and well-being review committee about its report and how the PCT will respond to it, which it will within the next few weeks. I stress that it is vital that the PCT and the local health and well-being review committee continue to work together with local groups to find a resolution to the problem. However, the PCT tells me that it is in the process of reviewing its plans against the criteria that the Secretary of State has set out. I would urge the hon. Lady to engage with and challenge the PCT to ensure that it is doing just that.
It is particularly important that the PCT works with local GPs and commissioners. Furthermore, it is not just the overview and scrutiny committee that needs to take a view; the whole of the London borough of Islington council needs to form a view as well. I strongly believe that it is in everybody’s interest that the issue is resolved quickly. It has been going on for far too long, and I understand the hon. Lady’s frustrations. What we need is a resolution that addresses those concerns in the way suggested by the Secretary of State to look at reconfigurations.
I hope that a swift resolution is possible, but there is always the possibility that the local health and well-being review committee will still consider the outcome unacceptable and refer it to the Secretary of State. The hon. Lady asked me how that would be dealt with by the Department. The answer is that there will continue to be an independent process of reconfiguration review to offer the Secretary of State advice in undertaking his arbitration and decision-making responsibilities at that final stage.
I recognise that these are difficult decisions, and they quite rightly provoke debate and discussion—and, in this case, disagreement. I am afraid that not all decisions can be made here in Whitehall or Westminster by Ministers, and we certainly should not seek to dictate. However, what is important to me as a Minister is the integrity of the decision-making process. By seeking the support of GPs and local people, basing decisions on clear evidence, and ensuring that all changes improve patient choice, we believe that we can achieve a better health care system for the people of Islington—one that is affordable and cost-effective. That is what I now expect from NHS Islington.
The hon. Lady will continue to play an important part in that, ensuring that all the sources of funding are understood and can be brought to bear. I hope that she will engage with the PCT and the local authority to get the long-term solution that delivers health care that is fit for purpose and is what local people want.
Question put and agreed to.
Westminster Hall
(13 years, 10 months ago)
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Human Tissue (Availability)
(13 years, 10 months ago)
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Jo Swinson (East Dunbartonshire) (LD)
The issue of making samples of human tissue available for use in medical research may seem obscure at first glance, but it has a huge impact on some of the other issues that we commonly discuss in this place, including the development of new medical treatments for common diseases, the safety of patients treated by the NHS, and the ever-controversial matter of scientific experimentation on animals. In today’s debate I shall discuss how increasing the availability of human tissue to the research community would be to our advantage, and shall suggest ways in which the Department of Health might help to make tissue samples more accessible.
I first became aware of the issue because of life sciences activity in my constituency. Glasgow is unfortunate in having one of the highest cancer rates in Europe, but that means that it has become a world-class centre of excellence. The Beatson research centre is based in my constituency, just outside Glasgow, and a new translational research centre is due to be built alongside it shortly.
The area is also a hub for other companies that work in the life sciences industry, such as the biomedical research company Biopta, which is based in Bearsden in East Dunbartonshire. Biopta uses fresh samples of human tissue to test new medical treatments before they get to the stage of clinical trial. Those tissue samples have been removed from patients during surgery and the parts not needed for diagnosis or therapy have been donated, with the patient’s consent, for use by researchers. Tissue is therefore not removed for the purposes of research; it is removed during surgical procedures anyway, most often to help in making a diagnosis, such as during a biopsy. A sample is taken, and in some cases an entire lump may be removed, but usually only a tiny amount of it is needed on a slide for diagnosis by examination under a microscope, and the rest is either incinerated or stored for use by researchers.
When I visited Biopta, the chief executive, David Bunton, explained the benefits of testing with human tissue. First, testing new treatments on tissue samples can help to protect those who volunteer as subjects in clinical trials from harm. I am sure that hon. Members have all seen adverts in newspapers, or perhaps in a doctor’s surgery or hospital, looking for people to give their time to participate in a study of a new medical treatment. Sadly, we have also all heard of clinical trials that have gone badly wrong, when people have become seriously ill; some have even died. By testing treatments on human tissue samples first, it is possible to rule out some potentially harmful treatments before they are tried out on human subjects in clinical trials.
Although there is no guarantee that a treatment that is tested on tissue samples and appears safe will not cause harm to a living person, currently the various techniques involving live tissue samples are the closest we can get to simulating the use of a particular treatment on a real patient. Basically all drugs are tested on human cell lines, but not all of them are tested on human tissue, whose reactions are closer to the behaviour of normal cells in the human body than cell lines in an artificial environment.
As well as posing a potential risk to the health of subjects, unsuccessful clinical trials also cost a great deal in time and resources. One of the biggest barriers to the development of new treatments for diseases is the huge costs and the financial risk involved in trialling treatments, as there is always a risk that they will not work. Many drug companies expect that nine out of 10 drugs taken forward will not reach production. That risk can never be eliminated, but the use of live human tissue samples can rule out some unsuccessful drugs before trials are carried out. That can reduce the costs.
Another reason for using human tissue samples is that it may reduce the need for experiments on animals. I shall touch only briefly on that point, but it is an issue on which many Members, like many of our constituents, feel strongly; other hon. Members may want to speak further about it. I accept that some testing on animals is still necessary for medical research, but of course we should pursue alternatives wherever possible, in line with the approach of replacement, refinement and reduction. Despite the benefits of tissue research that I have explained, vast quantities of residual surgical tissue are regularly incinerated as clinical waste. As a result, there is a shortage of human tissue samples for research.
Many of the diseases for which treatments could be developed by such research are common, and all hon. Members present for the debate will know someone who has suffered from them. Breast Cancer Campaign reports:
“There is a serious lack of access to breast cancer tissue available for breast cancer research. This access issue is hampering progress in breast cancer research: developing new treatments, finding the causes of breast cancer and discovering new breast cancer genes can only be achieved if breast tissue is available to scientists across the UK and worldwide.”
In this country one woman in nine will be diagnosed with breast cancer in her lifetime and 1,000 women and seven men die from it every month.
Another common disease for which no cure has been found is Parkinson’s disease, with which someone in the UK is diagnosed every hour. Researchers in the UK are looking to develop new drugs that could slow down, stop or even reverse the condition, and perhaps find a cure. According to Parkinson’s UK:
“A key challenge is that there is a shortage of human tissue, including intestinal tissue from the gut, available for research. There are then difficulties associated with obtaining it when it actually becomes available. We would therefore welcome any move to increase the amount of tissue which is retained for research purposes, including that which has been removed during surgery. For the first time, it would allow researchers to look at changes in parts of the body in people who are living with Parkinson’s.”
If tissue samples are to be used for research purposes, a number of things need to happen. First, the tissue donor needs to consent to the use of their tissue for the purpose of research. Secondly, tissue needs to be stored in an appropriate condition, and thirdly there needs to be a mechanism for making researchers aware of what tissue is stored where. As to consent, clearly it is important that patients should have the final say in how their tissue is used, but the current process for gathering consent is clearly not working. In a submission to the Academy of Medical Sciences, the Human Tissues Working Party, which includes a range of groups including the Safer Medicines Trust and Biopta, wrote:
“Respect for patients’ rights and wishes must always be paramount, and current regulatory requirements are very good at ensuring that anyone who may not wish to donate their tissues does not do so.”
However, the submission continues:
“The widespread desire amongst members of the public to contribute to medical research in this way frequently goes unfulfilled because many potential donors are not made aware of the possibilities of donation. The situation is often exacerbated by what is widely viewed as a complex and time-consuming bureaucratic process, time constraints amongst staff, a lack of appreciation amongst hospital staff of the importance of high quality tissues.”
Mark Tami (Alyn and Deeside) (Lab)
The hon. Lady has hit on the key point: often people are just not asked. As with cord blood, for example, I think that if the uses of the tissue and the benefits that can come from it are explained, people will say yes. However, people will generally be asked at a vulnerable time and may be nervous about what is happening and why, and that is an issue that should be addressed.
Jo Swinson
The hon. Gentleman is right. Often people are not asked, and the timing of the request is a question to be considered.
There is little public awareness of the need for live tissue, and it is fair to say that most people would never think of proactively offering to donate tissue samples for research. As the hon. Member for Alyn and Deeside (Mark Tami) has said, that is not uppermost in the mind of someone approaching a surgical procedure. Therefore, we need to ensure that patients are routinely asked whether they would like to donate.
Currently, it is up to each hospital trust to design and implement its own policy for gaining consent. Before a patient undergoes surgery, he or she will always be asked to sign a consent form giving the hospital the right to operate, and that would also seem like a good opportunity to ask for consent for the use of their tissue for research. Indeed, many hospitals do that, although many more do not.
Last year, I submitted a freedom of information request to every acute trust in England and every health board in Scotland, asking for a copy of their surgical consent forms. I found that, in England, 39% of hospital trusts have an option on their consent form for patients to donate tissue for research but that 61% do not. In Scotland, the situation is even worse—29% of health boards include it on their consent form, but 71% do not. Of those trusts that do not include the option on the form, some said that they had a policy of requiring their staff to ask patients verbally for consent; but others told me that they do not take tissue for research purposes at all.
The situation in Scotland is slightly different. Although the Human Tissue Act 2004 applies in Scotland, the Human Tissue Authority is responsible north of the border only for transplantation, not for regulating the use of tissue for research. However, the National Research Ethics Service is UK-wide, so I see no reason why procedures for gaining consent for the use of tissue cannot also be UK-wide; we would then have some consistency for those having operations, whether they live in Dundee or Doncaster.
The Human Tissues Working Party writes:
“Evidence suggests that the vast majority of patients agree to their surplus tissues being used in research. Moreover, they are equally happy for their tissues to be used by academic, biotech or pharmaceutical laboratories, as they understand that many players are required to bring new treatments to patients.”
Although no nationwide figures are available, research by the NHS Greater Glasgow and Clyde health board shows that only 5% of surgical patients in the area were being given the option to donate residual tissue. One way to increase that figure would be to standardise surgical consent forms across the country, ensuring that the option is always included. I discussed the idea last year with representatives from the Human Tissue Authority, but they argued that researchers and foundation trusts were likely to resent attempts to impose such a one-size-fits-all solution, as they all have different research systems in place.
Perhaps more importantly, the widespread view, articulated by the hon. Member for Alyn and Deeside, seems to be that when patients are about to undergo surgery, they may not be in the best frame of mind to make decisions about how their tissue might be used. They receive a great deal of information at this stage, including legal and medical information, which may be overwhelming; on top of that, they will understandably be nervous about undergoing surgery. Surgeons may also find it inconvenient. A surgeon at one London hospital told the Safer Medicines Trust that surgeons simply do not have time to explain to patients the benefits of donating tissue and simply tick the “no” box on behalf of their patients.
The Greater Glasgow and Clyde health board is taking a great interest in the matter, thanks particularly to the efforts of Professor Barry Gusterson at the university of Glasgow. It says that pre-surgical assessments could present the best opportunity to discuss the question with patients, and is now looking to make that standard practice. There is the potential, with IT developments, for patients checking in for pre-surgical appointments to be given information about tissue donation, and the opportunity at that point to click a box on the screen. However, we need to ensure that patients have information about what will happen to their tissue if they give consent. The health board has produced an information leaflet for patients that explains how and why tissue is stored by researchers, and for how long. That is a brilliant example of how information could be disseminated. I shall send the Minister a copy, and suggest that she share it with hospital trusts in England, Wales and Northern Ireland as an example of best practice.
The Scottish Government are working with schools to promote the benefits of joining the NHS donor register, giving information to young people about how the register works, and offering real life stories about people who have received transplants and the new lease of life that they now enjoy. A similar scheme could be developed for use throughout the UK to make people more aware of the research need for surplus surgical tissues.
In the longer term, we might even aim to reach the stage where hospital staff and the public are so well-informed about the need for surplus tissue for medical research that a system of presumed consent could be implemented. That would, of course, need to follow a national education campaign to explain the benefits of research on human tissue.
The debate about whether consent for organ donation should be opt-in or opt-out has been the subject of heated debate in this place. Indeed, my friend Dr Evan Harris, the former Member for Oxford West and Abingdon, introduced a Bill that would have brought in a system of presumed consent; under it, people would have to have opted out of it if they did not want to donate organs. In that case, of course, the debate was about organs for transplant rather than tissue for research purposes, which is slightly different, but we are still talking about measures that could save people’s lives. Personally, I would favour an opt-out system for tissue taken from live patients, as it would be less controversial; certainly, taking tissue post-mortem is more complex. I would welcome the Minister’s views on whether we could review the Human Tissue Act 2004, and whether the opt-in, opt-out question for live tissue samples might be considered.
The Department of Health carried out a review last year of the impact that human tissue legislation has had on the research community. It found that:
“the majority of participants report that human tissue legislation and subsequent regulation by the HTA had a negative impact on the research sector”.
That, of course, was not the intention of the legislation. The drive to ensure ethical practice is commendable—indeed, it is vital. However, 68% of respondents believed that it has made human tissues harder to obtain, and 61% believe that it has led to the disposal of potentially valuable tissue. Clearly, the use of human tissue for research must be subject to careful regulation to ensure a high standard of ethical practice, but that evidence suggests that the legislation may need to be reviewed.
Once consent has been granted and tissue has been removed, the question is how and where it should be stored in order to ensure that it is available for use by researchers wherever it is needed. Most tissue is stored in hospitals, and it can be difficult for researchers to find out what tissue is stored in which hospitals in various parts of the country, so that they can gain access to types of tissue that they need. There are more than 100 tissue banks in the UK, some publicly funded and some private, but scientists’ access to the tissue is seriously affected by its location—and their personal contacts—and some institutions are more willing than others to share their tissue stores.
Breast Cancer Campaign is in the process of setting up the first national tissue bank for breast cancer researchers in the UK. It will have a policy of equal access for researchers throughout the country. It is being funded through voluntary donations. As well as national tissue banks, there is another option for improving access to tissue samples; creating a database or online system would allow researchers to see what tissue there is and where, and to make requests for it. The national cancer biobanking organisation onCore has tried to set up a virtual network of tissue banks to share tissue with researchers across the country, but it has had limited success.
I maintain that the problem is not one of funding. Primarily, we need better co-ordination and implementation of the processes that need to be implemented, as well as greater awareness among health professionals and members of the public about the importance of human tissue research. Far too often, valuable tissue is incinerated rather than being collected for research purposes, even though collection is not difficult. It is a matter of spreading best practice, giving information to hospital staff and patients and making the gaining of consent part of the routine of surgical operations. When tissue is collected, it is not being made sufficiently accessible to researchers. I hope that the Minister will tell us whether the Department of Health is able to facilitate greater co-ordination across the NHS, and among academic and research institutions, to improve the sharing of information and clinical material such as human tissue.
I am sure that all hon. Members will agree that we should be doing all we can to speed up research into treatments for the diseases that I have mentioned, and the many others that I have not. I look forward to the Minister’s response.
Mr Russell Brown (Dumfries and Galloway) (Lab)
I attended this debate not intending to speak, but I congratulate the hon. Member for East Dunbartonshire (Jo Swinson) on securing it.
I wish to talk about the terrible condition of Parkinson’s disease. Yesterday evening I was making my way home and called my wife, as I routinely do. She informed me that a family member and good friend of ours, who is on holiday in Malta, had suffered an aneurysm, and is on a life-support machine until her family can get to her later today. I have known the lady for many years, and I know that she wants her organs to be donated to medical science, but tragically, she is hundreds of miles away from her family. That quickly brought home to me the fact that we need more research, and that more organs need to be donated to allow research to go ahead.
Parkinson’s disease, as we all know, is a terrible, debilitating condition. Every hour, someone in this country is told that they have Parkinson’s, and, if anything, the situation is getting worse. Parkinson’s UK is an admirable organisation doing its utmost to battle against the condition. Since 1969, it has spent over £45 million on groundbreaking research. At the start of the year, it was supporting 90 research projects worth over £15 million. Parkinson’s UK believes that it should be made easier for researchers to gain access to donated organs.
To be usable for research purposes, the brain must be harvested within 24 hours; however, all too often there are obstacles to that. For example, hospital staff are often reluctant to harvest organs without a death certificate—rightly so, on occasion. When someone dies over the weekend, there is often no one available to sign a death certificate, meaning that the organs, including the brain, cannot be harvested before they deteriorate and become totally unusable. When that happens, Parkinson’s researchers miss out on resources vital to developing better treatments and a cure. It also means that the wishes of the deceased, including those carrying donor cards, and their families simply cannot be followed. Parkinson’s UK is therefore calling for guidance for hospitals on the importance of harvesting organs, including the brain, quickly—within 24 hours—to avoid those obstacles. It also calls for greater public awareness of the importance of donated organs in medical research—an issue that the hon. Member for East Dunbartonshire raised.
The brain is the principal organ affected by Parkinson’s, and it is due to the death of specialised nerve cells in specific areas. However, the condition can also affect other parts of the body. There is emerging evidence, which the hon. Lady touched on, that early pathological changes found in the brain may start in the gut. The condition may actually start there and then spread to the brain. Much more research needs to be carried out in that area to investigate what is happening.
Parkinson’s UK funds a brain bank that makes it possible to look at changes that have happened in the brain once a person has passed away. However, it is also necessary to look at other organs, from people with and without Parkinson’s, particularly when they are alive, if at all possible. That would make it possible to correlate a person’s symptoms with any specific changes within the body; that is as important as looking at cells. A key challenge is the shortage of human tissue, including intestinal tissue from the gut, that is available for research. When it does become available, all too often there are difficulties associated with obtaining it. Parkinson’s UK would welcome a tissue database, as it would enable researchers to locate tissue more easily, thereby obtaining maximum benefit from it.
Mark Tami
Does my hon. Friend agree that we need the media to address research properly and to explain why it is being done? Too often, particularly in the tabloid press, we see headlines like “Frankenstein science”, and stories on experimentation for the sake of it, which has never been the case. Such language further undermines the likelihood of people giving consent; they would be more likely to do so if they were fully up to speed with why research was being carried out.
Mr Brown
I thank my hon. Friend for raising that point because I was going to come on to that issue. He made it abundantly clear that, regrettably, on too many occasions much of what we encounter day to day, especially in this arena, is driven by media hype and scare stories. His point is spot on. As the hon. Member for East Dunbartonshire said, the situation regarding presumed consent and everything surrounding it is delicate. New Members and those of us who were here previously will encounter over the coming months and years a significant amount of correspondence from people who are deeply concerned about organ donation and the provision of tissue. My hon. Friend the Member for Alyn and Deeside (Mark Tami) is right: when we tackle issues such as this one, we have to have open, honest and sensible adult debate, not driven by hype that, frankly, terrifies people.
I do not wish to say much more in my short contribution. Suffice it to say that the debate is very important indeed, and even that is probably an understatement. I have covered Parkinson’s disease, and I would like the Minister to address the issues surrounding that, the tissue database and how we overcome problems. I suspect that they occur too often, when the harvesting of organs needs to be dealt with very quickly—within 24 hours. How can we handle that better to ensure that we meet the wishes of those who want to give organs at the end of their life to save the lives of others and for research? Making that decision was a significant step for those individuals and we should do whatever is humanly possible to make it easier to respect their wishes.
Dr Julian Huppert (Cambridge) (LD)
I congratulate my hon. Friend the Member for East Dunbartonshire (Jo Swinson) on securing the debate. She briefly mentioned animal testing and I would like to pick up on that theme to start my comments. It is clear that further medical research is needed, and I have a background in that area. We heard movingly from the hon. Member for Dumfries and Galloway (Mr Brown) about Parkinson’s, and there are other areas where much greater research is needed, for which one needs some form of human-based model. That has led to the widespread use of animals for experimentation, which leads to concerns—ethical and practical.
The ethical concerns centre around how we should treat animals. While that is important and I very much share the deep concern, it has on occasion led to some extreme positions, which I do not think anyone in the House would support. There are sensible approaches to balancing the need for medical research, which leads to experimentation, with trying to avoid such experiments. I would like to highlight the Fund for the Replacement of Animals in Medical Experiments, which does a very good job in this area. It describes its position as anti-animal experimentation:
“FRAME believes that the current scale of animal experimentation is unacceptable, but recognises that the immediate abolition of all laboratory animal use is not possible. Essential medical research must continue, so that effective treatments for diseases that lessen the length and quality of human and animal life can be found. New products, including medicines and vaccines, and industrial and agricultural chemicals, must be adequately tested, in order to identify potential hazards to human and animal health, and to the environment.”
That nicely sums up the balance, and explains why we need to continue with this research. FRAME then goes on to say that it advocates the three R’s approach—replacement, reduction and refinement. As an aside, I notice that it is very traditional to use the three R’s whether we are talking about reduce, reuse and recycle or reading, writing and arithmetic.
There is a great deal of misunderstanding about animal testing. There is an idea that medical research organisations and pharmaceutical companies want to do animal testing, when in fact most of them would much rather not if alternatives were available. That might be for financial reasons if nothing else. A lot of work has been done to find different ways to test and develop new techniques. I am talking about work on humans, animal models and tissue. Recently, we have seen the idea of human on a chip, in which samples of different human tissues are put on a very small chip so that system interactions can be studied. There has also been work with stem cells and their derived tissues. There has been work in vitro and, increasingly, in silico—trying to use computational methods to work out what is likely to happen without having to perform real-life experiments—in which I was involved before I was elected to this place.
There are disadvantages to all those ideas. Testing on humans is risky; one has to be very careful about any intervention. We know that there have been some sad instances of severe illness and death when humans have tried out new therapies and medicines. We know that there are problems with animals; they often do not provide exactly the right systems. Drugs behave differently in some animals to the way that they do in humans. A lot of work has to be done on systems such as human on a chip, and most of the computational techniques still have a long way to go before they can truly be said to represent what is going on.
I do not want to breach the Haldane principles and suggest what research should be funded, but the topics that I have mentioned would be very interesting for the appropriate bodies to look at rather carefully—whether that is a funding organisation such as FRAME or the National Centre for the Replacement, Refinement and Reduction of Animals in Research. Support for such areas would be very gratefully received and would make a huge difference to many people.
Today we are talking about tissue, and tissue has a huge amount of potential. It occupies a very nice space in the hierarchy, between in vitro and in silico models and full humans with all the attendant risks. A number of tissue banks have been set up, including the UK Biobank. A large number of brain banks have produced some very nice work, typically post mortem, leading to results on Parkinson’s and Alzheimer’s. I shall mention, in particular, the Cambridge brain bank partly because it is in my constituency and partly because my mother was involved with it—as a researcher rather than as a donor. We should try to broaden the spread of these banks and create a proper network. Some of the brain banks have had problems with interacting with other banks and with transferring data. Things are also going on in this area with cancer banks. My hon. Friend the Member for East Dunbartonshire mentioned onCore, which is a national cancer biobanking organisation, and we need to have other such organisations.
There are issues not just with how we collect the samples and store the information, but over funding. Currently, there is not a viable commercial model for tissue banks or networks. From what I have heard, the banks have great difficulty in securing long-term funding. Banks cannot survive on project-based funding, because the value derives at the end of the process and not at the beginning, so there is a need for core funding to support such a network. They have to have a certain level of security.
Let me turn to the topic of consent. We have heard some discussions about whether we should have an opt-in or opt-out system. It would, I believe, be a great step forward if we decided on the opt-in model. If people were asked to opt in, we would see an increase in numbers. I would be concerned if we went to an opt-out system for tissue. There is not public acceptance of that, and I would prefer to get lots of people opting in.
The topic of organ donation was also raised. It is my strong belief that it should be on an opt-out basis, and I would have supported the Human Tissue Bill proposed by Dr. Evan Harris, the former Member for Oxford West and Abingdon. Why is there a difference between the two? One reason relates to public acceptability and the other to timeliness. While we benefit from having a larger and more thorough bank of information, individual instances of information missing are not critical; it is a general problem, but not a critical one. With organ donation, organs are individual lives, and there is a specific issue of timeliness. As my hon. Friend the Member for East Dunbartonshire mentioned, in the future we will be able to have an opt-out system for tissue. It will be nice to see a real acceptance of the benefits of research for everybody in this area.
There are also issues about the ease and clarity of consent. The advantages of a national system and how easily it can be established have been discussed. There are also questions about how much information should be stored with tissue, and that needs further thought. Should the data be anonymised? Should it be tied in to medical histories and to details of other phenotypes that were observed—other interactions that happened? Should it be tied in with a DNA profile from that tissue?
On that cue—I find it very hard not to talk about DNA as that is what I used to work on—let me say that there is an interesting asymmetry in the Human Tissue Act 2008 between DNA and tissue in terms of whose consent is required. The Human Tissue Act, which regulates tissue, stipulates that there is a hierarchy of consent before a tissue can be obtained from somebody who has died. Although we are mostly talking about tissue samples from those who are still living, post-mortem tissue is incredibly valuable as well. A spouse can refuse permission to use a tissue sample even though the benefit may accrue to those relatives who are biologically related. With DNA, there is no hierarchy of consent, and any relative can consent. Typically, the people who are asked are those with a genetic relationship. That gives rise to some interesting asymmetries, because it means that different people could be consenting for different aspects, whereas the DNA would typically be derived from the tissue. That will lead to problems in the future and we need to consider it. In general, DNA and the future of DNA technology and testing will be a topic that requires further thought from this House. It may be an appropriate topic at some stage for a debate such as this.
There have been a lot of drives for improvement as the cost of sequencing has plummeted—from costs in the order of billions for the first sequence down towards the £10,000 mark and heading very rapidly towards the £1,000 mark in the near future. That means that we are starting to see more and more projects in which everybody, or every baby at birth, is being sequenced. We will see some real effects on health—I hope that the Minister will be able to comment on some of those—both in research angles, through genome-wide association studies, and in areas such as personalised genomic medicine. I am sure that the Minister is aware of the House of Lords’ Select Committee report on the subject. Schemes are ready to be cascaded down through the NHS. For example, free foetal DNA testing allows Down’s syndrome screening at a very early age—at about six weeks into a pregnancy. A pinprick of blood is taken and the RNA is then sequenced. It is amazing that we can do that, and such a scheme is ready to go through the NHS in a matter of a few years.
In conclusion, let me support my hon. Friend and urge the Government to take action to support this work because it is in the interests of science and research, of reducing animal experimentation and of patients.
Mary Creagh (Wakefield) (Lab)
It is a pleasure to make my first outing as the shadow spokesman for public health under your chairmanship, Mr Benton. I congratulate the hon. Member for East Dunbartonshire (Jo Swinson) on securing such an important debate. Having listened to her this morning, I feel that I know a lot more about the subject. She is well known in the House for her campaigning work on this issue. Her early-day motion 212, which she tabled in the previous Parliament, attracted the support of 64 hon. Members, and I am sure that a version of the same early-day motion will make its appearance through the course of this Parliament.
It was interesting to hear about the hon. Lady’s strong constituency link with the subject. I was certainly unaware that her constituency was a hub for research into life sciences. I also want to congratulate her on her tenacity. Using the Freedom of Information Act to get the data on the hospitals is the work of someone who pays great attention to detail. In fact, she found that there are huge differences between hospitals. It might be interesting to drill down into the information that she has to see whether there are geographical differences, or differences between foundation trusts, in respect of how samples are collected. The challenge for Ministers is to try to get everybody up to the level of the best, and it is clear that there is a very long way to go to achieve that.
I congratulate the Minister, who has responsibility for public health, on her appointment. She has been in a shadow public health role since July 2007. She had a distinguished career in the NHS for 25 years, including working as a district nurse. She also worked in hospitals, in research and, of course, in palliative care, so I am very interested to hear her comments in this debate. Furthermore, she is possibly one of the very few Conservative MPs who has served as a trade union steward, for the Royal College of Nursing, so I will also be interested to hear whether she has any response to yesterday’s Budget. We welcome her, and her experience, to her new post. Her direct experience of front-line working in the public sector will no doubt stand her in very good stead.
I also want to congratulate the hon. Members who have contributed to today’s debate. I know that my hon. Friend the Member for Alyn and Deeside (Mark Tami) has a very strong interest in the subjects of cord blood and stem cell research; we have debated those issues together on many occasions. He raised a very important point about the general altruism that the public feel.
Most people want to make their own contribution and help to contribute to medical science. Unfortunately, however, the level of knowledge and debate on these types of issues is very low. Part of that is due to the “ick” factor—none of us likes to think of our precious bodies as, first, dying; secondly, being cut in any way, even after death; and, thirdly, being kept in a large fridge with medical scientists examining them. But in fact the reality is that that is how human progress, particularly progress in science, has been made for generations, even centuries.
I also congratulate my hon. Friend the Member for Dumfries and Galloway (Mr Brown) on his contribution to the debate. I send my condolences to the family of his friend who suffered such a terrible tragedy while on holiday and I wish them courage as they fly out to Malta.
My hon. Friend raised the very important issue of the practical barriers that exist in this area, even when hospitals systematically want to collect people’s brains after death. There are also the issues of the death certificate and the conflict that exists between the medical side and the research side. The hon. Member for East Dunbartonshire has really hit on an important issue here, which requires some constructive and creative thought.
Mark Tami
I thank my hon. Friend for her very kind comments. There is just one point that I want her to address; I am perhaps returning to the point that I made earlier about how we and the media view this issue. She knows that my particular interest in this area is with the Alder Hey hospital and with children—unfortunately, that interest derives from a personal experience. But the fact is that a lot of medical conditions, such as sarcomas, particularly affect children; indeed, in some cases, medical conditions only affect children.
Given that children are particularly affected by some conditions, it follows that the research into those conditions must focus on children, but we find such research difficult to accept. It is very difficult to accept research on adults, but research on children, which sometimes very unfortunately happens as a result of a child’s death, is even more difficult to accept. However, it is something that we really need to address. As I said, some medical conditions only affect children.
Mary Creagh
My hon. Friend makes a very important point. Actually, this is one of those issues where the answer of the child involved might be very different from that of a parent. I think that children can be incredibly wise.
Speaking as a mother, the thought of one of my children dying is beyond comprehension, or beyond the limits of my imagination. It would be wrong for someone to ask for a donation from a bereaved parent who was dealing with that level of stress and grief. The time for asking for donation is not at the point of surgery or of death; it is when people are feeling generous and altruistic, when they feel that donation is something that can help other people.
Actually, children themselves are incredibly generous and incredibly thoughtful. Obviously, it is different for babies and toddlers, but children from about the age of six or seven can start to work these things out for themselves. Perhaps there is a role for education in the classroom to get children to talk more seriously about these issues.
I know that the work that the Anthony Nolan Trust has done in increasing the number of people on the bone marrow register is incredible. In Huddersfield and Wakefield—my constituency covered part of Huddersfield until the last boundary change—we had a very brave campaigning journalist at the Huddersfield Examiner who, when he was dying in his mid-20s, launched a huge campaign, including writing a blog about his experience. Through that campaign, he engaged with a lot of young people to get them on to the bone marrow register.
The issue of donating tissue, or blood marrow, is a bit like that of blood donation. I have spoken to my staff about it and said, “The blood lorry is outside, off you go”. There are responses such as, “Well, I don’t fancy rolling up my sleeve and having someone stick a needle in me”. However, if I ask, “If you have an accident on your way home, or your child is ill, would you want blood for your child or yourself?”, the answer of course is, “Yes”. The time to do it is during a tea break or a lunch break from work and not when people are under stress and dealing with a huge range of emotions.
I also congratulate the hon. Member for Cambridge (Dr Huppert) on his contribution to the debate. It is clear that science has lost a great researcher, but science’s loss is certainly the House’s gain. While he was speaking, I had a quick look on my BlackBerry and perhaps after the debate he can explain to me what “nucleic proteins” are, or whatever it was that he was researching—I am not even sure that I have used the right word there—because I got lost after about the first sentence of his contribution.
Computational biology is clearly an emerging area of work in this field and the hon. Gentleman spoke very eloquently about its potential to reduce the need for experiments on animals and, in some cases, to replace high-risk human trials, which would be welcomed by all parts of the House. He also leaves us with the interesting image of a “human on a chip”, which is something that I will go away and reflect upon.
Using his own experience as a researcher, the hon. Gentleman raised the important ethical issue of the anonymisation of samples, and he is absolutely right to do so. Certainly, in any research that I have ever participated in, I have always been told that the donated material will be held completely anonymously and untraceably. Now, however, we are moving forward with this biobank. I was invited to take part in that project. I went along because I was interested and I asked, “Are more women than men coming along?” I was told that, yes, there were, so there were all the usual biases that exist. We come back to the altruism factor and it seems that women tend to be more altruistic than men. I will leave that point hanging; if anyone wants to intervene on me, I am happy to argue the point. [Laughter.]
Mark Tami
My hon. Friend is exactly right. Men are certainly less willing to become stem cell donors and bone marrow donors, because we are cowardly and do not like needles. That is a particular problem.
What we must do with bone marrow and stem cell research, as the work of the Anthony Nolan Trust shows, is to put fewer obstacles in the way of donors. When it comes to giving blood, I know from my own point of view that my reaction is really, “Argh”—giving blood really terrifies people. However, mouth swabs can be used to donate other material. If we can get people past that first stage and if they are then approached because they are a potential match, I think that people will say, “I am a potential match and therefore I will go to that next stage and give blood”. If we somehow phase people by saying, “You’ve got to give blood and you must have various tests for things”, then people are less likely to come forward.
Obviously, with bone marrow and stem cell donation, we are not talking about people who have died. It is one of the few areas where someone can save a life by giving something. It is not painful, it does not take that long and someone can actually save somebody else’s life. There are tens of thousands of people out there who do not even know that they are potential life-savers. This issue is not only about how we raise awareness, but how we—
Mary Creagh
Thank you, Mr Benton. I was listening with interest and totally agreeing with my hon. Friend. Most of us will not have the chance to save someone’s life in the normal way. The chance to be an everyday hero does not come to many of us, and most of us do not have the medical skills that would enable us to be one. However, a person can undergo a small surgical procedure to take bone marrow out of their hip, and someone else will be walking around as a result of their generosity to another human being. I find that profoundly moving.
We need to look at where the responsibility lies for raising awareness. We as politicians are in this room debating the matter, so we are fulfilling our responsibility.
We have heard of the difficulties that the media create in their coverage of these issues, some of which have been difficult. The Alder Hey and Bristol Royal Children’s hospital cases were seen as national scandals, and rightly so, but the scientific community has a huge responsibility in this area. This country has a problem with science. We have a framework that enables us to be world leaders in life sciences and all kinds of areas, and we have a population that is willing to run marathons, to do fun runs for breast cancer and cancer research and to work and raise money. Yet there is a gap.
Presumably, every one of the women who participated in the five-mile fun run in Wakefield—the race for life—did so because they knew someone who had died of or suffered from breast cancer. All those women could have been offered the chance to be screened for blood marrow donation or to talk about tissue sampling. The world of fundraising needs to work more closely with the world of research. I do not know how that would happen, but I think that the scientific community, whether it is researching genetically modified foods, cancer or Parkinson’s, has its own responsibility. However, it has not found its voice in this area.
We have an image of scientists working in their labs in white coats. It has been a long time since I have been in a research lab, so I do not know whether they still wear those coats, but they do not get on the telly. We tend to hear about sensational breakthroughs, but when we read the small print, we find that they are at least five, six or 10 years away. There is media sensationalism about what might be small steps at the beginning, yet no real conversation about the long, arduous and painful work that scientists have to go through to achieve a breakthrough. I agree with the hon. Member for East Dunbartonshire that there is not enough access to tissue samples, but there are difficulties at the interface between the two worlds.
My hon. Friend the Member for Alyn and Deeside mentioned cord blood collection. The Royal College of Midwives has specifically said to its members, “We do not want you to be distracted by cord blood collection while you are trying to deliver a baby.” Obviously, anyone who is assisting at a birth wants a happy baby and a happy mum. The cord blood thing comes much farther down the line. Certainly, that was my experience of giving birth, and I believe that it is probably the experience of most medical professionals.
The scientist is not in the room saying, “By the way, make sure you get the cord blood, and make sure you put it in the fridge quickly.” If a midwife is dealing with a baby that might be in respiratory distress or a mother who is in the middle of a haemorrhage, all other considerations rightly go out of the window. The midwife wants a safe delivery, and the researcher stands in the university lab and weeps as the precious cord blood heads off with the placenta to the incinerator. I do not know whether people still take the placenta home. I certainly was not interested in that; we are back to the “ick” factor.
There is a challenging conflict between the NHS professional who wants to deal sensitively with, for example, a cancer or Parkinson’s patient, and the colleague back at the lab who wants to know whether they have consent to do lab work on the tissue samples. We have heard some interesting suggestions today about how the medical process can support the collection of tissue. Most hospitals have introduced MRSA screening prior to surgical interventions, and that would be a good way of doing it.
The national patient care record—a national database with everyone’s details—is another possibility. The patient could sit with their general practitioner and go through organ and tissue donation. The information could be there in black and white on the computer screen for every medical professional who deals with them at any stage of their life. The decision could also be revoked at any stage.
Dr Huppert
As the hon. Lady knows, there has been a great deal of concern about uploading data. I hope she agrees that if what she is discussing is to happen at all, a huge amount of data safety and security, and a simple mechanism whereby people can opt out, will be needed. Ideally, they would opt into such a system, rather than being given a limited opportunity to opt out.
Mary Creagh
I agree with the hon. Gentleman. I know that Liberal Democrats have an antipathy to the national patient care record and have called for it to be scrapped, but it might represent an excellent opportunity to deal with this matter. Of course, people would have to opt in, and nothing I have heard today changes that.
The hon. Member for East Dunbartonshire asked whether people would opt in or opt out. We need to go back and look at consent, which is at the heart of this debate. As we have heard, the Human Tissue Act 2004 created the framework for the removal, storage and use of tissues and organs of the deceased.
We must remember the circumstances that gave birth to the Act. It came about because of public inquiries into the events at Bristol Royal and Alder Hey hospitals, where organs and tissues from children who had died had been removed, stored and used without consent. Scientists have been doing that for generations. I do not think that there is any question about that, and we can understand why they want to progress medical research. However, years—in some cases, decades—later, families discovered that the children who they thought they had buried had not been complete.
The series of moral, ethical and religious issues that came out of that practice had to be, and were, addressed by the Labour Government. The inquiries together with the Isaacs report, which focused on the retention of adult brains following coroners’ post-mortems, revealed that storage and use of organs and tissue without proper consent was commonplace. We as legislators had a duty to change that.
The chief medical officer concluded that the law needed to be changed. We had a wide-ranging public consultation, “Human bodies, human choices”, which set out proposals and led to the Act that created the Human Tissue Authority, which licenses and inspects institutions. The Act is based on the principle that consent should be given by the living. If that key principle is to be changed, it must be changed with a great deal of consent. I do not detect a groundswell of public opinion or hon. Members in this House wishing to reopen the consent issue, despite the efforts of Dr Harris, the former Member for Oxford West and Abingdon.
Jo Swinson
In the context of the legislation, I agree with the points that the hon. Lady makes about consent being vital. However, would she accept that the current problem is that many people would be happy to consent, but their wishes are not being fulfilled because they are not even being asked?
Mary Creagh
Absolutely. The hon. Lady makes a valid point, and systems, policies and processes are the only way. It is not laws or our passing Acts in Parliament that will make it happen. This is about the 60% of trusts that do not collect any form of tissue, but get rid of everything. It is about people being made aware—there is an educational side to this—and it is about having a system in place. If we want people to donate their organs, we have to make it as easy as possible, so that they can do it when they open a bank account or go to Boots pharmacy to pick up a prescription. Whatever it is, it has to be made easy.
Most people hope throughout their lives that they will not need a huge amount of surgical intervention. That is what we all hope for, is it not? I believe that the hon. Lady is right that most of those who are unfortunate enough to have repeated operations would like to help other people through medical research.
It is important to say that lifetime consent for a tissue sample is already possible under current legislation, and people may give “generic and enduring” consent for their own sample, but the hon. Lady may be trying to bring to the foreground lifetime consent for any medical research purposes. However, the law in such areas cannot and should not stand still, and we must renew the working of the existing law.
I was interested to hear the hon. Lady’s reference to the Human Tissue Authority’s evaluation of perceptions of how the legislation and regulations that flow from it have affected researchers. The Human Tissue Authority has said that it wants to ensure that researchers have access to high-quality samples by consolidating stocks throughout the sector; that brings us back to the idea of banks. It also wants to reduce the regulatory burden on the research sector by using open-ended rather than fixed-term licences, and moving to a risk-based approach to regulation rather than regulating everyone.
The hon. Lady will be interested to hear that the Nuffield Council on Bioethics is consulting on options for boosting the supply of organs and human tissue. It is clear that a problem is emerging as fertility sciences improve. There is a shortage of organs for transplant, as many hon. Members have said, and of sperm and eggs for donation. I prefer to refer to “sperm” rather than “gametes”, not least because I do not know how to pronounce that latter word. Let us call a sperm a sperm.
Transplant patients and women seeking fertility treatment may travel abroad, often to places where different rules apply or, in the case of organ donation, where there may be an illegal market. We must watch that carefully because moral and ethical considerations may be involved if inducements are offered, whether cash or paying funeral expenses for people who give their organs. Those are some of the issues being debated, and the consultation closes on 13 July. I put that on the record so that any hon. Members who want to participate in the consultation may do so.
New stem cells made by reprogramming adult tissue into induced pluripotent stem cells—iPS cells—which come not from human embryos but from adult skin cells, have been possible only since 2007, so science is already well ahead of legislation in this area. The iPS technique could lead to new breakthroughs for Parkinson’s disease, motor neurone disease, diabetes and paralysis, and that would obviously be very welcome.
Mark Tami
My hon. Friend referred to breakthroughs, and stem cells are one of the major areas where breakthroughs are happening. However, we must remember that much research comes to a dead end. Sometimes when we believe that it is going a long way, it does not. The Daily Mail and the Daily Express may say that drinking coffee prevents cancer, and also that it causes cancer. There is no “one size fits all” or one magical cure, so we must go down many routes, knowing that some will be a dead end.
Mary Creagh
I agree that there is no silver bullet, much as we would like one, and my hon. Friend is right about the red tops’ approach to eating—or not eating—yoghurt, strawberries, blackcurrants or whatever fruit or drink is fashionable. It would be impossible to live our lives by their diet rules, certainly in the House of Commons Tea Room. We need to understand better, and the hon. Member for Cambridge has a responsibility to his former colleagues in Cambridge to be a champion and an advocate in this place—he has already proved in this debate that he will be—in respect of the benefits involved and the management of people’s expectations.
I understand where the research is coming from. The hon. Member for East Dunbartonshire said that researchers are a bit cagey about sharing with other researchers where tissue is held. Someone doing a PhD who has put three or five years of their life into it does not want someone else from a different country or different research institution publishing six months before them; let’s face it, academics are as competitive as the rest of us. I know from my experience at Cranfield School of Management that we loved sharing our research at conferences, but we lived in dread of someone coming up with the same idea and publishing it a bit sooner. It is incumbent on researchers to work out ways and methods of sharing their research in this area.
Dr Huppert
The hon. Lady is making an important point. A lot of work is taking place on open-access data and open-access publishing with the safeguards that she correctly requires, so that people who have invested a lot of time and effort—for example, in building up a bank—get first priority. I hope that she is aware that many of the research councils are increasingly mandating that data should be made openly available.
The hon. Lady is correct about interaction with the media. She may agree that one problem is the shortage of good science journalists, with a few honourable exceptions.
Mary Creagh
I thank the hon. Gentleman for that intervention. I was not aware that the research councils were making open access mandatory, but logically it is right that that should be done. Researchers enjoy taxpayers’ money, so it is right that it should be shared for the common good. Most historic scientific breakthroughs have been made through people sharing building blocks with each other, rather than through working in splendid isolation.
The hon. Gentleman is right about science journalists. There is a paucity because they may make two, three or four times as much money working for a big pharmaceutical company. Writing for people who may not be interested or who may even be openly hostile to science may be less alluring than working for a big pharmaceutical company and being at the heart of breakthroughs.
The Human Tissue Authority website is incredibly useful in listing establishments that have human application, research application, post-mortem application, anatomy licences and display licences. I had not realised that the display of human bodies was regulated, but that was controversial a few years ago.
I hope that today’s debate will lead to solid proposals from the Minister. I look forward to hearing what she has to say. We must tread carefully if we are to maintain public confidence in these vital areas and public trust in the medical research community.
The Parliamentary Under-Secretary of State for Health (Anne Milton)
I welcome the debate, and congratulate my honourable colleague the Member for East Dunbartonshire (Jo Swinson) on securing this debate. Although we are not great in number, clearly the matter is important to some people, and this has been a brilliant opportunity to have a good run-around with some of the issues. My honourable colleague has worked extremely hard to promote the supply of quality tissue for research, and to encourage closer co-operation between everyone in the sector. If nothing else, the debate has highlighted the need for much greater co-operation.
Human tissue-based research is vital for advances in medical science. That is an obvious statement, but it needs to be reiterated. We want better and more effective treatments, and if that essential research is to flourish, everyone involved in procuring, storing and using tissue must work together. None of that work can take place without the generosity of people who are willing to allow their tissue to be used for the benefit of others. We can proceed only if we have their trust and confidence in what I believe is a difficult climate. The public’s trust of anyone outside their immediate family is low, so this is a good time to raise the matter.
My honourable colleague outlined some of the significant benefits of using human tissue. It allows for testing to reduce harm, reduces the need to use animals, and allows for placement refinement and reduction, which the hon. Member for Cambridge (Dr Huppert) also discussed at some length. I should point out that I am in the fortunate position of having a group of people to advise me, so I know all sorts of little facts that I did not know when I was an Opposition spokesperson. I should possibly have started my speech by congratulating the hon. Member for Wakefield (Mary Creagh) and thanking her for her kind comments.
My colleague the hon. Member for East Dunbartonshire said that the Human Tissue Act 2004 applied to Scotland, but I understand that there is separate Scottish legislation—the Human Tissue (Scotland) Act 2006. I am sure that she is aware of that Act, but I thought I would mention it for the sake of clarity.
The hon. Member for Dumfries and Galloway (Mr Brown) mentioned people who suffer from Parkinson’s. My mother-in-law suffered from Parkinson’s and, during my career, I have nursed many people who suffer from the illness, which is very cruel. Parkinson’s is very difficult not only for the individual to live with, but for those around them. Donated organs can clearly make a difference to research in that field, and I know that many people who suffer from Parkinson’s and their families look forward to a day when there is real relief from the symptoms and in time, I hope, a cure.
Of course, Parkinson’s is not the only illness, and there is possibly more publicity than ever for some of the severe, enduring and sometimes life-limiting illnesses that people have to go through. It is a shame that the opportunity is not always taken to highlight the difference that we can make as individuals who are not necessarily connected with people suffering from such illnesses. One of the ways that we can make a difference is by donating tissue.
The hon. Member for Dumfries and Galloway mentioned the tissue database. We are possibly in a fortunate position in the new coalition Government. I do not feel entirely responsible for what went on before I came into post, so this is a brilliant time to raise with Ministers some of the issues that hon. Members know create obstacles, particularly in relation to the subject that we are discussing today. This is an opportunity to raise issues, and I always welcome any feedback people can give me.
The hon. Member for Alyn and Deeside (Mark Tami) mentioned the need for media support. There is no doubt that the media have a huge role to play. The recent death from cervical cancer of a celebrity meant that the incidence of cervical screening shot through the roof. There is no doubt that the media have both a responsibility and, to some extent, a duty to raise some of the issues, as we all do.
Mark Tami
Further to the comments of the hon. Member for Cambridge (Dr Huppert), the problem is that the tabloid press provides a twisted, simplistic view of science, but the scientific press is too detailed and writes and speaks in a language that ordinary people do not understand. We need somehow to get a balance that crosses those two divides.
Anne Milton
I thank the hon. Gentleman for his intervention; he is absolutely right. I agree with the hon. Member for Wakefield—I call a sperm a sperm. The hon. Member for Cambridge strayed into areas that are way beyond me, but such matters are important. I welcome him to the House. At the last election, we lost a number of scientists and it is extremely important to have voices such as his in the House to inform journalists, particularly if there is not sufficiently extensive scientific journalism out there, although I am not in any position to judge on that matter. Such issues are important, and perhaps we should all take the opportunity to send a copy of this debate to our local press. That will perhaps highlight the issue of organ donation locally; we all have our responsibilities.
The issue of consent was raised. Legislation in that area was reviewed following revelations about the widespread retention of organs and tissue without the consent or knowledge of families, as the hon. Member for Wakefield mentioned. The Human Tissue Act 2004 makes it clear that consent is required for the storage or use of organs and tissue for research, whether they are taken from people during their life or after death.
As was mentioned, we know from talking to patients and their families that the vast majority of people are extremely supportive of tissue research and, when asked, will happily consent to their tissue being used. However, my colleague the hon. Member for East Dunbartonshire is rightly concerned that we should not waste opportunities to tap into that incredible good will. She suggested the use of generic consent for the retention of tissue, which could be sought at the same time as consent for other medical procedures—for example, surgery or a diagnostic biopsy. I entirely agree that people should be given the opportunity to donate tissue, but consent is not a straightforward issue.
I am not sure that a top-down approach is the best way to proceed with dealing with the matter. The good practice we seek cannot be imposed from the top, and history is littered with examples where a top-down approach simply somehow relieves professionals of their responsibility; they believe that they are no longer responsible for the matter. Increasingly, we find that organisations are tailoring their consent procedures to local needs; for example, there may be specialist clinics, where specific risks can be addressed. We are aware of successful and innovative approaches that have led to greater efficiency and a better experience for the patient or person. Innovative thinking must be encouraged and not constrained. I am often concerned about the latter happening with anything that takes a top-down approach.
Jo Swinson
I am sympathetic to what the hon. Lady is saying about enabling local decision making, but does she accept that there is a risk that if we have very different consent procedures across the country, it will hamper researchers and industry further? It would mean that when it came to accessing tissue samples, some would be available under certain consent rules and others would be available under others. That complexity is itself a real barrier and a problem.
Anne Milton
As with many things, it is a matter of balance. I heard my honourable colleague’s words about what the Department of Health must do. I do not know whether the Department of Health holds the solutions in this case. I really believe that the matter needs to be dealt with locally. Anyone who has first-hand experience of routine procedures knows that they can be quite unsettling for people. Most people about to undergo surgery are understandably nervous. The hon. Member for Alyn and Deeside expressed his visible concern about donating even blood. I suggest that he comes to see me afterwards—I will give him a talking to and get rid of his nerves.
We are dependent on the professionalism and humanity of health care professionals around the country, and we can draw on their experience to find the right time to discuss tissue research. Dealing with the issue is a question of trust—trust in the relationship between clinicians and patients, trust in local health organisations to provide the right information to people, and trust in health professionals to maintain the separation between treatment and research.
My colleague the hon. Member for East Dunbartonshire mentioned the fact that it might not be convenient for a surgeon to seek consent for tissue donation. I would suggest that it is not necessarily a matter of whether it is convenient; it is about whether it is appropriate. That is the difficulty. It is also true that clinicians can duck the issue and find it difficult to talk about. That also needs addressing. However, I do think that the solutions lie with the organisations and the clinicians, and should not come from the centre.
Mark Tami
The hon. Lady mentioned the issues of trust and getting information across on issues such as bone marrow donation and stem cells. However, there is also the matter of getting information across to minority communities, where levels of donation are very low. If, for example, a child is diagnosed with a particular condition, their odds of finding a donor are very slim compared with those of a child from the white population. We need to get information across to people and educate them about what is being done.
Anne Milton
I thank the hon. Gentleman for his intervention. It is interesting that this is the first time that we have referred to the differences between ethnic groups, and that is an extremely important matter, but there is a resource out there that we do not necessarily use, which is the faith leaders in communities, who can perhaps raise the issue. That is why we need to send tentacles out, perhaps even from this debate, to ensure that we get the messages across in many different settings. We mentioned children; perhaps the issue should be talked about in school.
Mary Creagh
The Minister says that this is not a matter for the Department of Health, but is she not even a little curious about which hospitals do systematically collect and process the material, and about the 60% or so that do not? I am very curious about that. Her Department could easily map, with the resources that it has, where the hot spots and cold spots are. It could use the transparency that we have under the Freedom of Information Act almost to shame the hospitals that do not do it, or it could at least have a conversation with those that do not do it systematically, perhaps because they are not attached to a university or because they are not teaching hospitals. We could examine how we could encourage hospitals to do it and educate the staff about the wider benefits to the community.
Anne Milton
The hon. Lady is right. I think that in the end it is the differences that will spread good practice and drive up standards and professionalism in this area. She is right to say that we must examine why some places are so good on this. One example that I heard about recently is that of a trust that sends combined, personalised leaflets about consent to treatment to patients along with pre-operative medication. My colleague the hon. Member for East Dunbartonshire mentioned that. That trust is giving patients the time and chance to think about their treatments in advance. That is the type of innovative practice that we want. I do not believe that a standardised form is the answer.
I would also have some misgivings about routinely seeking consent to use tissue for research unless we could be confident that there was a good chance of its being used. One of the key complaints from the families affected by organ retention scandals was that everyone tried to justify the practice of routinely retaining tissue in the name of research, when in fact most of the material had never been used. There is a test that is applied to children, called the Gillick competence. We do not often use the opportunities that we have to raise the issue with children, or to ask them what they want to do.
Let me clarify that there are no plans to revisit the question of an opt-out system. Certainly, on a personal level, I would not be happy with such a system. It would require an extensive information and education campaign, and there would be ethical and practical issues if people were able to opt out of some types of research but not others. No doubt some people would be happy to give tissue for some types of research but not others. Everyone feels so differently about the issue; it is a very difficult area.
My colleague the hon. Member for East Dunbartonshire also raised the prospect of a tissue database and mentioned the work undertaken by onCore. I understand that onCore was originally set up to collect and store tissue in a national bank for cancer research. It now focuses mainly on bio-banking activity, and that shift reflects the research community’s local initiatives.
I also understand that there have been excellent developments through the National Cancer Research Institute’s informatics initiative. For example, there is the oncology information exchange, a free-to-use computer portal for sharing information on resources for cancer research, including tissue collections.
At the heart of the debate is the issue of improving access to tissue for research. Some initiatives are under way, and there are some examples of good practice, but a common cause of concern is the complexity of the regulatory and governance regimes. A lack of confidence and misconceptions about requirements have meant that residual tissue from diagnostic procedures may be archived for purposes such as clinical audit, but not available for research. Perhaps the appropriate consent has not been secured or the licence to store tissue for research has not been obtained from the Human Tissue Authority. Either way, the effect has been to stifle research, which is not what we want. Researchers complain of local resistance to new research programmes because they are perceived as being too risky or beset with rules and regulations. Efforts are being made to help NHS organisations to overcome those perceptions.
The HTA, in collaboration with the National Research Ethics Service, has set out the licensing, ethical approval and consent requirements to enable diagnostic archives to operate as tissue banks. The HTA’s annual review tells the story of Guy’s and St Thomas’ NHS Foundation Trust, which was one of the first establishments to license its archive of diagnostic histopathology specimens as a research resource. A histopathologist from the trust said that
“support from the HTA was very helpful for us in approaching our Trust management with proposals to license our diagnostic archive for research and upgrade consent processes”.
That is precisely the type of collaborative and supportive approach that we want and it is typified by a joint enterprise between the HTA and the National Research Ethics Service, which has helped to open up access even further.
I look forward to the outcome of the consultation by the Nuffield Council on Bioethics. This is clearly a dynamic issue, and I personally would like to keep it as such. It is about raising awareness and about the role that we in this place can play in raising the issue in our constituencies and with a wider audience. That is not just down to the scientists or those with a scientific background in this place, although their expertise is very valuable. The media can play a role. The organ donation taskforce report raised the issue of awareness, and there have been a number of reasonably successful campaigns in the past year, but I cannot re-emphasise enough how important it is to have public trust and confidence in the systems in place. It is important that we do not have burdensome legislation. It is important to raise awareness among all types of clinicians in training and to raise awareness among members of the public. Possibly it is a question of just changing the culture, so that people think, “I can change what’s happening in the area in which I work.” Sometimes we perceive barriers when they do not exist.
We have raised the issue of the differences between men and women, so I suggest that the men go hence and give blood. It is true that there are gender differences. It is extremely difficult to get men to go to their doctor with symptoms, particularly concerning anything below the waist. It is an issue to get men to come forward and donate tissue and blood. It is important and perhaps incumbent on all of us at certain times in the year to seek an opportunity to demonstrate by example that we are prepared to do that.
I thank my colleague the hon. Member for East Dunbartonshire not only for her contribution, but for allowing us all to have quite a collaborative discussion about the issue. There is no single solution. The NHS, the research community, clinicians and Government agencies have a part to play. In particular, the Government have a role in facilitating, but at the end of the day, they cannot take action on the ground. I hope that I have been able to reassure my honourable colleague and other hon. Members that some progress has been made, and that the various initiatives allow us to be more optimistic about the future. I reiterate that my door is open, and officials in the Department would be pleased to hear from anyone with examples of attempts to make progress that have been frustrated by rules, regulations or bureaucracy that prevent research in this important area from going ahead.
New Roads (Hertfordshire)
(13 years, 10 months ago)
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Mrs Anne Main (St Albans) (Con)
It is good to serve under your chairmanship this morning, Mr Benton. The debate is about the adoption of roads in Hertfordshire, about which my hon. Friend the Member for Kettering (Mr Hollobone), who is in the Chamber, has also had an important debate. Highways adoption is a pressing concern countrywide, and its importance is signified by the fact that this is the second such debate in this Parliament alone. My hon. Friend also raised the issue in the previous Parliament, and I pay tribute to him for his tenacity. We both cried “Snap!” when we got back to the House and saw that we were trying to secure a debate on the same topic.
I thank the Minister for his considered replies to my hon. Friend’s debate on 10 June. I wish to pick up where my hon. Friend left off and to have second stab at the issue, which I hope to move forward even more. I noted with interest the Minister’s comments about the current position and the measures that are in place, but I hope that he will be able to update us on his thoughts and give us some hope of a speedy resolution.
Unadopted roads—particularly residential roads—are a particular issue in Hertfordshire, where we have experienced a large amount of development. Up-to-date information about the scale of the problem is not available, but it is estimated that 40,000 roads in England and Wales are unadopted. I am not particularly concerned about farm tracks or roads that residents wish to keep unadopted; I am talking about the tens of thousands of roads on new residential developments. Let me make it clear that when I say “new” I do not mean brand-new, but relatively new.
Worryingly, residents are frequently unaware of the status of their road until they try to consult their council about a problem. As we know, some roads have been unadopted for 10 years or more. The people who live on them often struggle to access public services and to meet the maintenance costs for which they are personally liable. More importantly, these roads materially inconvenience residents, creating an unfair situation in which householders pay significant amounts of council tax for services that they do not receive.
Hertfordshire contains significant areas of green belt. In areas such as my constituency, the focus has understandably been on the usage of brownfield sites for new development. One such site is the old City hospital site, where there is a problem with unadopted roads. That was highlighted to me when I talked to residents over the campaign period. They are frustrated that people visiting the current City hospital park on their roads to avoid the hospital’s car-parking charges. They are powerless to combat the problem because the local authority cannot do anything about rogue parkers. Children who live in these roads are also put at risk by the increased volume of traffic outside their homes. Furthermore, hospital visitors avoid paying parking fees, and local authorities, which raise significant amounts from legitimate parking schemes and city centre car parks, will be keen to see roads formally adopted and brought under proper control. Most of St Albans has a residents’ parking zone, so something surely needs to be done to protect residents who are affected by the blight that I have described.
It can be difficult living on an unadopted road. Street lights might go out, but no one will repair them. Vehicles can be dumped, but the police can do nothing. People use the busy roads as a car park, but there are no parking attendants. Residents cannot get parking permits, zones or controlling. Importantly, dangerous pavements also go unrepaired. Unadopted highways can lead to issues with maintenance, street cleaning, lack of pedestrian facilities, lighting and drainage. As time goes by, such issues make it harder for those living in the road to sell their properties.
Speeding is an even greater concern. For safety reasons, St Albans wishes to adopt a “20’s Plenty” city centre speed limit, but some city centre roads in new developments are not adopted, so the speed limit is not enforceable. The issue came up on the doorsteps. People are puzzled as to why recently constructed roads, which often look superior to the potholed roads that we are famous for in Hertfordshire, are not formally adopted.
I called the debate because my council wants action. Hertfordshire recognises that we in Parliament need to help it. Indeed, in 2009, Herts county council highways and transport cabinet panel formally recommended actively involving MPs, with the aim of exploring the possibility of altering legislation to address the problem. In many areas in my constituency where new housing developments have been built, the local authority has subsequently failed to adopt the roads. I have consulted Herts county council, which shares local people’s frustration about unadopted roads, but it is often frustrated by the limited mechanisms available to it to tackle the issue. There has been concern, and people have voiced the belief, that local authorities may not wish to adopt roads for reasons of their own, but Herts assures me that that is not the case.
One issue that has been raised with me over the years is that people buying a property are assured that the road is being considered for adoption. I know that this is a case of caveat emptor, but if someone is told that a road is seriously being considered for adoption—a woolly phrase if ever I heard one—they would expect it to be adopted within a reasonable time. One constituent, who contacted me last year, bought their home in 2006. The road was built approximately 10 years ago and was unadopted at the time of purchase, but inquiries seemed to suggest that it would be adopted shortly. However, four years later it has still not been adopted, and my constituent is understandably frustrated. Many purchasers who have been given similar assurances that their road is indeed progressing towards adoption feel duped. This seems to be a frequent issue when prospective purchasers do the searches; they are given the impression that the road is in the process of being adopted, but nothing is really being done to progress that.
A report to Herts county council in November 2009 looked for a new approach to highway adoption. The report was formulated in response to the concerns of many of my constituents, as well as district councils and developers, about the time that it was taking to adopt roads in new developments. At present, Herts county council, which has responsibility for all non-trunk roads in the county, is responsible for the adoption and subsequent maintenance of roads. The guiding principle in the adoption of new roads is that they should have wider utility than simply providing access to a small number of properties. As a result, short cul-de-sacs are routinely not adopted, and commercial and industrial roads are also not adopted. Herts county council tells me that all parties need more clarity over the extent of adoption and that the extent of highway adoption should form part of any planning approval for developments involving the construction of new highways. It also believes that it would be helpful if road signs on unadopted roads made it clear that they were not adopted, so that there was no confusion.
As I said, we have no idea of the number of unadopted roads, because the most recent survey was in 1972. It is vital, if we are to tackle the problem, that we gather more information about its extent. In his recent response to my hon. Friend the Member for Kettering, who is in the Chamber because he feels so passionately about this matter, the Minister stated that
“knowing the number of unadopted roads would not really provide the context, because the vast majority…are not really relevant to the issues in question”.—[Official Report, 10 June 2010; Vol. 511, c. 578.]
However, it might be helpful for the Government to have some idea of the scale of the problem. I am aware of the need to limit public expenditure at present, and a full survey would be prohibitively expensive, but closer working between the Minister, his Department and local authorities might help us all. Will the Minister therefore undertake to arrange for his officials to write to every relevant authority in England and Wales to seek an estimate of the extent of the problem in its area? In his recent debate on the issue, my hon. Friend the Member for Kettering listed 14 local authorities, my own among them, with which he had been in correspondence over the problems of unadopted roads. Their experiences are surely not atypical, which is why a thorough investigation of the issues is necessary, and it need not be expensive.
Let me give an example of the extent of the problem. In just one borough in Hertfordshire—Hertsmere—more than 626 out of 2,165 sections of streets, footways and other highways are not maintained. That represents nearly a quarter of the sections of Hertsmere’s roads. As I said, a lot of the data dates back to the 1970s, and there has been a huge expansion in building since then, so it would be helpful to get a sense of the extent of the problem. Will the Minister agree to undertake such an exercise and to place a copy of the information that is collected in the Library, so that other hon. Members can see the extent of the problem?
Where the construction of a new estate is involved, a local highways authority can, under section 38 of the Highways Act 1980, adopt a road by agreement with the owner. Essentially, the developer of an estate can enter into an agreement with the highways authority to construct streets to the authority’s satisfaction and in accordance with its specification. The road then becomes a highway maintainable at public expense. I should add that section 38 cannot be used if the owner cannot be traced. However, Hertfordshire county council tells me that under the current system, when local planning authorities grant permission for a development that includes new roads, they cannot impose planning conditions regarding the extent of highway adoption or the timing of the adoption process, nor do they have any power to force the developer to put a road up for adoption. Perhaps that can be looked at under the new Government’s fresh approach to planning.
In the previous Parliament, the use and inadequacies of section 106 funding were seriously examined, and section 38 might be a suitable topic for the Department for Communities and Local Government to look at with the Department for Transport in a cross-cutting report. There are no incentives for developers to enter into section 38 agreements, and developers currently initiate the process dictating whether they enter into a section 38 adoption. However, in the current economic climate there is a risk that even fewer section 38 agreements may be entered into, because developers do not have resources to fund the bond of such an agreement.
There are several reasons why a road often does not progress to adoption; I shall not list them in this short debate. My council tells me that it has concerns about the inability of local authorities to oblige developers to enter into a section 38 agreement so that highways can be adopted. I understand from the Minister’s recent reply to my hon. Friend the Member for Kettering that the Government are investigating options to alter legislation to address the problem. After the thought that he may have gone through since the last debate, will the Minister update us today on the progress of the investigations or give us a hint of the trajectory that his thought process might take?
Mr Philip Hollobone (Kettering) (Con)
It would be remiss of me not to pay a huge tribute to my hon. Friend for her excellent speech. She is hitting all the right buttons for me. On the Minister’s welcome point about looking at legislation on section 38 agreements, I hope that he will advise her about the point that, even if developers enter into section 38 agreements and have bonded funds, local authorities cannot access those bonded funds without the permission of the developer. Often the developer has to go bust before the local authority can access the moneys.
Mrs Main
I thank my hon. Friend for his valuable point. He has done sterling work on the matter. What he says is true. It seems that people are caught in the dilemma that although the money is in place, no one can access it. They are therefore powerless to do anything about the road that is unadopted. I am hoping that the Minister will give us his thoughts today, think outside the box and tell us what he could do.
I am told that another option is the advance payments code under the 1980 Act, which was designed to secure payment of the expenses of completing roadworks in unadopted roads next to new buildings, and to ensure that the street works authority could complete the roadworks if a developer failed to complete them. The code was apparently introduced to guard against the post-war problem of small, speculative developers, but my local authorities tell me that it offers little protection for them on today’s large developments where access roads may not contain houses adjacent to the road and are therefore not covered by the code, or where there might be many properties, each of which has to be dealt with separately, so that strict time constraints preclude that action.
The advance payments code is not implemented by Hertfordshire county council and has not been for at least 30 years. Surely that shows that it is a toothless tiger that needs to be revisited as a piece of defunct legislation. I am told that the code is highly resource-intensive and that it gives little protection against the problems currently besetting Hertfordshire, not least because we are a two-tier authority, and planning is the responsibility of the district council. Hertfordshire county council says that other highways authorities that follow the code are in the minority and are mostly single-tier authorities where the necessary communication between planners and highway engineers is more easily achieved.
I just wish to touch on one further issue today. I want to give the Minister plenty of time to respond; perhaps my hon. Friend the Member for Kettering and I may come back at him occasionally. I want to highlight a particular impact that delays in the adoption of roads have had in recent months. We all remember that dreadful cold snap in January and its effect on roads in many areas. In Hertfordshire, we felt it particularly acutely and it exacerbated an already dire situation regarding road surfaces in the area. As a result of two harsh cold snaps in two years, the problem is now reaching a tipping point for our roads. It has also affected unadopted roads. Those roads were not gritted. They were also liable to damage by the weather. Some roads that were already in a dire situation have got worse. Some roads still awaiting adoption have now deteriorated in the interim period and they are even less likely to lose their orphan status.
As for the question of timing, 10 years is a very long time in the life of a road. My constituent said that his house was built 10 years ago, and since then significant damage has been done, especially if utilities have been digging up the road and compromising its integrity. I shall be grateful if the Minister will say in his reply what steps are being taken to speed up the process so that such situations do not arise in the future, with the inevitable knock-on consequence for people waiting for their roads to be adopted.
On a final note, my hon. Friend the Member for Kettering stated that he was open, as I am, to practical suggestions as long as they place the cost on the appropriate people and can be implemented quickly, to enable authorities to manage the situation better. In these harsh economic times, that is exactly the right tone. It should be for the people who have benefited from the new estates and developments to make roads up to standard, which are then adopted with all rapidity. There needs to be a purposefulness on the part of the developer to bring that about.
My local authority has a great deal of expertise, and I know that it will welcome the chance to make practical suggestions to the Minister. Is he willing to meet representatives of Hertfordshire county council to discuss the issue in more depth, or even consider calling there once he has ascertained the seriousness of the problem in the country, bringing the authorities together for an open, round-table discussion? Since the problems vary greatly from area to area, people might throw their hands up in the air and say, “Nothing can be done”, but I do not believe that that is the case. Given all the expertise around the country highlighting the problems to the Minister and making practical suggestions, perhaps that is something that he could put as a feather in his cap. It would be an easy win relatively early in this Parliament, and prevent the problem from happening any more.
I welcome the fact that planning is being given back to people to decide at a local level. However, the Minister should be aware that in district councils there are many people who are willing to serve their area but do not necessarily know how to put in place a tough agreement to ensure that when they grant permission for a development, it has roads that are fit for purpose and can be readily adopted. The two-tier council approach that we have in Hertfordshire and other areas is part of the problem. Is the Minister able to give us any comfort on how we can have input from local authorities and how we can ensure that local people who wish to take control of planning are not left with a load of white elephants in the form of buildings on unadopted roads? Perhaps he can tell us whether he is able to get a sense of the scope of the problem by writing to local authorities, so that we can have the information at our fingertips.
The Parliamentary Under-Secretary of State for Transport (Norman Baker)
I thank my hon. Friend the Member for St Albans (Mrs Main) for, and congratulate her on, securing this debate on an issue that is clearly important to her, her constituents, and the constituents of my hon. Friend the Member for Kettering (Mr Hollobone) and many other Members up and down the country. I know that she has tabled an early-day motion on the subject. I assure her from the beginning that I am sympathetic to her concerns. I know that the issue has resonance with other Members; the last time I checked, her early-day motion had secured the support of 15 Members from both sides of the House, and perhaps that figure has now increased. As she knows, the debate that my hon. Friend the Member for Kettering secured recently was his second such debate in recent months, and I was pleased to be able to respond to it.
It is right to acknowledge at the outset that many developers routinely build roads in new developments to a high standard and in good time, and in many cases they are ready for adoption by the local highways authority. Where developers take the right approach, home owners should have little cause for concern. However, I am only too aware that that is not always the case. Some developers drag their feet in bringing the roads up to an adoptable standard, and as a result, even many years after a development has been completed, some home owners find that the roads remain unfinished and unsuitable for adoption by the highways authority. That is not acceptable.
My hon. Friend the Member for St Albans spoke eloquently about the problems that can arise in such cases. The obvious point is that poor road quality is a daily frustration for residents, but I am aware that in more extreme cases, there are concerns about damage to vehicles, the ability to enforce speed limits, and the removal of abandoned vehicles. Such problems can and do occur on unadopted roads. The issue of access for emergency vehicles has also rightly been raised with us.
I am aware that the concerns are not confined to my hon. Friend’s constituency. As she mentioned, it was estimated that there were around 40,000 unadopted roads across the country in 1972. Since then, some roads will have been adopted, while new roads will have been built but not yet adopted. As a result, there have been calls for the Government to conduct a national survey of private roads to bring the estimate up to date—something to which she referred.
While I am sympathetic to the problem, I am not convinced about the value of such a survey. First, any survey of private streets would reveal a large number of streets that are never likely to be suitable for adoption, and in which my hon. Friend is not interested—farm tracks, service roads, back alleys and suchlike. Secondly, any survey would reveal some private residential streets where the residents bought their properties in the full knowledge that they would retain responsibility for ongoing maintenance, and probably—or perhaps—benefited from that being reflected in the purchase price. In many of those cases, residents are quite happy to live on a private street.
In a specimen survey of 600 private streets, 63 were suitable for adoption, but only in 17 cases did the majority of the frontagers want the street adopted; that leaves 46. I accept that that is a small survey, but it might give some flavour of the position out there in the country. To deliver useful conclusions, any national survey would need to identify not only the number of private streets, but the number of streets that could be made suitable for adoption, and that residents actually wanted adopted. As I am sure my hon. Friend will appreciate, such a survey would be large-scale, costing a significant amount of taxpayers’ money, and I am not persuaded that it would offer value for money, particularly at this time. I am not sure how such a survey would help us move forward. We are fully aware of the problem and sympathise.
Mrs Main
I completely accept that a survey would not be a value-for-money thing and is not likely to happen. That is why I believe that talking to the local authorities might be useful. They will be aware of which roads people would like adopted but are frustrated that they cannot have adopted, and in which cases roads are not adopted, but nobody wants them adopted and everyone is fine with that. That is why I felt that talking to the local authorities could be the way forward.
Norman Baker
I agree with that, and we are talking to local authorities. I will come to that in a moment. The issue is not quantifying to the nth degree exactly how many unadopted roads there are, but ensuring that we have a full picture in the Department of the problems that arise, so that we can identify solutions to move forward. That is what I am trying to do in my role.
There must be two elements to any sensible strategy. The first element is to ensure that the best possible use is made of the powers already available to local authorities. They are not perfect, but the powers are there. I spoke in some detail to my hon. Friend the Member for Kettering about the existing tools, including planning conditions, adoption agreements and the advance payments code. I accept that there are limitations in respect of some of those matters. The second element is to consider whether the existing tools can be made more effective through changes in legislation.
On best use of the existing tools, as I indicated in a previous debate on the subject, planning circular 11/95 sets out the uses for planning conditions, and the courts have further clarified their use, setting out clear criteria. Rather than occupying the time of the House by repeating what I said previously, I refer my hon. Friend the Member for St Albans to that previous debate for further background information on that point.
The circular also states that conditions may be imposed to ensure that the development proceeds in line with locally defined needs. For example, a condition may be imposed to ensure that necessary infrastructure is in place before full occupancy of the site. I understand that this type of condition has been used to secure highway infrastructure where a development would have an adverse impact on the highway network. That is particularly important where sites are to be delivered in phases, as it allows a compromise between the needs of the developer to build and sell the site in phases, and the needs of the highways authority to ensure a safe and suitable standard of road.
The planning condition route allows the local authority and the developer to discuss and agree the needs of the site, and to take them into account for the benefit of future occupiers of the development. The Planning Inspectorate can provide model conditions to give guidance to local authorities where particularly problematic issues have been identified. My hon. Friend the Member for St Albans might like to know that at the request of the Department for Transport, and indeed the Department for Communities and Local Government, the Planning Inspectorate is developing a model condition to assist with the problems raised in places such as Kettering and St Albans.
My hon. Friend referred in passing—indirectly, at least—to problems potentially arising between two-tier authorities. I am familiar with that situation in my constituency, where we have a district and a county council. This is not necessarily a legislative problem, but in some cases local authorities—district and county—do not work together as well as they might. It is important that that is pursued from a local angle. Clearly, any changes to local government functions are a matter not for the Department for Transport but for my colleagues in the Department for Communities and Local Government.
Coming back to the model condition, it could offer increased consistency and certainty for authorities, some of which have voiced uncertainty about how planning conditions can be used robustly to specify highway standards, in line with the national policy set out in planning circular 11/95. I accept that no model condition would offer a one-size-fits-all solution; it would need to be adapted by individual authorities to suit the circumstances of particular developments. A carefully designed model planning condition that can be adapted for use in particular local circumstances could offer a useful way forward. Local councils in the constituency of my hon. Friend the Member for Kettering have certainly indicated that they would find that helpful.
I said in response to the previous debate on the subject that I would be prepared to explore potential legislative options, and I am happy to reaffirm that commitment. There are two particular aspects of primary legislation that have been identified by highways authorities as being in need of review. The first is the so-called advance payments code, to which my hon. Friend the Member for St Albans referred, which forms part of the Highways Act 1980. The original purpose of the code was to allow highways authorities to secure a payment or security from developers to cover the cost of making up the road to an adoptable standard, in the event that a developer failed to do so. The payment or security would be available when a development reached a certain stage, at which point the frontagers could require the carrying out of street works and the subsequent adoption of the road. In effect, the deposit or security covers the liability of the owners of the new homes for the cost of making up the street that would otherwise fall to them.
My hon. Friend the Member for Kettering was concerned that funds under section 38 cannot be accessed by the highways authority unless the developer goes bust. We understand from the local authorities with which we have discussed the matter that they have difficulty accessing funds deposited by developers, and we will examine that issue with authority representatives as part of our review of section 38 and other elements of legislation. I hope that is helpful to my hon. Friend.
Currently, under the Highways Act 1980, there is a six-week window in which the highways authority can request a deposit or security. I am aware that the usefulness of the code is weakened because, in many cases, there is no longer any reliable mechanism to make the highways authority aware of the start of works on a particular development, particularly in a two-tier arrangement. As a result, the authority will not necessarily become aware of the need to request a deposit or security until after the six-week window has passed. I think that there is a good case for extending that window, but I am advised that unfortunately that would require primary legislation to amend the Highways Act 1980. That has become the issue, rather than the assessment of the applicability or suitability of the existing condition.
Before I move on to my conclusion, I will refer to the second aspect of legislation that is in need of review, which is section 38 of the Highways Act 1980.
Norman Baker
We will look at how far we can get down the track. We want to get as far down it as possible, including through changes to legislation, if we can make them. Certainly we will do what we can short of introducing legislation, if that approach is necessary.
Section 38 of the Highways Act 1980 is a well-used mechanism that can be very effective where a developer is prepared to commit to making up new roads to an adoptable standard. I am aware, however, that the existing arrangements place no obligation on developers to enter into such an agreement, even if the authority is clear that that would be squarely in the public interest. In the debate on 10 June, I indicated to my hon. Friend the Member for Kettering that I was exploring that matter with the Department for Communities and Local Government to see whether we could have
“options for legislation, including empowering local authorities to require developers to enter into section 38 agreements.”—[Official Report, 10 June 2010; Vol. 511, c. 578.]
We have had initial discussions with representatives of the Department for Communities and Local Government on the subject. They were not unsympathetic, but the issue, both in that case and with regard to advance payments under the Highways Act 1980, is simply finding a window for legislation. Both my hon. Friends will be aware that the coalition Government’s commitment is to give priority in legislation to the elements that were included in the coalition agreement, so that we can be seen to be delivering properly on what we promised the public. It is a question of how much traffic one can get on the bridge at any time. That does not mean that action will not happen, but it means that the issue will have to take its place in the queue. We will do our best in our Department to try to find a way to progress the matter, either through primary legislation or through some other means that helps move matters forward in a productive way.
The Department for Transport had a constructive meeting earlier this year with council representatives from the Kettering constituency, which was helpful in establishing the nature of the concerns and providing an initial view of some potential solutions. I am now keen to move forward by inviting—
Cumbrian Shootings
(13 years, 10 months ago)
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Mr Jamie Reed (Copeland) (Lab)
The events of 2 June will never be forgotten by my community. An ordinary day in England’s most remote and, in my opinion, outstandingly beautiful constituency ended with the senseless loss of 12 members of a remarkable community—the community into which I was born and where I was raised and still live.
Nothing that I or anyone in the Chamber can do or say will undo the wrong done to my community. Nothing can, perhaps nothing should, ever erase the memory of those events. The west Cumbrian community will be defined more by its response to those events—indeed, it is already being so defined—than by the events themselves. The collective response that is sweeping across west Cumbria is, I believe, to those in many other parts of the country, an enviable response.
A number of lessons are to be learned from the events of 2 June, and we will by no means hear an exhaustive summary of them today. One of the most remarkable lessons—it is a source of the greatest pride for me and other west Cumbrians—is that something that we have always known can now be seen by the rest of the country. It is that our area, our community, our home—the towns of Egremont and Whitehaven, and the villages of Seascale and Boot—represent the kind of Britain that much of the rest of the country longs to be like. That view is strongly shared by His Royal Highness the Prince of Wales, and by a number of the media commentators who have written about the events of recent weeks. This is not false sentimentality. Many communities outside the metropolitan areas of the United Kingdom are very much like that.
I have touched on the fact that the purpose of today’s debate is not to rake over the facts. They are not yet exhaustively understood, and will be examined in due course. However, given what we know at the moment, I wish to learn what the lessons of the tragedy are for my community and our country. There may be lessons for the police, the emergency services, local authorities, and Members of Parliament as legislators—but it does not necessarily follow that there will be.
Parliament will not serve my community or the country well by rushing to make judgments because of the need to be seen to be doing something in response to the tragedy. Equally, should clear lessons require us to act, in the form of new legislation or practices, the House would betray my constituents and the people of this country by not acting swiftly, decisively and in concert.
My community has shown itself at its best in recent weeks—in truth, we usually do at such times—and it is time for Parliament to follow our example. That means acting with solemnity, dignity and purpose. As Tony Parsons, the author and Daily Mirror columnist put it, my community is trying to “understand the senseless”. So, too, must the country. In trying to reach that understanding, we must learn from the destructive behaviour demonstrated by so many in the print and broadcast media over recent weeks.
Communities dealing with the aftershock of seismic tragedies such as that which took place on 2 June are the worst places to be invaded by the media. In such situations, there is no place for the media’s invented exclusives, its prurience and voyeurism, its mawkish brutality and its cold-blooded pursuit of profit at the expense of the families of those most affected. Everyone expects intense media coverage of tragedies such as that which affected Cumbria, but do people really expect the news to give way to entertainment? I wish to talk about the behaviour of much of the media in recent weeks, and the anger and dismay that it has caused among my community.
May I say how grateful I am to the Minister who is to reply to the debate? These are not exclusively Home Office matters; I have some sympathy for him, as his brief cannot cover them exhaustively.
I return to Tony Parsons, and to reflecting on the piece to which I referred earlier. It was printed under the headline “The haven of decency that will remain unbroken”. He wrote that west Cumbria
“feels like an England that many of us remember from our childhoods…An England that we thought had disappeared into the mists of history. It is not a flashy place. It is not a place that ever gets much attention. But it is still out there. And among all the horror, we are reminded that it is still real. And that it represents all that is best about this country and our people. No place was less built for violence, and madness, and the mayhem of the modern world. No place deserves it less.”
I cannot describe the effect that those words have had on my community, how grateful we were that we had been seen as we see ourselves, and that our culture and our values had been recognised. How fitting it was. It was a small way of remembering those who had been taken from us. I can only hope that those words helped to fetch some comfort for the families of those who lost family members.
Parsons observed that when Cumbria
“gets attention from the leering outer world, it is seen through a prism of prejudice and ignorance…It is not too much to say that the communities of Cumbria could teach a lesson to us all.”
He continued:
“While we hear so much about the ugly face of the modern world, we forget that there is a Britain that is emphatically unbroken. And where all those old virtues—decency, tolerance, kindness, innocence and goodness—still prevail and thrive.”
John Woodcock (Barrow and Furness) (Lab/Co-op)
I wholeheartedly endorse the sentiments that my hon. Friend expresses. In Barrow and Furness in southern Cumbria—I have the huge privilege of being the new Member for that constituency—I see that spirit every day. Barrow and the surrounding area was once considered part of Lancaster, and many in the area still retain a great affinity with Lancashire. Indeed, if we were to ask, some would say that they would like to move back to being part of it. Does my hon. Friend agree that the tragedy and the many difficulties that the Cumbrian people have experienced in recent months underline the fact that there is a Cumbrian spirit and a Cumbrian community? Indeed, such ties bind my constituency with his and the people of that great region.
Mr Reed
I thank my hon. Friend for that intervention. He has been a Member for only a short time, but I know of the huge esteem in which he is held by his constituents. I am personally grateful to him for making the trip to Whitehaven on the weekend after the shootings to pay tribute, on behalf of his constituents and everybody in the Furness region, to people 40 miles to the north. We were standing shoulder to shoulder. My hon. Friend is absolutely right to talk about community spirit and community values. One of the lessons that we need to learn is that that spirit and those values do not come about by accident; there is a deep cultural purpose to those values, but they are supported, helped and strengthened by policy decisions taken by the House. There will be a time to address such matters, but it is not now. I am grateful to my hon. Friend for his comments.
Tony Parsons continued his article by saying:
“No, this Britain is not broken.”
That is the spirit to which my hon. Friend alluded. Perhaps most fittingly, Parsons gave us—or at least me—a simple phrase that encapsulates not simply the area but those whom I represent. Home to England’s deepest lake and tallest mountain, he wrote that we have
“a beauty that is beyond landscape.”
When that was read out in church on the Sunday after the tragedy, I am told that it had a remarkable effect on a usually stoic congregation. It certainly had a remarkable effect on me, and I will always be grateful. Why is it important? It is because the media, perhaps the most important force in our society—more so even than politics and politicians, even those in the Chamber today; we kid ourselves if we say that that is not so—have the ability to achieve so much good. We all know that the truth will set us free—it is a well-known phrase and a cliché, but it is true—so why do the media turn their collective back when they have the capacity to achieve so much good, so readily and so often?
The media local to the tragedy—the Whitehaven News, the News & Star, the North West Evening Mail, Border television, BBC Radio Cumbria and “Look North”—reported the tragedy with a care and diligence entirely different from that of the national media. That is because they are rooted in the area and care about the people about whom they are reporting. They understand the power of their roles and the effects of carrying them out in particular ways. The Whitehaven News was particularly impressive, as just one week before, it had reported the tragic deaths of Kieran Goulding and Chloe Walker, constituents who were killed in the Keswick bus crash. Like the News & Star, the Whitehaven News understands the role that it plays in my community and how it can help the community’s healing process—not the families’ healing process, perhaps, but certainly the community’s. To give a parallel—I know that this is a difficult issue—certain national newspapers have elicited feelings in my community similar to those that were elicited in Liverpool by the way that the Hillsborough tragedy was reported.
The first lesson of the tragedy is that communities such as mine have a lot to teach other parts of the country about the power of community, cohesion, social justice, compassion and solidarity. Social policy must protect and strengthen those values and virtues. The second lesson is not to seek to curb the freedom of the press or broader media, but to seek a better, enforceable code of conduct for the media. Certain desperate, spiteful journalists have written some dreadfully inaccurate copy simply because members of the community would not speak to them on learning that they were journalists. That reflects badly on those journalists; naming them would surprise nobody and so serves no purpose today.
I come to the second lesson. One price we pay for a free press is its freedom to write such misleading and opinionated bile. However, press intrusion is not a price anyone has ever agreed to pay. Nobody ever agreed to have journalists camped on their doorsteps while they were in the immediate aftermath of bereavement; to have friends and family members offered money if they spoke to, or obtained a photo of, a distraught relative of one of those who died; or to have six-figure sums paid for exclusives, or smaller sums paid to them if they could tell the whereabouts or movements of certain individuals, even if those individuals would be going to school that day.
If the west Cumbrian community demonstrates just how far from being broken Britain really is, then behaviour like that from certain sections of the media demonstrates just how dysfunctional and broken the media’s values are, and that their attempts to infect decent society with their values are iniquitous and wrong. I know journalists who have had their stomachs turned by the actions of some in their fold—they are far from being all the same—but surely such behaviour cannot be sanctioned and must be stopped. To that end, I will write to the National Union of Journalists and the Press Complaints Commission to seek meetings, and to discuss how the issue can be taken forward and how professional codes of practice can be improved significantly. I have spent so much time talking about the media because the activities of certain sections of them have weighed particularly heavily on the community in recent weeks. They have caused particular distress, anger and concern, and I feel duty-bound to articulate those concerns today.
The third lesson, so far, of the Cumbrian tragedy will be to review gun law; that is now essential. It does not necessarily mean that gun law can, will or should change; we must await the full facts of the case before we can assess them through the prism of the gun ownership laws. If any changes to the law could have prevented this tragedy, reduced its chances of happening or mitigated its effects, then it is a reasonable proposition to expect those changes to be made. Certainly, those are the views of some of the family members of those who lost their lives on 2 June. However, we do not yet know if changes are necessary.
The fourth lesson—this is imperative—is that the Government should release the £100 million pledged by the previous Labour Government to rebuild the West Cumberland hospital in Whitehaven. The cheque for the new development was in our hands on election day but taken from us when the new coalition Government were formed. The hospital is the fulcrum of my community and the entire west Cumbrian community, and demonstrated its worth again and again in the days and weeks that followed 2 June. Halfway through the general election campaign this year, that hospital saved my life, and it has saved countless more since. When my community needed it most, it was impeccable. The Prime Minister saw for himself just what a remarkable and valuable group of professionals there are at the West Cumberland hospital. I ask the Government again today to please release the funds required without any further delay.
Demolition of the old hospital has commenced in anticipation of the new-build programme, and any delay beyond September will have serious consequences for the project, for service configuration and for the entire community. Please return to my community the money given to us by the previous Government. The Government must acknowledge the importance of the matter and act in the only human, compassionate way imaginable by returning this money as soon as possible.
There will be other lessons—about the value of GP practices, retained fire fighters, the civil nuclear constabulary, the Church and the essential role played by voluntary agencies. Those lessons need to be brought before the House, and I expect that they will; that should happen soon. I am grateful to the Home Office for the interest it has shown and the time that it has taken to address the issues so far. I expect a full and frank inquiry, the terms of which should be determined principally by my community and the families of those affected.
I expect that the Select Committee on Home Affairs will want to undertake its own investigations, too. I am particularly grateful to the Chair of the Home Affairs Committee, my right hon. Friend the Member for Leicester East (Keith Vaz), for visiting my constituency earlier this week to speak with Cumbria constabulary and Copeland borough council about their experiences in recent weeks. That was extremely beneficial and welcome. For the benefit of all those affected, inquiries should probably be undertaken sooner rather than later, but not in an immediate rushed sense.
It is imperative that no inquiry should begin with the purpose of attributing blame. The conclusions of the Association of Chief Police Officers investigation that is currently under way should be placed in the public domain as soon as it is completed. The Cumbrian constabulary has nothing to hide and is a source of pride among my community. It performed fantastically on 2 June as events unfolded, and I know, through my conversations with it, that it is determined for the full facts of the investigation to be known by the public. No price can be placed on the truth—that is what we seek before anything else. We do not want inquiries that seek to validate opinions or theories; we want the facts, and those facts must be acted on. Other issues, such as the support services in place for the bereaved and applications to the criminal injuries compensation scheme must be addressed, but those are not issues for today. Fundamentally, the concern of politicians must remain once the cameras have moved away.
Finally, none of us will ever forget Michael Pike, Garry Purdham, David Bird, Kevin Commons, Susan Hughes, Kenneth Fishburn, Jane Robinson, Darren Rewcastle, Jennifer and James Jackson, Isaac Dixon and Jamie Clark, and this House owes it to their memories, their families and my community to understand and act on the lessons of 2 June. They deserve nothing less.
Mr Joe Benton (in the Chair)
Before I call the next speaker, I point out for the benefit of new Members that if they have not already made their maiden speech, they may speak here, but they then forgo their right to a traditional maiden speech in the Chamber. I am sorry, but that is the rule, and I thought that I ought to point it out. At least hon. Members are now aware of that and can keep it in mind.
Simon Hart (Carmarthen West and South Pembrokeshire) (Con)
I endorse the comments of the hon. Member for Copeland (Mr Reed). All of us who represent rural communities—I represent one on the west coast of Wales—can only imagine how dreadful an experience the event that we are discussing must have been. Everyone in the House and elsewhere will be reflecting on the things that the hon. Gentleman put so eloquently, and on the measured response that he and other professionals in his area have so diligently delivered for the rest of us. I should declare a bit of an interest, in that before coming into the House I represented an organisation that had rural communities at its heart. I have been lucky enough to travel to many isolated areas, including the hon. Gentleman’s.
It is sometimes quite difficult to articulate to the wider public exactly what a rural community is—what its strengths are and why we are so passionate about it. It is also sometimes difficult to articulate what a blow an event such as this can be. Of course, it would be a blow to any community, but purely because of where I have worked and where I live, I feel that I understand where the hon. Gentleman is coming from. For that, I am extremely grateful.
The hon. Gentleman made his strongest point when he said that we should proceed from here on the basis of the facts. In the past, there have been occasions when the instant reaction to a dreadful event has been a little too knee-jerk, political and shy of the facts. That has meant that the problem has not been dealt with and that people who should not have been caught up in the aftermath have been punished or penalised. The hon. Gentleman’s approach to this matter has been absolutely right, and has been generally endorsed across the House.
John Woodcock
I absolutely endorse the sentiments expressed by the hon. Gentleman and echo his call for our response to be fact-driven, but may I ask him whether he has any examples of knee-jerk and political responses to tragedies and of when the right outcome has not followed on from events?
Simon Hart
Yes, I have. Responses such as the Dangerous Dogs Act 1991 and legislation passed by a Conservative Government in relation to handguns did not achieve the objectives that this place and the public wanted, which is why there has been an ongoing debate about their effectiveness. There are also plenty of examples of people who have been adversely affected by the passing of that legislation. People at whom the legislation was aimed have hardly been touched at all, which is why a private Member’s Bill on dangerous dogs is starting its process in the House of Lords as we speak. There are probably more examples, but those are two with which I am familiar.
I want to cover just one area of the four that the hon. Gentleman mentioned. Due to my previous interest in countryside activities, I should like to focus on the shooting community. I must be very careful about that because I do not want to underplay the seriousness of the situation or give any impression that those who shoot, either recreationally or as part of their daily lives, are not sympathetic to the points that the hon. Gentleman made. Moreover, those who shoot are not unrealistic about the fact that many things will need to be reconsidered in the near rather than the distant future by this House and the other place. There is a real awareness that these are important issues, and nobody I know who possesses a shotgun or firearm certificate—professional or otherwise—is in any doubt about the need to get right to the heart of the problem.
Tony Cunningham (Workington) (Lab)
Does the hon. Gentleman agree that it is in no one’s interest to have a knee-jerk response? He is talking about the shooting fraternity, but it is not in the interests of the community of west Cumbria, or anywhere else, to have a knee-jerk reaction. What we need, and what my hon. Friend the Member for Copeland (Mr Reed) was asking for, is a thorough inquiry into the matter. I repeat: no one—but no one—wants a knee-jerk reaction.
Simon Hart
I absolutely agree. We cannot proceed without the facts. We cannot proceed sensibly until we have had the results of the inquiry by the Association of Chief Police Officers and of other investigations that may be associated with, or just on the fringes of, this particular incident. Yes, of course I endorse what the hon. Gentleman has said.
There is increasing evidence that, in many areas, gun crime is coming down while weapon ownership is going up, and interesting statistics on Scotland have recently been published on that score. Fewer than 0.5% of crimes involving weapons that have resulted in death or injury have involved licensed weapons—shotguns, in particular. As for the safety of the activity across the EU, target-shooting activities are among the safest for members of the public to take part in. If there is a lesson to be drawn from that, it is that any changes in legislation should be about the people who possess and use weapons rather than the weapons themselves. I mentioned the error that the Conservative Government made in relation to handguns. In that instance, they focused too much on the weapon, and not enough on the people who were ultimately going to be using it.
Moreover, there is not much evidence to suggest that shortening the certificate period for weapon ownership would have made much difference in these or other circumstances. Likewise, it is uncertain whether any evidence supports the theory that it is acceptable for people to keep no more than a certain number of guns.
I recognise the hon. Gentleman’s comments about the media. The distinction in approach between the national and regional media resonates with rural communities. The idea that people would have to show a good reason for owning a weapon would be unlikely to make much difference, although I am not talking about this specific incident.
Lastly, let me turn to the thorny issue of mental health checks for people who wish to acquire and use weapons. The shooting community is particularly conscious of the matter and is inclined to investigate it further. Those checks have to find a way of safely predicting dangerousness, and that will be a very complicated medical judgment. GPs, who could be the final arbiters in applications, might be put in a very tricky position as far as potential liability is concerned if it emerged that someone they certified as safe to own and use a weapon subsequently turned out not to be. There may also be GPs who have a fundamental dislike of weapon ownership and shooting-related activities; that might put them and the applicant in a difficult position.
From the perspective of both a rural community and an urban community that has access to and enjoys weapons for whatever purpose, there is a real willingness to engage in the debate that has emerged from this tragic event. I do not think that anybody is under any illusion about the changes, but what I hope we can do is strike a proper balance between the safety of the public and proportionality as far as our freedom to own and use weapons is concerned. If we can achieve that balance as a consequence of the hon. Gentleman’s efforts, we will have made sensible progress.
Keith Vaz (Leicester East) (Lab)
It is a pleasure to be in a debate under your chairmanship, Mr Benton; I think that this is the first such occasion for me. I am pleased to be following the hon. Member for Carmarthen West and South Pembrokeshire (Simon Hart). One of the great values of this House is that Members come from so many different backgrounds. They are able to give the House their experience and expertise in areas of policy of which some of us have absolutely no experience. I represent an urban constituency, which does not have anything like the open space and rural background of the constituencies of many hon. Members here this afternoon.
I pay tribute to my hon. Friend the Member for Copeland (Mr Reed) for the way in which he has conducted himself as Member of Parliament for the area where the event that we are discussing took place. It must have been a 24/7 experience, the like of which none of us would ever want to be involved in. Of course, we are always there to represent our constituents every moment we are in the House, but what he had to go through was exceptional. He conducted himself with enormous dignity, and he is a credit to his constituency and to this House.
Tony Cunningham
I just want to endorse what my right hon. Friend has said about my hon. Friend the Member for Copeland. However, there is one word that he did not use that I should like to add—it is “leadership”. That is what communities would always want to see in their MP in such difficult circumstances. Throughout this entire tragedy, my hon. Friend has shown real leadership and he is to be commended for that.
Keith Vaz
Indeed; my hon. Friend is absolutely right to say so. As we are in the business of acknowledging hon. Members, I should say that all the other Members with Cumbrian constituencies who are here today also played their parts in responding to this tragedy—the hon. Member for Penrith and The Border (Rory Stewart) and my hon. Friends the Members for Barrow and Furness (John Woodcock) and for Workington (Tony Cunningham). Those constituencies were just names to me until I went to Whitehaven on Monday. As I went down the motorway, I saw all those constituency names; I am sorry that I did not have a chance to notify the Members that I was driving past, as is the convention, but I tried my very best.
I will speak very briefly as I know that other hon. Members who represent Cumbria wish to be involved in the debate. I was in Whitehaven in Copeland on Monday, at the invitation of my hon. Friend the Member for Copeland, as I had expressed the view that it was important that we not only looked at the overall area of policy that is paramount in this particular case, but recognised, following statements made by the Prime Minister and the Home Secretary, that it was important that Parliament itself should look at the events that had occurred in this tragic set of circumstances.
Of course, those of us who live outside Cumbria send our condolences to the families of those who have died; it must be an awful experience for those families. On Monday, I met the vicar of Egremont and he told me about the funerals that he had conducted and the fact that it is a very close-knit community—everyone knows everyone else. The tragedy is taken very personally.
The hon. Member for Carmarthen West and South Pembrokeshire and my hon. Friend the Member for Copeland are absolutely right: the reaction of politicians, including the Prime Minister and the Home Secretary, was spot on. There was no rush to judgment. There was a careful and measured approach, as was demonstrated by my hon. Friend the Member for Copeland here in Westminster Hall today. That approach was also reflected in the statement of the Prime Minister when he went to Cumbria and by the Home Secretary in her statement to the House, which she made very soon after this tragedy.
It was right to say that we have to wait and see. There must not be a rush to judgment. Let us look at the facts, see exactly what happened and consider, in a careful and measured way, how to proceed. I think that that is what will happen in this particular case.
Nevertheless, I feel that it is important that there should be an urgency about getting to the facts. My hon. Friend and I had a meeting with the deputy chief constable of Cumbria, Stuart Hyde, who talked about a series of inquiries that were taking place. Clearly, the police do not want to leave things in a position where people have any further questions to ask, so there are a series of inquiries. There is the inquiry into the issuing of the gun licence, the inquiry into the circumstances of the day itself and another internal inquiry that the police are conducting. Those inquiries are all very important and very relevant.
At the end of the day, however, judging from the limited time that I spent in Cumbria, the interests of the constituents of my hon. Friend and other Cumbrian MPs will not be served until all the facts of the case come out, so that people know precisely what happened. That is important, although not so much for us to guard against this tragedy happening again—because, although we do not know the full facts yet, we think that this tragedy could have happened anywhere in the country at any time; this was not a premeditated series of events. It is important because it is right that the public should know about the full sequence of events. So I hope that when the Minister responds to the debate, he will tell us something about the timetable that has been placed on the local police force in Cumbria.
Although the deputy chief constable of Cumbria did not ask for additional resources, there may be a resources issue. As a second point of clarification, I seek an assurance from the Minister that, if those additional resources are necessary, they will be provided.
The deputy chief constable spoke intelligently about the fact that Cumbria does not own a helicopter, for example. He also said that, in his view, Cumbria does not need one. A deal had been done with another force—the Greater Manchester force, or perhaps the Merseyside force—to provide a helicopter when it was required. Obviously, not all police forces can have their own helicopters, but there may well be resource implications that need to be examined in the cold light of day.
I hope that in the meantime, before we get to the conclusion of the inquiries, whatever Cumbria’s police ask for and whatever hon. Members feel is appropriate is provided. I know that the Prime Minister has said to my hon. Friend the Member for Copeland that he is keen to know the views of local people; I know that, because my hon. Friend told me so on Monday. If the local people ask for something, I hope that it will be granted.
As we all know, we are in something of a limbo situation. As we speak, there are elections for the membership of the Home Affairs Committee, so that Committee has not yet been formed. However, at our first meeting I will certainly recommend to members of the Committee that we should look at this area, because I think that it is important that Parliament itself should examine the wider issues. We should not necessarily examine the detail of what happened, although of course we will need to take evidence from those involved, but we should examine the wider area of the policy issues that emanate from what has happened.
As I am sure the hon. Member for Carmarthen West and South Pembrokeshire will remind us, we have some of the tightest and strictest gun laws in the world and people will find it amazing that anyone should have been able to do what this person did to the citizens of Cumbria and then to himself. However, the fact is that we will have to look at the issue of gun law in the round. It would be very odd if we did not look at it.
I think that that is what my hon. Friend is talking about; he is not saying that there should be an instant revision of firearms legislation, but that we need to look at firearms legislation in context. The Home Affairs Committee last looked at this issue 10 years ago, when we made certain recommendations about having people on the national register. Immediately, the issue of data sharing is important too. When a gun licence is applied for and the data about that application are held locally, what happens to them? Are they available to others?
So broad issues need to be raised, without our getting into the finer detail of this case, because that is what the people will require. Of course, it is up to the Committee to decide on the inquiries that it carries out. It is not up to the Chairman, even in these days of electing Chairmen and having independence and accountability to Parliament. But I very much hope that this is an issue that we will look at when we have the opportunity to do so.
My hon. Friend mentioned a number of other issues concerning the media and his local hospital. On the media, I think that he has made some very valid points. It is important that we look at how these matters are reported and he is absolutely right to want to write to broadcasters and the Press Complaints Commission asking them to look at the overall handling of this situation.
My hon. Friend is also right to praise his local media, as we all do, because they have a better feel for local people. They are unwilling to trample on the lives of people, either the living or the deceased, because they know that they will be meeting them again. For the national media, it is something of a visit; they may be there 24/7 during the rolling period of a crisis, but they then go away quite swiftly to the next story. My hon. Friend’s concern is about how the story was reported at the time and I was certainly told about examples of cheque-book journalism and other issues of that kind, which really ought to be explored. He is right to raise this whole issue of the media; it is one of the lessons of Cumbria and one of the points that we need to remember.
As for my hon. Friend’s local hospital, I am sure that he makes his case more powerfully than anyone else here can, and I am sure that that case has been heard by Ministers. I wish him well in what he seeks to achieve.
In conclusion, the people of Whitehaven, its local Member of Parliament and the other Members of Parliament who represent the region desperately want to return to normality. I had never been to Whitehaven before Monday. It sounds odd, but I think that the furthest north that I had travelled in England previously was to Carlisle; of course I had been to Scotland before, including to the western isles many years ago on parliamentary business.
On my visit to Whitehaven, I saw a very beautiful place; it was absolutely stunningly beautiful. Local people, including the excellent leader of the local Labour group, Elaine Woodburn, and the local vicar, Richard Lee, wanted to return to normality. They want Whitehaven and Cumbria to be remembered for the beautiful places that they are, rather than for any other reason. We have a duty to ensure that they are able to return to that position. We also have a duty to ensure that all the facts come out. I hope that the Minister will assure us that the Government are also keen that that should happen.
Rory Stewart (Penrith and The Border) (Con)
I was not intending to make a maiden speech today, but I can think of no better example of what Parliament is about than the issue that the hon. Member for Copeland (Mr Reed) has brought us. There is a precision, a compassion and a sense of dialogue and openness in this room that I wish was more present on the Floor of the House, so I am proud to be making my maiden speech. The hon. Gentleman’s contribution was immensely deeply felt and measured. He balanced the kind words of Tony Parsons with the horror of cheque-book journalism. His commitment to the West Cumberland hospital really came across, and I very much hope that our Government will be able to sustain the hospital. As the hon. Gentleman said, the Prime Minister was very impressed by his visit.
As the hon. Member for Barrow and Furness (John Woodcock) pointed out, Cumbria is a dense and complex web, which stretches across the artificial boundaries created by the Boundary Commission. Grandchildren of constituents in Brampton were in the hon. Gentleman’s constituency when the shots were fired. In all that we do, I hope that we reflect that dense web of Cumbrian culture in two specific ways. I hope that we look at the lessons of the tragedy in terms, first of distance and secondly of the way in which we conduct the inquiry. Both should reflect Cumbrian approaches.
In terms of distance, we need to understand the sad but powerful lesson that we represent a county defined by its sparse population and long distances. That is why the West Cumberland hospital matters and why we in Penrith and The Border think all the time about what would have happened had some terrible tragedy occurred in Kirkby Stephen, which is an hour and a half from the Carlisle hospital.
In this time of potential budgetary cuts, we need to fight hard to make sure that the police services that got 47 armed officers on the ground within an hour continue to be able to do that. We should also remember that recent events are an argument against hasty amalgamations, against closing our cottage hospitals and turning them into big hospitals, and against amalgamating the Cumbrian police with the Lancashire police. As we have seen, local services are much more responsive and flexible, and they can draw on services available in other parts of the country and make them operate more effectively.
We need to fight for such things. That is partly because although Cumbria is one—although we are a dense web—the needs of people in Copeland are very different from those of people in Penrith and The Border. Although we are one, we are also divided in very sad ways. The life expectancy figures on the west coast are nearly 20 years shorter than those in the east of Cumbria. Those are the kinds of things that we need to work together to overcome. They are also the reason why all our specific services—the police, the fire service and social services—need to be local, adept, flexible and focused on specific communities and to be pragmatic in responding to them.
That brings us to the inquiry. The hon. Member for Copeland talked about Cumbrian virtues. As he said, the fundamental element of Cumbria and of the whole border is people who are slow to react and slow to anger, but who, when they are determined, are resolute and focused. Let us hope that the inquiry reflects those values. As the hon. Gentleman said, we should not rush into anything, but once a decision is made we should stick with it and push it through.
We should not have some grand commission based in London, with people who know nothing about Cumbria, guns or mental health pontificating in an abstract fashion. We need the very virtues that the hon. Gentleman saw in the local newspapers to be part of a local inquiry and a local commission. Those involved should include mental health professionals, the police and, above all, Cumbrians. Too often, our farmers and our teachers are ignored in favour of distant bureaucrats. Let the commission and the inquiry reflect Cumbrian values; let those involved be slow to anger and resolute, but also precise, pragmatic and focused on the exact events of the day of the shootings.
On that point, let me end my maiden speech by saying that it is a great honour to stand in this room with the hon. Gentleman, who is an impressive leader. It is also a great honour to participate in a debate that shows the precision, level of inquiry and openness that I hope can characterise the House as a whole.
Tony Cunningham (Workington) (Lab)
If this was the Floor of the House of Commons, I presume that the tradition would be for me to pay tribute to the maiden speech that we have just heard. I know that this is not the Floor of the House, but with your permission, Mr. Benton, I would like to pay tribute to the hon. Member for Penrith and The Border (Rory Stewart). I congratulate him on his excellent and moving maiden speech and thank him for his genuine concern, which was heartfelt. It was very much appreciated by myself and, I am sure, by my hon. Friend the Member for Copeland (Mr Reed).
I pay tribute to the emergency services and the wider community. We can only imagine what the emergency services—the police, the hospital staff, the doctors and the nurses—had to face, given the severity of the gunshot wounds; it must have been absolutely awful for the police officers and the doctors and nurses who looked after people.
The majority of the armed response officers who were involved were not police officers, but Civil Nuclear Constabulary officers. They are not the Minister’s responsibility, although the Home Office often believes that they are. However, I ask the Minister to take a personal interest in the Civil Nuclear Constabulary, which would like a number of issues to be looked at. I pay tribute to its officers, as well as to the police, because they did a fantastic job.
One group that we sometimes forget is the Churches. They were in evidence in huge amounts, as was the desperate spiritual need that the community felt. Whatever the denomination, the Churches played a significant part, and I pay tribute to them.
For a couple of weeks after the shootings, I carried around the article that Tony Parsons wrote in the Daily Mirror on the Saturday. I would be in the pub and I would tell people who were talking to me about the tragedy to read it. Not a single person who did was not wiping away a tear when they had finished—it was so moving. We should compare that article with what I can only describe as some of the rubbish that was written. I sent a little handwritten note to Tony Parsons—I hope that he got it—telling him what we in the community felt about his article.
On West Cumberland hospital, I spoke to a senior member of the community, who simply asked, “How on earth could anyone ever dream of not giving us the money?” We should think of what the hospital has been through. We had the floods last November, the terrible tragedy of the Keswick coach accident and then the shootings. How could people even think of not giving the area the money that has been promised? I do not think that they can, but we will continue to fight to make sure that the money is made available and that we get a brand-new hospital.
The weekend after the tragedy, I was standing at the bar in my local pub talking to a friend. We were talking about how awful, difficult and tragic the shootings were and about the enormity of what had happened. My friend looked at me and said, “We’ll get through this though. You know why? Because we’re west Cumbrians.” On that note, I would like to finish.
Tim Farron (Westmorland and Lonsdale) (LD)
It is a pleasure and a privilege to serve under your chairmanship, Mr. Benton. I thank and pay tribute to the hon. Member for Copeland (Mr Reed)—I will call him my hon. Friend—for bidding for and getting the debate. I also pay tribute—not out of form, but out of sincerity—to my neighbour, the hon. Member for Penrith and The Border (Rory Stewart). He has stepped out of line in a courageous way and made a maiden speech in an unconventional place and an unconventional manner on an issue that genuinely matters. I am sure that that will be noted by many.
There are not words to describe the horrors of 2 June and what followed, but there are words to describe the response of the community—compassion and solidarity, above all others. As the hon. Member for Workington (Tony Cunningham) and the hon. Member for Copeland said, that response defined and continues to define what happened. The hon. Member for Copeland in many ways embodies that spirit, not just by showing leadership in his community on the tragedy that we are debating, but in his response to the other tragedies that took place only days earlier.
There has been talk about London journalists. I am more used to reading Tony Parsons’s comments about 1970s pop culture than what he writes about modern tragedy in west Cumbria. However, he and other journalists who went there, whose conduct we will perhaps talk about in a moment, came away staggered by the strength of the communities and their response. London journalists make it their business in their line of work to visit the scene of dreadful tragedies. I am not trying to create a league table of community response, but without a doubt they have been staggered by the tremendous solidarity shown in the communities of Cumbria—not just those that were directly affected, but communities throughout the county.
Craig Mackey, the chief constable of Cumbria, who has been a policeman for 25 years, said that the event was by far the most hideous thing he had ever had to deal with—and he has seen some pretty hideous things. As has been mentioned by the hon. Member for Penrith and The Border, NHS staff and experienced police officers had never seen a gunshot wound, never mind several of them in one day. It needs to be said that they dealt with things with stoicism, compassion and professionalism. We expect the emergency services to be outstanding, and they were, under extreme pressure. In many cases they put themselves in harm’s way to provide assistance to stricken people. They dealt with physical and emotional traumas on that hideous day. The police, national health service staff—ambulance drivers, paramedics, doctors and nurses—mountain rescue teams, volunteers and others put themselves in harm’s way to provide assistance when it was important.
My constituency was not touched directly by the shootings, although the towns and villages of Ambleside, Coniston, Grasmere and Hawkshead were put on lockdown for much of that day, as it was feared that the gunman could arrive on the streets at any time. Cumbria is a huge county, but it feels small after such an incident. Connections emerge all over the place. My 25-year-old brother-in-law will not mind my saying that he is a rookie policeman, and for him it has been a baptism of fire; and a close friend of mine happened to be on the campsite at Boot where the final shootings took place. Even aside from such personal connections, if you kick one Cumbrian we all limp; and there is a sense of solidarity and standing together that shines through.
To echo the comments of most of the hon. Members who have spoken, a knee-jerk response from legislators would not be sensible. That does not mean that there should be no response; but hard, tragic cases make bad law, without a shadow of a doubt, and the laws passed in response to previous tragedies have clearly not prevented subsequent ones. We should not jump to conclusions. There is always a sense—which I share—that something must be done; we feel powerless. For now, at least, that something is to support the community and help it to recover. Lessons must be learned thoroughly. It goes without saying that there will be no trial, and that is why a full—and I would say public—inquiry is crucial, on terms set, as has already been said, by the community. That should not be to point the finger at anyone other than the culprit—not the emergency services or anyone else—but an inquiry is necessary to enable us to learn lessons from the tragedy.
There are some lessons that we should not learn. Like the hon. Member for Barrow and Furness (John Woodcock), whom I welcome to the House, I represent a good chunk of what is rightly Lancashire, but some of the patronising stuff written in the media focused on Cumbria being a pitifully small county with a police force that cannot deal with its problems. That is nonsense. Recently there was a proposal to merge Cumbria and Lancashire police forces; that would be the wrong lesson to learn. It would not help the grieving communities to put their police headquarters in Preston rather than Penrith.
Finally, I endorse the comments of the hon. Member for Copeland about the reaction of elements of the media. The media must leave families to grieve and to recover in dignity and peace. We must not, in future, allow them to turn such tragedies into a mawkish circus.
John Woodcock (Barrow and Furness) (Lab/Co-op)
I want briefly to add to what has been said, and to pay tribute to an excellent and unconventional maiden speech by the hon. Member for Penrith and The Border (Rory Stewart), which was quietly powerful. I also want to add to the comments on how my hon. Friend the Member for Copeland (Mr Reed) has conducted himself. All new Members come here wanting to represent our communities in the best way, and we look for examples of ways to do that; my hon. Friend has been an inspiration to me and others by his leadership in such difficult times, speaking out and representing a community in great pain. That will always stay with me.
My constituency is south of my hon. Friend’s, and like that of the hon. Member for Westmorland and Lonsdale (Tim Farron), it was not directly affected, although the town of Broughton was put under lockdown when no one knew where the gunman was going. Also, about 700 people a day travel to Sellafield to work, so there are deep ties, including family ties, there. Everyone knows someone who has moved down from Whitehaven, or moved up, and the family bonds between those areas are incredibly strong. I know that my constituents see the hurt and suffering of their west Cumbrian neighbours, friends and colleagues, and are at a loss to know how to help, but they stand ready, as we all do, to try to help the community through.
I do not want to add to the comments on the national press, because a powerful case has been made about what people have seen at first hand, and the effect on the community. However, I want to mention the local press. I fully endorse the huge value of the community role that it plays throughout the year, in community events big and small—and never does it play that role more fully than in such circumstances as we are debating. The local press and media are going through difficult times; part of that is due to reforms that they are undertaking to try to ensure that they are financially viable at a time when technological change makes that increasingly difficult. However, the Government must continue to look for ways to support local papers and media. I hope that they will think carefully when they consider their policy on public advertising, for example, which has the potential to take out a vital income stream from the local press. That would make things far more difficult. It is so important that we keep such institutions able to serve the community.
I endorse the case that has been made for continued investment in the police and the hospital in the area. They are early examples—there will be so many more of them as the weeks and months go by—of cases where the need to ensure the sustainability of the public finances nationally runs hard against local communities’ needs for continuation of services. No one can pretend that this Government will not face difficult choices, or that any party that had won would not have done so. That is why it is essential that the efficiencies that we make are not driven beyond what is ultimately best for the economy, and do not damage our local communities to such an extent that it will be difficult for them to recover. I am not making a party political point; I simply urge Members on both sides of the House to bear that in mind.
On the inquiry, it is clear that looking at mental health provision in respect of firearms licensing is absolutely necessary, as is a review of mental health provision in the community generally. We do not know—we can never fully know—but it is extraordinarily unlikely that a person would flip overnight from being completely mentally stable to committing such dreadful atrocities. It may be that we are talking about something that it simply was not feasible to have picked up, but that is a point to consider when we look at mental health provision in the wider community.
Finally, I endorse what everyone has said about the need to look at gun licensing thoroughly in the round, and to not make a knee-jerk response, but I urge the Government to come to the matter with an open mind, and not a preconceived idea that legislation to restrict guns is not the way to go; that would steer them on to another path.
We may review the matter and decide that the laws are as tight as they feasibly can be and that, given the balance of risk, the restrictions that would have to be imposed for further tightening would be disproportionate, but it would have been far less likely that a man who had a licence to use firearms for sport would have gone on a lethal killing spree if he had not had access to those guns. That does not prejudge any review of the balance to be struck and the consequences of further tightening, but it is essential that the matter is looked at as a separate question. Clearly, in rural areas such as mine and across the whole of Cumbria, farmers have a real need for firearms, but we must be prepared to take an open-minded look at guns for sport, and all the pros and cons.
Simon Hart
I simply want to pick up on the issue of the review of mental health provision, which the hon. Gentleman rightly raised. Most people would be open-minded about such a review, and I agree that it should proceed on the basis of evidence rather than anything else, but surely there can be no distinction between people who own weapons for sport and people who own weapons as part of their livelihood when it comes to mental health assessment.
John Woodcock
That is a good point. I was not thinking of that specifically when I spoke about a review of mental health provision, although those issues must form part of it. As I said, it may be impractical to say that guns that are held for sport should not be kept at home but in some kind of secure premises, but it is right that we examine the matter and look at whether a distinction can be made between guns that are needed by farmers, which clearly need to be kept at home, and guns used for sport, which one cannot say need to be kept at home. It may be disproportionately difficult to put in place other arrangements, but I hope that the issue will be properly examined as part of the Government’s inquiry.
Mr Alan Campbell (Tynemouth) (Lab)
It is customary on such occasions to congratulate the Member who secured the debate, but I know that on this occasion my hon. Friend the Member for Copeland (Mr Reed), like me, wishes that we were not here and that the events had not happened—but they did. He spoke movingly and with great dignity and bravery. I want to place on the record the high regard in which I hold him, as a result of not just what has happened in the past few weeks but the work that he has done on behalf of his community and the leadership that he has shown, which has also been shown by my hon. Friends the Members for Workington (Tony Cunningham) and for Barrow and Furness (John Woodcock) and, indeed, all hon. Gentlemen from that part of the world, as their local communities faced such tragedy. Our condolences go to the friends and families of those whose lives were taken.
I wish to pay tribute, as many speakers have, to the emergency services in the affected communities and also from across the north of England as additional resources were brought to bear on these terrible events. I want to place on the record our thanks to the Sellafield police, who have been referred to previously, who played an important role.
It is entirely right that investigations are taking place into what happened in west Cumbria on 2 June. As my right hon. Friend the Member for Leicester East (Keith Vaz) said, issues will be raised around resources and how they were deployed, and the resources that will be available in the future. It will seem incongruous to people for whom this is a raw and recent memory that the chief constable and the police authority in Cumbria should be discussing the loss of dozens of front-line officer posts at a time when the force has faced perhaps its greatest challenge.
We also heard about the West Cumberland hospital. I hope that these matters can be dealt with sensitively. I know that the Minister, who I welcome to his post—I wish that it had been under other circumstances, but I do welcome him—is a decent man, and that he will fight the Home Office corner. I would expect that his colleagues in the Department of Health would do the same. Members of Parliament from that part of the country are fighting the corner on behalf of their constituents, and I expect Ministers to do the same, because public services in this context—the emergency services—are synonymous with public safety.
The Government were entirely right not to rush to legislation, but it would be wrong to dismiss the positive effects of the earlier legislation which was referred to, particularly that following Hungerford and Dunblane. As the hon. Member for Westmorland and Lonsdale (Tim Farron) said, it may not have prevented this tragedy—it did not—but it may have prevented tragedies in other circumstances.
We have one of the strictest gun control regimes in the world, but if there are lessons to be learned we must learn them, and if changes need to be made we must make them. We should await the outcome of the Association of Chief Police Officers peer review of what happened in Cumbria, but there are already existing concerns. I do not want to prejudge that inquiry in any way, but as the hon. Member for Carmarthen West and South Pembrokeshire (Simon Hart) said, questions must be asked, and in the fullness of time we should try to answer them. He and I may have slightly different views, although I am by no means against people using guns as part of their jobs or sporting activities, but was it right, with hindsight, to move from three-year to five-year licences? Is there not a danger that when applying for a licence by post or, heaven forbid, by iPhone, as a media report suggested this week, the police will not make a visit? Such visits are not a statutory obligation, but might keep gun owners on their toes and allow their families to raise any concerns.
Reference was made to health care professionals, but if data protection concerns can be overcome, it would be sensible for health care professionals to be able to flag up any concerns. I accept that such issues might have had little bearing on what happened in west Cumbria, where police checks are carried out, but those concerns are legitimate, and we should discuss every aspect of them. I have looked back at earlier debates on gun control, and much was said about the cost of the bureaucracy that checks might bring, but we must keep people and communities as safe as possible, so we must have a balanced approach.
We await the outcome of the peer review, and I welcome the Government’s commitment to a debate in Parliament. However, I ask, as have many contributors to the debate, that the Government do not close the door to a wider, independent debate and a review of the events in west Cumbria and of gun laws generally. The hon. Member for Carmarthen West and South Pembrokeshire referred to balance and proportionality, which is subjective in this context, so from time to time we need learned and wise but, most importantly, independent voices to bring their views to bear.
I want to hear what the Minister has to say, so I shall finish by saying that in the months and years ahead, the people and communities affected will want to get on with their lives—that is probably happening already—and as far as possible not to be constantly reminded of what happened on 2 June. I represent an urban constituency where there was a gun rampage 20 years ago, albeit with fewer deaths than in Cumbria. Constituents ask me why, when events such as that in Cumbria occur and on their anniversary, the press continue to return to the tragedy that affected their community. The answer, I am sorry to say, is that while we have lazy and easy journalism, we cannot give guarantees that that will not happen, whatever we feel about it. It is incumbent on us, in Government and in Parliament, to stand by those communities, not just now, but in the years ahead.
The Parliamentary Under-Secretary of State for the Home Department (James Brokenshire)
At around this time three weeks ago, we were all feeling a real sense of shock as the full horror of events in Cumbria became apparent. The last funerals took place on Friday, and I join other hon. Members this afternoon in expressing condolences to the families and friends of all those who were killed or injured. Our thoughts are also with all those who were caught up in some other way in the tragic events. We should remember in particular the police and emergency services, who had to deal with the immediate consequences of the shootings, and who did so with professionalism.
I also want to join the many others who have praised the resilience of the people of Cumbria, who, with true community spirit, have pulled together in their efforts to come to terms with this and other recent tragedies. They are surely an example to all of us.
I thank the hon. Member for Copeland (Mr Reed) for providing this opportunity to debate the lessons that might be learned from the tragic shootings in his constituency on 2 June, and particularly for the sensitive, considered, measured and moving way in which he opened the debate. I would like to add my tribute to those paid by many others, both this afternoon and in recent weeks, for the way in which he dealt with the immediate aftermath of that shocking tragedy, and the way in which he has conducted himself since then.
I fully recognise the depth and range of feeling on the matter and the need for a broad debate. We have started that process today. A range of issues were touched on and, as the hon. Gentleman rightly said, many fall outside my specific ministerial responsibility, but I know that my ministerial colleagues outside this Chamber will read the debate and reflect on the comments that he and others have made this afternoon, particularly about West Cumberland hospital and its funding. I will draw them to the attention of my colleagues in the Department of Health.
An issue that came through strongly is the sense of community among the people of Cumbria. It was made clear in many speeches, including the measured contribution from the hon. Member for Barrow and Furness (John Woodcock), who may not have been in the House long, but has shown clearly how he seeks to represent his constituents. My hon. Friend the Member for Westmorland and Lonsdale (Tim Farron) also referred to the strength of the community and emphasised its sense of purpose. The hon. Member for Copeland talked strongly about solemnity, dignity and purpose, and his comments will resonate clearly.
I pay tribute to the maiden speech by my hon. Friend the Member for Penrith and The Border (Rory Stewart). It was considered and eloquent, but also passionate. I got a sense of my hon. Friend’s constituency and of his priorities as a Member of this House, and that is what new Members of Parliament seek to give in their maiden speeches. He made his extremely well, and I well understand why he chose this debate in which to make his first contribution to the House. In doing so, and in his actions as an MP, he demonstrated why he will be a fine champion for his constituents and those whom he serves. The way he conducted himself during his maiden speech demonstrated the values that he spoke about.
I have been particularly struck by the perception of many people that it is difficult to have in place proportionate controls to deal with those rare occasions when, for no apparent reason, someone suddenly embarks on a series of horrific killings. There has been ready recognition, both this afternoon and earlier, that a knee-jerk response is unlikely to provide a lasting solution, or the one that people seek, and that has been reflected in the contributions this afternoon.
Alongside that, however, there is a strong wish to ensure that we do all we can to learn lessons about both how we respond to future incidents and what we might reasonably do to prevent them, which is what we all fervently wish to do. That approach has been characterised today, and the debate has raised much for us to reflect on. Above all, we should listen carefully to what the local communities are saying. The Minister of State, Ministry of Justice, my right hon. Member for Arundel and South Downs (Nick Herbert), who has responsibility for policing and criminal justice, will return to Cumbria in the near future to talk to local groups about what happened, and to hear more about any concerns that persist.
Cumbria police are busy conducting a huge, complex investigation involving 30 crime scenes, 12 deceased victims, one offender and 11 seriously injured victims. Each incident requires a major investigation of its own—Cumbria is running more than 20 at same time. In the initial phase of the investigation, 100 detectives were working on the case and they searched 225 sq km of the country from land and air. Witnesses are still coming forward and the investigation will take many months to complete. I recognise the desire for answers and the points made by the right hon. Member for Leicester East (Keith Vaz), who I understand was not able to stay for the wind-ups—I pass my congratulations to him on being elected Chair of the Select Committee on Home Affairs—but it is important that the investigation takes its proper course. The Association of Chief Police Officers peer reviews—I will talk more about them in due course—are anticipated to report by this autumn.
We all recognise what a huge amount of work the investigation is for Cumbria police, but I have spoken to chief constable Craig Mackey and he has assured me that the force has the necessary resources and expertise to cope with the task. However, if it becomes necessary, the Government will support any bid from Cumbria police for a special grant to help meet exceptional costs on the force budget. Cumbria police have already received some specialist support from neighbouring forces, including police helicopters and scenes of crime officers. I would like to take this opportunity to formally thank Dumfries and Galloway, Lancashire and the civil nuclear constabulary for all the help that they have provided so far—a point made by the hon. Member for Workington (Tony Cunningham). Local forces stand ready to help should further assistance be required as the investigation progresses.
Tony Cunningham
May I ask for an assurance that there will be proper collaboration between the two relevant Departments? Obviously the police are the responsibility of the Home Office, but the civil nuclear constabulary is the responsibility of the Department of Energy and Climate Change. I would like to make sure that the connection is there and that, when the inquiry takes place, there will be collaboration.
James Brokenshire
Certainly there is a wider point of discussion on policing and cross-border assistance, and the hon. Gentleman has made an important point about the need for any consideration of the issues to take into account other police forces. He has rightly highlighted the case of the civil nuclear constabulary, and other forces, such as the British transport police, sit within the Department for Transport. When considering policing issues, we need to factor in services that might sit within other Departments, too. He makes his point very effectively.
The hon. Member for Copeland has made a significant contribution to the learning process by securing and leading the debate today. There are, as we know, other reviews in hand that will add to our knowledge. I refer to the peer reviews that ACPO has set up at the request of the chief constable of Cumbria, Craig Mackey. Those reviews will cover firearms licensing procedures, the tactical and strategic police firearms response, and any aspect of the incident that may require further national or local guidance.
The ACPO lead on firearms licensing, Assistant Chief Constable Adrian Whiting, will review the file and the procedures adopted in relation to the award of a firearms licence and shotgun certificate to Mr Bird. He will also consider whether there are any significant gaps or risks in the licensing process. The question of the armed police response and the resources that were available for deployment to the scene will be addressed by the ACPO lead on the police use of firearms, Assistant Chief Constable Simon Chesterman.
Following the conclusion of the first two reviews, there will be an examination of firearms tactics and the ACPO manual to see whether any accumulated learning should lead to changes. I should confirm at this point that the firearms response review will cover the issues previously raised by the shadow Home Secretary about the possible need to absorb lessons from counter-terrorism policing. In picking up the lessons from Stockwell, the police service has already put in place systems to ensure that any tactics developed to deal with counter-terrorism are not developed in isolation, but are picked up by authorised firearms officers across the country. The peer reviews are being led by senior police officers who take the professional lead in their areas of expertise and who are therefore uniquely placed to identify the issues. We expect the findings of both reviews to be published in the autumn.
On firearms licensing, the shootings in Cumbria bring home all too starkly just how dangerous firearms can be in the wrong hands, and it is inevitable that questions will be asked about the UK’s firearms licensing laws. It is widely acknowledged that we already have some of tightest legislative controls in the world when it comes to civilian access to, and possession and use of, firearms. Any firearms held must be accompanied by a certificate that is issued following extensive checks by local police, who must satisfy themselves that an applicant is fit to be entrusted with a firearm and will not present a danger to public safety. Local police must be satisfied that an applicant has a legitimate reason for wanting a firearm—for example, target shooting or deerstalking. The police will visit applicants at home to interview them about their application and to check security. They can seek a medical report from the applicant’s GP if they have concerns about any medical condition.
On that point, I would like to come on to an issue raised by my hon. Friend the Member for Carmarthen West and South Pembrokeshire (Simon Hart). Applicants for firearms certificates must give details of their GP, from whom the police can seek a medical report. That is not limited by time, and the police can approach the GP at any time during the life of a certificate. It is also open to a GP to approach the police at any time to pass on information or possible concerns. However, ACPO is working with medical associations to ensure that any medical concerns are not missed. It is discussing the possibility of placing a marker on NHS patient records, so that a GP will know whether a patient has access to firearms and can notify the police of any concerns about the suitability of that. We are following this process closely and we will feed the outcomes into subsequent work on gun controls as required.
It is only right that we should reflect on whether more might be done in that context to ensure public safety. In doing so, we have to look carefully at the balance between the maintenance of public safety and the legitimate expectations of the vast majority of firearm owners who use their guns safely and responsibly, and who totally condemn those who misuse them. The control of firearms is a complex area that requires careful consideration, a point rightly made by the hon. Member for Tynemouth (Mr Campbell). I thank him for his kind comments and assure him that we will consider all the issues extremely carefully. As he pointed out, we plan to hold a full debate on the issue of firearms before the summer recess, which will provide an opportunity to air in greater depth some of the issues raised today about existing controls.
As I said at the outset, this is the start of a process, and the debate that I just mentioned will provide an opportunity for people who wish to make more detailed comments about firearms legislation to do so. Even then, we should not draw conclusions precipitately. It is important to wait until we have the results of the police investigation and the peer reviews before we decide whether we need to take specific further action, either by issuing further guidance, introducing new procedures or, potentially, changing the law. I reassure the hon. Member for Barrow and Furness that we go into this process with an open mind.
We will also consider at that stage whether there is need for any further inquiry. The Government are committed to supporting the affected communities in this terrible situation, and we want to find out from them how we can best help them. The Department for Communities and Local Government has already asked its emergencies management team, which offers support to local authorities that have suffered disasters and emergencies, to contact the local authorities involved to see what support they require and what assistance they may need. The local authorities were confident that they had the resources available to cope, and that no further assistance was required.
I understand that the Government office for the north-west has contacted Cumbria county council and Copeland district council to offer assistance. Again, no further assistance has been requested at this point in time. We are confident that the local authorities will make immediate contact with the Government office for the north-west should any further assistance be required at a later date. The Government office stands ready to broker mutual aid support with the voluntary sector, should that be necessary.
Copeland and Cumbria councils are working to understand the needs of the families and communities affected, and have put in place arrangements to provide counselling and personal support. In addition, my hon. Friend the Member for Ruislip, Northwood and Pinner (Mr Hurd), the Minister with responsibility for Civil Society, will be visiting Cumbria tomorrow to meet the local authorities and the council for voluntary service to see what extra support or assistance they need.
In conclusion, this is the start of considering the issues that we have debated this afternoon. We have heard much about the spirit of the people of Cumbria and how they have been supporting each other. Such community spirit is truly priceless. For our part, we shall continue to liaise with the Cumbria constabulary to follow up any areas that require further or wider consultation. The learning from the reviews, which is expected in the autumn, will be shared with the public, the wider police service and, of course, the House.
Tolls (Severn Bridges)
(13 years, 10 months ago)
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Jessica Morden (Newport East) (Lab)
I am grateful for the opportunity early in the new Parliament to raise the long-standing issue of the tolls on the Severn bridges and their impact on my constituents and businesses generally in south Wales. I welcome the Minister to his new role. I had a very constructive relationship in the last Parliament with my right hon. Friend the Member for Tooting (Sadiq Khan), who was then the Minister of State in the Department for Transport. I look forward to continuing such a relationship with this Minister. I am very grateful for the cross-party interest in the issue, which is shown by the turnout at this debate, despite the football. I apologise for the fact that the debate is taking place during the match. It was looking encouraging before I came into the Chamber, but I apologise to those hon. Members who are missing it.
The Severn bridge tolls are expensive, inconvenient and inflexible; we know we are in trouble when we are the butt of jokes on “Gavin and Stacey”. In one famous episode, Smithy nearly missed the birth of his child because he was 10p short when crossing the Severn bridges. People cannot pay by credit card, debit card or online. They cannot travel off peak and there are no concessions for those who live locally. However, the tolls continue to rise year on year, even though the service is outdated.
Mr Mark Williams (Ceredigion) (LD)
I congratulate the hon. Lady on securing the debate. She mentioned the cross-party nature of the issue. I am sure that I can agree with what I anticipate she is going to say. She will agree that the issue does not affect just her constituents and the M4 corridor; some geographic spread from west Wales is involved as well, reinforcing the point that this is an all-Wales issue, affecting, particularly at this time of year, the tourism sector and, more generally, the business sector. It does not affect just south Wales, but the whole of Wales. It is a totemic issue affecting the whole Welsh economy.
Jessica Morden
I thank the hon. Gentleman for his intervention and agree that this is an issue for the whole of Wales. In particular, first-time visitors to Wales are an example of that. The issue does have that impact. I receive a bulging postbag on the issue from constituents and businesses and I want to highlight some of the points that they raise with me.
First, will the Minister examine the cost of the tolls? Every year on 1 January, the tolls go up in accordance with the Severn Bridges Act 1992. Under the agreement with Severn River Crossing plc, the company is permitted to collect tolls from both bridges for a concessions period until the project’s target real revenue level is reached or the time limit is up. I understand that at that point, the bridges revert to the Secretary of State’s control.
We are going through tough economic times. Commuters’ hours are being cut and there are pay freezes and high petrol prices, yet the tolls still go up. Severn bridge tolls are among the most expensive in the UK for cars, costing £5.50. My first request to the Minister is that he should examine the issue of toll rises, step in and recommend a freeze in this year’s tolls, particularly in the light of yesterday’s VAT rise. While he is at it, will he also examine whether we could implement a reduction in tolls for those who live locally? That could be worked out by postcode area, for example. Such a scheme has been introduced on the Dartford crossing. It is easier to do on the Humber and the Dartford crossing as there is no concessionaire, but why can we not have a look at doing it in Wales?
The second issue is the payment method for tolls. Currently, people can pay to go over the bridges only by cash, including euros, or by cheque. Those who are unfortunate enough to approach the bridge thinking that they can pay by such new-fangled methods as credit and debit cards are frustrated. Many constituents have regaled me with stories of getting to the tolls, not having the right money, being escorted over the bridge and then being told to go back over the bridge and to go to Gordano services, which is a round trip of about 20 miles. That is hardly a welcome to Wales for first-time visitors and it is not much fun for the long-suffering staff collecting the tolls, who have to put up with frustrated motorists.
Paul Murphy (Torfaen) (Lab)
My hon. Friend may not recall that I was a member of the 1992 Bill Committee that dealt with this issue. That was a very long time ago. Is it not right that after 18 years, the whole business of the Severn bridge and its tolls should be brought up to date?
Jessica Morden
I thank my right hon. Friend for his intervention. I agree with him. Progress was made on the method of payment of tolls by the previous Minister and it would be helpful if this Minister could confirm exactly when debit and credit card payments will begin and that the card-handling charge will not be passed on to the traveller. I would not expect Tesco to charge me more for paying by card, and I do not see why the bridges should be any different.
That brings me to the impact of the tolls on business in south Wales. The Severn crossing tolls, which are felt by many people to be a tax on entering Wales, are the highest in the UK for all but the largest vehicles. Light goods vehicles pay £10.90, compared with £2.00 for the Dartford crossing and £4.90 on the Humber. The Skye and Forth bridges are free. Heavy goods vehicles must pay £16.30, but on the Humber the charge is £10.90 or £14.60, depending on size. The Dartford crossing charges just £3.70 per heavy goods vehicle, and the Forth and Skye bridges are free.
An example in my constituency of the burden of the tolls is given by Owens Road Services, a long-standing Welsh company with a base in Newport that represents 1% of the total heavy goods vehicle traffic on the crossing. Owens pays £16,000 a month by standing order account and over £200,000 a year. The annual toll increases just come off the company’s bottom line; they are not passed on to customers because contracts have to be renegotiated and times are hard. The crossing represents a charge on the Welsh logistics industry that is not paid by competitors in England.
Nia Griffith (Llanelli) (Lab)
I congratulate my hon. Friend on securing the debate. The figures that she has cited illustrate clearly what a burden the tolls are on business. Owens, which also employs many people in my constituency, is really struggling. There is a very fragile situation economically now. Does my hon. Friend agree that we need to have every measure in place to improve the opportunities for businesses to relocate to places such as west Wales, where we know that we need to do as much as we can to help the private sector to grow?
Jessica Morden
I thank my hon. Friend for her intervention. I agree with her and hope that the Minister will pick up her point in his closing remarks. The industry is already struggling, with more than 3,000 heavy goods vehicle drivers claiming jobseeker’s allowance in Wales alone.
The previous Government froze the tolls on the Humber crossing after a study of the impact on residents and businesses. There has been no study of the Severn that I am aware of, so please could the Department for Transport work with the Welsh Assembly Government to initiate one?
Jonathan Evans (Cardiff North) (Con)
The hon. Lady is being very generous about interventions. As someone who is himself returning to the House, I congratulate her not only on raising this issue, but on continuing the wonderful record of her predecessor, who raised many of these issues, as the right hon. Member for Torfaen (Paul Murphy) will recall.
In relation to the charge, my understanding is that the actual real revenue is not likely to be reached until 2016. Is not the difficulty about abolishing the tolls the fact that the bridge was in essence built by a commercial company at no cost to the Government and was to be funded from the tolls? In that context, my constituents look to the ease of crossing the bridge, rather than having any expectation that in these times the tolls are likely to be either frozen or abolished.
Jessica Morden
I thank the hon. Gentleman for his intervention, but my constituents feel very strongly that the year-on-year increase in the tolls is very unfair on them locally. I promise that I will come to the concession later. I am not claiming that we should scrap all the tolls when the concession expires.
More than 31,000—31,437—heavy goods vehicles use the bridge each week. That is 4,491 a day. There are clear patterns of movement on the crossing, with most vehicles travelling between peak times. It is clear to me that a more flexible pricing structure, with off-peak travel for business, would offer incentives for people to travel at certain times of the day or night. That would reduce congestion, save on emissions and save companies money at the same time. I ask the Minister also to investigate that issue.
Finally, let us look to the future. According to the Highways Agency study of 2008, the current Severn crossings are being maintained at a constant level and require an annual maintenance expenditure of about 20% of the annual income generated from the tolls. In a few years, when the bridges are expected to be turned over to the Highways Agency—it would be helpful if the Minister confirmed the exact thinking at the moment on what that date might be—the agency will receive the revenue without the burden of debt.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
I congratulate the hon. Lady on securing this very important debate. Does she agree that it is imperative that the United Kingdom Government should ensure that the public purse is not left with liabilities for long-term repairs after the bridges are returned to public ownership?
Jessica Morden
I agree very much with the hon. Gentleman’s point. I know that his party has raised it before.
With the Severn crossing due to come back to public ownership in, say, 2016-17—depending on what the Minister says—the time is right to plan for a smooth transition, with tolls being reduced to a maintenance-only charge. I would appreciate it if the Minister considered the matter. I am really grateful to have had the opportunity of this debate and for the interest shown in it by other hon. Members.
To sum up, I should be grateful if the Minister worked with the Welsh Assembly Government to initiate an economic impact study, stepped in and froze the tolls this year, and looked at things such as off-peak travel for business and concessions for local residents so that we could finally reach a conclusion on the method of payment. As I said, at the start of the new Parliament the time is right, as we approach the end of the concession, to look at what the charges will be after it ends. I am grateful to have had the opportunity to introduce the debate, and I look forward to the Minister’s response.
The Parliamentary Under-Secretary of State for Transport (Norman Baker)
I wish first to congratulate the hon. Member for Newport East (Jessica Morden) on securing the debate. I thank her very much for her kind welcome to me in my new post. Our commitment to the issue is not in doubt, and I hope that the fact that it is taking place during another event outside the House demonstrates to her constituents her dedication to the issue—assuming, of course, that they will support England.
Before I start to discuss the tolls on the Severn crossings, I wish to make the point that, since 1945, it has been the policy of successive Governments that crossings on estuaries should be paid for by the user rather than by the taxpayer. Successive Governments have taken the view that tolls on all such crossings are justified because the user benefits from the exceptional savings in time and money that those expensive facilities make possible. It is important to make such a point at this stage. It is one that should not be forgotten, not least of all with the present financial difficulties that the Government and country face.
In specific relation to the Severn crossings, it might be helpful if I give a brief outline of their history, some of which is relevant to the issues that have been raised. The first Severn bridge was opened by the Queen in September 1966, providing a direct link from the M4 motorway into Wales, with a toll in place for use of the bridge to pay for the cost of construction. The original bridge continually operated at significantly above its designed traffic capacity, so the then Government said in 1986 that a second bridge would be constructed. In July 1988 they announced that the private sector would be given an opportunity to participate in the scheme and in April 1990 they announced the selection of the bid led by John Laing Ltd with GTM-Entrepose to design, build and finance the second crossing. That consortium was also to take over the maintenance and operation of the existing Severn bridge.
In October of that year, the concession agreement was formally signed between the Government and Severn River Crossing plc, and in February 1992 the Severn Bridges Bill received Royal Assent. The concession agreement was enshrined in an Act of Parliament and commenced in April 1992. Severn River Crossing plc then took over both the operation and maintenance of the present bridge and the construction of the new bridge. The finance arranged by the company covers the cost of construction for the new bridge and pays for the outstanding debt on the present bridge.
Construction of the new bridge started in September 1992 and the new crossing was opened on 5 June 1996 by the Prince of Wales, almost 30 years after the opening of the first bridge. The concession period is limited to a maximum of 30 years. The actual end date will be achieved when the concessionaire has collected a fix sum of money from tolls, which is £995,830,000 at 1989 prices; that is £1.8 billion at today’s prices. As part of the concession agreement, Severn River Crossing plc is authorised to collect tolls to meet its financial obligations. It is worth stressing that that is the company’s only source of income.
Let me make it clear why tolls are collected at the crossings. Tolls are in place to repay the construction and financing costs of the second Severn crossing, the remaining debt from the first existing crossing from 1992 and to maintain and operate both crossings. I have seen no evidence to suggest that the tolls impact on the economic viability of Wales, although I note the concerns of hon. Members about the impact of the tolls in their constituencies. Clearly, there is a cost to the crossing, which is borne by business and those who pay the tolls, but that has to be weighed against the benefits that the crossings provide in terms of more direct access into Wales, allowing users quicker access to markets than would otherwise be the case. However, I am happy to receive and to look at evidence from the Welsh Assembly, hon. Members or others. That is an open invitation to supply such information to me.
Nia Griffith
Does the Minister agree that in a situation where tolls are not the norm on other roads, it makes a firm such as Owens feel at a distinct disadvantage when it is competing with firms whose distances from the main markets and from the channel ports may be similar, but who do not have to make their route via a tollbridge, and that there is therefore a feeling of economic inequality in that instance?
Norman Baker
I do understand that. I mentioned earlier that it is standard practice for estuary crossings to have tolls, no matter where they are. They limit the journey time and deal with—or compensate for—the geography of the area. While I understand that there is a cost involved that would not be there if a crossing were not necessary, the alternative to a toll crossing would be a much longer diversionary route. That is a matter of geography; I am not downplaying the concerns that hon. Members and others have about the impact. As I said, I welcome any further information that they want to give me on that matter, and I will personally look at it.
Jessica Morden
Would the Minister commit to doing an economic impact study on south Wales with the Welsh Assembly Government?
Norman Baker
I do not want to commit to that here, but I will happily receive information that is supplied to me, and I will bear in mind that request as and when it comes in.
The Severn Bridges Act 1992 seeks to apply a clear structure to the tolls to give the concessionaire confidence that it will be able to meet its liabilities and manage the risks that it accepted through the concession agreement. The toll levels were set for three categories of vehicles at the time of tender and are embodied in the Act. The Act sets out the tolling arrangements and the basis for yearly increases in the toll rates. Toll rates are fixed in real terms. The new rates are introduced on 1 January each year and are increased in line with the retail price index using a formula, and rounded to the nearest 10p.
I want to stress an important point: the Secretary of State does not have the authority to set the annual tolls below the level of RPI increase without the concessionaire's agreement. The concessionaire would not be able to agree to anything that would affect their net revenue without compensation and agreement from their shareholders and lenders, which would result, if such an agreement were forthcoming, in a cost to the taxpayer.
Tolls are charged in a westbound direction only from England into Wales. The current toll prices are: £5.50 for cars, £10.90 for vans and £16.40 for vehicles over 3.5 tonnes. I do understand hon. Members’ concerns that those are higher than apply in other crossings.
Paul Murphy (Torfaen) (Lab)
The Minister made reference to the fact that it is an estuarial crossing, but it is unique in the United Kingdom because it goes into a part of our country that now has a devolved Government. When I served as Secretary of State, some of my conversations with the then First Minister were about how we deal with a situation where tolls are charged to come into Wales but not to go out. The impact on the Welsh economy is very severe, particularly in times such as this. The Minister ought to think a little more about the importance of having a dialogue with his counterpart in Cardiff, because of the importance of this to the Welsh economy in these difficult times.
Norman Baker
I am very happy to have dialogue with my counterpart or anyone else in the Welsh Assembly if they wish to do so. The issue has just been raised for the first time with the new Government—this is the first Adjournment debate on it. I am perfectly open to suggestions of dialogue with people from Wales or elsewhere on issues for which my Department is responsible.
I want to talk about VAT, which was raised by the hon. Member for Newport East. When VAT was first applied to the crossings in 2003, following a European Court ruling, there was no increase in the toll to the motorist. Following the Chancellor's statement yesterday, the Highways Agency will discuss adjustments within the concession to accommodate the new 20% VAT rate with Severn River Crossing plc. We do not expect the VAT increase to be passed on through an increase in the tolls, but the concessionaire expects to receive a certain amount of money, and the way in which that can be accommodated without increasing tolls is a matter for negotiation.
I know that the hon. Member for Newport East has an interest in local discount schemes, to which she referred in her opening remarks. Any discounts or exemptions are a matter for the concessionaire to decide, provided that they comply with existing legislation. Where that is not the case, such schemes cannot be introduced without changes to primary legislation and the concession agreement. They would have a financial impact on the concession and the period required for repayment, which would impact all road users. Discounts of around 20% for regular and frequent users are offered by way of a season TAG, whereas blue badge holders and the emergency services are exempt.
I now turn to the matter of card payments, which I know the hon. Lady pursued before the election and, with some justification, can claim to have had some success on in her campaign. In March this year, an amendment was made to the Severn Bridges Regulations 1996 to allow card payments at the tollbooths. She will recognise that there are associated costs with the introduction of card payments, mainly bank transaction charges, which are estimated to be between £7 million and £10 million to the end of the concession, or approximately £1 million per year depending on usage. Implementation is expected to cost around £1.2 million, and the way in which the additional costs will be funded has yet to be agreed. Discussions with the concessionaire to resolve the financial issues regarding the introduction of credit card payments are ongoing, but work to amend the tolling software to allow for the processing of credit and debit cards has started.
One of the drivers—no pun intended—that the hon. Lady will be aware of is the Ryder cup, one of the highest profile sporting events in the world. It is due to be held in Newport between 27 September and 3 October this year, with about 50,000 visitors a day, the majority of whom will come from overseas and will not be flush with money in their pockets to pay the tolls. We want to make progress on the matter, and I hope to have it resolved before the Ryder cup begins. My officials assure me that that will be the case, and I will look into the matter to ensure that that is so.
An hon. Member also raised the issue of motorists being sent back after driving some way and finding that they could not pay by card. I understand that signs are in place close to the bridge, before the last junction, advising motorists of the current arrangements, which is that they can pay only in cash. However, if they arrive at the tolls, I have been assured that they do not necessarily have to make a U-turn; they can be issued with an invoice with an added administration fee of £5. The problem with turning motorists back has been recognised, and that is being dealt with in the way I described as an interim measure. If that was new information to Members present, I hope that that was helpful.
Regarding maintenance, the concessionaire is required to maintain both Severn crossings in accordance with the concession agreement. A rigorous schedule of inspections is carried out and regular review meetings are held between the concessionaire and the Highways Agency.
A programme of cable inspections on the first Severn bridge began in April 2006 after corrosion was found in the suspension cables of bridges of a similar age and construction in other parts of the world. Unfortunately, significant levels of corrosion were found and a programme of works to tackle the corrosion followed. A full dehumidification system has been installed to address the corrosion. The system, which pumps dry air into the cables to reduce humidity, has been operational since December 2008. Reports show that humidity levels within the main cable are below the target level of 40% relative humidity. In addition, an acoustic monitoring system has been installed to track the rate and location of any further deterioration. A second round of inspections is currently under way to gain a detailed understanding of the level of corrosion and to verify the success of the dehumidification process so far. That work is due for completion later this year.
The corrosion of the main cables is a defect that existed before the letting of the concession and unfortunately—from my point of view—is not covered by the concession agreement. Costs associated with this work will therefore be met by the Government. The programme of mitigation and inspection work carried out so far has cost the Government £15 million, with the second round of inspections costing us a further £4 million.
Reports in the local media—and a letter from a Member of the National Assembly for Wales—suggest that the concessionaire will hand back the crossings in a state of disrepair. The suggestion was made earlier that, once the concession ends, the taxpayer will have to foot the bill. Let me make it clear, the concessionaire is bound by the legal terms of the concession, which it signed, to maintain the crossings to an acceptable standard. When the concession ends, the concessionaire is required to carry out any necessary maintenance and repair works on the crossings prior to handover. That is a legally binding commitment and is what I expect them to do.
Jessica Morden
Does the Minister have an indication of the year in which the concession will end?
Norman Baker
I am coming to that. The concession agreement sets out the requirements for transfer of the crossings to the Secretary of State at the end of the concession period. The concession is currently predicted to end in the first half of 2017, when the sum defined in the 1992 Act will have been collected through tolling. The bridges will then be returned to the Secretary of State. However, in order to ensure that tolls do not rise further, there are additional costs that have to be absorbed, both through the VAT increase and the work to ensure that credit cards can be accepted. I am giving the best estimate—it might slip slightly in the light of those two matters, but that is not certain at this stage.
Jonathan Edwards
Will the Minister indicate whether the UK Government are considering offering joint ownership of the bridges after handover to the Welsh Government?
Norman Baker
That matter has not been considered in my short time in office. The hon. Gentleman has raised an issue that I am sure is important to people in Wales and I will ensure that he receives a reply.
Jonathan Evans
The Minister shared with us a figure of £995 million. As I understand it, when we last heard from the Department, the assessment of how much mileage has been made towards that figure was about £682 million. Is the Minister able to update us on the current take, or if not, will he share it later?
Norman Baker
I do not have that precise figure at my fingertips, but if comes to me in the next couple of minutes I will tell Members. If it is not possible to do so before half-past 4, I undertake that all Members present will get a written response.
When the Secretary of State takes over the bridges at the end of the concession, the Government are authorised to continue tolling for a further five years following the handover of the crossings, to enable them to cover their own costs incurred, such as the £19 million that I mentioned in respect of the maintenance of the cables. No decisions have been made regarding the operation of the crossings once the concession ends, and therefore we are open to suggestions as to what might be the appropriate position at that stage.
In answer to the question about turnover at July 1989 prices, the present figure is about £648 million, against the final total of £995 million.
In conclusion, I thank not only the hon. Member for Newport East but Members of all parties who contributed to the debate. I and the Department recognise that this is an important issue for Welsh Members in particular. We are bound by the 1992 Act and the agreements entered into at that stage. Within that relatively tight constraint, I am willing to do what I can to address issues that Members have raised and I hope the House has found that helpful.
Accident and Emergency (Westmorland General Hospital)
(13 years, 10 months ago)
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Tim Farron (Westmorland and Lonsdale) (LD)
It is a pleasure to serve under your chairmanship for the second time in an hour, Mr Benton. I wish to express my gratitude for the opportunity to make the case for my local hospital.
The Westmorland general hospital in Kendal sits almost exactly at the geographical centre of the area covered by the University Hospitals of Morecambe Bay NHS Trust. It is one of three hospitals serving the area, along with the Royal Lancaster infirmary and the Furness general hospital at Barrow. Westmorland general hospital serves, in Cumbria: the Lake district, the western part of the Yorkshire dales, South Lakeland district and the southern part of the Eden district. In north Lancashire, it serves large swathes of the Lune valley.
For all those areas, Westmorland general is the closest and most accessible hospital. Indeed, it was built in 1992 expressly to serve those communities as a district general hospital. At that time, it provided full accident and emergency services and acute provision. Since 1992, the population of Westmorland general hospital’s catchment area has grown significantly in comparison to the populations of the other hospitals at Lancaster and Barrow. However, the past 18 years have seen the steady removal of key services from Westmorland general, culminating in the loss of medical emergency services in August 2008.
Since 2008, anyone suffering a suspected cardiovascular emergency, a heart attack or a stroke in the Westmorland general catchment area has been taken by ambulance to Lancaster or Barrow instead. The majority of local health professionals opposed that decision throughout the consultation process in 2006, as did the overwhelming majority of the local population. I presented a petition to this place, with 27,000 signatures opposing the proposals. There were 7,000 responses to the formal consultation, almost all of which opposed the proposal. Some 6,000 people joined a march in opposition to the cuts and 4,000 of us joined a human chain around the hospital to protest. I am proud to have been involved in all of those actions, as they were a key mark of the strength and vitality of our communities and of the clear awareness of the immense danger that the proposals pose to tens of thousands of residents and visitors. The campaign went on for almost three years, but in August 2008 the medical emergency provision closed.
Trust managers—I would say disingenuously—attempted to convince the previous Labour Administration that the opposition to the proposals was simply a case of an emotional and uninformed public and MP against an informed and clinically astute medical community. I can assure the Minister that that is absolutely not the case—it is, indeed, nonsense. As I have already said, the majority of local medical opinion was opposed to the closure. There were some doctors who supported the closure of emergency services, but there were barely any of those who were not also some sort of trust manager, and therefore sticking to the party line. I am seeking the Minister’s help to ensure that safe emergency provision is reinstated for residents and visitors to South Lakeland, the lakes, the dales, the northern part of the Lune valley and the southern part of the Eden district.
The resident catchment population for the Westmorland general hospital is 123,973 individuals, rising to 157,513 when one factors in resident visitors. For the Royal Lancaster infirmary, the resident catchment area is 143,500, rising to 161,886 when factoring in resident visitors. For the Furness general hospital catchment area at Barrow, there are 71,800 residents—78,093 when factoring in resident visitors. The catchment populations of Lancaster and Westmorland are roughly identical, with the catchment area of Barrow less than half their size. An additional factor, of course, is the vast number of non-resident visitors in the Westmorland general hospital catchment area visiting the lakes and the dales, who are as likely as anyone else to fall ill and need emergency treatment. That means that, for most of the year, there will be significantly greater numbers of people in the Westmorland catchment area than in that of either of the other hospitals in the trust area, yet Westmorland general is the only one without medical emergency facilities.
The area served by Westmorland general is much more rural and sparsely populated than the rest of the trust area. Barrow has 10.2 people per hectare, Lancaster 2.81, and Westmorland just 0.6. Many parts of my constituency already face vast distances and a significant trek to get to Westmorland general hospital, but to now force people to go all the way to Lancaster or Barrow is a significant threat to patient safety.
If one had a heart attack in Hawkshead, it might take an ambulance half an hour to arrive. The fastest time it would then take to get to Lancaster hospital would be an hour, but it would be more likely to take 90 minutes. The average patient suffering a heart attack would therefore arrive at Lancaster’s coronary care unit some two hours after they had dialled 999—if they survived. It would take 37 minutes to get to Kendal, rising to 45 if the traffic was sticky. The same, give or take a minute or two, is true for people who fall ill in Chapel Stile, Elterwater, Grasmere or Coniston. It takes 46 minutes at best—it is more likely to take an hour and a quarter—to get from Ambleside to Lancaster, but less than 20 minutes to get to Kendal.
We all know about the golden hour following a heart attack, during which a patient must be stabilised. After the hour is up, the chances of a patient dying or suffering permanent damage rocket. Anecdotally, I know of a great number of deaths that occurred as a consequence of the decision to close down emergency medical services at Westmorland general hospital. I know, from talking to ambulance service staff, that patients have died in the back of ambulances en route to Barrow or Lancaster, but that they would have survived had they been allowed to be taken to Kendal. Such deaths do not show up in statistics, because no one officially dies in an ambulance—they are only designated dead on arrival. I encourage the Minister to dig as deep as she is able to uncover hard evidence of that through coroners’ reports and other similar material.
All acute medical crises have better outcomes the sooner they are treated by a full medical team, a doctor and specialist nurses situated in a fully equipped resuscitation room. It is criminal to reconfigure acute services to lengthen the time that dangerously ill people have to wait before receiving life-saving treatment, especially given that Westmorland general hospital had an excellent record of managing the initial stages of heart attacks and other life-threatening acute cardiac emergencies. I invite the Minister to look at the official statistics, which show clearly that timings at Westmorland general for patients receiving vital treatment were significantly and consistently better than at Lancaster or Barrow. Outcomes were also excellent.
It is not the case that Kendal operated at a lower level or standard than the other two hospitals. Cutting-edge coronary care units are equipped to provide angioplasty services, but the nearest such unit to Morecambe bay is in Blackpool, which is well outside the trust area. It is important to spell out that neither Lancaster nor Barrow provide that function. Indeed, although the expertise and the level and standard of service provided by the coronary care units at Lancaster and Barrow are excellent, they are no more advanced and no better in terms of outcomes, patient experience, safety or survival rates than those that were available at Westmorland general hospital in Kendal just 22 months ago.
Expert opinion suggests that, where it is appropriate, a patient should be thrombolysed by a trained paramedic at the scene before being transported to the nearest specialist centre. In order to allay my fears and those of my constituents, the hospitals trust negotiated with the North West Ambulance Service to provide an additional ambulance service for South Lakeland and a number of additional paramedics to compensate for the closure of acute services at Westmorland general. Those promises were kept, but the figures clearly show that the administration of thrombolysis at the scene almost never happens in South Lakeland. Indeed, in the first six months of operation, only four instances of thrombolysis took place outside a hospital in the south lakes. In the other 95% to 99% of cases, the patient is left waiting at least 30 minutes longer for their treatment than they would have when the Westmorland general’s coronary care unit was open. I can only speculate why that is so—it may be due to a lack of training or a lack of confidence. A paramedic is now being asked to perform the same function alone in an immensely stressful situation, possibly in the presence of distressed relatives, that only 22 months ago would have been performed by a team of experts and experienced coronary care nurses in a specialist unit. I do not blame the paramedics for not thrombolysing, but I blame the trust management for pretending that this practice could ever have been a safe alternative to a coronary care unit at Westmorland General hospital.
There are additional dangers to patients as a result of this decision. Because more than 90% of ambulances from the south lakes now have to make the journey to Lancaster or Barrow to deliver a patient to hospital, the south lakes ambulances tend to be at least 30 minutes further away from their next emergency call than they used to be. That had to have a dramatic effect on response times, and indeed it has. However, some of this lengthening of response times has been covered by the presence of our outstanding volunteer first responder teams, who will usually get to the scene of an emergency before an ambulance and in some cases more than an hour before an ambulance, thus making it appear that the ambulance service has met its response time target when in reality it has not.
To illustrate the situation, I will use one example. In December I went on shift with one of Kendal’s ambulance crews. We responded to a 999 call from a man in his late 80s who had presented with chest pains. He lived roughly a mile from the Westmorland general hospital in Kendal, which 16 months previously would have been able to receive him and treat him. Instead, we had to drive this patient past the Westmorland general hospital on the A65 and take him down the M6 to Lancaster. The patient was clearly afraid and the paramedics were clearly appalled at having to take a potentially dangerously ill person so much further to receive treatment. His frail wife was left behind in Kendal, with no prospect of being able to visit her husband in the coming days, as she would have been able to do at the nearby Westmorland general hospital. Even with blue lights flashing and sirens blaring, it still took us 45 minutes to reach Lancaster’s A and E department. The nature of Lancaster’s traffic system means that, even when other road users pull over in unison to allow an ambulance to pass, it is barely possible to go above more than 15 or 20 mph as a driver attempts to negotiate the traffic.
We stayed with the patient for more than an hour until he was safely admitted and then we left to return to the ambulance station in Kendal. From getting the 999 call to returning to the base and being once again available for the next emergency call, it had taken almost three hours. If we had been allowed to take the patient to Kendal, we could have been back at the base, out and ready to help the next patient in just half an hour.
Again, I can only speculate as to the motives of the trust management who were behind the closure. At the time, financial motives were cited, although those financial pressures have actually alleviated significantly. Mostly, clinical reasons were put forward for the closure, but those clinical reasons were seriously flawed. The solitary piece of clinical evidence used by the hospital trust and the PCT to justify their decision was the Royal College of Physicians’ guidance notes from 2002, which included a recommendation that consultants in acute medical care should not straddle more than one hospital. To follow that guidance to the letter would mean closing acute hospital medical services at either Lancaster or Kendal, so the trust chose to close services at Kendal.
However, the guidance is just that—it is guidance. It is not an edict. Indeed, in an answer to a written question from myself to the former Secretary of State, Patricia Hewitt, it was confirmed that that guidance was only one of a range of considerations that had to be weighed up when trusts were deciding how best to deploy acute medical resources and, crucially, that many trusts, especially in rural areas, had chosen to acknowledge the guidelines but had also chosen to continue to operate the relevant coronary care unit, because of the greater importance of ensuring adequate treatment for patients within the golden hour.
We can look at the example of Fort William hospital, where GPs are recruited to fulfil a cardiac role within the hospital. They are well trained to manage cardiac emergencies, independently if necessary. At Westmorland general hospital, the answer could be to recruit a medical registrar—a grade doctor—and to ensure the presence of such a registrar around the clock with sufficient supporting cardiac-trained nursing staff. The reality is that, before the loss of coronary care services at Westmorland general, a consultant would very rarely be present during the acute stages—as is the case with most other coronary care units—and that the senior house officer or registrar would manage just as well as a consultant. One only needs to look at the outstanding performance indicators from the coronary care unit in Kendal until 22 months ago to see that.
As the Minister will be aware, local geographical and territorial politics can often be just as significant as party politics. In our case, the rural catchment area for Westmorland general seems to have been squeezed out by the more urban interests of the two districts either side of us. That is despite our large and often larger population.
I quote what a senior trust representative told Kendal town councillors when the closure proposal was made. He said:
“We had argued for 10 years with our administration that acute medical services should be transferred from WGH to Lancaster. They had resisted it but when the financial crisis occurred, we saw our opportunity. We recognise that the Consultation process was defective and we argued for accurate costs to be included but the final decision was the one we wanted. That is all that matters.”
I do not have time to give full details of the flaws in the process that led to the closure of Westmorland’s emergency service. Instead, I have chosen to make an outline case for such provision to be returned. In answer to my question about cancer services on 9 June, the Prime Minister made it clear that the present Government do not follow the “one size fits all” mantra of the previous Government that big is always beautiful. I know from his visits and those of the Deputy Prime Minister to Westmorland that they are particularly supportive of our cause.
As someone who lives in the south lakes area and whose family and friends rely on local services, I simply want the safest and most appropriate emergency care for our communities and the hundreds of thousands who visit our communities each year. I ask the Minister to do all that she can to ensure that emergency services are restored to Westmorland general as a matter of urgency.
The Parliamentary Under-Secretary of State for Health (Anne Milton)
Thank you for calling me to speak, Mr Benton; we seem to have spent a fair bit of time here today.
I congratulate my colleague the hon. Member for Westmorland and Lonsdale (Tim Farron) on securing this debate. I know that the future of Westmorland general hospital is a matter of long-standing interest and concern to him. He spoke with passion—and some frustration, because he has clearly been fighting a long and hard campaign. As a constituency MP, I have engaged in not dissimilar exercises in connection with a community hospital and a large acute trust hospital. I possibly lost one, but won the other. I know how passionate he must feel—and how passionate his constituents feel, which is demonstrated by the size of the petition that he presented.
I know how important hospital services are to local communities, and how worrying it can be to local people when services are moved. The fact is that change has not always been well managed in the NHS. I assure my honourable colleague that the Government are determined to do these things differently, and to get local populations behind changes in the NHS. We believe that the best decisions are local and that change should be driven by local clinicians and not imposed, top-down, by politicians or decided behind closed doors by managers. That is why we introduced an immediate moratorium on new or pending service reconfigurations.
The Secretary of State for Health has made it clear that all proposed service changes must now pass four crucial tests. First, they must have the support of GP commissioners. Secondly, public and patient engagement must be strengthened; that was at the hub of my colleague’s words. Thirdly, there must be greater clarity about the clinical evidence base for any proposals—a matter also mentioned by my honourable colleague. Fourthly, proposals must take account of patient choice. As a result, the local NHS will have to make its proposals more transparent to the public, more responsive to the views of the clinical community and more firmly grounded in robust clinical evidence.
In the case brought to the House by my honourable colleague, it means that there may be new opportunities for local debate, with new clinical judgments on how services should operate. However—my colleague will be disappointed to hear me say it—this is not an opportunity to revisit reconfigurations that have already been completed. That simply is not possible. That means that the 2006 review will not be reopened, and that the decision will stand. However, I note my honourable colleague’s concerns about valuation and patient safety; the Department of Health has raised them with the primary care trust and the local NHS trust. In case I forget to say so in my concluding remarks, I know that a Health Minister will be happy to meet my honourable colleague.
I understand that following a full public consultation, Cumbria county council’s health and well-being overview and scrutiny committee approved the changes; they were not referred to the Secretary of State for review by the independent reconfiguration panel.
Tim Farron
The overview and scrutiny committee did indeed rubber-stamp the proposals, but its process was deemed flawed by an investigation by the independent health commissioner because it did not take any evidence from the non-trust side. It was a completely loaded investigation.
Anne Milton
I thank my honourable colleague for that clarification, and it highlights so well what happens when things cease to have public trust and confidence.
My honourable colleague has made the case for acute services to be reinstated at the Westmorland. The NHS trust tells me that the coronary care unit had to be closed on the grounds that it was no longer sustainable or safe. There is an increasingly difficult balance to be drawn between services that are local and accessible and those that have a significant throughput to ensure that clinical safety is maintained. A service might have been safe in the past, but that does not necessarily mean that it will be safe in the future. I understand that, on average, the service treated only three or four patients a week, and that level of throughput is simply not enough and potentially puts patients at risk.
Tim Farron
I have two quick things to say. First, will the Minister investigate what evidence there was at the time of the closure for the Westmorland general unit to be deemed less safe than the other two units that we have mentioned at Barrow and Lancaster? Secondly, will she conduct an assessment of the position with regard to the safety of patients now? In other words, what impact has the closure had on the safety of patients or visitors within the South Lakeland area?
Anne Milton
There are two issues here: what happened in the past and what happens in the future. The concerns that my honourable colleague has about safety in the future will be examined, and I am sure that Department of Health officials will help with that. I understand that Professor Roger Boyle, the national director for heart disease and strokes, has said that he does not believe that reopening the cardiac unit will be best for the local people, so that should be borne in mind. He feels that it would not be feasible to provide primary angioplasty for severe heart attacks at the Westmorland. He also thinks that for less severe heart attacks, Westmorland cannot provide the most appropriate care, such as early referral for intervention. However, I do recognise my honourable colleague’s legitimate concern over the use of pre-hospital thrombolysis, and over the fact that it is low in Cumbria. Clearly, more work is needed to ensure that heart attack patients in Cumbria get the best possible treatment.
I understand that the trust is listening to my honourable colleague’s concerns and that it is looking to increase the number of cardiologists from three to five across the regions. Those clinicians will be based at the Royal Lancaster infirmary and the Furness general hospital, but they will help to build extra capacity in the treatment of outpatients. That might not be enough here and now, but it is something that my honourable colleague can take away.
I understand that there has never been an accident and emergency department—whatever that means in this day and age—but I am also told by the NHS trust that there would be insufficient volume of patients going through Westmorland to sustain a full A and E department. An A and E department has to have back-up services, such as intensive care and CT scanning, to support the unit, and the Westmorland is not in a position to provide those facilities. The trust’s argument, therefore, is that it is safer for patients to access those services at Barrow or Lancaster, and I appreciate that that is fundamental to this debate and will be fundamental to ongoing discussions, because my honourable colleague believes that the opposite is the case.
My honourable colleague also mentioned travel times, and I am told that the North West Ambulance Service advises that across Cumbria, the average time for it to get to the scene is 10 minutes. He might dispute that, but that is what I have been told. The average time on scene assessing and treating a patient is 20 minutes and the average time from Kendal to Lancaster under normal driving conditions—not with blue lights—is 20 to 30 minutes. I acknowledge that patients on the far reaches of his constituency have further to travel.
Tim Farron
I simply reiterate my earlier point: in rural areas, the bulk of those times record the time that the first responder arrives—the ambulance probably arrives another 20 minutes later.
Anne Milton
And let us pay tribute to first responders; I have them in my constituency and they do a fantastic job.
Anne Milton
It is not always about the time spent getting to the hospital, but the treatment in the first crucial half hour or so.
Provided paramedics can reach the patient quickly, they can provide treatment and stabilise them en route, which is often preferable, and then go to a hospital or an A and E department further away. However, the expertise has to be provided by the ambulance staff. “Dead on arrival” incidents would be reported, and NHS Cumbria has advised me that no such cases have been reported in the past 18 months, but the hon. Gentleman may have data that goes back further.
Unfortunately, when it comes to serving rural populations, the NHS has to balance what is safe with what is desirable. This is very tricky and it is held in the balance. There is no doubt that across the country the NHS is facing considerable challenges, and the local NHS in Cumbria is no different from any other. We made an historic decision, as a coalition Government, to protect health spending during this Parliament and to secure the front-line services that our constituents value so highly, but it is clear that local health services need to change and to become more efficient to secure their long-term future. That will not always be a smooth process; there will be tough calls to make in the future, as there have been in the past, but a clearer and more open process, led by clinicians and putting the local people firmly in the picture, will, I hope, reduce the anxiety that my honourable colleague has spoken about today. I hope that it will also build the trust that we need around such decisions. That is how we can achieve higher standards and better outcomes.
I said to my honourable colleague that I am sure that the Minister will be happy to meet him. The question is: how does my honourable colleague move forward with his constituents and how do we ensure that, even if we cannot right what has happened in the past, we move forward constructively? This is just a suggestion, but if he and local GPs formed a small informed group to work with the trust, I would hope that the local NHS organisations could take into account some of his concerns about the future of health services. What matters now is what happens in the future. I hope that they can provide the service that he wants to see.
Tim Farron
I am grateful to the hon. Lady for giving way so often. Would that include the possibility of the local GP community, should they so wish, moving towards something akin to the Fort William situation that I mentioned earlier?
Anne Milton
I thank my honourable colleague, but I am always very nervous about stepping outside my pay grade. The crucial thing now is how we and local MPs who have fought closures and reconfigurations move forward constructively; and we cannot reopen what has gone in the past. Local GPs and clinicians forming a group to work with and alongside the local primary care trust could ensure that good and improving decisions are made about NHS services.
It is not always about how close someone lives to a hospital. Across his constituency, life expectancy will vary by 10 years or more, and that has nothing to do with proximity to the hospital, but with deprivation. The issue of health care is much wider than this debate. There is an open door for my honourable colleague, so he feels that he can get the access to Ministers; I hope that will restore his trust and the trust of his local community.
Question put and agreed to.
Written Ministerial Statements
(13 years, 10 months ago)
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IMF (New Arrangements to Borrow)
(13 years, 10 months ago)
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The Chancellor of the Exchequer (Mr George Osborne)
The Government have today laid the International Monetary Fund (Limit on Lending) Order 2010 before the House of Commons. Copies of the revised New Arrangements to Borrow, which relate to this order, have been deposited in the Libraries of both Houses.
HM Courts Service Estate
(13 years, 10 months ago)
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The Lord Chancellor and Secretary of State for Justice (Mr Kenneth Clarke)
I am today announcing proposals for consultation that I believe will enable HMCS to best provide vital public services to local communities. Our court system has long been a guardian of British values of fairness and responsibility. I believe that the changes proposed in this statement will preserve those values.
We need to look critically at the services courts provide—they are a vital pillar of the justice system but they are not the only forum where civil disputes can be resolved. I want to explore whether more people can resolve their disputes using alternative methods which give faster solutions that are flexible to people’s needs. Across the civil, family and criminal courts, I want to look at what can be done to use technology more effectively so fewer people have physically to attend court for routine purposes. Increasingly we are using the internet, telephone and video technology in our work and personal lives—we should be more rigorous in exploring their use across the justice system.
HMCS currently operates out of 530 courts, some of which do not fit the needs of modern communities. Their number and location does not reflect recent changes in population, workload or transport and communication links over the many years since they were originally opened.
My Department has published consultation papers setting out proposals to close 103 magistrates courts and 54 county courts and inviting views on how we can best provide local justice services in our communities across England and Wales. In reaching decisions on closures I will ensure that we keep courts in the most strategically important locations, communities continue to have access to courts within a reasonable travelling distance, that cases are heard in courts with suitable facilities and that there is an overall reduction in cost.
Closure of the courts covered in the consultation would achieve running cost savings of around £15.3 million per year. These courts also have backlog maintenance of around £21.5 million, costs that can be avoided if the closures go ahead. Following a full analysis of responses to the consultation, and a decision on whether and which courts to close, a further assessment will take place on the level of savings that could be achieved and the potential value that could be released from the disposal of the properties. I believe that as well as savings to HMCS there will also be savings for other criminal justice agencies by focusing their attendance at a single accessible location within a community.
When public finances are under pressure, it is vital to eliminate waste and reduce costs. At the same time we should also take the opportunity to think afresh about how we can provide more modern court services. The arrangements we currently have are historical and now need to be reassessed to ask if they meet the needs of society as it is today. We increasingly use the internet and email to communicate and access services and we travel further to work, for leisure and to do our weekly shop. Providing access to justice does not necessarily mean providing a courthouse in every town or city. Across the civil and criminal courts there are great opportunities to harness technology more effectively so people do not necessarily have to physically attend court when they give evidence or access court services. Not all disputes need to be resolved in court. I will also examine ways of enabling more people to resolve their disputes in a way that leads to faster and more satisfactory solutions. We will continue to develop proposals for introducing alternatives that deliver a better service for less money.
The consultation seeks the views of all with an interest in local justice arrangements. I will take all views expressed into account before making any decision on which courts ought to be closed and when. I also invite views on how the courts service could be modernised to improve the justice system as well as reduce its costs.
The consultation also includes proposals on the merger of a number of local justice areas which would enable effective changes to courthouse provision. This will facilitate further efficiency savings in administrative work, while enabling an effective service to continue to be provided by magistrates to the public.
I am also announcing that following a consultation on the proposed closure of Leigh County Court in 2009, I have decided that this court should close without further delay. Since an arson attack two years ago, all cases that would have been heard in Leigh are being heard in Wigan or Warrington, only seven and 10 miles away respectively. This has not caused any disruption to the delivery of justice in Greater Manchester.
The consultation documents and the full list of courts we are consulting on will be published on the Ministry of Justice website. Copies will be placed in the Libraries of both Houses, and in the Vote Office and the Printed Paper Office.
Legal Aid Reform
(13 years, 10 months ago)
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The Lord Chancellor and Secretary of State for Justice (Mr Kenneth Clarke)
I confirm that we are considering policy on the subject of legal aid in England and Wales as announced in the Government’s document “The Coalition: our programme for government” published last month. The Government are considering how to make the system more efficient having regard to the current financial climate, while ensuring that it continues to play a vital part in ensuring that people can get access to justice.
This Government’s immediate priority is to reduce the financial deficit and encourage economic recovery. We have made it clear that the main burden of the deficit reduction will be borne by reduced public spending, achieved by financial discipline and the most efficient and effective delivery of public services. I am seeking to develop an approach to legal aid spending which balances these necessary financial constraints with the interests of justice and the wider public interest. We will seek to develop an approach which is compatible with fair and necessary access to justice for those who need it most, the protection of the most vulnerable in our society, the efficient performance of the justice system, and our international legal obligations.
We intend to seek views on our proposed new approach in the autumn.