House of Commons

Thursday 24th June 2010 Commons Chamber

Thursday 24 June 2010

The House met at half-past Ten o’clock

Prayers

Thursday 24th June 2010 Commons Chamber

[Mr Speaker in the Chair]

Business before questions

Canterbury City Council Bill

Ordered,

That so much of the Lords Message [10 June] as relates to the Canterbury City Council Bill be now considered.—(The First Deputy Chairman of Ways and Means.)

Motion made, and Question proposed,

That the promoters of the Canterbury City Council Bill, which was originally introduced in this House in Session 2007-08 on 22 January 2008, may have leave to proceed with the Bill in the current Session according to the provisions of Standing Order 188B (Revival of bills).—(The First Deputy Chairman of Ways and Means.)

[Hon. Members]

: Object.

To be considered on Monday 5 July at Seven o’clock.

City of Westminster Bill [Lords]

Ordered,

That so much of the Lords Message [10 June] as relates to the City of Westminster Bill [Lords] be now considered.—(The First Deputy Chairman of Ways and Means.)

Motion made, and Question proposed,

That this House concurs with the Lords in their Resolution.—(The First Deputy Chairman of Ways and Means.)

[Hon. Members]

Object.

To be considered on Monday 5 July at Seven o’clock .



Nottingham City Council Bill

Ordered,

That so much of the Lords Message [10 June] as relates to the Nottingham City Council Bill be now considered.—(The First Deputy Chairman of Ways and Means.)

Motion made, and Question proposed,

That the promoters of the Nottingham City Council Bill, which was originally introduced in this House in Session 2007-08 on 22 January 2008, may have leave to proceed with the Bill in the current Session according to the provisions of Standing Order 188B (Revival of bills).—(The First Deputy of Chairman of Ways and Means.)

[Hon. Members]

Object.

To be considered on Monday 5 July at Seven o’clock.

Oral Answers to Questions

Thursday 24th June 2010 Commons Chamber

The Secretary of State was asked—

[Richard Drax (South Dorset) (Con)]

1. What discussions she has had with the Secretary of State for Business, Innovation and Skills on the roll-out of broadband to rural areas.

[Nadhim Zahawi (Stratford-on-Avon) (Con)]

9. What discussions she has had with the Secretary of State for Business, Innovation and Skills on the roll-out of broadband to rural areas.

[Matthew Hancock (West Suffolk) (Con)]

11. What discussions she has had with the Secretary of State for Business, Innovation and Skills on the roll-out of broadband to rural areas.

[The Secretary of State for Environment, Food and Rural Affairs (Mrs Caroline Spelman)]

As I am sure the House is aware, a former Minister for Agriculture, Fisheries and Food and Secretary of State for Wales, Peter Walker, has passed away. I felt it right to record our gratitude for his services to agriculture, and our condolences to his family.

I wrote to the Secretary of State for Culture, Media and Sport, and have followed that up with conversations with my right hon. Friends the Secretaries of State for Business Innovation and Skills and for Culture, Media and Sport about this important issue. I have spoken to the latter—the Government lead on broadband—to express my support for the initiatives announced on 8 June to take broadband to rural communities.

[Richard Drax]

I welcome the Secretary of State to her post, and thank her very much for coming down to South Dorset during the election campaign. I also welcome the Government’s plans to roll out broadband. Can she please confirm that there will be a rapid broadband legacy in rural South Dorset after the Olympics?

[Mrs Spelman]

I thank my hon. Friend for his kind words. I have seen for myself that his constituency presents challenges in terms of broadband provision, especially given the high ground before the acute descent to the coast. He is, however, fortunate to have the opportunity provided by an Olympic facility that will leave a lasting legacy in his constituency.

I take the view that we should not try to reinvent the wheel. Where broadband infrastructure is already in place, of course we should seek to use it. However, I will use my good offices to speak to those at the DCMS and to ensure that the legacy is a good one.

[Nadhim Zahawi]

I, too, welcome the Secretary of State to her post. Yesterday’s Budget confirmation that the Government will fund three pilot schemes to bring super-fast broadband to hard-to-reach areas is crucial to my constituency. It is especially crucial for the 50 to 80 age group—which, for various reasons, is one of the fastest-growing groups of internet users—and, obviously, for enterprises in the area. Can the Secretary of State tell us a little more about her discussions on those three pilot schemes?

[Mrs Spelman]

I thank my hon. Friend for drawing attention to the importance of super-fast broadband provision to all generations in our society, and to the social inclusivity it provides. The coalition Government have made a clear commitment to roll out super-fast broadband to ensure that those who live in rural communities are not disadvantaged. As my hon. Friend pointed out, that includes businesses, but it also includes children, who often need broadband to complete their homework. I assure him that this is a priority for the Department, and that the choice of location for the pilots will be decided shortly.

[Matthew Hancock]

I welcome the Secretary of State and her team to the Front Bench. I also welcome what she said about rural broadband. In counties such as Suffolk, it is an important part of our modern infrastructure. The people of Suffolk are enterprising and innovative, and I know that they too will warmly welcome what the Secretary of State has said. However, will she tell us more about the importance of community initiatives for improving broadband, and what she will do to support them?

[Mrs Spelman]

Obviously, broadband is very important to my hon. Friend’s constituency, which contains many farmers. It is simply assumed that those farmers will have access to broadband in order to complete form-filling online.

As I said earlier, this is a community opportunity. There are some excellent examples of the big society at work in Northumberland and Rutland, where communities have come together to ensure that good broadband access is available to all.

[Mark Menzies (Fylde) (Con)]

2. What plans her Department has to reduce the level of regulation on farmers; and if she will make a statement.

[The Minister of State, Department for Environment, Food and Rural Affairs (Mr James Paice)]

As I announced at the cereals event on 9 June, bureaucratic burdens on the food and farming industry will be scrutinized by a new industry-led taskforce on food and farming regulation. The taskforce will identify ways to reduce regulatory burdens by trusting farmers to deliver the necessary outcomes, rather than telling them how to do so. It will also advise on how best to achieve a risk-based system of inspection in future.

[Mark Menzies]

I am sure that many farmers in Fylde will take comfort from the work that is being done. To what extent is the Minister’s Department liaising with EU member states regarding further reducing the regulatory burden?

[Mr Paice]

I am grateful to my hon. Friend, whom I welcome to his first DEFRA questions. He is absolutely right: a huge amount of DEFRA regulations emanate from the European Union. Only yesterday, my right hon. Friend the Secretary of State and I met the Agriculture Commissioner and impressed upon him not only the measures I have announced, but the need for the whole EU to adopt a much more simplified approach to regulation and to concentrate on outcomes. I am pleased to tell my hon. Friend that that message went down very well with the Commissioner, who entirely endorsed that approach.

[Tony Lloyd (Manchester Central) (Lab)]

Will the Minister guarantee that this rush into deregulation will not be at the expense of the health and safety of people working in agriculture, farmers themselves, their employees and the wider public? Will he guarantee a place for the trade unions on his taskforce?

[Mr Paice]

I can assure the hon. Gentleman that we have absolutely no intention of reducing standards. We in this country—particularly under the last Government—seem to have become obsessed with the view that to maintain standards, we must have high levels of intervention in how people comply with regulations. We have become obsessed with process. I can assure the House that we have absolutely no intention of allowing our standards to fall, be they in health and safety, food safety, pollution or anything else. We are focusing on reducing the burden on businesses regarding how they comply with such regulations by concentrating on whether they do.

[Tim Farron (Westmorland and Lonsdale) (LD)]

I welcome the Minister to his position. He will not be surprised to learn of my recent conversation with a farmer in South Westmorland who bought a bull from market to his farm and was then unable to move any sheep from a field two miles away because of the six-day movement rule. That made absolute sense during the foot and mouth crisis of 2001, but is now an unnecessary burden on the farming industry. When will the Minister scrap it?

[Mr Paice]

I have a lot of sympathy with the hon. Gentleman, whose constituency I have visited; I have probably had the same farmer saying the same thing to me there, as well as farmers in many other places over the many years when I sat on the Opposition side of the House. I tend to share his doubts about the six-day rule, but the advice I have received so far is that there is a very sound reason for it. It will certainly be one of the issues considered by the taskforce and I hope that, along with other such provisions, it will recommend getting rid of the rule.

[Hilary Benn (Leeds Central) (Lab)]

May I associate this side of the House with the remarks of the Secretary of State about the late Peter Walker?

Regulation is very important in animal health, including in combating animal disease. Will the Minister therefore tell the House when a decision was taken that there would be a targeted cull of badgers in hotspot areas?

[Mr Paice]

As the right hon. Gentleman well knows, the commitment appears in the coalition agreement, so, bearing in mind that we have a new Government, I suppose the answer to his question is that the decision was taken when that coalition agreement was drawn up. Until that point, there were measures being proposed by the Conservative party and by the Liberal Democrats. There is a great deal of science concerning bovine TB. We are looking at all of it and drawing up our proposals, which we will publish and put out for consultation. As the right hon. Gentleman well knows, there is a valid case for addressing the reservoir in wildlife, including badgers, in this country, as has been done by every other country in the world.

[Hilary Benn]

If a decision has been taken that there will be a cull, which is what the Minister said at the Devon county show, why did he say in a written answer on 22 June that all the evidence would be considered “before taking a decision”? How will it help to deal with the disease when the two Ministers responsible appear to be saying completely different things?

[Mr Paice]

The former Secretary of State is desperately trying to create a division where none exists, because the situation is clear—in black and white, if I may use the phrase—in the coalition agreement. The considerations mentioned in the parliamentary answer to which he refers concern the details of how, where and who, along with all the other issues that have to be addressed in working out how to do a cull of badgers and how to integrate it with the badger vaccine deployment project.

[Neil Parish (Tiverton and Honiton) (Con)]

May I follow up an earlier question on the movement of animals? During the winter, a sheep farmer in Honiton had to fill in a form every time she moved her sheep in and out of a field for lambing because she did not own that field—it was not part of her holding. We have got to find ways of simplifying movement orders.

[Mr Paice]

I welcome my hon. Friend to the House and to DEFRA questions. I entirely agree with him: that is one of countless regulations that appear on the face of it to be nonsensical, and which the taskforce will consider.

[Toby Perkins (Chesterfield) (Lab)]

3. What progress has been made on flood defence projects in the Chesterfield area since 2007; and if she will make a statement.

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Richard Benyon)]

The Environment Agency is currently taking forward a project that will provide protection from the River Rother to more than 150 homes and businesses in Chesterfield. Further schemes to provide protection in Chesterfield are being assessed.

[Toby Perkins]

I welcome the Secretary of State and her Front-Bench team to their positions. Flood defence work was one of the many areas on which the Conservative party when in opposition criticised the Labour Government for not spending more, rather than asking for cuts. Can Ministers please confirm that there will be no cuts to flood defence work, which is so important, particularly given the likely increase in flood risk due to climate change?

[Richard Benyon]

I thank the hon. Gentleman for his kind words. He has a particularly interesting project in his constituency: the work on the River Rother. I am very interested in it because it involves local levy funding, which is a very good way forward in times of difficult financial circumstances. We have found some savings in the budget for this year, and that is simply because the Environment Agency was ahead of the game in its targets for this year. I cannot say to the hon. Gentleman that there will be no cuts in the flood defence budget, but if he looks at the coalition agreement he will see that flood protection is an absolute priority for this Government.

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

May I congratulate the entire ministerial team and assure Ministers of a very warm welcome when they appear before the departmental Select Committee? May I press my hon. Friend on flood defences for Chesterfield and other more urban areas? Will he take this opportunity to review the way the points are skewed in favour of urban areas to the detriment of rural areas, and make sure we restore more funding to regular maintenance rather than, almost exclusively, capital expenditure projects?

[Richard Benyon]

I thank my hon. Friend for her comments, and it will be very interesting to take up these matters with her Select Committee; I know they will be of great interest to it. This is all about getting the balance right. There are circumstances in which rural communities can put together a very good financial case, particularly with a form of local levy funding, to which I have already referred. We also have to recognise, however, that spending must go to where it is most effective and can secure as many homes as possible from the risk of flooding. I cannot talk in specifics on such a general issue, but I can assure my hon. Friend that this is an absolute priority that we will take forward.

[Mr Marcus Jones (Nuneaton) (Con)]

6. What recent discussions she has had on the objectives of the Campaign for the Farmed Environment; and if she will make a statement.

[The Minister of State, Department for Environment, Food and Rural Affairs (Mr James Paice)]

The Government are strongly committed to the Campaign for the Farmed Environment, which we consider to be an excellent example of the farming industry taking responsibility for its environmental impacts. The Secretary of State and I met a number of senior representatives of the campaign’s partner organisations at the recent cereals event and discussed aspects of the campaign with them, and we look forward to receiving the progress report later this month.

[Mr Jones]

I thank the Minister for his response. He may be interested to know that I shall be attending an event to promote the Campaign for the Farmed Environment in my constituency this very evening. Can he say what the level of uptake has been for the campaign across the country?

[Mr Paice]

The latest statistics we have are from a survey done in February. As I have said, there will be a further report shortly, but the latest statistics show that 25% of farmers had already taken measures under the campaign and that another 50% plan to do so in the near future.

[John Mann (Bassetlaw) (Lab)]

8. What recent discussions she has had with the Secretary of State for Health on the Health Protection Agency’s investigation of the potential for mushroom composting to cause or exacerbate chronic obstructive pulmonary disease.

[The Minister of State, Department for Environment, Food and Rural Affairs (Mr James Paice)]

The local primary care trust has been investigating the concerns that the hon. Gentleman has raised previously about possible health impacts from the mushroom composting plant in his constituency. I understand that its report is due in the next few weeks.

[John Mann]

If the report says there is a link of any kind, will the Minister act immediately to ensure that the health and well-being of my constituents and others is immediately protected?

[Mr Paice]

I cannot forecast what might come out in the report, so I am not going to make any commitments as to what the Government might do afterwards, but I can tell the hon. Gentleman that, as I am sure he is aware, the preliminary findings of the PCT investigation show no links between the mushroom composting plant and incidences of chronic obstructive pulmonary disease in the locality.

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

12. If she will discuss with trade unions measures to reduce the adverse effect on the natural environment of workplace activity.

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Richard Benyon)]

I or my colleagues would be happy to hold such discussions.

[Luciana Berger]

With public sector employers having to make the longest and deepest cuts since the second world war, will the Minister recognise the role of trade union environment representatives in helping to achieve energy, water and waste savings? Can he assure me that managers in his Department regularly discuss and monitor environmental cost savings at joint union-management meetings?

[Richard Benyon]

I assure the hon. Lady that such matters are taken up. The general secretary of the Trades Union Congress wrote to my right hon. Friend the Secretary of State recently about the trade union sustainable development advisory committee, wanting reassurance that the Government will continue with that organisation, which links employees with government regarding ideas for sustainable working methods. My right hon. Friend wrote back to Brendan Barber this week to say that my noble Friend Lord Henley will chair that committee in future. We certainly will be taking these issues forward in government.

[Guy Opperman (Hexham) (Con)]

I welcome the ministerial team to the Front Bench. It is good to see someone with some farming experience finally putting forward the case on behalf of DEFRA. Will the Minister confirm that in these difficult times, when decisions have to be made regarding cuts, consideration will be given to the Agricultural Wages Board, as its task could be dealt with through the national minimum wage procedure?

[Richard Benyon]

I can confirm that the future of the Agricultural Wages Board is being considered as part of the whole review of arm’s length bodies and non-departmental public bodies, and that there will be an announcement soon.

[Karen Bradley (Staffordshire Moorlands) (Con)]

13. What recent discussions she has had with the farming industry and other interested parties on reform of the common agricultural policy.

[The Secretary of State for Environment, Food and Rural Affairs (Mrs Caroline Spelman)]

I have attended the Agriculture Council twice and have discussed the CAP with Agriculture Ministers from other member states. Last night, I hosted a dinner attended by the Commissioner for Agriculture and Rural Development, Commissioner Ciolos, my colleagues here and from the devolved Administrations, the Secretary of State for Scotland and other key UK stakeholders. We discussed a number of issues, including CAP reform, and I have more European visits planned in the coming months.

[Karen Bradley]

I thank the Secretary of State for that answer. She will be well aware of the problems caused by the Rural Payments Agency’s remapping exercise, particularly in non-flat areas such as Staffordshire Moorlands. Can she reassure farmers who are still waiting to agree their revised maps that the single farm payment will not be delayed and that they will not suffer undue hardship?

[Mrs Spelman]

I am sure that my hon. Friend’s farmer constituents will be very grateful to her for bringing up this issue. If she gives us the details of any significant problems with the mapping in her area—I understand that they might relate to the slopes and gradients of the land—I am sure that my hon. Friend the Minister of State will look into it closely, as he has offered to chair the board of the RPA.

[Dr Eilidh Whiteford (Banff and Buchan) (SNP)]

May I also welcome the right hon. Lady and her team to their posts? I believe that her talks yesterday with the Scottish Government’s Cabinet Secretary for Rural Affairs and the Environment were very constructive, but will she clarify for the benefit of the House how she intends to work with the devolved Administrations? In particular, how does she see the future of pillar one support in the common agricultural policy reform process?

[Mrs Spelman]

I thank the hon. Lady for that question, and I can tell her that discussions with her honourable colleague from Scotland were indeed very constructive. I made it clear to him that I would always consult before taking a position ahead of any Council meeting. I added that we will have very close and good contact with all the devolved Administrations, and I said specifically that I am confident that pillar one and direct payments will continue.

[George Freeman (Mid Norfolk) (Con)]

May I, on behalf of the people of Mid Norfolk, send a warm welcome to the members of the Government Front Bench? It is nice to see a DEFRA team with such a rich experience of the countryside, after 13 years of feeling rather neglected.

On CAP reform, will my right hon. Friend reassure the House and the people of Mid Norfolk that, as far as possible, we will seek a revised structure that rewards our farmers for growing food competitively? Such a structure should reward them for what they do in the countryside, for which they get no support at the moment.

[Mrs Spelman]

I thank my hon. Friend for those warm words. In fact, I should like to take this opportunity to say to all Government Members that the Front Bench is grateful for their admirable level of support. I can assure my hon. Friend that in the CAP reform negotiations, we will be seeking the best deal for farmers, consumers, taxpayers and the environment. There is no doubt that sustainable food production is a public good, and there is broad support across European countries for recognising the contribution that farmers make.

[Jim Fitzpatrick (Poplar and Limehouse) (Lab)]

May I add my welcome to the Secretary of State and her ministerial team, and congratulate them on their new positions? Indeed, I extend that welcome to all new Back Benchers on both sides of the House.

A few moments ago, the Secretary of State mentioned her discussions with other interested parties, but do they include the Treasury? Reductions in the overall CAP budget might be attractive to the Treasury, but does she agree that that would be to the detriment of British agriculture? Will she assure the House that she will defend the interests of British agriculture, in both Brussels and Downing street?

[Mrs Spelman]

Of course I can give the hon. Gentleman that assurance. I just said that I was seeking to get a better deal for farmers, consumers, taxpayers and the environment, and he can be assured of that. DEFRA is an economic Department with a very clear role in the economic recovery that this country needs. It is absolutely at one with the objectives set out by the Treasury in that regard.

[Harriett Baldwin (West Worcestershire) (Con)]

15. What recent discussions she has had with the farming industry and other interested parties on the Animal Health Agency; and if she will make a statement.

[The Minister of State, Department for Environment, Food and Rural Affairs (Mr James Paice)]

As has been mentioned already, the most urgent issue in animal health and welfare is bovine TB. I have reviewed the badger vaccine deployment project and have decided to proceed with one area near Stroud for the time being, in order to help maintain the capacity to train lay vaccinators. Badger sett surveys will also be completed in the Gloucester area, near Cheltenham. That change reflects the need to consider all our public expenditure carefully.

The previous Government appointed Rosemary Radcliffe to examine options for responsibility and cost-sharing for animal disease control. Unlike that Government, though, we will await the outcome of that report, as it may well include options for the agency’s future. I have had a number of discussions regarding that review.

[Harriett Baldwin]

I thank the Minister for that answer, and may I also add my welcome to some fellow meat-eaters in the Front Bench team for this particular portfolio? I want to emphasise how important animal welfare is for farmers in West Worcestershire. A vet came to my constituency surgery recently and highlighted the fact that, while the AHA seemed to have spent a lot of time on management, computer systems and office work, it was not placing enough emphasis on its veterinary function. Does the Minister have any plans to tackle that?

[Mr Paice]

I am grateful to my hon. Friend, and I welcome her to this question session. She is absolutely right and, as part of our overall review of all arm’s length bodies, we are looking for the sorts of efficiencies to which she has referred. However, I can tell her that the AHA has already instituted a road map for change that should deliver a significant tranche of savings, and a much more efficient business as well.

[Andrew George (St Ives) (LD)]

16. What plans she has for the future of the Rural Payments Agency.

[The Minister of State, Department for Environment, Food and Rural Affairs (Mr James Paice)]

An independent review of the Rural Payments Agency, commissioned by DEFRA last autumn, has recently concluded. We will publish the recommendations of the review and our response to it shortly.

[Andrew George]

I am grateful to the Minister for that reply, and I wish him well in his work. As he knows well, each claim to the RPA costs £1,700, and the RPA has been characterised by mistakes and inefficiency throughout its years of operation. What reassurance can he give farmers in my constituency and throughout the country that those problems will improve?

[Mr Paice]

I am grateful to the hon. Gentleman. I think he knows that the impossible we can do at once, but miracles take a little longer, and putting the RPA right probably comes within the last part of that saying. I assure him that I am extremely determined to get a grip on the problems at the RPA; I am conscious, as I have made clear over recent years, of the problems and the service to many farmers, and we have to get it right. When I publish the review I will also put forward the measures that we propose to take to address them.

[Grahame M. Morris (Easington) (Lab)]

17. What estimate she has made of her Department’s expenditure on flood defences in 2010-11.

[The Secretary of State for Environment, Food and Rural Affairs (Mrs Caroline Spelman)]

DEFRA’s estimate of its expenditure in 2010 to 2011 on flood and coastal erosion risk management is currently £664 million. This does not include local authority expenditure, estimated at £87 million, which is funded by Government through the formula grant.

[Grahame M. Morris]

In welcoming the new ministerial team to the Front Bench, may I point out that on 23 March last year the right hon. Member for Arundel and South Downs (Nick Herbert), the then shadow Secretary of State for Environment, Food and Rural Affairs, said that it was

“essential that the Government takes a strong lead and implements the key recommendations from the Pitt review”

on flood defences? This was at a time when Labour was committed to protecting flood defence expenditure, which is very important in the north-east—in Morpeth and Carlisle—in view of the recent floods. Will cuts to her Department mean that key recommendations from the Pitt review will not now be implemented?

[Mrs Spelman]

I can give the hon. Gentleman an absolute assurance, because the coalition agreement states our commitment to taking forward the findings of the Pitt review on the 2007 floods. We are considering how best to put this into effect, against the difficult spending background, and as he will have heard earlier from my hon. Friend the Under-Secretary of State for Environment, Food and Rural Affairs, this year, because the Environment Agency was ahead of the game with the amount of flood defences it had provided, there is no question of this important front-line service being compromised. In the spending review we will of course give priority to flood defences.

[Damian Collins (Folkestone and Hythe) (Con)]

The Secretary of State will be aware of the importance of the investment in sea defences in my constituency at Dymchurch, the Romney Marsh coast and Dungeness. May I ask that she continues to give consideration to the importance of that work when reviewing the budget in the future?

[Mrs Spelman]

My hon. Friend will not know this, but Dymchurch and Hythe have a special place in my heart because as a small girl I used to enjoy my summer holidays taking the light railway to such places. So I perfectly understand the importance of defending that part of the Kent coast with effective coastal defences.

[Amber Rudd (Hastings and Rye) (Con)]

18. What recent discussions she has had with the fishing industry and other interested parties on reform of the common fisheries policy.

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Richard Benyon)]

Since May, I have had preliminary discussions with representatives of the fishing industry, and within the next two weeks I will meet the National Federation of Fishermen’s Organisations, the Scottish Fishermen’s Federation and the New Under Ten Fishermen’s Association, along with the EU Fisheries Commissioner, to discuss CFP reform specifically. I have also had discussions about CFP reform with other interested parties, including environmental non-governmental organisations, and shall do so again in the future.

[Amber Rudd]

I thank the Minister for his answer. I know that he is aware of the shameful way in which the under-10-metre community of fishermen has been treated in the past 13 years. What steps might this Government take to restore their way of life?

[Richard Benyon]

My hon. Friend is to be credited for her assiduousness on behalf of her constituency’s fishing community. She badgered me when I was sitting on the Opposition Benches, and she continues to do so now. My answer will be in three parts. First, there is a longer-term strategy of reforming the CFP and getting an improved deal for vessels under 10 metres in length. In the medium term, we support the very good initiative on sustainable access to inshore fisheries, which was started by the previous Government. The project will report in the next few months and we will take forward its recommendations. In the short term, we can take on board the good suggestions made by fishing communities and hon. Members and try, when we can, to improve the lot of those communities through methods such as swaps of quota. This is not easy, but I assure my hon. Friend that I shall listen to the honest pleadings of her fishing community and do what I can to help them.

[Barry Gardiner (Brent North) (Lab)]

I am grateful to the Minister for attending the meeting of the Global Legislators Organisation for a Balanced Environment commission on fisheries on world oceans day. Has he had the opportunity to read the letter that I sent him following the meeting in which I outlined the proposals for a marine fisheries recovery strategy that were made by the 16 nations represented on that day, and when might I expect a response?

[Richard Benyon]

I must apologise if I have not replied already. I thank the hon. Gentleman for inviting me to the event, which brought together people from across the world, and for chairing it so well. The event gave us the opportunity to show that what we are doing on marine conservation in this country is ahead of what is being done in many other countries, so people can learn from what we do. I assure him that I will reply to him as soon as I can and take forward the recommendations of that excellent organisation.

[Huw Irranca-Davies (Ogmore) (Lab)]

I welcome the ministerial team to their positions. I know that they will do their very best in their roles and I ask them to keep the Department in good shape for us.

The CFP is on the agenda of the European Council meeting on 29 June. At that and subsequent meetings, will the Minister try to change the rigid rules that bind the hands of member states in international negotiations so that they abstain when they cannot reach consensus, thus condemning iconic species such as the bluefin tuna and perhaps whales?

[Richard Benyon]

I pay tribute to the hon. Gentleman, with whom I worked closely when we sat on opposite sides of the House, for his hard work in doing an awful lot for the fishing community.

I am bemused by the arrangements requiring members of the European Union with a long tradition in the International Whaling Commission, including ourselves, to find an absolutely solid position with EU colleagues. The hon. Gentleman is to be credited for taking an independent line on bluefin tuna. I will take up the matter seriously, and my right hon. Friend the Secretary of State and other colleagues are also concerned about the voting procedure.

[Huw Irranca-Davies]

On the issue raised by the hon. Member for Hastings and Rye (Amber Rudd), I know that great expectations were raised in Hastings and elsewhere about the future of the under-10s fleet. I welcome the Minister’s remarks about the work that has already been done, particularly with the SAIF—sustainable access to inshore fisheries—project. There was, however, an expectation of a master plan and an additional way forward, so will he tell us what that is?

[Richard Benyon]

I do not want to sound weak, but it is work in progress. I concede, and am the first to admit, that what seems incredibly simple in opposition can become more complicated, as the hon. Gentleman will understand. However, I am deeply mindful that we must recognise that fishing supports not only fishermen themselves, but communities. The Government will be focused on those communities. On the back of the SAIF project, we will bring forward answers in the medium term. We are looking to try to provide more quota and fishing capacity on a daily basis, and that will continue around the coastline.

[Elizabeth Truss (South West Norfolk) (Con)]

19. What plans she has to review the (a) functions and (b) accountability of the Environment Agency.

[The Secretary of State for Environment, Food and Rural Affairs (Mrs Caroline Spelman)]

In the Queen’s Speech, the Government announced their intention to bring forward a Bill to reform public bodies. DEFRA is carrying out a critical examination of the number and cost of its arm’s length bodies. The Environment Agency is being considered as part of that review.

[Elizabeth Truss]

I thank the Secretary of State for her answer. I am worried about the bureaucratic and remote nature of the Environment Agency’s processes, specifically on the flooding of the A1101 at Welney and flood defences at Wiggenhall St Germans. Will she tell us how local communities can hold the Environment Agency’s functions further to account and make it more responsive?

[Mrs Spelman]

One assurance I can give about unnecessary bureaucracy is that every one of the arm’s length bodies with which DEFRA does business will be subject to the three tests applied to arm’s length bodies across Government. They are: does it perform a technical function; does it need to be politically impartial; and does it act independently and transparently to establish the facts? The Environment Agency will be subject to those criteria.

I shall certainly take up my hon. Friend’s concerns about flooding. She has made it clear on her website and in a number of interventions how anxious she is to ensure that her constituents are protected from flooding. I shall impress that upon the Environment Agency.

[Mr Tom Watson (West Bromwich East) (Lab)]

Will the Secretary of State ask the Environment Agency to act independently and establish the facts of the use of aminopyralid herbicides, which have recently been licensed by the chemicals regulation directorate? They have got into manure and the toxic chemical has destroyed allotments in my constituency and allotments belonging to thousands of our citizens. She might not be an expert on the subject now, but I hope that she will take some responsibility and look into the misery that the chemical is causing.

[Mrs Spelman]

I thank the hon. Gentleman for his question, although I took my chemistry O-level so long ago that I have a little difficulty unravelling the description of the pesticide. There is also a pesticides inspectorate, but whether the Environment Agency or some other DEFRA agency is the appropriate body, I will take up his specific question.

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

21. If she will take steps to support fishermen in Suffolk Coastal constituency subject to restrictions in fishing activity arising from quota allocations and regulations on fishing vessels under 10 metres in length.

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Richard Benyon)]

As I said, I recognise the difficulties currently facing the inshore fleet. In the immediate term, the Marine Management Organisation is actively managing catch limits to keep fisheries open as long as possible, and is working to secure additional quota through swaps for stocks of importance. However, the current system is not sustainable in the long term. I plan to meet representatives from across industry and reflect on the outputs of the SAIF—sustainable access to inshore fisheries—project as a matter of priority. Common fisheries policy reform will also play a key role, where I want to see greater clarity on user rights and management devolved to local communities.

[Dr Coffey]

I thank the Minister for that reply. I hope that when he comes to my constituency to look at the impact of coastal erosion, he will make time to meet local fishermen and, indeed, enjoy some delicious fish and chips in Aldeburgh or Sole Bay. For too long, fishermen have felt remote from what goes on in this House, and direct access to a Minister for a short time would be very welcome.

[Richard Benyon]

I hope that I have got it across to many members of the fishing community that I am accessible and that they can approach me to explain their problems, which are often very local and specific to the area of coastline where they fish. I shall certainly take up my hon. Friend’s kind offer of fish and chips in her constituency and have a detailed discussion with members of her fishing community about the problems they face.

[Chris Skidmore (Kingswood) (Con)]

22. What plans she has to increase levels of biodiversity; and if she will make a statement.

[The Secretary of State for Environment, Food and Rural Affairs (Mrs Caroline Spelman)]

I assure the House that biodiversity is one of my highest priorities. I shall take action domestically through a White Paper on the natural environment, which will promote green spaces and wildlife corridors to restore and increase biodiversity. At international level, I shall ensure that the UK shows leadership in this international year of biodiversity by working to achieve a global agreement on a new biodiversity framework at the meeting of the convention on biological diversity in Nagoya in October.

[Chris Skidmore]

I am sure the Secretary of State agrees that a key aspect of improving our nation’s biodiversity is planning. In Kingswood, our much treasured green belt has been threatened by the previous Government’s disastrous regional spatial strategy and the plan to build 10,000 houses on it. Does my right hon. Friend agree that the urgent abolition of the RSS and returning powers to build houses to local communities will help to protect our green belts and defend biodiversity?

[Mrs Spelman]

I can reassure my hon. Friend that he is speaking to a Secretary of State whose constituency is entirely within the green belt and who has campaigned tirelessly on its erosion and, in particular, the unfortunate consequences of the phenomenon of garden grabbing. Those matters are the responsibility of the Department for Communities and Local Government and I am well aware that my right hon. Friend the Secretary of State for Communities and Local Government intends to abolish the regional spatial strategy and to protect and maintain the green belt, as my hon. Friend would like.

[Sajid Javid (Bromsgrove) (Con)]

24. What plans her Department has to reduce the level of regulation on farmers; and if she will make a statement.

[The Minister of State, Department for Environment, Food and Rural Affairs (Mr James Paice)]

I refer my hon. Friend to the answer that I gave to Question 2.

[Sajid Javid]

I welcome those on the Front Bench to their new roles and I thank the Secretary of State for visiting Bromsgrove during the election campaign.

The Minister referred earlier to the review of EU regulations, but may I draw his attention to the fact that they are often not enforced by our major trading partners? While we enforce regulations harshly, many EU countries ignore them, so will the he consider that urgently?

[Mr Paice]

I am grateful to my hon. Friend for that very important question. There is a huge amount of concern that some EU countries are less vigorous in enforcing regulations, and it is one of the issues that the taskforce will want to look into. I would just add the caution that when one looks closely at a matter on the ground, it is not always as clear-cut as it appears. If he has a particular case in mind, I will be happy to look into it.

[Tristram Hunt (Stoke-on-Trent Central) (Lab)]

25. What plans she has for the future of British Waterways.

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Richard Benyon)]

I made a statement on Monday 21 June on inland waterways policy for England and Wales. The Government consider that civil society has a valuable role to play in delivering public services as part of the big society. We will be looking in detail at options for a third sector model that will be appropriate for British Waterways, including the possible inclusion of Environment Agency navigations. No decisions will be taken until after the spending review.

[Tristram Hunt]

The Minister will know that Stoke-on-Trent is blessed with many things, and among them are the great canals of England: the Trent and Mersey and the Caldon canal, where we recently had the Hanley regatta. In order to become a proper third sector organisation, British Waterways needs an appropriate financial settlement following the comprehensive spending review and a longer contract with Government to replace annual grants. Can British Waterways’ property endowment be put in a charity-locked mechanism, so that the Treasury does not sell it down the canal, and we can be assured that, as an example of the big—

[Mr Speaker]

Order. I am grateful to the hon. Gentleman, but I think that we have the gist of his question.

[Richard Benyon]

I am grateful for all those questions, and I look forward to debating this matter with the hon. Gentleman and other colleagues to whom it is important. I know that he is particularly interested in the heritage of our waterways. The answer to his question is yes. For the third sector model to work, British Waterways will have to have access to its estate, or a large proportion of it, for it to gear up funding for sustainable funding in the future. I can assure him that it will not proceed unless it is locked in in that way. Those are the negotiations that we are taking forward with British Waterways.

[Peter Aldous (Waveney) (Con)]

T1. If she will make a statement on her departmental responsibilities.

[The Secretary of State for Environment, Food and Rural Affairs (Mrs Caroline Spelman)]

I will be publishing my Department’s priorities shortly in our structural reform plan, but I can share with the House that they are: to support British farming and food and encourage sustainable food production; to enhance the environment and biodiversity to improve the quality of life; and to support a strong and sustainable green economy, resilient to climate change.

[Peter Aldous]

Fishing and farming are important industries in my constituency of Waveney in north Suffolk, and the forthcoming reviews of the CAP and the CFP provide a great opportunity to improve the prospects of those two industries. Can the Minister and her team assure my constituents that they will stand up for British farmers and fishermen and show the leadership to get them the best possible deal?

[Mrs Spelman]

I can assure my hon. Friend that the coalition Government are engaging effectively and constructively with the EU in the UK’s national interest. I hope that the early evidence of the invitation to the commissioner, which was accepted last night, will demonstrate that we are taking the concerns of British farmers and fishermen right to the heart of European matters.

[Hilary Benn (Leeds Central) (Lab)]

Sixteen conservation organisations have recently written to the Secretary of State urging her to protect agri-environment schemes from spending cuts. Given that every pound that we spend brings in money from Europe, and given that once biodiversity is lost, it is very hard to bring back, can she give the House an assurance that she will make the natural environment a priority in the decisions that she makes?

[Mrs Spelman]

I can give the right hon. Gentleman that absolute assurance. In answer to a question about biodiversity, I have just made it clear that I and the Department attach great priority to it, and agri-environment schemes are an integral part of ensuring good biodiversity.

[Robert Halfon (Harlow) (Con)]

T3. It is a shame that the former Prime Minister and right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) made only a fleeting visit to the Chamber, as I would have liked him to have heard my question. Does the Secretary of State agree that the previous Government’s payments agency was an expensive shambles? Will she visit Matching and other villages in my constituency and meet farmers who were threatened with financial ruin when payments were delayed? Will she take steps to simplify that service?

[Mr Speaker]

Order. May I say very gently to the hon. Gentleman and to other Members that topical questions in particular are supposed to be brief, and that a Member has a topical question—singular?

[The Minister of State, Department for Environment, Food and Rural Affairs (Mr James Paice)]

I shall try to reply with one answer. I fully understand my hon. Friend’s concern. I would be very happy to visit his constituency, as I have done many times, and I am very conscious of the distress that the mistakes of the Rural Payments Agency caused to many farmers.

[Kerry McCarthy (Bristol East) (Lab)]

T2. Earlier this year, Nocton Dairies submitted an application for a factory farm for 8,000 cows in Lincolnshire, and said:“Cows do not belong in fields.”Now the pig farmer of the year 2009 has submitted an application for 26,000 pigs to be held in a factory farm in Derbyshire. Does the Minister agree that we should resist that increasing industrialisation of our food production?

[Mr Paice]

I am grateful to the hon. Lady for a question that tests many people, as she rightly identifies. I make two points. First, specific planning applications must, quite properly, fall to the local planning authority and are not for DEFRA Ministers to comment on. Secondly, on wider animal welfare issues, the coalition has made achieving the highest standards of animal welfare one of its absolute commitments. However, all the evidence is that management, rather than simple numbers, necessarily dictates the quality of animal welfare in any particular unit.

[Philip Davies (Shipley) (Con)]

T6. Does the Secretary of State understand the frustration of people who hear the European Commission for ever promise to reform the common agricultural policy, and Governments of all parties promise to get it reformed, when nothing ever happens? Does she not agree that the failure to reform the CAP, which costs this country £10 billion a year, is yet another perfect example of why we would be better off out of the European Union?

[Mrs Spelman]

I perfectly understand the frustration of my hon. Friend and, in fact, farmers, who feel that we could and should get a better deal from the common agricultural policy. From the preliminary stages of the negotiations, however, I can share with him the fact that, across Europe, there is a clear consensus on lifting the regulatory burden on farmers. That augurs well for the issue being an important part of CAP reform and for my ensuring that the UK gets the best possible deal for its farmers, fishermen, consumers and taxpayers alike.

[Mr Jim Cunningham (Coventry South) (Lab)]

T4. Has the Secretary of State had the chance to talk to her colleague in local government about the building of 7,000 houses on Coventry’s green belt in Keresley and Kings Hill? Will she honour her pledge to stop that proposal, which was put forward by the previous Conservative-controlled city council?

[Mrs Spelman]

I assure the hon. Gentleman that with the abolition of the regional spatial strategy the local plan is what determines where and how many houses are built. That will be a matter for Labour-controlled Coventry city council: it is within its gift to decide where the houses that are needed for the people of Coventry should go.

[Guy Opperman (Hexham) (Con)]

T7. The electronic sheep tagging rules were introduced by the previous Government. Will the Minister review the practical operation of those hated rules? Traceability can surely be maintained without the unnecessary cost and bureaucratic burden on farmers and Government alike.

[Mr Paice]

My hon. Friend puts his finger on a key regulation for which I cannot find any sensible justification. Nevertheless, it is in place, but I plan to speak to the relevant commissioner about it in Luxembourg next week.

[John Mann (Bassetlaw) (Lab)]

T5. Will there be any cuts in taxpayers’ subsidies to farmers in 2011 and in the consequential four years?

[Mrs Spelman]

Obviously, the common agricultural policy determines in large part the remuneration that farmers receive, and taxpayers from all member states contribute to its funding. As the hon. Gentleman will just have heard, I have made it clear that, as part of the CAP reform negotiations that will take place shortly, my objective is to ensure that we get the best deal for farmers, taxpayers and consumers alike.

[Tom Brake (Carshalton and Wallington) (LD)]

T8. Smallholdings in Carshalton suffer badly from fly-tipping. What consideration have the Government given to the National Farmers Union’s request to extend fines for people who fly-tip and to extend the Flycatcher database to include private land?

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Richard Benyon)]

I am very interested in the NFU’s suggestions. I have been following advice on this issue from organisations such as the Campaign to Protect Rural England. Fly-tipping is by and large a local issue, and it is often solved at a very local level by the immediate community. It is a burden that often falls to landowners, and to farmers, to clear up. We will be working with the NFU to get a better strategy, but also trusting local communities and empowering them with the necessary laws and regulations that they need to bear down on this scourge of the rural environment.

[Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)]

Does the answer that the Secretary of State gave to my hon. Friend the Member for Bassetlaw (John Mann) a few moments ago mean that she will indeed be arguing aggressively within the European Union for Europe-wide cuts in agricultural subsidies?

[Mrs Spelman]

I have made it clear that my objective as part of the CAP reform negotiations is to get a better deal for Britain’s farmers and taxpayers. That should include, for example, proper recognition of the measures that farmers take to protect the environment at the same time as producing food in a sustainable way. The negotiations are at the early stages. It will be quite some time before we know how the UK will be affected, but my objective is to get us the best deal.

[Tony Baldry (Banbury) (Con)]

On landfill, the coalition agreement says that the Government hope to promote energy from waste through anaerobic digestion. How will that be done?

[Mrs Spelman]

My hon. Friend, whose constituency is not far from mine, will perhaps have observed that our local authorities find that the increasing cost of the landfill tax is a strong incentive to try to reduce the amount of material that goes into recycling. There are opportunities for organic waste not to go to recycling at all; it is often composted by people who live in a rural or suburban locations. As regards anaerobic digestion, it is possible to consider collection from places where large quantities are produced, such as hospitals, catering outlets and schools.

[John Cryer (Leyton and Wanstead) (Lab)]

The plan to privatise British Waterways by the back door—that is what the Minister is planning—has been knocking about for decades. What makes him think it will work this time?

[Richard Benyon]

It is not a plan to privatise British Waterways, but a plan to mutualise it. That was a very good suggestion that was made under the previous Government. It will offer the opportunity for longer-term secure funding. This is the sort of organisation that can exist in a voluntary sector role, as long as it has the proper resources to call on. I urge hon. Members to look carefully at the proposals that are being made. We are listening and consulting; we have not made any decisions yet. This is a method of securing a long-term, viable future for waterways that we all value greatly.

[Julian Sturdy (York Outer) (Con)]

Will the Minister give the House an update on the health of bees in this country and on what future measures are planned to help the current situation?

[Mr Paice]

The whole House has always taken a great interest in bee health, and we were very critical when the previous Government initially planned to cut funding for it. My hon. Friend may be aware that this week, using a significant contribution from DEFRA, a £10 million research programme was launched on the whole issue of bees and other pollinators, because we recognise their value to the economy.

[Ann Coffey (Stockport) (Lab)]

What support can the Secretary of State’s Department give to traditional markets to encourage the sale of local produce?

[Mrs Spelman]

I thank the hon. Lady for that question. As I am sure she has seen, there is now a proliferation of farmers markets in most locations, because consumers very much like the diversity of high-quality produce that they offer. The decision about facilitating a farmers market in a particular location rests with local government. However, I am happy to discuss with colleagues at the Department for Communities and Local Government how we might give further encouragement so that we see more such markets.

[Duncan Hames (Chippenham) (LD)]

As part of her forthcoming review of arm’s length bodies, will the Secretary of State consider the track record of the Environment Agency in facilitating the introduction of hydroelectric power schemes on rivers? Its indecision and delay are an obstacle to progress on the River Avon in my constituency.

[Mrs Spelman]

I thank the hon. Gentleman for his question, but I believe that the question of hydroelectric power is one for the Department of Energy and Climate Change rather than the Department for Environment, Food and Rural Affairs. However, the Environment Agency operates as an arm’s length body and, as I have previously said, will form part of the review.

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

Canals and waterways are vital in my constituency in inner London, where there is a huge renaissance thanks to the Olympics. I welcome the Minister’s tone, but what conversations has he had with the Treasury? It is vital that British Waterways is not sold down the canal but is there for the long term, to protect this asset for the British public as a mutual.

[Richard Benyon]

I am aware that Regent’s canal, in the hon. Lady’s constituency, is a great heritage asset to that part of London. People who love it, and those who love the canals in my constituency and elsewhere, will look on with great concern to ensure that that point is made and that the Treasury understands—and it does—the need to provide British Waterways with the endowment it needs to gear up for the necessary repairs and maintenance of our canals.

[Martin Horwood (Cheltenham) (LD)]

I welcome the Ministers to their responsibilities. They will probably be aware by now that the previous Government were being taken to court by the WWF and the Angling Trust for non-compliance with the European Union water framework directive. Will the new Government adopt a different strategy on that important environmental legislation, based on involving local communities and stakeholders rather than lawyers?

[Richard Benyon]

We want to see much greater consultation with local communities, anglers and all sorts of interest groups—

[Mr Dennis Skinner (Bolsover) (Lab)]

Liberals?

[Richard Benyon]

And Liberal Democrats, certainly. We want that consultation on the management of our river systems, and it is important to understand that we are talking about not just river ways but the whole system, including the farmers who ensure that the water that gets into the rivers is clean. The water framework directive is a vital piece of legislation and a good directive with which we want to comply, and we will work with all parties to ensure that it is a success.

Business of the House

Thursday 24th June 2010 Commons Chamber

11:32

[Ms Rosie Winterton (Doncaster Central) (Lab)]

Will the Leader of the House give us the forthcoming business?

[The Leader of the House of Commons (Sir George Young)]

The business for the week commencing 28 June will include:

Monday 28 June—Conclusion of the Budget debate.

Tuesday 29 June—Opposition day (2nd allotted day). There will be a full day’s debate on local government financing. This debate will arise on an Opposition motion.

Wednesday 30 June—General debate on the progress and prospects in energy efficiency.

Thursday 1 July—General debate on global poverty.

The provisional business for the week commencing 5 July will include:

Monday 5 July—Motion relating to the clear line of sight project, followed by the Chairman of Ways and Means has named opposed private business for consideration.

Tuesday 6 July—Second Reading of the Finance Bill.

Wednesday 7 July—Opposition day (3rd allotted day). There will be a debate on an Opposition motion. Subject to be announced.

Thursday 8 July—General debate on defendant anonymity.

[Ms Winterton]

I thank the Leader of the House for giving us the business.

It is important that today we take the opportunity to acknowledge that the Leader of the House has been working extremely hard this week to fine-tune his leak-prevention strategy. I certainly detected his guiding hand in the reports of the unprecedented move by the Chancellor of the Exchequer to ask journalists to sign a written legal agreement that they would only take photographs of him and not ask any questions, just in case he let the cat out of the bag about anything in the Budget. That was a magnificent move, not least because it vindicated the work that the Opposition have been putting in week after week, making helpful and constructive suggestions about how to get the Leader of the House’s leak-prevention strategy up to scratch. Sadly for the Chancellor, the media refused to co-operate and, frankly, things have been going downhill ever since.

The Secretary of State for Education announced his plans for free schools to the papers and came to the House only because the Opposition tabled an urgent question. The Secretary of State for Health announced to the media the biggest shake-up of the NHS operating framework at 9.25 on Monday morning, but a written ministerial statement did not appear until 12.40. As for the Budget, most of it, including detailed figures, was in the Sunday papers—my hon. Friend the Member for Rhondda (Chris Bryant) made a point of order about that this week.

Obviously, an investigation of what went wrong will be in order, but Labour Members are quietly confident that the Leader of the House and Deputy Leader of the House can become the Government’s Sherlock Holmes and Dr Watson. They might like to have as their prime suspect the ventriloquist’s dummy, the Chief Secretary, who tells us very little when he comes to the House, but may be rather more garrulous with journalists as the Liberal Democrat mouthpiece for Conservative policies. Perhaps the Leader of the House could put in the Library the advice that is being given to the Cabinet about making announcements to the House before making them to journalists.

Why is there no oral statement today from the Secretary of State for Work and Pensions on changes to the state pension age, which mean that men in their 50s will lose on average £8,000 of state pension?

Last week, the Leader of the House stated that he had set out in response to a written question how the Government would inform Parliament of the numerous reviews and commissions that are taking place. It is not clear from his reply where the review took place that led on Monday to the Prime Minister’s saying, in response to an intervention from me, that the Sheffield Forgemasters loan was a piece of “financial engineering”. Those remarks have caused huge concern among industrialists in Sheffield and south Yorkshire. The implications of the Prime Minister’s words are that he is backing Japanese and Korean industrialists against UK manufacturing. I urge the Leader of the House to provide more information about the reviews’ terms of reference.

May we have a general debate on today’s findings by the Institute for Fiscal Studies? The IFS shows that, under Labour’s plans, the poorest 10% would have been virtually untouched, but under the Chancellor’s Budget, their incomes are cut by more than 2.5%. Even the Government’s appointed public sector pay commissioner has said that there is no logic to the brutish cuts that the Chancellor proposes. Will the Leader of the House ask the Prime Minister himself to lead the debate on the IFS findings so that he can explain to the House why he said yesterday that it was a fair Budget?

I thank the Leader of the House for granting the general debate on defendant anonymity. That is very welcome.

[Sir George Young]

I am grateful to the right hon. Lady for her last comment. I congratulate the hon. Member for North East Derbyshire (Natascha Engel) on her success in the election for the Chair of the Backbench Business Committee.

I am afraid that the right hon. Lady is wrong about the written ministerial statement on the NHS operating framework. It was issued on time, just after half-past nine, and the document, which was the subject of the point of order, was deposited in the Library at 9.34 am. All the normal procedures were followed in respect of that document.

It is indeed the case that more urgent questions are being granted. I listened to your important speech to the Hansard Society, Mr Speaker, when you said:

“I have also deliberately rescued the urgent question, a device which compels a Minister to come to the House to face a question on a matter which has suddenly arisen”.

The previous Government also experienced that change of approach. We welcome it and are happy to come to the House to answer urgent questions when they are granted.

On Sheffield, the Secretary of State for Business, Innovation and Skills dealt with that point extensively in his speech in the Budget debate yesterday, and I understand that the Deputy Prime Minister is meeting Sheffield Forgemasters tomorrow in his constituency.

So far as welfare is concerned, the right hon. Lady will know that on Monday the Budget debate will be opened by my right hon. Friend the Secretary of State for Work and Pensions. He will deal robustly with the points that she has made. She will also know that, for the first time, the Red Book contains a whole section on the impact of tax and welfare changes on households, from page 63 all the way to page 69. I am sure that she will have read the conclusion about child poverty on page 69, which says:

“Steps have been taken to protect low income families with children from the impact of these changes, by freezing the rate of Child Benefit to partly fund above indexation increases to the Child Tax Credit. This ensures that the overall impact of all modelled Budget changes on child poverty…is statistically insignificant.”

Let me say to the right hon. Lady that of course I take seriously the question of leaks, as I have said before. The House should be the first place to hear of any major changes in Government policy, and we also take seriously the suggestion of any leaks in advance of statements. However, on her general point, the House would take the Opposition more seriously, first, if they exhibited just some remorse for the mess that they left this country in, and secondly, if they indicated how they would fill the £50 billion gap in the public finances that they left us to inherit.

[Several hon. Members]

rose—

[Mr Speaker]

Order. A great many right hon. and hon. Members are seeking to catch my eye. As always, I would like to be able to accommodate everybody, but a single, short supplementary question and a characteristically brief reply from the Front Bench are the order of the day.

[Mr Edward Timpson (Crewe and Nantwich) (Con)]

Now that we realise how much the previous Government misled the public about transport infrastructure investment, promising money that simply did not exist, can the Leader of the House find time for a debate on enabling greater private sector investment in our transport infrastructure, including helping to boost projects such as the regeneration of Crewe railway station in my constituency?

[Sir George Young]

I am grateful to my hon. Friend. Along with many other hon. Friends, I had occasion to visit Crewe railway station some two years ago, in order to secure his election to the House. He will have heard my right hon. Friend the Chancellor refer in his Budget statement to a generous regional investment fund to take forward transport and other infrastructure projects that will lead to jobs. My hon. Friend will also know that we favour much longer railway franchises, which will enable the train operating companies to take a longer-term view and therefore afford major investment projects such as that in Crewe railway station.

[Kate Green (Stretford and Urmston) (Lab)]

Yesterday the Secretary of State for Communities and Local Government informed me that he would not be calling in a planning decision for a mega-Tesco in my constituency. Although gains in jobs will be welcome in the local economy, just down the road in Stretford town centre, there is a shopping centre in deep financial difficulties as a result of the Tory council’s failure to invest and support it. Can we have a debate on how this Government intend to support and regenerate local town centres, which is something that I know is of concern across the House?

[Sir George Young]

I will of course draw to the attention of my right hon. Friend the Secretary of State for Communities and Local Government the failure to call in a particular planning decision, but I have to say to the hon. Lady that one of the thrusts of the coalition Government’s policies is to devolve decision making down to local communities—to local councillors who are answerable to local people for the decisions that they take on planning and others matters.

[Mr David Davis (Haltemprice and Howden) (Con)]

May I draw my right hon. Friend’s attention to the written statement this morning on pre-charge detention? Although I understand that the instrument will be debatable in the House, we are talking about a highly controversial issue. In future when they have such highly controversial issues, can he encourage his right hon. Friends to come and speak to the House, and not follow the new Labour practice of releasing things as written statements on a one-line Whip Thursday.

[Sir George Young]

I am grateful to my right hon. Friend. As he knows, today’s statement is about an interim arrangement while the review of detention takes place, and it carries forward for six months the 28-day detention proposal. As he generously said, the order that my right hon. Friend the Home Secretary has just laid will be debatable and votable on in both Houses, so I hope that there will be adequate opportunity for his views on this important issue to be heard.

[Natascha Engel (North East Derbyshire) (Lab)]

I thank the Leader of the House for his congratulations and I look forward to working with him closely. He has always been a vocal supporter of a strong Backbench Business Committee. As such, will he ensure that the Chair of that Committee has full membership of the Liaison Committee?

[Sir George Young]

I am grateful for the hon. Lady’s words. I had always envisaged that the Chairman of the Backbench Business Committee would indeed be a Member of the Liaison Committee and take part in its important work, not least in its twice yearly interrogation of the Prime Minister.

[Roger Williams (Brecon and Radnorshire) (LD)]

Would the Leader of the House look favourably on requests for a general debate on the Floor of the House on science and its role in ensuring that we have an expanding and improving economy, particularly so that the Government can express their views on genetically modified technology and the role it can play in British agriculture?

[Sir George Young]

I am grateful to my hon. Friend for that proposal. As he will know, in future, decisions as to whether or not a general debate is held will fall to the hon. Member for North East Derbyshire (Natascha Engel) and her colleagues on the Backbench Business Committee, which we hope to get up and running as soon as we can. I am sure that what my hon. Friend has said did not fall on deaf ears.

[Vernon Coaker (Gedling) (Lab)]

Will the Leader of the House arrange a debate on the answering of written questions with respect to a named day? Last Monday, I was expecting an answer from the Treasury to a named day written question about the distributional impact of a 1% rise in VAT. Given that the right hon. Gentleman has just quoted the Red Book, is he not astonished that I am yet to receive an answer to that question?

[Sir George Young]

I am genuinely sorry if there has been any discourtesy to the hon. Gentleman, and I will draw to the attention of my ministerial colleagues at the Treasury the need to get him an urgent reply.

[Dr Julian Lewis (New Forest East) (Con)]

May I welcome the late conversion of the former Labour Government to not leaking to the press before making announcements in this House? May I ask the Leader of the House for an early debate on the importance of maintaining specialist mental health facilities, which would allow me to raise the question of the loss of the intensive care unit at Woodhaven hospital in the New Forest and the threat to the Crowlin House rehabilitation centre there?

[Sir George Young]

I am grateful to my hon. Friend and I know that this is an important issue for New Forest Members. He might like to put in for an Adjournment debate on this important issue or raise it with Ministers at the next Health questions.

[Mr Dennis Skinner (Bolsover) (Lab)]

A few weeks ago, we were told that a statement on Building Schools for the Future would be made so that everybody would know which schools would be able to go ahead. The people living in Shirebrook and Tibshelf in the Bolsover constituency are still waiting for an answer. Several schools were built when the Labour Government were in power; when are we going to have a statement?

[Sir George Young]

As the hon. Gentleman will know from the Budget statement, the comprehensive spending review is now under way and the outcome will be known on 20 October. At that point, the Department will be in a position to see how best to spend its capital programme.

[Mr John Baron (Basildon and Billericay) (Con)]

My right hon. Friend will know that the news flow from Afghanistan has not been very good recently. In addition to the further tragic loss of life, there has been the news about General McChrystal, the resignation of key Ministers within President Karzai’s Government and the early retirement of the UK special envoy to Afghanistan. Will my right hon. Friend use his influence to encourage the Government to bring forward perhaps a ministerial statement outlining the latest situation, particularly given the talk from within the international security assistance force—ISAF—comparing Afghanistan to Vietnam?

[Sir George Young]

I am grateful to my hon. Friend, who will know that the Prime Minister made a statement on Afghanistan a few days ago and that the Government are committed to regular updates to the House on Afghanistan from where there has indeed been some more tragic news today. He will also know that Foreign and Commonwealth questions takes place on 6 July, but I do bear in mind his request, which I know is widely shared, for a more general debate on what is happening in Afghanistan.

[Mr Phil Woolas (Oldham East and Saddleworth) (Lab)]

The House would not want to be left with the suspicion that the Deputy Prime Minister says one thing to one group and quite another thing to another group. Will the Leader of the House ask the right hon. Gentleman if he will report to the House on his meeting, due to take place tomorrow, with Sheffield Forgemasters? This is an issue not just for Sheffield—important though it is there—but for the whole of the nuclear industry, and particularly for our plans in the north-west of England.

[Sir George Young]

The hon. Gentleman will know that the Deputy Prime Minister answers questions to the House like any other Minister—[Interruption.] The hon. Gentleman will have an opportunity to raise the matter with him. Alternatively, he can table a written question to the Deputy Prime Minister on the issue he has raised.

[Greg Mulholland (Leeds North West) (LD)]

All the English Members of the House thoroughly enjoyed England’s qualification yesterday, and it was wonderful to see the cross of St George flying. However, it is still frustrating to hear England singing the wrong anthem—the anthem of the United Kingdom. Following the historic decision to use “Jerusalem” at the Commonwealth games, may we have a debate in the House about properly establishing an English national anthem for when England, as opposed to the United Kingdom, compete?

[Sir George Young]

I am sure that England’s victory yesterday was celebrated not just in England but in Scotland and Wales. The hon. Gentleman raises an important issue. In future, whether or not something is debated in the House will be a matter for the Backbench Business Committee. In the meantime, he might like to try his luck in Westminster Hall.

[Mr Dave Watts (St Helens North) (Lab)]

Further to the question put by my right hon. Friend the Member for Doncaster Central (Ms Winterton), will the Leader of the House arrange for a debate on the impact of VAT increases on low-paid families, bearing in mind that the Chancellor’s and the Prime Minister’s claims that the Budget is fair are contradicted in the Institute for Fiscal Studies report?

[Sir George Young]

We are in the middle of a four-day debate on the Budget, and the hon. Gentleman will have an opportunity later today and on Monday to raise precisely the issue he has just touched on and to get a convincing reply from one of my right hon. Friends.

[Mr David Nuttall (Bury North) (Con)]

In view of the announcement by the Chancellor of the Exchequer that regrettably the civil list is to be frozen yet again, will the Leader of the House please arrange for a statement on the latest position on the Queen’s forthcoming diamond jubilee being properly marked in the House and throughout the country?

[Sir George Young]

I understand that the arrangements on the civil list were dealt with by agreement, and I entirely agree with my hon. Friend that appropriate celebrations are necessary. We have a year or two in which to plan them, and I hope there will be an opportunity to share with the House exactly how that will be handled.

[Pete Wishart (Perth and North Perthshire) (SNP)]

May I offer my most sincere congratulations to the English football team on reaching the knockout stage of the World cup? Does the Leader of the House not agree that disqualification of the smaller parties in the House from the Backbench Business Committee is in danger of rendering the whole project undemocratic and illegitimate? What is he doing to ensure that all Back Benchers are equal and that all have an opportunity to participate in the business of the House?

[Sir George Young]

The Wright Committee recommended that there should be a business committee of between seven and nine members. The House agreed the establishment of a Backbench Business Committee of eight members a few days ago, and the allocation between the parties was done according to the formula with which the hon. Gentleman is familiar, and the minority parties did not get a place. However, that Committee will be re-elected every year, and I can only suggest that when members are elected for the current year, he opens a dialogue with as many of them as possible to ensure that the voice of minority parties is heard at the Backbench Business Committee, and I am sure that its Chairman has listened to his point.

[Andrew Percy (Brigg and Goole) (Con)]

The Leader of the House will no doubt be aware that following years of under-investment in our magistrates courts, Goole magistrates and county court, along with neighbouring Selby magistrates court, are scheduled for closure. May we have a debate on that important issue?

[Sir George Young]

As my hon. Friend will know, the Lord Chancellor yesterday announced a consultation on the closure of 157 magistrates and county courts. With public finances under pressure, we need to reduce costs wherever we can. We are committed to supporting local justice, and the Justice Secretary will take all views expressed into account before deciding which courts ought to be closed and when.

[Mr Tom Harris (Glasgow South) (Lab)]

I am not entirely sure about this new democracy malarkey. Although we are not allowed to say it, the Whips did a very good job in previous Parliaments of ensuring that Select Committees had a good balance, geographically and in terms of gender and experience. Under the new system, I am not sure that that will be possible. May we have a debate at some point on whether this new experiment in democracy within the House has worked? I am not sure that the Wright reforms were the right reforms.

[Sir George Young]

I cannot believe that the hon. Gentleman is suggesting that we go back to the old system whereby the Whips nominated Members to Select Committees. It is astonishing that in the House of Commons, the cockpit of democracy, an hon. Member should make such a regressive suggestion that we abandon elections and go back to nominations.

[Geoffrey Clifton-Brown (The Cotswolds) (Con)]

Does the Leader of the House agree that we should in no way wish to curtail demonstrations in Parliament square, but that the present system of almost permanent incumbency is unsatisfactory? The square should be used on a much wider basis by more demonstrators and by people for recreation, including tourists.

[Sir George Young]

I agree with my hon. Friend. With the Houses of Parliament, Westminster Abbey and Whitehall, it is a historic setting, and the presence of a shanty town right in the middle does no credit to the centre of one of the greatest capital cities in the world. As he will know, the Mayor of London is responsible for the green in the middle of the square, and he is in the process of taking action through the courts against those currently occupying it. If he is successful, I hope that the green will be cleared and accessible to more people. Personally, I have no objection to people lobbying and protesting outside the Houses of Parliament, but I think that at the end of the day they should go home.

[Maria Eagle (Garston and Halewood) (Lab)]

In the newspapers this morning, the Minister for Police has been quoted as saying that

“the last government mistakenly believed that the test of an effective police force was how many officers it employed.”

We know that the Budget and spending review will ensure that there are far fewer police on our streets across the nation, but at the recent general election, in Garston and Halewood, my Conservative opponent promised

“more officers on the beat in Liverpool” ,

as did my Lib Dem opponent. The Deputy Prime Minister, who visited on a number of occasions, also said that the Lib Dems would put more police on the streets. Will the Leader of the House agree to a debate in Government time on the new politics that the governing parties appear to be advocating, and on whether it equates to no more than completely ignoring election promises and treating the electorate like dupes?

[Sir George Young]

There will be Home Office questions on 28 June. Until the hon. Lady tells the House how the Labour party would have filled the £50 billion gap in the public finances, we will listen with suspicion to her points accusing us of making reductions that the Labour party would not have had to make had it won the election.

[Mark Lancaster (Milton Keynes North) (Con)]

May we have a debate on child abduction? We might then discuss the case of my constituent, Ken Spooner, whose two British-born children were abducted by their Zambian mother in 2008. Having spent nearly all his life savings on successfully getting his children made wards of a UK court, and having that registered in Zambia, even now he cannot get them returned to the UK. Can the Government do anything to help?

[Sir George Young]

I am grateful to my hon. Friend for that question. Many Members of Parliament will have experienced cases in their constituency in which the courts have awarded custody to the UK parent but the children are abducted to another country. Where the other country has signed the relevant Hague convention, it is possible through the courts of that country to get the child repatriated, but it is difficult where the country concerned has not signed up to that agreement. We are pursuing the matter with the Foreign and Commonwealth Office, which will be in touch with my hon. Friend.

[Jim Sheridan (Paisley and Renfrewshire North) (Lab)]

May we have a debate on compensation payments for Christmas Island victims? Such a debate would allow us to find out exactly why the compensation payments are taking so long and to assure the victims that the payments will still be made. More importantly, it would allow us to choke off the financial gravy train for the legal profession.

[Sir George Young]

The hon. Gentleman raises an important issue, and I will share his concern with the Foreign and Commonwealth Secretary. On 6 July, there will be questions to that Department, and he may have an opportunity to raise the issue then.

[Philip Davies (Shipley) (Con)]

May we have a topical debate on the remit and membership of the National Institute for Health and Clinical Excellence, which is rapidly in danger of becoming a nanny state monster? Most people thought that its job was to assess the clinical and cost effectiveness of drugs, yet not a day goes by without it proposing some ridiculous measure, such as compulsory sex education for five-year-olds, state handouts to food companies to produce healthier food, smoking breath tests for pregnant women or minimum pricing for alcohol. May we have a debate on getting NICE back to doing what it should be doing, rather than a load of garbage that it should not be doing?

[Sir George Young]

No public body should engage in mission creep and start encroaching on the responsibilities of other organisations such as school governing bodies or, indeed, parents. My hon. Friend may have an opportunity to share his concern with the Secretary of State for Health during Health questions, which I believe will take place next Tuesday.

[Mr Kevan Jones (North Durham) (Lab)]

May we have a debate in Government time on the politicisation of the military, given that a story in this morning’s Daily Telegraph made clear that a row had taken place between the Secretary of State for Defence and the Prime Minister, and given that it was announced last week that the Prime Minister would personally interview candidates for the post of Chief of the Defence Staff? Is there not a danger that any future CDS will be seen as merely a Tory party stooge?

[Sir George Young]

The hon. Gentleman should not believe everything that he reads in the papers, even in The Daily Telegraph. As for the question of public appointments, I can assure him that the proper procedures will be observed in the appointment of senor public officers.

[Robert Halfon (Harlow) (Con)]

Has my right hon. Friend seen early-day motion 282?

[That this House congratulates the millions of people who gain vocational qualifications every year and celebrates their achievement on the third annual Vocational Qualifications Day on 23 June 2010; notes that, while there have been significant improvements in the way vocational qualifications are viewed, more needs to be done to raise the stature and demonstrate the benefits of practical and vocational learning; recognises that vocational qualifications provide the workforce of tomorrow with the practical skills needed to progress in the workplace and help employers improve and grow their businesses, especially in a challenging economic environment; and believes that the many paths to success available should be celebrated.]

It refers to Vocational Qualifications day, which was held yesterday. According to Edge, 4 million vocational qualifications were awarded last year, many of them in Harlow. Will the Leader of the House give thought to allowing an annual skills debate to be held on the same day?

[Sir George Young]

It so happens that I have read early-day motion 282. As my hon. Friend will know, the coalition agreement contains a clear commitment in this regard, which states:

“We will improve the quality of vocational education, including increasing flexibility for 14–19 year olds and creating new Technical Academies as part of our plans to diversify schools provision.”

[Emma Reynolds (Wolverhampton North East) (Lab)]

Several schools in my constituency are expecting investment under the Building Schools for the Future programme. I am deeply concerned by the Leader of the House’s statement earlier that we would have to wait until October to find out whether that investment will go ahead. May we have a debate on the issue, and will the Government reconsider?

[Sir George Young]

The outcome of the comprehensive spending review will indeed be announced on 20 October, but I understand that a statement on Building Schools for the Future is likely to be made next week.

[Kevin Brennan (Cardiff West) (Lab)]

Further to the comments of my hon. Friend and best mate the Member for Cardiff South—sorry, I mean Glasgow South—[Laughter.] It is a bit further north than the Cardiff constituency.

My hon. Friend the Member for Glasgow South (Mr Harris) obviously agrees with a predecessor of yours, Mr. Speaker. Bernard Weatherill once told me, “You can’t have civilisation without sewers, and you can’t have Parliament without the Whips.” May we have a statement, or perhaps a debate, on the cost of democracy and of some things we have lost which are valuable, including the ability of Opposition spokespeople to travel in order to carry out their duties? That has been taken away by our handing over such matters to people who know nothing about politics. Is it possible for the Leader of the House to look into the matter? I am sure that he will want to make certain that the Opposition can do their job properly, as he did when he was in opposition.

[Sir George Young]

The Government are very anxious for the Opposition to be able to hold us properly to account. Having been an Opposition Front-Bench spokesman myself, I recall that the Short money makes provision for travel for Opposition spokesmen. That is the source to which the hon. Gentleman should look in order to fund his important travels around the country.

[Mr Mark Williams (Ceredigion) (LD)]

The Amnesty International report “From Protest to Prison” reveals that up to 5,000 Iranians citizens are now languishing in prison following the disputed presidential election. There have been 150 executions in Iran, and persecution of the gay community, the Baha’i community and, of course, women remains characteristic of the Iranian regime. May we have a debate on the human rights record of the regime and our Government’s necessary response to it?

[Sir George Young]

The hon. Gentleman has raised the important issue of the barbaric treatment of a number of prisoners in Iran. Foreign Office questions will take place on 6 July; alternatively, he may wish to apply for a debate in Westminster Hall, where the matter could be dealt with at greater length.

[Chris Bryant (Rhondda) (Lab)]

May we have a debate on ministerial statements, or at least a statement on statements? The right hon. Gentleman has suggested to us that it is fine for Ministers to use written ministerial statements even to deal with such highly controversial issues as retirement and the closure of magistrates courts in areas throughout the country, including Llwynypia in my constituency. He has just said that there will be a statement on something next week. Would it not have been better to include that in his opening announcement? Would it not be better for him to say that he knows that there will be a statement next week, so that it will be easier for us to scrutinise the Government?

[Sir George Young]

The business statement does not normally include written statements. We can give prior notice of written ministerial statements, and I shall see whether that could be done in the instance that the hon. Gentleman has cited. However, we have not deviated from the policy on written ministerial statements that was adopted by the last Government, of whom he was a distinguished member.

[Mr Tom Watson (West Bromwich East) (Lab)]

If the Leader of the House granted a debate on public sector cuts, I could inform him of my plans for alternative cuts. The Foreign Office recently admitted to me that the ministerial wine cellar was worth £860,000 a year, and that it had just spent nearly £18,000 on replenishing it after the election. However, it was less candid about what was held in the collection. Does the Leader of the House think that Ministers should tell me what is in it, and should we sell it so that we are “all in it together”?

[Sir George Young]

I could have said that the Chief Secretary was not the only person who left the cupboard bare, and that the Government hospitality cellar had to be replenished when we came to office; but I will not.

It says here: “The Government hospitality cellar is a carefully managed resource that is integral to the service delivered by Government hospitality for all Government Departments. Expenditure since the election has been part of the normal buying pattern for the cellar, on which between £80,000 and £100,000 is spent per annum.”

[Barry Gardiner (Brent North) (Lab)]

When will the Leader of the House announce measures to make good his party’s excellent manifesto commitment based on the Illegally Logged Timber (Prohibition of Sale and Distribution) Bill, which I presented as a ten-minute Bill? The party made that commitment in opposition. Will he also tell us whether the rumour that responsibility for it has been passed from the Department for Environment, Food and Rural Affairs to the Department of Energy and Climate Change is correct?

[Sir George Young]

I would require notice of the second part of the hon. Gentleman’s question, but he has raised an important issue. There is a commitment, and it will be honoured.

[Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)]

Given that there is plenty of time for general debates over the next few weeks, may we have an early oral ministerial statement on Equitable Life? Before the election the Government parties made lots of sympathetic noises to Equitable Life policyholders, but they are now increasingly concerned that they are about to be betrayed. May we have an early ministerial statement to reassure them that the promises made not just by the Government but by 380 Members of Parliament across the House are to be kept?

[Sir George Young]

This side of the House will accept no criticism from Opposition Members about the treatment of Equitable Life policyholders. We can do better than a statement: we will introduce a Bill.

[Mr Speaker]

Last but not least, I call Mr Nick Smith.

[Nick Smith (Blaenau Gwent) (Lab)]

Yesterday in Parliament the Prime Minister said, in regard to employment, that the Government would

“introduce our work programme, which will be the biggest, boldest scheme in…. history”.—[Official Report, 23 June 2010; Vol. 512, c. 288.]

Unemployment in my constituency is almost 12%. The Labour Government’s future jobs fund has been a tremendous success, creating nearly 500 jobs, but when will we have a proper debate? When will we have further discussion and much more information about this important subject?

[Sir George Young]

The short answer is “on Monday”. My right hon. Friend the Secretary of State for Work and Pensions will lead Monday’s debate on the Budget, and will focus on that subject.

The future jobs programme was expensive in comparison with other programmes. It found relatively short-term jobs paying relatively low wages. We believe that we can do much better than that.

Points of Order

Thursday 24th June 2010 Commons Chamber

12:09

[Barbara Keeley (Worsley and Eccles South) (Lab)]

On a point of order, Mr Speaker. My right hon. Friend the shadow Leader of the House raised today the issue of the announcement made by the Secretary of State for Health at 9.25 am on Monday of revisions to the NHS operating framework. I checked personally with the Library at 9.30 am and then throughout the morning for the written ministerial statement. It was not made available until 12.40 pm, 10 minutes after the deadline for submission of an urgent question to you, Mr Speaker. Is it in order for me to ask now for a review of the way in which written ministerial statements are made available to Members?

[Mr Speaker]

I am grateful to the hon. Lady for her point of order. The handling of matters of this kind, subject to its being orderly, is in the hands of the Government. As the Leader of the House is here, he might wish to respond, and is welcome to do so.

[The Leader of the House of Commons (Sir George Young)]

I would welcome the opportunity to have a chat with the hon. Lady immediately and explain my understanding of what happened on that day.

[Mr Speaker]

I hope that that will suffice for now; I think it must.

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

On a point of order, Mr Speaker. Before we come to the serious matter of resuming the debate on the Budget, I wonder if I might crave your indulgence to see whether you might be willing to consider doing something on behalf of the House. You might have noticed that yesterday saw the most titanic tennis match ever played—in this great city of ours and in our country. Nicolas Mahut, the Frenchman, and John Isner, from the United States, ended up in the fifth set at 59-all when, for the second day running, they were not able to complete that match. They will take it to a conclusion today. I wondered whether at the end of the match you might consider inviting the two players to this House to show, in this great summer of sport, how much we value sport in this country and how much we value people from all over the world coming to show their talents in this great country of ours.

[Mr Speaker]

What I would say to the hon. Gentleman is as follows. First, it may or may not be of interest to him and the House to know that I myself watched significant parts of that match—certainly for at least a couple of hours in the evening—and was as fascinated by it as the hon. Gentleman. The second point is that his suggestion is an interesting one but, sadly, does not qualify as a point of order. My third point is that I would be more than happy to invite the two gentlemen concerned to the House, but I do not have the foggiest idea whether they would be interested in accepting the invitation.

If there are no further points of order, we come now to the main business.

Ways and Means

Thursday 24th June 2010 Commons Chamber

Budget Resolutions and Economic Situation

Thursday 24th June 2010 Commons Chamber

Capital Gains Tax (Rates)

Debate resumed (Order, 23 June),

Question again proposed,

That provision may be made in relation to the rates at which capital gains tax is charged.

12:12

[The Secretary of State for Energy and Climate Change (Chris Huhne)]

I am delighted to open this day of the Budget debate and I want particularly to do three things in this speech. One is to argue why the Budget strategy—what used to be called the Budget judgment—is an essential and correct response to the balance of risks that the economy faces. The second is to address the question that always arises at this stage of the business cycle, which is from where the jobs are likely to come during the recovery. The third is to outline why, like all other recoveries from deep recessions, we will build a new economy. Indeed, a large part of the answer as to where the jobs will come from are the new low-carbon industries which represent our third industrial revolution. In five years’ time, the outlines of a sustainable and resilient economy will be clear, thanks in part to the route map that we begin to sketch out in the Budget—the carbon price floor, the green investment bank and the green deal.

Let me start with the point about the balance of risks, and pick up where we left off in the last debate, when the right hon. Member for Doncaster North (Edward Miliband) was disparaging me for the “Greek defence” as he put it. This determines the timing of measures to cut the budget deficit. The last time that we debated these issues, the right hon. Gentleman accused me of performing a U-turn on whether there should be cuts in this year. I conceded that we in the Liberal Democrat part of the coalition had changed our minds. I also pointed out that we had done so on the basis of events in international capital markets, which have dramatically raised the risks of our being engulfed in a firestorm. If that were to occur we would not be looking at a proactive plan decided by Government, but at a forced reaction to market pressure, which would be unplanned, unconsidered and deeply damaging.

When I last made that point, the right hon. Gentleman said that there had been no change in circumstance that justified a change in judgment. So I looked up the figures for the key public finance borrowing interest rate: the 10-year bond yield for each of the afflicted economies and for our own. The 10-year bond yield determines the cost at which we finance our own borrowing, but it also sets the tone for interest rates in the rest of the economy. The 10-year yield for the Greek Government on the day the election was called in this country, 6 April, was a little less than 7%; it was 6.98%. It had hovered at or around that level for most of the early part of the year, yet during the general election campaign the Greek bond yield began lurching upwards, reaching a peak of more than 12% the day after our general election.

The right hon. Gentleman mocked my Greek defence and said that the circumstances were so different that we could not possibly be affected. I merely remind him that our Budget deficit is the second highest in the EU and currently higher than that of Greece. It is true of course that Greece has substantially higher public debt to national income ratios than we do, but that is not as consoling a thought as the right hon. Gentleman appears to think. Contagion does not work like that. It is, by definition, irrational and sees similarities even where a cooler mind sees differences.

[Barry Gardiner (Brent North) (Lab)]

Did the right hon. Gentleman have the opportunity to watch and listen to the eminent Japanese economist on “Newsnight” last night, who explained, on precisely this point, that were Britain to be paralleled with Greece, the bond rates in Britain would not be showing a four point spread at the moment and would not be being bought so avidly by British companies and consumers?

[Chris Huhne]

The hon. Gentleman makes a point about the circumstances, but markets travel on expectations. The expectations of what was going on in this country were very clear during the general election campaign: the hon. Gentleman and his friends were about to lose the election. It is precisely the case with the contagion in southern Europe that it spread quickly from Greece to Spain and to Italy. Italy, of course, has a very high public debt to GDP ratio and is clearly in a different category from ourselves. But that is not the case for Spain—one of the most substantial economies in Europe—where the central Government to GDP ratio is actually much smaller than ours. The debt to GDP ratio in Spain was 33% as against 60% in the UK at the beginning of this process. That is the problem that the right hon. Member for Doncaster North and his friends have to answer. It was absolutely clear from the rise in bond yields across southern Europe that we were in the firing line and it would have been completely irresponsible for us not to remove ourselves from it.

[Matthew Hancock (West Suffolk) (Con)]

Is the right hon. Gentleman aware that yesterday in the Chamber the shadow Chancellor argued that the problem with Greece, and one of the reasons for what happened there, was that the authorities did not act quickly enough? Does he share my surprise that the shadow Chancellor can combine that with an argument for not acting now here?

[Chris Huhne]

My hon. Friend is absolutely right. There is no doubt that the lessons of history are completely clear. Those countries that grip their problems and deal with them do so in their own time and their own way and in a proactive manner. Those countries that fail to do so end up like Greece and Spain—with socialist Governments—grappling with measures that will be far more severe than anything that we have introduced in this House. I simply remind the right hon. Member for Doncaster North that Lord Keynes, the great Liberal economist who continues to be an economic hero to me, was once famously accused of changing his mind. He splendidly replied, “When the facts change, sir, I change my mind. What do you do?” The right hon. Gentleman’s principal problem today is that the facts have changed and he has not changed his mind. That is precisely the argument.

I would merely remind the right hon. Gentleman of another dictum from a rather great economist—also something of a hero of mine; I should probably be looking towards the Liberal Democrats here—J. K. Galbraith. He served a number of American Presidents, including J. F. Kennedy, and I should point out to the right hon. Gentleman that it was J. K. Galbraith who said that the essence of leadership was for a leader to confront the greatest dangers of the people they aspire to lead. The right hon. Gentleman is not doing that.

[Chris Bryant (Rhondda) (Lab)]

I can fully understand why the Secretary of State feels the need to justify his change of position; he has a lot of voters to try to explain himself away to. I can also understand why he makes the argument that some elements of the economic situation in Europe have changed over the past few months. [Interruption.] No, I can see why he might make that argument, but I do not see why that means he has got to change his principles, because I thought one of his principles was that progressive taxation was better than regressive taxation, and that that was why he had a great big poster about a VAT tax bombshell. It is his principles that we are worried about.

[Chris Huhne]

The hon. Gentleman makes an interesting point, but I would merely commend to him the Institute for Fiscal Studies analysis published today, which looks in particular at the distributional consequences of value added tax. From the tables the IFS has usefully produced—at this point I rather agree with my right hon. Friend the Secretary of State for Business, Innovation and Skills that it would be helpful if we had a PowerPoint presentation pack in the Chamber for the edification of those who seem to be unaware of the evidence—and in particular from the analysis of the impact by decile of expenditure, it is very clear that VAT is not in fact the regressive tax that the Opposition have said. [Interruption.] Please, just look at the IFS distributional impact analysis, as it is made clear there. The reason for that—

[Chris Bryant]

On a point of order, Mr Speaker. “Erskine May” makes it very clear that hon. Members should be able to explain themselves without requiring documents that they then want to present to the House. The right hon. Gentleman has just said that Members should look at some document that he is referring to, but we are not able to do so. Should we not get back to the facts?

[Mr Speaker]

It is true that the use of visual aids in the Chamber is disorderly. I am going to be charitable and generous, and interpret the Secretary of State as suggesting that these are matters that people might like to take forward at another time outside the Chamber, but they clearly do not aid the debate in the Chamber now.

[Several hon. Members]

rose—

[Mr Speaker]

I fear that we are going to have a flurry of points of order. [Interruption.] No, they are not points of order. I therefore call the Secretary of State.

[Chris Huhne]

Thank you, Mr Speaker. Let me merely assert, until the hon. Member for Rhondda (Chris Bryant) has had the opportunity to check this for himself, that the distributional analysis of changing the main VAT rate produced by the IFS today shows that there is not a regressive pattern to that when looked at by decile of expenditure.

I am very happy to defend this Budget, not least on the basis that, astonishingly, it is the first Budget in which we have a serious distributional analysis of the impact of its measures. We had 13 years of a Labour Government producing Budget after Budget, and on not one occasion in one Red Book was there a section devoted in this way to distributional analysis.

[Edward Miliband (Doncaster North) (Lab)]

Why did the leader of the Liberal Democrats, now the Deputy Prime Minister, say on 7 April 2010 that we should remember that VAT is a regressive tax? How does the Secretary of State square that with the fact that he is seeking to claim from the Dispatch Box today that it is not a regressive tax?

[Chris Huhne]

If VAT is raised right across without the exemptions that we have for food, children’s clothes and books, for example, and without the lower rate on fuel, then it is a regressive tax. It is a standard feature of basic micro-economics that indirect taxes are more regressive than direct taxes, but I ask that Members please look at the IFS analysis, because it seems to me to undermine directly the case that the Opposition are attempting to make.

[Rachel Reeves (Leeds West) (Lab)]

The right hon. Gentleman talks about the IFS numbers on the distributional impact. Does he agree with the following numbers from the IFS? The impact of the measures announced on Tuesday on the incomes of the poorest—the bottom—decile will be minus 2.6%, whereas it will be minus 1.5% for the next two deciles, then minus 1.4%, minus 1.3%, minus 1.1%, minus 0.9%, minus 0.6%, minus 0.6% and minus 0.7%. So the bottom decile will see a reduction in their income of minus 2.6% and the top decile will see a reduction in their income of minus 0.7%. Is that regressive or progressive?

[Chris Huhne]

The hon. Lady clearly did not listen to my earlier answer. When looking at the distributional impact, it is very important, particularly with indirect tax measures, to look at the expenditure effects, not the income effects. The IFS report shows very clearly the enormous distinction between the conventional answer on the distributional impact on income and the answer when we look at the expenditure effects.

The choice for this Government has been clear: either we manage the transition to lower borrowing to sustain the recovery, or we will have those choices yanked from our hands by the markets and we will face force majeure. It is far better to design a fair package, as we have done, than to have an unfair package imposed on us that no one has had the time or thought or energy to design.

No fiscal package responding to a market emergency that I have ever seen has been fair, whatever Opposition Members may say. I spent five years of my pre-political life analysing sovereign risk and sovereign crisis. I was in Seoul before Christmas 1997, in Djakarta at the time of the food riots, and in Bangkok when the authorities struggled with the collapse of the Thai baht, and I never want to see a British Government have to go cap in hand to the International Monetary Fund as those countries did, as Greece is now doing and as the friends of the right hon. Member for Doncaster North had to do in 1976.

Had we run the risk of contagion—of a sharp spike in Government and probably short-term policy interest rates too—the impact on growth would have been severe. The truth is that the course of action that the right hon. Gentleman and his friends recommend—the Micawberish course of hoping that something will turn up—would have put the British economy and British jobs in the international firing line, and no responsible Government would have done that. Frankly, I have enough respect for the intelligence and judgment of the right hon. Gentleman to believe that he would not have adopted that stance if he and his friends had been re-elected.

[Ian Swales (Redcar) (LD)]

Does my right hon. Friend agree that regressive taxes are those that stay the same regardless of people’s income, such as council tax, whereas progressive taxes are those that increase with income, such as value added tax, under which the rich will pay more because they will spend more? [Interruption.] I say that as one of the qualified accountants in this House. [Interruption.]

[Chris Huhne]

Before Opposition Members start chortling away, let me say that my hon. Friend makes a very good point. I would merely remind Opposition Members which Government raised council tax so steeply—the most regressive tax in the entire toolkit. Year after year under a Labour Government it was pushed up and up and up.

Let me now turn to the issue of growth and jobs. At this stage in every business cycle that I have followed, going all the way back to the recovery from the bust that followed the Barber boom in the early ’70s, the cry always goes up, “But where will the jobs come from?” That cry is particularly urgent whenever, as has too frequently happened, Governments are trying to deal with the legacy of past fiscal misdeeds. However, the forecast from the Office for Budget Responsibility is a reasonable central assessment and is similar to independent forecasts. It shows that the biggest impetus to growth this year comes, as is usual at this point in the cycle, from the inventory cycle. Recessions inevitably put businesses under enormous financial pressure. Businesses try to raise cash by cutting output and by meeting the demand for their goods from stocks, but that process has to exhaust itself as those stocks of finished goods run down. More of the demand for those goods then has to be met from output, and businesses once again gear up production. That is where we are today. The inventory cycle is a powerful stimulus. The OBR forecast has it contributing 1.2% of gross domestic product this year.

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

Let me take the right hon. Gentleman back to his defence of his party’s volte-face on VAT. He explained that VAT was not a regressive tax because of the range of exemptions from it. Will he tell us what exemptions there are now under the coalition Government that were not there before that make it less regressive than it was before?

[Chris Huhne]

The hon. Gentleman knows that the exemptions are exactly the same. I merely make a standard point that is made by the IFS every year when analysing the distributional consequences of any financial measures. We can always take individual measures—the hon. Gentleman refers to VAT, but, as my hon. Friend the Member for Redcar (Ian Swales) has mentioned, the distributional consequences of what the Labour Government did with council tax were appalling because it is such an unfair tax—but we must look at the package as a whole. If one looks at the section of the document that describes what the distributional consequences are, one sees that the package as a whole is a fair one.

An important part of the answer regarding where jobs will come from is, of course, from existing businesses as they recover, as I have described. That will in turn feed confidence, consumer spending and investment. However, there is also a deeper answer.

[David Wright (Telford) (Lab)]

Will the right hon. Gentleman give way?

[Chris Huhne]

Let me make a bit of progress with the argument. The deeper answer is the profound change that must take place in our economy over the next 10 years, which will also be a great source of growth, jobs and profit. I am talking about the transition of our economy—the third, or green, revolution—to being powered from low-carbon sources. That is potentially as great a shift as some of the biggest changes in our economic history—from water to coal, from coal to oil and from gas to electricity. With each of those fundamental changes of technology, there was a wave of new investment that powered the recovery of a new and very different economy. We can look at the legacy of the rapid recovery in the 1930s from the point of maximum downturn in 1931. That was one of the fastest periods of British economic growth, with the development of new electrical appliances, other light industries and the suburbs around our major cities.

Let me cite some numbers to give a feel for the scale of the potential transformation that we face as a result of the green revolution. Thanks to the ageing of our energy infrastructure, my Department estimates that we will need £200 billion-worth of new investment in the next 10 years. That scale of investment will have substantial macro-economic consequences for businesses in the supply chain and for all those who work in them. I am pleased that my right hon. Friend the Chancellor announced in the emergency Budget, even though the focus was inevitably on averting a fiscal crisis, two measures that will support that investment. The first was our coalition commitment to remodelling the climate change levy and providing a carbon price floor to encourage low-carbon sources of energy, renewables and others. We will consult on that in the autumn. The second was, of course, the commitment to the green investment bank. We will be looking at the scope of the bank through the autumn and we hope to bring forward proposals on that.

[Toby Perkins (Chesterfield) (Lab)]

A lot of environmentalists were deeply disappointed that there were not more green taxes. Is that just another example of how little influence Liberal Democrat policy has had on what was a classic Tory Budget?

[Chris Huhne]

I honestly think that the hon. Gentleman is misreading the situation dramatically. We had three announcements; I have mentioned two of them already and I am going to expand on the green deal. It was an emergency Budget, and I would not have expected a substantial programme of reform on green taxes in an emergency Budget that was designed to take us out of the firing line. We have a clear coalition commitment, going forward, to a rise in revenue from green taxes as a proportion of total revenue. That is in the coalition agreement and I have absolutely no doubt that that is what we will see when the full Budget is brought forward in the normal way after the processes of consultation throughout Government.

[Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)]

Even if we accept what the right hon. Gentleman says about the emergency Budget, there was a very carefully costed proposal on air passenger duty in the Lib Dem manifesto—at least my Liberal opponents said that it was carefully costed—which seems to have gone missing. Why has that proposal been replaced by some future discussion in some future commission? Why has it become something that only might happen, if it could, apparently, have added £3 billion a year to the Budget now, at a time when that money is clearly needed by the Government?

[Chris Huhne]

I hope that the hon. Gentleman realises that there will be a consultation on that proposal in the autumn. I have no reason to believe that it will not be brought forward in the normal course of events with ordinary Government announcements. It is part of the coalition agreement and is widely welcomed. I believe that it was in both the Conservative and the Liberal Democrat manifestos, but not everything can be announced on day one. The overwhelming priority for this Budget has been to ensure that we can sustain growth and jobs by removing ourselves from the substantial and real risk of contagion from the financial crisis in southern Europe. That has been the overwhelming priority.

[Duncan Hames (Chippenham) (LD)]

Given my right hon. Friend’s comments on the need to invest in the infrastructure needed for a low-carbon energy future, will he assure me that his Department’s investments in the south-west wave hub will endure and survive the current turbulence associated with the machinery of government of its sponsor body?

[Chris Huhne]

I thank my hon. Friend for that question. Obviously, he knows that we will go through the comprehensive spending review in the autumn, and the normal process is to make announcements when we have been through that, but I have no reason to doubt that the Government’s commitment to the support of infant wave, tidal stream and wind technologies will continue and I am confident that there will be announcements reflecting that priority, which is in the coalition agreement.

[Mark Lazarowicz]

Will the right hon. Gentleman give way on that point?

[Chris Huhne]

I shall give way a bit more, but let me make a little progress. I have been making the argument that the need to replace our ageing energy infrastructure will give enormous impetus to growth in coming years. The other part of the argument has to be about looking at the centrepiece of the Bill that my Department will bring forward later in the year and at what we are proposing on the green deal. That, too, is an enormously significant package that will have genuine macro-economic consequences for the transformation of the economy and the creation of a whole new industry.

[Edward Miliband]

That was not mentioned in the Budget speech.

[Chris Huhne]

The right hon. Gentleman mutters from a sedentary position that that was not mentioned in the Budget speech, but the Budget documents contain a clear commitment in that regard. It is very clearly something that we are proceeding with rather dramatically.

The point that I want to make is that this will be the first genuinely comprehensive attempt to make sure that all of our housing stock is retrofitted. We know that most of the homes that we will be using in 2050 have been built already, so we need a comprehensive way to get carbon emissions from our residential housing sector way down if we are to meet our 80% overall reduction targets.

[Dr Alan Whitehead (Southampton, Test) (Lab)]

rose—

[Barry Gardiner]

rose—

[Mark Lazarowicz]

rose—

[Chris Huhne]

Before I give way, let me make a couple of points about the economic significance of that approach. First, the potential increase in demand as a result of the creation of new industry will be absolutely enormous if we can get the Bill, the framework and the pay-as-you-save measures right. By way of indication, we would be talking, in practical terms, of 14 million homes that could be insulated with the support of the green deal. Purely arithmetically, if the average cost were £6,500, for example, we would be talking about a market worth literally tens of billions of pounds—£90 billion over a substantial period.

We are talking about creating a new industry that would be genuinely jobs-rich, as it would use skills already present in the construction sector and need unskilled labour as well.

[Dr Whitehead]

Will the right hon. Gentleman give way?

[Chris Huhne]

I will happily give way to my neighbour in Hampshire.

[Dr Whitehead]

I thank the right hon. Gentleman for giving way. He envisages that his green deal will involve insulating and raising the energy rating of 14 million homes in the UK. The previous low-carbon transition plan envisaged that that would be done through the provision of subsidised loft, cavity-wall and other forms of insulation. Has he succeeded in defending the money set aside in his Department for subsidising that, or will he rely on Tesco to do the job instead?

[Chris Huhne]

I certainly do not believe that we can rely on achieving the sort of comprehensive approach that I am talking about merely through introducing pay-as-you-save measures. The reality is that there will have to be cross-subsidy, as there already is, but particularly to the fuel poor and to those in homes that are hard to heat and which need solid-wall insulation and so forth. I am afraid that the hon. Gentleman will have to wait for the final proposals in the Bill, but I very much agree that we need a comprehensive set of proposals to deal with the whole of the residential housing sector. Those proposals must cover homes owned by owner-occupiers but also the private rental sector, where many of the worst offenders when it comes to energy inefficiency are to be found. I hope that that is what he will see.

[Barry Gardiner]

I am grateful once again to the right hon. Gentleman. I welcome the measures that he is outlining and we will want to study them carefully, but I am troubled by his suggestion that one element of the coalition agreement was a decision that green taxes should rise as a proportion of the revenues into the Exchequer. I have heard him make the argument, from this side of the House, that green taxes should be used to change behaviour but not as long-term revenue streams on which the Exchequer can depend. I agree with that, but will he explain why that element of the coalition agreement is now seen to fund resource into the future?

[Chris Huhne]

The hon. Gentleman knows, as I do, that the two points that he makes are not as mutually contradictory as he suggests. There is a long history in this country of applying so-called “sin taxes” to alcohol and tobacco, and they have had the very desirable effect of helping to get people off smoking and of cutting their drinking. The success of those taxes is not perhaps as great as many hon. Members on both sides of the House would like, yet I am assured by the latest Red Book documents that the Treasury continues to raise a very substantial amount of money from both tobacco and drink excises.

The reality is that, while green taxes will change behaviour, the responsiveness of behaviour is such that revenue will continue to be raised for a very substantial period. I have to say that, in the present circumstances, that point is likely to commend itself to the Treasury, which always used to follow the motto of Colbert, the finance minister of Louis XIV, who said that the art of taxation lay in plucking the maximum number of feathers from the goose with the minimum amount of hissing. In that context, green taxes certainly are a very justifiable way to pluck the maximum number of feathers.

I shall give way once more, to the hon. Member for Edinburgh North and Leith (Mark Lazarowicz), and then I shall wind up and let the debate make progress.

[Mark Lazarowicz]

I am very grateful indeed to the right hon. Gentleman for giving way. I want to leave Louis XIV and return to future technologies, and I was interested in the response that he gave to the hon. Member for Chippenham (Duncan Hames) about support for wave technologies. The right hon. Gentleman will probably know that two of the UK’s leading marine renewable energy businesses have their headquarters in my constituency. Can he assure me that support for marine renewables will be at the centre of his policies for every constituency in the UK, and not just those in the south-west of England? More specifically, will he tell us how the Government’s support for marine renewables will be affected by the Budget that we are discussing?

[Chris Huhne]

Quite properly, the hon. Gentleman wants me to anticipate announcements that will be made by the Government in the normal course of events. I understand that game, as I have played it myself on many occasions. At this stage, however, I can merely tell him that I visited Aberdeen recently for the All Energy conference, where I had interesting and fruitful talks with the marine energy specialists currently testing equipment off Orkney. I am deeply committed, as I believe the Government are, to making sure that what is a genuinely interesting source of potential future prosperity and jobs continues to get the support that it needs to get off the ground.

Obviously, we are in very tough times and have had to cut our cloth to fit our straitened circumstances, but I believe that marine energy offers real opportunities. We have made a number of proposals in that regard, and we will continue to support the sector.

[Chris Bryant]

Will the right hon. Gentleman give way?

[Chris Huhne]

No. I said that the previous intervention would be the final time that I would give way before winding up, and I have given way to the hon. Gentleman before.

By the way, I should add to my response to the previous intervention by saying that we have confirmed some of the grants and soft loans made available, for example, for wind energy.

[Dr Sarah Wollaston (Totnes) (Con)]

Will my right hon. Friend give way?

[Chris Huhne]

I am not going to give way again. I am sorry, but I am going to end up—[Hon. Members: “But it’s a new Member!”] I am sorry, I did not realise that the request came from a new Member.

[Dr Wollaston]

I am extremely grateful to my right hon. Friend for giving way. My constituency is home to Transition Town Totnes, of which he may have heard. It leads the way in looking at climate change and peak oil, and I am sure that the people involved will be very interested to know the size and scale of the projects that will be funded by the green banks. What will be the time scale? When might they be able to start looking forward to making applications?

[Chris Huhne]

I thank my hon. Friend for that intervention. [Hon. Members: “Answer!”] Opposition Members know perfectly well that there are certain processes in Government that we have to go through. We have to consult. We have to make sure not only that we produce decisions at the moment that both Opposition and Government Members would like, but that those decisions are right and have gone through all the normal processes.

However, I want to pick up on one very important point. My hon. Friend mentioned peak oil, something that, especially in the context of Deepwater Horizon in the gulf of Mexico and our exploration west of Shetland, opens up a terribly important point about the whole thrust of what we are intending to do. That is that we have been given a wake-up call to move towards a low-carbon economy even more rapidly than before. That is not merely for climate change reasons but because an economy that is more independent of volatile sources of energy from geopolitically troubled parts of the world is also more resilient to oil price shocks. If the name of the game is not to end boom and bust, as the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) used to promise, but at least to moderate boom and bust, then an important objective for my Department has to be to ensure that that moderation takes place by making energy security a more serious objective and defining energy security not merely in terms of physical interruptions—problems, say, in the straits of Hormuz—but in terms of our ability to withstand price volatility and price shocks.

I think I have gone on far too long—[Interruption.] As the hon. Member for Islington South and Finsbury (Emily Thornberry) says from a sedentary position, and I can agree with her—[Interruption.] Sorry, the hon. Member for Wallasey (Ms Eagle)—I was being barracked. I want to make a key point about the prospect of the move to a low-carbon economy providing us with a new type of economy that will be more resilient to shocks, will be jobs-rich and will provide genuine prosperity, employment and profit for British businesses, including opening up enormous opportunities in export markets. The framework that we have set out enables us to do that, and I commend the Budget to the House.

12:51

[Edward Miliband (Doncaster North) (Lab)]

May I start by congratulating the Secretary of State? He is by my reckoning the first Liberal to open a Budget debate in peacetime since 1914. That is a remarkable honour, which we should note today.

[Chris Huhne]

I am delighted to accept the right hon. Gentleman’s commendation, but I should remind him that my right hon. Friend the Secretary of State for Business, Innovation and Skills opened the debate.

[Edward Miliband]

I do not want to be a pedant about this, but he was not the first speaker in the day’s debate. That was the only point that I was making. The Secretary of State can accept my congratulations or not. I also want to congratulate him on something else. Today we have seen the completion of a remarkable political journey by the right hon. Gentleman. Remember the Liberal Democrat leadership election, Mr Deputy Speaker? He was the tribune of the left. He ran to the left of the current leader of the Liberal Democrat party. Today we heard the most remarkable political transformation from left-wing Liberal to Thatcherite. He could be the Reg Prentice of 2010. He could easily qualify as a Conservative candidate at the next election on the basis of the speech that we heard today.

There is a proud tradition here—Reg Prentice, Hartley Shawcross; maybe soon he will join those predecessors. But the problem for the right hon. Gentleman is that in order to complete this political journey, he has to engage in the most remarkable amount of doublespeak, which speaks to the heart of the traditions of liberalism. I come to this House today to praise the traditions of liberalism; he comes to bury them. What is the legacy of John Maynard Keynes? [Interruption.] I know that the right hon. Gentleman does not want to hear it. John Maynard Keynes taught us about the dangers of fiscal austerity at a time of global downturn. This Budget pays no heed to those warnings.

What is the lesson of William Beveridge? It is the principles of social insurance and protecting the most needy. What is the legacy of David Lloyd George? In 1909, 101 years ago, David Lloyd George delivered the people’s Budget. The people’s Budget—I say this as a Labour Member of Parliament—was a remarkable example of showing that one could be fair at a time of fiscal challenge. Nobody could claim that Tuesday’s Budget was anything like a people’s Budget. So I am afraid I give up on the right hon. Gentleman, but there are some Liberal Democrats in the Chamber today, and of course the new tribune of the left is the hon. Member for Bermondsey and Old Southwark (Simon Hughes). I am afraid that we have to put our faith in him as far as this Budget is concerned, because we have to give up on the Secretary of State. [Interruption.] My hon. Friends say he is conning me. I think that we should give him a chance during this debate.

The Conservatives will vote for this Budget at the completion of the Budget debates on Tuesday because they vote for unfair, unjust, unequal Budgets. I say to Liberal Democrats in all candour that they have to make a judgment. If the Budget is akin to the people’s Budget of 1909 and if it shows fairness at a time of fiscal austerity, they should by all means vote for it. But if it is a rerun of Lord Howe’s Budget of 1981, they have a duty to vote against it. I know that power is tempting. The Secretary of State is in power and has been tempted by office, but there are Liberal Democrat Members who are not in office, and they need to examine their consciences between now and next Tuesday. They should ask themselves, “Is this what I came into politics for?” That is the argument that I shall develop in my speech.

[Chris Huhne]

I wish to nip in the bud any temptation for the right hon. Gentleman to make parallels between what my right hon. Friend the Chancellor has announced and what Lord Howe announced in the early 1980s. The right hon. Gentleman says that this Budget is worse, but if he looks at the fiscal tightening set out in the cyclically adjusted budget deficit in the Red Book, it is 0.5% of GDP. The right hon. Gentleman is too young to remember, but the Howe Budget was more than 2%. So this is a very different Budget. We are talking about something that allows growth to continue, and indeed safeguards growth, precisely because it takes us out of the firing line of the southern European crisis.

[Edward Miliband]

I am afraid I disagree with the right hon. Gentleman. The fiscal tightening may be less than the Howe Budget, but he has to look at overall conditions in the world economy. There is a reason why President Obama has written to G20 leaders ahead of the meeting this weekend to warn about the dangers of early exit from fiscal stimulus. President Obama is worried about the world economy. Of course one has to look at fiscal tightening, but one also has to look at conditions in the world economy.

Let me develop my argument. First, let us look at economic growth. There was an honest difference of opinion at the election about economic growth and how we could ensure that growth, which is the surest way of reducing the deficit, could be maintained. The Labour party was on one side of the argument. We said that growth should be maintained by maintaining spending this year. The Liberal Democrats—the Secretary of State admitted this—were also on our side of the argument, and the Conservatives were on the other side of the argument.

The Secretary of State made much play in his speech about Greece—the Greek defence as I called it last time. He said that everything had changed because of Greece. Has the right hon. Gentleman changed his position because he is now in power and must defend a Conservative Budget, or is his change of position genuine? If it is genuine, we should give him credit for that, but I am afraid I have to say to him in all candour that it cannot be a genuine change. Look at the facts. He made great play of the fact that Greek bond yields had gone up from 7% at the beginning of the election campaign to 12% on the day of the election. The question is not whether Greek bond yields went up but what was the impact on the UK. What happened to UK 10-year bond yields between those two dates? Ten-year bond yields went down during that time, so there is no evidence for his claim about contagion.

The right hon. Gentleman must face a hard and uncomfortable truth. I do not blame him for taking the chance of office that he was offered, but he must come clean with us and admit that he has had to accept a macro-economic strategy totally at odds with the one that he went into the election defending.

[Chris Huhne]

rose—

[Edward Miliband]

I will give way to the right hon. Gentleman. Perhaps he will say that because he wants to do good things at the Department of Energy and Climate Change—I do not doubt his good intentions—it was worth paying the price of supporting a Budget that he would have opposed before the election. That is the reality of the situation.

[Chris Huhne]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. May we have short interventions? The right hon. Gentleman has already made a speech, and there are a lot of Members to follow.

[Chris Huhne]

May I remind the right hon. Gentleman that the former Chancellor of the Exchequer said that the ice always looks most solid just before it cracks? The contagion affected other countries in Europe including, as I cited, Spain, which had a lower central Government debt to GDP ratio than ours, and it is irresponsible to suggest otherwise.

[Edward Miliband]

I would give the right hon. Gentleman more credit if he had been more explicit about all these dangers before the election.

Interestingly, the right hon. Gentleman has been sufficiently concerned about the public finances to put pen to paper. We should take at face value the concern that he expressed at the start of the financial crisis in an interesting article in The Guardian titled “Cameron and Osborne are peddling skewed facts and scaremongering on public finances”. He felt moved to open his article by writing:

“You do not normally expect opposition politicians to leap to the defence of the government of the day, but there is an important national interest in doing so on the key issue of public finances. If David Cameron’s view that the ‘cupboard is bare’ gains ground, not only will policymakers feel more constrained, but we will risk thinking and talking ourselves into a worse downturn.”

He does not even have a blank record to defend, because his record is one of defending us on the public finances—[Interruption.] I do not want to take up too much time, but if he wants to explain away his article, I shall give way to him.

[Chris Huhne]

The right hon. Gentleman really has to take on board my case that while there was no evidence of contagion at the beginning of the election campaign, there was massive evidence by the end of it. I changed my mind when the facts changed. He has not done so, but he should not be proud of that.

[Edward Miliband]

No, at the end of the election campaign the right hon. Gentleman was offered the chance of office—and that is the sad truth of why he changed his mind.

[Chris Huhne]

The right hon. Gentleman recently accused me of not changing my mind because I wanted office when he suggested in a newspaper interview that our negotiating sessions with the Labour party showed that we had somehow become right wing because we were insisting on cuts in this financial year. He cannot have it both ways: either we accepted the cuts for opportunistic reasons because we wanted office; or we are saying that the facts have changed and we need to move the economy away from the risks of contagion from southern Europe.

[Edward Miliband]

The right hon. Gentleman’s defence is becoming even more contorted—I am not sure that even I understand it now. I shall make some progress.

The real problem with the Budget in respect of economic growth is that it ignores the lessons of Keynes. The right hon. Gentleman is defending a Budget that, on the Chancellor’s own figures, will reduce growth by 0.3% next year and lead to 100,000 fewer people in work not just this year, but next year, the year after and the year after that. Even that scenario is optimistic according to independent forecasters such as the Chartered Institute of Personnel and Development, which says that unemployment will go on rising, so there are real dangers in the Budget strategy.

A further problem with the Budget is that it has no plan for growth. The right hon. Gentleman waxed lyrical about green industries, but he can point to nothing in the Budget that will support the green industries of the future. The Liberal Democrats said at the election that they opposed cuts this year, but they are making not only the efficiency savings that the Conservative party promised at the election, but real cuts to regional development agencies, university places and Government support for industries of the future, the most outrageous example of which is the case of Sheffield Forgemasters.

During the debate on the Gracious Speech, I told the right hon. Gentleman that we would hold him to account on the Sheffield Forgemasters decision—and he will be held to account for it. I have to say to him in all honesty that the decision is short-sighted, damaging and wrong. The Labour Government approved a loan to Sheffield Forgemasters—not a grant, a loan. We had money from the European Investment Bank—those people do not throw money at problems when it is not required—and Westinghouse, which was going to order parts for the nuclear power stations that it wants to build in the UK, which will involve one of the only two reactor designs that we are going to have in the UK. The decision was therefore central not only to our economic strategy but to our green strategy. I know that the right hon. Gentleman does not like nuclear power, but prejudice against it will get us nowhere, either economically or in relation to the green industries of the future.

The grant to Sheffield Forgemasters would have given us the ability to make key components for the nuclear industry that currently have to be sourced from outside Britain, but the Government have turned their back on it. The Minister of State, Department of Energy and Climate Change, the hon. Member for Wealden (Charles Hendry), who is in the Chamber, is an honourable guy whom I respect, because he supports nuclear power—that is slightly complicated given his Secretary of State—but during a debate on Tuesday, he said about Sheffield Forgemasters:

“If one went to a bank and said, ‘I need an overdraft because I want to give more money to charity,’ the bank would question the wisdom of that approach.”—[Official Report, 22 June 2010; Vol. 512, c. 26WH.]

Sheffield Forgemasters is not a charity. It has the potential to be at the centre of the green industrial revolution that our country needs. I have spoken to the management of Sheffield Forgemasters, the unions and people in Sheffield, so I know that they are bemused by the Government’s decision.

I was the Minister who, along with Lord Mandelson, signed off the loan—it is not a grant—after we had looked at the arrangements over 18 months in government. It passed a whole set of value-for-money considerations, yet the Government have cut it off. I hope that the Secretary of State can force a reconsideration of the decision—

[Chris Huhne]

rose—

[Edward Miliband]

I have given way to the right hon. Gentleman a number of times, but if he is going to say at the Dispatch Box that he will reconsider the decision, I shall give way, albeit more in hope than expectation.

[Chris Huhne]

Does the right hon. Gentleman really think that an appropriate use of public money would be to ensure that the major shareholders in Sheffield Forgemasters do not have to reduce their equity holdings below 51%? I do not think that it would be.

[Edward Miliband]

That is an extraordinary statement to make on the Floor of the House. A set of commercial negotiations was carried out with Sheffield Forgemasters. The decision was signed off by the permanent secretaries of DECC and the Department for Business, Innovation and Skills as a value-for-money loan, but now the right hon. Gentleman questions that.

The right hon. Gentleman’s explanation is different from that offered by the Chief Secretary to the Treasury, who said that the loan represented value for money, but the Government did not have the money. The Secretary of State is not only wrong to oppose the loan, but confused about the reason why it is not being offered. I am afraid that the Government are hampering the green revolution that we need.

[Toby Perkins]

Does my right hon. Friend agree that the fact that a Liberal Democrat Chief Secretary to the Treasury came to the House to tell us the decision about Sheffield Forgemasters, and that a Liberal Democrat Secretary of State is supporting that decision today, is just another sign of how the Conservative Government are using the Liberal Democrats as a fig leaf, which will shame the leader of the Liberal Democrats in his Sheffield constituency?

[Edward Miliband]

My hon. Friend is completely right. He has experience of booting out Liberal Democrats locally—something that will happen in many constituencies at the next general election. It is blinkered short termism: that is the only way to describe what they have done.

What is the assessment of the Budget from a green point of view? Friends of the Earth says that the

“June Budget does little to suggest”

that the coalition will keep the

“promise to be the greenest Government ever.”

That is not a very good start, but I want to reassure the Secretary of State by telling him that there is praise for the Budget from an unlikely quarter. Roger Helmer, a Conservative MEP and a well known climate change denier, quite likes the Budget and says:

“Green lobbyists are whingeing that ‘this is the least green Budget for years’. Brilliant! Well done George. Maybe we’ve come to our senses”.

I have to tell the Secretary of State that for the first Budget in which he was involved to have congratulations from Roger Helmer and condemnation from Friends of the Earth is not a very good start.

The second test we should apply to the Budget is that of fairness. Is it a fair Budget or not? Let us be clear: as well as going beyond the decisions that the Liberal Democrats advocated for the first year, the Budget goes well beyond the pace of deficit reduction that they recommended. To sustain the Secretary of State’s argument, we are talking about not only cuts now, but a much faster timetable. He shakes his head, but the Institute for Fiscal Studies analysis published at the time of the election shows that the Liberal Democrats had set out exactly the same pace of deficit reduction in 2014-15 as we had, but this Budget goes beyond that, with £30 billion of extra cuts in spending and the rise in value added tax.

The question at the heart of the Budget debate over the past 48 hours is where do the cuts fall? Who bears the burden? That is the question that Lloyd George asked in this House years ago. The truth is becoming clearer: this is a regressive Budget, not a fair one. The Chancellor claimed in his speech that the Budget was fair, and I think it important to quote him exactly. These are not my words, but those of the Chancellor of the Exchequer. He said:

“Overall, everyone will pay something, but the people at the bottom of the income scale will pay proportionally less than the people at the top. It is a progressive Budget.”—[Official Report, 22 June 2010; Vol. 512, c. 180.]

That is simply not the case. That was exposed yesterday by the IFS. When one looks at the Budget measures, one sees that it is regressive, not progressive. According to the IFS, as my hon. Friend the Member for Leeds West (Rachel Reeves) said, as a result of the measures in the Budget the poorest 10% will pay four times more as a proportion of their income than the richest. I repeat: four times more.

[Matthew Hancock]

Will the right hon. Gentleman give way?

[Edward Miliband]

I will give way to the hon. Gentleman in a minute, because as a former adviser to the Chancellor, he might be able to explain what is going on—but let me offer an explanation first.

What the Chancellor did was an extraordinary sleight of hand. He published in the Red Book figures that take credit for Labour’s last Budget, which was progressive, and he combined the impact with that of his regressive Budget. Remember, this is a guy who claimed in his Budget speech that there was a renewed transparency and honesty in the Budget process. What he had done was exposed within hours by the IFS. I give way to his former adviser.

[Matthew Hancock]

I can certainly be more proud of having been an adviser to the current Chancellor than if I had been an adviser to the one who said that he had abolished boom and bust.

Following on from the right hon. Gentleman’s misleading use of statistics, which are described by the OBR on page 93 of the Red Book as “misleading”, does he agree with me that the IFS said that when all the Budget measures are taken into account, the impact is greatest on the richest 10%, not the poorest 10%, and that he is quoting partially?

[Edward Miliband]

I want to be generous to the hon. Gentleman, as a new Member of Parliament, but I fear that he has walked into the most enormous elephant trap. Let me read from the last page of the IFS handout:

“Treasury said that reforms to be implemented between now and 2012-13 progressive, but

—This is mainly because of reforms announced by the previous government

—They only look at reforms to 2012-13—benefit cuts announced yesterday for subsequent years hit the poorest hardest”.

The IFS concludes:

“So likely that overall impact of yesterday’s measures was regressive”.

If the Chancellor wants to bring a new transparency and honesty to the debate, he cannot take credit for measures announced by my right hon. Friend the former Chancellor and say that they are somehow part of his Budget.

[Chris Huhne]

rose—

[Edward Miliband]

The right hon. Gentleman is itching to get back in, but let us be clear. The Chancellor’s words—the words a Chancellor uses in his Budget speech are a grave matter—were:

“It is a progressive Budget.”—[Official Report, 22 June 2010; Vol. 512, c. 180.]

I cannot see how that can possibly be the case, but perhaps the right hon. Gentleman, in his newfound role of defending the Conservative party, can.

[Chris Huhne]

The reality is that it is perfectly legitimate for the Treasury to analyse pre-announced measures as well as the measures that are announced, because a new Government reverse measures that they do not like and confirm measures that they agree with. Look at, for example, the decision to freeze the threshold at which the higher rate of tax begins to be paid. Does the right hon. Gentleman support that measure? It will increase the progressive element by taking more tax from the best-off.

[Edward Miliband]

The doublespeak just gets worse. The Conservatives spend the election attacking the Labour Government for putting up national insurance contributions on employees, then they produce their own Budget which is regressive and unfair, then they realise that that will be pretty damaging for them, so they take credit for a measure that they used to attack. That cannot possibly make sense. The truth is that the Chancellor made a claim in his Budget speech that the Budget was progressive. The Institute for Fiscal Studies, to which the Chancellor referred in his Budget speech, has said clearly that if one looks at the measures announced in the Budget one sees that it is a regressive Budget—and not just regressive, but deeply regressive, because the poorest 10% pay three and a half times more than the richest 10%. However much they may twist and turn with the help of their new friend, the Secretary of State for Energy and Climate Change, who is auditioning to be a member of the Conservative party, it will not help them. People can smell it. People can see through the doublespeak.

[Mr Mark Field (Cities of London and Westminster) (Con)]

The right hon. Gentleman has made a statement about national insurance that he knows does not tell anything like half the truth. Our objection always was to the employer’s element—the jobs tax element—of the national insurance rises. It is that element that we have been very glad to put to one side, rather than the employee’s element, to which he gives such undue prominence.

[Edward Miliband]

I have enormous respect for the hon. Gentleman, but he will have to do better than that.

[Rachel Reeves]

Can my right hon. Friend confirm that, in addition to what I said earlier about this Budget affecting the top decile by just 0.7% and the bottom decile by 2.6%, Labour’s March Budget had an impact on the top decile of 7% and absolutely no impact at all on the income of the poorest decile? There is a different way of doing a Budget, and that was a progressive Budget.

[Edward Miliband]

My hon. Friend is right, of course. That is the difference between a Labour Budget and a Conservative Budget—

[Joan Ruddock (Lewisham, Deptford) (Lab)]

And the Lib Dems.

[Edward Miliband]

I am coming to them in a minute. That has been the case historically, but the difference this time is that the Liberal Democrats are faced with a choice. The hon. Member for Bermondsey and Old Southwark—someone I respect; a person of good conscience who came into politics to make our country fairer—has a big decision to make. He is not going to fall for the stuff we have heard from the Secretary of State for Energy and Climate Change, trying to explain away the Budget.

The hon. Member for Bermondsey and Old Southwark knows an unfair Budget when he sees one, so he has a decision to make in the coming days. He has an honourable path to take. He can say, “Up with this I will not put.” That is what Liberal Democrats throughout the country will expect him to do. Maybe he will defeat the Budget, maybe he will get the Government to rethink parts of it, but he could lead a movement, not just of Liberal Democrats in the House but of Liberal Democrats outside the House who will join him. He did not come into politics to put up VAT or to freeze child benefit. He campaigned against the freeze in child benefit in the 1980s under Mrs Thatcher. He did not come into politics to abolish the health in pregnancy grant. He did not come into politics to do those things, and he is not in office. He does not face the choice of resignation: he faces the choice of how to vote. In all candour I say to him that he wanted a Lib-Lab alliance after the last general election because he knew what would happen otherwise. He saw it in the runes. He saw where things would go, and he was proved right. But now he faces the ultimate choice in politics, which is between principle and expediency—and he should follow principle.

[Ian Swales]

Yesterday The Independent described the Budget as a social democratic Budget. I came into politics via the Social Democratic party, and I am very happy with the Budget.

[Edward Miliband]

The hon. Gentleman should not believe everything that he reads in The Independent. I say in all seriousness to him that, as we saw, the presentation from the Chancellor was that this was a fair Budget, and for a few hours it fooled some people, who thought that perhaps it was fair. But that has been completely exposed and blown apart by the Institute for Fiscal Studies. The Secretary of State shakes his head, but we all know what he would be doing if the Budget had been presented and he was not in government. He would be railing against it with his great eloquence. He would be talking about what he came into politics for: his belief in fairness.

One of the central arguments of the leader of the Liberal Democrats at the election was that the poorest people in our society paid too much in tax and the richest paid too little in tax. That was the central and powerful claim made by the Liberal Democrats at the election. The question one must ask is: what happens as a result of the Budget? It makes the situation worse. How can the hon. Member for Bermondsey and Old Southwark possibly vote for that? This is not a Budget that he can in all conscience support.

The Budget does not help to lay the foundations for economic growth and it is not fair. It also attacks some of the most important things that we have in this country to help the poorest families, such as tax credits. The Chancellor said in his Budget speech that he would reduce payments to families earning over £40,000 next year, but we learn from the Red Book that the cuts are for those earning over £25,000 a year—not well-off families.

What about fairness? How have the banks fared as a result of the Budget? The banks were a big target for the Liberal Democrats during the election campaign. [Interruption.] The hon. Gentleman shouts “Bank levy”. Perhaps this is the saving grace for the hon. Gentleman. Perhaps that is something that he can cling on to. It is interesting, because that is starting to unravel too. There was much trumpeting of the bank levy in the Budget as a fairness measure. But the reality is that the corporation tax cut from 28% to 24% will help every bank in the country. HSBC’s banking analysts say:

“We’d expect most domestically-orientated banks…to be better off after four years than they were pre-Budget.”

When the measures are taken together, the banks are not worse off but better off—another shred of credibility for the Budget destroyed. Deutsche Bank says that it is a good outcome for the banks. It is plain to see who bears the burden. This is not a Lloyd George Budget; it is a repeat of the unfair, unequal, unjust Tory Budgets of the past.

I end on a point about trust and credibility. The Liberal Democrats said that there should be no spending cuts this year; now they support them. They said that they supported our four-year deficit reduction plan; now they do not. They said that there should be no VAT rise; now they support it. They said that there should be protection for young people through the future jobs fund; now they support its abolition.

It takes a long time to establish an honourable political tradition, but it takes a very short time to destroy it. This is a week of judgment for the Government, but in particular it is a week of judgment for the Liberal Democrats. I say to them very clearly that they should exercise their conscience and be willing to oppose the Budget. The question that the hon. Gentleman and his colleagues need to consider this weekend is whether they are still the party of Keynes, Beveridge and Lloyd George. We all know that those three men would turn in their graves at the idea that the inheritors of the liberal tradition were supporting this Budget.

Today, Liberal Democrats face the ultimate choice between power and principle. They did not come into politics to raise VAT, freeze child benefit or do all those other things. No doubt they think that voting against the Budget would truly make them turkeys voting for Christmas. The opposite is true. If they vote for the Budget it will bring unfairness and injustice to the people whom they claim to represent. It will go against everything that they have claimed to stand for, and it will destroy for ever their claim to be a progressive alternative. That is why they should vote down this unfair, unjust Tory Budget that will damage our economy and divide our society. That is why they should join us in the No Lobby to vote down the Budget next week.

13:26

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

I am happy to take part in what is clearly an important debate, in which we are invoking the spirits of forebears of mine, of ours, whom I pray in aid as part of the traditions to which I belong. Lloyd George, Keynes and Beveridge are indeed part of the family of progressive liberals, of whom I regard myself as a modest inheritor.

The most important thing that was announced in the area of energy and climate change and environmental policy, the specific theme of today’s debate, was the green investment bank. It had been a Labour party commitment, and the Conservative party and Liberal Democrats were clear that it should be invented, created and got up and running. It is absolutely central to this Parliament’s strategy that we set up that bank in the near future. It must not be a modest little invention hidden away in a corner; it must be a central part of the new stage of the British economy and it must draw on money from the private sector, which will be used for projects that would not otherwise be funded. But it must also help us to invest in the new generation of green jobs that will make us again the country that can export our manufacturing abilities and the success of the world. For the last 25 years, we have slipped back in manufacturing and exports in these areas and have relied too much on the City, on finance and on banking. That is not enough to sustain a modern economy, and it is not enough to change the environmental way in which we do our business and honour our international obligations.

The second specific area that was much discussed when I shadowed the right hon. Member for Doncaster North (Edward Miliband) and my neighbour the right hon. Member for Lewisham, Deptford (Joan Ruddock) was how to ensure that households and individuals play their part. The Labour party started that process and I pay credit to the right hon. Lady and her right hon. Friend for beginning to ensure that we make households energy efficient, reduce bills, insulate homes properly, protect the vulnerable, and so on. But the scheme was never big enough; it was always a set of schemes that were confusing and lacking in coherence. The phrase “Green Deal” comes from the Conservative manifesto, but the idea comes from both manifestos. That we have a green deal for households must also be a central part of the Government’s strategy. We need to ensure that the new housing that is built and the housing that needs to be renovated and improved give us the safe, warm and pleasant housing that we need. My right hon. Friend the Secretary of State knows as well as anybody else, because he was the architect of the policy in our party a mere three years ago for a carbon neutral Britain, that the crucial area here is to ensure that the poor and the vulnerable are protected first, and that the people who spend a huge amount of their money on fuel when they cannot afford it are given the help that they need. One of the criticisms that I must repeat of the Labour Government, which I made when they were in office, is that when it came to helping the fuel poor—those who pay more than 10p in the pound of their income on fuel—they sadly failed. They tried, and I do not doubt their integrity in trying, but they failed, and we have to do better than that. We have to ensure that single people on their own, who make up 40% of households, and those with families do not have the ridiculous, out-of-control bills that they had; that we save the fuel and reduce the energy that we need as a country; and that we reduce our climate change liability.

[Dr Whitehead]

Does the hon. Gentleman agree that, if a programme such as that which he envisages is to have any real traction, there is an absolute imperative to defend and increase the almost £200 million that was set aside for the insulation of hard-to-treat homes and social housing? Will he put that in his book as a red line on Government investment in the energy efficiency uprating of social housing? If that investment does not appear, will he publicly underline his opposition to energy efficiency improvement methods that are not underwritten properly by Government funding?

[Simon Hughes]

The hon. Gentleman has a good, honourable and knowledgeable track record on the issue, and, as he would expect, in this Parliament I have already met the Housing Minister, the Secretary of State for Communities and Local Government and my friend the Secretary of State for Business, Innovation and Skills to ensure that those points are made. We are just beginning the debate about where the spending cuts must be made, and a coalition of Members needs to put the case for retaining that expenditure which is necessary to pump-prime, drive and incentivise the housing stock change that we clearly need. The other central point, on which the Government have made a commitment, is to introduce the power of general competence to local councils, so that they have much more flexibility over how they address such issues.

Thirdly, on the green agenda, I note the comments that my right hon. Friend the Secretary of State for Energy and Climate Change made about the carbon price, and we await with interest the publication of the proposals to reform the climate change levy. However, I remind him that we ought to reconsider introducing the emissions performance standard, which both our parties were willing to do. Labour resisted it, but I hope that it gets back on the agenda as a way of ensuring that we make progress not just in our country, but throughout Europe.

Fourthly, and more controversially, there is nuclear power, to which the Budget referred not specifically, but indirectly in relation to Sheffield Forgemasters. I made my position clear about nuclear power before the election, and when the initial announcement was made about the Sheffield Forgemasters loan, and I have always believed that the nuclear industry will not have a viable future unless it receives public subsidy. I have never had a theological opposition to nuclear power. I believed that it was the wrong answer, contributing too little to emissions reduction and to the country’s power needs, but in that context the Sheffield Forgemasters loan was inconsistent with a policy of not subsidising the nuclear power industry.

The announcement is difficult for Sheffield and for south Yorkshire, but we have to have a policy that applies from the beginning to the end, and we have to be tough on that. In reality, other countries such as Germany have now introduced a tax on nuclear power stations to make up for the fact that the industry benefits from a carbon price but does not pay for the clean-up of the legacy nuclear waste. There must be economic realism in the nuclear industry. That has been our position, and it has been accommodated in our parties’ agreement.

There is another matter on which I have lobbied the Government but not yet seen anything emerge, and if it could be dealt with in the ministerial winding-up speech that would be helpful. It is about helping with biodiesel that is made from recycled vegetable oil. I declare two interests: I drive a vehicle that uses it; and there is a firm in my constituency from which I purchase it, and which in turn takes it from firms locally. It is a good and environmental product, but the financial incentives for biofuels do not yet encourage the industry to grow. It is an industry of small businesses, it ought to be incentivised but the Treasury loses out because of the wrong incentives as well as inadequate incentives for the sector. I hope that that issue will be looked at, and that we might introduce an amendment to the Finance Bill in order to pick up on that individual and ring-fenced item.

On the Budget as a whole, the right hon. Member for Doncaster North rightly said that I had always assumed that the more natural coalition, had it been achievable, would have been between the Labour party and ourselves. There is no secret about that, but in the end it proved undeliverable on two counts: first, the numbers did not add up, and this country needed a secure, majority Government; and, secondly, the Labour party was not willing to move on key issues. They included political and electoral reform and a fairer taxation system—in particular, taking people on low incomes out of tax.

The measures that commend the Budget are specifically items that were in the Liberal Democrat manifesto, on which I did fight the election. They include, first, linking pensions with earnings. The link was broken by Mrs Thatcher and never reintroduced by Labour, but its restoration next year was committed to in this Budget. Secondly, there is the measure on taking people who have an income of less than £10,000 out of tax gradually, the first wave of which was introduced in the Budget, and which matters not to the absolutely poorest who have no incomes, but specifically to pensioners and working people who have a small income. Thirdly, there is the measure on increasing capital gains tax, because we believe that it should be set at the same level as income tax. There has been a debate among Government Members on that issue, and there is a difference in view, but there has been a move in that direction, which I applaud and recognise.

[Toby Perkins]

I congratulate the hon. Gentleman on his appointment as the deputy leader of the Liberal Democrats, but I fear it strangely apposite that at the moment he sits all alone on the Liberal Democrat Benches. If he feels that this is a coalition Budget, will he explain how much worse it would have been for the poorest people without the influence of the Liberal Democrats?

[Simon Hughes]

I am, and always have been, very clear about that issue. When it was obvious that there was no possibility of a coalition with the Labour party, we had the option either of letting the Conservatives become a minority Government or of being in coalition with them. I am very clear that it was better for the country and for the issues that matter to me that we were part of the Government—that we were influencing matters and ensuring that there was a shared programme, not a Conservative programme. I say that completely honestly, and the hon. Gentleman, with a constituency that is in some ways not dissimilar to mine, would expect as much. I have made it my business to battle for the people whom I represent in order to ensure that we end up with a fairer Budget, and a fairer Britain as the outcome. The election, the Budget and the next exercise, the spending cuts, must all be judged on whether we end up with a fairer Britain.

Let me therefore address the remaining issues that follow from that. There has been some press speculation that, because certain items are expensive, they are unaffordable and should be dropped. They include items for the poor, such as the freedom pass and the winter fuel allowance. There is no issue between me and my friends on the Treasury Bench, but the coalition deal is a deal and what has been agreed must stand. There cannot be any unpicking of items in that deal, otherwise the whole thing risks falling apart. There is no suggestion of that from the Government; there is a suggestion from outside the Chamber of changes. However, the deal must be that we go down the committed road. We signed up and the Conservative party signed up, all compromising where appropriate, and that must stand. If there were any suggestion that it change, there would be trouble. I do not think that it will change, because I have heard nothing from colleagues in government suggesting that they want it to, but let us be clear from the beginning: it is a deal, and if it is stuck to, it will last the five years.

I turn to yesterday’s Institute for Fiscal Studies report. The IFS is a respected organisation. It made clear that the Budget as a whole increases fairness, but that if it excluded the matters that were implemented by the Labour Government in the Budget earlier this year it would not be. However, the Budget does not exclude them; it has endorsed and continued them. The right hon. Member for Doncaster North and I know each other well, but the Government have continued with those elements that the previous Labour Chancellor introduced in the routine Budget earlier this year.

[Helen Goodman (Bishop Auckland) (Lab)]

Are you taking credit for it?

[Simon Hughes]

No, we are not taking credit for it—we are just making sure that we look together at the measures that this country has as its tax regime in the coming days and months.

On that basis, this is a Budget that produces greater fairness. There is difficulty in reaching the people at the very bottom end of the income scale who are not in work, and there are other difficult areas. However, my right hon. Friend the Chief Secretary and my hon. Friend the Member for Thornbury and Yate (Steve Webb), the Pensions Minister, who come from a proud tradition of knowing these issues well and campaigning for the poor and the disadvantaged, would not have signed up to something that undermines all the sorts of campaigns that they have been fighting for.

There remains the issue of VAT. I did not want a Budget with a VAT increase, nor did the Conservative party, and nor did the Labour party. I have no idea what was the view of some people in the Tory party behind the scenes, but there was a rumour that they would think it was a good thing. That is why, during the election campaign, we said that we thought it was a bad thing and challenged them to agree with us. Nevertheless, none of us ruled it out. I wish it were not here, as it is clearly less progressive than other taxes where people pay on the basis of income, but it is a necessary measure given that we have to fill the huge debt that the Labour party has left us.

We will vote for the Budget next week. However, if there are measures in the Finance Bill whereby we can improve fairness and make for a fairer Britain, then we will table amendments to try to do that. That is where we can make the difference, as we will during the spending review that will follow in the months ahead.

13:41

[Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)]

I have seldom been so disappointed with a speech by the hon. Member for Bermondsey and Old Southwark (Simon Hughes) as with the one that we have just heard. I suspect that he will find life even more uncomfortable as time goes on. Having listened to the speech by the Secretary of State, and then heard the support offered by the hon. Gentleman, it seemed to me that many Liberal Democrat supporters will be thinking that this must be the biggest conversion since the Chinese general baptised a whole army with a hosepipe. We have had a whole election campaign in which many of the things commended today by Government Members were not only blatantly opposed by Liberal Democrats, but disowned.

I have had the privilege of serving for many years in the constituency in Lanarkshire that I represent, where my next-door neighbour was the late John Smith. More than once, he said to me, “You know, I judge a Budget on the impact I think it has on ordinary young men and young women, with all their aspirations, living in a council house in Lanarkshire.” It is on that test that I make my views clear.

We have heard today a defence of a Budget that is thoroughly unfair and absolutely vindictive towards a large number of people in this country, region by region, not least those in my own constituency. I am not at all surprised that the Conservatives have supported what is a Tory Budget; it is the kind of Budget that they have always wanted to introduce, with or without a global crisis. However, I have to say that the apologies from the Liberal Democrats are profoundly unconvincing, as they have shown again today. As Jeremy Thorpe might have said, “Greater love than this no man has—that he laid down his principles to save his Mondeo and his red box.”

I have to tell Government Members frankly that their claims for this already discredited Budget stand in stark contrast to the consequences for my constituents in Coatbridge, Chryston and Bellshill. For several years before the election, and then again during it, the Conservatives talked about “a broken Britain”, but no Budget has done more to introduce a broken Britain than this one. The most vulnerable have been attacked, with housing benefit cut, child benefit frozen, the health in pregnancy grant scrapped, and the maternity grant slashed—and we are told that this is a fair Budget.

Then we come to what I would regard as perhaps the most appalling aspect of this Budget—the increases in VAT, hugely painful because they are clearly regressive. A 2008 report by the Institute for Fiscal Studies demonstrated that cuts in VAT benefit the poorest 10% most, while increases hit them hardest. That is why during the election the Tories were particularly ambiguous on this specific issue, although I have no doubt that they had this policy in mind all the time. To be fair to the Liberal Democrats, they did warn us—for example, by unveiling a poster showing a “VAT bombshell”, with their leader standing beside it. What we got on Tuesday was a Trojan horse with their leader and his friends standing inside it.

We are told that we are all in this together—that this Budget is indeed fair. I invite the House, then, to contemplate for a few moments what it means for a constituency like mine. In Coatbridge, Chryston and Bellshill, the average wage of those in work is £18,000. Unemployment stands at 7.4%—lower than in 1997, but clearly unacceptable. Let us look at Tatton, the Chancellor’s constituency. The average wage is over £25,000, and unemployment stands at 2.9%. In Twickenham, the Business Secretary’s constituency, the average wage is over £33,000, and unemployment stands at 2.5%. Yet this Budget is being applied to the whole nation.

Of course there is a crisis, as recognised most recently in the letter that President Obama sent to those involved in the G20. However, the words that he repeatedly used about investment, about real fairness—and, above all, about growth—were hardly reflected in the Budget that we are asked to approve. More sustainable ways to reduce the deficit clearly apply to the growth that President Obama has promoted and that, along with progressive taxation, Labour Members strongly support.

I can see that for the Tories this is a matter of ideology. They do not like the public sector: they have made no bones about that. The public sector provides education, excellent services from the police, and infrastructure for providing new jobs—and, my heavens, we will need them after this Budget. How can they possibly argue that this Budget will not lead to unemployment? We need to build more schools. We need to make more industrial parks available, hoping to invite inward investment, via the regional authorities, and making more money available so that the Government are creating the environment by which jobs can be provided.

[Kwasi Kwarteng (Spelthorne) (Con)]

What does the right hon. Gentleman think about the remarks written down by his party’s former Chief Secretary to the Treasury, the right hon. Member for Birmingham, Hodge Hill (Mr Byrne), who said, I believe, “There is no more money”?

[Mr Clarke]

I had assumed that the hon. Gentleman had a better sense of humour. It was clear to the whole country that it was a joke, so I do not regard that as being a serious point.

The Government blame the public sector for the recession, but what about the banks? [Interruption.] We must ask that question. My right hon. Friend the Member for Doncaster North (Edward Miliband) dealt at some length with how we have approached that important matter. While the Government have been hammering away at the poorest people in the poorest parts of our country, they have treated the banks with a feather duster. They have hardly responded to the problems that the banks themselves created, and no Member on their Benches can defend that.

[Rachel Reeves]

Does my right hon. Friend agree that it does not seem fair that the welfare bill will be cut by £11 billion, but we are asking the banks to contribute only an extra £2.4 billion?

[Mr Clarke]

Absolutely—that is an excellent point. Indeed, I wish now to compare the Budget’s response to local government, and to people applying for disability living allowance, with the way in which the Government have treated the banks. They have certainly not done so in a way of which my constituents, or the disability and local government organisations that I know of, would approve.

What the Government have done to local government is to cut, cut and cut again. They have offered the public a freeze in council tax but failed to explain that the services that they and the House have imposed upon local authorities cannot possibly be carried out without other services being slashed, including social services and social work for the most needy. That is clearly missing from the thoughts of coalition Members. I invite them to compare that with their approach to the banks, which I was heckled for mentioning.

What about those who seek to live on DLA? We are told that one by one, they are going to be recalled and re-examined. I was a Member of the House in the early 1980s when we had that version of Thatcherism, and I want never again to see men who have worked in the mining industry, and who have to be helped into my surgeries because they can hardly breathe, being cut off from benefit because they are told that they can walk 50 yards. If that is the type of policy that the so-called coalition Government are planning, which I believe it is, they can expect the utmost opposition.

At a time when there is a clear demand for housing, what the Government have done to housing support is simply disgraceful. I say that as somebody who was in local government before coming to the House. Even the Evening Standard had to point out last night that because of the Government’s approach to housing benefit, more poor people would be made homeless. I predict that local councils faced with the financial challenges that that represents will build fewer and fewer social houses, which the Liberal Democrats told us before the election were one of the important issues for them.

[Matthew Hancock]

Will the right hon. Gentleman give way?

[Mr Clarke]

I will not, because I know others want to speak. I wish to conclude now for that very reason—many hon. Members wish to speak about the situation in their constituencies and the Budget’s impact on ordinary people and communities. They want to do so partly because we have seen this situation before—not in this generation, but certainly in the 1930s and the ’80s, and we do not want to see it again.

This is a regressive and dangerous Budget that will hit the poor hardest. Yesterday, my hon. Friend the Member for Derby North (Chris Williamson) referred to Orwell’s “Animal Farm”, and I wish to conclude by quoting some words from that work:

“Twelve voices”

—I look at the mixture of Liberal Democrats and Conservatives on the Government Benches—

“were shouting in anger, and they were all alike…The creatures outside looked from pig to man, and from man to pig, and from pig to man again; but already it was impossible to say which was which.”

But the British people can see through that.

13:54

[Michael Fallon (Sevenoaks) (Con)]

It is always a pleasure to follow the right hon. Member for Coatbridge, Chryston and Bellshill (Mr Clarke), but he will not be surprised that I cannot agree with his analysis. I wish to make two specific comments to him. First, he spoke passionately on behalf of the poorest people in his constituency, but I cannot see how one helps the poorest and those out of work in Coatbridge by messing up the public finances and producing spending plans that are unaffordable and cannot be carried through. Making promises of that kind does the poor no favours.

Secondly, I disagree with the right hon. Gentleman’s accusation that we take pleasure in the measures that were announced on Tuesday. There are many things in the Budget that I do not take pleasure from, and many spending cuts are coming that Members in all parts of the House will probably wish had not been made. There are certainly tax increases in the pipeline that we would not have wished for. However, many of the decisions that the Chancellor has taken were simply unavoidable because of the mess that we have inherited. We take no pleasure in the judgments that have had to be made.

It is heartening to Members on the Government side of the House, after so many years of hubris, boasting and declaration, to have a Budget that is so clear, honest and straightforward. Even if the right hon. Gentleman disagrees with the measures in it, it sets them out clearly and simply. It is refreshing to have a Budget that takes the longer view—a Budget for a whole Parliament. It is good to know now the structure of the measures in it, unpopular and unpalatable as some of them are to Members on our side of the House as well as his, and that if those decisions are carried through, the current structural deficit will be closed by the end of this Parliament.

It is refreshing also to have a Government who face up to a situation that has deteriorated rapidly, as we have seen in the eurozone. There is no exact parallel between our deficit and that of Greece, or between our debt and that of Spain, but there was a parallel between the Labour Government and the Governments of Greece and Spain in that all of them ignored successive warnings. They were all warned by the International Monetary Fund, the OECD and the European Commission to start putting their public finances in order, and they ignored those warnings. That is why we have had to be confronted with a second Budget in a year—an emergency Budget that puts right the weaknesses that have been identified.

[Mr Tom Clarke]

When the hon. Gentleman makes comparisons with other countries, will he bear in mind that we in Britain are not in the euro? Will he also, as he did when he was on the Treasury Committee, recognise that there is a big difference between short and long-term debt, and that that matters?

[Michael Fallon]

I accept both those points, and I am not drawing exact parallels with Greece and Spain. I am making the much more general point that when a country is warned by all the international agencies and commentators, and depends on the international markets to finance its accelerated borrowing, it has to listen to those warnings. That is why we are now confronted with a second Budget in three months.

The Budget is to be welcomed because the pain is quite clearly shared. We can of course argue about its relative impact on various deciles and so on, and we have had that argument. We can also discuss whether we should include the measures taken in earlier Budgets or just consider this Budget itself. What cannot be argued about, however, is that the pain is spread across all income groups and sectors. My constituents will bear some of that pain, just as the right hon. Gentleman’s constituents will in Coatbridge.

Let us be clear about some of the spending cuts that will ensue: they are legacy cuts; in the end, they are Labour’s cuts. We discovered that some of the spending promises made in January would, shockingly, have been financed from the reserve, which was set aside to ensure that our troops in Afghanistan would be properly financed if new need arose there for equipment and so on. It would have been raided to finance the extra spending commitments that were announced in the pre-election rush. The plain fact is that the spending was unfunded. We cannot continue to spend £700 billion and raise only £545 billion in taxes. That gap must be bridged and the Budget, for the first time in a series of Budgets, sets out a credible path for achieving that.

I am pleased that, when the Chancellor considered the make-up of those spending totals, he decided not to cut the capital spending programme further. That is important. Clearly, there are implications for jobs, and the capital spending totals were already being halved from their peak. There are explanations for that, but it was right not to cut them further.

I note that when the Chancellor reviewed the capital spending programme and future capital spending commitments, he was careful to preserve some of the commitments for key infrastructure projects in, for example, the northern cities. It is not true that the Budget hits Scotland, Lanarkshire or the north harder than other parts of the country. The dualling of the A21, for which we have long campaigned in Kent, was one of the first casualties of the spending review. Long-cherished projects in the south-east, too, are being further postponed. The pain is being spread across the country. That should be borne in mind when particular decisions, such as the loan to Sheffield Forgemasters, are considered.

I want to make three further comments about the Budget judgment. First, I assume—obviously, I must await the completion of the spending review—that there will be further contributions from annually managed expenditure. I assume that, as well as the decisions that have already been made—I accept that Labour Members may oppose them—about housing benefit and some of the other grants that have been mentioned, there will be more changes through some of the welfare reforms that my right hon. Friend the Secretary of State for Work and Pensions and his team are considering.

Secondly, I hope that, when an element of spending is protected, it will not be wholly insulated from the same downward pressures that we apply elsewhere to reducing management, eliminating unnecessary bureaucracy and focusing more spending on the front line. That must apply equally to health and international development as to other matters. Otherwise, in two, three or four years, those who happen to work in the health service will end up being better rewarded than those who have chosen to work in the education service or the police service. That would not be right.

Thirdly, I want to say a little more about the proposed freezes. There are freezes on public sector pay, child benefit and council tax. The reasons for them are all too obvious: the private sector has had to accept a huge measure of freezing—I pay tribute to trade unions in the private sector for the extent to which they accepted the necessary restraint on pay and the changes in working practices that had to follow in the teeth of one of the worst recessions we have had to face. It is therefore right that, as well as freezing pay, we should continue to consider the greater flexibilities that we need, and equity between the private and public sectors. Working practices, various entitlements and inherited rights should also be examined. It is not simply a question of freezing pay for two years and exposing public services to some of the problems that we have experienced in the past with incomes policy, when there is immediate demand for catch-up, immediate pressure for comparability and so on. While the freezes are in place, it is important to continue the search for radical reform, which helps restructure those services. That should apply across the public sector, where we have frozen pay and in local government, where we will freeze council tax. We must continue the drive for more efficient services, and shared services between councils.

The principle may also apply to some of the frozen benefits, such as child benefit, where freezing the benefit does not wholly tackle some of the inherent difficulties with universal benefits—the deadweight cost that is expended on those who are well able to afford to bring up their children but are entitled to exactly the same amount of child benefit as those much further down the income scale. Those issues need to be addressed while the benefits are frozen.

As we rebalance the economy away from the expansion in the public sector to encouraging the private sector to grow again—I welcome the enterprise measures in the Budget—it is enormously important to continue to focus effort on reskilling and ensuring that those who have to change their jobs and seek the new opportunities that are being provided have the necessary skills to alter their position in the labour market. We must get alternative training providers in alongside jobcentres and existing services.

Labour Members have described the Budget as a gamble. It is not a gamble, but a necessary judgment to restore the public finances and get our economy growing again in a way that provides the jobs of the future. We are in politics to make such judgments, and I am delighted that my right hon. Friend the Chancellor has set out his judgment so honestly in the Budget that I support.

14:07

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

In my speech today, I will examine several different issues of Welsh, UK and international significance, noting the impact of the new Budget on the Welsh economy and Welsh families and communities. However, I begin by asking whether the Budget was even necessary, never mind whether it deserves the billing of an “emergency Budget.” It was clearly a political and ideological Budget, designed to shrink the state, and not one that was economically needed.

Indeed, even the Financial Times columnist, Sam Brittan, called it a “totally unnecessary budget” in his column of 18 June. We already had figures from the March Budget from the new Office for Budget Responsibility, and we all knew that the major announcements are actually the cuts that will be announced in October in the comprehensive spending review.

On Tuesday, the UK Government confirmed that, except for health and overseas aid, departmental budgets are to be cut by 25% during this Parliament. If we map that level of cuts on the position in Wales, around 60,000 public sector jobs are at risk—15,000 more than the 45,000 job cuts planned by Labour in March. Indeed, based on today’s Financial Times figures, 65,000 public sector jobs are in danger in my country. That is very worrying for many families in Wales, and we believe that it is unnecessary and avoidable.

Clearly, the national debt and deficit must be tackled, but there is a question of timing, and I cannot believe that increasing the cuts in this way and at this time is in any way beneficial to the people of Wales. However, the implementation of the recommendations of the Holtham commission on funding and finance in Wales would be beneficial. A major plank of that was the recommendation that a floor of 114% of English spend be implemented immediately, to ensure that Wales does not lose out further under the Barnett formula.

Plaid Cymru is not alone in calling for that. Government Members may recall that the Liberal Democrat leader in Wales said on 7 June 2009 that

“the Westminster Government should act immediately”

in introducing a floor. That £300 million a year would save around 9,000 public sector jobs in Wales, but would be only the first step on the way to the fairer, needs-based formula that we need. It is therefore disappointing that all this has been put on the back burner. With so much work on the issue contributed by Gerry Holtham and his team, as well as three other independent reports, I cannot see the need for an additional commission after a successful referendum on further powers for the National Assembly.

There were other areas where the new Budget is both tough and unfair. The most important are the cuts in the welfare budget, to the tune of £11 billion in coming years. As figures in the Financial Times showed, any cuts in welfare or the public sector hurt areas that are already in need of more. The change from upgrading benefits according to retail prices index inflation to upgrading them according to the consumer prices index will mean a lower rate of benefit growth than before, as well as a stealth saving. Having worked for Citizens Advice Cymru, I can tell hon. Members that people who rely on benefits will struggle because of those changes, and we are talking about real people and families on low incomes, not the “welfare scroungers” that the political right like to caricature.

Specifically, the proposals to lower the number of people on disability living allowance are a cause for concern. In Wales, more than 240,000 people are on DLA. Having seen the impact of tribunals and stricter qualification criteria on other benefits, we have concerns about how the new changes to eligibility will be implemented and who will make the final decision. What appeals system will be in place, for example? We and disability groups support getting people into work. That is a good thing, but when such schemes are suggested, especially in such a manner and in such a Budget, there is a wider concern that they are just a means for getting people off benefits, rather than supporting them back into work.

I must also say that, in many parts of the UK, even if people are able to work, they cannot. Some parts of my country have very few jobs available, with between 10 and 15 registered jobseeker’s allowance claimants for each advertised job, and that is even before adding people who are switched from disability benefits. It is the same with parents of young children going back to work. If the work is not available and we are forced into making savage cuts in the public sector, how are those people to find work?

However, there are some steps in the Budget that we welcome. There was a recognition that Wales and other parts of the UK have not shared in economic growth in the past and that a level playing field is required. Quite how Labour managed to create or accept a situation where only one private sector job was created in the north or midlands of England, but 10 were created in London, is beyond me. That shows Labour’s failure of imagination in growing or developing a balanced economy. However, the Conservatives’ proposal to allow a national insurance holiday is hardly likely to correct the years of economic centralisation in London and the south-east of England, or rebalance the economy geographically.

A more far-reaching idea might be the regionalisation of corporation tax according to gross value added. That would give the poorest nations and regions a competitive advantage. In west Wales and the valleys—the areas that I represent—GVA is only 64% of the UK average, so additional assistance to equalise that across the UK would be warmly welcomed. Another avenue might be the devolution of that tax, so that the Welsh Government could make their own decisions, within EU regulations. Bolder moves to develop the Welsh economy are needed than those given in the Budget. The route map for economic renewal, to be launched in a few weeks’ time by Welsh Deputy First Minister Ieuan Wyn Jones, will provide more nuanced, Welsh solutions.

Changes that bring about real-terms cuts in benefits and public sector pay freezes punish those who had nothing to do with the economic mess created by the banks. The general public will contribute £13 billion extra towards the deficit through the VAT hike. The bankers will pay a measly £2 billion a year through a levy, yet still see huge benefits in shifting their profits from income tax to capital gains tax. The levy is not only small; it is being introduced only gradually. The banks will not be squealing as a result of this Budget, as the cuts in corporation tax will compensate for the levy. Considering that the Public and Commercial Services Union estimates that there is £123 billion of uncollected tax, far from demonising vulnerable people struggling to get by, would it not be better if the Government targeted the super-rich for their tax avoidance and evasion? Instead, cuts to Her Majesty’s Revenue and Customs staff will reduce capacity to collect due tax from those intent on not paying their fair share.

There were elements of the Budget that must be welcomed, not least the increase by £1,000 of the level at which income tax is paid by basic rate taxpayers, a Plaid Cymru policy at the general election.

However, a further disappointment for my country in this Budget is that although confirmation was given of other transport schemes in England, the electrification of the Great Western line was noticeable by its absence. I do not need to remind you, Mr Deputy Speaker, that Wales ranks alongside Albania and Moldova at the bottom of the electrified rail track league table. Without a concrete timetable for either electrification of the Great Western line or the creation of a high speed rail link to south Wales and north Wales, we will languish there much longer.

Far from all of us being in this together, the emergency Budget aimed its axe at the poorest and the most disadvantaged communities, while being more or less “business as usual” for the economic elite.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. As hon. Members will have recognised, we have a 12-minute limit, and I am grateful to everybody for observing that. I am sure that the House will also want to observe the conventions associated with maiden speeches.

14:16

[Karen Bradley (Staffordshire Moorlands) (Con)]

It is an honour to address this House for the first time today. It is an equal honour to do so as the Member for Staffordshire Moorlands. I could easily use up all the time available in praising my beautiful constituency, and although I shall resist doing so, as there are pressing matters facing the House, I make no apology for my pride in representing the people of the Moorlands, among whom I feel very much at home, as I represent the seat where I was born.

I would like to start by paying tribute to my predecessor, Charlotte Atkins. She made many friends in the constituency in her 13 years of representing the seat. There are many local causes that she made her own, including her advocacy for the charity Sailability and her vocal campaign for the preservation and promotion of the canal network. I am privileged to take up the baton in representing the Staffordshire Moorlands in this House.

Right hon. and hon. Members may be aware of the unique character of the Moorlands. Staffordshire is a large county with a great industrial history, but sometimes we overlook its claim as home to much of the Peak district. The geography of Staffordshire Moorlands is demonstrated not only by the name, but by the fact that one third of the seat is made up of Peak national park land. I see it as one of my responsibilities to encourage visitors to that beautiful place, which is something of an undiscovered tourist gem. When hon. Members visit the Moorlands, they will find a wealth of natural attractions. The very many hills enjoyed by walkers provide striking and inspiring scenery, including the famous Roaches. While among the peaks, hon. Members can slake their thirst in up to five of the 10 highest pubs in Britain.

Alongside the wild shapes and deep colours of the moors and the peaks, we should not forget, of course, that much of the wonderful rural beauty is conserved for our enjoyment largely thanks to the hard work and dedication of farmers. As a result, Staffordshire Moorlands is an important source of the nation’s food. We are now entering the summer country show season, when the quality and variety of livestock will be on prize-winning display. We all benefit from the maintenance of the land that supports that vital industry. It will be one of my aims to encourage the House to ensure that farming—not hidden by the catch-all “rural affairs”— is given due attention by the Government.

There are opportunities not only for walking, but for bird watching, including around Tittesworth reservoir, and for sailing on Rudyard lake, the place after which the famous Mr Kipling—not the one who makes cakes—was named. The lake is no mean feat of engineering, and was created at the end of the 18th century to feed the canal network, another important part of our tourism industry. On top of those natural attractions are other reasons to be confident about the future for the Moorlands. The constituency is home to the most visited tourist attraction outside London, Alton Towers. There is also a thriving arts community, building on a long history that includes William Morris, who lived and worked in Leek for a time. Local painters such as David Hunt continue the tradition, capturing the essence of the area.

Of course, Staffordshire Moorlands is no simple rural idyll; it is also home to towns with an industrial, textile and mining history. Biddulph grew up on mining, but has adapted and is now finding its way with more modern industries. Leek prospered from the silk trade and has long been the home to two large providers of financial services, Leek United and Britannia. Contrary to some reports, manufacturing in the UK is not finished. Small firms in the Moorlands are making gearboxes, seat belts, chemicals and agricultural equipment, to name just a few.

I believe that the traditional character of our towns and villages and our farms has been strengthened by a feeling of togetherness—a feeling of the moorlands being something unique—but we have to trade some of that positive feeling for our fellow moorlanders with the difficulty of ease of access. There is, for example, neither a train station nor a dual carriageway in Staffordshire Moorlands. That lack of infrastructure might be one problem for our businesses that seek to connect quickly with others, but another, more severe, problem has been one of neglect of places such as the Moorlands—neglect by the previous Administration who developed policy with an eye only on its metropolitan heartlands and large companies. They were an Administration who strangled small businesses with regulation and looked on in ignorance of anyone who works on the land or cultivates livestock.

However, I do not think that I have been elected by the people of Staffordshire Moorlands just to sing the praises of the area. I consider that they have elected me also to support the new Government in redressing the balance in focus of our legislation. I welcome the intention to devolve powers to the right local level and recognise that the diversity in our country requires that we have strong principles and that we apply them appropriately. I also believe that my constituents expect me, along with all other right hon. and hon. Members, to uphold the supremacy of Parliament, because that is how their interests will be represented most effectively.

That brings me to the point I want to make about today’s debate. We have the duty, as well as an opportunity in this new Parliament, to hold the Executive to account, but we must understand clearly what we mean by the Executive. Today, it is not simply Cabinet Government, but the extension of Government through the civil service and numerous Government agencies. We must ensure that, as we vote for laws in this House, what we pass is actually implemented in practice.

My professional background is as a chartered accountant and chartered tax adviser—and I realise how many people would be disappointed if the word “tax” did not appear in this maiden speech. Over the years I have advised businesses, large and small, on their tax affairs, I have seen many instances of where the intention of the law has been altered in practice, not by another Act of Parliament or even by a judge, but by officials in Government Departments—in my particular case, by Her Majesty’s Revenue and Customs. That is a question not necessarily of unintended consequences, but of deliberately altered consequences by officials.

Let me provide a concrete example of what I mean; it relates directly to our debate on green energy and reducing carbon emissions. Under the Finance Act 1999, the then Government encouraged people to cycle to work—which given the terrain in the Moorlands, would keep us extra fit. Parliament determined that if businesses provided cycles for their staff, that provision would be exempt from tax. There are several ways that a business could do that—for example, by creating a pool of bikes or by setting up a salary sacrifice scheme. In the latter case, a credit agreement between the employer and employee is required.

One of the principles in the legislation is that the benefit should be “generally available”. However, HMRC guidance drawn up in the normal way on the matter results in a subtle, but different, position—that the benefit must be “available to all”. Crucially, employees under the age of 18 cannot enter into a credit agreement. This means that most employers could not offer the option to all employees; and, according to the Revenue, if it is not available to all, it cannot be available to any.

A Department for Transport guideline produced 10 years later attempted to clear up the anomaly, but why did we need guidelines from one Department to interpret guidelines from another when the intent of the law was quite clear? Why should HMRC apply the rules in this way? Did not Parliament say that it wanted this tax exemption to be given to employees to encourage green transport? Who gave the Revenue, a Government agency, the right to re-interpret the law? That may seem a small instance, but it is indicative of the larger problem we face. There is a culture of control often masquerading as advice, and there is a tendency to complicate the law—and not just in the area of tax.

Too many times my constituents have said to me that they do not understand why MPs or councillors have to take legal advice or are following the official guidance rather than doing what the intent of the law says. Parliament must be supreme, and not just in fiscal matters. Ministers and Members of this House must be confident that they are the masters of the rules, because they are accountable to those who have sent them here. If we pass fewer but simpler and clearer laws, there will be less scope for confusion. Simplicity will help Parliament maintain that supremacy, while transparency will also help to restore the reputation of politics.

Our electors are more than capable of judging what we are doing—and seeing whether it is worth while—if they can see what it is, and clarity of principle might even increase interest in the business of Parliament. People will see this House as a place of serious and relevant debate, and, dare I say it, simplicity might even help us make efficiency savings. I therefore ask that in this Budget debate, and in the debates that follow on of the Finance and other Bills, we ensure that what we intend the legislation to do is what officials implement and enforce.

Before I sit down, Mr Deputy Speaker, I hope you will indulge one final comment, as I want to thank the voters of Staffordshire Moorlands for putting their trust in me. I will endeavour to work hard for all of them and represent their interests in this House.

14:25

[David Wright (Telford) (Lab)]

I congratulate the hon. Member for Staffordshire Moorlands (Karen Bradley) on a genuinely excellent maiden speech. She mentioned 10 pubs that were among some of the highest in Britain. My love of a pint of beer will ensure that I visit her constituency very soon, perhaps over the summer holidays, and avail myself of a pint of bitter—or maybe even two—in each one of them. As a fellow midlands MP, it is a great pleasure for me to welcome her to the House. I was the Government Whip for her predecessor, Charlotte Atkins, to whom she paid worthy tribute. Perhaps I can encourage the hon. Lady to join us in the Lobbies next week, as I used to encourage her predecessor to do, but on the basis of her excellent speech, I think I might have some problems achieving that.

I want to speak about some general issues surrounding the Budget. First, I was struck during the Budget debate over the past couple of days about how the Budget failed to mention the scale of the global downturn over the past three or four years. Anyone listening to the Chancellor would not have believed that the world economy had gone through one of the greatest downturns—indeed, the greatest downturn—since the second world war. This omission amounts to a significant rewriting of history.

I recall visiting the United States when the housing crisis, prompted by the mis-selling of mortgages in the US, was just beginning to take hold. There was real fear on Wall street about the value and confidence of what was then triple A-rated debt. It sent a shockwave around the world, yet we heard no mention of that in what the Chancellor had to say, which I found quite remarkable.

I also found it remarkable that the Chancellor had nothing to say about the decisions taken by the Labour Government to support the economy at the height of the recession. I still believe that those decisions were the right ones to take, supporting the banks during the crisis and cutting VAT—perhaps the Liberal Democrats would like to reflect on that when it comes to the vote next week—to provide a stimulus to the economy. The car scrappage scheme was a particularly successful economic stimulus and was important for companies in my constituency and across the midlands. Quantitative easing was another positive step. During that period, the Conservative party largely got it wrong. It opposed a number of those initiatives, and was particularly slow when it came to supporting bailing out the banks. In large part, it got a number of those decisions wrong.

The crucial question facing us now is the speed at which we pay down the deficit that resulted from the global recession. We are all agreed on that. The risk is that if we take too drastic action, we could find ourselves pushed back into recession. On “Newsnight” last night, which I watched with my cup of tea, an economist, Richard Koo of Nomura Investment in Japan, said that there is a danger that the Budget will take too much cash out of the economy, and made the point that the private sector is deleveraging and might also be tempted to pay down debt. He made the point that, as a result of the Budget, we might find ourselves in a low-growth, low-inflation economic position, as experienced in Japan. At such times, he said, a portion of financial stimulus needs to be sustained, and that should have happened in Japan in the late 1990s. What happened in Japan was that it bumped along the bottom in economic growth. That is a worry.

The Budget envisages a massive shift to private sector investment and exports over the next three years. We should all support that and hope that such a strategy succeeds, but such a significant rise in private sector investment and exports over a three-year period is a tall order, especially if, as the Prime Minister said proudly from the Dispatch Box the other day, economies across Europe are contracting public spending. Several European Governments have withdrawn stimulus from the economy, which is a concern in relation to demand for exports over the coming three to four years. That is why the question of the speed of cuts is crucial.

The Canadian deficit reduction model, which is often cited by commentators in relation to the Budget, was pursued at a time of growth in the economy. I want to see more growth and I want to see the country succeed, as we all should, but my concern is that growth is fragile here. Businesses are concerned about the impact of cuts on levels of demand in the economy. The Shropshire Star, my local paper, did an excellent piece on the Budget—that will get me a good slot in the editorial tonight—and quoted Geoff Parkes, who runs a company in Telford, ASC Finance For Business. I do not know him or pray him in aid of the Labour party’s position, but he had this to say about the Budget:

“The big unknown is the effect of public sector cuts, reduction in tax credits, freezing child benefit and critically the rise in VAT to 20% from January 2011”.

He said that this

“will have an impact on demand in the economy—this means firms will have to compete harder for their share of the recovery”.

He is right: companies will have to compete harder for their share of the recovery. My concern is that we are taking public spending out of the economy too quickly. We need to cushion the impact of the cuts over the next two to three years; otherwise, we might find ourselves in a double-dip recession.

My concern about the Budget is the ideological drive of the Conservative party to reduce the role of the state. This is the kind of Budget that the Conservative party would have introduced whether we had these economic problems or not. The Conservatives have a big society view about the country based on a US small state theme. The headline from the Budget is, “Pain now, more pain later”. The massive spending cuts are pushed away to the autumn, when they can be announced by the Chief Secretary to the Treasury, the Chancellor’s personal human shield. I would not be surprised if the Prime Minister and Chancellor were well away—probably out of the country—when the Chief Secretary stands at the Dispatch Box to announce the savage cuts later in the year. In the meantime, the Budget can be presented as half the story of what needs to happen in our economy.

The Institute for Fiscal Studies has said clearly that if some Departments are to be protected, with perhaps 10% cuts, others will have to bear cuts of about a third. That is an enormous amount to come out of the budget in the next two to three years. I am extremely concerned about the impact that will have on police services in constituencies such as mine, where we will see fewer police officers on the street, fewer community support officers and fewer front-line services. Telford is heavily reliant on civil service jobs: defence jobs, Department for Work and Pensions jobs, and jobs that are reliant on work from the Treasury. I fear that there will be a significant reduction in the number of civil service jobs in Telford, which will have a consequential impact on our economy. I want us to protect those jobs in Telford, and I will fight to protect them. It is important for us to protect our local economy—an economy that relies so much on public sector jobs.

I was disappointed that the Building Schools for the Future programme was not mentioned in the Budget. A significant amount—more than £200 million—has been invested in the renewal of our schools in Telford, but there is currently no security for head teachers, pupils or parents with regard to the future of those schools. Secondary schools such as Wrockwardine Wood arts college, the Phoenix school, Lord Silkin school and Sutherland business and enterprise college are waiting to see whether the Government will proceed with Building Schools for the Future. I shall campaign with local communities to ensure that we complete that programme—a programme that we initiated as a Labour Government, and of which I am incredibly proud.

I believe that the Budget will have a disproportionate impact on the poorest people in the country. The Institute for Fiscal Studies stated clearly today that it believed that it would have a greater impact on the lower paid and the poorest than on anyone else. As our discussion over the past couple of hours has made plain, Labour’s last Budget was progressive and this Budget from the Conservatives is regressive. That has been the focus of the debate.

The core tax rise in this Budget is, of course, the increase in VAT. Before the election, both the Conservatives and the Liberal Democrats said that they had no plans to introduce increases in VAT. This VAT rise is a bombshell. We talked about it during the election in Telford, where it will have a significant impact on families. I shall be in the Lobby next week opposing it. Indeed, I shall be in the Lobby opposing the entire Budget package, because it is damaging to communities such as Telford and damaging to the country. We should oppose it because it is non-progressive—in fact, it is regressive—and I look forward to Liberal Democrat Members joining us in the Lobby to oppose it next week.

14:37

[Mr Mark Field (Cities of London and Westminster) (Con)]

I congratulate my hon. Friend the Member for Staffordshire Moorlands (Karen Bradley) on her charming maiden speech. She spoke with great passion about her constituency, although I felt slightly guilty when she lamented the fact that there were no railway stations in it. There are 32 tube stations in my constituency, along with no fewer than three of the four railway stations on the Monopoly board. Perhaps we can swap a few between Cities of London and Westminster and Staffordshire Moorlands before the world is too much older.

The first Budget of any new Administration is always a momentous event. It inevitably sets the seal for much of what will follow economically. This is a groundbreaking and very brave Budget, which has expressly changed the terms of trade. In his speech, the Chancellor made a robust case for the nation to have a future that would be underwritten by the success of business and enterprise.

It is only the third time in more than three decades that such a Budget has been delivered. In the infinitely more clement economic weather of 1997, the then Chancellor, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), while ostensibly sticking to his predecessor’s spending plans, announced fatefully his intention to restrict private pension tax breaks. At a stroke, the culture of personal savings was undermined, and a distinct shift from individual responsibility to collective state provision was flagged up. It has, perhaps, taken a full 13 years for us to appreciate the true implications of what many then regarded as a technical manoeuvre born largely from a need to secure an easily available pool of cash to spend on pet projects, a state of affairs that was necessitated by the making of an orthodox manifesto pledge.

In the emergency Budget of 1979, the incoming Conservative Government signalled a desire to unleash the power of the free market from the state’s grip, and to promote free trade after a characteristic spell of Labour mismanagement. Indeed, in the run-up to the general election this year, it became the pastime of many political commentators to draw comparisons between that momentous 1979 election and the political and economic landscape that faces us today. Yet, of course, that simplistic analysis ignored the significant differences between the two episodes. When the Conservative Government took control of the public purse in the final year of the 1970s, our nation had been subject to monetarist policies for two and half years courtesy of the IMF. In essence the very toughest decisions on public spending had already been made at that time.

In contrast, this year, while there was a superficial acceptance that the best of economic times was over, the sheer gravity of our economic problems has been too lightly skated over during the campaign skirmishes. Indeed, it served the expedient interests of all three main political parties to confine any economic discussion to a somewhat fatuous battle over public spending cuts of £6 billion; a sum of money that we borrow, not spend, every fortnight.

The public were willing to embrace change in 1979. Today, I fear that the electorate have been less willing to accept the seriousness of the national economic situation. The breathless relentless media coverage over the past two years charting stock market swings, house price crashes and global turbulence has convinced many that the worst is already behind us when, really, the reckoning has yet to begin.

I have felt that the past couple of years have been uncompromisingly ugly—we have seen that in many of the speeches from Opposition Members today—for those of us who support capitalism, free markets and open trade. Once again I am delighted that this Budget starts to make the case for empowering people, the smaller state and individual responsibility.

The election is now of course behind us. I remain concerned that our coalition Government do in all fairness lack the critical and explicit mandate to make some of the very tough economic decisions that are required as a matter of urgency to get the public finances back on track, for this Parliament—indeed probably for the entire decade—stands to be dominated domestically by the need to take a firm grip of the public finances.

This year’s public budget deficit of some £155 billion represents 11 per cent. of GDP and means that we continue to borrow fully £1 in every £4 that we spend. This colossal living beyond our means is made up of consumption rather than investment in any meaningful sense of the word. Correcting that imbalance will necessitate diminished living standards for the generation of taxpayers yet to enter the workplace. In a large measure, that means that we have to take an axe to public spending, and that has of course been a remarkably rare event.

I am delighted by the generally positive media response to the Budget, but I should point out to my hon. Friends that the pain of the tax rises accounts for only 23 per cent. of the overall measures. Details of the adjustments to public expenditure will be hammered home in the months to come and will become fully apparent only in 2011-12. That is when the real logistic and political tests will come.

There is much to learn from history about those very few previous episodes when we have needed to make a substantial cut in public spending. The single most significant period of efficiencies and reductions in public spending came in the aftermath of the first world war and, perhaps significantly, was also in a time of peacetime coalition between the Liberals and Conservatives under Lloyd George. The wartime economy at that juncture was characterised by huge unprecedented state control, so much so that when the conflict came to an end, there was a massive upswing in the economy as pent-up demand, wartime savings and the removal of wartime controls caused a boom. However, the first peacetime Budget in 1919 actually led to a budget deficit of 6 per cent. of GDP after the then Chancellor concentrated on building homes fit for heroes and embarking on an ambitious social programme rather than balancing books.

Hot on the heels of that boom, however, was a grim slump. Having been one of the world’s largest overseas investors before the first world war, Britain became one of the biggest debtors with interest payments taking up some 40 per cent. of all Government expenditure. The value of the pound was depressed, yet the anticipated export boom failed to materialise. Even preceding the slump there had been a public outcry at the Government’s extravagance. As the economic gloom descended and tax increased, the outcry against Government waste became a thundering clamour.

It was against that background of public pressure and economic misery that the then Prime Minister Lloyd George appointed Sir Eric Geddes to chair an independent review of Government spending in the bitter year of 1921, the aim being drastically to cut spending by eliminating the waste that had been identified. The Geddes committee was to become the most thorough and rigorous outside investigation of public expenditure ever conducted in Britain. It was also, of course, highly controversial. Its membership consisted of only a single elected MP and five unelected business leaders, and while it was lauded by the world of commerce and Conservatives and taxpayers, it was attacked by the fledgling Labour party and the trade unions.

In the end, Geddes was able to slice some £54 million off Government expenditure. That seems an almost risibly small sum today, but in those days it amounted to a 10% reduction. We should soberly remember that, once ring-fencing is accounted for, departmental cuts of about 25% are likely to be required next year.

Back in the 1920s, a clear message was sent to Ministers, Whitehall and the general public that spending in any form would be very closely scrutinised like never before. The committee’s work marked a crucial turning point in rebalancing the public finances from a distorted war basis to a peacetime basis. It is a lesson we need to learn in the months ahead as we go about the work of ensuring that these departmental changes happen.

The committee’s success in rapidly achieving its goal was due to a number of factors: it had professional and respected committee members; it enjoyed unstinting political support; it worked to a very swift timetable, which I think we will have to do again this time; there was widespread public support for its aims; and it was willing to compromise on proposals that proved to be politically unfeasible—I think we will find ourselves in that situation again in the months to come. The experience of nine decades also has demonstrated that while securing public expenditure cuts is very politically difficult, it is far from an impossible task, as is often claimed. We undoubtedly need to try to achieve great public support. The experience of the 1920s showed that while voters might agree in general with cuts, they almost never agree with specific cuts that directly affect them. To put it simply, we need to ensure that the cuts are fair, focused and effective.

History also provides important perspectives and pointers to the future. Wisely, the coalition Government have an even more recent precedent in mind. The hon. Member for Telford (David Wright) rightly pointed out that the Canadian model of deficit reduction in the first half of the 1990s took place in an era of great global growth and plenty. We should not underestimate how much easier that made its very painful readjustments, under which a quarter of public sector employees in the country lost their jobs. By contrast, today’s reductions in the head count will, to an extent, be tomorrow’s unemployment rise.

In Canada in the 1990s, the Government had already levelled with the voters over a period of time. They then proceeded to provide very clear evidence, on a year-by-year basis, of the gains as expenditure was reduced. They also made the moral case that the living standards of future generations of taxpayers should not be diminished to pick up the tab for the consumption and debts of current taxpayers. That is absolutely crucial.

This has been an extremely brave Budget from the Chancellor. The fact is that despite the—at times contrived—anger from Opposition Members, those who are most likely to suffer are middle England voters, who are the very people the Conservative party has relied upon for electoral support. The Budget’s promise to be tough but fair is largely borne out, especially in its protection for the poorest and most vulnerable in our society. Indeed, I have been calling for some years now for the removal of the very lowest earners from income tax altogether, and I am very pleased about the steps that have been taken in that regard.

I sound only two notes of caution. First, I believe that the Office for Budget Responsibility unemployment projections have been over-optimistic. Indeed, such has been the unreliability of economic forecasting over recent years, that I think that unemployment will not peak this year, but that it will be higher in both 2011 and 2012. Secondly, I fear that there is a real risk of serious sovereign default in the eurozone, as has been discussed.

I do, in part, accept the Opposition’s view that there is a significant element of risk in this Budget, with many of the toughest measures coming in next year when the coldest winds may well be sweeping across the continent. However, for the sake of this nation’s economic welfare, I believe this calculated judgment is well worth taking. Given that denial, debt and delay are part of the problem, I cannot see that they will be the solution to this crisis.

14:49

[Clive Efford (Eltham) (Lab)]

This is my first speech in the new Parliament, so let me take this opportunity to say what a pleasure it is to see you in your position, Mr Deputy Speaker.

One of the first things that we need to say about the Budget is that it is quite clear that the underlying narrative is an assault on the size of the state. It is not merely an attempt to deal with the deficit following what has been described as a profligate former Labour Government. It is an ideological assault on the state based on the belief that reducing the size of the public sector will create space and that the private sector will inevitably grow and fill the vacuum. Without question, this Budget is—apart, perhaps from the absence of the NHS from the cuts—the Budget that Margaret Thatcher always wanted to introduce. But who would have thought it would be the Liberal Democrats who would give the Conservatives the power to wield the axe?

The Deputy Prime Minister sat through the Budget nodding in support of every swing. We all remember the warnings that he gave during the election about what the Conservatives would do if they got into power—the VAT bombshell—but what changed? I think he is suffering from Stockholm syndrome, which is what happens when a hostage becomes emotionally attached to the people who are holding him captive. It is quite clear from his response to the Budget that there is something going on. He has now collaborated in the biggest robbery since Patty Hearst just went to the bank.

Perhaps I am being unfair. It could be that the Liberal Democrats just cannot help themselves. I am reminded of an experiment at Stanford university—the Stanford prison experiment—in which students were given the roles of prisoners and jailers. Very quickly, two thirds of the jailers became very sadistic, but the peculiar thing was that the prisoners, although they were free to leave at any time, decided to stay and take the sadistic treatment being dished out. I think that something is going on here. The Liberal Democrats who have taken the thirty pieces of silver and the Toyota Prius cars are clearly taking on the role of the sadistic jailers who have adopted the policies in the Budget. The Liberal Democrats who are left—I do not know what the collective term for them should be, but perhaps it could be dupes, as that is a term that someone has used recently—are unable to free themselves. They have internalised their grief and they are going along for the rollercoaster ride on the track that has been laid by the Conservatives in this Budget; they are hanging on for a white-knuckle ride.

There are endless quotes from the general election in which Liberals warned us about the Conservatives and what they would do in government, so there is no mandate for the Liberal Democrats to support the Budget. The majority of people who voted at the last general election voted for the parties that opposed the sort of cuts that are in the Budget.

The fact that we need to address the deficit is without doubt. If Labour were in government we would be cutting public services, and people would feel the consequences of those cuts; there is no doubt about that. However, the size and scale of what we have got from the coalition Government is beyond anything that anyone has attempted in the UK before. In one Budget, they are cutting back the size of the state, over six years, beyond what it was when Labour came into power 13 years ago. Under the guise of reducing the deficit they have set about reducing the size of the state, with an enthusiasm that Margaret Thatcher could only look on in wonder.

[Kwasi Kwarteng]

The hon. Gentleman mentions the deficit; who does he think was responsible for it?

[Clive Efford]

The hon. Gentleman will probably know the history of this matter. Until November 2008 there was an agreement in this House about how to deal with the deficit. The Conservatives supported what the Government of the time were doing, so I suggest that he go back and look at the facts of what was going on.

The Liberal Democrats conveniently forget the statements that they made expressing their fear of what the Tories would do. I remind the House of one that was made at the start of the general election campaign. In an interview with The Observer, the leader of the Liberal Democrats, the right hon. Member for Sheffield, Hallam (Mr Clegg), said this about a new Conservative Government:

“They then turn around in the next week or two and say we’re going to chuck up VAT to 20%, we’re going to start cutting teachers, cutting police and the wage bill in the public sector. I think if you’re not careful in that situation…you’d get Greek-style unrest…be careful for what you wish for.”

I think that those are very wise words.

The Government have also prayed in aid what has gone on in Greece, Sweden and Canada, but my right hon. Friend the Member for Doncaster North (Edward Miliband) pointed out at the Dispatch Box that comparisons with Greece are utterly ridiculous. In Sweden they cut back public expenditure by 20% over 15 years, an approach that bears no comparison with the scale of what is being attempted here. It is true that the Canadian Government carried out a consultation exercise, but that was confined to short-term measures to deal with the deficit, and the intention was always that there would be a return to expenditure.

What we are seeing is a permanent cut-back of the state, and a withdrawal from expenditure for ever. That is what the people of this country are being asked to participate in through this consultation.

The hon. Member for St Ives (Andrew George) is the only Liberal Democrat in the Chamber. I am not surprised that there no others participating in this Budget debate. I have quoted the party leader as saying

“be careful what you wish for”,

and I hope that the hon. Gentleman will remind his friends of that, especially the ones who cheered this Thatcherite Budget. Supporting this Budget is a proclamation of an intent to reduce the size of the public sector in perpetuity. Liberal Democrat Members cannot support reducing the size of the state and say with any credibility that the axe will not swing against the NHS in the long term. This is an ideological change, and they cannot escape that fact.

[Andrew George (St Ives) (LD)]

Will the hon. Gentleman give way?

[Clive Efford]

I welcome the hon. Gentleman getting to his feet. Perhaps he will explain whether he supports the state being withdrawn in this way.

[Andrew George]

I am grateful to the hon. Gentleman for giving way. I certainly appreciate the attention that he is giving to my party, although he fails to recognise that this is a coalition Government. There will be elements of both the Budget and the coalition agreement about which the Conservatives are especially enthusiastic, and elements about which the Liberal Democrats are especially keen. The measures in the Budget include a raising of the personal tax allowance, a significant improvement in annual increases in pensions, increases in capital gains tax and the introduction of levies on banks—all things that Labour failed to do at all.

[Clive Efford]

If that did not sound like an excuse, I do not know what would. A person on a low income who receives benefits or child tax credits is going to see those benefits reduced, so raising the personal tax allowance will make very little difference to household income.

[Andrew George]

What about the 10p rate?

[Clive Efford]

I assume that the hon. Gentleman has applied to speak in the debate, but it is clear that I have touched a raw nerve with him.

It is as sure as night follows day that those who support this Budget will want to cut the NHS next. Attacks on what has been describe as an “over-bloated” public sector are attempts to soften the public up in preparation for an unprecedented attack on public sector workers and the people who rely on the services that they provide.

The public sector will be hit in three ways, with a triple whammy—a freeze on council tax, a freeze on pay, and a squeeze on workers’ pensions. The claim that none of those would be necessary if the previous Government had not left the country in the state that the present Government say that they did just does not stand up to scrutiny.

In this Budget we are being asked to vote for taking away £1.8 billion from housing benefit, £1.4 million from disability benefits, £11 billion from the welfare state overall—and £2 billion from the banks. The Government say that they oppose nationalisation, but they have certainly nationalised the cost of the banking failure, and it is the poorest people in our constituencies who will pay the price.

The figures show that £1 in every £7 spent by the poorest 10% in our communities goes on VAT, but that drops to £1 in every £25 for the richest 10%. The IFS has confirmed that Labour’s plans would hardly have touched the poorest 10% at all, but this Budget will reduce their income by 2.5%. Labour’s proposals would have reduced the position of the richest 10% by 7%, but the Budget adds only a further 0.6% of that.

[Guy Opperman (Hexham) (Con)]

Will the hon. Gentleman give way?

[Clive Efford]

No. I have given way twice, and other Members wish to speak.

We can see who is paying the price for the Budget. The Government say that we are all in this together, but some of us are in it more than others, and the poorest are in it up to their ears.

There is no mandate for this Tory Budget. Despite all the coverage that we have read about it, no one has said, “Thank God the Liberal Democrats were there to hold back the nasty Tories.” Everyone says that it is a Conservative Budget—the Budget that the Conservatives would have introduced whether or not they had the rag, tag and bobtail of the Liberal Democrats tagging along behind them. This assault on our public services is founded on the misguided belief that as the pubic sector contracts, the private sector will expand and provide new jobs.

There is no intention of returning investment to the public sector. The dogma that drives the cuts is the same that drove the Tories to attempt to destroy the NHS when they were last in power. Anyone who votes for the Budget is signing up to a Thatcherite philosophy of slashing the public sector and paying no heed to the consequences for the most vulnerable people in our communities. Never again will the Liberal Democrats be able to claim that they are the party that stands up for the underprivileged and a party that is in favour of intervention. This is a Thatcherite Budget and anyone who votes for it will be a Thatcherite: Members on the Government side of the House are all Thatcherites now.

15:01

[Mr Matthew Offord (Hendon) (Con)]

I pay tribute to the speech made by my hon. Friend the Member for Staffordshire Moorlands (Karen Bradley). I know her seat very well and I am tremendously proud that she is in the House. It was interesting to see the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) in the Chamber earlier, but Conservative Members would have liked him to stay for the whole of today’s debate.

It is a great honour to speak in my first debate as the newly elected Member of Parliament for Hendon. Mr Speaker will know my seat well. He grew up in the neighbouring constituency, so he will know of many of my constituency’s attributes. Hendon is famous for many reasons, including the Metropolitan police training college, the Medical Research Institute, the British Library newspaper depositary, Brent Cross shopping centre and the RAF museum, to name but a few. Many people are migrating to Hendon for some of its other attractions, such as our lower than average crime rate, our good schools and our green spaces, all of which are within easy access of central London, so I urge hon. Members to travel on Thameslink or the Northern line to come and visit. I am sure that many Members, certainly those representing northern constituencies, have already visited Hendon, especially if they travel back to their constituencies at the end of the week by car along the A5, A1, A406 or even the M1.

My constituency is also known for many of its former inhabitants or those who were schooled in the area, including Oliver Postgate, the creator of Bagpuss and the Clangers; Garbo, the Spanish spy who fed the Germans false intelligence about the D-day landings 66 years ago; William Wilberforce, a former Member of Parliament and slave trade abolitionist; and Sir Stamford Raffles, the founder of Singapore. More recent Hendon characters include Henry Cooper, Denis Compton, Joe Beevers and even Lord Mandelson, who attended school in the area. That shows us that my constituency has attracted people who have contributed to a range of activities in our society and national life. It continues to do so, and I hope, as its new MP, that I will make my mark for the people of my constituency.

I pay tribute to the work of my predecessor, Andrew Dismore. He worked hard on many issues, and I intend to continue some of that work for different sections of our community. He set the bar high, but I intend to exceed it. He also prided himself on having made the longest speech in the Chamber in the past decade, but hon. Members will be pleased to hear that I do not wish to emulate that.

The constituency of Hendon is marked by extreme religious and cultural diversity, which is mirrored economically in the contrast between the affluent Hale, Hendon, Mill Hill and Edgware wards and the housing estates of Burnt Oak and Grahame Park, the Perryfields estate and Stonegrove. I am pleased to confirm, however, that the London borough of Barnet has already started work to regenerate the Stonegrove and Grahame Park estates.

One of the most tragic comments I heard during my campaign to be elected to Parliament came from a mother on the Grahame Park estate, who said that too many foreigners were coming into this country and taking social housing away, and asked how her children could have any chance of taking over the tenancy of their home. That illustrates the lack of aspiration that many people have today. I contrast her attitude with that of parents in other parts of the constituency who spoke about their children going to university, buying their first home and eventually getting married. We live in one of the most prosperous cities in the western world, but there remain yawning chasms between the aspirations of the people I represent.

In that respect, my constituency is probably a microcosm of London. In turn, London represents part of the affluent south that stands in total contrast to the other places where I have lived, such as Barnsley, Carlisle, Bodmin and Leek. The difference for those places is in how they are viewed by us, as law-makers. Without doubt there is an urban-rural dichotomy in this country, which even today is reflected in our politics. That was reinforced by the previous Government when they established the Urban Task Force and the Rural Task Force. However, when more than 80% of us live in areas, such as my constituency, that can be classified as suburban, it is anathema that the suburbs play a secondary role in regeneration and urban policy.

Given the importance of cities to Britain’s future economic prosperity, I urge the Government to recognise that suburban constituencies must play a key role in their policies for urban regeneration. Many commentators share my view, recognising that suburbs are the forgotten dimension in our urban policies. There are many initiatives that could overcome that issue. In the past, the former Member for Sedgefield spoke about “Education, education, education”, but I think that that was too narrow a focus. I would prefer us to instil in our people a sense of “Aspiration, aspiration, aspiration”, which will continue with them throughout their adult lives. But we cannot do that on a national scale. We need to allow local people to implement the right social and economic priorities for themselves on a suburban scale.

When I was deputy leader of Barnet council, I was proud to introduce a scheme whereby we employed our looked-after children, in the same way that any parent would employ one of their children in the family business. It was not a guarantee of employment, but an opportunity of aspiration that could be taken up—one which, I am pleased to say, several young people did take up and so improved their life chances by entering the local economy. Barnet council also led in the promotion of what became known as the Barnet bond—a financial scheme to raise more than £300 million to be invested in schools, transport and other local services that will be needed to provide the infrastructure to cope with the housing growth expected over the next decade in our suburban constituency. If Barnet does not achieve that—if it does not raise the aspirations of the area and the people who live within it—community life will be on a downward trajectory.

Today, I have heard some Labour Members say that Government Members dislike the public sector. I assure them that that is not the case. In fact, we believe that the public sector has a part to play but that there are others who are able to contribute better than the public sector. Unlike the previous Government, we do not believe that throwing money at problems is the way to create a better economy and better living conditions for our people. We believe that there are many other organisations—particularly in the third sector—that are better at deciding what local people’s objectives are and introducing action to achieve them.

My constituency has many organisations that provide benefits for civic and local life—my Seahorse sailing club on the Welsh harp; the Community Security Trust, which plays a great role in our Jewish community; the Mill Hill Preservation Society and the Larches Trust, to name but a few. Particularly when we talk about green energy and climate change, we must create the aspiration for those organisations and new ones to emerge and allow them to play their part. We must not let the budget deficit become an excuse for inertia.

Under the previous Government there was an increase in violent crime. More than 40 years ago Robert Kennedy told an audience that there is another kind of violence besides physical violence—one that is slower, but just as deadly and just as destructive—and that is the violence of institutions, particularly when they become indifferent, show inaction and produce slow decay. That is, in essence, a neglect of aspirations by politicians and policy makers. Because we do not have any money, we must look at alternative ways of reducing our deficit and improving our country.

Because of the massive economic deficit we must win the argument, particularly Conservative Members and with our colleagues the Liberal Democrats, that it is the opportunity of aspiration that will create private sector employment and pull us out of the state that we are in. It will not happen as a result of some of the objectives proposed by Opposition Members. We need to recognise that different communities work in different ways, be they rural, urban or suburban, and we have to give our constituents the ways and means to address the problems that they face and to introduce the right conditions for themselves. As the Member of Parliament for Hendon, I intend to play my part to achieve that.

Finally, I wish to thank the people of Hendon who gave me, and the Conservative party, their respect and trust in allowing me to come to this place.

15:11

[Karl Turner (Kingston upon Hull East) (Lab)]

I start by welcoming you, Mr. Deputy Speaker, to your position. One of the first tasks that I undertook when I came into this place was to put my cross against your name, so welcome. I also congratulate hon. Members on their maiden speeches. Members will share with me the sense of privilege and much pride that comes with entering this magnificent Chamber. That pride brings with it a real sense of responsibility, which I will keep to the forefront of my mind throughout.

However, the happiness of the occasion is tinged for me with some sadness and real fear: sadness because I do not take my seat on the Government Benches where the important decisions that affect my constituents will be made, and fear for the constituents whom I represent, and worry that the choices already made by the coalition will severely damage the good that has come from 13 years of a Labour Government. Those choices are driven by pure ideology, with consequences that are likely to be far-reaching and long-lasting. My constituency has benefited tremendously from a Labour Government, and I fear the clock being turned back to Tory time.

Hull East, or East Hull, as it is known to those of us who were born and bred there, is a fantastic place. Its greatest asset is its people. East Hull folk have a reputation for straight talking, and I hope that I bring with me to the House that special quality. East Hull people are enriched by many excellent qualities, among which are their good sense and sound judgment. I am delighted that they employ those when they vote Labour, which is why I am here.

To that end, I have the benefit in my constituency of the hard work and tireless commitment of many excellent Labour councillors, led by the leader of the Labour group, Councillor Steve Brady, and I thank them for their service. I can also tell the House that in the past few days we have had a new councillor on the Labour benches in the chamber in Hull—Councillor Maureen Bristow. She crossed the floor from the Lib Dems because, in her words, she did not come into politics to implement Tory policy that hit the hard-working and the poorest people the hardest. That sentiment is shared by people in Hull and throughout the country who have previously voted Lib Dem but will never make that mistake again.

I am often reminded that I have very big boots to fill, and I acknowledge that in paying tribute to my predecessor, John Prescott. It was 40 years ago on the 18th of this month that John was elected to the House. In that time he has been credited with many achievements, perhaps too many to mention in the short time that I am permitted to speak. Throughout his time here, he was blessed with the loyalty of his agent, Harry Woodford, who still attends Labour party meetings at the age of 93. I know that I can rely on the same loyalty from my agent, Howard Flitton. He is much younger than Harry, but, if I stay in the House as long as John, by then he will be about the same age.

While John was a Member, some say that he delivered many knockout blows. He was very faithful to his constituents and to the Labour party, and I hope to emulate that. Hon. Members might recall that in the 2001 general election, while on the campaign trail, John was involved in an incident in Wales. When his then boss, Tony Blair, asked him, “John, for heaven’s sake, what were you doing?” I am told that John replied, “Well you told me to go out there and connect with the electorate, so don’t blame me now.” He was straight talking, and he had a very good left jab.

John Prescott has a lot to be proud of. He rose from being a seafaring steward to the dizzy heights of Deputy Prime Minister, following the Labour party’s magnificent election success in 1997. I feel compelled to mention that, unlike the incumbent Deputy Prime Minister, John gained his place in government through the electorate and the then leader of his own party. It was not gained through the desire for power, whereby 22 Government jobs, with gold-plated pensions, have been traded for many thousands of public sector jobs—a desire for power that I predict will not come without a great cost to the right hon. Member for Sheffield, Hallam (Mr Clegg) and his party.

My predecessor is very different from the right hon. Gentleman, but there are some comparisons. I say that with some apprehension, because I am clearly at risk of offending my predecessor, and I do not suggest for even a second that John has, or will ever, utter the words, “I agree with Nick,” but interestingly enough at the general election he and the right hon. Gentleman asked the electorate to vote for their respective parties in order to stop the Tories ruining the economic recovery that was set in train by the previous Labour Government. Like the electorate, I have no recollection of the current Deputy Prime Minister saying, “I agree with Dave.” While making comparisons, however, I seem to share the Prime Minister’s sense of humour, because like him, I and many other Opposition Members have a new favourite joke. The former Deputy Prime Minister—the one whom the electorate wanted—will soon continue in the other place with his tireless commitment to his interests, and I wish him well there.

Indeed, I do have big boots to fill. The last Hull-born MP to represent the area was the great William Wilberforce, who began his political career in 1780 when he became the independent MP for Yorkshire, which at the time covered some parts of my constituency. He was a truly honourable man, who led the parliamentary campaign against the British slave trade, and after some 26 years the Slave Trade Act 1807 was passed. When Wilberforce left the House in 1826, he continued his campaign, and just three days before he died he learned of the passing of the Slavery Abolition Act 1833.

East Hull has a record of electing Members with seagoing experience. In 1945, the area elected Harry Pursey, a former naval commander, and of course my predecessor was a merchant seaman. Although I have no seafaring experience, I am the son of a former seaman, so to that end the tradition continues.

I am very proud of my roots. I was educated in a state comprehensive, and my school suffered from some shameful under-investment during the previous, 18-year-long Tory Government. I left school without having achieved much academic success, but after the first term of the previous Labour Government and their agenda for lifelong learning I had the opportunity and confidence to study law at the excellent university of Hull. I was eventually called to the Bar in 2005.

Hull has many things to be proud of, not least the excellent quality of its rugby league. In the east we have Hull Kingston Rovers and in the west Hull FC, both of which rival each other in the super league. We also have Hull City football club. Not unlike another team that are extremely close to my heart, we suffered last season what I hope turns out to be a short-lived demotion. The team were led by, I often argued, an excellent leader in Mr Brown—that is, Phil Brown.

Despite the coalition Government’s attempts to convince each other and the wider electorate that we got it wrong, Labour Members sit on this side of the House proudly and with our heads held high. We have an excellent record to defend. I am particularly proud of the national minimum wage; our investment in the NHS, with 85,000 more nurses and 32,000 more doctors, and cancer care that is again becoming the envy of the world; record numbers of students from normal backgrounds like my own going off to university; Sure Start; the winter fuel allowance; equality legislation set in train by the Labour party in government; the historic Good Friday agreement and the peace in Northern Ireland that it brought; tackling pensioner poverty; child tax credits; the abolition of section 28; the introduction of civil partnerships; massive investment in social housing; free bus passes for over-60s; free swimming for under-16s and over-60s; free nursery places for three and four-year-olds; and Building Schools for the Future.

On the economy, I am proud that we took decisive action when the global economic crisis hit. I am proud, too, that we saved the banks from inevitable collapse and invested in the economy, leaving the new coalition with an economy that is in growth. Make no mistake about it—we did mend the roof when the sun was shining. The vast majority of those policies were opposed by the new Government; some have already gone in the short time that they have held office.

I vow to hold this Government to account while I sit on this side of the Chamber, but in doing so I remember the responsibility that I have to my constituents. If the Con-Dem coalition gets it right, I will support it, but when the policy is wrong, when it is for ideological reasons, and when it adversely affects my constituents, I shall challenge it at each and every opportunity.

15:21

[Angie Bray (Ealing Central and Acton) (Con)]

Let me start by congratulating the hon. Member for Kingston upon Hull East (Karl Turner) and my hon. Friends the Members for Staffordshire Moorlands (Karen Bradley) and for Hendon (Mr Offord) on their excellent maiden speeches. I am sure that they will all make great contributions to this House over the years to come.

I cannot imagine that many of us who sat in the Chamber on Tuesday to hear the Chancellor’s emergency Budget statement will have found it exactly an enjoyable experience. Theatrical, yes; dramatic, yes; enjoyable, no. It was a bleak Budget statement drawn from a grim economic landscape bequeathed to us by the previous Labour Administration. We will all now be thinking about getting back to our constituencies this weekend and discussing with our constituents how we can face these tough measures together. Yet I suspect, judging by the Leader of the Opposition’s response, that many of those on the Labour Benches will be blaming everyone and everything but themselves for the situation in which we find ourselves. That is neither wise nor credible. I hope that at least some of them will recognise that under their governance this country was living way beyond its means for far too long. As the well-worn but true saying goes, all good things come to an end—only on this occasion, not just an end, but a juddering halt that has shaken the whole country violently.

I would like to put on record how much I abhor the manner in which the previous Labour Government, in their last few months, went round dangling all sorts of promises—this project, that programme—to dazzle the electorate, all of them knowingly unfunded, so that they were inevitably withdrawn when reality kicked in with the new Government. Another Labour Government—heaven forfend—would have been in no position to do any different from what we are having to do.

I believe that the Chancellor’s Budget is tough but fair. Responsible governance means taking tough decisions now to get our country back on its feet down the road. Fair governance means the better-off shouldering the biggest share of the burden, but most important, it means taking account of everyone in our society, ensuring that pensioners can enjoy dignity in retirement and that families in poverty receive the support they need. The long overdue restoration of the link between pensions and earnings and the triple lock is to be welcomed. The increase in child tax credits for the poorest families demonstrates that fairness is a priority for this Government. Raising the income tax threshold for those on lower incomes is a huge step forward. It means that 880,000 of the lowest taxpayers will be taken out of tax altogether. I recognise that that was very much a Liberal Democrat manifesto pledge, but it is no less welcome in our coalition for that. It also resonates closely with Conservative values, and I hope that the Chancellor will be able to get even closer to the £10,000 threshold that we all want to see when we can afford it.

[Kate Green (Stretford and Urmston) (Lab)]

It is all very well to say that this Budget will protect the poorest, but how can that possibly be reconciled with a long-term freeze or cut in benefits as a result of linking them to the consumer price index rather than the retail price index? That is to be compensated for only by the short-term measure of increasing the child tax credit. Surely this is not a Budget that is fair to the poorest but one that will leave people who rely on those state benefits in a much worse position.

[Angie Bray]

I have to say to the hon. Lady that needs must, to an extent, and we find ourselves in these problems thanks to the appalling governance of the Labour party. I also suggest that part of the problem, and the reason why I agree with her that many will feel the pain, is that the previous Government had a record of allowing a dependency culture to grow. Far too many people in this country depend on benefits, and we need to turn that around if we possibly can.

[Matthew Hancock]

Does my hon. Friend share my surprise that Opposition Members can possibly comment on the fairness of the Budget, given that under the Budget as a whole the richest will pay the most and the poorest will not, and that when they were in office, they doubled the tax of the lowest-paid in this country?

[Angie Bray]

My hon. Friend makes an extremely good point, and let us not forget that the gap between the rich and the poor actually grew wider under the previous Government.

I believe that the measures I have outlined will help ease the unavoidable impact of the rise in VAT. I am well aware that that proposal is especially hard and will affect every single person in the country. Thankfully, food, children’s clothing, books and newspapers are still exempted, but we will all undoubtedly be hit to some degree. My question, however, is this: if not a rise in VAT, which will bring in an estimated £13 billion, then what instead? If the Chancellor had not gone for VAT, he would inevitably have had to look elsewhere, including possibly at further curtailment of public spending.

Those on higher incomes will face the biggest share of the Budget burden. Tax credits will be limited to households earning less than £40,000, and the figure will go down. The 50% tax bracket introduced by the previous Government is being kept in place for those earning more than £150,000, and capital gains tax will rise from 18 to 28%. Fiscal drag will also mean more people paying higher-rate tax. I am not exactly thrilled by the prospect of any of those measures, but I accept that they play an important part in providing a fair Budget.

Prosperity for all is the long-term positive message to take from this week’s Budget. To move forward and replenish the enormous hole in our finances, we must support the people who can make that happen. Britain needs positive entrepreneurs, so a reduction in the tax on the profits that they make is welcome news. Allied with reductions in business taxes, it should kick-start our economy and be the decisive action that we need to lift us out of the mess that we are in—the mess created by 13 years of a Labour Government.

In my constituency, there are many fine examples of the type of people who will drive this country forward again through their own enterprise. They will certainly welcome the rise in the national insurance contribution threshold to ease costs for employers, and the cuts in taxes on businesses small and large. The regional growth fund is a great step forward in helping small businesses get off the ground. At the moment its remit excludes London constituencies such as mine. I know that it is only too easy to present an image of London as having streets paved with gold, but as we Londoners are well aware, our capital has many areas of serious deprivation that need supporting. I hope that, in due course, the Chancellor and his team will consider extending the scheme or taking other measures to help grow small businesses across Ealing Central and Acton.

I would also like to put in a plug for Crossrail. I am delighted that the Budget allows capital projects to proceed and I greatly hope that Crossrail will be one of them. It is essential to London and particularly important in my constituency of Ealing Central and Acton.

It is fitting that the Chancellor was allowed to bring out Gladstone’s original Red Box to carry his Budget to the House. There can be no doubt that Gladstone, a Conservative before becoming a Liberal, would fully support the coalition and the Budget. He was passionate about free trade and lower taxes when possible, and was clear that borrowing was no way to cover over deficits.

The coalition’s task is to turn around the biggest financial deficit that this country has faced since the second world war. The Chancellor and his team have taken courageous and difficult decisions, and provided us with a Budget that gives us every chance to turn the corner, get our country back on track and, most important, open Britain for business again.

15:31

[Dr Alan Whitehead (Southampton, Test) (Lab)]

I must say that I felt that the previous speech was derived directly from a Conservative central office handout, which was unfortunately handed out before any proper examination of the Budget and its impact on those who benefit from it and those who do not. It is beyond doubt that the Budget is unfair, and harms those least able to defend and help themselves as well as future prospects for the recovery and development of the British economy. I want to consider that in the context of the energy and climate change theme of our debate.

The Secretary of State, in introducing the theme, purported to defend the role of the Budget in the Department’s proper ambitions for a green energy economy and a green recovery in the overall economy, with prospects for green jobs and a change-round so that we produce the goods and services that we need at a fraction of the carbon output. I have great respect for the Secretary of State’s commitment to the environment, climate change and energy matters, so I am sad to say that I was reminded of the well known 18th century ballad, “The Vicar of Bray”, in which the vicar of Bray intoned against popery when it was out of fashion and greatly in its favour when it was again in fashion. I hope that the right hon. Gentleman’s—and, indeed, the Liberal Democrats’—principles on climate change and a low-energy economy are not affected by the expediencies that the Budget outlines.

We must take action to change the way in which our economy works in the next few years. We must keep in place the goals to ensure that we reduce carbon outputs in our economy so that we reach our target by 2050 of no less than an 80% reduction in carbon output in our country and a 50% reduction throughout the world. I hope that the Government do not resile from that target, even though they have taken away targets for waiting lists in hospitals and for house building. If they do not resile from that target, there will still be a number of imperatives—a number of which the Secretary of State outlined—in terms of the investment needed in our economy over the next few years to turn around how much of it works, and in terms of energy supply and a range of other activities.

That is why I thought, among other things, that the recent Forgemasters decision, although not enormous relative to some of those other areas, was nevertheless totemic. It was a decision for apparently short-term and expedient reasons to take away a loan—not a grant—from a company that would have invested in the future of our economy and, in particular, our low-carbon economy. I hope that the decision is not a precursor to other things for our low-carbon economy, because the coalition document sets out a number of ambitions that will work only if the investment, underpinning and Government support for such changes are put in place. They include ambitions on carbon capture and storage, a green investment bank, a floor price for carbon and a new green deal for home energy efficiency, all of which are essential pillars of that new, green, low-carbon economy. However, the prospect of a 25% cut in the Department of Energy and Climate Change’s budget over the next few years suggests, at the very least, that a number of those ambitions will not be supported and funded in the way that will be necessary.

I am concerned that the ambition for a green investment bank might turn out to be no more than a re-badging exercise, unless the Government are prepared to underpin the bank in a way that will secure those investments, which will go into new methods of production and new services that would not otherwise receive support from the traditional banking sector. If the Government have turned their face against loans that produce results far beyond the ambition of this loan, that would suggest that the green investment bank might just be the re-badging exercise that I have described. I would also be concerned if the green investment bank simply sought to replace money that is already in the system—for example, the £400 million for research and development in low-carbon technologies or the £120 million for the promotion and development of offshore wind—with other means, albeit perhaps with inferior outcomes.

As for a floor price for carbon, it is one thing to have an ambition for the future. Setting aside for a moment the fact that we operate in the context of a European Union with a single market and that if our country unilaterally set a floor price for carbon, others might free-ride on it, any floor will have to have intervention to support it if it is breached. Do the Government intend to provide the assistance to ensure that a floor price can be sustained or do they think—as the Budget suggests—that these things can simply be left to the market?

The green deal has been put in place, through the carbon emissions reduction target and the community energy savings programme, while the Great British Refurb is coming up—we hope—in order to ensure that houses across the country have the energy efficiency that they will require to play their part in the new low-carbon economy. Considerable investment will be needed to underwrite efficient home insulation for social housing and homes that are without cavity wall insulation. That will require several million pounds of Government support. All that was in place prior to the general election. Is it the Government’s intention to continue that underwriting or will that be left to the market as well?

A number of important aspects of the development of a low-carbon economy will require that intervention, support and underpinning. I am concerned that, instead of continuing to provide that underpinning, the intention might be to place increasing obligations on energy companies to undertake it instead. There are already obligations on energy companies concerning smart meter introduction, feed-in tariffs and the carbon emissions reduction target and, indeed, carbon capture and storage. As well as hearing about increased obligations on energy companies, we have heard that the introduction of smart meters will be rolled forward by a further three years, which will place a further obligation on energy companies to undertake the financing. Every obligation placed on an energy company increases the fuel price and puts more people in fuel poverty as a result. For every 1% increase in the fuel price, 40,000 people go into fuel poverty.

Is the Budget going to be fair when it increases VAT not necessarily on domestic fuel but on fuel across the board elsewhere, which also indirectly but eventually pushes up fuel prices, leading to more people living in fuel poverty in the future? Will the mechanisms ensure that fairness in fuel access and fuel price becomes a real part of the country’s future energy economy?

The final important totem to watch carefully is whether the renewable heat incentive happens over the next year. Will the Government put in the underwriting to make that renewable heat incentive work? If they are not prepared to do that or to make a number of the other necessary underwritings to take us towards the green economy, they will have aspirations without means and the principles set out today will prove to be nothing more than hollow promises.

15:43

[George Eustice (Camborne and Redruth) (Con)]

I am grateful for the opportunity to make my maiden speech. I start by congratulating my hon. Friends who have also made their maiden speeches today. I sympathise with my hon. Friend the Member for Staffordshire Moorlands (Karen Bradley) in her frustrations over bureaucracy and her impatience at the way in which Whitehall sometimes adds additional layers to the laws that we in this House set out. I also congratulate my hon. Friend the Member for Hendon (Mr Offord) and I completely agree with him about the importance of building aspiration.

I would like, too, to congratulate the hon. Member for Kingston upon Hull East (Karl Turner), who I believe has just left the Chamber, on a very articulate speech. That might be something that the constituents of Kingston upon Hull East take a while to get used to. I am grateful to the hon. Member for Eltham (Clive Efford)—he has also left the Chamber—for his colourful description of, and personal perspective on, the new coalition, although when I heard him discussing the Stockholm syndrome, I wondered whether he was talking about the process whereby Labour Members stuck with their former leader, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), for such a long time.

The seat that I represent is a three-way marginal, as was the former constituency of Camborne and Falmouth. The election left me with a majority of just 66 over my predecessor, so it has certainly lived up to its reputation again this time around.

It is a special honour for me to represent my home town. I was brought up between Camborne and Hayle, in Cornwall, and my family have lived and worked in the area for more than 400 years. When one has such deep roots in a constituency, one feels a special responsibility for its long-term future.

My predecessor, Julia Goldsworthy, was also local, and came from a well known Camborne family. I pay tribute to her work for the seat in her five years as a Member of the House. When she was elected she was the youngest MP in England and one of the youngest in the country. She was quickly promoted within the Lib Dems, and became first a health spokesman, later shadow Chief Secretary to the Treasury, and finally Communities and Local Government spokesman. She also campaigned locally, most notably on water charges and the injustice in the south-west whereby just 3% of the population are expected to carry the burden of maintaining 30% of our coastline. I, and many other Devon and Cornwall MPs, will be persistent in pushing that agenda forward and trying to find a policy solution that ends that injustice.

Camborne and Redruth is a diverse constituency. To the south is the peace and tranquillity of the Helford passage and some fantastic gardens such as Trebah and Glendurgan, with their collection of plants. To the north is the rugged splendour of the north cliffs and undoubtedly one of the best beaches in the country at Hayle, with three miles of golden sands. At its heart, however, are the three industrial towns of Camborne, Redruth and Hayle, which have made a remarkable contribution to the industrial revolution. The steam locomotive was invented there by Richard Trevithick, the famous Camborne engineer, and the first ever gas lamp was invented by William Murdoch in Redruth. Ever since, there has been a healthy rivalry and competition between those towns and not least their rugby clubs.

The loss of the mining industry and iconic engineering firms such as Holman Brothers in Camborne dealt a serious blow to the Camborne and Redruth area. I truly believe, however, that we can be pioneers again and become the international centre of excellence in renewable energy and, most importantly, wave power. Cornwall’s coastline is second to none, and we have the engineering expertise to turn ideas into industry. The wave hub project, currently under construction near Hayle, will be the first of its type anywhere in the world—the first installation that can test commercial-scale wave devices. The constituency also leads in much of the academic research work that will enable wave power to move forward, especially at the Camborne school of mines, now located at the combined universities for Cornwall at Tremough.

My No. 1 priority for the area will be economic regeneration. I was delighted to hear the Chancellor say in his Budget that he does not propose to make a further cut to total capital spending. If we want to improve our infrastructure and competitiveness and rebalance our economy, it is essential that we continue to invest in that infrastructure. He is also right, however, that we should switch the focus to creating new enterprises and businesses, and that in particular we should encourage the development of new enterprise in those regions such as mine that have perhaps been too dependent in the recent past on the public sector. There is only one way out of the current recession: through new businesses setting up and new industries being created. We need to harness a culture in which entrepreneurs are willing to get out there, take risks, have a go, and feel that they can make a difference.

Earlier, I mentioned Richard Trevithick, the most famous inventor from Cornwall. Like many pioneers, Richard Trevithick never actually made any money from his idea of building an engine, but the rest of the country did, and the world has benefited from that invention and everything that followed it. Trevithick had no regrets about what he had done. Recently, when conducting some research, I came across an interesting extract from a letter that he had written. I shall end with this quotation, because I think it makes a very valid point.

“I have been branded with folly and madness for attempting what the world calls impossibilities, and even from the great engineer, the late Mr. James Watt, who said to an eminent scientific character still living, that I deserved hanging for bringing into use the high-pressure engine. This so far has been my reward from the public; but should this be all, I shall be satisfied by the great secret pleasure and laudable pride that I feel in my own breast from having been the instrument of bringing forward and maturing new principles and new arrangements of boundless value to my country. However much I may be straitened in pecuniary circumstances, the great honour of being a useful subject can never be taken from me, which to me far exceeds riches.”

I believe that as we face the present economic challenges and try to deal with the environmental challenge of climate change, we can learn a lot from pioneers such as Richard Trevithick. What we can learn is that Government cannot simply drop all the answers. I have heard a great deal in the debate today about how Government can do everything, but they cannot. In the final analysis, we need talented individuals to come up with the solutions. The role of Government is to enable those individuals, not to try to replace their role.

15:51

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

I welcome you to your seat, Mr Deputy Speaker. I also congratulate the hon. Member for Camborne and Redruth (George Eustice) on his excellent maiden speech, and my hon. Friend the Member for Kingston upon Hull East (Karl Turner) on his.

Many of my hon. Friends have already raised their objections to the Budget. I share all those objections. As was pointed out by my hon. Friend the Member for Telford (David Wright), the Budget attempted to rewrite history, completely ignoring the world economic crisis. This is the first Budget of the 21st century that hits those who are worst off the hardest. Contrary to what was said by the hon. Member for Ealing Central and Acton (Angie Bray), who used the phrase “needs must”, the Tories told us throughout the election campaign that there would be no cuts in front-line services. There is no possibility of cuts of more than 25% in Government Departments without front-line services taking a hit.

I want to focus on two very different elements of the Budget which will have a negative impact on my constituency. The first is the appalling news that the Sure Start maternity grant is to be restricted to the first child. That raises a number of obvious problems, not least the moral hazard of cutting benefits for low-income families and their newborn babies when they need help most.

It seems obvious that, in the interests of all of us, children from low-income families should be supported as much as possible. The proposal in the Budget is less than clear. Will the restriction of the grant to a first child mean that those who did not take the benefit when they had their first child and are now having their second cannot receive it, even if they need it? That seems particularly likely to happen in a number of instances, especially following the recession. Moreover, the Budget seems to make no provision for a number of “blended” families. What of the mother with her first child who is the father’s third? Will that family be eligible for the grant? What of families in which a child is born while an older baby is still using the necessary equipment, and what of twins?

The Government will undoubtedly attempt to justify the cut by saying that the grant is intended to buy permanent equipment such as prams, cots and sterilisers, items that will last and can be used for siblings, but what their decision fails to recognise is that a great deal of the grant is used after the baby is born to offset the high cost of looking after a newborn child. The grant is often spent on nappies, milk, other food products, clothes, medicine, and any number of other perishable items that cannot be used for more than one child.

Furthermore, while it is somewhat more likely that a family with a second child will already have the necessary equipment, it is by no means reasonable to make such an assumption. That is especially true of low-income families who will often buy cheaper, less durable equipment that simply will not last long enough to be used by later siblings. Even if it were reasonable to assume that a pram, for example, could be used for a second child as well as a first, what of the third or fourth? The estimated cost of bringing up a baby during its first year is £4,000. I know from speaking to many constituents that the £500 Sure Start maternity grant has afforded babies in Wavertree a better welcome to our world.

The Chancellor said on Tuesday that his Budget would protect the most vulnerable.

[Robert Halfon (Harlow) (Con)]

The hon. Lady talked about cuts to front-line services in her constituency and I understand her wanting to protect those services, but why even in the boom times did her Government cut front-line services in my constituency, such as closing down the Territorial Army centre, cutting the budget of Harlow college by £1.6 million and closing down the Inland Revenue office? Why are Labour cuts ignored and Tory cuts condemned?

[Luciana Berger]

I thank the hon. Gentleman for his comments but I do not agree with them. My point was that the Conservatives campaigned during the election on a pledge that they would not cut front-line services. That will not now be the case.

[Toby Perkins]

Does my hon. Friend share my confusion? Have we not been told for the past six weeks that the Labour Government spent too much money? It appears now that we were cutting all the time. Is she as confused as I am as to the policy of the Government?

[Luciana Berger]

My hon. Friend makes a very good point. [Interruption.]

[Mr Tom Harris (Glasgow South) (Lab)]

My hon. Friend is making a powerful and significant contribution in talking about the difficulties that younger parents in particular have in bringing up their first and second children. What conclusions does she draw about the Conservatives’ approach to those difficulties from the fact that Conservative Members are mocking her and laughing when she is trying to make a serious point about the difficulty and cost of bringing up children?

[Luciana Berger]

I thank my hon. Friend for making his point and I am disappointed by the response from Conservative Members.

On Tuesday, the Chancellor said that his Budget would protect the most vulnerable. I urge the Government to address the question of what limiting support to the firstborn will mean in practice. No family that needs help should miss out and, contrary to the Chancellor’s declaration, this cut will affect rather than protect the most vulnerable.

The second very different element of the Budget I wish to raise is the remarkably short-sighted decision not to introduce tax relief for the UK video games industry, which makes a valuable contribution to the UK economy: in 2009, it generated £2 billion of sales, added approximately £1 billion to the UK’s GDP, raised over £400 million for HM Treasury in tax revenues, and employed more than 28,000 people. It is an export-oriented, high-tech, highly skilled, low-carbon industry.

As we speak, the best developers are leaving the UK and going to Canada and the USA. The UK lost 700 jobs in the sector from 2008-09; a full 7% of its work force. That not only is harmful to the UK industry and to games already in production but means that some games that would otherwise have been made in the UK are made elsewhere.

Why are so many of the video games industry work force leaving the UK at a time when global video game sales grew by 24%. between 2007-09? Why has the UK games development industry fallen from the third largest in the world based on revenue in 2006 to fifth place in 2009? It is because the UK’s principal competitors in Australia, Canada, China, France, South Korea, Singapore and the USA all received national or regional state tax breaks for games production. For example, in Montreal, Quebec, there is a five-year income tax holiday for foreign specialists and research and development tax credits cover 20% to 35% of qualifying expenditure.

Other competitive nations have taken a strategic decision that the video games sector is a key element of their economy. Research carried out by TIGA, the trade association representing the UK games industry, indicates that over five years games tax relief would create or save 3,550 graduate-level jobs, increase and safeguard £457 million in new development expenditure and save development expenditure that would be lost without tax relief. Most significantly, introducing games tax relief would increase and protect £415 million in new and saved tax receipts for HM Treasury—far outweighing the £192 million that games tax relief would cost.

Can the Minister explain why it is stated in table 2.1 of the Red Book that the non-introduction of video games tax relief would raise an additional £190 million over the next five years? How was that figure arrived at?

In my constituency and across Liverpool there are a number of video games developers: Genemation, Bizarre Creations, Magenta Software and Playbox. Sony Computer Entertainment, based at Wavertree technology park, employs more than 600 people. Games developed over the past 15 years in north-west England alone have produced and sold over 100 million units, equating to over £3 billion in revenue.

We have an outstanding record for vision and originality of games, but it is clear to me from having spoken to a number of people in the industry that there is a deep sense of frustration. All they want is a level playing field so that we can at least maintain the UK’s position, if not grow the sector, so that jobs are retained and we can compete on a fair basis.

The video games sector is an important and growing knowledge-based industry. More than a third of the work force are carrying out graduate-level jobs in games development. Average salaries exceed £30,000, which is above the national average of £22,000. There is absolutely no doubt that a cultural revolution is taking place in the games sector, whether in serious games such as educational programmes and defence training simulators or recreational games.

Interactive media industries are with us for the next century and we should be doing all we can to support the sector to be a world leader in the field. Just as we have film tax relief in the UK, the Government should uphold the commitment both coalition parties made before the election to have a games tax relief. Britain has traditionally been a leader in the field of video games development, and in many ways it still is. However, we cannot compete without the same tax incentive system that is in place in other countries.

Throughout the Chancellor’s speech on Tuesday, he kept on repeating that his Budget was an accelerated decrease in the structural deficit, but as I have shown through reference to just two of the cuts announced, it is actually an accelerated attack on families. It is an accelerated attack on those who are most vulnerable, on business and on growth and jobs. I will be voting against it next week.

16:02

[Jeremy Lefroy (Stafford) (Con)]

May I welcome you to the Chair, Mr Deputy Speaker? May I also congratulate those Members who have made their maiden speeches today: my hon. Friends the Members for Staffordshire Moorlands (Karen Bradley), for Hendon (Mr Offord) and for Camborne and Redruth (George Eustice) and the hon. Member for Kingston upon Hull East (Karl Turner)? We have heard some excellent speeches, and I was particularly pleased to hear from my hon. Friend the Member for Staffordshire Moorlands, whose constituency I often have the pleasure of walking through on my very rare days off these days.

I wish to speak briefly about business finance. Some Members have talked about the lack of discussion of growth today, and growth is clearly vital for our economy. Members have referred to the importance of the private sector and of private sector investment taking us out of the situation we are in and creating jobs and tax revenues.

The Budget Red Book rightly states that small and medium-sized enterprises

“are fundamental to the economic recovery and to tackling unemployment”,

and I listened with interest to the remarks of the hon. Member for Liverpool, Wavertree (Luciana Berger) about tax relief on video games. However, some SMEs continue to have problems accessing the affordable finance that they need.

It is important to put that statement in context. According to figures from the Institute of Directors, in 2001, 45% of its members were financing their businesses through bank loans and 40% through overdrafts. A recent survey shows that now only 28% do so through bank loans, 36% through overdrafts and 20% to some extent through credit cards. That is not a sustainable model for SME finance when we are looking to SMEs to be the engine that pulls us into the strong growth necessary both to tackle the scourge of unemployment and to generate the tax revenues that we so desperately need.

Why have things changed so much? An IOD survey of 1,045 directors earlier this year was revealing. It showed that 57% of businesses seeking bank finance in 2009-10 were rejected by their banks. Perhaps even more discouraging was the fact that 83% of those declined bank finance were not even offered information on the previous Government’s and the current Government’s enterprise finance guarantee. Indeed, personal guarantees were sometimes asked for even when the enterprise finance guarantee was offered.

The Government have increased the enterprise finance guarantee facility by £200 million for the current year to support additional lending of up to £700 million. I welcome that, but it is clear that implementation is key. The EFG will not help small and medium-sized enterprises if the participating banks do not make their customers fully aware of it. Neither will it help if the procedures are lengthy. Profitable SMEs often run into short-term cash-flow difficulties—I recently came across one such instance in my constituency—and swift and decisive help is needed in such cases. I therefore welcome the processing target, which is mentioned in the Red Book, of 20 business days for all major lenders participating in the EFG. Indeed, I think that serious lenders could do considerably better.

Although the EFG is welcome, it will not fix the problem of the lack of bank finance. The announcement that the Government will publish a Green Paper on business finance before the summer recess is an important and clear sign that they understand the situation, but we need action from banks now. Their reputation has been tarnished in recent years, and I do not make that point with any satisfaction because they are not the only people in that position. What better way for British banking to restore its reputation than to provide most of the finance that UK SMEs need to carry out the task of profitably creating jobs and generating tax revenues?

Bank loans and overdrafts are not enough. SMEs also need greater access to riskier capital, particularly equity and quasi-equity, but the UK has not excelled in that area. The new or growing business cannot necessarily provide security for loans, so more unsecured finance is desperately needed. I therefore welcome the growth capital fund that the Government will create as part of the existing £237 million programme of enterprise capital funds. I credit the previous Government with recognising the importance of such funding and I am delighted that this Government will build on that work.

Those amounts are necessarily small. It is the Government’s role to take the lead, but they cannot and do not shoulder the whole burden. In north Staffordshire, we have the Michelin development fund, which was set up by the tyre company to provide unsecured finance to local SMEs, with the specific remit of creating sustainable jobs in profitable businesses. There is also the North Staffordshire Risk Capital Fund, which invests in businesses in my constituency. It is a public-private partnership, with investment from local businesses, individuals and the regional development fund. It was set up with a 10-year life and is drawing to a close. We must ensure that it is renewed or replenished, because it performs a vital role. I will do everything I can to assist with that. In south Staffordshire, we have the Black Country Reinvestment Society, which supports firms in Stafford with secured and unsecured funding.

I believe that Members of Parliament on both sides of the House have a vital role to play in encouraging such funds to form and grow in our constituencies. In my working life in business, over more than 25 years, the greatest pleasure was in creating new and lasting jobs, and the times of most distress were when someone had to be made redundant. Working with local people to create or support such funds gives us the chance to play a direct role in helping SMEs to do the job that they want to do and that we so desperately need them to do.

16:09

[Mr Chuka Umunna (Streatham) (Lab)]

I have listened with interest to the various speeches made today and I do not think anybody denies the need to reduce the deficit. Neither do I think that my fellow Labour Members think that the answers all lie with government, but the big decisions that we are taking at the moment are about judgment and the direction in which we think economic strategy should go.

I want to pose some questions on those issues, because it is clear, on any analysis, that this Budget is going to hit everybody. My own view, which is obviously not shared on the other side of the House, is that it will hit the poorest and most vulnerable people in society hardest. How can it not, given the figures that we are looking at? The IFS data for 2012-13 leave no doubt of the Budget’s regressive nature. They make it clear for all to see: indeed, the Financial Times said yesterday that

“the result of cuts in government services will be felt more on Nottingham's estates than by the Notting Hill set.”

There has been a lot of talk in the Chamber today about comparisons with the situations in Greece and Canada, but in my view they are false. I think that the most appropriate comparison in many respects is a domestic one, and it was touched on by the hon. Member for Cities of London and Westminster (Mr Field). He is no longer in his place but he made a very interesting speech, in which he compared the present situation with the approach adopted by Geoffrey Howe and Margaret Thatcher. In fact, the Culture Secretary has been talking up the appropriateness of making comparisons with the Thatcher Budget of 1981 and the general economic strategy of that Conservative Government.

There are differences—we are in a different time, and the economic circumstances are not the same—but what is being done with this Budget has strong parallels with what was done in the early 1980s. Geoffrey Howe raised VAT from 8% to 15% in 1979, following an election campaign in which he said that his party had absolutely no intention of hiking up the tax. Today, of course, the Chancellor has raised VAT from 17.5% to 20%, following an election campaign in which he—and his coalition partners in particular—said that they had no plans to increase VAT.

Geoffrey Howe slashed benefits in the 1980s: the 1981 Budget made sickness benefits and unemployment benefits taxable, and unemployment benefit for the over-60s was reduced. The Chancellor today has done similar things today: among many other things, he has cut child benefit and disability living allowance, and reduced tax credits for young parents earning just £15,000 each.

The reactions from the national commentariat are similar too. In 1981, 364 economists signed a letter to The Times warning that the Thatcher Government’s policies would deepen recession and threaten social and political stability. In April this year, 80 economists signed a letter to The Times warning that the current Tory Government’s approach would lead to job losses that would affect spending and confidence and tip us back into recession.

Surprisingly, Washington in some respects took a more cautious approach, then as now. In 1981, just after Geoffrey Howe’s Budget, President Reagan signed the Economic Recovery Tax Act to stimulate US consumption. This month, President Obama wrote to the Prime Minister and other G20 leaders to remind them of the dangers of withdrawing stimulus and engaging in fiscal consolidation too quickly.

What were the effects of the approach adopted by Geoffrey Howe in the 1980s? I can describe what they were in my constituency, in which I am proud to say that I have lived all my life. In April 1981 my mother was out shopping with my sister and me in the middle of Brixton when the riots broke out. I was too young—just two and half—to be able to remember what happened, but my mother remembers it well, and it was terrifying.

Soon after those riots, Lord Scarman was appointed to hold an inquiry into what caused them. It is well known that racism in the police at the time was a major factor, and the rioting was attributed to a loss of confidence in the police among significant sections of the population in my constituency and the other two constituencies in the Brixton area. However, although the report said that

“the social conditions in Brixton do not provide an excuse for disorder”

it added that

“the disorders cannot be fully understood unless they are seen in the context of complex political, social and economic factors”.

The report continued:

“There can be no doubt that”

unemployment

“was a major factor in the complex pattern of conditions which lies at the root of the disorders in Brixton and elsewhere. In a materialistic society, the relative deprivation it entails is keenly felt, and idleness gives time for resentment and envy to grow.”

With regard to the Tulse Hill estate—I have just come from that estate to the House today—it was pointed out that high unemployment, coupled with society’s emphasis on material acquisition, led to both material deprivation and a sense of hopelessness, particularly among the youth. Of course we know what happened after that: unemployment rocketed beyond the 3 million barrier and stayed there until 1987.

[Kwasi Kwarteng]

Is the hon. Gentleman seriously suggesting that riots on the scale witnessed in Brixton in 1981 will come as a result of the Budget?

[Mr Umunna]

No, I am not, but I am seeking to point out what happens when people take a cold, dispassionate and inhuman approach to economics and neglect to consider the consequences of their actions.

[Mr Tom Harris]

I rise in part to respond to the hon. Member for Spelthorne (Kwasi Kwarteng), because it was not my hon. Friend the Member for Streatham (Mr Umunna) who suggested that riots would return to the streets of Britain; it was the Deputy Prime Minister, who said just a few weeks before the general election that the scale of cuts foreseen at the time would result in civic society breaking down in this country. Is the hon. Gentleman suggesting that the Deputy Prime Minister is mistaken?

[Mr Umunna]

Silence.

There has been a lot of talk about IFS and Institute of Directors reports, various statistics, the extent to which we need to reduce the structural deficit and the extent to which it is cyclical—but we are talking about people’s lives, and I am deeply worried about what the approach adopted by the Government means for my constituents and those who live in similar areas. There was talk of contrived anger. My worry is not contrived; it is very real. As has been said, the Office for Budget Responsibility has revised up the unemployment forecast by 100,000 people. The Chartered Institute of Personnel and Development is saying that it is absolutely certain that unemployment will go beyond the 3 million barrier again.

I took the trouble to look into some of the cuts that Geoffrey Howe imposed on the country, and what worries me most is that they pale into insignificance compared with the cuts envisaged by the Government now. Howe cut spending by 4% between 1981 and 1984. The Chancellor is planning 25% cuts over four years.

[Matthew Hancock]

I thank the hon. Gentleman for giving way in his an extremely thoughtful speech. Does he not agree that we have to deal with these huge problems because of the structural deficit that we had going into the recession? Does he agree with this quotation:

“Public finances must be sustainable over the long term…If they are not, the poor, the elderly, and those on fixed incomes who depend most on public services will suffer most.”?—[Official Report, 2 July 1997; Vol. 315, c. 303.]

They are not my words but those of the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown).

[Mr Umunna]

First, the deficit pre-November 2008 was primarily in some respects caused by increased spending to which those who are now in the Conservative Government were then committed. Conservative Members are continuing to promote the view that somehow there was no global credit crunch, and that the bankers, many of whom they are very friendly with, had nothing to do with it—but the general public do not buy that.

Conservative Members will have to accept that, but the real question that I want answered—I note that a Minister is still here—is: what comfort can he give to the people who live in places such as the Tulse Hill estate in my constituency that they will not have to pay the price? What measures will he take to help them to get back into work? What will he do to give them extra training and experience? Why on earth is he cutting programmes such as the future jobs fund, which I have seen working in my constituency, helping to get people back into work? The Government say that the future jobs fund is ineffective and a waste of money, but they do not have figures on which to base that assertion. The Red Book makes no provision for funding any programme to get young people back into work or into training that will replace what the Government are abolishing.

[The Financial Secretary to the Treasury (Mr Mark Hoban)]

Perhaps the hon. Gentleman will think back to the package of cuts that was announced last month. Some £500 million of the £6.2 billion of cuts was recycled into extra training and more apprenticeships; that is where this party’s commitment to growth comes from.

[Mr Umunna]

I am not going to say that I do not welcome things such as apprenticeships, because we need those programmes, but at the same time as the Government are putting in place 10,000 apprenticeships, they are slashing a programme that could place hundreds of thousands of people in work. I do not understand their approach; ultimately, my constituents want to know what is happening.

16:21

[Guy Opperman (Hexham) (Con)]

I remind the House that I have declared a previous involvement in manufacturing through my family firm.

Before I talk about the Budget, I wish to say something about the maiden speeches that we have heard. We heard an excellent maiden speech from my hon. Friend the Member for Staffordshire Moorlands (Karen Bradley). Her seat is similar to my Northumberland constituency, and she spoke eloquently about the contribution that can be made by tourism and farming, which I look forward to championing with her. My hon. Friend the Member for Hendon (Mr Offord) also spoke well, and the hon. Member for Kingston upon Hull East (Karl Turner) was a great deal more articulate than his predecessor in the House. My hon. Friend the Member for Camborne and Redruth (George Eustice) said that his family lived in his constituency 400 years ago. The constituency was also the home of Ross Poldark, who found fame and fortune in the novels, and I am sure that my hon. Friend will have a similarly colourful career.

It gives me no pleasure—to a certain degree I endorse what was said by the hon. Member for Streatham (Mr Umunna) on that subject—to speak in a Budget debate when we all face such difficult circumstances. Unemployment has increased considerably in the four Northumberland constituencies. It has increased by nearly 60% over the past five years in the two Labour-held constituencies of Blyth Valley and Wansbeck, and by a similar amount in Berwick-upon-Tweed. Unemployment in Hexham has increased by 67% in the past five years.

I have heard much of what Labour Members have said in today’s debate, but this is not a question of ideology. We are not Thatcher’s children producing Thatcherite views. I assure Labour Members that I did not join the Conservative party until considerably after Mrs Thatcher left office, and I am not in a position in which I want to put forward such a point of view. The ideology behind what we are trying to do to put things right is a simple question of maths. We have outgoings of £700 billion and incomings of £545 billion. Those figures are unquestionable; the issue is how we address the situation.

My ideology arises from the fact that my family came to this country nearly 100 years ago as immigrants with next to nothing. They had no opportunities, save what they could make. In the 1920s—when there was a real recession and things were really bad—my grandfather came home from school to be told by his father that school was no longer an option, and he would have to be withdrawn so that he could work for his father. The three children then began to work for their father in the basement of a small flat in Islington and built up a small manufacturing business on the back of a small gift of £40. I wish to say something about manufacturing. In 1997 we made roughly as much as we consumed in this country—about £160 billion, compared with £150 billion. Now, however, we consume nearly twice what we make.

In Northumberland apprenticeships are struggling. I visited Glendinning’s, a firm in my constituency, shortly before the election. I was told that the firm could not take up the Government’s apprenticeships, for the simple reason that they were so complex and so administratively difficult to implement that it was better off working outside the Government’s scheme and ignoring any Government money.

During the election I went round nearly all the stores in Wylam in my constituency and asked the owners what the effect would be if national insurance went up. Every single one said that if it was increased, they would have to put people out of work.

There are many responses to the Budget that we could discuss, but there has been little from the Labour leadership. I have listened to the debates so far, and yesterday I listened to the hon. Member for Harrow West (Mr Thomas), who uttered not one word about what he would do differently. It is all very well saying that the Labour Government were going to cut the deficit by 50% in a number of years—but surely the question is what would they cut, and what would they do differently? The answer to that is fundamentally lacking from the Opposition’s arguments. It is a bit like watching the French football team: everything is wrong, but they have no alternatives.

I have also read in detail the speeches of the shadow Chancellor, the right hon. Member for Edinburgh South West (Mr Darling), and the right hon. and learned Member for Camberwell and Peckham (Ms Harman), who spoke on Tuesday. The only features of which she spoke in support were the capital gains tax measure, the 50p tax and the bank levy.

Earlier today, to support his argument, the right hon. Member for Coatbridge, Chryston and Bellshill (Mr Clarke) quoted the right hon. John Smith saying, “I judge a Budget on what happens to a person living on a council estate.” We have a number of council estates in my constituency, and during the election we constantly articulated the view that to spend £400 a week while making only £300 a week is to head for financial disaster. Everyone can understand that.

We have heard a lot in our debates in the House about various organisations’ comments on the Budget. I represent a north-east constituency. The North East Chamber of Commerce, an august body which represents more than 4,000 businesses and more than 30% of the region’s work force, says:

“The Budget clearly contained a number of painful measures on…taxation and spending. However… Funding for a strategic economic development body in the North East was maintained”.

The NECC continues:

“Reductions in employer National Insurance (NI) contributions and headline Corporation Tax are welcomed by businesses, as is the extra exemption on NI in certain regions”.

It says:

“The Chancellor was right to avoid further capital spending cuts and to confirm spending on the Tyne and Wear Metro”.

The NECC goes on:

“The scale of the public finance deficit clearly required radical action… NECC believes the measures taken broadly support the wealth-creating part of the economy in the North East.”

It adds:

“Freezing public sector pay and reforms to pensions were difficult but necessary decisions to address the deficit and help reduce the need for large job cuts in the region’s public sector.”

The NECC welcomes—[Interruption.] Bless you. I welcome the hon. Member for Washington and Sunderland West (Mrs Hodgson), a fellow north-east Member, who is suffering from hay fever. I am happy to have accepted her intervention, brief though it was.

The NECC has also welcomed the increased thresholds for employer national insurance contributions and changes to the headline rate of corporation tax. The one criticism I put to Treasury Ministers is that, like the NECC, I find it

“disappointing to see no change to empty property rates, which we continue to see having a punitive effect”

on businesses, not only in the north-east, but throughout the country.

On capital spending, it is wonderful to see that the Tyne and Wear metro will go ahead, and that the A1 will finally see some form of action, which has long been supported by many hon. Members—albeit that the money still has to be found.

As I was sitting here this morning representing a fundamentally farming constituency during questions to the Department for Environment, Food and Rural Affairs, there was a brief sighting of an interesting and rarely seen—in the House for the past six weeks—individual, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown). He is not normally seen at DEFRA questions, and like a small badger he nipped in and, alert to a possible cull, nipped out again very quickly, before any of us could question him in any way whatever, whether on DEFRA questions—not something that I necessarily think he would have been seeking to answer—or on Budget matters. It would have been wonderful to have had the opportunity to ask the former Prime Minister just what he had to say about the state of the budget. I would certainly have wanted to make the point that we are set to miss his golden rule by £485 billion—quite a significant miss, one might think. One thing is for sure: when he is brought to account in this House, he will have to answer for the state of the nation and the country’s finances. He may run, but he will never hide from that issue. He has much to account for, and we will ensure that he does so.

I finish by recommending a study of all the finances. Some aspects might be due to other factors, but most of what we now see happened on the watch of the previous Government. I recommend the Budget to the House.

16:32

[Valerie Vaz (Walsall South) (Lab)]

It is a pleasure to follow the hon. Member for Hexham (Guy Opperman). He does his family proud. They will be very proud of him and the speech that he made today. It is also a pleasure to listen to all those who made their maiden speeches. They will do their constituents proud.

Thank you, Mr. Deputy Speaker, for allowing me to speak in the Budget debate. There was an audible gasp around the country, and that was just from the parents whose children had finished their GCSEs, and that includes my own daughter Liberty, my nephew Luke and 630,000 other 15 and 16-year-olds. They have worked hard and given up many activities, so that when August comes no one can say that they did not work hard and that exams are getting easier. When they end up here, as some of them will do, I hope that they will not condemn us by saying that we just taught them how not to pass exams and did not give them a decent education. We should acknowledge the efforts of their teachers, too. My husband Paul is waiting for an Ofsted inspection, so there is another major event in the family. I was pleased to invite his school, St Mary’s Roman Catholic primary, to the House. They came on Monday, and were greeted by their MP, the hon. Member for Brentford and Isleworth (Mary Macleod).

The Secretary of State for Education could learn something from those young people. He seems to misunderstand the word “free”. He wants people to set up free schools, but they are not free; the money is coming from the public sector and coming from taxpayers so that some people can say, “We’re setting up vanity schooling;” and that is just what it is.

Much has been said about public sector workers, and it is here that I have to declare an interest because I have friends and former colleagues who work in the public sector. I know how hard they work. They work beyond their contractual hours, and when there is a recruitment freeze, they pick up the slack and carry out the work created by the vacancies. They went into the public sector because they wanted to serve the public, and their only perk was a decent pension. They have never had a large wage compared with those in the private sector. They are the people who serve the House, who turn policy into legislation and who defend the Government. Instead of being accountable to members of the public, they seem to be accountable to accountants. They know where the budget can be trimmed. Every single minute of their working day is accounted for.

Public sector workers work beyond the call of duty just to ensure that the wheels of this country turn. They always act in the public interest and are committed and loyal to this country. I note that the Government want to hear from them about how to make cuts, but that old cliché of turkeys voting for Christmas comes to mind, because no one will say, “Here, have my job. Take this as a cut.” The Government should carry out a skills and policy audit of each Department, because that way they can decide their policies and priorities. I note from the Chancellor of the Exchequer’s speech that he has asked Will Hutton to look at plans for fairer pay throughout the public sector, and I ask the right hon. Gentleman to extend that remit to those private companies that received public money in the bail-out.

Will Hutton said himself in an article in The Observer that even John Lewis, the founder of the department store, thought it extraordinary that a chief executive should receive almost 20 times’ the pay of other workers. President Obama’s pay tsar is doing exactly the same in the United States, and Will Hutton’s remit should be used to renegotiate the payouts and compensation made to those who have received exceptional taxpayer assistance.

Much has been said about the private sector mopping up after the public sector, but the reality is there to be seen in my constituency. On Saturday I met a delegation of workers from Maple Leaf Bakery in Raleigh street. They told me how they are under pressure to sign a new contract at different hourly rates. If they do not, and even if they put in a letter of protest, they will be sacked, so they either accept the new rate or go. The rate has been reduced from £8.48 an hour to £6.88. Those people make our daily bread. I met them, and some have been at the factory for more than 37 years, so they have the skills. If there had not been a minimum wage, who knows what their pay would be? ACAS has been involved, and all that the workers want to do is work. They have a way forward and have suggested a team to look at ways of reducing waste, upgrading the plant and cutting the number of managers. Its parent company in Canada is making a loss, but the company in my constituency makes a profit. My hon. Friend the Member for Bolsover (Mr Skinner), commonly known as the beast of Bolsover, is sadly not in the Chamber, but he described the events of the economic meltdown as an “economic tsunami”. I could not put it any other way.

People forget that when the Prime Minister attends the G20 summit at the weekend, he takes with him the legacy of my right hon. Friends the Members for Kirkcaldy and Cowdenbeath (Mr Brown) and for Edinburgh South West (Mr Darling), who did not blink in the face of the huge financial pressures and meltdown but steered the ship of state into safer waters. That is the true legacy of the past 13 years.

16:38

[Sajid Javid (Bromsgrove) (Con)]

I pay tribute to those hon. Members who have made their maiden speeches today. My hon. Friends the Members for Staffordshire Moorlands (Karen Bradley), for Hendon (Mr Offord) and for Camborne and Redruth (George Eustice), and the hon. Member for Kingston upon Hull East (Karl Turner), all made excellent maiden speeches.

After 13 years of Budgets that were predicated on the mistaken notion that boom and bust had ended, it is hugely reassuring to see a Budget that restores some fiscal sanity. This Budget puts at the heart of our economic policy the restoration of our nation’s finances and the laying of foundations for stronger economic growth. In response to the hon. Member for Walsall South (Valerie Vaz), however, I must add that we do not know what the previous Government’s legacy is, because some costs of the past two or three years’ actions have yet to be borne—but will be unless this Government take preventive steps.

I shall not dwell on what has been bequeathed to us, but I must mention a few statistics that speak for themselves. The budget deficit is more than 11% of GDP, and the largest of all advanced nations; the visible national debt is 68% of GDP; and a record 28% of the adult working population—8 million people—are currently described as “economically inactive”. Despite all Labour’s efforts, no amount of spin can hide the truth of the abysmal inheritance that we have been given. Once again, it has been left to a Conservative-led Administration to clean up the mess of a former Labour Administration. As it says in the Budget, we have to start doing that by addressing this record peace-time deficit.

I am somewhat surprised that Labour Members continue to act as though we can keep living beyond our means, when only £3 in every £4 of Government spending is raised through general taxation. Only eight weeks or so ago, even the Labour leadership admitted during the election campaign that if they won the election they would have to carry out severe cuts as well. There were various estimates, but they averaged about 20% of real cuts in unprotected Departments over the course of the next Parliament. Notably, the then Chancellor of the Exchequer said in an interview that if he were re-elected he would have to make bigger and deeper cuts than Margaret Thatcher did in her time. Now, however, Labour Members act as though those cuts are not necessary and we are able to make a choice.

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

It is not the reduction of the deficit that is the point of conflict between us but the scale and the speed of doing it. Doing it in the way that has been proposed risks pushing the economy back away from growth and into recession. In that situation, the deficit will increase, not decrease. Does the hon. Gentleman accept that point?

[Sajid Javid]

The hon. Gentleman’s own party said before the election that it expected to make very large, severe cuts, in the order of about 20% in real terms. Our Budget proposes cuts of about 25% in real terms in unprotected Departments. Is he really saying that the only thing bothering him is a difference of 5%? I have not heard anything from Labour Members in the past two or three days that remotely suggests how they would achieve the 20% cut that they have talked about.

James Carville, who was President Clinton’s political adviser, once famously said:

“I used to think if there was reincarnation, I wanted to come back as the President or the Pope or a .400 baseball hitter. But now I want to come back as the bond market. You can intimidate everyone.”

Soon after that, President Clinton abandoned his plans to increase borrowing, recognising instead that, even at that time, he had no choice but to balance the budget. I have traded in the international bond markets for many years, and working on a trading floor I saw for myself just how severe the financial crisis was. There is no question but that we would have faced economic problems regardless of the actions that were taken by the previous Government, but their actions made things worse, and that is the key. The situation has been made worse by the huge amount of borrowing that we have taken on since that time.

[Mr Tom Harris]

Does the hon. Gentleman believe that it was right for the Government to bail out Northern Rock?

[Sajid Javid]

Personally speaking, on my own behalf, I would not have carried out the bail-out in such a way. I think that the true consequences and costs of that bail-out are yet to be borne out.

I know from my own experience of the bond markets that they take no hostages. We now depend on them utterly for the nation’s finances. My right hon. Friend the Secretary of State was absolutely right to point out that we face a major sovereign crisis unless we take serious action. Some Labour Members have said that it does not look as though we have had problems with financing our budget deficit to date. We borrowed about £225 billion in gilts in the last financial year, but at the same time, the previous Government, through the process of quantitative easing, printed about £225 billion of new money. It is therefore not difficult to work out how, in effect, much of that borrowing was paid for.

The United States was the only other major economy that went through a process of quantitative easing, and we cannot use it as an example to compare with ourselves because, as we know, it has a reserve currency and we do not. That makes its situation entirely different when it comes to such an economic policy. The only other country in the world that I can think of without a reserve currency that went ahead and printed money at about the same time as us—indeed, before—was Zimbabwe. It is rumoured that the Finance Minister of Zimbabwe sent a note in 2008 to the then Chancellor of the Exchequer offering him his economic advice in exchange for lifting visa restrictions on him and his family. I think the then Chancellor took the advice but did not give anything in return.

The bond markets are picking off grossly indebted nations one by one with rising bond yields and falling prices. We have heard today about Greece, and we have seen what has happened in Ireland, Portugal, Spain and Italy. Those who observe the markets carefully need only look at what has happened, to a lesser extent, in France in recent weeks, where problems have started. That is why France, too, recently announced an austerity package. We have no choice but to reduce the record budget deficit, or else we will face an economic crisis of cataclysmic proportions.

[Chris Williamson (Derby North) (Lab)]

I would be interested to hear what the hon. Gentleman has to say about Professor David Blanchflower’s comments yesterday. He said that the Budget made him more certain that there would now be a double-dip recession, with no room for manoeuvre because interest rates are already so low. Would the hon. Gentleman comment on that?

[Sajid Javid]

Yes; Professor Blanchflower has been consistently wrong for the past three years since the crisis started, and he was wrong in what he said yesterday.

We have no choice but to cut the deficit, and that requires both cuts in spending and the raising of taxes. As we have heard today, we have to a strike a balance between the two, and the burden must fall on public spending. We have no choice about that, because if we raise taxes too much we will destroy the very incentives that we need to create the growth that will get us out of this economic mess.

As we go through that process, we must naturally try to protect the most vulnerable as much as we possibly can. Opposition Members have accused us of being ideological about the matter, but how can we be anything else? They are absolutely right, and there is no shame in it, because there is an ideological difference between what they believe and what we believe about how to get our country back on track and our economy going.

The Opposition believe in some kind of Alice in Wonderland economics in which we can go on living beyond our means year after year. We believe in the real world, where we have to pay our way. They believe that the state has the answer to all society’s problems, but we believe that individuals, helped by the state, have the answers. They believe in an ever increasing welfare state, in which people are tied down and not allowed to profit from their own industry, and we believe in helping the most vulnerable in society—those who cannot help themselves—but freeing those who can work for themselves and earn an income, and giving them the incentives to do just that. Because of that, we believe that we can get more out of our constrained budget, repair our economy and create a fairer and more responsible society.

[Mr Tom Harris]

Will the hon. Gentleman give way?

[Sajid Javid]

I should like to plough on for a bit, but I will give way in a moment.

The size of our national debt cannot be ignored, either. It has not been mentioned much—we have all talked about the deficit, but let us not forget the enormity of the problem caused by the national debt. Any Government will have to address it at some point. Benjamin Disraeli once said:

“Debt is the prolific mother of folly and of crime.”

He should have known, because there was not just public debt at the time; I believe he had some personal debt, and he was probably referring to that as well.

After 13 years in office, Labour took our visible national debt from £350 billion to more than £900 billion—an almost threefold increase. That does not include the invisible national debt, public sector pension liabilities, which reputable organisations estimate to be more than £2 trillion, and all the private finance initiative liabilities, which grew from approximately £20 billion to £150 billion. We have a huge debt problem, which must be addressed, otherwise not only will this generation and our children pay for it, but our children’s children will inherit it. Let us not forget the changing demographics in our country, where we have a growing elderly population and fewer people of working age. That means that there are fewer people to tax and fewer who are able to fund the state’s activities, including repayment of debt.

The Budget addressed how to start promoting growth, which will help us get out of the mess. The Government are reducing corporation tax, the tax on small companies and on entrepreneurs’ relief, and addressing some of the problems of bank lending Many banks have been held back from increasing lending since the onset of the crisis because of the uncertainty of the future economy. The Budget gives banks much more certainty about the future of our economy, and that gives them more confidence to lend.

The securitisation market has not been mentioned often in the debate. More than the equivalent of £5 trillion has been issued in the past 10 years. Many banks used that to provide funding to small and medium-sized companies and to fund mortgages throughout the world. Securitisation unquestionably caused some of the problems of the credit crisis, but we must consider that market if we are serious about getting banks to lend again. So far this year, European banks have issued €30 billion of securitised bonds, against €500 billion in the same period last year. Last year, 95% was purchased by the private sector; so far this year, 95% has been purchased by the public sector central banks throughout Europe, including ours.

We are considering a bold Budget to redress a dire situation. Its measures are thoughtful and disciplined and it aims to spread the economising process throughout the nation. No group is spared and none is favoured.

16:52

[Toby Perkins (Chesterfield) (Lab)]

It is interesting to follow the hon. Member for Bromsgrove (Sajid Javid). There was one thing in the past 14 minutes that I am glad that he acknowledged; otherwise there was little with which I could agree. However, I agreed with the admission that the Budget is ideological and that the Conservative party has delivered the sort of change that it always wanted to make and scrapped the massive improvements that the Labour party made in the public sector. It is not an economic but an ideological Budget. The hon. Gentleman’s honesty, at least about that, does him great credit.

I want to consider the huge and unnecessary gamble that the Chancellor has taken with our economic recovery, and why a genuine growth strategy would enable us to grow our way out of the economic crisis without threatening thousands of people with the dole, and without threatening those who rely on housing benefit or the economic recovery. I shall also talk about the Budget’s impact on my constituents in Chesterfield and Staveley.

First, I shall deal with the myth that the Chancellor had no choice and that the measures were taken out of economic necessity rather than, as the hon. Member for Bromsgrove admitted, political ideology. That is nonsense. The Chancellor’s Office for Budget Responsibility’s report confirms that the borrowing requirement this year was £8 billion less than that forecast by my right hon. Friend the shadow Chancellor in March. Before the Chancellor’s intervention in the Budget, we were on target for the growth forecast for 2011 of 1.25% that the shadow Chancellor had made. The OBR admitted that the shadow Chancellor’s plans for spending restraint over the next four years would have halved the budget deficit by 2014-15, just as he said they would when he delivered his Budget in March.

Uniquely among the main parties, the Labour party is putting forward policies that we campaigned on in the general election a month ago. This could catch on: we could go into elections telling the public what we wanted them to vote for, and then we could come to this place and deliver those policies.

[Mr Tom Harris]

That’s not the new politics.

[Toby Perkins]

My hon. Friend makes a valid point: it probably is not the new politics, but it is something that political parties should perhaps consider.

Hon. Members should remember that the previous Labour Government were the first Government for many years to start paying off the national debt. The stringent financial rules that the former Prime Minister put in place during his long stint at the Treasury put this country into the position whereby we entered the recession with the second lowest debt to GDP ratio in the G7.

[Jacob Rees-Mogg (North East Somerset) (Con)]

Is it not the case that the only time when the economy was run properly under the previous Government was when they followed Conservative spending plans in their first three years?

[Toby Perkins]

It certainly is not the case. The hon. Gentleman should remember that in 1997 we inherited hospitals that were in a disgraceful state and where people died of things that they could have been treated for, if only they had got to the top of the waiting list. We should also remember that we inherited schools where the roofs leaked every time it rained. Our children were educated in quite disgraceful conditions. That was the legacy of 18 years of the Conservatives, which is why when they lost, they lost so massively that they were not even credible as a party for another 13 years.

[Mr Tom Harris]

May I congratulate my hon. Friend on a terrific election result in Chesterfield? Does he share my bewilderment—and, I have to say, amusement—at the efforts by the Chief Secretary to the Treasury and the Business Secretary to claim not only that they were wrong to oppose an increase in VAT, but that they have miraculously transformed VAT from a regressive tax before 6 May into a progressive tax now?

[Toby Perkins]

I was certainly bewildered by the Secretary of State for Energy and Climate Change’s contribution in opening this debate, and by the idea that when the Liberal Democrats talked about the tax bombshell, what they meant was that VAT was regressive only if it was levied on food, a suggestion that nobody had made and which was never part of the debate. His speech was one of the most bizarre contributions that we have heard over the past three days. I look forward to watching it on iPlayer tonight and reliving the moment, because it is something that will live long in the memory.

I want to talk about the choice that the Labour party made. What we enjoyed under the previous Labour Government was 11 years of stable economic growth. That was the longest period of stable economic growth in this country’s history, yet unlike the Conservatives, we went into recession only when the entire world went into recession. The Conservatives did it differently: they could go into recession when the rest of Europe was in a strong position. It was only the global economic crisis that threw the economy off course under a Labour Government.

[Kwasi Kwarteng]

Will the hon. Gentleman enlighten me on one thing? What does he think the former Prime Minister and then Chancellor meant when he suggested that there would be no more boom and bust?

[Toby Perkins]

What he was probably referring to was 11 years of stable economic growth. What he did not foresee was that we would be hit by the biggest global economic crisis for more than 80 years. Of course, nobody foresaw that. There were no Conservative Members suggesting that the ways in which our banks were regulated would lead to the economic crisis. To pretend that you knew that that was coming or that the deficit that has been built up is somehow irrelevant to that is just ludicrous, and no one believes you, so you really must stop trying to treat people like fools when you say that the deficit that has been created was something that happened just because we had a Labour Government—

[Mr Deputy Speaker]

Order. I ask Members please to refrain from using the word “you”, because that means me, and the hon. Gentleman has just accused me of saying something that I have not said.

[Toby Perkins]

Please accept my apologies, Mr Deputy Speaker. I shall make sure that I address you and hon. Members correctly in future.

It is right to talk about the choice that Labour made, which was to protect the jobs that people relied on and to prevent an extra 500,000 going on the dole. Labour’s choice was to protect the homes that people had saved up over their whole lives to be able to buy. Labour’s choice was to support industry and bring forward public spending projects to keep the construction industry working when the private sector was sitting on its hands. Labour knew that the price of salvaging those jobs, those homes and those businesses would be an increase in our deficit. We delivered a plan for the recovery, which is working, and a plan for reducing the deficit after the recovery had been secured in the following year. The hon. Member for Bromsgrove told us that we could not keep living beyond our means, but of course we already knew that; that is exactly what the shadow Chancellor was referring to in the previously attributed quote. He made it absolutely clear what our strategy was.

[Jonathan Reynolds]

Does my hon. Friend agree that there is something deeply disingenuous about the fact that the Conservative party supported our Government spending plans until 2008—before the economic crisis hit home? They believe that we are living beyond our means, but they supported our spending at the time.

[Toby Perkins]

My hon. Friend effectively anticipates my speech, for which I thank him. He makes a very wise contribution. The reality between 1999 and 2008 was not that the Conservatives were calling on the Labour Government to reduce spending; quite the opposite, they were complaining about all sorts of things that we were not spending enough money on—from police to flood defences and all sorts of other things. Now they sit there and say that we should have known all along what was going to happen. No one can take what they say seriously.

[Matthew Hancock]

rose—

[Toby Perkins]

Talking of no one taking the Conservatives seriously, I give way to the hon. Gentleman.

[Matthew Hancock]

The hon. Gentleman referred to the Labour Government’s plans for significant cuts in public spending. Can he give us one single example that they have set out?

[Toby Perkins]

Yes, as the shadow Chancellor made clear, we would have maintained spending over the course of this year and put in place a different Budget from that of the Conservatives, along with headline measures about what future spending would be. Of course it was too early for us to have a comprehensive spending review; when the Conservatives were in opposition, did they ever do a comprehensive spending review and tell us every line of the Budget they would have carried out? Of course not. That is the reality of the situation.

My hon. Friends have pointed out that under the former Prime Minister the Labour Government led the rest of the world to the solution when the global economic crisis was at its worst. Labour made the choice to protect jobs, as I said. Just as Labour made a choice—an ethical and a political choice as well as an economic one—so the Chancellor has made his choice with the Budget. He did not choose fairness; he chose to gamble. His gamble is based on an ideology that says that the growth of the public sector somehow constricts the private sector, but it is utterly fallacious to suggest that the success of the one has to be to the detriment of the other and that the role of Government is to keep taxes low for businesses and keep out of the way. That is the wrong choice. That is taking a gamble with the recovery that Labour was delivering in a stable and managed way. It threatens our recovery at a time when the economy is still fragile.

The choice to increase VAT is, of course, regressive. When even the TaxPayers Alliance denigrates the policy as hitting the poor, we really have to listen. This will take approximately twice the amount from the incomes of the bottom 20% as it does from the top 20%, and it will stunt growth. That is acknowledged on page 97 of the Red Book, so the Chancellor is introducing a policy that he knows will stunt growth. As a business owner myself, I know that this tax will directly remove 2.5% from the bottom line of my firm if it were not passed on to my customers.

I also know that cuts in corporation tax are not as important as having a market in which one can make a profit. While the VAT cut introduced by Labour in 2008-09 stimulated growth, this VAT increase will take about £300 out of the average family’s pocket at a time when families are crying out for more help from Government, not less. That will have a knock-on effect on business. The Government seem to think that reducing the corporation tax burden, already historically low on businesses, will stimulate growth, without recognising that the environment in which businesses trade is the most important part of making a profit.

Taking money out of the pockets of consumers also takes money out of the pockets of businesses. It increases redundancies and business failures, and it stunts our ability to grow our way out of recession. For the hundreds of extra businesses that will now struggle to stay afloat, the thought of a cut in corporation tax will merit little more than a mirthless laugh. At every level, the Budget stunts growth. Cutting the allowances on which manufacturing firms were relying, and replacing them with a corporation tax cut over the next few years, will result in businesses being less likely to invest and more likely to focus on bottom-line profits.

The starkest aspect of the Budget, however, was a complete lack of a sense that the Liberal Democrats have been a moderating influence on the Tory plans. Where were the Lib Dem influences in this Budget? Seriously, does anyone in the House believe that if the Budget had been delivered by a Tory majority Administration, the Liberal Democrats would have marched through the Lobby and supported it? I will take that as a no. Where was the £2 billion capital gains tax increase? It was less than halved. Where was the commitment to restrict tax relief on pensioners to the basic rate? It disappeared. Where was the mansion tax? It does not exist. Where were the green taxes? How can one justify a £2 billion bank levy that will be compensated by corporation tax cuts for the banks that caused so much damage? Where was the Robin Hood tax on bank transactions, which would have brought in more than treble the amount?

[Simon Hughes]

Will the hon. Gentleman give way?

[Toby Perkins]

I am afraid that I do not have time.

This was a Tory Budget without a shred of Lib Demery about it. I will applaud the hon. Member for Colchester (Bob Russell) if he sticks to his guns and refuses to vote for it. The Chancellor had a choice: he made the wrong choice, and we will all pay a heavy price for years to come.

[Mr Deputy Speaker]

Three Members wish to catch my eye, and I intend to call the winding-up speeches at half-past 5. I am sure that Members will wish to show their characteristic generosity in sharing the time.

17:07

[Nick de Bois (Enfield North) (Con)]

Thank you, Mr. Deputy Speaker. I shall do some immediate live editing to meet your request.

As a relative newcomer to the Chamber, let me say that we need to remember that there is no such thing as free money. The vast sums that we are discussing have had to be earned by people, and those same people will pay the price for the failed policies of the previous Administration. We should bear in mind the fact that they will be making sacrifices because of Labour’s mistakes.

In a former life, I was fortunate enough to be able to run my own business. During 20 years in the private sector, I have enjoyed the ups and downs that go with that territory, as well as sharing the challenges and opportunities that all families face. Given that reality, I recognise that this Budget, and the legacy we have inherited, will hurt people, and will hurt some in their pockets. Obviously, no Chancellor would wish to give such a Budget, but it is the one that any responsible Chancellor would have to give.

We are like the receivers coming in to clear up the chaos left by the previous owners. It falls to us to tell the shareholders, the staff and stakeholders what must be done to save them from bankruptcy. In government, Labour Members were always keen to hold company directors to account for their mistakes, and would often pursue criminal prosecution. I notice that there is not the same alacrity to do so with the right hon. Members for Kirkcaldy and Cowdenbeath (Mr Brown) and for Edinburgh South West (Mr Darling).

In the limited time available, I want to focus on enterprise in the Budget, because my constituents in Enfield North will welcome steps to protect jobs and create an enterprise environment that can create new jobs—and why not? Given the 15% annual increase in the number of jobseeker’s allowance claimants under 24 and the 30% drop in the number of vacancies, jobs are clearly a key issue in our area.

By reducing the burden of taxation and regulation, the Budget will give business the confidence to invest in the long term, which is crucial. The hon. Member for Chesterfield (Toby Perkins) suggested that the tax cut for companies would be of no value and would do nothing except, perhaps, create extra profits for those involved. That is nonsense. According to a survey of its members by the Federation of Small Businesses, 42 per cent. of small firms will use savings from tax cuts to invest in growing their businesses, 20% will use them to employ more staff, and some 22% will try to invest in new services and products. We must allow our companies to invest and, in doing so, create jobs.

I welcome the benefits to increase the level of business rate support temporarily for new businesses. We are trying to introduce help in the regions, and the exemption from national insurance for the first 10 employees will certainly be welcome. Let me, however, introduce a note of caution, and ask my colleagues to bear it in mind. I do not want to see the emergence of a series of phoenix companies that may wish to take advantage of the exemption as an aside. This is not the occasion on which to discuss the merits of phoenix companies, but they have the potential to abuse what is otherwise a very welcome policy.

Above all, I welcome the Government’s commitment to urging banks to promote small and medium-sized enterprises in particular. That too is crucial. Many people in my constituency and—I declare an interest here—in my own experience have seen the abject failure of banks, some of them owned by the people, in that regard. Many pursue a twin-track approach: they tell us that they are publicly committed to lending to SMEs, while in the real world actively discouraging them from applying for loans. Such disgraceful behaviour should not be allowed to continue without comment. I for one will be watching the banks carefully and holding them to account in the future. Their behaviour explains why, according to the FSB report, only 18% of its SME membership apply for loans, and only 9% are awarded them. SMEs are being discouraged from applying, and that is distorting the certificates.

[Andrew Bingham (High Peak) (Con)]

I agree with what my hon. Friend has said about the banks. Will he also acknowledge that hard-working counter staff are being criticised by members of the public although they are not to blame for the difficulties that the banks have caused? They have been working very hard, and they are being unfairly criticised.

[Nick de Bois]

I thank my hon. Friend for highlighting that distinction. Indeed, it does not apply only to those working on the shop floor. Many senior managers are clearly being directed to follow a policy which—I am extremely pleased to note from the Budget—we are prepared to challenge. The Red Book refers to a review of the way in which banks should respond to the need to lend in the future. I realise that Britain needs its banks, but the banks need to play their part openly and honestly, and I look forward to seeing that happen. It is a key part of the proposals outlined in the Red Book.

This is a necessary Budget. It is a tragedy for our country that every 20 years or so Conservative Chancellors must make difficult decisions and accept public unpopularity for sorting out the mess left by their opponents. That has now happened again. I dislike many of the measures in the Budget, but I support them because I dislike even more the idea of our country literally going bankrupt. I hope that many of the tax rises that have been announced will eventually be reversed as our economy grows over the coming years, but our priority now is to stop the country slipping into a spiral of debt-driven decline, to rebuild our businesses, and to create jobs and opportunities to turn our economy round.

17:15

[Matthew Hancock (West Suffolk) (Con)]

It is an honour to be able to speak in this debate on what is, by common recognition, a Budget of historic proportions. After the Budget, I bumped into a group of former civil servants who were reminiscing about huge Budgets of the past and where this one came. They talked about the 1981 Budget that has been much discussed in this debate, and the 1970 Budget by Iain Macleod that was never actually delivered because he died before he had the chance to give it. Of course they talked about the big 1950s Budgets of Rab Butler. All those Budgets had something in common: they were Conservative, or mostly Conservative, Budgets that were clearing up the mess left by a previous Labour Administration. This one of course is no different.

The mess created by the Labour Government has not been left at their end. We know from the letter by the former Chief Secretary, of which we will no doubt hear more, that there is no money left. That only repeats a letter sent in 1964 by Reggie Maudling to Jim Callaghan, which said, “Good luck, old cock. Sorry to leave it in such a mess.” Here we are at the end of a Labour Government, once again clearing up the mess.

Before we hear too much from Labour Members, we must remember the economic as well as the budgetary consequences of former Labour Administrations. Under the Attlee Administration, unemployment went up by 280,000; under Wilson from 1964-70, unemployment went up by 226,000; under Callaghan, it rose by 479,000; under Blair-Brown, it went up by 460,000. In fact the only Labour Government under which unemployment fell was Ramsay MacDonald’s 1924 Administration. I am not sure that that is one that we should follow or one with which Labour Members would want to agree.

Those lessons from history teach us several things. One is that memories of the failure of an Administration run deep. We all remembered for a long time the winter of discontent. We now know that the public recognise that many of the measures proposed in the Budget are Labour cuts because they are the response to the legacy that Labour has left. As my hon. Friend the Member for Enfield North (Nick de Bois) has said, it is a responsible Government who pick up the pieces following the irresponsibility of a Labour Administration who sent us into a recession with the largest budget deficit in the developed world.

Opportunism and oppositionism make life harder in opposition, rather than easier. We have seen so many times from Labour Members today and in the debate on the Queen’s Speech the pointed finger and heard their lists of cuts, with almost no recognition of the need to deal with the size of the deficit that existed before the election.

There was one exception to this; the hon. Member for Streatham (Mr Umunna) made what I thought was an extremely thought-provoking speech. But at the end, he accused the Government of having nothing to say about reskilling and helping the unemployed. He was quite literally stumped and sat down after he was intervened on by the Minister who explained some of the proposals that the Government have put forward to help to lower unemployment and improve skills. At that point, the speech quite literally disintegrated. We have seen that repeatedly over the past few days.

Many Labour interventions have been based on accusations that are groundless. One is that the OBR shows a reduction in growth thanks to the Budget, but the OBR itself describes the contrast between two of its forecasts as misleading. It ignores the effect of the reduction in interest rates in the international bond markets that has happened since the election because of the anticipated action to deal with the deficit. Those interest rates have fallen further today. They are now half a point lower than at the election, and the total fall has been more than 10%. That is having a positive impact on companies throughout the country.

As Labour marches to the left, with its lengthy leadership contest meaning that the competition for taking up ever more left-wing positions intensifies, we increasingly find that there is a lack of credibility. The coalition parties are facing up to the seriousness of the situation and supporting measures that may not all be easily palatable. We support them because we see the long-term benefit of turning our country around and getting it back on its feet. There is no way that a position that lacks credibility, and simply attacks every cut and puts forward absolutely no alternatives, will be seen by the public as anything other than sniping from the sidelines.

The centre of the debate is how we get through this difficult period. Lessons from history also teach us that clearing up this mess is crucial to the success of the Government, and that the bigger argument about turning our economy around and dealing with the problems we face will trump every complaint about an individual problem and each cut. After all, the public are yearning for a stable and secure economy—we have seen the opposite of that in recent years—and this Budget attempts to deliver it.

I strongly believe that the coalition must govern in the national interest. It must eliminate the structural deficit. I was surprised by something the shadow Chancellor, the right hon. Member for Edinburgh South West (Mr Darling), said yesterday. He said that Greece

“took far too long to do what was necessary”,

and

“Had they done it in February, when the problems first became apparent, some, although not all, of those problems might have been avoided.”—[Official Report, 23 June 2010; Vol. 512, c. 312.]

How he can hold that view and also hold the view that we should not deal with the deficit in this country is baffling.

We must eliminate the structural deficit and ensure that growth returns by supporting the enterprise package and the corporation tax cuts and, of course, by stopping the jobs tax, which was an important part of the Budget. We must solve some of the long-term problems we face such as on public sector pensions—I am delighted that John Hutton will be producing a report on reform of public sector pensions.

Many Members have spoken of the impact of the Budget on their constituencies. I know that in my constituency there will be more support for enterprise, lower corporate taxes on successful businesses, more business confidence, which will allow people to create jobs, and lower interest rates for businesses that want to expand.

It is a bold Budget. It is undoubtedly a difficult Budget, but it is the right step for the country, and I commend it to the House.

[Vernon Coaker (Gedling) (Lab)]

On a point of order, Mr Deputy Speaker. Last Thursday, I tabled a written question for named day answer on Monday of this week, to which the Department for Education’s response was that it would reply to me as soon as possible. I had asked it to name the schools that had applied for academy status, and I read in today’s edition of The Guardian that that list is to be published tomorrow, but I have as yet received no communication from any Minister. I wonder whether at this late stage you have received any request from a Minister to come to the House to explain what is going on in respect of naming the schools that applied for academy status.

[Mr Deputy Speaker (Mr Nigel Evans)]

I thank the hon. Gentleman for notice of that point of order. I have received no such request, but I know that Ministers in successive Governments have worked late into the night and the list might be being typed out as I speak and then be delivered to him. I know that the relevant Minister will want to keep his word, and I am sure that the Government Whip on duty will make sure the message gets through.

17:24

[Kwasi Kwarteng (Spelthorne) (Con)]

I am very grateful to you for calling me to speak in the debate, Mr Deputy Speaker, and I feel privileged to follow my hon. Friends the Members for West Suffolk (Matthew Hancock) and for Bromsgrove (Sajid Javid), who outlined in their compelling speeches why the Budget is incredibly important. The issue that we have not really focused on enough is the context of the Budget. We all—even Opposition Members—accept that the deficit is too large and that at some point in this Parliament we have to deal with it. The big point of contention between the coalition Government and the Opposition is how soon we should grapple with the deficit.

We forget the fair hopes that we had in 1997 when the then Chancellor of the Exchequer produced his first Budget, entitled “Equipping Britain for our long-term future”. That was the message that he wanted to send. That financial statement and Budget report came out in July 1997, and it was in that report that he famously stated his golden rule:

“The golden rule means that over the economic cycle the Government will borrow only to finance public investment and not to fund current expenditure.”

So far so good. The second rule was that he would maintain stable public finances—a requirement for our long-term economic stability.

[Toby Perkins]

The hon. Gentleman will be aware that those rules were changed only in the face of huge, global economic crisis. His party supported the change when the economic crisis struck, so was it incorrect to do that?

[Kwasi Kwarteng]

The hon. Gentleman will remember that the second rule was that

“public debt as a proportion of national income will be held over the economic cycle at a stable and prudent level.”

The then Chancellor concluded the 1997 report by stating:

“These rules will ensure that borrowing will be kept under firm control.”

Everyone applauded him. He was talking about prudence; he was the Iron Chancellor and very much the hero of the hour. In the same report, he referred to the recession of the early 1990s. His conclusion was that the public sector borrowing requirement rose to a peak at 7% of GDP and he said:

“The Government regards it as important that no similar risks should be taken with fiscal policy again.”

That was the position of the Labour party in 1997, and in 2006 Labour was repeating the same mantra and the same pie in the sky ideas. It was saying that

“public sector net debt is projected to remain low and stable over the forecast period”.

In 2007, it said:

“The Budget 2007 projections for the public finances are broadly in line with the 2006 Pre Budget Report”,

and so on.

[David Wright]

Will the hon. Gentleman outline what spending he would have cut between 1997 and 2007?

[Kwasi Kwarteng]

I am merely stating the very prudent rules that the former Chancellor and Prime Minister outlined. All the rules that he set in place in 1997—[Interruption.] The hon. Gentleman asked a question and I want to answer it. All those rules were ripped apart. The PSBR figure of 7% of GDP, which the then Chancellor had thought was a scandal, went up to 12%. According to the very rules that he set, we have failed and been found wanting. It is in that context that my right hon. Friend the Chancellor of the Exchequer introduced his bold and comprehensive Budget on Monday. It was only because we had to do this that the Budget was introduced to this House. It was not part of any ideology or master plan; it was an act of dire necessity.

I thought that the most interesting contribution in the debate was that of my right hon. Friend the Business Secretary, who recalled with a lot of emotion and understanding the experience of 1976. It was exactly that experience, when another Labour Government had bankrupted the country and had to go to the International Monetary Fund, that he was so anxious to avoid. It is in that spirit that the Budget has been introduced to the House and that is why I am very happy to commend this Budget and to go through the Aye Lobby to vote for it on Monday.

17:29

[Ms Angela Eagle (Wallasey) (Lab)]

It is a pleasure to welcome you to the Chair for the first time, Mr Deputy Speaker. I would also like to add my personal welcome to the Economic Secretary to the Treasury; this is the first time that we have debated over the Dispatch Box since the election, although it is not the first time ever. I hope that she will accept my personal good wishes in the job that she is now doing.

I would also like to commend the maiden speeches that we have heard in the debate today. In particular, I thank the hon. Member for Staffordshire Moorlands (Karen Bradley) for her praise of her predecessor, Charlotte Atkins, who is a very long-standing friend of mine. The hon. Lady spoke passionately about her beliefs and her constituency, which I know is a very beautiful one.

In his maiden speech, the hon. Member for Hendon (Mr Offord) talked about another good friend of mine, his predecessor Andrew Dismore. Alas for the hon. Gentleman, today’s 12-minute limit on speeches meant that he could not even begin to compete with Andrew’s record for the longest speech in the House. However, I am sure that he will rev up and have a go at that.

Unfortunately, my hon. Friend the Member for Kingston upon Hull East (Karl Turner) is unavoidably absent from the wind-ups tonight. As the successor to Lord Prescott he has very big shoes to fill, but his maiden speech was witty and astute. He spoke about his constituency and his political credo, and I am sure that we can look forward to many more contributions from him.

The final maiden speech was made by the hon. Member for Camborne and Redruth (George Eustice), who has one of the smallest majorities in the House. He spoke about Trevithick, the railway pioneer; as he did so, I was thinking about the fact that whenever I return to my own constituency, I travel through Rainhill, where the famous and historic trials that were won by the Rocket took place—an event that brings back many happy memories as we travel to Liverpool Lime Street station.

We have heard some important speeches today, from all sides of the House. One of most intriguing was made by the hon. Member for Bermondsey and Old Southwark (Simon Hughes). I shall say more about it later, but he said some intriguing things about how he might wish to amend the Budget—particularly with respect to VAT—as it goes through the House. I certainly look forward to seeing the amendments that he may propose. I think that I shall look on them with a sympathetic eye if they do what we want, which is to make this Budget more progressive than it is at the moment.

Other speakers in the debate included my right hon. Friend the Member for Coatbridge, Chryston and Bellshill (Mr Clarke), and my hon. Friends the Members for Telford (David Wright), for Eltham (Clive Efford), for Southampton, Test (Dr Whitehead), for Liverpool, Wavertree (Luciana Berger), for Streatham (Mr Umunna), for Walsall South (Valerie Vaz) and for Chesterfield (Toby Perkins). They all made extremely important contributions.

We heard some passionate speeches from the Government Benches, and I agreed with very little of them. However, I can certainly thank the hon. Member for Stafford (Jeremy Lefroy), who was unique among Government Members in recognising that the Labour Government did some good things while in office. I thank him for his grace in accepting that, although I am not sure that it will do him in any good, or help his career.

The hon. Member for Bromsgrove (Sajid Javid) gave the game away when he revealed himself in the Chamber as a crusading small-state Conservative, and proud of it. He praised the Government’s ideological basis, something whose very existence many Government Members were frantically trying to deny.

There were other important contributions to the debate today, and the short speech by the hon. Member for Spelthorne (Kwasi Kwarteng) was by no means the least among them. He asked us to look at the context in which the Budget was held, and I want to spend a little time doing that now.

We have lived through a difficult time in the last two years. We have seen the deepest and most synchronised global recession in living memory, with world GDP falling for the first time since the second world war as a direct result of the global credit crunch. That credit crunch was precipitated by monumentally reckless and greedy behaviour in the banking sector worldwide, which made a few people spectacularly rich but also impoverished countless millions of its victims around the world. I thought that the hon. Member for Cities of London and Westminster (Mr Field) probably came the closest of all Government Members to being up-front about that in his extremely good speech.

The credit rating agencies, which are now so frequently quoted by Government Members with reverence as economic oracles, were particularly compromised by the triple A rating that they awarded to complex derivatives masquerading as assets when they were in fact debts, and they did so for lucrative fees. The credit crunch was exacerbated by the undoubted failure of politicians, policy makers, economists and regulators to understand and price risk appropriately in the complex and interdependent global market. That led to a degree of complacency and the misreading of international conditions that were shared by almost every economic commentator. Hindsight is a wonderful thing, and with the benefit of it we can learn many lessons to prevent those problems from recurring—I certainly hope that we do.

Meanwhile, fiscal deficits everywhere had to rise dramatically to cope with the crisis. Our tax revenues here in the UK were significantly impacted, while spending had to rise to deal with the costs of recession. The fiscal stimulus, which was necessary to stop the global recession turning into a worldwide depression, also had an effect on the deficit. That is the cause of our deficit problem, and it is certainly not unique to this country. The previous Government were right to take the action that we did to protect people’s bank deposits and to shore up the very foundations of our economic system. I am proud that we were able to rise to that challenge.

I have taken some time to outline the economic context, in agreement with the pleas of the hon. Member for Spelthorne, because in four days’ debate on this theatrically named “emergency Budget”, we have not yet heard any Government Member, from the Chancellor down, have the decency and the honesty to mention it at all. They wish the country to believe that, somehow, the considerable economic challenges that we now face were all caused by the previous Government’s irresponsibility and have nothing to do with the greed of reckless bankers and speculators. That is arrant nonsense, and they know it.

[Mr Mark Field]

Does the hon. Lady not recognise that huge global imbalances built up, and that mistakes by policy makers and politicians of all colours from across the world had their part to play, rather than the problem just being caused by, as she would put it, the greed and recklessness of bankers?

[Ms Eagle]

I agree, and during an earlier part of my speech I listed all those people as being among those who had things to apologise for, as the hon. Gentleman will see if he reads the record.

In the prelude to the Budget, other preposterous myths have been peddled, designed to justify an austerity programme so severe that it is positively, even gleefully, sadistic. I will just mention one of them in passing. The myth says, “It’s all much worse than we thought.” We have heard the Prime Minister, the Deputy Prime Minister and the Chancellor all singing that refrain in recent days. They had prepared the ground, they had the newspapers all going along with it, and they had briefed their Back Benchers, who are even now loyally parroting the line. How irritating for them, then, that the facts have failed to conform to their prearranged narrative, and how positively annoying that the Chancellor’s new forecasting quango—the pejoratively named Office for Budget Responsibility—should so comprehensively give the game away just before the main show. It quickly became clear that, far from all this being much worse than we thought, it was actually better:

“embarrassingly, the economy is just not playing along. Things just keep getting better.”

I was quoting Fraser Nelson—that well known socialist writer—from the Telegraph.

[Dr Julian Huppert (Cambridge) (LD)]

Will the hon. Lady give way?

[Ms Eagle]

The hon. Gentleman has not been here all day, so I will not give way to him.

In the pre-Budget report, Sir Alan Budd was obliged to point out that my right hon. Friend the shadow Chancellor was being too pessimistic—those who know him are not always surprised by that—and that on almost every measure, the public finances are in better, not worse, shape than we expected at the time of the March Budget. Unemployment, Sir Alan revealed, would be 200,000 lower than expected, and tax revenues would be much stronger than forecast. Thus the borrowing forecast was £8.4 billion lower this year than predicted in March, and £22 billion lower by 2014-15.

[Matthew Hancock]

Will the hon. Lady give way?

[Ms Eagle]

No.

No amount—[Interruption.] Conservative Members have had all day to peddle their view of what is happening to the economy. I am now responding to that, and they have to sit and listen whether they like it or not.

No amount of Orwellian double-speak emanating from No. 10 or No. 11 can cover up the basic fact that things are not worse as far as the deficit is concerned, but better. Shorn of the prearranged excuse for ratcheting up the pain levels in his austerity Budget, the Chancellor has been exposed as a small-state ideologue and a true child of the 1980s. He has imposed the most brutal cuts in public spending that the country has ever experienced in peacetime for reasons of dogmatic delusion, not economic necessity. The Tories are doing this not because they have to, but because they want to. They have made a political choice, not an economic choice, and we will see the results of their return to their Thatcherite roots.

There is no electoral mandate for the economically dubious dance with dogma that is at the Budget’s intellectual core. The majority of the electorate voted for parties that did not want to make immediate cuts at a time when the recovery was not locked in and our major EU trading partners were seeing their upturns falter. Those who voted Lib Dem did not expect their chosen party to experience a wholesale conversion to Tory fiscal hawkery after a quick cup of tea with the Governor of the Bank of England. They feel betrayed—and they have been.

Make no mistake: this is a very Tory Budget. It contains the largest spending cuts in our peacetime history, focused on the neediest areas of the country. It brings about a huge rise in the most regressive tax available, which will hit the poorest hardest. The decision to attempt to eliminate an 8% structural deficit in five years, and the choice of a ratio of 77% spending cuts to 23% tax rises, are more brutal than Mrs Thatcher ever dreamed of. The Chancellor has paraded Canada and Sweden as examples to follow, but as Will Hutton recently pointed out, the plans for fiscal consolidation in the Budget are three times tougher than those achieved in Sweden and twice as tough as the Canadian example. Sweden took 15 years to achieve 20% cuts in some departmental spending, but this Tory-led Government want to cut 25% in five years.

The lesson from Japan is that it is positively dangerous to attempt radical fiscal consolidation when the private sector is deleveraging, so why are the Government prepared to risk making the same mistake? Because of its error, Japan experienced a lost decade of growth and achieved the opposite of its intentions: not a shrinking deficit, but an increasing one. The Budget contains no strategy for growth beyond the usual tired old Tory refrain that the private sector will fill the gap. That is not a growth strategy, but a statement of blind economic faith that might or might not be fulfilled.

It has taken a mere two days for the pitifully thin Lib Dem veneer attached to the Budget to flake off completely. The Lib Dem leader promised us “progressive cuts”, but the devastating analysis of the IFS has put paid to that absurd and oxymoronic phrase. When we take out Labour’s remaining Budget changes, this Budget is deeply regressive, and it gets more regressive as the years go on and the huge cuts in welfare support and tax credits bite. It is now clear what the Deputy Prime Minister means by progressive cuts: he will cut this year, cut more next year, and cut even more the year after that. His phrase is true, when it is taken literally.

A Budget that targets £6 billion of cuts on the most vulnerable, including pensioners, by delinking benefit uprating from the retail prices index, yet hits banks with only a £2 billion levy that is being given back through corporation tax, is not sharing the pain. A huge hike in VAT that hits the poorest hardest is not sharing the pain. A deliberate decision to destroy large swathes of social support, and cutting support for the jobless and home owners when they are most under pressure, is not sharing the pain. The choices in the Budget make it abundantly clear that we are not all in this together.

Today’s Financial Times carries an article that states:

“Ministers warn that they may have to tear up some untargeted welfare promises—such as the £4bn spent on subsidising bus travel, winter fuel and television licences for older people…One minister said that such a move was ‘almost certain’”.

The hon. Member for Bermondsey and Old Southwark said today that he would not allow that to happen. Well, if he wants to stop that betrayal, he has to table those amendments and carry his Lib Dem colleagues through the Lobby with us to stop this Conservative-led Budget doing even more damage. We look forward to seeing him in there with us.

17:45

[The Economic Secretary to the Treasury (Justine Greening)]

Mr Deputy Speaker, may I start by saying what a pleasure it is to give my first speech as a Minister with you in the Chair? I thank the hon. Member for Wallasey (Ms Eagle) for her kind words. I very much enjoyed debating with her when I was the shadow Minister and I look forward to continuing to do so in government.

We have had a good debate this afternoon and evening. It was broadly meant to be about the Budget in relation to the environment, but we have not heard a lot about that, apart from in the thoughtful speech made by the hon. Member for Southampton, Test (Dr Whitehead). The hon. Member for Eltham (Clive Efford) said that there is little on the environment in the Budget, but given that the Labour Government had stalled on reducing emissions and wanted to go ahead with polluting measures such as a third runway at Heathrow, I am not surprised that the shadow Secretary of State for Energy and Climate Change failed to mention the environment in the half hour that he was on his feet.

I wanted to start by reflecting on the many speeches—23 or 24, by my count—made today, in particular some excellent maiden speeches. I was delighted to hear from my hon. Friend the new Member for Staffordshire Moorlands (Karen Bradley), especially when she said that she is an accountant. Speaking as an accountant myself, I think that this House needs more of us, and I dare say the Opposition could do with a few more as well, so that they can start adding up properly.

We also heard a great maiden speech from my hon. Friend the new Member for Hendon (Mr Offord). I remember his predecessor—indeed, I think I was present in the Chamber during that very long speech he made. If it is the one I remember, it was about animal welfare and lasted more than two and a half hours. On that occasion, the hon. Gentleman said how sad he was that his dog had died, and I intervened at one point to ask whether the dog had died of boredom. He said that it had not.

The new hon. Member for Kingston upon Hull East (Karl Turner), who is no longer in his seat, made a really good maiden speech. I hope he does not go around hitting people like his predecessor did, but his predecessor was certainly a colourful character, who brought his own personality to this place. We will see whether the new Member for the constituency can match him.

I thought the maiden speech of my hon. Friend the Member for Camborne and Redruth (George Eustice) was excellent, especially when he talked about how it is often individuals—their drive, initiative and creativity in working to tackle climate change and developing new technologies—who make all the difference. We should never forget—we on this side of the House certainly do not—that it is individuals who make the difference, not always Government alone. The latter theory has been tested to destruction by the Labour party.

We have heard a number of other speeches this afternoon, not least that of the shadow Secretary of State for Energy and Climate Change, who seemingly failed to mention anything about the environment. I have to say that the public watching the debate and hearing all the contributions from Labour Members would not have thought that they had just been through an election that they lost. It is as though they have learned nothing. They have not even paused to reflect on the message that they have just been given by the British people. They have handed over to this coalition Government an absolute basket-case of an economy, and what we have heard from Labour Members today is what we heard when we were in opposition: they always know better. They knew better in government and now they know better in opposition. They know better than the British Chambers of Commerce, which said

“The Chancellor’s message that Britain is open for business will be welcomed by companies the length and breadth of the country, and across the globe”.

They know better than the CBI, the Federation of Small Businesses, the Governor of the Bank of England, the G20 and the EU, which says that countries such as ours need to get on faster with reducing their fiscal deficit.

[Clive Efford]

Would the hon. Lady care to comment on a quote from the right hon. Member for Wokingham (Mr Redwood), who urged people hit by budget cuts to wear more clothes, turn down the thermostat and eat more vegetables? Is not that just about the most damning indictment of the Budget that we could have, from one of her own colleagues?

[Justine Greening]

The hon. Gentleman continues in the vein that the Opposition have adopted today, which is to try to score cheap political points. The message from the British public at the last election was that they want a constructive debate about how to solve the deep financial crisis that our country faces. We have had nothing from the Opposition. No alternative is being presented to all of the measures that were raised as concerns by Opposition Members. I presume that we can now start ticking them off as measures that the Opposition would say a Labour Government would take. We will rapidly reach the conclusion that there are no measures that the Opposition would take to solve this deficit. After all, they were happy to cancel their spending review, and now they are happy to play no role in having a constructive debate with the public and the Government about how we dig ourselves out of this mess. It is simply not true to say that the Opposition had no role in it. We were running a deficit long before the global crisis hit. That is why we went into the recession first, that is why we came out of it later, and that is why our recession was deeper. We have now had the longest and deepest recession since the second world war under the Labour Government. We need take no lectures from them.

[Matthew Hancock]

Does my hon. Friend agree that the Labour party’s views tend to be based on misrepresentations? For instance, I think that the shadow Minister said that according to the Office for Budget Responsibility on almost every measure things were better, but on the crucial measure of the size of the structural deficit, which is the measure that will not come back with economic growth, things are worse, and that justifies the position that the Government have taken.

[Justine Greening]

My hon. Friend is absolutely right. Let us just talk about the Office for Budget Responsibility. I still cannot quite work out whether the Opposition support it. I am happy to take an intervention from the shadow Secretary of State to clarify that. We are none the wiser.

On the point about changing forecasts, and the OBR forecast pre-Budget and its forecast on the Budget, let me be clear about what it said about comparing those two forecasts. If the Opposition have any shred of credibility, I hope that they will pay attention to this. At the bottom of page 94 of the Red Book it says it is

“misleading to interpret the difference between the pre-Budget and Budget forecasts as the economic impact of the Budget measures.”

The Opposition want it all ways. They want to quote some figures and, as my hon. Friend says, conveniently forget the key figure, which showed that the structural deficit was worse. They want partially to welcome it warmly, but to ignore what it says about the impact of comparing false statistics. They do the debate, which is important for people throughout the country as we go through an incredibly difficult process, a real disservice, because the British public need them to play a role, which should be for them as the Opposition to come up with some constructive comments. It would have been better if they could have come up with some kind of an alternative, but we have had none today.

We need take no lectures from the Opposition about fairness. This is the party that did a pensions raid. This is the party that came up with the 10p tax fiasco. This is the party that widened the gap between rich and poor. This is the party that told us we had an end to boom and bust. It is no wonder the savings ratio in Britain went down. If people had listened to the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown)—who knows where he is now?—they would never have thought that they needed to save for a rainy day. The British people get it, because they have started paying down their debts, but the Opposition parties have totally missed the point. They seem to be living in a post-election bubble, and they have not taken a moment even to reflect on what has happened or on the verdict of the British voters, let alone to reach the stage at which they might apologise for the mess that they handed over to the coalition Government. The two parties in government have taken the decision that they need to work together for the British public’s interest in order to find a resolution to our crisis, and to get ourselves out of this financial mess.

[Toby Perkins]

The hon. Lady has referred to the election result a couple of times, but we remember the election result in 1997 after a long period of Conservative Government, when that party lost so badly that it was out of power for 13 years. If people were so dissatisfied with the Labour Government, how come the Conservatives could not even secure a majority?

[Justine Greening]

The hon. Gentleman, if he is not careful, might be projecting the political fate of his own party. With this Budget, we want to ensure above all else that we start addressing our country’s dire financial situation. By the end of this Parliament, we will have started to return to a sustainable set of public finances which puts us in a position to make sure that our debt is more affordable. He might think it acceptable that the average taxpayer pays almost £1,400 in interest to service the debt that his party racked up, but I do not, and over a period of years we want to get into a position where our debt is affordable once again. The process will not be quick; it will take us time, because of the gravity of the situation.

Let us make no mistake: we have no time to wait. Before the election, we had only to look across the water at some of our European partners to see what was happening to their countries. I shall draw an analogy, because in Spain the equivalent of the bank manager—the markets—said that they simply were not willing to lend to that country at the same rate of interest as previously. That debt now costs Spain’s taxpayers millions of pounds more in interest than it did when their credit rating was better. Greece has gone one step further and, effectively, has the bailiffs knocking on the door.

Our Budget was all about ensuring that we do not reach the position where the bank manager says that he is going to raise interest rates on us. We as a nation cannot afford it, and British households cannot afford it. We definitely do not want to reach the stage where we have the bailiffs knocking on the door, which is what has effectively happened in Greece. I am concerned, however, because in spite of everything that has happened in our country, including the election and the state of our public finances, we have still not heard a meaningful debate from the Opposition.

[Dr Whitehead]

As the subject of today’s debate is supposed to be energy and climate change, I wonder whether the hon. Lady has anything at all to say about the extent to which the Budget might facilitate a recovery towards a low-carbon economy, or whether, as I suspect the case may be, she does not.

[Justine Greening]

I am pleased that the hon. Gentleman has given me the chance to finish on that subject, because I wanted to take the time to talk about the environment in the context of the Budget.

We have said that we are determined to make progress on setting up a green investment bank; we have talked about ensuring that the green deal works, because it is critical that our housing stock be made more environmentally friendly; and, of course, the final piece of the Budget was about ensuring that we can move to a low-carbon economy that does not just put our energy strategy on a more sustainable footing, but includes the jobs that can be part of the green enterprise economy that we want to set up.

The hon. Gentleman was right to raise the matter, because too often the issue of climate change and the environment has been exclusive—the idea being, “If you can afford to save the planet, you can do it.” We want to make sure that everybody in our country is able to be part of tackling climate change. That is why the green deal and the green investment bank are so important. The supply side of technologies is critical in ensuring that these markets can get the finance they need. I can absolutely assure the hon. Gentleman—

18:00

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

Ordered, That the debate be resumed Monday 28 June.

English Language Schools

Thursday 24th June 2010 Commons Chamber

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

18:00

[Conor Burns (Bournemouth West) (Con)]

It is an honour to give my first speech in this Chamber as the new Member of Parliament for Bournemouth West—a new constituency that should more accurately be called Bournemouth West and Poole East, because it includes wards from the constituencies of my hon. Friend the Member for Poole (Mr Syms) and the hon. Member for Mid Dorset and North Poole (Annette Brooke). I thank the Speaker for giving me this opportunity to deliver a maiden speech in an Adjournment debate, which I understand is a slight breach of the conventions of this House.

I believe that I am standing in the same place as another new Member who breached convention some 50 years ago—Margaret Thatcher, who delivered her maiden speech when introducing a private Member’s Bill. I told her on Saturday that I was going to do my maiden and had waited 50 days to do so, and she told me that it was over time to be getting on with it. In fact, in researching this speech, my team found out that Lady Thatcher waited more than 100 days; I shall point that out to her on the next occasion that I see her.

I will, if I may, say a word about my predecessor, Sir John Butterfill, who served this House for 27 years. During that time, he piloted four private Members’ Bills into law, which, I imagine, must be something of a record: the Registered Homes (Amendment) Act 1991, the Insolvency Act 1994, the Policyholders Protection Act 1997 and the Building Societies (Funding) and Mutual Societies (Transfers) Act 2007. I hope that Sir John will have time to reflect, in a good way, in the months and years that lie ahead on the totality of his 27 years of service in this place, and not just on the difficult period in the run-up to the last general election.

I suspect that it must also be unusual for a new Member who represents a constituency that has only ever had four Members of Parliament to be able to pay tribute not only to my predecessor but to my predecessor’s predecessor, Lord Eden of Winton, who joined me, with Bournemouth’s member of the Youth Parliament, Jasminn Osborne, on the campaign trail in Bournemouth during the last general election. Lord Eden has now served for 27 years in the other place.

I bring to the House today the subject of Britain’s English language schools and the enormous contribution that they make to the economy of the United Kingdom. More than 500,000 students a year choose to learn English in Britain. That figure accounts for almost 43% of all students who choose to travel abroad to learn English. It is estimated that they contribute more than £1.5 billion to the UK economy every year. It is appropriate that we talk about this in the context of the Budget that my right hon. Friend the Chancellor introduced earlier this week. We have been talking about diversifying the UK economy, away from sole reliance on the financial services sector, and this is a massive export for our country and a contributor to the bottom line.

Bournemouth has, I suspect, more language schools per head of population than almost anywhere else in the country. However, not only Bournemouth has them. I see in his place my hon. Friend the Member for Cambridge (Dr Huppert). He wanted to intervene in this debate, but the Chair is of the view that we should not breach that convention. I know that these schools are very important in Cambridge too, as well as in Poole and in Brighton. I also see my hon. Friend the Member for Grantham and Stamford (Nick Boles), who is hoping to make a brief contribution to the debate.

Why am I raising this subject now? It has become a problem because of what the previous Government did in their dying months of office. Immigration became a rising political topic as we got closer to the general election, and the previous Government, in an attempt to be seen to be doing something, did the old civil service Sir Humphrey thing: “We must do something; this is something, so let’s do it.” They changed the criteria on the requirement for competence in the English language that was needed for someone to come to Britain to study English. They also changed the student visa arrangements so that such a person had to return to their country of origin to extend their visa.

I wish to draw attention not just to the question of the English language schools and the employment that they generate in Bournemouth and Poole, but to the welcome additional earnings in the household budgets of the host families who welcome students into their home, and to the boost to the local economy when students’ family and friends come to visit, stay in local hotels and use local restaurants. Professor Fletcher of Bournemouth university has estimated that they contribute more than £200 million to the local economy in the Bournemouth and Poole area.

Then there is the matter that one probably cannot quantify: those who have come to Britain to learn English have a great affection and affinity for Britain which will stand our country in great stead in the years ahead, when they return and enter businesses. The right hon. Lord King visited me during the election campaign and relayed the story of an Egyptian Defence Minister who, on his first night on a visit to Britain, did not want to go out to dinner with the then Secretary of State for Defence because he wanted to go and see his old landlady, for whom he had great affection. We cannot put a price on such things, but they are of enormous benefit.

The previous Government were right to recognise that there was a problem with some bogus schools, and they put in place measures to try to deal with them. Prior to the introduction of the points-based system, it was estimated that up to 50,000 students could be using the student visa system as a way of staying in the United Kingdom illegally. In April 2009 they introduced the new system, which forced schools to gain Government accreditation and led to the closure of several thousand bogus language schools. Great strides were made in tightening up the system.

On 12 November 2009, only months after the system was put in place, the then Prime Minister ordered a review of it due to concerns about those coming in to study at below degree level. The hon. Member for Oldham East and Saddleworth (Mr Woolas) said about that on 11 December 2009:

“I would like to make it absolutely clear that no firm decisions as to whether and what changes ought to be made to Tier 4 have yet been taken. The responses we have received from all parts of the education sector have suggested that there is the potential for some of the broader review questions to affect the UK’s attractiveness as a destination for study if they are implemented. Damaging the education sector is not the aim of the review.”

However, the reality is that the outcome of the review has done just that.

I wish to go into some detail about what the change to the English language requirement has done. I shall quote a letter from my right hon. and noble Friend Lord Eden, who posed a simple question to my hon. Friend the Minister for Immigration on 20 May. He wrote:

“The simple question that needs to be answered is how are students that are coming to this country to learn English supposed to be able to qualify in English language proficiency in order to receive a student visa?”

It is not just a very basic understanding of English that they require. The definition of B1 competence, which is the equivalent of about an A* GCSE, is that a student can

“understand the main points of clear standard input on familiar matters regularly encountered in work, school, leisure, etc. Can deal with most situations likely to arise whilst travelling in an area where the language is spoken. Can produce simple connected text on topics which are familiar or of personal interest. Can describe experiences and events, dreams, hopes & ambitions and briefly give reasons and explanations for opinions and plans.”

It seems to me that if someone is able to do all that, they are pretty fluent and would not necessarily need to enrol themselves on an English language course. We are saying to students, “Learn English so you can qualify to come here to study and learn English in Britain.” It is painfully ridiculous.

The other matter on which problems arise for the language schools is their dealings with the UK Border Agency. Institutions and students have found it difficult to communicate with the agency. One student trying to negotiate the application process said they had found that the

“UK staff provide conflicting information or are unable to answer queries regarding classification of guidance which does more than simply repeat the existing regulations.”

Hon. Members might recognise some of that in another organisation with which we have had dealings in recent weeks closer to home, but I shall not derail myself by going into that.

The UK Border Agency failed to carry out any impact assessments before implementing the changes, and that was extremely damaging. Under pressure from its flawed system in April 2009, it was obviously anxious to be seen to be robust and proactive, but that meant increasing frustration on the part of the English language schools, which are now responsible under the licensing arrangements for their students’ whereabouts. One college in Bournemouth, Anglo-Continental, which is led by Guido Schillig and has existed since the 1930s, gave an example of that. Guido Schillig is responsible for his students’ whereabouts, yet the UK Border Agency would not tell him whether a student had arrived in the United Kingdom. The situation is grossly unfair.

My hon. Friend the Minister for Immigration met a delegation of local language schools. My hon. Friend the Member for Poole can probably enlighten the House about that if he contributes to the debate shortly. My hon. Friend the Minister for Immigration said that the previous Government had used a sledgehammer not simply to crack a nut but to smash entirely the wrong object.

There is a point to make about the number of students who come to the United Kingdom, learn English in the language schools and progress to higher education. My constituency of Bournemouth West contains the whole of Bournemouth university, which was rated by The Guardian—I give The Guardian credit; I would not normally do that—as Britain’s No. 1 new university. It has a regular flow of new students from Bournemouth’s language schools who move on to degree-level qualifications.

I hope that the Under-Secretary of State for the Home Department, my hon. Friend the Member for Old Bexley and Sidcup (James Brokenshire) will acknowledge that we do not operate in a vacuum. There is global competition for language schools. Obviously, people can go to New Zealand or Canada, and if they want to learn to speak English badly, they can go to America. The principal relationship is between the agents who place the students and the schools. Those agents are now considering the difficulties that face students who come to this country and are already exploring relationships with language schools in other parts of the world. If we allow the relationships to be severed, we will inflict a terrible and grievous wound on the UK English language schools sector.

I hope that the Home Office will continue to review the changes that the previous Government implemented. We can learn much from other countries and how they handle matters. I am not standing here simply to complain about the previous Government’s actions because that is futile. The coalition has an opportunity to review much of that and find other solutions. For example, we could move to a bond system—I know that my hon. Friend the Minister for Immigration examined that before the election—whereby the student pays an up-front sum of money, which would make absconding much less likely. We could have an assessment level, whereby we examined the risks posed by students from particular risk countries, and we could have a classification system, whereby we perhaps relaxed the rules for others.

The changes that the previous Government made are having a profoundly worrying and detrimental effect on businesses in my constituency and throughout the country. I hope that the Under-Secretary will examine all the alternatives because we can be proud of the English language schools sector. The English language is one of our greatest assets. English is the language of world commerce, and if we shut off the ability of those schools to thrive, to welcome people to our shores and to enable them to immerse themselves in our language, our culture and our values, in time we will look back and realise that we made a very fundamental mistake.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. Has the Minister been notified that the hon. Member for Grantham and Stamford (Nick Boles) or any other Member wishes to speak?

[The Parliamentary Under-Secretary of State for the Home Department (James Brokenshire)]

Two other hon. Members apart from my hon. Friend the Member for Grantham and Stamford (Nick Boles) have spoken to me. I have indicated that, with your consent, Mr Deputy Speaker, I would be happy for them to speak in the time allowed, if the hon. Member for Bournemouth West (Conor Burns) is also content with that.

[Conor Burns]

indicated assent.

[Mr Deputy Speaker]

I call Mr Boles and ask that hon. Members make short speeches with no interventions please.

18:15

[Nick Boles (Grantham and Stamford) (Con)]

Thank you, Mr Deputy Speaker. I should first apologise for my croaky voice: I spent rather too much of yesterday afternoon shouting at the television.

I congratulate my hon. Friend the Member for Bournemouth West (Conor Burns) on what was, frankly, a very classy maiden speech. I hope that it will be the first of many conventions that he will overturn. I also declare an interest, in that I have spent, it seems, quite a lot of the past six months helping a young Israeli friend of mine try to navigate his way through the bureaucratic, Kafkaesque nightmare that is the process of applying for a tier 4 general student visa—and it is just that: a Kafkaesque nightmare.

Like my hon. Friend, I support the Government’s attempts to restrain excessive immigration, which has been such a problem in recent years, and in particular—he described this in more detail—the attempt to crack down on abuses by cowboy colleges and gangs that abuse illegal immigrants’ desire to get into this country. However, I believe that the previous Government’s approach was wholly misconceived. Instead of focusing ruthlessly on closing down the cowboy colleges that are colluding in fraud, they resorted to a process of ever-shifting bureaucratic meddling, in order to make the application process as complicated as possible.

I would like to give a specific example. I believe that I have a reasonable command of my mother tongue. I also have two degrees from moderately okay universities—one in this country and one in the United States—but it took me literally hours to help my friend fill out those forms and understand the supporting documentation that was required.

I will give hon. Members one example. Any student has to demonstrate—quite rightly—that they have enough funds to maintain themselves while they remain in the UK. The current requirement is for them to produce a bank statement showing that they have the funds in their bank account back home for 30 days. That is fair enough—I do not think that any of us would complain about that—but the bank statement has to be stamped by the bank, even though it is a statement from the bank. However, the statement does not have to be just stamped by the bank; it has to be signed by the bank manager. And that is not all: the statement also has to list the equivalent amounts in the account in sterling, and applicants can use only one website for that.

My hon. Friend has made the point that English is our greatest asset and our greatest competitive advantage. We must change the system, so I hope that my hon. Friend the Minister will do what he can to help.

18:18

[Mr Robert Syms (Poole) (Con)]

I congratulate my hon. Friend the Member for Bournemouth West (Conor Burns) on making a characteristically strong case for his constituents. He will be a powerful advocate for his constituents and I look forward to working with him.

I had a debate at the end of the previous Parliament on the same topic. It is vital that we get a quick resolution to the problem, before students are diverted to other schools and this country loses millions of pounds, loses jobs and loses a great opportunity for what is a world-beating industry, if we remove the bureaucracy. Of course we need a firm immigration system, but it has to be fair, and we have to be fair to the language schools so that they can do their business.

18:18

[Dr Julian Huppert (Cambridge) (LD)]

I will be extremely brief. I pay tribute to the hon. Member for Bournemouth West (Conor Burns) for securing this debate and making an excellent speech. I want to add my support, because the problem is serious in Cambridge and elsewhere. My hon. Friend the Member for Eastbourne (Stephen Lloyd) has tabled early-day motion 140, which is about English language schools and has attracted a lot of support.

I hope that the Minister will deal with the problem seriously. English UK estimates that there are 3,500 jobs at stake, with £400 million in schools and £1 billion in universities, plus the advantages to the households that look after the people involved. I look forward to hearing the Minister’s comments.

18:19

[The Parliamentary Under-Secretary of State for the Home Department (James Brokenshire)]

Let me say what a pleasure it is to take part in this debate and to have listened to the excellent contribution from my hon. Friend the Member for Bournemouth West (Conor Burns). Although his maiden speech might have been unconventional in terms of procedure in this House, it was impressive in style, considered in content and impassioned in delivery. He has shown very clearly by his contribution to the debate what an excellent Member of Parliament he will be for his constituents in Bournemouth West. I wish him all success in the House. I have no doubt at all about the contributions that he will make in the months and years ahead.

I also thank my hon. Friend the Member for Grantham and Stamford (Nick Boles) for his contribution. He highlighted a particular case, and although it is difficult to draw conclusions from one case alone, we certainly heard what he had to say and I am sure that, if he provides any further details either to me or to my hon. Friend the Minister for Immigration, we will look into those matters. I also thank my hon. Friend the Member for Poole (Mr Syms) and the hon. Member for Cambridge (Dr Huppert) for their contributions. We recognise the importance of language schools and I hope to address some of the points that they raised.

I should also mention that, in a sense, this is my maiden speech as the hon. Member for Old Bexley and Sidcup. It is rather unconventional to be speaking from the Dispatch Box in that context, but I am proud to represent Old Bexley and Sidcup and I will do my utmost to fulfil the responsibilities that my constituents have placed on me. Although I may not always be able to speak in this Chamber on the full range of topics on their behalf, I will certainly do my utmost to fulfil my duties and to ensure that any matters of concern to them are properly addressed and dealt with.

Let me say at the outset that, as my hon. Friend the Member for Bournemouth West is aware, the English language schools in his constituency—and in the constituencies of my other hon. Friends in their places this evening—are involved in challenging by judicial review some of the changes identified tonight, particularly the minimum level of language study permitted under tier 4. That case is ongoing and is due to be heard next week, so I hope that my hon. Friend and others will appreciate that I may be somewhat limited in my responses on certain points raised this evening.

The Government are committed to attracting the brightest and the best to the UK, which is why we are determined to encourage legitimate students to come here for study. The UK is the second most popular destination for international students—second only to the United States. We must therefore ensure that our immigration system does not inhibit the education sector, which we recognise has to compete in an increasingly competitive global market.

At the same time, we need to ensure that our overall immigration system works to prevent abuse, so the Government are now taking the necessary steps to set a new direction in immigration policy, built on the coalition’s core values of freedom, fairness and responsibility. We face a number of challenges, however, in delivering a safe and strong border, which are made even more pressing by difficult economic times. Immigration must be properly controlled, so that people can have confidence in the system. Our intention to introduce new measures to minimise abuse of the immigration system, including abuse of the student routes, is a priority that was outlined in the coalition’s programme for government.

I do not ignore the fact that the English language industry contributes millions of pounds to the UK’s economy every year. As my hon. Friend rightly pointed out, English language schools in the UK provide jobs for their staff, while students spend money on fees and books, and generate additional income for their host families. The English language is a global language, and we are, of course, keen to promote the UK as the home of English. We are also acutely aware of the part played by English language schools in preparing overseas students for further and higher education in the UK.

However, in the past there has been significant abuse of the student route, with the previous Government ignoring repeated warnings of the scale of abuse by bogus students and bogus colleges for a number of years. Bogus students were often found applying with forged documentation, not taking up their course of study or dropping out part way through, and working too many hours. The UK Border Agency dealt with bogus colleges that would engage in simple fraud, such as not delivering courses as advertised, if at all, and collaborating with bogus students to facilitate their entry to the UK—in some cases, falsifying education certificates to allow bogus students to prolong their stay in the UK.

Since the launch of the register of education and training providers by the former Department for Innovation, Universities and Skills in January 2005, more than 300 bogus colleges have needed to be removed from that register. The introduction of tier 4, the student route of the points-based system, along with sponsor licensing, has gone some way to addressing the problem of bogus colleges. Under the new system, students are tied to their sponsoring institution and must seek our permission to change institution. We do not think that that is inappropriate, as migrants should keep in contact with us and we need to know if they are no longer studying, as they will be in breach of their student conditions.

Although colleges might find it frustrating that the UK Border Agency does not routinely inform them when a student has entered the UK—this point was raised directly—it is simply not practical when we consider the millions of arrivals at our ports and airports each year. Institutions will know when their sponsorship has been used in a visa application and they will know when their student is expected to arrive. If a student does not do so, it is this exception that must be reported to the UK Border Agency and we will then check whether the student is in the UK and in breach of his or her conditions.

The difficulty remains, however, in identifying those bogus students who have no intention of studying in the UK, but simply seek a route of entry. Such so-called students have no qualms about deceiving bona fide education providers to obtain an offer of a place on a course that will go some way to securing their entry to the UK. Such economic migrants tend to target courses that have little in the way of pre-entry requirements, and English language courses have proven to be particularly susceptible to abuse by non-bona fide students. Between April and November 2009, UK Border Agency data show that almost a third of English language schools licensed under tier 4 voluntarily notified UKBA of more than 1,100 students who had failed to enrol or who had dropped out of their course of study.

The tier 4 student visa can be very attractive to economic migrants because of the generous entitlements that such visas rightly provide to those who wish to study here. The ability to work part-time during term time and full-time during vacations, and to bring family members to the UK, are two important privileges that help us to compete with other countries and attract the brightest and the best to study here. However, the Government are committed to ensuring that such privileges are not abused. We must therefore be sure that there are sufficient safeguards in place to ensure that the tier 4 requirements are not so abused.

Data collected since the launch of tier 4 showed a surge in the number of applications made under the route, which was certainly a significant change. That increase, coupled with students who had secured entry under tier 4 but failed to enrol on their courses or ceased their studies early, painted a worrying picture. For that reason, changes were introduced from March. As hon. Members will have heard, the minimum level of language study permitted under tier 4 is level B2 of the common European framework of reference for languages. That means that students must be at least proficient to level B1 before they can use tier 4 and enjoy the entitlements that the route confers. Students whose English language ability is not at that level are still permitted to come to the UK to develop it, using the student visitor route, which allows a person to come to the UK for up to six months.

Without wishing to pre-empt the outcome of next week’s judicial review hearing, the Minister for Immigration intends to undertake a thorough evaluation of the student system in the coming weeks and months, to ensure that the measures currently in place strike the right balance between providing a user-friendly route for bona fide students and education providers and keeping out those who would seek to abuse the student system. Let me be clear: the Government want to encourage genuine students who seek to benefit from our world-class education system and to take away knowledge, skills and a sense of our culture, which they can then put to good use in their home countries.

Question put and agreed to.

18:30

House adjourned.

Ministerial Correction

Thursday 24th June 2010 Ministerial Corrections

Thursday 24 June 2010

Justice

Thursday 24th June 2010 Ministerial Corrections

Topical Questions

[Barbara Keeley (Worsley and Eccles South) (Lab)]

T9. In a recent case, a Salford man had committed a rape and was bailed, but then committed a further rape, and the police believe that there are further victims of this man. Can the Secretary of State explain why the Government have committed in their coalition agreement to extending anonymity to such defendants before all the evidence is heard? Can he also say who will now be consulted for that evidence?

[Official Report, 15 June 2010, Vol. 511, c. 735-36.]

Letter of correction from Mr Kenneth Clarke:

An error has been identified in the oral answer given to the hon. Member for Worsley and Eccles South (Barbara Keeley) on 15 June 2010. The answer given was as follows:

[Mr Kenneth Clarke]

With great respect, I find it very surprising that so many questions are being raised about a proposition that has been before the House, on and off, for the past 20 years and is not easily resolved. We will, of course, look at all arguments, including the experience of the case to which the hon. Lady has referred, but that is only one of the considerations to be taken into account. There will undoubtedly sometimes be cases where the publication of the name of the accused person gives rise to other people coming forward with well-founded complaints against that person. We will have to see whether there is any evidence that such cases are a significant proportion of the total cases of rape. We shall also have to consider the arguments on the other side, where a woman can make an anonymous complaint, the man can eventually be convicted, after going through a long and probably rather destructive ordeal, and the woman retains her anonymity as she walks away, with her ex-boyfriend or ex-husband left to live with the consequences.

The correct answer should have been:

[Mr Kenneth Clarke]

With great respect, I find it very surprising that so many questions are being raised about a proposition that has been before the House, on and off, for the past 20 years and is not easily resolved. We will, of course, look at all arguments, including the experience of the case to which the hon. Lady has referred, but that is only one of the considerations to be taken into account. There will undoubtedly sometimes be cases where the publication of the name of the accused person gives rise to other people coming forward with well-founded complaints against that person. We will have to see whether there is any evidence that such cases are a significant proportion of the total cases of rape. We shall also have to consider the arguments on the other side, where a woman can make an anonymous complaint, the man can eventually be acquitted, after going through a long and probably rather destructive ordeal, and the woman retains her anonymity as she walks away, with her ex-boyfriend or ex-husband left to live with the consequences.

Westminster Hall

Thursday 24th June 2010 Westminster Hall

Thursday 24 June 2010

[Mr Joe Benton in the Chair]

Local Media

Thursday 24th June 2010 Westminster Hall

[Relevant documents: Fourth Report from the Culture, Media and Sport Committee Session 2009-10 HC43-I, and the Government response thereto, Cm 7882.]

Motion made, and Question proposed, That the sitting be now adjourned.—(Miss Chloe Smith.)

14:30

[Mr Joe Benton (in the Chair)]

I call Mr Ed Vaizey. [Hon. Members: “Hear, hear!”]

[The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (Mr Edward Vaizey)]

What a great pleasure it is to open this debate under your chairmanship, Mr Benton. I thank hon. Members and hon. Friends for their early support for my remarks, which may have been heard as “noises off”.

[Mr Don Foster (Bath) (LD)]

On a point of order, Mr Benton. I apologise for interrupting the Minister. Would it be in order for hon. Members to take off their jackets?

[Mr Joe Benton (in the Chair)]

I see nothing wrong with that, as long as they have a decent shirt on.

[Mr Vaizey]

Thank you, Mr Benton, for that important ruling, which was effectively ex post facto, as I noticed that Opposition Members had already pre-empted it.

This is an important debate about a very important issue—the future of our local and regional media—and I am delighted that we will have the opportunity in the next three hours to examine in detail the landscape before us and the opportunities that we could have to reinvigorate local media and, through local media, local communities and local democracy.

I am delighted to see so many important members of the Culture, Media and Sport Committee here today. Towards the end of last year, the Select Committee issued a very important report on local media, and the Government have recently responded in some detail to it. That response is now available at the Vote Office and I am sure that all hon. Members present will have read it in some detail.

As is clear in our response, the Government welcome the Select Committee’s in-depth investigation and analysis of the issues affecting local media—indeed, we broadly agree with most of the Committee’s conclusions. I must say, albeit in his absence, that I have been a great admirer of the hard-working Chairman of the Committee, my hon. Friend the Member for Maldon (Mr Whittingdale), and of one of its more articulate members, my hon. Friend the Member for Shipley (Philip Davies), who has had a strong and independent voice in Parliament and looks set to continue to have one for his foreseeable parliamentary career. That is very welcome, particularly as Parliament gains powers and responsibilities under the coalition Government.

I am grateful for the Select Committee’s emphatic support for local and regional media—above all, local journalism. Westminster Hall is full of quality today, but I had anticipated more quantity, in terms of the number of hon. Members present. I say that because debates on the local media give all in this House a chance to praise our local newspapers and local media organisations, in a desperate attempt to curry favour with them. In fact, during the four Westminster Hall debates in which I participated as a member of the Opposition, I went out of my way to praise my local newspaper, the Wantage and Grove Herald. In response, I am delighted to say that it put details of my expenses on the front page and campaigned vigorously for an independent candidate to stand against me.

So let me instead use this opportunity to praise Oxfordshire’s JACKfm, a local radio station that is enormously successful. To be serious for a moment, JACKfm won two awards this week at the Arqiva commercial radio awards. [Interruption.] I think that my hon. Friend the Member for Shipley may indeed have been present at the awards ceremony. JACKfm won two awards. The first was for Ali Booker’s “Cancer Diaries”. Ali Booker is a constituent of mine, who is a very well known local personality and radio DJ. She has been recording her battle with cancer on JACKfm and it has been an extremely moving and highly popular programme. JACKfm also won the commercial radio station imaging award. I must confess that I am not quite sure what an “imaging award” is, for a local radio station.

I also want to thank Arqiva for sponsoring those commercial radio awards. I am a huge admirer of Arqiva, although our relationship is somewhat strained at the moment, because my local television antenna in Oxfordshire, which was built by Arqiva to enable the digital television switchover, unfortunately caught fire and burned down as it was being erected. That has affected the local television coverage of many of my constituents. A new antenna is being built, but it will not be erected until September and I am in constant dialogue with Arqiva about the situation.

I wanted to use the opportunity of this debate to talk about some of the themes highlighted in the Select Committee’s report, in the light of the Government’s approach to this vital part of the media landscape. As I am sure all hon. Members will agree, we have a fine tradition of excellent journalism, provided at a range of levels through a wide range of media. That tradition is as important at the local level as at the national level. Indeed, survey data from Ofcom indicate that four in five people rate local news stories as very important. Although they were tragic, awful and unprecedented, one thing that emerged from the terrible events in Whitehaven recently was how important the local newspaper had been.

Indeed, I remember the floods in Oxfordshire in July 2007, when BBC Oxford radio became an incredibly important source of local information, with people able to ring in to the station to talk about the situation on the ground. As a result, the radio station became a vital hub of local communication at a time of crisis.

Independent journalism and news distribution have a clear and vital role in democracy at every level. In an international report on the newspaper industry, published by the OECD last week, the industry was described as:

“a pillar of public life and pluralistic, democratic societies”.

I recommend that hon. Members read that excellent report, if they can. To put a finer point on it, as the Select Committee said in its report:

“The importance of reporting on local institutions and local democracy cannot be overstated; without it there is little democratic accountability.”

Democratic accountability has never been more important. As we roll back power from the core to the periphery and from central Government to local government, and as we empower local government and local people to take more and more decisions, reporting on those decisions, or on the environment and climate in which those decisions are made, will be a vital role for local news sources.

For example, we intend to introduce locally elected police chiefs. It will be vital for local newspapers and local media to participate in the debate on that issue. We also intend to have elected NHS boards, to give new powers to councils, to publish local Government spending, and to unlock local and national Government data. That presents a huge opportunity for the local media in getting hold of that information, leading the debate or providing a forum and platform for important debates at the local level.

As my right hon. Friend the Secretary of State for Culture, Olympics, Media and Sport, has said:

“This government is committed to…giving local communities far greater control over their own destinies…But for this to happen we need strong local media to nurture a sense of local identity and hold locally-elected politicians to account.”

However, as the Select Committee report makes clear, there are significant challenges ahead for our media. Newspapers have been particularly hard hit. A report last week—I think that it was the OECD report to which I referred earlier—noted a projected 26% fall in overall UK print advertising revenues for 2009, the steepest fall in Europe. Since 2004, regional newspapers have faced a much steeper decline in circulation than national newspapers. Not only newspapers, but local radio and regional TV news programmes face significant structural challenges—shifting to meet audiences online, developing effective new advertising models and carrying the burdens of onerous ownership restrictions. Those have been exacerbated by the cyclical pressures brought about by the current economic climate.

It is obviously important for the industry to adapt to the changing economic and technological environment and, in debating this subject, we should not lose sight of the fact that these are, by and large, commercial companies that were able to make substantial and significant profits in the pre-internet age. It is therefore only right that they, as commercial companies, should be prepared to adapt and change their business models in a very different technological climate.

I was interested to note, for example, that yesterday the Evening Standard announced that it has started to move into profit after having adopted a free distribution model. Those are the kinds of changes that newspapers may have to consider. However, it is also incumbent on the Government to ensure that there are no barriers to enterprise—we made that point again and again in opposition—and to provide the necessary independence and vision to enable a commercially successful and publicly valuable local media economy to develop. In that regard, we have stood still for too long, even in the face of the vast changes that I have mentioned.

That is why, as a coalition Government, our priorities in this area are to find ways to improve local media provision, and to enable the development of partnerships across the local media landscape. As elements of local media increasingly converge through digital means, it is vital that we see the landscape as interlinked, so we have to be active across all areas. That means a programme of action across television, newspapers, radio and the internet.

Importantly, we do not think of the issue as a zero-sum game—we are not going to be moving the deckchairs about on the deck of the Titanic. As I said earlier, even in the face of the downturn, we know that the digital age presents real opportunities to grow and strengthen local media. There are opportunities to support the plurality of news, hold local government to account, strengthen democracy, participate in and lead debates, and aggregate data at a local level. There are also opportunities to reconnect people with the work of their local voluntary and community sector, with job opportunities and local businesses, and with neighbourhoods.

We believe that the issue can be dealt with without straightforward subsidy. In fact, we take the view that Government patronage can be a problem—it can create dependence and threaten impartiality. Local media should be given the opportunity to become commercially viable and sustainable in the long term, but they should also have commercial and editorial independence from the very institutions that they are meant to scrutinise.

So what does such an approach look like in action? First, my right hon. Friend the Secretary of State recently announced that we are going to implement the recommendations that Ofcom put forward at the end of last year. We will therefore significantly relax local cross-media ownership regulations, and I hope that that relaxation will be in place by the end of this year. However, we would like to go further, which is why we have asked Ofcom to look at the scope for removing the remaining rules and what the implications of that would be.

If any barriers to local media growth and sustainability are to remain, we want to be absolutely clear about whether they are necessary. Local journalism and the local media economy will benefit from more permeable boundaries between different types of media. That will help to achieve greater economies of scale, to follow consumers as they move between platforms and to develop innovative ways of communicating with audiences.

Secondly, we have a commitment to building a strong broadband network in the UK. Broadband also has a crucial role to play in supporting local media. As I have already pointed out, media at every level—national, regional and local—are converging online, and local media’s ability to connect with audiences will increasingly depend on fast internet connections. We want to ensure a basic universal service and to explore ways to introduce super-fast broadband in rural and urban areas. We will work to accelerate the roll-out of super-fast broadband, particularly by using existing infrastructure—the pipes and poles in every neighbourhood—to improve fibre-optic access.

[Mr Tom Watson (West Bromwich East) (Lab)]

Will the Minister do me the honour of defining the term “super-fast broadband”?

[Mr Vaizey]

As the hon. Gentleman is fully aware, I have answered a parliamentary question on that point, and I refer him back to the answer I gave him some days ago.

[Mr Foster]

As some of us have not had the opportunity of seeing the answer, would my hon. Friend the Minister be kind enough to tell all hon. Members what that answer was?

[Mr Vaizey]

As the hon. Gentleman knows, I am against Government waste, and it seems pointless to repeat that answer here when it has already been printed in Hansard. I will write him a letter explaining what my definition of super-fast broadband is, but it certainly does not involve the word “megabit.”

We have always been clear that the previous Government’s plans for independently funded news consortia were the wrong way to go, and we opposed those plans from the beginning. We understood why the previous Government wanted to put the measures in place: it was their answer to the challenge of sustaining regional news. There is a legacy from the process that they started, in that it kindled innovative ideas among local media companies. Indeed, my understanding is that many of the consortia that formed as a result of that policy will continue to work together to look at ways of taking their ideas forward. We hope that by, for example, relaxing the cross-media ownership rules, they can follow a deregulatory path, rather than the subsidy path, to bring their ideas to fruition.

We always felt strongly that the issue of subsidy focused consortia on the best way to get access to the subsidy, as opposed to the best way to engage with viewers. That is why we opposed subsidies, and why we took an early decision not to go ahead with the pilots. The savings made from not going ahead with them will go into providing super-fast broadband, a definition of which is available in Hansard.

[Philip Davies (Shipley) (Con)]

I agree with much of what my hon. Friend has said, but does he accept that in places such as Yorkshire, ITV regional news—the news programme there is called “Calendar”—is incredibly popular, and that there is great demand for it? Will he think again about the obvious solution that would help organisations such as ITV carry on with programmes such as “Calendar”? That solution is to top-slice the BBC licence fee. The BBC gets more and more money every year—so much money that in most years, it does not know how to spend it. That money could be given to an organisation such as ITV to do something worth while, such as providing real competition within regional news, which is much enjoyed in places such as Yorkshire.

[Mr Foster]

No.

[Mr Vaizey]

The hon. Member for Bath (Mr Foster) wants to answer the question, so I am tempted not to answer it, and simply to leave him to deal with it when he speaks. However, I should mention a number of points. First, I have always been against top-slicing the BBC licence fee to fund other broadcasters, because that is the thin end of the wedge. We have one publicly supported broadcaster in this country, but once one starts top-slicing, one effectively creates a second, and possibly a third.

I do not say that ITV is calling for top-slicing, but I say to any broadcaster that might still be calling for it to be careful what they wish for, because the BBC operates under a number of constraints and in a very public climate—something that other broadcasters are, to a certain extent, free from. We do not think such an approach is the way forward, but we believe that we have an answer for my hon. Friend the Member for Shipley: the third strand of our policy after deregulation and laying the infrastructure for super-fast broadband, the definition of which is in Hansard.

[Mike Weatherley (Hove) (Con)]

I feel that I am missing out on some of the definitions here. May I, too, please receive the Minister’s letter about the definition of super-fast broadband?

[Mr Vaizey]

I am delighted to welcome my hon. Friend, the new Member for Hove, who has had a distinguished career in the film industry. I went down to Hove to support him during the election and got into trouble with the Daily Mirror as a result, but I will not go into that. I like to think that my visit contributed substantially to my hon. Friend’s impressive victory, and I will certainly drop him an e-mail about my definition of super-fast broadband.

After deregulation and broadband roll-out, the third strand is our major announcement on strong public service local television. Bizarrely, this country has had no real local television. As I am sure right hon. and hon. Members will point out, when they turn on their local news it is, in effect, regional news, and regional news can be wholly irrelevant to one’s local area. As an Oxfordshire MP, I am used to getting news from Southampton and other places, which are fantastic, but the news is not entirely relevant to where I live. Things are very different in America and western Europe, where local television thrives. A local television network, enabled by a new regulatory regime, could form a core plank of local journalism and local democracy in a thriving multi-platform local media ecosystem. If the hon. Member for West Bromwich East (Mr Watson) wishes to put down a parliamentary question, I will give him a definition of multi-platform local media ecosystem.

The Government’s focus is on making new local media models commercially viable. We believe that local television has the potential to revitalise local media markets with new cross-media models, and as a new platform for reaching local audiences. Before I go into further detail, I want to stress that regional news will remain, for both ITV and STV, an obligation on the channel 3 licence holders. Our vision for local TV is in addition to existing regional news services. We are looking at the potential for existing public service content providers in the nations and regions to play a role locally.

[Mr Watson]

I have not had the chance to read in detail the Minister’s vision for a multi-platform local media ecosystem and for public service TV. Does he acknowledge that some commercially independent newspapers would be wary of a further extension of local TV if it distorts a market in which they are already finding it difficult to operate? Can he reassure them?

[Mr Vaizey]

I am happy to reassure them; we see local newspaper groups as having an opportunity with local television. It is important to make the point that many of our local newspapers are owned by national or multinational companies; they are not produced with a photocopier in someone’s back room, but are part of a substantial business. The Government think that there could be a huge opportunity there, not just because of the quality of the journalism, which is obviously very high and we should not lose sight of that—it reaches its peak in the Wantage and Grove Herald, owned by Newsquest—but because local people tend to identify closely with the brands. We continue to see opportunities there.

On introducing local television into this country, part of the opportunity for local television comes about because of the changes in technology that have decentralised production and reduced costs, and because we have new flexible means of reaching and interacting with audiences. I have already talked about the convergence of different media platforms online, which, again, makes this an exciting opportunity.

We have asked a chap called Nicholas Shott, the head of UK investment banking at Lazard, to examine the potential for commercially viable local television stations and to look at what the barriers are, what incentives are needed and what we need to do to make local television a central part of a thriving local media ecology. On the basis that if one announces something in Parliament, it will not get into the public domain, I want to tell right hon. and hon. Members in complete confidence that we have appointed a steering group to support Nicholas Shott. That may be in the newspapers in a few weeks, but I will tell Members in confidence now. The group includes the media analyst, Claire Enders; the venture capitalist, Brian Linden; the former GCap director, Richard Eyre; and the Labour peer, Baroness Kingsmill, the former head of the Competition Commission. They have agreed to work with Nicholas Shott on his report, which is due in the autumn, to take things forward. There is work to be done.

[Mr Watson]

I apologise for hogging the Minister’s time. Have the terms of reference for the review been published in the House? If they have not, could he facilitate that?

[Mr Vaizey]

I am not entirely clear—I cast a panicked look at my officials—whether those terms of reference have been published. I cannot see any reason why they should be confidential. I imagine that my right hon. Friend the Secretary of State for Culture, Olympics, Media and Sport has sent a letter to Nicholas Shott explaining in detail exactly what the Government hope he will examine in the next few months.

A number of other points arose from the Culture, Media and Sport Committee’s report that are worth covering. It focused on the impact that local authority newspapers might have on local newspapers. In opposition I enjoyed sparring with the hon. Member for Hammersmith (Mr Slaughter) on the subject of the role of Hammersmith and Fulham council’s local newspaper. I got the impression that he was driven less by principle than by a concern that the newspaper might cost him his seat. Now that he has won a seat that the Conservatives may have expected to win, he may take a more objective view of the newspaper’s role. The Secretary of State for Communities and Local Government will bring forward a consultation on the impact of local authority newspapers on the local press in the very near future.

It is also important to address specifically the Culture, Media and Sport Committee’s points on local radio. In particular, the Committee praised the role of community radio, and I am delighted to echo that praise. Community radio has been a huge success story, and a lot of the credit goes to the previous Government for how they nurtured it. Towards the end of the previous Parliament, I was on a Committee that further deregulated community radio. In the run-up to digital switchover, which remains a firm commitment of the coalition Government, it is important to acknowledge that there is, again, a significant opportunity for community radio, in that more of the FM spectrum should be available to community radio stations so that they can broadcast to local communities.

I have covered quite a large area of ground in substantial detail. I am grateful that not too many hon. Members intervened on me. I look forward to hearing the speeches of the Opposition spokesman—the right hon. Member for Exeter (Mr Bradshaw)—and other hon. Members during the two and a half hours that we have to debate this subject.

[Mr Joe Benton (in the Chair)]

I call Mr Ben Bradshaw.

[Mr Ben Bradshaw (Exeter) (Lab)]

Forgive me, Mr Benton, but I understood that I would speak towards the end of the debate. I can then respond to hon. Members’ points before the Minister sums up.

[Mr Joe Benton (in the Chair)]

If you prefer, you may do so. I call Mr Tom Watson.

14:59

[Mr Tom Watson (West Bromwich East) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Benton, and to give a speech that I did not know I was going to deliver when I entered this cavernously empty Chamber. Given that we have two and a half hours together this afternoon, I would like to use the opportunity to praise the Minister and congratulate him on his appointment. He is a noble and elegant member of the Government, and I am looking forward to working with him when I can, scrutinising him in infinite detail and helping him to do his job to the best of his ability. It is good that he has published the response to the Select Committee’s report last year on local media, but I suspect that it has only just gone to the Table Office. He is new to his job, so I shall not be pedantic and complain about that, but he will understand that we have not had time adequately to read the report and respond to it. Perhaps we will have a chance to do so in another forum.

The figure that worried me most in the Minister’s speech was that from the OECD of a 26% fall in print advertising revenue this year. That illustrates the huge structural problems that local, regional and national media face in the United Kingdom. They are structural because of the internet, which is the most disruptive technology for many centuries. It is hackneyed to say that it is as disruptive as the Gutenberg press, but it is important that we, as policy makers, understand some of the characteristics that the internet gives us when responding to the challenges in local media. I hope to sketch out a few of my concerns in that area.

The Minister talked about advertising revenue as a prime example of why advertising models for newspapers are now in such trouble. A great man called Craig Newmark, who invented Craigslist, looked at the classified ads in American newspapers and thought they created an imperfect marketplace because people could not find all the goods that they wanted to purchase, and people trying to sell goods could not find all their potential purchasers. He found a digital solution and founded Craigslist, the vast majority of which offers free classified advertising. Having started his endeavour with no idea of how he would make the model pay, he created a small revenue base, based on advertising real estate in selected American cities. Craigslist is one of the biggest and most successful global websites.

Craig Newmark understood the power of network growth, which is killing newspapers’ revenue models today. We are almost in a commune of despair when it comes to considering how we can retain a strong, rigorous local news base in the UK. None of us has the answers to the hugely disruptive models that the internet gives us. The lesson that we, as policy makers, must learn is: if we do not have the answers, let us not make it harder to find them. One thing that worries me—my position is probably slightly ironic in my party—is that if one does not know an answer, the regulatory models that are then devised may make the problem worse, not better. I hope that in years to come, the one thing that we can share an interest in is trying not to be too prescriptive with our regulation.

The two Front-Bench teams will probably be in despair at my wittering on about the Digital Economy Act 2010, but I believe that if we are honest with each other, it managed the politics of decline for some of the old publishing models that are now completely challenged and almost washed away by the internet. Governments must sometimes step in and protect industries that are transforming themselves, and that is fine, but I suspect that the Act has made it harder, not easier, for publishers to find solutions.

The simple truth of the internet is that scarcity cannot be enforced, as used to be possible in print media, and local newspapers have found it difficult to find solutions. There are some things that communities do on the internet from which lessons can be learned. It enables people easily to form groups. They may coalesce around a brand, a journalist or a newspaper group, so that what a newspaper does and its component parts are vital to its future success. A classic example is the Daily Mail’s Jan Moir, who chose to write a vicious article that resulted in 25,000 complaints to the Press Complaints Commission when people uprose digitally and formed a community. I believe that harmed the Daily Mail brand. A good pioneering local newspaper that distinguishes itself in a niche market by being the only creator of local news and has a track record of integrity, honesty and checking facts can manage transformation in the digital space, but it must understand the power of its brand.

The Minister referred to the Wantage and Grove Herald, which mistakenly made an editorial decision to put his expenses on the front page. How would a newspaper respond to that? The country’s biggest-selling regional newspaper—the Express and Star—is in my constituency. It is—dare I say it?—a classically run newspaper with strong news values, and when one turns a page one knows whether one is reading a news story or a comment piece; it does not have editorialised news pages. Editorially, it backs a political party—the Minister’s party—but its news coverage is studiously impartial. It refuses to take off-the-record or unattributed briefings; everything is on the record. When it makes a mistake, it apologises and puts it right. When I appeared in the Express and Star accused of claiming for a 69p pair of rubber gloves and a tree surgeon, it apologised and put the matter right by explaining that it was in fact my neighbouring MP who had made those claims. That is why the Express and Star has managed to stand up against some of the forces that have been unleashed in local newspapers better than others. It has strong values which result in a loyal readership.

Another matter that newspapers should understand is the power of communities. They could collaborate with their readership more than they have. We all take part in some form of collaboration. Most hon. Members have columns in our local newspapers, and it is far easier in a digital age to build a more participative relationship with readers. I hope that the Government will play a role in helping to facilitate that.

In our report, we did not discuss in depth whether there is a role for the Government to provide not a technology fund, but technology advice to old-school newspapers in the analogue sector moving through the transition to the digital age. Perhaps one of the most worrying parts of the mix in the newspaper industry now is that when it has had to cut back, it has done so on news journalism to such a degree that it cannot cut the staff any more, so it is now turning on the higher-paid technologists and making it harder for them to handle the digital age. If the Government have a role in partnership, it could be in the technology sector.

I cannot end my rather rambling contribution without referring to the report’s reference to the Hammersmith newspaper. What united both wings of the Committee was that we were almost stupefied that a local authority could produce a weekly newspaper containing pizza advertising and—I will not refer to cranky religious advertising—all sorts of dubious advertising without any social policy on that. The only people from the council who were allowed to appear in the pages of the newspaper were the elected Conservative cabinet councillors; the poor Conservative back-bench councillors were not even allowed a voice. The paper had such a dominant place in the local market that it would be impossible for a commercial rival to set up and produce an alternative form of news. It could not possibly have held the local authority to account.

[Philip Davies]

I support what the hon. Gentleman says. Does he agree that it is bad enough when local authorities use local taxpayers’ money to pay for propaganda when it is clearly labelled as propaganda, but it is even worse when local authorities such as Hammersmith and Fulham produce newspapers full of propaganda that masquerade as independent newspapers?

[Mr Watson]

Yes, the hon. Gentleman is right. In an article in The Daily Telegraph last week, the Secretary of State for Communities and Local Government complained about the cost of envelopes in local government. Far be it from me to give the Minister advice about his privatisation plans, but the paper in Hammersmith and Fulham is one local authority paper that could adequately be privatised. That would do us all a democratic service, because it would then hold elected politicians to account.

On the consultation, I hope that we have a serious discussion about how we can give local authorities proper boundaries and show them what is and is not democratically acceptable, because some authorities have inadvertently or deliberately crossed a line that needs defining. It is fair to say that all the members of the Committee entered the inquiry thinking that old newspapers were bleating about local authority newspapers, but when we looked at the issue in depth, we were pretty shocked. I hope the Minister will be able to work with colleagues in other Departments to do something about that, because it is not fair. With that, I will conclude, which should give my right hon. Friend the Member for Exeter (Mr Bradshaw) adequate time to wrap up over the next two hours.

15:11

[Mr Don Foster (Bath) (LD)]

It is a great pleasure to follow the hon. Member for West Bromwich East (Mr Watson) and to serve under your chairmanship, Mr Benton. The debate gives me the opportunity formally to welcome the Under-Secretary of State for Culture, Olympics, Media and Sport, my hon. Friend the Member for Wantage (Mr Vaizey), to his post on the Front Bench.

We are discussing a really important issue. The Minister rightly recognised that we all had an opportunity to namecheck our excellent local newspapers. He did so with the Wantage and Grove Herald, and I certainly want to do the same for my own paper, The Bath Chronicle, which is now, sadly, a weekly rather than a daily. The Bath Chronicle, the Wantage and Grove Herald and all other local newspapers are important in ensuring the accountability of our local councils and other public bodies, and they are a focal point for the community. Sometimes they do interesting things; the Minister gave us the example of the coverage of his expenses. About eight years ago, when The Bath Chronicle was a daily, the letters page included a letter complaining that there were too many photographs of Don Foster in the paper. I was delighted that the paper chose to illustrate the letter with a quarter-page photograph of me, with a banner underneath saying, “Too many photographs?”

Local newspapers and the local media—radio and so on—also act as good vehicles for important local campaigns. Let me just say on a serious note, and with a degree of personal interest, that the front page of today’s edition of The Bath Chronicle includes an article about my part-time secretary in my constituency office. This lady has had breast cancer and bone cancer, and she now has liver cancer. She is quite seriously ill and she was, most recently, taking Herceptin, until her consultants discovered that it was causing heart failure. The only drug now available to her is relatively new. It was recommended by her consultants, but it has not, unfortunately, gone through the final stages of approval by the National Institute for Health and Clinical Excellence, so she is being denied access to this life-saving drug. I am delighted that my local newspaper is running a campaign to gain support for her and that my secretary’s local MP, the hon. Member for North East Somerset (Jacob Rees-Mogg), is supporting her.

Local newspapers, local radio and local media overall are clearly important, and they provide all the things that I have described. They also provide a training ground where many people can develop their media skills before moving to more regional or national newspapers. Given the emphasis that the coalition Government place on localism, it is critical that we find ways of supporting and defending local media so that they can carry out important checks on what happens locally.

As we have heard from the Minister, there are many problems. The local media industry has been contracting for the past five years. Thousands of jobs have been lost in regional and local newspapers, and 25% of jobs are being cut in local papers. Sixty titles were cut last year alone, and more jobs and titles will potentially be lost. Reference has also been made to ITV, where some 1,000 jobs have already gone in the regional news service. More than half of local commercial radio stations are now loss-making, and the industry’s total revenue has gone down dramatically—by nearly a quarter—in the past few years. Its audience share has also declined.

The Minister has given us some of the reasons for what has happened. Of course, it is largely to do with the recession and, therefore, the fall in advertising revenue. However, there has also been a move to new platforms, not least on the internet—an issue to which I will return shortly. If we believe that something needs to be done, the real question is what we are going to do about these issues. I am delighted that the coalition agreement makes clear reference to the coalition Government’s desire to

“enable partnerships between local newspapers, radio and television stations to promote a strong and diverse local media industry.”

The question is how we do that. I want to make a number of suggestions to the Minister and to pick up on some of the points that he and others have made.

Let me start by saying that it is critical that we understand the important role that the BBC plays, and that we make it clear that we would do great damage to local, regional and national media if we followed the advice of the hon. Member for Shipley (Philip Davies) and top-sliced the BBC’s licence fee. That would undermine the BBC’s independence—something that I am delighted the Secretary of State, in his recent speech on these issues, made clear the coalition Government are not prepared to do. The minute we allow top-slicing at the BBC, the corporation will be constantly looking over its shoulder to make sure that it is not offending the Government of the day, and its independence from the Government will be lost. I have to tell the hon. Gentleman that I strongly oppose top-slicing and I hope that that will be the view of the coalition Government.

[Philip Davies]

If that is the case, and top-slicing undermines the BBC’s independence, is the hon. Gentleman saying that the BBC’s independence suddenly disappears in the months and years before the charter and the licence fee agreement come up for renegotiation, because the BBC is looking over its shoulder and thinking about what the Government might do?

[Mr Foster]

The hon. Gentleman makes a fair point, but two wrongs do not make a right for a start. He should look carefully at the BBC’s current role, because there are ways of involving the BBC—I will come to this in more detail in a minute—in developing things that we need to support local and regional media. The BBC’s sixth purpose, for example, includes responsibility for helping to develop platforms on which BBC programmes will appear. The most obvious example currently is the roll-out of high-speed broadband, the definition of which we will receive shortly when we get our letters from the Minister. That is an important example. Under its existing charter obligations, the BBC could be expected to provide even more support through such activities.

The hon. Gentleman is also well aware that the BBC has recently developed an even more vigorous approach to the concept of partnership. It is working with others in all parts of the media to provide forms of mutual support. That work benefits the BBC, but it also supports others. That is another area that we need to do more about in future.

Recently the biggest area of support, collaboration and partnership has been in developing a key part of the solution to our current problems: Project Canvas. I am sure that all hon. Members present are aware that while we debate the BBC Trust is making a final decision about whether to allow the BBC to go ahead with it. I hope the trust will allow it, because it will be a key driver in solving many of the problems that we have described.

[Mr Bradshaw]

Before the hon. Gentleman moves away from the question of the BBC and top-slicing, have not the Government announced that they intend to do exactly what he so decries, in that they have said they will fund super-fast broadband, whatever that means—one assumes it must be more than 2 megabits post-2014—from the licence fee? That can only mean a continuation of top-slicing post-2014.

[Mr Foster]

The right hon. Gentleman should know better than to ask me of all people that question, because he knows only too well that the previous Government identified the underspend from the digital switchover money, which was provided for the targeted help scheme. That was ring-fenced and was not going to be used for any other BBC activities. I was highly critical of it; it should never have been there. That is a very different proposition from taking money from the BBC’s operating funding. It was a separate fund. The previous Government were going to use it for one set of purposes, and the coalition Government are going to use it for other purposes. On a judgment call as to who is right, I believe the coalition decision to use it for the roll-out of high-speed broadband is right. The right hon. Gentleman was going to use it in part for independently funded news consortia.

[Mr Bradshaw]

If we are only talking about the underspend from the digital switchover before 2014, how will the coalition fund super-fast broadband after 2014?

[Mr Foster]

That is obviously a matter for subsequent announcements that the Minister will no doubt make. I do not want to second-guess him. I have already hinted that the Government would be wise to give careful consideration to the sixth purpose of the BBC. That could happen in combination with several other measures that would help to drive up demand, which I shall come to, and that would incentivise the commercial companies—Virgin, BT and others—to act, for their own benefit. There are ways forward.

The other television organisation that has been mentioned is ITV, which has been a catalyst for debate because of its decision to reduce regional television. Many people have been deeply concerned about that. There is a new management team, and ITV seems at least willing to consider maintaining present regional TV levels, rather than making further cuts. The decisions have not yet been made. However, certain things should be done to provide support to ITV. Ofcom is already looking at the airtime sales rules, and we shall have to wait for the outcome. It is considering—I would hope it would do it rather more urgently—the issue of minutage, particularly in peak time. However, there is a key area in which it is important for the coalition Government to find a solution: the problems currently caused by the contract rights renewal situation. That is a fetter on ITV’s opportunity to develop a rational approach to the sale of advertising. I fully appreciate the difficulties, although it is not appropriate to go into them here. I hope that the Minister will make some reference to the issue and give a commitment that the Government will do all they can to find a solution, perhaps working with colleagues in the Department for Business, Innovation and Skills.

The Minister has mentioned something else that will be helpful for local and regional media—the reduction of regulation of cross-media ownership. The Secretary of State referred in his speech at the Hospital club to Ofcom’s recommendations, and an agreement to proceed with those, but he said he wanted to go further, and if possible to remove the rules altogether. Of course he rightly entered a caveat, saying that we must bear in mind monopoly situations, which would be a matter of concern to us all. I hope that the Minister will be willing to consider, in addition to monopolies, the other side of the coin: all our deliberations—on all mergers—should include a public interest test. On some occasions a public interest test would suggest going ahead with something even if it would lead to a monopoly. We should introduce such a test not just for cross-media ownership but for monopolies. That is a possible approach.

There is a problem for the coalition Government and we should make no bones about it. The two parties in the coalition started their approach to independently funded news consortia from different positions. The Conservative party was opposed to them and the Liberal Democrats wanted to go ahead with the three trials. The coalition agreement states that we shall not go ahead, and I support that because of the Minister’s clear acknowledgment that although they were not necessarily the right way forward, valuable lessons had been learned from the work that was done in setting up the potential trial areas. The question for the coalition Government is whether to grasp the opportunities of those lessons and find ways to take them forward.

I mentioned Project Canvas. With that, people will be able to sit in front of their televisions and see programmes that come from satellite, free-to-air or, effectively, their computer, via broadband. It would then be perfectly possible to develop a model of local television, which the Secretary of State and the Minister are interested in developing—I support them in that—through an internet protocol television route. That would be one potential model. We could then bring into partnership local and regional newspapers, local radio stations and other interested groups, and many others in the creative industries, in developing programmes. A model could be developed that could provide truly local television, which would support the other parts of the local and regional media industries. That would bring something of real interest to communities, and would be a sustainable model.

[Mr Watson]

The hon. Gentleman will not be able to answer this, because none of us has an answer, but although I follow the logic of his argument, is not the advertising revenue model from which organisations now work finite? What he suggests might load greater obligation and cost on to local news organisations without an increase in revenues to cover it.

[Mr Foster]

I hear what the hon. Gentleman says, but all I am suggesting is that I hope the review will consider the model I describe. That model could also receive support from the BBC and ITV, to provide some programming through partnership arrangements with the BBC and Canvas and ITV and its regional news outlets. That could provide a new route forward. Interestingly, the Select Committee hinted at it as a possibility in its report, and it ties in with the precise wording of the coalition agreement, which mentions partnerships between all those bodies.

Of course, as the Secretary of State said, there would also be the possibility of having straightforward, free-to-air local TV stations, but in those circumstances it is almost certain that they would have to use the interleaved spectrum. As we know, there is pressure on that spectrum for other uses such as programme making and special events—PMSE—and so on, so there are problems to be overcome, but it would be interesting to look at both models.

My final point on this subject to the Minister, and through him to the Secretary of State, is that reference is often made to the situation in America. We are aware, of course, that many of the American stations that he referred to are actually cable television stations—that is, the equivalent of broadband today. The one advantage of developing that model as part of the package is that it would be a key driver for broadband take-up. Broadband roll-out is crucial, but it is equally important that there is high take-up of broadband as it is rolled out. If that occurs, there will be a greater incentive for commercial operators to do a greater proportion of the work than they might otherwise do, thereby reducing the requirement on the state to fill in the gaps for rural and hard-to-reach areas. The model that I am describing would have the advantage of driving up broadband take-up.

[John McDonnell (Hayes and Harlington) (Lab)]

I apologise for coming late to the debate, Mr Benton, because of an earlier ministerial meeting. Otherwise, I would have intervened earlier.

May I point out to the hon. Gentleman our regret over the dropping of the IFNC plans? There is a sense of urgency within the industry, and as secretary of the National Union of Journalists group I have stood up time and again in virtually every debate we have had over the past 18 months on the matter to demonstrate that sense of urgency. I suppose that what I am trying to get across to him is that if he is offering an alternative model, it would behove him to put as much pressure as he possibly can on the coalition to bring his proposals forward rapidly, before we lose even more jobs in the industry.

[Mr Foster]

I hear what the hon. Gentleman says. In the most appropriate way that I can, given the rather strange circumstances that we all find ourselves in, I shall offer several suggestions in a friendly and supportive way to the Minister who has responsibility in this area. I hope that I have done exactly what the hon. Gentleman has asked of me.

I have two more quick points before I conclude. The first, which is about local radio, is a plea to the Minister. It will not fall on deaf ears, because I know that he shares my view on this: we must have a clear route map for digital radio switchover, as quickly as possible. It is vital so that the industry can understand where it is going. In doing that, can we please continue to make it clear to the public at large that digital switchover does not mean that FM will disappear? The continuation of FM provides a set of opportunities for exciting new things to happen, not least the development of true community radio, which is often run by volunteers and local groups. It would provide yet another form of local media which I believe would be very popular indeed. So please let us get on with digital radio switchover. We have passed the legislation to enable it, so let us now get on and implement it as quickly as possible. And, please, can we make it clear that there is no intention to switch off FM?

Finally, following on from where the hon. Member for West Bromwich East left off, of course we are all deeply concerned about the relatively small number of local councils that produce free sheets far too regularly, taking away advertising from their local newspapers, and action needs to be taken. I am sure that he, like me, has looked carefully at the statistics provided by the Local Government Association, which did some helpful work recently in looking at the number of councils that do that. It is staggering how few local councils, relatively speaking, are doing what he suggested—going way over the mark—but the fact is that several are, and it is critically important that action be taken by laying down clear guidelines on what will be allowed. In those areas where the council is going over the top—going overboard—we must provide protection to the local media.

I hope that the Minister will think that my remarks have been helpful in suggesting a way forward. I look forward to other colleagues joining the debate and to hearing what the Minister has to say.

15:34

[Mike Weatherley (Hove) (Con)]

Thank you, Mr Benton, for giving me an opportunity to speak today. This is not my maiden speech; it is actually my second speech, so I shall not be constrained by the 10 minutes one gets for a maiden speech. I have one hour and 20 minutes to complete my speech, so thank you for that.

I thank you, Minister, for helping me to win the seat of Hove, which I hope will soon be called “Hove and Portslade”, as I am campaigning for use of the full constituency name. We had an enjoyable ice-cream on the beach, I recall, and you had a lot of green paint on your jacket that day after sitting on a painting. We sat on theatre seats on the beach, which was appropriate, given the Department for Culture, Media and Sport role that you hold.

You spoke to local businesses at the Brighton and Hove business show, which included many media companies. As you said, advertising revenues are in decline, but there are many opportunities out there for specific, targeted advertising, which is more effective. Advertising revenues may be down, but opportunities are up through the many outlets that you are creating in local media.

Of course, local democracy is important, so I shall take up your advice to include some of the names of my local media outlets. Our wonderful daily newspaper, The Argus, is not always helpful but is always informative, like your own local paper, I believe. It is a wonderful example of a regional newspaper.

We also have a free weekly magazine called Latest Homes. It is an example of a magazine whose readership is in ascendancy rather than decline. As you said earlier, many comments have been made about changing the media. I believe you mentioned that the London Evening Standard is now in profit. I am sure that that will be one of the ways forward for many papers.

[Mr Joe Benton (in the Chair)]

Order. May I in the nicest way possible put it to the hon. Gentleman that he should not use personal pronouns when addressing other Members? I point out that it should be “honourable Member”.

[Mike Weatherley]

Thank you, Mr Benton, for pointing that out. I appreciate it.

We also have several good, strong local radio stations. One is Juice FM, and there is a community radio station called Radio Reverb, on which I was fortunate to host a programme called “House of Rock”. I mention Radio Reverb because it is a good, local community radio station which does not have any advertising revenues. That has its own problems, but the station is an example of how the community can get involved. The ongoing point is that it goes out on the internet as well, and a programme that I presented with the Iron Maiden manager had a spike of listenership because it was taken up around the globe.

That brings me to local television. Like other hon. Members who mentioned this, I am a little concerned about propaganda masquerading as entertainment programming. We need to be careful of that.

I know that various consortiums in my constituency are looking closely at local TV, and one of my hopes, as someone who wants to expand the creativity of the city, especially Hove and Portslade, is that we take up all the opportunities for media. And, while considering local TV, we must consider whether super-fast broadband, whatever that may be, has implications—whether there is actually a local aspect, and whether we have enough listenership and enough people in the locality viewing the programmes rather than taking information from elsewhere.

[Mr Watson]

It is a great honour to make the first intervention on a new Member. I did not realise that we had the Jack Black of the Conservative Back Benches with us, but I am delighted that the hon. Gentleman is taking part in the debate. When he is looking at his local media and how internet radio and internet TV can be developed, does he accept that the capacity in which super-fast broadband is delivered will be vital to that? If we are to scale up the extent of people downloading content through the net, we will perhaps need a definition of or at least a floor level for what super-fast broadband means in practical terms.

[Mike Weatherley]

I thank the hon. Gentleman for his intervention. I, too, am looking forward to the definition of super-fast broadband and how that is implicated in the debate. Certainly in my professional career, I have been very involved with intellectual property rights and the problems that that issue creates. I believe in creative ownership and, as the hon. Gentleman rightly points out, digital downloads will potentially cause a problem going into the future. I look forward to supporting the Government in providing a full definition, including the aspect of super-fast broadband.

15:40

[Mr Ben Bradshaw (Exeter) (Lab)]

I welcome the debate. At the beginning of it, the Minister made much of how the new Government want to take Parliament more seriously, but six weeks after taking office, the Secretary of State has made a speech at the Roundhouse about the arts and one in Weymouth about tourism and he has announced at least some media policy at the Hospital club—but he has yet to come to the House of Commons to make a statement. I therefore welcome the opportunity to have a proper debate about media policy this afternoon.

As hon. Members on both sides rightly said, strong, independent local and regional media are essential to the health of our democracy as well as to a sense of identity and place in communities and regions throughout the United Kingdom. However, these have, as hon. Members noted, come under severe pressure in recent years for the reasons already highlighted: the move from traditional to digital media, the reduction in advertising revenue and, for some local newspapers, unacceptable competition from local authority freesheets.

The threat to quality television news on ITV in the English regions and in Scotland, Wales and, to a lesser extent, Northern Ireland, has been particularly serious. ITV has already made drastic cuts to its regional news provision, affecting quality and local content and hampering those programmes’ ability to compete effectively with the BBC. However, in all surveys of opinion in this country, the public have said that high-quality local and regional news is the public service content that they value more than any other. Viewing figures substantiate that, with evening regional news programmes often being the most watched news programmes on the schedule in those regions.

That was the context of Labour’s policy for independently funded news consortia—a policy supported by both Commons and Lords Select Committees, both with Conservative Chairs. It was also supported by the hon. Member for Bath (Mr Foster), who used to speak on Department for Culture, Media and Sport matters for the Liberal Democrats, but who has been unceremoniously excluded, so far, from the governing coalition.

In fact, my first question for the Minister is, who does speak for his Liberal Democrat partners on DCMS matters in the present Government? Whoever it is, he or she cannot be too effective, because I have so far failed to identify a single Liberal Democrat DCMS policy that has survived the coalition negotiations. If that person is the hon. Member for Bath, or if it may well be in the future, I wish him better luck going forward.

[Mr Foster]

As the right hon. Gentleman has asked a straight question, may I read to him from the coalition agreement? It states:

“We will maintain the independence of the BBC”—

a Liberal Democrat policy—

“and give the National Audit Office full access to the BBC’s accounts to ensure transparency.”

That was also a Liberal Democrat proposal. The agreement refers to the policy that we have already mentioned about partnerships between newspapers and radio. It refers to

“free entry to national museums”,

work to deliver the Olympic games,

“moving to a ‘gross profits tax’ system for the National Lottery”,

the use of dormant betting accounts and

“reform of football governance rules”.

It also states:

“We will cut red tape to encourage the performance of more live music.”

I think that the right hon. Gentleman will recognise each and every one of those as a Liberal Democrat policy, and if he looks in other parts of the coalition programme, he will also notice reference to, for example, minimum pricing for alcohol and other measures. I think that he can be confident that we have played our part.

[Mr Bradshaw]

Yes, but the hon. Gentleman has read out a rather long list of policies that were also Conservative party policies; none was a distinctive Liberal Democrat policy. However, despite what I have said about the hon. Gentleman’s previous support for IFNCs, one of the Government’s first acts was to scrap them, without having any clear idea of what to put in their place. When I asked the Secretary of State, during DCMS oral questions this week, whether he could point to any other European country in which his new preferred model of local TV works, he could not.

It would be very helpful to hon. Members here if the Minister did better in his summing up, or if he identified a single respected media industry commentator who believes that the figures on local TV stack up. No, this has been done for ideological reasons and has been cheered on, no doubt, by the Government’s friends in the Murdoch empire, who object to any intervention in the market or any obstacle to their aim to dominate it. I am afraid that it will mean the end of high-quality news on ITV in the regions and nations of the UK, and that will be the first bitter legacy of the present Government’s media policy.

The move has also been greeted with dismay by local media leaders—people involved in newspapers, magazines, radio and television. Sly Bailey of Trinity Mirror said:

“We believed that the IFNCs’ capacity to tap the talent and expertise of regional media companies to provide a viable alternative to the BBC’s local news made sense for everyone…we don’t see ‘City TV’ as a viable proposition. Our research suggests that the costs are too high and the revenues too low to support a sustainable business model.”

Tony Watson, managing director of the Press Association, said that

“we are sorry to see the scheme for independently funded news consortia scrapped”.

David Faulkner, managing director of NWN Media, said:

“The concept of the Independently Funded News Consortia offered a real way forward in boosting news provision on Channel 3”—

ITV—

“and multi-platform coverage across the whole of Wales…We are disappointed with today’s statement that the news pilots will not proceed.”

[Mr Foster]

I am sure that as we have a few minutes ahead of us, the former Secretary of State will not mind my intervening again. I have already made it clear that I think we would have carried on the trials were we not in coalition. The problem that we faced, and that he now has to answer, is this. Had the trials been successful, where would the money have come from? Is he saying that the Labour party is committed now, in opposition, to providing funding for the full roll-out across the country of the costs of IFNCs? If so, where is the money coming from?

[Mr Bradshaw]

We were absolutely clear about that, in our manifesto, in the “Digital Britain” White Paper and in all the discussions that we had on it—that our preferred model was to use a small fraction of the licence fee, equivalent to the fraction currently being used to fund digital switchover. However, we were also open to any other arguments in favour of sustainable, long-term and transparent funding models.

I shall come to the issue of funding now, because the Government appear also to have reversed their previous position and to have accepted what we have always said, which is that fast next-generation broadband cannot be supplied to the whole United Kingdom by the market. They have acknowledged, or at least said, that they will use the underspend from the digital switchover fund to help to pay for that, instead of for the IFNC pilots.

What I am not clear about—I do not think the Minister himself is—is how he defines super-fast broadband. I was sent a definition on my BlackBerry a couple of moments ago, but I have lost it. It did not come up with a figure, although I understand that the current Chancellor of the Exchequer used the figure of 200 megabits at some stage during the election campaign. The Minister’s language involved something about a speed that would deliver the best broadband in Europe.

Either way, the Government have at long last recognised that the market will not deliver that, but I am still not clear about something. Our target was to reach 2 megabits by 2012 by using the underspend from the digital switchover, but after 2014, we were going to fund it—again, this was supported by the Liberal Democrats at the time— through a very modest levy on fixed telephone lines. That would have provided the super-fast broadband by 2018. I am not sure what the Minister’s funding mechanism will be post-2014. Although the hon. Member for Bath said that it would not mean the continuation of top-slicing of the BBC licence fee, I should be grateful if the Minister confirmed that that is so. If that is not to be the funding stream, what will be?

If, after 2014, the Government intend to continue using a portion of the licence fee to fund super-fast broadband, I suggest that, having criticised the Labour Government for planning to use part of the licence fee to fund regional news with important public-service broadcasting content, using part of the licence fee to fund infrastructure would show breathtaking double standards. I would appreciate some clarity on the point.

Will the Minister also give us a guarantee—we have not had one so far—that there will be no further deterioration in ITV regional news until he and his Liberal Democrat friends come up with—whatever model they intend to put in its place? Will he also assure us of something that the Prime Minister could not assure us of yesterday at Prime Minister’s Question Time—that there will be no relaxation in the rules governing impartiality for broadcasters?

We have talked about further deregulation in the local ownership market. The Minister has already acknowledged that Ofcom has recommended a relaxation of local media rules, with the exception of the same organisation owning all three media—newspapers, radio and television—in one area. Does the Secretary of State’s statement at the Hospital club that he wants to go even further than previously proposed mean that the Government would be happy to see a monopoly of media ownership across those three platforms in one area or region? I would be grateful for an assurance—and so, I suspect, would the hon. Member for Bath.

I turn to local newspapers. The downturn in advertising, structural changes in the advertising market and the significant generational shift in reading habits has, as we all acknowledge, hit local newspapers hard. A number of newspaper and other media organisations were part of the successful consortiums that bid for our IFNC pilots, and as I said earlier, they are dismayed by the Government’s decision to scrap them. However, the local newspaper industry is looking to the Government to act on the proliferation of local authority freesheets.

None of us thinks that there is anything wrong with local councils keeping in touch with their residents on an occasional basis, to ensure that the public are aware of local services and how to access them, and how to contact their councillors. However, as we have heard, in a small number of cases things have been getting out of hand. The hon. Member for Bath referred to the Local Government Association survey, which showed that about 15% of local authorities produce a newspaper or magazine at least once a month, and that 13% of newspapers give over more than a third of their pages to adverts, with one local authority reporting that half its freesheet comprises adverts. That deprives the local paid-for newspaper market of extremely valuable advertising revenue.

Before the election, the Labour Government were about to issue new guidance that would have put a stop to that. When can we expect action from the Government on that front? The Minister spoke of consultation, but we have already had consultation. We had a long and full consultation last year; we do not need more. The rules mean that he cannot look at documents or correspondence from the time before his arrival at the Department, but I understand that they allow me to get hold of that information; I would be happy to give him a copy of a letter that I wrote to my colleagues at the Department for Communities and Local Government, giving a simple solution. I urge the Minister to implement it forthwith, without having to go through another lengthy consultation. I know that local newspapers and the local newspaper industry are desperate for something to be done. They do not want more consultation; they want action.

I should be grateful if the Minister told us what the Government intend to do about news aggregating services. They have the enormous potential to suck up news for little cost. Indeed, Google is already doing so, but Google will never pay local journalists to cover court cases or to scrutinise the workings of a local authority.

The hon. Member for Bath touched on the importance of local radio and the digital switchover. When we were in government, we recognised the pressures facing the commercial radio industry. The Digital Economy Act 2010 relaxed the rules governing the local radio market. We also provided the industry with much needed certainty on digital switchover, setting a date and the conditions that needed to be met. As the hon. Gentleman said, the freeing up of the FM spectrum for local and community radio could be valuable for local and community radio. However, the industry needs certainty.

The Minister said on Monday that the Government were proceeding with digital switchover, but were

“taking all factors into account”——[Official Report, 21 June 2010; Vol. 512, c. 12.]

Will he explain exactly what that means? Are the Government still committed to switchover in 2015? Will they be setting out the criteria that have to be met before a final decision is taken? Will the Government also be deciding on a help scheme similar to that for digital switchover on television, to support people through that time?

Last but not least, will the Minister say when the DCMS website will be updated? I wanted to check what the Government’s policy was on media and broadcasting, but it was blank.

15:56

[Mr Vaizey]

This has been an enjoyable and illuminating debate. Before turning to the myriad questions put by the excellent Opposition spokesman, the right hon. Member for Exeter (Mr Bradshaw), I wish to dwell briefly on some of the speeches that preceded his.

First, I thank the hon. Member for West Bromwich East (Mr Watson) for his kind comments about me. It is sometimes disconcerting to members of the public when Members of Parliament from opposite sides of the House pour praise on each other. It might come across as some sort of establishment conspiracy. However, the public occasionally say that they dislike yah-boo politics and would like politicians to work more closely together. That is obviously why we decided on a coalition.

I do not stint in my admiration for the hon. Gentleman. I have known him for many years. He has turned himself into a digital champion, and a champion of the creative industries. He thinks deeply about the subject and about the impact that the internet is having on all aspects of our lives. It is always dangerous for a junior Member to patronise a more senior MP, but I think that over the past few years the hon. Gentleman has earned the right for his comments to be heard by all sides. He always makes a powerful case. His speeches are not party-free, but they are generally independent and thoughtful. I look forward to engaging in debate with him on this subject for months, if not years, to come. I say, as a matter of praise, that I am always slightly nervous when he intervenes on me; I know that whatever questions he puts to me will probably be difficult, as was demonstrated today.

The hon. Gentleman was absolutely right to speak, perhaps in a Rumsfeldian way, about unknown unknowns in connection with the internet. It is important for hon. Members to understand that the internet is changing things so quickly, and technology is moving so rapidly, that any attempt at prescriptive regulation would be dangerous. The general consensus about the Communications Act 2003 is that it may already be significantly out of date. We certainly had interesting debates about the Digital Economy Act 2010, and there are views across the spectrum on how effective it might be.

The hon. Gentleman raised a specific point about technology advice from the Government. I can tell him—the answer was obviously in my head as he was asking the question—that there exists a creative industries knowledge transfer network. Apparently, that is part of the Technology Strategy Board. It has made an open call for proposals as part of its digital test bed. I do not need to explain this, but for the record the board is an arm’s length group under the Department for Business, Innovation and Skills—or, as I learned this morning, part of the BIS family. I am sure that the board will continue to thrive in the age of austerity.

The hon. Member for Bath (Mr Foster)—perhaps I should call him my hon. Friend—and I have participated in a number of debates over the past few years, and as the select group of people who have followed them, and even obsessed about them, will know I have frequently referred to him as my mentor, and that is no less true today than it has been in the past. He is a man from whom I have learned a great deal, and he is a very important part of the DCMS family under the current coalition Government. We continue to listen closely to him and to engage in regular discussions with him. As he demonstrated in his speech, his knowledge of this sector and areas around it is second to none. I obviously concur with his view that top-slicing would be a dangerous road to go down. I heard what he said about contract rights renewal, and I can assure him that the Government are looking at that, because it has become clear that a simple regulatory reform may not be enough. He was very honest in his appraisal of IFNCs and how they came to an end. I heard his remarks on radio switchover as well, and I will return to them when I address the questions put to me by the Opposition spokesman.

I thought that it was a little unfair of the Opposition spokesman to claim that there were no distinctive Liberal Democrat policies in the coalition agreement. There was already strong agreement between the Liberal Democrats and the Conservatives on a range of issues across culture and the creative industries, so in effect, coalition policies already existed, and they made it into the coalition agreement. Indeed, that includes policies that have crashed resoundingly in the past week. I refer to the video games tax credit, of which I was an enthusiastic supporter, as was the hon. Member for Bath. When faced with the brick wall of the Treasury, even policies that have the strong support of leading members of both parties can break like an egg and slide slowly into oblivion.

[Mr Bradshaw]

In that case, will the Minister give us an example of a single policy from the Department for Culture, Media and Sport that was ditched after pressure from the Liberal Democrats?

[Mr Vaizey]

I did not come to this debate as well prepared as the hon. Member for Bath, who clearly anticipated the Opposition’s question regarding which policies made it in and which were out. The only issue that we disagreed over was IFNCs, and we had a specific alternative policy to put in place. On most other things—I am sure that at any point now the hon. Member for Bath will intervene and help me out—we were in agreement.

I congratulate my hon. Friend the Member for Hove (Mike Weatherley) on his maiden Westminster Hall speech. He and I share a similar ambition; I have renamed my constituency “Wantage and Didcot”, although technically it remains Wantage in the Official Report. Even the BBC, when I occasionally appear on it, refers to me as “the Member for Didcot”. My advice to my hon. Friend is to call himself “the Member for Hove and Portslade”, and in every arena other than this, he will be known as that. As I discovered at the last election, he will rack up the votes in Portslade as a result. He has had a very successful career in the media and will bring important expertise to bear on the subject. No doubt he will continue to press me for a definition of super-fast broadband to demonstrate his strong independence while he remains temporarily on the Back Benches.

I welcome the shadow spokesman, the right hon. Member for Exeter, to his place. I occasionally faced him across the Dispatch Box, and he brought a great deal of passion and expertise to his role as Secretary of State for Culture, Media and Sport. Again, without wishing to confirm the prejudices of the public, I have long been an admirer of him and his work. I now have to address some of the specific questions that he was able to put to me as a result of the expertise that he gained as Secretary of State. He challenged me to cite examples of successful local television in Europe. Obviously, there are strong examples in America, but there are also very important successful commercial examples in Spain, and possibly even Sweden. He also challenged me to name any serious commentators who supported our proposals. Roy Greenslade, the éminence grise, who is probably at the pinnacle of media commentators, was full of praise for the Secretary of State’s proposals on local television. No one is pretending that a solution is ready to be taken off the shelf; we are working hard on the matter. What Roy Greenslade praised, and what the right hon. Member for Exeter might bring himself to praise in a quiet and private moment, is the ambitious nature of our plans for local television.

[Mr Watson]

I am grateful to the Minister for his comments, and if I was deploying Rumsfeldian rhetoric in this debate, I apologise. I hope that he appreciates that on this occasion, I have not followed through with the tanks. I am looking for general reassurance on a point. Essentially, I think that his dilemma is that very early on in his time in the Department, he will be asked to back a winner. The point that I was trying to make, obviously rather inelegantly, is that he should try not to lose some of the initiatives that are encouraging innovation and creativity. In particular, I am thinking of 4iP and the work that it has done in the hyper-local news sector, which might be revolutionary, and might be the solution that develops. Have a look at www.thestirrer.co.uk, which was set up by Adrian Goldberg. Goldberg has created a community that generates its own news content, and people participate in a community board on the back of that. I ask the Minister to resist the temptation to narrow down the options, and ask him to try to use very small amounts of investment to ensure that 1,000 blossoms can bloom.

[Mr Vaizey]

I take the hon. Gentleman’s point, and let me say that we can agree on a number of levels. As he said, we are talking about a very fast-changing landscape, so it is not the job of the Government to pick winners. That brings the focus on to why the Conservative party, when in opposition, opposed IFNCs. We felt very strongly that it was about picking winners. It was effectively keeping in place the old model of regional television with public money. In contrast, with local television, we are looking at a deregulatory initiative; it could also perhaps be called a regulatory initiative, at least in so far as it would mean setting in place a regime that allows commercial organisations to fill that space, if they think that it is viable. That is why we have asked Nicholas Shott to examine the commercial viability of the initiative, but the hon. Gentleman is right to say that we must not lose sight of the fact that there are hundreds of different initiatives that are involved in the delivery of local news.

The last time I mentioned the subject in Parliament, I was e-mailed by the local news bloggers in Lichfield, who met in the pub and now provide an ultra-local news service. Of course, there will be elements of public money available for that kind of research and experimentation. In effect, one could argue that although 4iP does not strictly have public money, a public service broadcaster is providing the service. The Technology Strategy Board is available, and the National Endowment for Science, Technology and the Arts could potentially lead research in this area, as could our universities and higher education institutions. It is not beyond the bounds of possibility that media companies might also find room to experiment.

The right hon. Member for Exeter pressed me on broadband roll-out, and how the Government were going to pay for it post-2014. We intend to have an industry day at the Department for Business, Innovation and Skills on 15 July, when the Secretary of State will make his proposals clearer. The right hon. Gentleman could invite the Secretary of State to make those proposals to Parliament. He also raised the issue of impartiality.

[Mr Bradshaw]

Before the Minister moves off broadband, I thought that it might be helpful if I provided him with his own definition of “super-fast”, which was

“broadband of sufficient speed and quality to deliver the services that will lead to Britain having the best broadband network in Europe. The technology used to deliver this could be fixed or wireless but will represent a significant upgrade on today's fixed and wireless networks.”—[Official Report, 17 June 2010; Vol. 511, c. 533W.]

I hope that that is helpful to hon. Members. It will make it unnecessary for the hon. Gentleman to write to everyone after the debate. The Chancellor used the figure of 100 megabits per second in his interview with Andrew Marr during the election campaign.

[Mr Vaizey]

The Opposition spokesman has read out my definition, and I wonder what all the fuss is about. What could be clearer? In this World cup climate, an alternative definition could be, “just so long as we are faster than the Germans”.

The right hon. Gentleman also asked whether the coalition Government were planning to remove the rules for broadcasting impartiality. “Smear” would perhaps be too strong a word, but that is a long-running misrepresentation of a discussion document issued by the Conservative party in opposition. There is a real issue.

No one is planning to remove the rules of impartiality for our current public service broadcasters, but what about The Guardian or the Daily Mirror? When The Guardian does podcasts or makes broadcasts that it puts out on its website, should it be subject to impartiality rules? Common sense dictates that that would not be the case, but there is an open question about what happens with IPTV when the internet becomes effectively available on our television. Suppose that a channel run by The Guardian is on the internet, but viewed through our television—should that be impartial or not? It is an interesting matter to explore.

The Labour party was keen to speculate that we were anxious to import Fox News to this country, but that is certainly not our intention. As for whether we would be content with a monopoly of ownership at the local level, we have asked Ofcom to consult on the issue. We want to explore whether it is possible to go further, but we acknowledge that sweeping away such regulations cannot simply be a straightforward political decision. The matter has to be analysed and consulted on, and we would listen to and abide by whatever Ofcom came up with.

News aggregators are an ongoing matter of concern for the local and national media. In recent weeks, News International has decided to put pay walls around its website. Interestingly, Rupert Murdoch is always cited by the Labour party as effectively dictating the Conservative party’s media policy; despite the fact that his newspapers supported the Labour party between 1994 and approximately 2009, he apparently has always been in control of the Conservative party and has absolutely no influence on the Labour party.

[Mr Watson]

I am grateful to the Minister for giving way. He knows that we have plenty of time to develop such arguments. Does he acknowledge that news aggregators are successful because they allow citizens and consumers to find content in a useful format? However, media companies do have the right to opt out of news aggregators and that really should be where the arm of the Government is in such discussions.

[Mr Vaizey]

Absolutely. The matter is, in effect, an argument between two competing businesses and business models. Again, it is a fast-moving debate and we will see what emerges. I am not convinced at the moment that there is a case for direct Government intervention, even if such intervention were realistic or possible.

Finally, the Opposition spokesman, the right hon. Member for Exeter, pressed me on the digital radio switchover. We remain completely committed to switchover. We intend fully to press ahead with it, but it is important to take all factors into account. As my hon. Friend the Member for Bath pointed out, it is important to scotch a few of the myths that surround digital radio switchover; the idea that FM will suddenly disappear is not true. There are myths about the energy use of digital radios and, again, digital radio technology is changing rapidly to enable cheaper and even more consumer-friendly radios to be put into the marketplace. The previous Government set interesting and important targets for the percentage of the population that should be listening to digital radio before switchover, as well as the level of coverage. Those are all factors that we will take into account. We hope to announce the road map to digital switchover shortly, and by “shortly” I mean in less than three weeks.

This has been an enjoyable debate. I began by teasing my local paper, the Wantage and Grove Herald. I hope that nobody would take my remarks as criticism in any sense, because it is one of the best local newspapers in the country, and it provides an important local community service, along with its sister papers the Oxford Mail and The Oxford Times. I also, perhaps, teased Arqiva for burning down my television aerial in Oxfordshire. I would like to put on the record, as a new Parliamentary Under-Secretary of State, that as far as I am concerned—and this is a tribute both to the current Opposition spokesman and his predecessors—the digital television switchover has gone incredibly smoothly. It is one life’s great ironies that the first glitch just happened to happen in an area that affected my constituents.

Question put and agreed to.

16:16

Sitting adjourned.

Written Ministerial Statements

Thursday 24th June 2010 Written Statements

Thursday 24 June 2010

Postal Services

Thursday 24th June 2010 Written Statements

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Mr Edward Davey)]

The Government believe that unless we take the right steps Royal Mail risks being laid low by falling mail volumes, low investment and its huge pension deficit.

To address these challenges, we propose to introduce a Bill in the first Session of this Parliament that will help modernise the Royal Mail, in partnership with employees, and ensure that the company benefits from private sector capital and disciplines.

We believe that the recommendations and analysis in Richard Hooper’s report on the maintenance of the universal postal service in the UK published in December 2008 are still broadly valid today, but as our policy develops we want to be able to test it against current market conditions. I have, therefore, asked Richard Hooper to update his report.

The terms of reference for Richard Hooper’s update are:

To consider developments in the postal sector and Royal Mail since the publication of the review’s final report.

To test whether the underlying issues which threatened the maintenance of the universal postal service remain.

To consider whether the recommendations in the report still provide the best solutions to maintaining the universal service.

I have asked him to let the Government have his initial views in the summer and he will publish a fuller update by early autumn.

Police and Guarding Agency

Thursday 24th June 2010 Written Statements

[The Parliamentary Under-Secretary of State for Defence (Mr Andrew Robathan)]

Priorities for 2010-11 have been set for the chief constable/chief executive of the Ministry of Defence Police and Guarding Agency (MDPGA). These priorities are linked to the delivery of the agency’s key outputs of providing an effective policing and guarding service. In brief the eight priorities are:

Priority 1—By 31 March 2011 to have ensured that the customer requirement for Ministry of Defence Police (MDP) and Ministry of Defence Guard Service (MGS) services are matched with available resources, through proactive engagement with TLBs.

Priority 2a—By 31 March 2011 to have delivered at least 95% of MDP agreed UK customer tasks.

Priority 2b—By 31 March 2011 to have delivered at least 95% of MGS agreed UK customer tasks.

Priority 3a—By 31 March 2011 to have improved MDP customer satisfaction using the 2009 survey results as a baseline.

Priority 3b—By 31 March 2011 to have improved MGS customer satisfaction using the 2009 survey results as a baseline.

Priority 4—By 31 March 2011 to have achieved a detection rate of at least 55% of recorded crime that significantly impact on defence capability.

Priority 5—By 31 March 2011 to have achieved all agreed international tasks.

Priority 6a—By 31 March 2011 to have met and maintained external MDP accreditation and compliance for:

a. NPIA Firearms Training Licence.

b. Professionalising Investigation Programme Compliance.

c. ACPO accreditation for Police Dog Training Instructors.

d. Management of Police Information.

e. Home Office Counting Rules for Recording Crime/Scottish Crime Recording Standards.

f. National Standard for Incident Reporting.

Priority 6b—By 31 March 2011 to have met and maintained external MGS accreditations for:

a. The National Security Industry Gold Standard

b. Security Industry Authority Standard.

Priority 7—By 31 March 2011 to have maintained or raised the Diversity Excellence Model score for the agency using the results of the 2009-10 assessment as the baseline.

Priority 8—By 31 March 2011 to have delivered specified outputs within resource control totals.

Identity and Passport Service

Thursday 24th June 2010 Written Statements

[The Minister for Immigration (Damian Green)]

The “Identity and Passport Service Annual Report and Accounts 2009-10” has been laid before the House and published today. Copies are available in the Vote Office.

Pre-charge Detention

Thursday 24th June 2010 Written Statements

[The Secretary of State for the Home Department (Mrs Theresa May)]

I am announcing today our intention to renew the current maximum period for pre-charge detention of terrorist suspects for a period of six months, and I have laid a draft order to that effect.

Section 23 of the Terrorism Act 2006 extended the maximum period of detention of terrorist suspects before charge from 14 days to 28 days. Section 25 of that Act says that the 28-day period of detention must be renewed by order if it is to remain in place.

It is vital that we support the police and other agencies in their work to keep us safe from terrorism. We face a serious threat, and the nature of modern international terrorism means that police investigations can be longer and more complex than they have been in the past. At the same time, as a Government we are also committed to safeguarding the rights and liberties of the public.

To ensure this balance is appropriately set, the Government have made clear their commitment to review counter-terrorism legislation, and pre-charge detention will form part of that review. That review is due to report to Parliament in the autumn, but in the meantime the current, and exceptional, 28-day maximum period of pre-charge detention for terrorist suspects will expire on 24 July.

However, while we would not wish to pre-judge the outcome of the review, both parties in the coalition are clear that the 28-day maximum period should be a temporary measure and one that we will be looking to reduce over time.

Reinvigorating Retirement

Thursday 24th June 2010 Written Statements

[The Minister of State, Department for Work and Pensions (Steve Webb)]

The Government are announcing today two key reviews as part of their strategy to reinvigorate retirement.

As set out in the coalition agreement, we have established a review into the timing of the increase in state pension age to 66.

Ensuring an equitable state pension is a key priority for this Government. We are protecting the future value of the basic state pension through the triple guarantee. However life expectancy at age 65 is increasing at a faster rate than was previously projected and we must make sure our pensions system is sustainable. The current fiscal position means it is right to consider the timing of the rise in state pension age to 66.

To support this review I have published today a call for evidence to inform an internal review. This provides an opportunity for people and organisations to submit evidence to help us reach our decision. This call for evidence will close on 6 August and we will publish our response in the autumn. This is to ensure that we are in a position to give as much notice as possible to those who might be affected by an earlier rise in the state pension age than expected.

To help ensure sustainability of the system over the long term the Government will also consider future increases to the state pension age and how best to manage the ongoing challenges of longevity.

As part of our strategy to encourage greater private pension saving we are also reviewing how best we can support the implementation of automatic enrolment into workplace pensions.

The coalition agreement confirms our intention to introduce automatic enrolment, which evidence shows is an effective means of increasing pension saving. However, circumstances have changed since the Pensions Commission published its recommendations in 2005. It is right that we consider whether the approach inherited from the previous Administration strikes the right balance between cost and benefits to individuals, employers and for the taxpayer, particularly in the light of current economic and fiscal conditions.

The review will be conducted by an independent team, led by Paul Johnson, Frontier Economics, David Yeandle OBE, Engineering Employers Federation and Adrian Boulding, Legal and General Group plc.

The terms of reference for the review and the call for evidence are available on the Department’s website at: www.dwp.gov.uk/policy/pensions-reform/latest-news. They are also available in the Vote Office and the Printed Paper Office.

House of Lords

Thursday 24th June 2010 Lords Chamber

Thursday, 24 June 2010.

11:00

Prayers—read by the Lord Bishop of Liverpool.

Introduction: Lord Gardiner of Kimble

Thursday 24th June 2010 Lords Chamber

11:08

John Eric Gardiner, having been created Baron Gardiner of Kimble, of Kimble in the County of Buckinghamshire, was introduced and took the oath, supported by Lord Mancroft and Lord Kimball, and signed an undertaking to abide by the Code of Conduct.

Introduction: Lord Maples

Thursday 24th June 2010 Lords Chamber

11:14

John Cradock Maples, having been created Baron Maples, of Stratford-upon-Avon in the County of Warwickshire, was introduced and took the oath, supported by Lord Lamont of Lerwick and Baroness Shephard of Northwold, and signed an undertaking to abide by the Code of Conduct.

Lord Waldegrave of North Hill took the oath.

Lord Sacks made the solemn affirmation.

Government: Savings

Thursday 24th June 2010 Lords Chamber

Question

11:20

Asked By

[Lord Eden of Winton]

To ask Her Majesty’s Government what savings are being made in the administration of Government.

[The Commercial Secretary to the Treasury (Lord Sassoon)]

My Lords, the Government have announced savings in the current financial year of £6.2 billion, of which £360 million will be made in the administration budgets of central government departments, and £400 million will be made in the administrative costs of quangos. The Government have also announced in the Budget £3.3 billion of savings from freezing public sector pay for two years from 2011-12 for those earning above £21,000. A portion of these savings will be made within administration budgets. The Government are committed to reducing the administrative costs of Whitehall and of arm’s-length bodies by at least one-third. Further details and spending plans will be set out at the spending review on 20 October.

[Lord Eden of Winton]

That was a good Answer. I suspect that there are masses of people like me who are fed up with the monitoring, hectoring and intrusion by government agencies and quangos. Can my noble friend confirm that every department has been required critically to examine the justification of and the value for money of every activity in which they are engaged? Can he confirm that they have been given a clear timetable by which to report, and is he able to say what will be the likely impact on front-line services of any subsequent cutback?

[Lord Sassoon]

My Lords, I want to read some words that my noble friend may recognise:

“I am most concerned about the people who are hardest hit ... They have been trying to deal with their own responsibilities themselves, and … to take the burden off the State and look after themselves. The wasteful money-spending policy of the Socialist Government has virtually ruined their little nest eggs”.—[Official Report, Commons, 13/3/55; cols. 2158-59.]

Those are the words of my noble friend in another place some 55 years ago, so I applaud him for the consistency of his concern that the size of the public sector be reined in. It reminds your Lordships that such reining in has, regrettably, had to be done in the wake of successive Labour Governments. Therefore, this time round, I can absolutely confirm everything that my noble friend asked for. In particular, we will ensure that departments completely meet their commitments on reducing admin spend. This, as I said, will be done by a cut of at least one-third, which is committed so far. That is a starting point and we may look to go further.

[Lord Brooke of Alverthorpe]

Can the Minister say whether the Palace of Westminster is classed as one of the arm’s-length bodies? Will there be a savings of one-third here? What plans does he have for implementing them and what is the timetable? If he does not have such plans, can he explain why?

[Lord Sassoon]

My Lords, I have not been here very long but I know that I would be foolish to get into off-the-cuff answers on admin costs for the Palace of Westminster. Rather than waste time giving the noble Lord a definition of what is included, I shall write to him.

[Lord Newby]

Will the Minister ensure that, when looking for savings, he does not only do so within departments but seeks to reduce duplication of function between departments and quangos by implementing the principles of the Total Place programme more generally across government?

[Lord Sassoon]

My Lords, I thank my noble friend for that; we will indeed look right across government in the way that he suggested. The definition of what constitutes admin costs will itself be considered in the spending review and reported at that time.

[Lord Pearson of Rannoch]

My Lords, did the noble Lord see the recent article in the Daily Telegraph which estimates that up to 2,000 Eurocrats are paid more than the Prime Minister? Why do we go on sending some £8 billion in cash every year to support these people, who then go on to inflict such ruinous over-regulation on our economy?

[Lord Sassoon]

I thank the noble Lord for his concern about the costs of bureaucracy in Brussels, about which we, too, are of course very concerned. The Government will be taking steps to make sure that the budget contribution to Europe fully reflects the need for Europe to restrain its costs. So far as concerns Eurocrats, we want to make sure that the best-quality British officials play their part as senior officials in Brussels.

[Lord Morris of Aberavon]

My Lords, what is being done to reduce the number of civil servants of the rank of Permanent Secretary in the Cabinet Office and Downing Street, of whom there are six in number?

[Lord Sassoon]

My Lords, while there are those six Permanent Secretaries in addition to the Permanent Secretaries in each department, we have over 600,000 civil servants in total. The main question is how we reduce the total number of civil servants, which increased by 28,000 under the previous Government.

[The Lord Bishop of Bath and Wells]

My Lords, while recognising the need for child protection and health and safety matters, will the Minister also recognise that at present over 4 million volunteers are being lost to the system due to what one might describe as overzealousness in these areas? Can serious attempts be made to focus on what is absolutely essential in these matters, rather than on that which seems to be ongoingly pervasive?

[Lord Sassoon]

I thank the right reverend Prelate for that question. I would stress that by having a target of a one-third reduction in administration costs, which we hope to exceed, we will be able to target the expenditure on where it really matters, including in the ways that he has described.

[Lord Marlesford]

My Lords, given that the cost of compliance with government regulations by the business sector is tax-deductible and therefore a net cost to the Exchequer, will my noble friend seek to bring under better control some of the quangos whose regulatory functions appear to lack both proportionality and common sense? Will he ensure that if they are to continue at all, they are brought under much tighter discipline?

[Lord Sassoon]

I simply confirm that that will be done, in line with my noble friend’s suggestions.

[Lord Maxton]

My Lords, is not the introduction and development of smart-card technology for all our citizens the best way of improving the quality and reducing the expense of public services generally? If that is so, why on earth are this coalition Government abolishing the ID card programme?

[Lord Sassoon]

It is a waste of money, my Lords.

Japanese Knotweed

Thursday 24th June 2010 Lords Chamber

Question

11:28

Asked By

[Baroness Sharples]

To ask Her Majesty’s Government what plans they have for preventing the spread of Japanese knotweed.

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Henley)]

A controlled release of the highly specialist psyllid—Aphalara itadori—is currently under way to help control Japanese knotweed. If successful, this should restrict its growth, slow its capacity to spread as vigorously and enhance the effectiveness of management effort. It would not eradicate it altogether.

[Baroness Sharples]

I thank my noble friend for that reply but is he aware that it is more than 20 years since I first asked about knotweed and nothing seems to have happened since then? Should psyllid be released and the genie is then out of the bottle, how can we ensure that it is safe? Is there not a problem for people trying to get mortgages? When it is proved that they have knotweed in their gardens or on their land they cannot get a mortgage.

[Lord Henley]

My Lords, we are all aware that my noble friend has been pursuing this matter for about 20 years. This is an experiment worth doing. We have put a great deal of research into the safety of the psyllid that is being introduced to ensure that it will not eat anything other than Japanese knotweed. So far, as far as we know, it does not. If we find any evidence that the psyllid moves off, we will quickly eradicate it to ensure that it does not cause the damage that uncontrolled releases of biological agents can cause.

[Lord Campbell of Alloway]

What has been done about it over the past eight years?

[Lord Henley]

My Lords, a great deal has been done about it. I notice that the noble Lord, Lord Hunt of Kings Heath, is laughing, because he has had to address these questions before. I am grateful for the work that the previous Administration did in this area in introducing research into the said psyllid, the—let us get the name right again—Aphalara itadori. We hope that it will do the appropriate job in due course.

[Lord Davies of Oldham]

My Lords, we on this side wish the Minister well in the attempt to control Japanese knotweed. Will he emphasise that it is not just gardeners and people who own cultivated land who are concerned about it, but our public services? Knotweed represents a heavy cost on our railway system because of the threat that it represents.

[Lord Henley]

My Lords, the noble Lord is right to emphasise the costs, as did my noble friend in her supplementary question. It can cause major structural damage. We estimate that the costs of managing it are about £150 million a year but, as the noble Lord will remember from when he had to deal with the matter, back in 2003 the cost of total eradication was estimated at £1.5 billion. Now, obviously, it would be a great deal more. We should wait to see what this psyllid can do and whether it leads to a much better control of Japanese knotweed.

[Lord Greaves]

My Lords, first, I congratulate the noble Baroness, Lady Sharples, on her persistence in pursuing this matter over many years—even before I was here. It is now coming to some fruition. If the present small-scale release tests in the real world prove successful, what is the next step?

[Lord Henley]

My Lords, if those tests are successful, obviously we would want to take it on, on advice from the appropriate scientists, to lead to greater control of Japanese knotweed. I have to say that it will take a considerable time before we know whether it will be effective; it is thought that it could be five to 10 years before we see any evidence of greater control.

[Baroness Gardner of Parkes]

Can the Minister tell us exactly what this mysteriously named thing is? Is it an insect, is it like the Hawaiian cane toad in Australia, or is it bacterial?

[Lord Henley]

My Lords, the psyllid known as Aphalara whatever it was, is a very small bug, of the order of two to three millimetres long. It is difficult to see with the naked eye, and a magnifying glass may be used better to see it. I have some pictures, which I could show to my noble friend after this Question if she wants to see whether she can identify that bug.

[Baroness Quin]

My Lords, I, too, pay tribute to the noble Baroness for her persistence in raising the issue. Is it not potentially a good news story that after so long, given the problems and great expense which this has caused to people in both urban areas and the countryside, that some of the cost incurred by this plant may be limited in future? I know that the Labour Government had also commissioned research into another method of control of Japanese knotweed, a leaf fungus, which also did not appear to attack other plants. Can the Minister confirm that that research is continuing and what progress is being made?

[Lord Henley]

My Lords, the noble Baroness is quite right to say that it is a good news story. That is why I was trying to offer some praise to the party opposite for the work done, particularly by the noble Lord, Lord Hunt of Kings Heath. We will continue our research on the fungus that the noble Baroness mentioned and, in due course, I hope that I will be able to tell her how that is getting on. I have nothing further to add to what I have said today, but we will continue with both avenues as appropriate.

[Lord Skelmersdale]

My Lords, would it not be quite a good thing if this bug, the name of which I cannot pronounce either, were to mutate and attack the oilseed rape seedlings that are desecrating our waterways and creating quite a large eyesore around the country?

[Lord Henley]

My Lords, my noble friend has a point, but we would be rather worried if the highly specialist psyllid mutated because that could cause considerable damage in areas that we would not be aware of. If we saw any signs of it mutating, we would have to stop these experiments.

Parliament: MP Numbers and Constituency Review

Thursday 24th June 2010 Lords Chamber

Question

11:35

Asked by

[Lord Roberts of Llandudno]

To ask Her Majesty’s Government what consultations they plan to hold with local authorities and the Boundaries Commissions on reducing the number of Members of Parliament and reviewing the size of parliamentary constituencies.

[The Minister of State, Ministry of Justice (Lord McNally)]

My Lords, Ministers are taking advice on the details of proposals, including on consultation, and, as I said in the House on 15 June, we will of course seek to frame the legislation in a way that ensures that the Boundary Commissions complete their task in a timely, fair and thorough way.

[Lord Roberts of Llandudno]

I thank my noble friend for that response. Will the Government assure us that when the Boundary Commissions consider this, they consider not only the electorate size but the geography and the local authority boundaries when reporting on the new constituencies? Will they also discuss thoroughly with the devolved Administrations any effect that the new boundaries for Westminster might have on, say, the Cardiff Assembly or the Edinburgh Parliament?

[Lord McNally]

My Lords, my noble friend will know that the sole objective of this exercise is to bring greater fairness to our electoral regulations and equal weight to votes. He is right, of course, that common sense and a sense of history and of geography will have an influence on this, and we will consider the implications for Wales and the other nations and regions of this kingdom when we come forward with our proposals.

[Lord Bach]

My Lords, the noble Lord, Lord Roberts of Llandudno, is quite right; local consultations, representations and involvement in boundary reviews, particularly this boundary review, are vital. The Liberal Democrats have always been proud of their commitment to local democracy. My question is: will this commitment survive? If promises such as the ones on VAT can so easily be shredded, how can the Minister convince the House that this commitment to local democracy will not be sacrificed in due course?

[Lord McNally]

These proposals will strengthen local democracy and enhance the whole quality and culture of our democracy by giving fairer votes and votes of more equal weight.

[Lord Forsyth of Drumlean]

My Lords, I congratulate the coalition Government on their plan to reduce the size of the other place in order to achieve economies, but will the Minister explain why they propose at the same time greatly to enlarge the size of this House at considerable cost, and in doing so, as he himself has pointed out, perhaps bring this House into some disrepute in the country?

[Lord McNally]

My Lords, I could not agree more with my noble friend. If he comes to the debate next week, as I am sure he will, he will hear my noble friend Lord Strathclyde and me speaking at an appropriate length about how we think the numbers and the costs of this House could be radically reduced.

[Lord Elystan-Morgan]

I suggest to the Minister, I hope without impertinence, that these proposals are spawned by cosmetic considerations and indeed by populism, and that it is utterly absurd to consider a reduction in the number of Members of the House of Commons to a lower level than at the time of the Great Reform Act when the population of this kingdom was only a third to a quarter of what it is now. Indeed, all that will be achieved is an enhanced distance between the ordinary voter and the ordinary representative, which cannot be good for democracy.

[Lord McNally]

On the contrary, one of the things on which we can again pay tribute to the previous Administration is the progress that they made in devolution. We intend to carry forward the process of devolution so that more responsibility is given to the Parliaments and Assemblies of the nations and regions of this country. If you do that, it is absurd to continue with a House of Commons of the same size as when it had the responsibilities that have now been devolved. That is part of the sensible consequences of devolution.

[Lord Howarth of Newport]

My Lords, is the Minister entirely confident that it is a wise course on the part of the Government to attempt to reduce the number of constituencies at the same time as introducing AV? Does he accept that it is one thing, and pretty difficult at that, to persuade Members of Parliament to vote for an electoral system other than the one that brought them to Westminster, but that it is an altogether more desperate undertaking to ask them to agree to a game of Russian roulette, which will ensure that for significant numbers of them there will not be a seat in the next Parliament? Will all this not stretch the tolerances of coalition Back-Bench MPs?

[Lord McNally]

These are matters of political judgment. The twin objectives of the coalition are to bring greater fairness to our electoral system and equality of weight to each vote. At the same time, we would wish to go with the flow of what we have been doing in recent years, which is to move power to the devolved Parliaments and Assemblies.

[Lord Rennard]

My Lords, does the Minister accept that special provision for island communities would need to be made in the guidelines given to the Boundary Commissions? Does he further accept that without special provisions, it would, for example, be very difficult for a single Member of Parliament to represent, say, a part of the Isle of Wight and a part of the mainland, or for a single Member of Parliament to represent the 20 populated islands in the Orkney and Shetland constituency, and the large geographic constituency of Caithness, Sutherland and Easter Ross?

[Lord McNally]

That is a fair point. The integrity of the Boundary Commissions and the way in which they go about their work have never been in doubt, thank goodness. Because this is constitutional legislation, it will be taken on the Floor of the House in the other place and we will have in this place experts such as the noble Baroness, Lady Gould, my noble friend and others who have great experience and will put their input into the deliberations as this legislation goes through.

[Lord Grocott]

My Lords, two weeks ago, when I asked a similar Question, the Minister was good enough to acknowledge that the Answer provided by his civil servants was wholly inadequate. He was also rather disappointed that the answer with which he attempted to improve the efforts of his civil servants was not that good either. Now that he has had a fortnight to think about how long he estimates the Boundary Commission will take bearing in mind that the last review took six years, and now that the finest brains of the civil servants in his department have been focused on this for the past couple of weeks, can he give any improvement on the wholly inadequate Answer that he gave me last time?

[Lord McNally]

I very much regret that the noble Lord has raised that. I was severely reprimanded by the department and it was a couple of days before any of the civil servants talked to me. As I said in answering this question, Ministers are taking advice on the detailed proposals and will bring forward legislation and a timetable as soon as possible.

Daylight Saving Time

Thursday 24th June 2010 Lords Chamber

Question

11:44

Asked By

[Baroness Miller of Hendon]

To ask Her Majesty’s Government whether they have plans permanently to move clocks in England, Wales and Northern Ireland forward by one hour.

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox)]

My Lords, we are aware that there are a range of views on this subject. While the Government do not propose to change current summer time arrangements, we continue to listen to representations we receive and consider any evidence presented to us.

[Baroness Miller of Hendon]

I thank the Minister for that not terribly helpful reply. Repeating facts that have been known for many years, is she aware of research done at the University of Cambridge which suggests that moving forward one hour from GMT would be equivalent to taking 200,000 vehicles off the road? That cannot be something that can just be overlooked in a brief reply.

[Baroness Wilcox]

I am aware of the campaign and in particular the Elizabeth Garnsey report, to which my noble friend has referred. It is important to stress that evidence on this issue has not always pointed in the same direction. In particular, it is suggested that the change would save a significant amount of CO₂ emissions. However, work undertaken in 2005 by the Building Research Establishment for Defra indicated that putting the clocks forward an additional hour in winter and summer would lead to a net increase in carbon dioxide emissions corresponding to around 1 per cent of total UK emissions.

[Lord Rogan]

Does the Minister agree that British business, especially manufacturing, would greatly benefit from the introduction of this time change by affording us at least two if not three extra hours in a trading day to communicate with our mainline European customers and suppliers?

[Baroness Wilcox]

I have been in this House a few years now and I have heard the arguments for and against doing this. Always we come back to the same thing: certain parts of the country would benefit while other parts certainly would not because the time zone would not be helpful to them. There would be an impact on the City, for example. As we are at the moment, the time works very well for us. We are there when Asia is online and we are still there when the United States starts trading. I am not sure that the arguments for and against are as clear as we would like them to be.

[Lord Dubs]

My Lords, does the Minister agree that there is one overwhelming argument in favour of the change, and that is the number of lives that would be saved on our roads?

[Baroness Wilcox]

Yes. Evidence from the Department for Transport suggests that road casualties would be reduced, with a reduction in road deaths by around 80 per year and serious injuries by 212 per year out of a total of 3,000 and 28,000 respectively. Those are not enormous benefits, but benefits none the less.

[Lord Howe of Aberavon]

My Lords—

[Lord Oakeshott of Seagrove Bay]

My Lords—

[Noble Lords]

Lord Howe!

[Lord Howe of Aberavon]

Does my noble friend recognise that the central European time zone extends very widely from Berlin to Madrid; that the People’s Republic of China has one time zone that stretches from east to west in its entirety; that the people of Wales and Haverfordwest can live in a time zone stretching from Greenwich to Haverfordwest; and that it should not be impossible for us all to live in a time zone stretching from Greenwich to Oban?

[Baroness Wilcox]

That is very interesting and goes back to my original Answer, which I am afraid that I still have to give. While we do not propose to change our summer time arrangements at the moment, we continue to listen to representations and will consider any evidence presented to us, including what has just been said.

[Lord Faulkner of Worcester]

My Lords, is the Minister aware that the answers she is giving are as disappointing as those which used to be given by Ministers in the previous Administration? The problem we had then was that this Question was being answered not by the Department for Transport, which has a concern for saving life, but by another government department. Could those two departments talk to each other and look at the evidence? The noble Baroness has referred to the lives that would be saved. I cannot believe, and surely she must accept this, that the saving of lives is not more important than any other consideration. The evidence is overwhelming in this area.

[Baroness Wilcox]

That is why we continue to look at these matters and consider the evidence that we have rather than the feelings that we have. The two departments talk to each other; they both briefed me today.

[Lord Oakeshott of Seagrove Bay]

My Lords, following the point so well made by the noble and learned Lord, Lord Howe, does the Minister accept that it would protect jobs for Britain as a whole if we were in the same time zone as 374 million people in west and central Europe, who are our main trading partners, and not 15 million in Ireland and Portugal?

[Baroness Wilcox]

I am afraid we do not have evidence that agrees with that completely. If we did, we would act on it immediately and change the time zones. People have been trying to get this right for a very long time and we will continue to do so.

[Lord Hunt of Wirral]

My Lords, I declare an interest as deputy president of RoSPA. I congratulate the Minister on her brilliant start to handling a difficult departmental brief. She inherited this issue from her predecessor, who we knew under several titles, including Last of the Time Lords. Does she accept that there is now a feeling that the campaign for lighter evenings—the Lighter Later campaign—would cut energy costs, save lives, cut emissions and should now be carefully considered?

[Baroness Wilcox]

That is exactly what we are going to do. I have referred to the Lighter Later campaign and said that it has made a persuasive case for change on environmental, safety and well-being grounds, and we will consider all the evidence. I thank my noble friend for his kind remarks.

Business of the House

Thursday 24th June 2010 Lords Chamber

Timing of Debates

11:51

Moved By

[Lord Strathclyde]

To move that the debate on the Motion in the name of Viscount Montgomery of Alamein set down for today shall be limited to three hours and that in the name of Lord Mawson to two hours.

Motion agreed.

Procedure Committee

Thursday 24th June 2010 Lords Chamber

Motion to Agree

11:52

Moved By

[The Chairman of Committees]

That the First Report from the Select Committee (HL Paper 10) be agreed to.

[The Chairman of Committees (Lord Brabazon of Tara)]

My Lords, the purpose of the report is to seek the agreement of the House to expediting the introduction of new Peers between now and the summer Recess. I hope the report, which was unanimously agreed by the committee, is self-explanatory. If agreed by the House, it will mean that from next Monday until the Recess up to three new Peers will be introduced on each Monday, Tuesday and Thursday. This will be in addition to the introduction of up two new Peers on Wednesdays. On days when there are three introductions scheduled, the House will sit 15 minutes earlier than usual— that is to say, 2.15 pm on Mondays and Tuesdays and 10.45 am on Thursdays.

[Earl Ferrers]

Where does the noble Lord think everyone is going to sit?

[Lord Brabazon of Tara]

That is a very good question from the noble Earl, which will be addressed—in part, in any case—by the Administration and Works Committee next week.

Motion agreed.

House of Lords: Financial Assistance to Opposition Parties

Thursday 24th June 2010 Lords Chamber

Motion

11:53

Moved By

[Lord Strathclyde]

That, in the opinion of this House, the resolution of the House of 30 July 2002 (Financial Assistance to Opposition Parties) should have effect, in relation to the giving of financial assistance, with effect from 12 May 2010, as if—

(a) in paragraphs (1) and (2)(a) the references to the second largest opposition party were omitted, and

(b) paragraph (8)(b) were omitted.

[Baroness Boothroyd]

My Lords, this is an important resolution. It is cloaked in technical terms and it affects the way in which opposition parties are funded in this House to help them perform their parliamentary duties. Sadly, no one would know that without recourse to Hansard and to the resolution of 2002 that the Government seek to amend. I regret that. Where public funds and parliamentary accountability are involved, the Government need to be more transparent.

I believe that the Motion before us is more than a tidying-up operation. Rightly, it recognises the changed fortunes of the Liberal Democrats; wrongly—unless I am corrected—it implies a severe cut in the distribution of Cranborne money to the opposition parties in this House by no less than 30 per cent. At the same time, it does less than justice to Cross-Benchers, whose independence will always disbar them from office and who operate on a shoestring.

The Cross-Benchers came late to the party when Cranborne money was distributed for the first time in 1997. They had to wait two years. By that time, the cake had been cut and they were handed the smallest slice—a meagre slice, some would say. Cross-Benchers received £10,000 out of a total allocation of £291,000. Our relative position has improved slightly, but it remains at a subsistence level. I am really quite shocked at the disproportionate way in which Cranborne money has been divided during the past 13 years. To some, the Cross-Bench share was almost a joke.

Eight years ago, when Lord Williams of Mostyn increased the Cross-Bench allocation to £35,000, he laughingly remarked:

“I stand amazed at our generosity”.—[Official Report, 30/7/02; col. 820.]

My colleagues were grateful all the same.

Last year, the Cross-Bench Convenor, the noble Baroness, Lady D’Souza, received the princely sum of £61,003—a substantial percentage increase, you might say, but that was only because the starting point was so low. Cross-Benchers had trailed so far behind they were almost out of sight.

The £60,000 a year allows our Convenor to employ one full-time and one part-time assistant to administer her office and respond to the needs of the 187 Cross-Bench Peers. She also represents us in consultations with the Government and other parties. She sits on some nine House committees. I pay tribute to her fortitude, but it is wrong that she should have to bear so heavy a burden without adequate support.

In contrast, the Conservatives and the Liberal Democrats last year shared the rest of the Cranborne money on a 2:1 ratio. In 12 months, they received £770,000. If that is not lop-sided, I do not know what is. Sinn Fein received more than the Cross-Benchers for its non-performance in the Commons. Despite the refusal of five Sinn Fein Members to take the oath of allegiance, Sinn Fein netted £96,000 to finance what the previous Government described as “representative business”, a term capable of many interpretations. I take these figures from an excellent research paper on the public funding of opposition parties produced by the Commons Library. The section on the way in which the Cranborne money operates makes eye-popping reading.

Sadly, unless the Leader of the House enlightens us otherwise, this Motion makes matters worse. In the absence of further information, the Government appear intent on returning to the Treasury the funds previously allocated to the Liberal Democrats. If that is right, the total amount of Cranborne money available to the Opposition will be reduced by nearly a third, all without reference or explanation to this House.

A clever lawyer might argue that the Cross-Benchers are entitled to all the Cranborne money that went to the Liberal Democrats—not that I would think such thoughts, of course. But the pecking order set out in the resolution of 2002 is clear. Then, the Cross-Benchers were in third place; now, they are in second place. It is a position that the Government choose to ignore to save money and—who knows?—perhaps to reassure their junior partner that its entitlement to Cranborne money is secure if the coalition fails. I do not challenge Labour’s entitlement to the £475,000 which the Conservatives received as the Official Opposition last year—that is, of course, on top of the salaries paid to their Leader and their Chief Whip. Nor do I begrudge Ministers the command of resources needed to formulate their policies, run their departments and present their case as persuasively as possible. I do, however, believe in fair play and hope that the Government do too.

As the House knows, we on these Benches belong to no party. We have no common platform or agreed policies, and no leader. We speak and vote according to judgment and conscience, without the discipline of Whips to guide us through the Lobbies, and we may be swept away if this House is replaced by an elected Chamber. However, while we are here Cross-Benchers will, I know, do their duty to Parliament and to the country. They need adequate resources to do so. We are not partisans but share the same principles and, I believe, perform a useful role.

These Benches do not need the hundreds of thousands of pounds that routinely go to opposition parties. Your Lordships may be surprised to know that during Labour’s period of office, the Conservatives received over £4 million in Cranborne money, the Liberal Democrats £2 million and the Cross-Benchers £400,000. I was a Whip in Harold Wilson’s Government when the first public funds were allocated to opposition parties in the Commons. The aim was to improve the parliamentary effectiveness of parties and groups not in government. I hope that the noble Lord the Leader of the House will agree that the need to do so has not changed. He is long experienced in the travails of opposition, and I hope that he will review the allocation of Cranborne money in the light of my unashamed appeal for a better deal for these Benches. I do not seek generosity; I seek fairness. Fairness will do for me.

[Viscount Tenby]

My Lords, I support the powerful and persuasive words of my noble friend Lady Boothroyd. I promise not to detain the House for long. I have had the privilege of being closely associated with a number of distinguished Convenors in recent years. I have also had the personal experience of working in the office of the Convenor. I can testify to the difficulty of serving so many noble Lords in such a confined office area and with slender personnel resources. Indeed, it is a testimony to the professional skills of the present personal adviser and his assistant that we get the excellent service we do but, as the noble Baroness has said, the figures speak for themselves. It is surely an anomaly from the bad old days that a grouping combining over 25 per cent of our total only receives disproportionate sums of money. I should add that we are grateful for any crumbs that fall from rich men’s tables.

My guess is that the reluctance to put us on a footing with other political groups is that to do so would somehow disturb the delicate framework of our independence and make us more like the other political parties. Yet to anyone who has studied the pattern of voting in recent years, as I have, those fears can be allayed. In over 25 years, I cannot recall an occasion when Cross-Benchers have voted as one and—believe me—a 50:50 breakdown, or near those figures, is all too common. This appears to be an open season for reviews. I suggest to the noble Lord the Leader of the House that, with his customary generosity of spirit and instinct for doing the right thing, he might set up such a review—it may be in conjunction with the usual channels—to look into this whole matter so that it can be addressed and so that we can look forward to a fairer deal.

[Lord Alderdice]

My Lords, when I was charged with putting together the Northern Ireland Assembly I came to the other place and consulted with the noble Baroness, Lady Boothroyd, who was extremely helpful and generous in her guidance. I also drew on the experience of Clerks, Attendants and the Members and procedures of your Lordships’ House—particularly the respectful way in which Members treat with each other, because that seemed to me a very important aspect of parliamentary life.

One thing I did not draw upon was the grossly inadequate resources provided for all the Members of this House in the conduct of their business. When the Northern Ireland Assembly was brought into being, we ensured that all parties, on a per capita basis, had funding for staff for research purposes. If there is to be proper consideration of our work—policy work holding government to account and legislation—then the undoubtedly greater talents of your Lordships’ House have to be conveyed properly in the House and indeed beyond the House. It is not necessarily the case that money should be provided to groups, but resources of personnel need to be provided. Therefore, on the question of whether it is money or whether staff are employed and allocated to groups, there are various ways in which to achieve the same purpose. But the purpose must be to provide Members of your Lordships’ House with the opportunity of doing their work.

It is sometimes thought that it is purely a matter of policy research and producing amendments for Bills, but it is not. It is necessary for the groups to organise themselves in an orderly and proper fashion and to keep each other advised and informed of what is going on. But there is another purpose that has increasingly become important. At both ends of this building, we have been concerned about our relationship with the wider community, with non-governmental organisations and charitable bodies, with special interest groups and campaigns of various kinds, as well as with individual citizens of our country. One way in which your Lordships’ House has become particularly successful is that these groups have found your Lordships accessible. Very often, they have been brought together with members of different groups in your Lordships’ House by the very researchers paid for by Cranborne money. That has been the case not just with Liberal Democrats but with Cross-Benchers and members of other parties in your Lordships’ House.

As long as we have the adequate resources in all the parties—it is not a question of the Government and the Opposition in this regard—as in Northern Ireland, where money is allocated to parties whether in or out of government, on a per capita basis, that will enable us, as it has in the past, to engage properly with those charities, NGOs, interest groups, professionals and ordinary citizens who want to convey their message to Parliament. One great satisfaction that the community has found with your Lordships’ House in recent years has been with its accessibility and openness on a non-partisan and non-constituency basis to these important issues.

I support what has been said in the appeal to my noble friend the Leader of the House, that he gives consideration to this question. Of course, it is especially sensitive at a time of economic difficulty, when we are asking for cutbacks in all sorts of circumstances—that is absolutely the case. But at least at this time we might consider what kind of mechanism and formula might be possible so that at a time when it was more affordable we would be in a position to provide for your Lordships’ House the kind of resources necessary not only for our internal functioning and operation but for our relationship with the rest of the community.

[Lord Dholakia]

My Lords, I ask for clarity in this resolution. Will the Leader of the House confirm that this resolution applies for the duration of this coalition Government? Now that there is the arrangement with the fixed-term Parliament, would he not consider it necessary to have a sunset clause for the termination of the arrangement?

[Lord Strathclyde]

My Lords, I am very grateful to all noble Lords who have spoken, especially to the noble Baroness, Lady Boothroyd. I am certainly one who would never want to cut across what she says. I am glad that what she said was said with her customary elegance and force. There was also an element of logic behind it. I shall try to deal with all the points that the noble Baroness raised—no mean feat.

I do not share the view of one of my predecessors, Lord Williams of Mostyn, that it was an act of great generosity. I have always taken the view that parties that are in opposition or on the Cross Benches should receive support from the taxpayer so as to fulfil their functions. The noble Baroness said that it was a disproportionate way in which to do things. Her main point, I think, was that there was an unfairness between how the main party in opposition and the Cross Benches were dealt with.

This lies at the heart of how I think the House views the different roles of the Opposition and the Cross Benches. I was in opposition for a long time, so I know perhaps more than anyone else that the Opposition have a difficult task to do. In an unpaid, part-time House, they need to provide a substantial number of Peers to act as shadow Ministers and they do not have the benefit of the Civil Service to provide them with the papers and amendments that are required for the Opposition to function. As I have said many times, it is important that there should be a strong Opposition. That is why a substantial amount of support is provided to the party of opposition in this House, which is now the Labour Party. I do not think that anyone would believe that the nearly £500,000 given by the taxpayer to the Labour Party is overgenerous. It is probably about right and it allows the Opposition to do the work that they are asked to do.

Those conditions do not apply to the Cross Benches. The Cross-Benchers—I say this with the greatest respect—do not have a Front Bench or a central office. They are not involved in the formulation of policy. They do not need to negotiate with their colleagues in another place, because they do not have any colleagues in another place. As the noble Baroness pointed out—and I cannot disagree—the Cross-Benchers come together as a loose alliance for administrative purposes, but they are all individuals, with individual views of how things should be done. It may be that there is not quite enough money to help the Convenor to do her job. I do not wish to be in the least bit flippant about this and I pay the greatest tribute to the work that the Convenor of the Cross Benches does on behalf of her whole flock—indeed, I pay tribute to her predecessors, too. It is faintly shocking that, 10 years ago, the Cross Benches received nothing at all. The amount was reviewed only two years ago and was increased by 48 per cent—a substantial increase—to £61,000. The current amount is, I think, £63,000. I know that that was from a relatively low base, but I am always happy to receive representations from the Cross Benches and from the Convenor about whether that figure should be increased.

My noble friend Lord Alderdice raised an entirely different question, which was about the funding of political parties when they are in government. I am not enormously attracted to that idea. The purpose of Cranborne money, which is the subject of the Motion, was to support the parties of opposition. There is now only one party of opposition. Naturally, consideration was given as to whether the one party of opposition should receive all the Cranborne money, but wise counsel prevailed on both sides of the House. We took the view that, as the Liberal Democrats had joined us in coalition government, both we and they should give up that money. There is a good reason for that. We now have the resources of the Civil Service at our disposal to create policy and to do all the administrative work. We recognise that the civil servants do an excellent job.

Other Parliaments and Assemblies have created different traditions, particularly those that have almost inbuilt coalitions. I have no idea how long this coalition will last, although I hope that it will last for a long time. That leads me to the question raised by my noble friend Lord Dholakia. He rightly said that, if a second party of opposition should re-emerge, the whole situation should be reconsidered and the position reviewed. I cannot conceive of circumstances in which such a review would not be done in a most positive light, with Cranborne money reapplying to a second party of opposition.

Although the Motion on the Order Paper is slightly opaque, I think that it has now been clearly explained, not least by the noble Baroness, and I hope that we can now agree it.

[Viscount Tenby]

My Lords, the remark of the much lamented late Lord Williams of Mostyn has twice been referred to today. For the record, he made that remark in response to a rather carping comment from me; I was speaking for the Convenor on that day. It was ironic, and there was a twinkle in his eye when he said it.

Motion agreed.

Latin America

Thursday 24th June 2010 Lords Chamber

Debate

12:15

Moved By

[Viscount Montgomery of Alamein]

To call attention to recent developments in Latin America; and to move for Papers.

[Viscount Montgomery of Alamein]

My Lords, we now turn to more interesting and international affairs. My thanks are due to the Convenor, my noble friend Lady D’Souza, for allocating me time for this debate. It is four years since our previous debate on Latin America and a great deal has happened since then.

Although retired from all business activity for 10 years, I remain a vice-president of Canning House, the Latin American focal point in London. I am glad that two of my fellow vice-presidents—the noble Lord, Lord Garel-Jones, and the noble Baroness, Lady Hooper—will speak. The president of Canning House, the noble Lord, Lord Brennan, is unfortunately away, so we will miss him.

We welcome today the maiden speech of the noble Lord, Lord Liddle. He comes from a think tank background, and will add a great deal to our deliberations. I hope that I can recruit him to the Latin American cause, which needs a lot more members whenever we can get them. Whether we will agree entirely on the method of achieving this is another matter.

It is just over 55 years since I first went to live and work in Latin America, and I have been continuously involved, in a variety of capacities, ever since—especially after I returned to live here in 1962. During this time, there have been huge changes and I will highlight a few. Fortunately, with the number of speakers we have today, we should be able to cover most aspects in the time allocated.

Latin America is a vast geographical area, growing in importance, with the mainland stretching from the US border with Mexico to Cape Horn. It contains over 500 million people, spread across 20 republics. Brazil, the largest country—slightly bigger than the USA—has 200 million people alone. It plays a leading role, which is an added responsibility. Brazil, Mexico and Argentina are all G20 member states. The GDP of Brazil is greater than that of India. The combined GDP of Mexico and Argentina equals that of India. The combined GDP of Latin America is equal to China. Given that China and India have populations in excess of 1 billion, one can see that individual purchasing power—GDP per capita—is much greater in Latin America, making its countries significant markets to which we should pay attention.

In April last year, President Obama made a powerful speech at the Summit of the Americas in Trinidad. He engendered a great deal of enthusiasm and there was much optimism that the US would start to take its southern neighbours seriously after many years of neglect. The continent was expecting some rapprochement with Cuba, and President Chavez of Venezuela even shook President Obama’s hand warmly. Sadly, nothing happened subsequently.

The same malaise has been the norm in this country. Sadly, the Labour Government never took Latin America seriously. They closed embassies, downgraded others, and the region ceased to be a priority area while we slavishly followed the US into eastern wars. I like to think—indeed, hope—that the new coalition will turn over a new leaf and take a different line; in other words, they might like to turn the Foreign Office back into the policy-making department that it once was. That would be valuable, instead of having policy decided in No. 10 Downing Street.

I turn now to a few ideas by way of encouragement. In the debate four years ago, I suggested that UKTI should be closed and the promotion of trade overseas done by commercial officers in British embassies, who would be involved in what was happening on the ground and therefore able to offer practical advice to businessmen. Unfortunately, this proposal fell on stony ground. In parallel, DfID, which has a ring-fenced budget, could be transferred back under the Foreign Office. It would be much better able to identify technical assistance projects overseas from on the ground, and stop spending funds through international organisations, which is extremely wasteful. This is very important in these hard-pressed times. Indeed, one wonders whether—with such a huge national debt—charity should not begin at home. Under current rules, most Latin American countries are middle-income countries and not aid recipients. However, there is a case for aid in certain countries, where microfinance would be highly productive in starting new small businesses in an extremely entrepreneurial environment. I appreciate that the suggestion I have just made is highly controversial. It fell on stony ground four years ago. It is now even more worth while, hence my recycling of it today.

I turn now to Latin America itself. When I first went there to live, it was mainly run by military Governments, with central planning, multiple exchange rates, import restrictions and inflation. Gradually, nearly all the countries returned to democracy, with market economics, huge investments and rapid development. Sadly, poverty, which is prevalent in the region, has not yet been eradicated and is still a major challenge. However, perhaps the most significant development of recent years has been the development of what is known as ALBA—the Alianza Bolivariana para los Pueblos de Nuestra América, which translates as the Bolivarian Alliance for the Peoples of our America. This is the brainchild of President Chavez of Venezuela. It originally had two member states, namely Cuba and Venezuela, and was based on an exchange of Venezuelan oil for medical staff and teachers from Cuba. Subsequently, Bolivia joined, followed by Nicaragua and Ecuador. Some smaller Caribbean states also joined.

Essentially, the aim of ALBA was an alternative to the US-led free trade area of the Americas known as LAFTA. Oddly, the Venezuelan wealth which is dispensed and accounts for the country’s dominance of ALBA is almost entirely derived from oil exports to the USA. This form of authoritarian socialism—which is how I loosely describe it—involves the nationalisation of companies, the loss of independent media, manipulation of the constitution to provide continuous re-election of the President and the intimidation of opponents. Argentina is not a member of ALBA, but the Kirchner husband and wife team—who seem to alternate in power—follow the same precepts and policies as Chavez. Like it or not, ALBA is a reality. We need to understand it in this country, come to terms with it and work out how we can relate sensibly to it and do business there.

Fortunately, there are plenty of bright spots to compensate for the rather gloomy picture that I have painted. We have a strong relationship with Brazil, where President Lula will stand down in October after a most successful presidency, which included an important visit to Britain. As and when the UN is reorganised, surely Brazil should be one of the permanent members of the Security Council. I wonder when this will happen. Chile is a great success story, as is Peru. Colombia has just elected a new President in a huge turnout, with a massive majority in the second round. President Santos is no stranger to this country, where he lived for many years. I am sure our relations with Colombia will continue to prosper.

Mexico, the second most important Latin American country, is in a strong economic situation, but has major security problems due to infighting by the warring drug cartels. Central America is also extremely interesting as it is developing an integration process called Sistema de la Integración Centroamericana, or SICA for short, with a rotating presidency every six months. Currently, this is Panama, which will be succeeded by Belize on 1 July. In this country we have an all-party group which reflects this arrangement, which is very satisfactory.

I would like to go on, but wish to make one last general point. This year, 2010, is the bicentenary of the start of the independence movement in Latin America in 1810, in which Britain played a major role. Both Simón Bolívar in the north and San Martín in the south derived their philosophical ideas from the French revolution and their political support from Britain. With the exception of Portuguese-speaking Brazil, which did not become a republic until the late 1880s, all countries in Latin America are holding commemorative celebrations at various times, as are the Latin American embassies in London and the various bilateral Anglo societies.

The dream of Bolívar was of one great united Spanish-speaking region. It remains a dream and is, indeed, the aspiration of President Chavez of Venezuela. However, I contend that it will never be achieved through the imposition of authoritarian socialism. It may come eventually when all the Americas, north and south, unite in a common cause freely given. It also remains my dream, but I doubt that it will happen in my lifetime although it is a very worthwhile aspiration.

In my short speech I have tried to touch on a few aspects of this huge and fascinating subject—rather controversially, I fear, but that is the norm given my position in this House. I am happy to stand corrected by others who have different views. I will listen with very great interest to all that follows. I beg to move.

12:26

[Lord Garel-Jones]

My Lords, I begin by paying tribute to the noble Viscount, Lord Montgomery, not just for initiating this debate but for his life-long promotion of Latin America in your Lordships’ House. He is, as they would say over there, “un amigo leal y constante”.

All of a sudden Latin America is in fashion. In my day job in the City, I am frequently approached by leaders of industry with the question, “Do you think we ought to be looking at Latin America?”. The answer is yes, and it is hardly surprising if you look at what is going on down there. I wish to give a few snapshots. Peru’s economy is expanding by more than 6 per cent and foreign direct investment will double in the next five years. It has investment-grade status. Colombia’s GDP is expected to grow by 5 per cent in the next four years. It has never defaulted on a sovereign obligation and should recover investment-grade status any time soon. Chile has investment-grade status, no public debt to speak of, is a member of OECD and has a level of economic, political and social development which rivals that of most European countries. Growth is projected at around 4.5 per cent. Brazil is predicted to be the sixth largest economy in the world by 2015 and is the guardian of one of the largest reserves of natural resources in the world. Growth is predicted at around 8 per cent. Mexico is a member of the G20, is the eleventh largest economy in the world, a member of OECD and has a growth rate of 4.2 per cent. Even in these times of unprecedented difficulty, Argentina is tackling its debt overhang with the firm intention of returning to the international markets at the earliest opportunity. It has a growth rate of 5.5 to 6 per cent. I pick out just one of a whole host of smaller countries, Uruguay, with projected growth of 5.1 per cent this year. It is a small country but about as serious and proper a place as you could hope to find along with other smaller states such as Panama, which has investment-grade status, Costa Rica, which may become the first carbon-free country in the world, the Dominican Republic and others.

That economic success, as the noble Viscount pointed out, has been accompanied by democratic consolidation. In Brazil, the transfer from President Cardoso to President Lula has been exemplary and the upcoming elections will be hard fought, but with one certain winner—the democratic process. In Chile, the deservedly popular left-of-centre President Bachelet handed over to the centre-right President Piñera. It was a real sea change after 20 years of centre-left government. In Uruguay, there was no such ideological shift, but impeccable behaviour by both candidates. As the noble Viscount pointed out, this very weekend Colombia, a country that has been challenged by criminal terrorists for more than 30 years, has upheld its position as the most longstanding democracy in Latin America. There were two interesting and intelligent candidates; there was a proper campaign, a proper process and a President-elect Santos who is eager to build on President Uribe’s record.

Noble Lords might think that people such as myself would be deeply satisfied. Well, not quite. Why, I ask myself, does this great continent with a gross domestic product, as the noble Viscount pointed out, that is almost twice that of India and only a tad short of China’s, remain no more than a bit player in world affairs? Is there some congenital deficiency? By no means. If one steps outside the political world, in almost every other field of human endeavour, we are talking about first division players.

In literature, there are Octavio Paz, Neruda, Vargas Llosa, García Márquez and Borges. The only surprising thing is that only three of them have a Nobel prize. In art there are Botero, Diego Rivera and Oscar Niemeyer. In music, there is what is known as El Sistema in Venezuela, which is perhaps the most exciting classical music experiment in the world, embracing every town and village in the republic and showcased by the Orquesta Sinfónica Simón Bolivar, led by Gustavo Dudamel. The recent appointment of Sonia Sotomayor to the US Supreme Court is just the latest example of citizens of Latin American origin occupying the highest positions in the public, industrial and intellectual life of the United States. We are talking first division here.

So what is wrong? Why is Latin America no more than a bit player? Latin American countries are prisoners of the 19th-century Westphalian model of the nation state—as we all are, up to a point. Here in Europe, after the loss of 60 million lives in two world wars, we have begun to move on from that model. But it is difficult. How does one identify those areas where the pooling of sovereignty with others is the most effective way of advancing our interests and values without losing that all-important and underlying sense of belonging and social cohesion that the nation state provides? It is no easy task.

In Europe, we are moving in that direction. I will not dwell on our successes or many failures. Suffice it to say that Latin America has yet to embark seriously on that journey. For all the Mercosurs, the Andean pacts, the ALBAs, the ALCAs, the CAFTAs, the FTAAs, the bilateral free-trade agreements, and Brazil's membership of the BRICS, the continent remains a collection of 19th-century Westphalian states competing macho-like against one another. It would be impertinent of us here in Europe to lecture Latin America on how to go about its business. There are a number of senior prestigious former presidents— Bachelet, Lacalle, and Zedillo, who are soon to be joined by Lula and and President Uribe. My hope is that they might come together to start the process of really bringing this continent together, because we need them.

In another place, I was sometimes described by political foes as the “Member for Madrid Central”. It was a badge that I wore with some pride. Spain and Portugal have led the effort to put Latin America on to the European agenda. However, as the noble Viscount pointed out, we British have a history there, too. The British Legions fought with distinction in the battles of Boyacá Carabobo, Pichincha and Ayacucho—earning for the British the title of “saviours of my country” from Bolivar. It was here in London that Bolivar, along with Miranda and others, planned the struggle for independence.

There are encouraging signs. The European Union has agreed to set up the EU-LAC Foundation, whose aim is to strengthen EU-Latin American partnership and to encourage further knowledge and understanding between us. The new coalition Government have appointed the honourable Member for Taunton as Minister of State for Latin America, and I know that he is approaching his responsibility with all the relish and enthusiasm that the noble Viscount could wish for.

No doubt, Canning exaggerated a little in 1825 when he famously claimed:

“I have called the New World into existence to redress the balance of the Old”.

That balance has yet to be redressed and I call on our Latin American friends to do just that, and on our Government and the European Union to support them in that endeavour.

12:35

[Baroness Gibson of Market Rasen]

My Lords, I thank the noble Viscount, Lord Montgomery of Alamein, for instigating this debate. Unlike the noble Viscount and the noble Lord, Lord Garel-Jones, I do not have their in-depth knowledge of Latin America. However, like both the noble Viscount and the noble Lord, I have a great love for Latin America and its people.

I fell in love with Latin America when I attended Essex University in the 1970s as a mature student. I joined the school of comparative government, and because I knew very little about Latin America, I chose to compare the Government of the UK with those in Latin America to learn more about the region. Brazil was the major country that I studied, but I also covered Chile, Argentina, Peru, Mexico and Colombia. After my first lecture, I was hooked on the glories of this continent, and I remain so today. I am pleased to see the Minister on the coalition Front Bench to listen and respond to this debate. As the former chair of the All-Party Parliamentary British-Latin America Group, and now one of its vice-chairs, I sincerely hope that Latin America will move higher up the political agenda.

Despite the efforts of a number of very good and knowledgeable Ministers in the previous Government who had responsibility for Latin America, including the noble Lord, Lord Triesman, in this House and Chris Bryant in the other place, it was not as high a priority as many of us would have wished. Of course I recognise that the wars in Iraq and Afghanistan took—and in the latter case, continue to take—a great deal of government time, energy and resources. However, I was disappointed at what I felt was a lack of recognition of the potential of this continent, and how investment and closer working relationships could benefit the UK and individual Latin American countries. I know that a number of their ambassadors based in the UK felt as I did. I am hopeful that the present Government will wish to build on the relationships which exist currently, with the aim of even closer working relationships in the future.

I have been lucky enough to visit Bolivia in 2009, and Cuba in 2009 and earlier this year. Both countries are progressing, despite the difficulties that they face. Bolivia is a fascinating country where the Evo Morales Government came to power in 2006 in a blaze of glory. For the first time, the indigenous peoples of Bolivia were included in the Government and they look forward to greater involvement in all walks of Bolivian life. As I have said previously in this Chamber, when our delegation met the Bolivian people last year we realised that their expectations may be higher than any Government could satisfy in a relatively short space of time. To some extent, this has proved to be accurate. Despite the fact that Bolivia’s economy has managed to perform well during the global economic downturn—a point to which I shall return—there have been signs of unrest among the working people in Bolivia.

On May Day this year, the Central Obrera Boliviana—the COB—Bolivia’s trade union confederation, called an indefinite strike and organised a march on the city of La Paz. This followed a dispute over salaries and new pension laws. The march began in Caracollo, 200 kilometres from La Paz. The Government were offering a public sector pay rise of 5 per cent—well over the current level of inflation—but the COB rejected this and also called for the retirement age to be reduced to 55. The large march consisted mainly of factory workers, miners and teachers. The powerful peasant union did not participate; instead, it supported the Government. An agreement was reached to lower the general retirement age to 58 and to 51 for miners, although their pensions are still under discussion. Does this seem a little familiar?

There has been tension in Bolivia between the La Paz regions and those in and close to Santa Cruz since the Morales Government took power. The governor of Santa Cruz, Rubén Costas, is the main political opponent of President Morales. When we visited in 2009, the tension was almost tangible. However, there are signs that things may be improving. This month the two leaders have met, in both La Paz and Santa Cruz, and the President has promised to help to facilitate new loans to the department responsible for road building and development projects. It is hoped, therefore, that a warmer and more positive relationship will develop between these two vital regions for the Bolivian economy.

I mentioned the economy earlier, and this is proving a positive force in Morales’s political and social reforms. He came to power promising a rise in living standards for the majority of the Bolivian people. Although Bolivia remains a poor and unequal country, the rates of relative and extreme poverty have, over recent years, shown improvement. Political and structural reforms appear to be working.

Bolivia recorded the highest rate of economic growth in the western hemisphere in 2009 in the midst of the global economic downturn. According to figures from the Bolivian National Institute of Statistics, economic growth in 2009 was 3.36 per cent. This compares favourably with other countries in the region that are much larger than or equally as large as Bolivia and are possibly more forward-going, such as Brazil and Mexico. That is an impressive achievement given many of the external conditions affecting the economy, mainly as a result of the financial crisis. These include falling remittances, limited foreign investment, the cancellation by the United States of trade preferences and export prices declining for part of the year.

That follows a trend of sound macroeconomic management that has seen Bolivia’s economy perform consistently well since the Morales Government came to power. In 2008, for example, Bolivia’s GDP grew by 6.1 per cent. The country also managed to keep inflation low in 2009, at 0.26 per cent. This follows higher inflation rates in 2008, partly due to trends of rising global food prices and high oil prices.

One of the first major reforms carried out by the Morales Government on taking office was the nationalisation of the oil and gas industry. The Bolivian state took ownership of all oil and gas reserves, and foreign investors were asked to renegotiate their operating contracts. The new contracts increased taxes paid on income from sales of gas from 18 to 50 per cent, thus returning to the situation prior to privatisation. Indeed, our 2009 delegation visited BG Bolivia, as it is now called, and its relationship with the Bolivian Government seemed to be both constructive and working. This nationalisation continues. In May this year, an electricity generator owned by a British company, Rurelec, was nationalised. The Bolivian Government have given assurances that adequate compensation will be paid, and in a statement that he made on 2 June the Rurelec chairman, Jimmy West, expressed confidence that that would happen.

I turn now to the other country that I have recently visited—Cuba. One of the more important things about Cuba is that its constitution gives the Cuban people certain rights, including the right to work, to a house, to education, to health and to safety in their environment. I want to speak briefly about Cuba’s healthcare system and share a little anecdote about it. Its health service is renowned throughout the world for its advanced medical capabilities. Cuba exports its doctors, in particular, to many other countries in Latin America and further afield, and is rightly proud of so doing. However, it is the healthcare of its own people that is quite outstanding. The health of its people, and especially its young people, is obvious to anyone who travels around Cuba. This is because, although the adult population faces the problems of food rationing—mainly because of the continuing American blockade, which the UK Government do not support—the young in Cuba get a regular supply of eggs, milk, cheese, meat and vegetables to ensure their fitness.

On my first visit to Cuba, I visited a healthcare centre in a tiny village in the centre of the island. Cuba provides a healthcare centre in each small grouping of houses. The doctor and his family lived in the upper apartment, and the nurse and her family in the lower one. On the whitewashed walls of the waiting room, there were graphics explaining how women should examine their breasts for the first signs of breast cancer. There were also a great many leaflets about other medical conditions. After talking to the medical staff, we were asked whether we would like to see the garden. Slightly puzzled but not wishing to appear rude to our hosts, we agreed. What the nurse wanted to show us were the herbs that they still use for some ailments, just as we used to do. So, from the specialist hospitals in Havana—for example, those dealing in eye or brain surgery—to the smallest medical house in the countryside, the Cubans have a wide degree of medical care, including their herb gardens. Perhaps somewhere along our way of providing medical care, we have thrown the baby out with the bath water.

We will be hearing a great deal about this diverse continent in the debate and, as always, I will learn a lot. I am well aware of the darker side of Latin America: the drugs and human trafficking; the political corruption, which has to be fought and sometimes fought again; and the potential for natural disasters such as floods and/or earthquakes, which is ever present. However, today I have chosen two more positive examples of Latin America and I hope that they have added to the debate.

12:47

[The Lord Bishop of Liverpool]

My Lords, perhaps I may say how delighted I am to be the prelude to the maiden speech of the noble Lord, Lord Liddle, and how much we look forward to his contributions to the House and admire the alacrity with which he has engaged with the business of the House today.

The noble Viscount, Lord Montgomery, is famous for his championing of Latin America, and today is an opportunity for us to share in his enthusiasm. It is excellent that within the first weeks of the coalition Government, we should have had a debate on the millennium development goal of universal private education and now, today, a debate on developments in Latin America—a continent where, in spite of its great economic progress and cultural achievements, 44 per cent of its population still live in poverty.

Although Brazil is one of the fastest-growing economies in the world and an increasingly important player on the international stage, Latin America is a region of marked contrasts and extremes. Seventy-five per cent of the population of Latin America live in expanding urban areas. The urban poor live in vast cities with low incomes and poor access to clean water and sanitation. The rural poor live in remote areas with inadequate infrastructure and little law enforcement.

I was very heartened to read the coalition Government’s paper, The Coalition: Our Programme for Government—Freedom, Fairness, Responsibility. In it, we read this commitment:

“We will support reform of global financial institutions such as the World Bank and the International Monetary Fund in order to increase the involvement of developing nations”.

That work is long overdue.

Travelling in Latin America and central America, I have come across stories of the developing nations feeling disempowered by the international bodies. In Honduras, I listened to local people resisting the pressure from international bodies to divide up their forests under the slogan of land rights, saying that they would rather keep them in common ownership and live their traditional way of life owning the forest as a community. I have sailed up the Patuka river in a dug-out canoe; I have flown over the Mosquitia rain forest; and I have seen the courageous resistance of native people resisting both the illegal logging and the international pressure to change their way of life fundamentally. What is the Government’s strategy to ensure that the voice of developing nations is heard in these international bodies, such as the World Bank and the International Monetary Fund? It would be wonderful if in 2010, as we mark the bicentenary of the independence movement, we could see real progress in that direction.

In the past 50, years central America has lost 80 per cent of the rain forest. Globally every minute we lose an area of rain forest the size of 15 football pitches. Whatever view noble Lords take of the changing climate, this is simply unsustainable. One of the most forest-ravaged regions of the world is Latin America. A few years ago I was in Brazil on a symposium with leading scientists and religious leaders looking at the future of the Amazon rain forest. Under the leadership of President Lula, much is being done to protect the biodiversity of the region and to ensure that the rain forest is preserved as a global utility. This cannot be done by Latin America alone; it requires international agreement. We came very near to it at Copenhagen but then fell short of securing such an agreement. Our eyes now turn to the UNFCCC in Cancun later this year but the voices of Latin America must be heard as loudly as the consuming nations.

I pay tribute to His Royal Highness the Prince of Wales for his rain forest initiative. He visited Latin America last year, and his insistence on bringing them to the table as equal partners in his initiative offers a model for international co-operation and agreement. Will the Government approach the Cancun conference with a full briefing from those involved in the Prince’s rain forest initiative? I believe that that would be a major contribution to the development and well-being of Latin America. The forests are worth more alive than dead. If they die, so will Latin America, but if they live, that continent will flourish as will the whole world because the forests are indeed the lungs of the earth.

12:53

[Lord Liddle]

My Lords, I thank the right reverend Prelate the Bishop of Liverpool for his kind remarks and I am delighted to deliver my maiden speech in this debate, which I believe the noble Viscount, Lord Montgomery of Alamein, has pushed so hard to have.

Before my introduction on Monday, I felt that I sort of knew the House of Lords quite well. Until his death two years ago, my father-in-law, George Thomson, Lord Thomson of Monifieth, had been a Member for many years. My brother-in-law, the noble Lord, Lord Newby, speaks for the Liberal Democrat Front Bench from time to time. When it comes to the debate on the composition of the House, if I am not exactly strongly in support of the hereditary principle we have at least tried to keep it in the family. For good measure, my history tutor at Oxford, my noble friend Lord Morgan, is also a new colleague, which I am delighted about.

Still, on Monday, I was rather like a nervous school boy—the 11 year-old on my first day at Carlisle grammar school with all the fears of the mysterious rituals and initiation rites that were to follow. My nervousness has been much allayed by the kindness and warmth with which I have been greeted—not just by my fellow Peers, but from the House staff whose courtesy and helpfulness in dealing with new Members is quite wonderful. I want to put on record my heartfelt thanks to them.

Some may be surprised that I have chosen to make my maiden speech in a debate on Latin America. I spent 10 years of my early life in local government as a councillor in Oxford and then Lambeth. I remain a firm believer in local democracy and am against overcentralisation. I am passionate about economic development of the regions. As a lad from Cumberland whose father was a railway clerk and grandfather a miner, it is matter of great pride to me to be the chair of our local economic partnership, Cumbria Vision, and I hope to join a strong Cumbrian contingent voicing the needs of Cumbria in this House.

From my work in No 10 and Brussels, I care deeply about the future of the European Union. I believe that all of Europe, Britain included, is the winner if we can work together to build a strong, integrated and dynamic single market, revitalise a social model to which many in the rest of the world aspire, and become an effective force for good in our new multipolar world.

That brings me to Latin America. I was brought up on Tip O’Neill’s famous political adage, “All politics is local”, but I now believe that all politics is also global. The task is to build a new politics of sustainable globalisation. Think how the banking crisis, immigration and terrorism shaped the debates at the recent general election. Think what the coalition Government have decided in the past week or so. I am not trying to make a party point but simply wish to offer a reflection. They have no alternative but to obey the dictates of financial markets to bring down the public deficit quickly. In other words, we have no sovereignty as a Government or a people to challenge the need for 25 per cent cuts in our main public services. That is what Latin America suffered at the hands of the IMF under the Washington consensus in the 1980s and 1990s. We all have to strive somehow for a better global way.

I first became interested in Latin America as a result of an initiative that Tony Blair and President Clinton took to set up an international network of progressive centre-left leaders in which key Latin American countries took a keen interest. The think tank, Policy Network, that I now chair and which was chaired previously by my noble friend Lord Radice, is about helping to build that progressive network. In 2003, we had a conference in London which Presidents Lagos of Chile, Kouchner of Argentina and Lula of Brazil came as honoured guests. In the past three years, I have twice been to events led by the Chileans and President Bachelet.

For progressives, Latin America has made impressive strides in the past decade. Democracy has replaced dictatorship, the ballot box and the military junta, and remarkable social progress has been achieved. While the Governments of progressive Latin America are not slaves to the market, they have come to terms with the market and shown how they can redistribute its rewards in progressive ways. When Pinochet left office in Chile, 40 per cent of Chileans lived below the poverty line. Now the figure is only 12 or 13 per cent. The number of young people going to university in the past 20 years has risen from 10 per cent to 40 per cent. When the right-wing candidate for president won the election this year, there was a peaceful transition marred only by the calamity of that awful earthquake.

In a way, the Latin American progressives are the perfect exemplars of my noble friend Lord Giddens’s third way. In foreign policy, they do not wish to be the lackeys of the United States. They are never going to sign up to some modern version of the Monroe doctrine, and they may even be a bit wary of President Obama's more sympathetic multilateralism, as we see from Brazil's recent vote in the Security Council on sanctions against Iran. Domestically, however, they are searching for means of social progress that avoid the painful injustices and extremes of American free-market capitalism.

In my experience, that makes them very interested in the European model. I agree with the noble Lord, Lord Garel-Jones, that they have not made a lot of progress beyond the nation state, but I have found many Latin Americans who are interested in the possibilities of regional integration on the European pattern and are trying to learn from our experience. I believe that Europe has a real opportunity for influence there, but, as in so many areas, the European Union has yet to fulfil that potential. Part of that is about getting our act together in Europe and recognising that as nation states alone, we have limited power in the new world that is emerging. We have to get our act together. That is particularly true in diplomatic representation, given the huge economies which are having to be made in the British embassy network as a result of the present financial crisis.

When we speak the language of multipolarity, we as Europeans must recognise that that means a shift in the balance of power in the world. Let us take the IMF. If we are to tackle the global imbalances that still threaten financial stability, we desperately need to bring all the emerging big economies of the world on board within the IMF structure to make it truly representative of the world as it now is. The EU member states’ insistence—this is not just a problem of Britain, it is a problem of all the big member states—on maintaining their gross over-representation on the IMF's councils stands in the way of that necessary power shift

Let us take free trade and Doha. The Latin Americans hesitate to lower their tariffs on Europe's high value-added exports while their food exports are denied access to European and American markets. Brazil is hugely competitive in agricultural products such as sugar and beef, but the US and EU are both reluctant to adjust to that, although the overall impact on our growth prospects and economies would be favourable.

Finally, let us take climate change. We simply cannot lecture the Latin Americans on their growing carbon emissions and destruction of forests while we in the industrialised world fail to tackle the problems of industrialisation that are our legacy and our responsibility. The EU must make itself the global leader in low-carbon transition. I believe that that would be a sustainable platform for recovery.

In conclusion, it is a great privilege to speak in this House for the first time. If I may express a personal regret, it is that my parents narrowly missed being alive to see it. I hope that for all my time in this place, I will continue to speak truly to the values of social democracy and internationalism that they imbued in me.

13:04

[Lord Giddens]

My Lords, I join the queue of other noble Lords in congratulating the noble Viscount, Lord Montgomery, on instigating this debate and on all the work that he does to improve the relationship between the UK and Latin America. I especially congratulate my noble friend Lord Liddle on his wonderful maiden speech, demonstrating such intellectual power and coverage. He does not hang around, as he has only been formally inducted into your Lordships’ House for three days. Perhaps I may say, given his impetuous nature, “Why did you wait so long?”.

I have known and worked with my noble friend for many years and I can vouch for his collegiality and for the power of his intellect. He has enormous in-depth knowledge of British politics and of the European Union—qualities on display in his maiden speech—having served in the European Trade Commission and having been for some years adviser on the European Union to the former Prime Minister Tony Blair. He has also written widely in those areas. He will be a marvellous addition to your Lordships’ House, and I hope that your Lordships will join me in offering him a very warm welcome.

I shall talk about climate change policy in Latin America with especial reference to Brazil. Climate change poses massive threats to the Latin American subcontinent. To take one example, rapid tropical glacier retreat is observed in the Andes, with enormous implications for future water supply for the countries affected. Brazil is a front-line country for climate change. Even in the short term, it faces significant adverse changes in its ecosystems. As the right reverend Prelate rightly observed and discussed in a most interesting way, it is home to much of the Amazon basin, one of the world’s greatest natural resources, but one under threat should periods of prolonged drought become more common—and they seem to be becoming more common, especially given the big drought of about four years ago. Deforestation in the Amazon is a major source of humanly created carbon emissions.

Brazil is an extremely interesting country in terms of climate change policy. It has quite a different energy profile from most other countries—not only in the developing but in the developed world. Forty per cent of its energy, and twice that proportion of its electricity—more than 80 per cent—come from renewable sources. Virtually no other country in the world has a profile like that. It famously launched an ethanol programme in 1975 as a response to worries about energy security. More than half the cars in the country are flexi-fuel—they can run on 100 per cent ethanol or petrol, or a mixture of the two. The use of biomass for energy production, involving wood pulp and other sources, is highly advanced in Brazil. It therefore has a very interesting and almost unique energy profile.

President Lula introduced a comprehensive national climate change programme earlier this year. It was an ambitious set of policies. It marks the first time that a large developing country has set itself stringent carbon reduction targets, although they are voluntary rather than legally binding. The stated target is to cut emissions by between 36 per cent and 38 per cent by 2020, which propels the country right to the vanguard in world society. It is a target beyond that offered, for example, by the European Union. Crucially, Brazil’s mitigation activities will be quantifiable and verifiable, making them open to international scrutiny—something that the other large developing countries, India and China, have so far not put into practice.

Brazil therefore has the opportunity dramatically to influence international negotiations on carbon reduction. It was one of the five countries that made up the so-called BASIC group that created the Copenhagen accord following the conference in Copenhagen last December. The others were the United States, China, India and South Africa. The large developing countries are often seen as blocking effective international policy on the control of carbon emissions, but Brazil shows otherwise.

The success of the country in meeting its targets will depend significantly on how far it can effectively tackle land use and deforestation. These count for the large bulk of its greenhouse gas emissions. Brazil has a distinctly patchy record in this respect, but there are signs of progress. The country is involved in a number of bilateral relations with other states in which deforestation is a vital issue, such as in Indonesia. It has also signed up to a climate policy dialogue with the United States.

Hillary Clinton’s interesting speech in Quito earlier this month marked a significant shift in the United States’s policies towards Latin America. She spoke of creating what she called a community of the Americas. It is entirely appropriate that a climate change strategy should be a key part of this new approach, and in such a dialogue the US has at least as much to learn from Brazil as the other way around.

13:10

[Lord Hannay of Chiswick]

My Lords, for many decades now, Britain has not been giving the priority that it should have done to its relations with the countries of Latin America. Diplomatic posts have been closed and thinned out, ministerial visits have been few and far between and at a junior level, and our trade and investment have fallen behind those of our main competitors from both Europe and elsewhere. Latin America has become a group of far-away countries of which we know little—and this in a country that played, as other noble Lords have said, an important role both politically and commercially in the first century of every one of Latin America’s states’ histories—so the excellent initiative taken by my noble friend Lord Montgomery of Alamein to debate our relationship with Latin America is really timely, all the more so as it comes just after a new Government have come to office and a new ministerial team has been installed in the Foreign and Commonwealth Office.

Britain’s relative neglect of its relations with the countries of Latin America is all the more regrettable in that it has coincided with the rise in world economic and political rankings of a number of those countries. Not only does Brazil supply the “B” in the acronym BRICs, which has become synonymous with the leading emerging countries, but there are three Latin American countries—Brazil, Argentina and Mexico—in the G20, which now has the principal co-ordinating role on global economic issues.

A good number of Latin American countries have paid the painful transition from military-dominated authoritarian regimes to relatively stable democracies with much improved human rights records. There have also been some remarkable economic success stories: Chile and Brazil prominent among them. We are therefore missing a lot of tricks, and we have quite a lot of catching up to do. Some of that catching up surely needs to be done through our membership of the European Union, and here I welcome the maiden speech by the noble Lord, Lord Liddle, and what he had so say about Europe in general and its relationship with Latin America in particular, with which I agree wholeheartedly. The establishment of the EU’s External Action Service provides an opportunity to thicken up and to strengthen Europe’s, including our, overall relationship with Latin America. It is high time, surely, to dust off the trade negotiating file between the EU and Mercosur and to try to bring those negotiations to a conclusion.

Of course Europe will not provide us, or anyone else, with a soft option. The days when the elites of Latin America looked almost automatically towards Europe as an alternative to their fraught relationship with the United States are past or passing, as indigenous leaders come to the fore in a number of Latin American countries and as new players—China and India—muscle in on Latin American markets. However, Europe will continue to matter to Latin America, if only it can learn to speak with a single voice and to make itself heard.

Any strengthened British relationship with Latin America has, I suggest, to begin with Brazil—the regional giant, if not a superpower—but, economically and in world politics, that country is on the rise. This October, a new President will be elected, and we need to build a new, broader and more mature relationship with her or his new Administration. It will not be entirely easy or straightforward, as reactions to Brazil’s recent efforts to broker a deal over Iran’s enriched uranium have shown. Reactions to that deal have tended to be either dismissive or submissive. Neither is the right response. The deal itself if Iran were to implement it, which now seems highly unlikely, could have bought some time, but it did not address effectively the wider issue of Iran’s nuclear programme as its centrifuges continued to spin, so it was a bit unwise to suggest that it did or that it precluded the need for another round of sanctions. We need a much deeper, broader and ongoing dialogue with Brazil that covers the whole range of international politics, and I hope the Minister will say that we intend to build that up.

I will say a few words, if I may, about our aid efforts in Latin America. Here, I declare an interest, because one of my sons runs an activity centre for deprived children in one of the most poverty-stricken parts of greater Sao Paolo. It is quite right that the main thrust of our aid effort should be poverty elimination, but I hope that we will not be persuaded by any general statistics that demonstrate rising economic growth in Latin America into thinking that there is no need and no justification for a continued effort by us in that continent. The plight of deprived and abused children, which I have seen at first hand, is truly terrible in many parts of Latin America. With our skills, our experience and well-directed resources, we can do something to make a difference, and I trust that we will continue to do so.

I have one final thought. In recent years, the developed world has found it more difficult to work with Latin American countries at the UN and in other international organisations than in the past. On human rights, our agendas seem to have drifted apart. We really cannot afford simply to accept that as a continuing trend. If we cannot work effectively with Latin American countries across a wide range of global issues when that region is less troubled by security and governance problems than pretty well any other part of the developing world, we really will be in poor shape as we search for global solutions to the global challenges that face us. I so much agree with what the noble Lord, Lord Giddens, had to say on climate change, which is a perfect example of that issue. I therefore hope that we will put our backs into this relationship in a way that we have not done in recent years.

13:17

[Baroness Coussins]

My Lords, I, too, congratulate the noble Viscount, Lord Montgomery, on his determination and success in securing this debate. I also congratulate the noble Lord, Lord Liddle, on his impressive maiden speech.

I will raise two issues: first, the contribution that some UK-based NGOs are making to human rights, anti-poverty and development programmes in Latin America; and, secondly, the importance of encouraging the learning of Spanish and Portuguese in our schools and universities if we are to maximise our business opportunities in Latin America.

The economic ascendancy of Brazil is impressive, as we have heard from a number of noble Lords. It has the lowest unemployment figures since 2001, growth is expected to be at least 6 per cent this year, its economy is predicted to become one of the five largest in the world in the next 30 years, and it will host the 2014 football world cup and the 2016 Olympic Games. However, this success in one country masks a very different picture elsewhere in Latin America, where human rights abuses, poverty, discrimination and corruption inhibit economic and democratic participation. I will give just two examples to illustrate what UK NGOs are doing to help.

First, I pay tribute to the work of the UK section of Peace Brigades International, PBI. It sends trained volunteers as human rights defenders operating as observers, accompanying vulnerable individuals under threat and acting as a kind of information go-between for representatives of the international community, the civil authorities and those involved in conflict. It has volunteers in Colombia, among other places, providing protection in a region riddled with internal armed conflict involving killings, kidnapping, torture and extortion. Between 1999 and 2008, Colombia had the highest number of landmine victims in the world, higher even than Afghanistan. The UN special rapporteur on indigenous peoples has reported the extreme vulnerability of such groups, who are at risk of total physical or cultural extinction. The human rights defenders routinely face hostility, including death threats which are sometimes carried out. Similarly in Mexico, where Amnesty International has put on record its particular concern about the widespread discrimination against women, PBI has volunteers who are at risk.

I am sure that the clock should not say nine minutes.

In October last year, the then Foreign Secretary, Mr David Miliband MP, acknowledged the important role played by human rights defenders and called on the Colombian Government publicly to support their work and to provide a sufficient and secure level of state protection for those under threat. I should like to ask the Minister in his reply to reassure the House that the coalition Government will also actively pursue this policy. As regards Mexico, I should like to know what bilateral and multilateral initiatives the Government are planning to take to ensure that human rights defenders receive greater protection from the Mexican authorities. Will he also say what steps the UK is taking to ensure the full implementation of the EU guidelines on human rights defenders?

I also pay tribute to the work of VSO, which since 2008 has operated in five Latin American countries—Bolivia, Honduras, Peru, Guatemala and El Salvador—in addition to its programme in Guyana which has been in place since 1964. Its volunteers help to promote the employability of young people, the sustainability of natural resources, and the access to justice for the poor and marginalised, particularly women and children. In Peru, for example, 29 per cent of the population is aged under 15, 35 per cent do not have access to justice for a variety of reasons, and human rights abuses of certain racial and ethnic groups have resulted in many thousands of deaths, disappearances and acts of discrimination.

One of the many contributions of VSO has been the anti-discrimination training it has supplied to public authorities and the police. This helped to pave the way for local anti-discrimination legislation. It is easy to miss the actual, real-life impact of such a development at such a distance when we are so used to debating and legislating for every last detail of discrimination. There follows an example of what it changed in Peru: before the legislation, no one could enter a public building without a national identity card. People from distant villages whose mother tongue was not Spanish often had no means to obtain their ID card, so they had no access to basic services. Now, that requirement to have ID as an entry ticket has been swept away and the measure has been so successful that other regions are copying it.

That mention of the Spanish language leads me to my other point and here I declare an interest as chair of the All-Party Group on Modern Languages. If UK businesses are to take advantage of emerging markets in Latin America, they will need people who can speak Spanish and Portuguese. Sadly, the lack of language skills in the UK workforce and the general decline in foreign language learning is undermining our international business competitiveness.

It has been estimated that up to £21 billion is being lost to the UK economy every year because of our languages deficit. Currently, the UK does only half as much business with Brazil, which has a population of 200 million, as it does with Denmark, which has a population of 5 million. Brazil is the world's fifth biggest country but only our 30th biggest export market. Even so, that makes it the UK's biggest market in Latin America. Mexico is next, but no other Latin American country is in our top 50. Will the Minister say what is being done to promote trade between Mercosur and EU countries? UKTI has pointed to the importance of networks in promoting bilateral trade and this is precisely where and why knowledge of the relevant languages comes in. English is important, vital even, but it is not enough. UK export businesses which have proactively valued and used language skills have reported a 45 per cent increase in sales.

Interestingly, Spanish is the one European language bucking the trend at GCSE, with take-up increasing instead of declining. This is good news and businesses should be aware of it and more up-front in advertising their wish to recruit people with Spanish or other language skills. Spanish is the fourth most widely used language on the internet and is the second most spoken language in the world after Mandarin. Yet the value of UK exports to the 19 Spanish-speaking nations of Latin America is only £1.9 billion. There is a great deal of potential waiting to be tapped.

London alone has nearly 12,000 schoolchildren who speak Portuguese. That language now figures prominently on the employers’ list of languages that they would like to see among their staff, as confirmed in the CBI’s latest survey published last month. There is a campaign to add Portuguese to the list of the six official languages of the United Nations. If that is successful, there will be even more pressure than there is already on the UK to produce more linguists to work as interpreters and translators.

The popularity of Latin America as a gap-year destination has undoubtedly added to the interest in learning Spanish and Portuguese, but our shortfall in this area is so shameful that it really needs some firm, clear leadership from government to ensure that we are properly equipped to contribute to and take advantage of the economic benefits arising from emerging markets in Latin America, as well as the intercultural understanding needed to sustain relationships and success.

13:27

[Baroness Hooper]

My Lords, I, too, congratulate the noble Viscount, Lord Montgomery, on securing this debate at this particular time. It is now, as he said, a few years since we held a dedicated Latin America debate in your Lordships’ House, but the interest and contributions from your Lordships today underline the value of holding such a debate. This is a particularly interesting time in the affairs of many Latin American countries. Like others, I rejoice in the results of the latest elections in Colombia. Former President Uribe is a good example to everyone in not having tried to stand for a further term, as he must have been tempted to do.

I also represented Her Majesty’s Government at the inauguration of Evo Morales for his second term in office. The noble Baroness, Lady Gibson, talked in detail, and most interestingly, about Bolivia. However, I believe that we should not only look closely at what is happening in the energy sector in Bolivia; we should also remember the changing role of indigenous people in Latin America and the cross-boundary/cross-border effects that this increasing alignment may have. That could well be the subject for a further and separate debate.

This debate is timely also because of the recent developments in relations between the United States and Latin America, to which reference has already been made. I am rather concerned about the attitude of President Obama and Hilary Clinton as regards, for example, our relationship with Argentina over the Falkland Islands. However, this is also an excellent moment to underline for the new Government the significance of Latin American countries in world affairs and the value of our special relationship.

I do not need to repeat, but would like to emphasise, all that has been said about the historic links that bind us, whether we are talking about the independence movements, the bicentenaries of which we are currently celebrating, or the other historic links that include the founding of the navies of Chile and Brazil by Admiral the Lord Corcoran—who has a special association with your Lordships’ House since, until 1998, a direct descendant of Lord Corcoran sat on the Red Benches.

I would also emphasise the importance of the ongoing trade and investment links which British companies have maintained in Latin American countries. Amazingly, these links survive despite the focus and priority that, I am sorry to say, successive Governments have given to other parts of the world. Perhaps I should declare interests as a former president and current vice-president of Canning House and as vice-chairman of the Institute for the Study of the Americas. While the right reverend Prelate the Bishop of Liverpool was speaking, I reflected on the fact that the reason I learnt to speak Spanish and take an interest in Latin America, following a postgraduate course there, is that my mother came from Liverpool. Liverpool is the port of the Americas and my mother realised the importance and significance of the Spanish language. I am happy that the noble Baroness, Lady Coussins, was able to emphasise that point so well.

Like the noble Viscount and others, I deplore the way in which the official British presence in Latin America is diminishing through the closures and downsizing of our embassies and the British Council. In the Evening Standard last night, I noticed a rather caustic comment to the effect that the high life enjoyed by British diplomats abroad faces the axe. The Foreign Office already has a £55 million efficiency programme that includes spending less on consultants, closer working with other departments, increasing the sell-off of embassy space and cutting low-priority programmes. We must all regard this with grave concern because it builds on the many cuts and downsizing programmes that have been carried out in the past. I can only hope for and seek reassurance from the Minister that the axe will not fall inordinately heavily in Latin American countries.

Fortunately, our relations with Latin America are not just bilateral. The European Union is the channel through which many of our activities in overseas development, and our policies in relation to the American, Caribbean and Pacific group of states, have an impact—in the latter case, particularly in the Spanish-speaking Caribbean countries. It may well be that in the future the lack of bilateral representation in Latin American countries will be replaced by EU representative offices. I would be interested to hear the Minister’s comments on that possibility.

Reference has already been made to the trade agreements between the European Union and Mexico, Brazil and Chile, as well as negotiations with the Mercosur countries and so on. I would be interested to know if any reviews or analyses have been undertaken into the effect of these trade agreements. Can the Minister give us any information about this? If I remember correctly, as far as the first of those trade agreements—I believe it was with Mexico—is concerned, the effect was to increase greatly the importation of European Union goods into Mexico but not the reverse, which should be the object of the exercise. In all this, I hope we may also have an assurance from my noble friend that the United Kingdom will play its part in European Union policy formulation with regard to Latin America and not leave it to Spain and Portugal, perhaps the traditional colonial powers in Latin America. But we are also increasingly working together, particularly with Brazil and Mexico, within other international organisations such as the United Nations, the IMF, the OECD, the G20 and the G8. All these links have been referred to and it is important to remember them in our efforts to improve our bilateral relations.

When faced with a debate in the broad terms of the noble Viscount’s Motion, it is often difficult to know where to place the focus. The countries we are talking about have diverse populations, different contributions to make and different needs to fulfil—from Mexico in the north, through the Caribbean and central American countries, to the furthest reaches of Patagonia bordering on Antarctica—with, as the noble Viscount said at the outset, a combined GDP equal to that of China. Nevertheless, because of the common colonial history of those countries, the two mainly used official languages—rather than the indigenous languages—the many cultural links and the apparent common risk of natural catastrophes which seem to afflict many countries, particularly the hurricane and the volcano zones of the west coast, we are tempted to regard Latin America as more of an entity than the countries themselves would wish. Rather than concentrate on individual countries, I have decided to deal with certain common issues.

I shall start with one of the difficult ones, that of drug trafficking. This remains a huge problem throughout Latin America and the Caribbean. Only last night, a BBC news programme highlighted the emergence of problems in Monterrey, Mexico’s most advanced industrial centre and a thriving and prosperous state-of-the-art city. That was sad news to me. Peru, we are told, has now overtaken Colombia as the main producer of the coca leaf. Interestingly, Colombia’s output has dropped by some 16 per cent, which shows what can be achieved. I believe that the United Kingdom, as a consumer country along with the whole of the rest of Europe, has a duty to do its part in the fight against drugs in order to lower demand. Here I refer back to 1990 when my noble friend Lord Garel-Jones, then Minister of State with responsibility for Latin America, attended the important and successful drug summit. Leaders of many of the Latin American countries most concerned, together with representatives of the consumer countries, got together and tried to look at both sides of the issue.

The environment is another area in which developments have taken place. Increased awareness of the causes of climate change is leading to positive action. In Bolivia, it is high on the agenda. President Morales travelled to New York to deliver to the United Nations the results of the World People’s Conference on Climate Change held in Cochabamba in April. Mexico, as well as supporting the dialogue on sustainable development, has proposed the creation of a green fund to scale up the amount of resources available for climate change litigation and adaptation activities.

Like the noble Baroness, I am amazed at the way the clock seems to be racing ahead, and I apologise if I am over-running my time.

On his visit to the United Kingdom last year, the President of Ecuador, President Correa, spoke here in Parliament about the Yasuni project. In Brazil, as the principal guardian of Amazônica—the lungs of the world—a great deal of activity is taking place. This is another huge area for co-operation on a bilateral basis as well as within the European Union.

I may have outrun my time. I seek confirmation that the clock is correct.

[Lord Wallace of Saltaire]

It is.

[Baroness Hooper]

Oh dear. I had hoped to talk in a little more detail about energy, education, the issue of visas and the need to review the work of the UK Borders Agency in this respect, and the role of students from Latin America in the UK. However, I shall wind up as quickly as I can.

In my view, Parliament and parliamentary relations are as important as intergovernmental relations in all this, particularly in regard to the strengthening of democracy, and the role of the Inter-Parliamentary Union has to be encouraged and built on. As the newly elected chairman of the All-Party Group on Latin America, I hope we will see far more inward and outward visits.

This debate underlines the importance of Latin America and Latin American countries. We have got to get our act together, as the noble Lord, Lord Liddle, rightly exhorted us. Let us start that today, not mañana.

13:41

[Lord Griffiths of Burry Port]

My Lords, I am delighted that my noble friend—although he is sitting on other Benches he is still my friend—has brought this issue to our attention and given us this opportunity to debate it. When our newspapers this morning tell us that England must dispose of Argentina and Brazil if they are to lift the world cup, clearly it is a topical and timely debate.

I congratulate the noble Lord, Lord Liddle, on his maiden speech. We are sitting at the same level and I hope that my speech will attain something like the same level as his.

Others have spoken in general terms about the economic aspects of our relationships with Latin America; I want to speak in a more particular way. If it is a long time since Latin America has figured in our debates here, it must be forever since Haiti figured in them. This is a rare opportunity for me to hang some thoughts about Haiti on the back of the debate, with the permission of the noble Viscount, Lord Montgomery.

Latin America and the whole world owe far more than they think to poor Haiti. We celebrated recently the abolition of the slave trade 200 years ago, but not much was said about the fact that the slaves in Santa Domingo took their freedom from the mighty French armies by their own efforts under the leadership of Toussaint Louverture. That needs to be lauded as having set the scene and created the atmosphere for later and rather more timid efforts on our part.

However, it is only when the first President of Haiti was approached by Simon Bolivar as part of the drive for independence in Latin America that we see the linkage between Haiti and the great continent beyond it. Simon Bolivar found himself without provisions and called in at Port-au-Prince, where the President at that time, Alexandre Pétion, supplied him with victuals and materiel for the struggle in Venezuela and other places. Bolivar was duly thankful but did not express his thanks practically when, at the Congress of Panama in 1826, which was intended to give some kind of unity to the newly emerging free nations of the Americas, he colluded with the United States of America in excluding the President of Haiti from that congress because he was black. Simon Bolivar therefore has, I am afraid, a bad mark in my book as well as all the obvious good ones.

Then there was a grudging recognition of Haiti’s independence—from Denmark, the United Kingdom and eventually France—but with a huge indemnity that Haiti went on repaying until the early part of the 20th century. After that there was recognition, even more grudgingly, from the Vatican in 1860 and from the United States in 1863, but only because the civil war had caused a re-evaluation of the place of black people in society there. Haiti was the first black republic in the world.

For the remainder of the 19th century Haiti endured gun-boats and an assassination of character. The Germans, the British, the French and the Spanish all had their go at poor Haiti and perpetuated its image as a primitive nation. This culminated, of course, with the arrival in July 1915 of the USS “Washington” and the 20-year occupation by the American, black-hating Marines—rednecks—to look after Haiti’s affairs, but really to safeguard the approaches to the Panama Canal. So much is owed to Haiti that the deprecatory words which so easily fall off the tongues of all kinds of commentators need to be qualified against the facts of history. The weight of history hangs heavily around the shoulders of those who deprecated a country which got rid of its slaves at a time when the nations around it were anxious to keep theirs, We need to re-evaluate history in the light of those circumstances.

There was then, of course, puppet government after the occupation. The creation of an intellectual black hole was bound eventually to be filled by a dictator who looked something like Papa Doc Duvalier, and in the end resembled him exactly. I went to Haiti and lived there in the time that he was the dictator. I met him a couple of times and he died a month later. I do not think there was a causal relationship.

After the Duvalier dynasty in the 1980s—Baby Doc had gone in 1986—at a time of great turmoil when Haitians were looking for some kind of accountable government, what happened? The IMF came in and insisted on an economic package that eventually crippled and stifled the new revolution at birth. It was so irresponsible.

After a meeting in Chile, in Santiago in 1991, all the Foreign Ministers and Heads of Government of the Americas came together to promise themselves that if there were military government in any of their territories thereafter they would all rally round the cause and win back the lost independence. Three months later, a junta displaced the democratically elected President of Haiti and for three years and two months he was in exile in the United States. What did the Latin American continent do? Nothing. The Organisation of American States appointed an envoy, who came and went—leaving a carbon footprint the size of 40 football pitches—and nothing was done. Proximity talks in New York eventually secured some kind of future for Haiti but meant the end, effectively, of accountable government with the departure of President Aristide and the rebellion that came thereafter.

I rehearse these facts to secure on the record of the British Parliament the nature and the extent of the indebtedness of the rest of the world to the trail-blazing activities of Haiti. I hope that does not get either a sneer or a laugh. I have laid out the case, but it will not end there because there are some very encouraging things happening now.

I was in Haiti in February, just two or three weeks after the earthquake there. It was as bad as the news media showed it to be. People whom I had taught had been killed; the whole population of the university was decimated. I talked to survivors and people who were dreadfully mutilated. To know where to begin to reconstruct or to develop a future for Haiti in the light and the aftermath of that disaster is very difficult for the imagination.

But what did I find? In earthquake-stricken Port-au-Prince, I found that the lights worked and the electricity was 24 hours a day. I thought, “That was never the case on my previous visit. What on earth has happened?”. I found that the Government of President Chavez, much reviled by many in Venezuela, had seen to it that a power station and cheap oil was ensuring that the Haitian capital had its electricity. It had survived the earthquake and was still supplying its energy as appropriate to those properties that were not destroyed. Then, I was on air myself, being interviewed about Haiti and my impressions of it after the earthquake in a studio with people from Médecins Sans Frontières. We all admire them; they get there first and they like to tell us they get there first. But there were hundreds of Cuban doctors there before them who never got interviewed anywhere. That those two countries—Cuba and Venezuela, which do not count for much in the eyes of many commentators—should practically have reversed Simon Bolivar’s denial of the Haitian president all those years ago seemed to me to be an extraordinarily wonderful and generous thing.

I am delighted to say that a man whom I introduced to Haiti and provided with a network of friends is now taking it much further himself. One of London’s finest architects, a specialist in urban regeneration, is taking on responsibility for much of the reconstruction of Port-au-Prince. Seriously good things are happening there: an expo is about to take place in the next couple of months, from which tenders will be invited to provide model communities and rehouse displaced people around the capital of Port-au-Prince. He himself, our London architect John McAslan—I am proud to mention his name and honour it here in this assembly—has approached the private sector to gain the necessary funds to rebuild the marketplace in downtown Port-au-Prince. He has started not with the presidential palace but with the place where everybody goes to get their supplies. It is wonderful thing. We hope that, by December or January, that will be up and functioning, and all that trading will take place again. So there are signs of hope.

What do I want Her Majesty's Government to take note of as I mention Haiti in this way? Her Majesty's Government, whatever party is in power, are not known to take much heed of what happens in Haiti, but I shall offer my five-pennyworth. It is that Haiti should figure a little in the councils of our Government, and that we should see in Haiti an opportunity to do something that might have practical and beneficial outcomes. I go further and say that if we cannot crack the problem of Haiti, there is not much hope for some of the more problematical areas in the world that worry us to death.

I am very glad to ride on the back of the noble Viscount, Lord Montgomery of Alamein, and give my five-pennyworth of hurrahs for Haiti, and hope that perhaps it will figure a little in our thinking in the future.

13:53

[Lord Avebury]

My Lords, I join others who have expressed thanks to the noble Viscount, Lord Montgomery, for once again leading us in a debate on Latin America, a subject which has been seriously neglected over the past few years. I also join those who have congratulated the noble Lord, Lord Liddle, on a notable and informed maiden speech. I look forward very much to hearing him again.

The noble Lord mentioned the huge economies having to be made in British embassies, a subject taken up also by the noble Baroness, Lady Hooper. The previous Government’s FCO change programme was said to be focused on the modest ambition of changing the world, but, to do that, the aim was to have more of its resources abroad. Latin American countries suffered a round of cuts several years ago, when we closed the embassies in Honduras, El Salvador and Nicaragua. How does the current number of staff in the region as a whole compare with that in, let us say, 1997, when the previous Government came into office? When President Zelaya of Honduras was ousted in a coup a year ago, the Foreign Office Minister, Chris Bryant, had to issue statements through our embassy in Costa Rica, which must have lessened their impact in the country where the coup occurred. Does the Minister have an opinion on the reinstatement of Honduras as a member of the OAS, which was proposed by Hillary Clinton at its meeting a fortnight ago? We cannot have as direct a knowledge of the events in Honduras as we would have had if an embassy had been there.

Our ability to monitor drug trafficking through central America, referred to by the noble Baroness, Lady Hooper, must also be impaired by the reduction of our presence. Only last week, members of a gang who had been convicted in Bogota were reported to have been smuggling 30 tonnes of cocaine a month through Honduras and Costa Rica. But when my honourable friend Jeremy Browne was asked last week about staff levels at embassies for the three years 2010-13, he said that we would have to wait until the Comprehensive Spending Review, which is not expected until six months after the start of the period to which it relates. Surely we are entitled to know whether budgets for embassy staff in the region are, at worst, going to be maintained at their present levels. I hope that the Minister will comment on that in his winding-up.

When Chris Bryant visited Colombia last September, he spoke about the harm being done to the people by cocaine production, with 8,000 hectares of rainforest destroyed in the previous year, the widespread threat of kidnapping by the drug gangs, and innocent members of the public being maimed or killed by landmines. He pointed to the success of Colombia’s shared responsibility scheme—to which the UK is a substantial contributor—in helping to reduce coca cultivation in Colombia and to increase by 25 per cent the wholesale price of cocaine in the EU. Why are not more European states, and the EU itself, supporting that scheme?

In Peru, it is a different story, with the UNODC reporting, as has been mentioned already, that production of coca and cocaine are on the rise. The Government have made some effort to eradicate the business to keep in Washington’s good books, but the main areas of production are in remote valleys on the eastern side of the Andes, in some of which the writ of state institutions and the rule of law do not operate. In those areas, Sendero Luminoso calls the shots, in spite of recent successes against individual SL leaders. There is also some collaboration between SL and the Colombian terrorist organisation FARC, according to the Brazilian federal police. Would not Peru benefit from an international effort such as the shared responsibility scheme, and are there not any Andean regional measures to combat the narcotics industry that could be usefully supported?

As the FCO’s Annual Report on Human Rights says in a chapter on Colombia,

“the activities of illegal armed groups and drug traffickers continue to have a severely negative impact”.

But this is equally true for other countries of the region. Colombia at least invites the UN Special Procedures to visit and reports quarterly on what is being done to comply with the recommendations of the UN’s recent universal periodic review of Colombia. Here again, a wider regional approach would be welcome. Colombia is the only country in Latin America covered in the FCO’s human rights report. The reader might be unaware that the human rights problems cited—vulnerability of human rights defenders and civil society groups; impunity; internal displacement; and extrajudicial killings—are common also to Peru, for instance.

The FCO report mentions the UN rapporteur’s commendation of all the initiatives taken by Colombia on the health and education of indigenous people, but also the massacres of the Awa people in February and August 2009. Also in Peru, 33 people were killed in the Bagua incident in June 2009; the leader of the indigenous people fled to Nicaragua, where he was granted asylum, after being accused of responsibility for the clash. The special rapporteur visited Peru after the event and made a number of recommendations, including the establishment of an independent commission of inquiry to clarify the events of 5 June and the following days. Could Mr Anaya be asked to review the progress made in complying with his recommendations, 12 months on? As a signatory of ILO Convention 169 and a supporter of the UN Declaration On The Rights Of Indigenous People, enacting the ley de consulta and agreeing a process of implementation with representatives of indigenous people would go a long way toward fulfilling those obligations.

The ley de consulta does not give indigenous peoples the right of veto over exploitation of natural resources on their lands, but the ILO has asked Peru to suspend both exploitation and exploration affecting peoples covered by the convention until their participation in consultation on the processes is ensured, in accordance with Articles 6, 7 and 15 of the convention. Yet the state oil and gas agency, Perupetro, is going ahead with the auction of 25 new blocks, making only one that overlaps with a reserve for uncontacted tribes off-limits. Representatives of Perupetro were in London recently looking for bids, contrary to the advice of the national organisation representing indigenous people, AIDESEP, which called the bid process,

“a new provocation against indigenous peoples”.

It is also a breach of chapter V of the OECD Guidelines for Multinational Enterprises, which says that enterprises should,

“engage in adequate and timely communication and consultation with the communities directly affected by the environmental, health and safety policies of the enterprise”.

In their response to the JCHR report Any of Our Business on 10 February this year, the Government said that they continued to encourage the wider use of tools such as the OECD guidelines, so I would be grateful if the Minister could say what advice they have given or would give to companies thinking of bidding in this auction, and whether they will encourage other member states of the OECD to follow their example.

There could be one other way to leverage our efforts on human rights in both Peru and Colombia. If the draft EU trade agreement with those two countries is what is called a “mixed” agreement and not purely commercial, it would have to include a human rights clause. The noble Lords, Lord Grenfell and Lord Hunt of Wirral, both asked for assurances on this matter when the noble Viscount, Lord Montgomery, asked a Question about the agreement in January. Can my noble friend assure us that this Government will insist that the agreement contains clauses on both human rights and environmental protection?

Finally, Peru’s national human rights plan comes to the end of its five-year mandate this coming December and the president of the national council on human rights, CNDH, has asked the international community for assistance in carrying out an evaluation of the initiative. In the meanwhile, the Ministry of Economy and Finance has announced a cut of 70 per cent in the CNDH budget. I would be grateful if the Government could consider this with our EU partners, with a view to making up the deficiency. There are hundreds of cases of human rights abuse arising from the internal armed conflicts between 1980 and 2000, and there continue to be hundreds of cases still of social conflict—no fewer than 255 being reported by the ombudsman in May alone. Peru can ill afford to cut back on human rights, and I hope that it will be one of our concerns, and that of the European Union, to raise that higher in our priorities.

14:04

[Baroness Kinnock of Holyhead]

My Lords, first, I add my words of warm welcome to my noble friend Lord Liddle. As many other noble Lords have said, he has enormous experience, knowledge and understanding, which he clearly showed in his very impressive speech today. I have known my noble friend for many years and in many lives, in British politics and in the European Union when I sat in the European Parliament. I certainly know and admire his intellect and his total refusal ever to deviate from the fundamental principles and priorities that have guided his political life. I am sure that his parents would have been extremely proud of him in maintaining that strong position on values and principles in what he said. I know that he will bring all of that knowledge and experience to our work in this House.

To state the obvious: Latin America is a continent, as others have intimated. This excellent debate, instigated by the indefatigable and noble Viscount, Lord Montgomery, has again made clear that the variety of developments and interests which we have tried to cover is limitless. Indeed, it would be unwise for anyone to try to cover the spectrum. I will therefore limit my remarks to considering some of the salient and most recent developments in Latin America. One of those has been the interest and commitment shown by the Obama Administration in that continent. On her latest—indeed, her seventh—visit to Latin America as Secretary of State, Hillary Clinton said:

“If I told you 10 years ago that the leaders of the United States and Europe would be taking some well deserved advice on economic management from some of our Latin American counterparts, many people would not have believed me. But today, many of the region’s governments have navigated steadily and responsibly through the global economic crisis and are on their way to recovery”.

The noble Lord, Lord Hannay, referred particularly to the importance that we should attach to building a really strong relationship with Brazil. Time magazine recently named Lula da Silva as one of the world’s 100 most influential people. By 2050, Brazil will be the world’s fourth largest economy—and that will bring with it enormous diplomatic clout.

In the past 20 years, Latin America has gone through extensive political, economic and social change, but simultaneously with that social change taking place, as we have seen, the centre of global gravity has steadily moved to the east and the south. Now we know that we cannot ignore the power and influence of the emerging economies of Latin America—or, of course, emerging economies in other parts of the world. As others have alluded to, the continent contains a mix of ideologies. There is both market orthodoxy and a subscription to what many leaders would choose to call 21st-century socialism, but because of that situation it is not possible to make generalisations about the economic success or otherwise of countries in Latin America. The reality is that of the 15 most unequal countries in the world, 10 are in Latin America. The continent has endured two centuries of deeply entrenched inequality, which is of course not easy to change.

It is a continent which has been defined, too, by its commodities. It has a huge number of valuable commodities: gold and silver, coffee, copper, coal—and now oil, the black gold. In the past 10 years, the important changes that we have seen and the improvements in economic performance are directly related to the income generated by those commodities. Latin America exports many of those commodities to the European Union—again, many noble Lords have described that situation—but the European Union is the biggest investor in the region, with Spanish corporations leading the field.

The EU is also Latin America’s second largest trading partner after the United States. However, not many noble Lords have described China’s involvement in Latin America, which would be appropriate as it is fast catching up on issues of trade. Many European companies participate in banking and privatised services such as electricity and gas, as well as in mining and other export sectors. Negotiations with Mercosur have been referred to. This has stalled over a number of years for many of the reasons described by noble Lords, but the other reason given is the pending Doha decision, which it is felt prevents any progress being made.

Does the Minister believe, as I do, that more needs to be done about our relations with Latin America? I accept that in the past there needed to be and in the present there needs to be a bolder and more innovative approach to Latin America. We need to change and adapt to the evolving circumstances that we see there. These are critical times, particularly since the United States is clearly ratcheting up its interest, and when China has had such an important role as a trading partner. Interestingly, China’s huge hunger for commodities has done more over the decades than western aid and countless Marshall plans have been able to do.

All the fine words need to be fleshed out by the European Union and the United States as well as the UK. We need more joined-up thinking—we need to get our act together and to think more coherently. For instance, as members of the European Union we need to pay more attention to the emphasis that Brazil and other emerging economies are placing on what is called south-south diplomacy. They are not looking to the north for diplomatic contacts; they are looking for their southern allies to work with. In my view, they are punching above their regional and international weight in an unprecedented way. Brazil has recruited hundreds of new diplomatic staff and is strengthening relations with China, India, Russia and South Africa. Brazil now has more diplomatic missions in Africa than does the UK and, with other emerging economy allies, is crucial to making progress, as many noble Lords have said, on climate change, trade and financial regulation. It seeks a seat on the Security Council and argues that the UN must, sooner rather than later, reflect the make-up of the modern world. Would the Minister care to comment on these Brazilian aspirations? Does he agree, too, that progress has been made by a number of burgeoning Latin American democracies, which should be more positively recognised? P5 members such as the United Kingdom must be ready to respond that all permanent members and nuclear powers now face new and unprecedented challenges.

Another country to touch upon, as other noble Lords have done, is Venezuela. We take note of the purchase of £4 billion worth of Russian weapons and the Chinese loan of £20 billion. Those are surely clear reasons to up our game in Latin America at a time when its new allies are preparing to pour in still more dollars.

Noble Lords will be aware that a growing number of Latin American countries are making serious attempts to tackle some of the human rights abuses that have been raised by many noble Lords, including impunity, and to recognise increasingly that peace and reconciliation depend on truth, justice and reparation. Six countries in Latin America now have comprehensive laws on violence specifically against women, covering domestic violence, community and state violence. However, violence against women and girls remains endemic in many countries in Latin America and discrimination against women, according to Amnesty, still lacks vigorous discrimination. Meanwhile, discrimination against the indigenous people continues, as the noble Baroness, Lady Coussins, has said. They face intimidation and harassment across the whole continent. However, Bolivia has made substantial progress, including the elevation of indigenous jurisdiction, making it equal to current judicial process. As the noble Baroness, Lady Gibson, pointed out, in many ways that country is making a great deal of progress.

Would the Minister clarify what the UK position is on the European Union trade agreements with those countries, particularly Columbia and Peru, alluded to by the noble Lord, Lord Avebury? Will the Government insist, as the noble Lord asked, that there be consultation with and ratification when appropriate with the Parliaments of those countries? Will there be subsequent monitoring of any clauses relating to human rights and environmental protection? These are important points; the commercial interests are important, but they have to be seen in tandem with the leverage that it gives us on human rights.

In conclusion, we all know the stereotypes of Latin America have been transformed, but there are still structural constraints on economic growth and on political and social systems, which are in need of radical overhaul. There is insecurity stemming from the narcotics and arms trades, but this House should agree that partnership and engagement are the only way forward.

14:16

[The Minister of State, Foreign and Commonwealth Office (Lord Howell of Guildford)]

My Lords, this has been a rich and deep debate. We have to thank the noble Viscount, Lord Montgomery, for initiating the debate, which he did quite excellently, and for giving us the opportunity to let our minds range over this increasingly important area of the planet. When listening to a debate such as this, the Minister arrives with a wheelbarrow full of briefing. However, the task is not merely to try to share with noble Lords the contents of my files; it is to share with the Foreign and Commonwealth Office the contents of noble Lords’ minds. In this debate, there has been a magnificent briefing for all those that care to read Hansard and study the expert views of many noble Lords. There is a massive amount of material of immense value. I shall greatly enjoy studying it further and discussing it with Jeremy Browne, my excellent colleague in the Foreign and Commonwealth Office, who has immediate responsibility for this area in the pattern of responsibilities that we share out in the Foreign Office. In a way, that involves some slightly unrealistic silos, but we all have to take an area of the planet to look at, and I am very pleased that Jeremy Browne is doing just that.

The debate was also marked by the remarkably comprehensive and profound maiden speech from the noble Lord, Lord Liddle. First, he told us about his dynastic connections with this House, and we really feel that he is one of us already—if that is not too offensive a phrase. It was a delight to hear his deep mind at work on the great issues. He is a committed internationalist, and I know that we will enjoy hearing much more from him. I shall come to some of his specific points later.

The noble Baroness, Lady Kinnock, is absolutely right. To try to generalise about this colossal area of the world and this vast pattern of diverse and different countries is a dangerous thing anyway, but to do it in 18 or 20 minutes at the end of a debate such as this verges on the absurd. However, I will try to cover a great many of the points that have been made. I will not cover them all, of course, but I will write to noble Lords about some aspects that I omit.

Let me start where the debate started, with the excellent introductory speech of the noble Viscount, which immediately struck the central point of our debate: Latin America is a changed scene. We have stereotyped ideas about the Latin America of the past—inflation, dictatorships, juntas and appalling poverty. The poverty still exists to some degree, but the stereotype is no longer valid. A completely new pattern of interrelationships weaving with the rest of the planet has emerged. If we have no other message from this debate for the wider world, I hope that that one will stick.

In the words of my noble friend Lord Garel-Jones, the issue is now in fashion. It is right that it should be, as entirely new influences, trends and interests for this country are now at work, which we have to study closely, grasp and adjust our policy to. My noble friend pointed out that, in many ways, Latin America is a continent full of prisoners of nationalism. Well, we are all prisoners of nationalism to a degree, but we also have to adjust to global trends and interdependent forces which are bound to require that nationalism to be modified. The dilemma remains of how to combine loyalty—in the sense of belonging to one’s local community and nation, in which one wants pride—with the facts of globalisation and interdependence. I thought that my noble friend put that extremely well.

The noble Baroness, Lady Gibson, spoke with great knowledge and detail about Bolivia and Cuba. I do not think that I have anything to add to her knowledge; indeed, it would be almost an impertinence to do so. She rightly said that we are not in favour of the continuation of the blockade of Cuba. I believe that minds in other capitals take the same view, so we could be moving to a better era, although I hardly need to tell your Lordships of the difficulties.

The right reverend Prelate the Bishop of Liverpool talked about new international bodies. It is a profound thought. The 20th-century platforms that we inherited need repair and refurbishment and, although they still have immense value, we may have to think about new prospects as well. He mentioned the central issue of the rainforests, which are one of the keys to both adjusting to and mitigating the effects of global climate change. I can assure him that, as we move towards the Cancun gathering, that will be very much in our minds. We shall give considerable emphasis to the whole issue of rainforests, on which a great deal of work has been done both under the previous Government and under this one. There is no question but that that is a central issue.

The noble Lord, Lord Giddens, turned to an area that interests me very much and rightly illuminated the issues relating to the power of Brazil, about which we heard a great deal in the debate, as it emerges as a major global player. Underpinning that power is the effective policy on renewable energies that Brazil has developed with great courage over many years. I say “with great courage” because, throughout the 1990s, when oil prices dipped right down to $6, $7 or $8 a barrel, many people said that Brazil had backed the wrong horse in going for renewables—the ethanols and so on—which it would find more expensive, as indeed they were for a time. However, the Brazilians stuck to their policy and now it has paid off handsomely. Brazil is now one of the greatest producers not just of ethanol but of commercial and clean ethanol of the highest quality, which puts it to the forefront as a great energy nation. That is quite aside from the fact that Brazil has now discovered so-called pre-salt oil deposits at considerable depth, which make it a major oil-producing power as well.

One way or another, quite aside from natural resources and energy, Brazil is emerging as a key player. It is a country with which we intend to establish close and closer relations. Indeed, we would be foolish not to do so, as the voice of Brazil can be heard very clearly on the international scene. The noble Lord, Lord Hannay, rightly reminded us that not only Brazil but Mexico and Argentina are members of the G20, which is the new motor of global policy-making. It is not the only one, but it is very powerful, and three countries in our purview today are at the centre of it. He referred to the deal that Brazil recently offered, alongside Turkey, to Iran over enrichment. That caused a number of queries around the world, because it was a surprise to many people that suddenly Brazil and Turkey should be players on the international stage. We have to look carefully at that and perhaps have second thoughts about what they were proposing and what contribution it could make in unravelling the hideous jigsaw of Iran’s nuclear weapons ambitions, which we all fear.

The noble Lord and the noble Baroness, Lady Kinnock, mentioned the influence of China and, indeed, Japan on Latin America. We are all sitting here thinking that Latin America lies somewhere to the west of us, but of course in Latin America there is just as strong a perspective going westwards around the world to China and Japan. Chinese investment and interests are spreading all over Latin America, while Japanese interests are strong, too. These are major factors in assessing our own relationship and how best we can build on it. The noble Lord also mentioned what we all recognise, which is that we may get a little carried away with the rhetoric of the new dynamism of these great economies, as poverty remains in massive quantities. The need for effective and well targeted aid and development programmes—the kind of aid that leads to development, which not all aid does—remains vital.

The noble Baroness, Lady Coussins, concentrated on human rights in Mexico and Colombia. I have extensive notes and briefings on these, but I may need to write to her. However, I will say now that, although we have all read about the ugly drugs wars and the heavy casualties in Mexico, we take all reports of human rights abuses seriously wherever they occur. Human rights are a key part of our bilateral political dialogue with Mexico. The noble Baroness asked whether we regard human rights defenders and NGOs as important for Colombia. Yes, we do. The work in Colombia of civil society groups, human rights defenders and trade unions is very important. We want to promote the strengthening of Colombian civil society and, in our view, human rights defenders need to be seen as part of the solution to human rights difficulties and should not be stigmatised officially or otherwise as part of the problem. Are we undertaking practical work to help? Yes, we are. Our embassy in Bogota frequently meets those under threat to discuss the situation and how we can carry it forward in a positive way. There is much more to say on that but, frankly, there is no time to say it.

The noble Baroness also asked how the EU fits into all this. There is the EU-Rio Group and the EU/Latin America/Caribbean group, a meeting of which my right honourable friend the Secretary of State and my honourable friend Jeremy Browne, whom I have already mentioned, attended within the first few days of taking up their posts in the department. They had considerable, detailed and constructive discussions with Latin American leaders, demonstrating the seriousness of our commitment behind the words and generalities about stronger relations with Latin America.

My noble friend Lady Hooper, who is extremely well acquainted with these issues and has considerable knowledge and understanding of Latin American developments, spoke on the sensitive question of our representation there. There have been closures, and concern has been expressed both under the previous Government and recently. Our intention is that there should be no further retreat in these matters. We have no plans for further closures of embassies. There may have to be reallocation of resources—we are all in the business of trying to adjust to a tighter resource allocation—and details about how we will react to the pressures on us will be spelt out fully and clearly to both Houses of Parliament at the right time. However, in general we are concerned to see no further retreat in our diplomatic capacities and representations in the area. Changes to meet new conditions may be required, but the shrinkage is something that we hope to put behind us.

The noble Lord, Lord Griffiths, gave the sort of classically valuable speech that can emerge in your Lordships’ House. He spoke with enormous and detailed expertise on Haiti. Most of us think of Haiti only in relation to the horrific earthquake that happened recently, and to what we could do thereafter. We have done a good deal—we have cancelled all Haiti’s debts to the United Kingdom—and it is encouraging to hear from the noble Lord that there are signs of recovery and development brilliantly emerging out of the ruins and horror that we saw reported in the papers only a few months ago.

My noble friend Lord Avebury spoke, as I expected him to, on a range of detailed issues concerning drugs and human rights. In Colombia, the work of the British Government with the Colombian authorities has been much appreciated and is seen as very successful. This is a very positive and effective story in a difficult area. Generally, we try to encourage—this is a different issue from drugs, but the noble Lord mentioned conflict with indigenous peoples—any kind of conflict-reducing talks and developments. We have encouraged all kinds of negotiations. The noble Lord mentioned Honduras, where our non-resident ambassador and her staff have just visited and met NGOs to hear concerns about human rights. The clear aim is to normalise relations with Honduras and that is what we will do. I will write to my noble friend about the Peruvian situation, because I must devote a few minutes to some general remarks.

The noble Baroness returned, as I expected, to the salient issues of the rise of Brazil as a great nation; of the vast power of Mexico, which is now the 11th largest manufacturing nation in the world; and of Argentina, with which, despite the colouring of our relations over the Falkland Islands issue, on which there is no change in our policy, we want to have warm and effective relations, as historically we have had. We will continue to work to achieve that, despite the Falklands problem. The Government intend to build on these newly established relationships with Latin America across a whole range of foreign policy areas. A deeper understanding, which this debate has certainly assisted, will enable the UK not only to be a true friend of the region, but will also allow us to extend the hand of partnership, which will be in the best interests of our own citizens and society as well as of those in the region.

Noble Lords have said in the debate this afternoon that the centre of gravity, and the balance of power and influence, have shifted away from traditional 20th-century patterns, and global decision-making has moved away from the narrower North Atlantic duo of European and North American influence to the broader and more representative G20. Many wise voices have pointed to the rise of the BRICs: Brazil, Russia, India and China. That has become a shorthand for describing the shift in the economic climate, which includes not just the BRICs but such large and influential countries as Mexico. It is absolutely right that countries such as Mexico, Brazil and Argentina are members of the G20 and at the heart of global economic decision-making today. Not only is it important that our international economic framework reflects the global economic reality, but many of our Latin American friends who suffered great financial turbulence in the 1980s and 1990s, which we all remember, learnt early lessons about strict financial discipline from which we could all benefit—as Secretary Clinton rightly pointed out the other day when she spoke about these matters. The markets of Mexico and Brazil may seem far removed from the bread and butter of our domestic issues, but intensifying our engagement with emerging economies will be critical in helping us tackle the issues that we face at home. The same is true if we are to make our views count on the global challenges central to our security and well-being. I include in those challenges concerns about climate change. Latin American countries are more important than ever to the achievement of these objectives.

We have all had the opportunity in this debate to discuss briefly where some of our shared interests lie. The examples that have been raised show that our relations with Latin America are multidimensional: not one of them can be defined by just one issue. A stronger relationship between the UK and Latin America would benefit us all, and I leave noble Lords in no doubt that that is the view of Her Majesty's Government. Our posts in the region raise human rights issues with host Governments and ensure that the European Union takes these matters seriously. We are pleased that many Latin American countries are participating positively in the UN’s universal periodic review process, and we look forward to ongoing co-operation with them in this process.

In conclusion—because my time, too, is up—the fortunes of Latin America and the UK are very much intertwined. Although we may not agree on everything, we understand how important it is to remain engaged with each other, and we look forward to the future. It is the Government's intention to shape a distinctive foreign policy that protects and promotes our national interests, strengthens our economy, makes the most of the opportunities of the 21st century and upholds the highest values of our society—namely, political freedom, individual aspiration, democratic choice, human rights, free trade and the eradication of poverty. I look forward greatly to working with my noble friends in the House, and with our friends and partners in the countries of Latin America, to achieve those goals.

The central message remains that Latin America has changed. In the words of the noble Baroness, Lady Kinnock, we need bold and innovative approaches to the new conditions. The role of the United States, our great ally, is no longer so dominant. The Washington consensus is no longer the ruling rubric of the area, as was pointed out in the debate. Countries such as Brazil and Mexico have their own agendas and are reaching out to parts of the world in new ways, including to the United Kingdom. The noble Lord, Lord Garel-Jones, reminded us that Mr Canning talked about the new world being called in to redress the balance of the old. Perhaps we should turn that on its head and say that the time has come when the old world should be called in to redress the balance of the new. I thank noble Lords for a superb debate. We all have a right to feel that we have made a contribution to understanding this vast and important issue for our nation.

14:39

[Viscount Montgomery of Alamein]

As two noble Lords have withdrawn there are theoretically a few more minutes for me to sum up, but I do not propose to take many of them. Fortunately, the noble Lord, Lord Howell, has summarised everybody’s speeches succinctly, so I do not have to.

We have this afternoon had an amazing range of opinion and views. I cannot fail to mention the maiden speech of the noble Lord, Lord Liddle, with which I agreed almost entirely. He will be a valuable asset not only to this House but to the cause of Latin America. His policy review organisation will no doubt produce many interesting papers of value on the subject.

The themes that came though in this debate were, obviously, human rights and environmental concerns, which were mentioned by so many. The one thing that I thought was particularly striking was the idea of unity—the noble Lord, Lord Hannay of Chiswick, expressed this—in Europe and Latin America; in other words, the dream of Bolivar. There are obviously a lot of differences of opinion and different ideas about how to achieve unity in these two great continents that must work together. In coming back to that in other debates, as the noble Baroness, Lady Hooper, said, we may need to address many aspects of this immense problem.

I am extremely grateful to all those who have taken part. I have learnt an enormous amount from this debate. One never stops learning. Even though I have been at it for many years, every day I learn something new. Today has been no exception. I beg leave to withdraw the Motion.

Motion withdrawn.

Health: Primary and Community Care

Thursday 24th June 2010 Lords Chamber

Debate

14:41

Moved By

[Lord Mawson]

To call attention to practical lessons from changes in primary and community care during the last 10 years; and to move for Papers.

[Lord Mawson]

My Lords, it is a privilege to be able to lead this debate on the future of primary and community care at this early stage in the new coalition Government. The vision that the Government have set out for primary care, where resources are deployed in the hands of practitioners close to the ground, has significant risks but is full of opportunity. As a social entrepreneur, I welcome this bold step.

As noble Lords will know, over the past 13 years in an area of great deprivation and health need, where the health authority had left a gaping hole in primary care provision, we, with the local community of Bromley by Bow, have set up a health centre which is integrated with housing, education, businesses and the arts. I declare an interest as the founder and, now, president of the centre, and that, in my professional life, I am increasingly working across the country advising on this area of health development.

The Bromley by Bow Centre is about health, not sickness, which is reflected throughout the building. You enter through a beautiful cloistered garden, recently full of purple wisteria. There are no gruesome pictures of human bodies on the walls greeting our patients, the kind of images that used to haunt me as an imaginative eight year-old at our local doctor’s surgery in Bradford. Instead, you walk into an art gallery and open-plan reception made of natural timbers and bathed in natural light. A high-quality environment, a focus on human relationships, open communication and customer focus are the keys to the Bromley by Bow approach. Doctors come out into the reception to chat and greet their patients in person. In the consulting rooms, patients and doctors sit side by side around curved wooden tables, looking at the computer screen together. At Bromley by Bow, doctors, nurses and patients work in partnership together.

Patients are not merely prescribed pills, referred and sent on their way. The drug we give to a patient with depression is only part of what our GPs prescribe as a fully comprehensive care programme. At the centre, we can offer on-site career advice; support to overcome debt; vocational training qualifications, and even a university degree programme; business support, including the opportunity to set up your own business; and practical housing and legal assistance.

Over the past 13 years the Bromley by Bow Centre has become an exemplar of an integrated approach to health and social care. It inspired the £300-million healthy living centre programme, run by the then New Opportunities Fund, and the £2-billion NHS LIFT initiative, which is of course the public/private partnership programme for building primary health and social care centres in the most disadvantaged areas across the UK.

Others have developed integrated approaches to health in other parts of the country. Dr Angela Lennox built a police station in her health centre in Leicester and reduced crime in the housing estate where it is based. The Westbank Community Care Centre in Exeter promotes healthy living across Devon. The Gracefield Gardens health centre in Streatham works in partnership with Lambeth PCT and Lambeth Council to deliver better healthcare. We ourselves now run three health centres for over 18,000 patients and are the largest primary care provider in the London Borough of Tower Hamlets.

I apologise for not being able to speak last week in the debate on the big society, but are these not all examples of where, in the micro, a big idea like the big society might take root? If integrated models of health and community care were encouraged in every community up and down the land, and the necessary local relationships and partnerships brought together, this important idea—the big society—might not become subject to yet further cynicism and be seen as more meaningless government spin with little substance underneath. It might actually become the fertile ground within which a wholly new definition of what it means to be a healthy society—a thriving community—took root. Of course, such an approach would need to be given time and consistent leadership.

There is a wealth of untapped social entrepreneurial talent in our country. Many of these entrepreneurs have it in them to generate creative and innovative approaches to primary and community care. There are hundreds of latent and undernourished third-sector organisations in this country with the capability to become like Bromley by Bow and take on the task of transforming how public services are delivered in communities up and down the UK. Our task is to find these people and organisations and put the wind in their sails. Over the past 10 years I have travelled up and down the country and discovered social entrepreneurs who are massively frustrated at how hard it is to be trusted and resourced to take on public contracts, including in the areas of health and social care. Despite the positive rhetoric from successive government Ministers, it has been intensely difficult for dedicated and talented social entrepreneurs to develop creative solutions.

My noble friend Lady Finlay and I offer the Minister a visit to some of these centres and the opportunity for him to see in detail what a successful integrated approach to health and community care actually looks like in practice, and what conditions need to prevail if it is to grow exponentially and to take root. The sad fact remains that these examples of an integrated health model are still few and far between. Despite all the rhetoric and promises, there has been little practical encouragement for these integrated approaches to health. It was ironic that our approach, which everyone now thinks is a great idea, was physically blocked by a boulder across our road to delivery back in the mid-1990s. The boulder was not local people but the local health authority at that time.

I am not convinced that things have moved on much. Yes, money has been spent on building new buildings and, yes, there has been investment in services, but the principle of broadening the base of primary and social care delivery and engaging social enterprises has barely been understood. I am aware that the language of social enterprise is spoken inside Whitehall, but I am profoundly doubtful as to whether it is understood. Indeed, the evidence is that it is not. Our public services need to be known for doing and achieving, not just endless talking, restructuring or writing yet another new stack of policy documents. In a modern enterprise economy, we are nowadays returning to the sensible practice of “learning by doing”. The idea that we learn much through the writing of endless documents that are out of date within weeks can seem rather outdated. There is nothing better than getting your hands dirty in the practicalities to really understand what is going on. When I spoke to the recently departed chair of NHS London, he told me that his mission was to build stand-alone “medical model” health centres without what he called “the distraction of social and community care”. Evidently, the complications inherent in the lives of disadvantaged Londoners were outside the brief of the chair of NHS London.

Similarly, the vision of the noble Lord, Lord Darzi, of a network of polyclinics, announced in your Lordships’ House, was in practice another missed opportunity. When you get into the practical detail with those of us who are practitioners, you see that it was not at all a vision of polyclinics, but of monoclinics—that is, health centres that are almost solely about the clinical model of healthcare. It is a sophisticated clinical model and, invariably, these clinics are full of state-of-the-art equipment and procedures. However, I am vexed to say that they pay scant lip service to the lessons many of us have learnt about integration and the bringing of different disciplines together in the way I have described—that the route into addressing the pressing and underlying health needs in some of our most challenging communities in this country lies in getting GPs to work with their non-health colleagues. It is as simple and as complicated as that.

We need our health service to be open to working in partnership with the third sector and social enterprises in integrated schemes which address the real, practical day-to-day issues that face patients. These include poor social housing, underachievement in education, credit card debt and fear of bailiffs, concern over street violence and anti-social behaviour, and the lack of opportunities to take control of their lives. We are not asking the NHS to solve all these problems. We are simply asking that the health profession be willing to work more collaboratively with others who have the tools to change our communities for the better, including by addressing their physical and mental health needs.

What those of us who have had real experience of running successful integrated health centres found was that the definition of a polyclinic changed on a six-monthly basis, and each new definition was communicated by NHS London with such clarity and certainty that real players and practitioners in the field were left totally paralysed. This meant that important health centres still remain not built, with enormous potential abortive costs. I know of one health centre that has had to go through so many NHS London-inspired redesigns that it has incurred over £1.5 million of design fees and still sits in NHS London’s in-tray. I truly wish I could say that this is the only example I am aware of in London but it is not. I am afraid that the last Government were rather fond of initiatives that never in practice happened, and of trusting the reports of young consultants at McKinsey rather than those who do the job.

I welcome a world envisioned by the coalition Government where resources are put in the hands of practitioners on the ground with a real understanding of their neighbourhoods and local needs. However, this vision is far from straightforward. Not all GPs will deliver the integrated model of healthcare that I described earlier. Many GPs who support an integrated approach tell me that their colleagues who do not support it fear loss of status and title, without realising that real status in communities is based on the strength of their relationships with patients. Often in deprived areas there is a stark lack of GPs with the capacity to rise to the challenges that they now face. This new approach has important implications for the ways in which doctors are now trained.

The Government need to ensure that GPs are encouraged not to resist change, nor protect an expensive biomedical model of health. We need to show our doctors that an integrated approach to healthcare will address the profound problems that people in disadvantaged areas face, with considerable savings to the public purse. At Bromley by Bow, we run our health centre like any successful customer-focused business. For example, 20 per cent of consultations are conducted on the phone, which saves not only the patient’s time but the GP’s as well. What we all have to realise is that the NHS has access to people across the country which any business would die for. Eighty per cent of consultations in the NHS take place in general practice, and 90 per cent of the population is seen in any one year. If we encourage entrepreneurship in the world of health, then the more capable practitioners will step into these gaps in the market and ensure successful delivery of care.

As the new Government begin to formulate their health policy, I have three questions for the coalition and the Minister, who I wish to thank for a very helpful discussion earlier this week on this subject. First, what is the Government’s vision for the future make-up of primary and community care? Will they simply leave it to the marketplace? Will they promote the standard medical model or the integrated approach of the type I have described? A clear approach is essential for the dedicated medical staff, who have had to suffer countless changes in direction over the last decade and now feel disillusioned, confused and frustrated. Secondly, once the Government have clarified what their future model of primary care and community care will be, how will they deliver and develop this approach effectively? This has simply not been happening. Finally, who in the coalition Government will lead with consistency and longevity, and pursue this course? Under the previous Government, we saw a succession of initiatives and restructuring led by “here today, gone tomorrow” Ministers, which has left the health service, frankly, in ill health. Who will be the leader? That is my key question.

The Government are rightly opening up a world of opportunity and I welcome that. However, the devil, as ever, will be in the detail and perhaps most importantly in consistent leadership not from civil servants but from practitioners—GPs and others who have done the job and understand the practical details on the ground. I encourage the Minister and his Government to lessen their reliance on academics and theorists, who have often never built anything, and to embrace the world of the practitioner and the social entrepreneur; to create a culture where we learn by doing, and not by talking and writing endless expensive documents and papers. We cannot afford this expensive, rather old fashioned way of doing things any more. Let us support—and learn from—people who do the job.

14:56

[Lord Colwyn]

My Lords, I congratulate the noble Lord, Lord Mawson, on securing this debate. I listened to his speech with great interest. He has a splendid vision for future healthcare and should be congratulated on all that he has done. I hope he will forgive me for not following directly his line of thought. I am not used to speaking so early in a debate; normally every subject has been covered by the time I get to my feet. I must concentrate on matters that have affected and will affect my dental colleagues. I have no need to declare an interest. I was in dental practice for more than 40 years but I have now been retired for two or three years.

As I said in the debate on the Queen’s Speech, the past 10 years have seen fundamental changes to the provision of dental services. We have been left with unfinished reform of NHS dentistry and must now work to deliver a better system both for patients and dentists, even at this time when the Government are making complex financial decisions which will affect us all. Alongside the challenges of oral health promotion and NHS dentistry, general dental practitioners face mounting challenges in the management of their practices. The creation of the Care Quality Commission, with which both NHS and private practices must be registered by the end of March next year, imposes a further layer of regulation on dental practices.

Why this current explosion in the evaluation, accreditation and remediation of health professionals? The CQC emphasis is on the registration and inspection of practices, rather than the assessment of individual performance. This will probably be followed by the General Dental Council’s proposed revalidation processes, focusing on individual registrants rather than the environment in which they happen to be working. There will be areas of overlap, which will need to be looked at to avoid duplication and possible misinterpretation.

The British Dental Association’s Good Practice Scheme recognises the practice, not the individuals within it, and Denplan Excel has, for nearly a decade, been independently auditing dentists against a full range of quality and oral health measures, regularly visiting the practices and de-accrediting those found wanting. The BDA has identified a significant surge in the demand for advice on regulatory issues. It says:

“It is clear from our analysis that the challenges facing dentists are increasing and changing”.

Paramount to its concerns is the growing burden that changes to professional regulation are placing on its practices and the impact it is having on the delivery of patient care. The BDA continues:

“Recent years have seen a significant and disproportionate elaboration of the regulation of dentistry, with the publication of new decontamination guidance and the advent of the Care Quality Commission. We hope that the (recent) announcement of the halting of the proposed vetting and barring regulations signal a fresh approach to regulation that puts patient care before bureaucracy”.

Dental Protection, the dental branch of the Medical Protection Society, which I used to have the honour of chairing, reports an unprecedented demand for its advisory services. It says:

“The controls are out of control”.

There is a widespread feeling in the profession, and a growing sense of anger and frustration, that there are too many hoops for practitioners to jump through, often resulting in a duplication of effort and with no real justification in most cases. The evidence base for many of these new requirements being imposed on dental practices is sketchy or non-existent. We desperately need a more balanced, logical and measured approach whereby any additional layers of governance are scientifically based and targeted where they are justified and most needed, rather than being applied across the board. The current environment is wasting the time, energy and money of many practitioners who are already doing an excellent job for their patients.

At a time when the new Government are proposing that high-performing schools should be inspected less often and freed from unjustified bureaucracy, the current excesses in the regulation of dental health professionals are impacting upon morale, deflecting effort and resources and ultimately not serving the best interests of patients. Now that many NHS practices are effectively operating on fixed incomes, any unnecessary expenditure in one area needs to be funded by cutting back on more constructive expenditure elsewhere.

I have received many letters from dental colleagues. I wish to quote from one that I received from Caroline Thornton, who practises in Gloucester. She comes from a family of dentists. Her grandfather was a dentist, as were her father, her brother and her husband, and she wants her 16 year-old daughter to become a dentist. She writes:

“We are trying very hard to conform to the avalanche of regulations piling up every day. However, in a recession, this is proving to be very expensive! We have spent thousands on a new sterilization room, paid for the nurses to be trained, registered, and their CPD up to date, CRB Checked, even though 2 are pregnant. We are having one of the surgeries revamped in August to make sure it is up to date with the HTN 1-5 regulations at a cost of £20,000, and even completed a clinical waste audit, amongst many other trivia, all at our own expense. At this rate we will have a lovely practice but be bankrupt!”

I could quote many other letters.

One detail that seems to be overlooked in this eagerness to be seen to be monitoring, documenting, auditing and acting is that when assessing the risk presented by an underperforming dentist, it pales into insignificance when compared to an underperforming medical practitioner or surgeon. Before all this monitoring, documenting, auditing and acting became an art form, how much actual damage was being done to how many dental patients? How often and how serious were the consequences? Medics can kill people. Even at the very worst, dentists are unlikely to do so. I am tempted to wonder whether we are creating an entirely new industry and spending an awful lot of money “fixing” an illusory problem, or heading off the hypothetical threat of a “virtual” problem that may not even exist in reality.

15:03

[Lord Rea]

My Lords, I thank the noble Lord, Lord Mawson, very much for raising this important topic, and particularly for his inspiring description of his Bromley by Bow project. It reminds me of the Peckham health centre from pre-war days, which was a concept ahead of its time. It is now, sadly, closed. There is much we can learn from the noble Lord’s project and his words this afternoon.

The noble Lord has worded his Motion constructively, concentrating on recent changes and the lessons to be learnt; basically, what has worked; what has not worked; and what might work better. If we were to start with a blank sheet, we would need first to look at the kind of health and social problems which the population presents—of course, the two are inseparable—both nationally and locally and then try to fit services best to tackle these problems. However, we have to build on what we have. As the noble Lord has described, this is far from ideal, but I am an optimist and I think that it is getting better. It is already a lot better than in many other countries.

Of course, we have an age pyramid typical of a western developed economy, getting top heavy with older people such as myself—there are more and more of them—and they are living longer and, sadly, becoming increasingly disabled, needing more care. Other than this demographic problem, the other main public health problem, which we share with the rest of the world, is the difference in health status between the best off and the worst: health inequality, in other words. This gradient applies throughout the social spectrum from top to bottom. We need to improve the health not only of the poorest but also of the middle of the range who have worse health than those on the next rung of the ladder and so on, as Professor Michael Marmot has recently re-emphasised. To restrict services such as Sure Start to the really poor and deprived does not tackle the relative health problems that exist, for example, between skilled and non-skilled manual and non-manual workers. There is work to be done right across the board.

Ideally there should be a gradation of health and social service funding taking into account the age and social structure of each community. To be fair, there has for many years been a serious attempt to do this, but the inverse care law still persists and it needs an even greater share of resources than we have so far allocated to it to reverse it. This might be politically difficult since if this was done on a tight budget, as now, and was in some years past, relatively well-off communities might have to accept a reduced budget. These communities know how to fight their corner, so it is a difficult situation. The health problems of ageing and inequality are deep-seated and have their root causes in the nutritional, physical and social environment of early childhood, which is largely outside the scope of the community health and social services. Even so, it is these services that have to cope with the lasting legacy: the social problems of young adults, including drink, drugs and crime and the chronic ill health of older adults.

Though those with chronic degenerative illness often need periodic admission to hospital, most of their care is appropriately and better done in the community. In a minority of cases “hospital at home”, including procedures such as intravenous drips, is sometimes possible, avoiding admission or enabling early discharge rather than treatment as an as an in-patient. However, the Royal College of Nursing is concerned that the development of specialist home nursing teams such as advanced nurse practitioners, community matrons, specialist nurses, and consultant nurses concerned with managing serious illness at home is having a knock-on effect in reducing the recruitment of community nurses and health visitors, who are still vital in overall community care, particularly for the disabled elderly at home, and in providing mother and child care and preventive services. The transfer of much hospital care to primary and social care at home has long been part of government policy but is not always cheaper. Patients may be discharged too early and need re-admission—a process perhaps encouraged by the payment by results scheme, which can result in a hospital being paid twice, once for each admission.

For many years, GPs have increasingly come to accept that they need to work in teams—not all, I agree, but the trend is there—including other health and social workers to give a really effective service. There are still a few Dr Finlays out there who prefer to work on their own. They are very different from my noble and professional friend on the Cross Benches. The primary care team is now the norm and is encouraged by the National Health Service. As the noble Lord said, my noble friend Lord Darzi proposed a network of polyclinics in which there were more services and links with hospitals than in most group practices, but this proved to be a bridge too far for many GPs and their professional organisations. However, the concept has become more acceptable, provided that the centres are GP-led and tailored to local needs and development. Many GPs are concerned, however, that the polyclinic concept will lead to primary care groups being taken over by private profit-making healthcare companies. This has occurred already in some PCT areas. The one that I know is in Camden PCT, where the contract for practice was awarded to United Health in preference to a local GP group which was offering a better and fuller service, but at a slightly higher price. The results have not, as far as I am aware, been fully evaluated, but the local feedback is unfavourable.

The new contract for general practitioners brought about major changes, as well as a rather generous package for most GPs. The BMA had a sharp negotiating team and the Government needed the GPs to be on board. The biggest change was to remove the obligation to provide 24/7 out-of-hours clinical cover for registered patients. PCTs had to take on this responsibility. They have not found it easy and have often farmed the work out to private companies. Patients are not always happy to be seen by a strange, often foreign, doctor who does not know the area; and of course there has been the occasional tragedy, as we all know. This is a far cry from the days when I was a general practitioner, when we were responsible for after-hours care. Our group made it tolerable by collaborating in a consortium or rota, with other local GPs. In fact, the BMA negotiating team was prepared to continue with the responsibility, if the money had been right. In the end, however, the cost to the PCTs of providing the service was much higher than estimated; in fact, according to my information, it was greater than the amount that the BMA had originally asked for.

The other important part of the new contract was the QOF—the rather grandly named “quality and outcomes framework”—whereby GPs receive a payment for each procedure in a list of measures which assist in monitoring, and thus improving, the health of their patients. They include weighing, taking blood pressure, keeping disease registers and so on. I and some of our colleagues were sad that GPs had to be paid for measures which many of us regarded as part and parcel of good practice, and should have been part of any contract. However, it is clear that this carrot has increased the capacity of general practice to anticipate serious illness. The standard of practice has improved and some lives may well have been saved through, for instance, control of blood pressure and weight reduction. However, I am sceptical about the accuracy of some of the numerical extrapolations that have been made about lives saved. It would be good to know whether, without the financial incentive, this exercise will result in permanently better practice by GPs.

An alternative or addition to the polyclinic model has been suggested by the Royal College of General Practitioners. It proposes primary care federations, which are associations of primary and community care teams, as a legally binding enterprise. I am sure that that concept is not unfamiliar to the noble Lord, Lord Mawson. The college cites three examples: the Croydon Federation, consisting of 16 practices; Lincolnshire General Practices, which has14 practices; and Epsom Downs Integrated Care Services, where 20 practices are collaborating. These hold considerable promise, but I should like to see more involvement of social services and mental health teams, as well as appropriate parts of the voluntary sector. This is very much in line with the proposals of the noble Lord, Lord Mawson. As it is, these projects provide better-integrated primary and community care as well as more emphasis and better facilities for preventive medicine and health education. They could also help to form, through their PCT, a nucleus for practice-based commissioning, which so far has had little impact on services provided by hospital trusts.

Local collaborations such as this, which very much fit the ideas of the noble Lord, Lord Mawson, including voices from all the caring professions, are more likely than top-down decisions to provide or commission good services for their communities.

15:15

[Lord Alderdice]

My Lords, like other noble Lords, I commend the noble Lord, Lord Mawson, on obtaining this debate, particularly in this area of healthcare—the bringing together of primary and community care and learning practical lessons from the work that has been done.

Until my retirement from psychiatry and the NHS at the end of March this year, I had worked for many years in healthcare in Northern Ireland. As some noble Lords will know, we have had a fully integrated health and social care system since the early 1970s. This has been enormously beneficial. Let me give noble Lords some idea of what it means. When I was working as a psychiatrist, a patient would be referred to me by a general practitioner in the same trust. I would see the patient as an out-patient, and I would have at the clinic, as part of the multidisciplinary team, nurses, social workers, psychologists, as well as junior medical colleagues. Indeed, secretarial and administrative staff were very much regarded as part of the team because they would meet the patients. How the staff related to patients on the telephone or in reception was an important part of managing them. If they needed to be admitted to hospital, the same team would be able to work with those involved in patient care and the patients. All these teams included social care. Social services staff were as fully involved in the trust as the medical or other professional clinical staff.

With regard to the management of the trust, a manager of doctors might have been a doctor but they might also well have been a social worker, an experienced nurse or some other professional within healthcare. It meant that people were able to work together right across the disciplines with the single concern of ensuring the best possible health and social care for patients, whether they were at home or a daycare facility or whether they were short or long-stay in-patients.

My noble friend need not be concerned; I am not proposing that there should be structural changes in the healthcare system in England, but that structure facilitated us in working as multidisciplinary teams. However, we discovered that there was a limit to multidisciplinary teams, because after a time it became apparent that there still had to be an element of leadership. It was not enough to get the professionals to work together as though everyone had the same role and the same responsibilities; it became apparent that there was a need for leadership. Whether that came from the medical side or from social work, psychology or nursing was much less important than the skills that the individual had as a leader. Being a leader is not a particularly professional qualification; it is a personal one.

I say to the noble Lord, Lord Mawson, that for many of us a medical model is biopsychosocial. The notion that it is only about the physical and does not include the mental, emotional and relational is, from my point of view, a rather perverse idea of what medicine is really about. However, I accept that there has been a tendency for doctors and others outside medicine to push medicine in that direction, and it is down to those of us who believe in something different to open up the windows and to help people to understand that we are talking about not just the whole person but the whole person in their relationships with others. That is all part of good medical work.

We did not just find a limit to the notion of multidisciplinary teams; we also found a very definite limit to the notion of managerialism. Of course, as things became more complex and finance became involved, it became necessary to have managers and administrators. At the start of the process, they were seen as serving the requirements of professionals and patients. However, it was not long before they began to regard themselves as the bosses of the clinicians—and indeed sometimes of the patients as well. They would be far less concerned about the professional and clinical requirements or the requirements of the patients than about balancing the books or having a growing managerial empire. Every time there was a reorganisation and restructuring, the one group that never seemed to reduce in number was the managers. There always seemed to be places for them to go and none of them ever seemed to be made redundant in restructurings.

The truth is that an arrogance began to develop whereby the people at the centre, whether they were managers or in Whitehall, felt that somehow they had more real interest in, concern about, knowledge of and expertise in what was good for patients and patient care than the people who had committed themselves to that work from the beginning of their professional lives. Some of the managers came from business and had no real understanding of the complexity of healthcare. However, they were encouraged by Governments who saw a market model as being the way to run a healthcare system. That never seemed to make much sense to me because, if the bottom line was important for you, the best thing you could do was to let many of the patients die as quickly as possible so that they would not be a charge on the state.

The market principle just does not work when you apply it to healthcare. In fact, if you apply it too energetically, you provide perverse financial incentives to do absolutely the wrong things. I do not mean that there is no place for the market but I have always felt that a menu was better than a market—yes, there is choice, you make decisions and you understand that different approaches involve different costs; nevertheless, there is some kind of informed choice that is based not just on the cost but on the value of what you are trying to obtain for yourself or your patients.

Therefore, there is a limit to multidisciplinary teams that have no leadership; there is a limit to the notion of managerialism as the way to run a healthcare system; and there is a limit to the market as a model for running a healthcare system. Those are some of the things that we have learnt in healthcare over the past 10 or more years.

However, there are also a couple of major challenges that we need to address, one of which is the enormous change in the social patterns of the lives of the people with whom we are working. The noble Lord, Lord Rea, mentioned that we have an older population, and that brings with it increased challenges of all sorts—ethical and management problems and clinical difficulties. For example, certainly for a period of time, we were largely successful in getting rid of infectious diseases, and that let people live longer, so they lived longer in order to develop cardiovascular disorders. When you dealt with those, they then lived long enough to develop cancers of all kinds and, when you dealt with those, they then lived long enough to develop dementia. It is not as though when you deal with a whole set of problems they all go away. We live longer and experience other kinds of problems.

That does not mean that we give up but we have to be realistic that all sorts of changes need to be addressed. There are changes in social patterns, including the size of families, the type of family units and a range of people from all parts of the world with all sorts of different dietary backgrounds and physical backgrounds, infectious disorders, and so on. We have to deal with all those things. We have to be alert and aware of change, which is quite a challenge. As such patients come into your practice, whether it is a hospital or community practice, you have to become aware, if you were not before, of the complexities that they bring. That is not easy. There are cultural issues in dealing with patients that are very sensitive and difficult. It is not all about those in the community welcoming folk in from outside. It is not only about them understanding and changing; it is also about helping people who come in from outside to understand the community they are joining and the culture and requirements that that community has.

Those are challenges but there are also opportunities, many of which are provided particularly by information and communications technology. They change the way in which young people in particular—though not just them as many older people are increasingly adept at the use of information and communications technology—react to things, receive messages, relate to each other and the way in which we educate our clinicians. It is now possible to educate clinicians at a distance. For example, a skilled surgeon in one part of the country can assist someone conducting an operation on the other side of the world by using telemedicine. We can be in contact with patients in the community by staff using ICT.

Some but not all of this is extremely successful. Just because you have a new gadget does not mean that it is better; just because something works faster it does not mean that it always works better. A colleague told me about a wonderful new system that he wanted to put in that would ensure that immediately the general practitioner made a referral it would be in my inbox. I said that it was no use whatever because the waiting list is still six weeks. It does not matter whether the referral comes in today, tomorrow or the day after, it will still be six weeks before the patient is seen.

Not every piece of technology or new gadget is appropriate, helpful or an effective use of resources. Some approaches can be extremely helpful in allowing us to move on and to learn the lessons about what actually works, which was the whole theme of the noble Lord’s introductory speech. That is crucial but let us not dismiss the importance of research and academic work. It is not just about managerialism, although I do not dismiss that, as in a complex community management is extremely important. I have been encouraged by our new coalition Government’s commitment to get decision-making and responsibility back to the patients, their families, the communities and clinicians of all kinds with whom they deal—it should not be held back at the centre whether that is a management centre, a Whitehall centre or even a governmental centre.

15:28

[Baroness Finlay of Llandaff]

My Lords, I must declare an interest as a true Dr Finlay. I am a practising clinician; I am president of the Chartered Society of Physiotherapy; I work in palliative medicine; and I have links with many hospices around the UK. I hope that I have made all the declarations before I start.

We are facing change and I am sure that the Minister is inundated with advice and pressures but in the time preceding change, I hope that he will be cautious so that we do not have change while ignoring the potential unintended consequences of such change. One of the difficulties is that often we do not know what we do not know, and in the rush to bring about change we may not do the background research or explore the issues. I want to address the specialist services providing care for patients, the role of the third sector, particularly for terminal and palliative care, and the needs of patients out of hours.

In 2006, in England and Wales there were 503,000 deaths. That figure is anticipated to rise to 586,000 in 2030, which is a massive increase. Only about 20 per cent of patients die at home, so we have to think how the needs of all these patients will be accommodated. With that there has been pressure to move patients out into the community. The need for integrated care pathways for complex conditions increases as high levels of expertise are required to meet patient needs and there are more patients with complex conditions. I am concerned that in trying to save money substitution has been looked at but it is not without its dangers.

Despite a priority of providing care closer to home, the Audit Commission report, More for Less, found little evidence to show that PCTs have been successful in removing care from hospitals. There is little evidence that patients with rare, complex conditions are not prepared to travel to get expert care, because they know that they need accurate diagnosis and a really good management plan. The challenge is: how do we get patients seen by the right person at the right time in the right setting, as well as trying to move care out into the community? That is a stark cultural challenge that needs multiprofessional teams working in managed clinical networks to encourage collaboration and co-operation between primary, community and secondary care. That must also cover other aspects of home care provision, including social care.

The new commissioning arrangements must cross traditional NHS boundaries. The publication by the Royal Colleges of Physicians and General Practitioners, Teams without Walls, identified the need for integrated systems, clinical leadership in commissioning and aligned incentives, underpinned by patient involvement in commissioning systems, especially for those with long-term conditions.

The current problem is that payment-by-results tariffs in their present form incentivise against integrated care. The current tariff-based system encourages hospitals to treat more patients while, simultaneously, GPs are under pressure to refer fewer patients. That creates a tension that can work against the development of integration and against quality in patient care. It works against earlier diagnosis, particularly in recognising rarer and complex conditions. One way to rebalance the disincentive is to introduce payment by pathways or payment by conditions, to ensure that high quality generalist and specialist care have a sustainable future, for the benefit of patients.

Patients must enjoy equitable access to specialists when required. I have just chaired a joint report on allergies for the Royal Colleges of Physicians and Pathologists, and we have found a stark inequity in provision around the country. Specialist resources must be at the heart of any clinical network or community-based service. It is essential that we have services available 24/7. The current five-day provision does not meet patient needs. That service does not respond to the true, seven-day need of those who are really ill, including at night. In Wales, we have moved from five-day to seven-day working by clinical nurse specialists in palliative care, and we have shown in a short space of time a dramatic change, because problems that occur on Saturday will be dealt with on the Saturday or Sunday. By the Monday, it would have been too late to address them.

There are some specialist service needs where integration is essential. There needs to be a one-to-one relationship between the GP, the patient and the specialist in secondary care to ensure patient safety and that people understand the complexity of the patient's background. Repeated handovers do not work well. We know that information is being lost in a kind of conveyor-belt hand-over between clinicians. We need to restore patient safety and quality of care and ensure that the lead clinician has a comprehensive understanding of the patient to reduce complications and near misses, particularly in surgery.

Some things should be done only in places well equipped to do them. An increasing amount of so-called minor surgery has been done in general practice, but there have been some awful situations where melanomas have been removed, the margins have not been adequately marked, the resection was inadequate and the subsequent surgery was much more extensive and expensive than if it had been done in a specialist dermatology surgery centre at the outset. The Anaphylaxis Campaign has sent me horror stories of GPs giving advice to parents about children suspected of having a peanut allergy that was completely inappropriate and would have jeopardised the child’s life, not just their health. It was just as well that the parents phoned the campaign with their anxiety.

There are real problems out there, and there are risks as well as opportunities in moving towards a largely GP-commissioned framework. Academic GP is essential to driving up the standard of evaluation. We need to evaluate patient outcomes in any change. This is not about having a fashion for one model or another; an evidence base must underpin commissioning. As PCTs are divested of their commissioning responsibilities, GP consortia are expected to take up the mantle, but their skills and background knowledge, and even their willingness to do this, are really deficient in some places.

There needs to be a national view on minimum access rates and the provision of highly expert services to avoid a postcode lottery, particularly where there is a low critical mass in a smaller population, otherwise you get a bidding war between GPs and consultants that works against quality. If you do not have adequate dual provision, community-based services will have fewer places to turn to for training specialists for the future, for continuing professional development and for research. Driving that forwards will drive up standards of care in the future, particularly for those with more complex conditions.

I ask the Minister to consider some specific things: that promoting the idea that engaging doctors in the spirit of collaboration is required for successful commissioning; that commercial loss leaders might appear at first sight to be useful but may lose expertise and undermine quality in the long term; that the repudiation of unhealthy forms of competition is essential, as is encouraging jointly commissioned models for integrated health services; that choice for patients means the ability to access specialist scientifically based clinical excellence to diagnose and plan their management, which can then go back for ongoing care in primary care if there are good pathways; and, lastly, that the incentives and disincentives of payments by result need to be rebalanced to bring integrated generalists and specialist care closer to the patient’s home.

I am grateful to the noble Lord, Lord Alderdice, for flagging up the importance of the whole person and the whole family, because the third sector provides that par excellence in hospice care. There is a need to specify minimum levels of service, such as in hospice care, across the UK, and to have centrally agreed three-year contract with an agreement on how the service is delivered locally. At the moment, Marie Curie has to negotiate 200 separate contracts across the UK. That is a waste of time and a duplication of effort when models such as the fire service or the police demonstrate that you could have a national framework with local agreements on implementation.

Hospice grant money has to be negotiated at a local level by small hospices that often do not have much expertise in negotiating with all the different people from whom their patients come. Competitive tendering is punitive to the third sector, because it does not have the resources to tender or the expertise of larger bodies. Punitive contracts in the third sector can really work against them. If they miss a level in their service they may incur a penalty, yet they provide a key service to the NHS.

Commissioning must become outcome-related, as much in hospice care as anywhere else. Currently, it seems to be process-related. It has to be integrated across the whole pathway, and this need to commission across the whole pathway means that the professional competency framework needs to be driven up to promote higher levels of competency. There is a real concern and a danger that private companies will come in and commission against a whole pathway, and one questions why they are needed as an intermediary. The danger is that increased income will go in profits to shareholders and not be reinvested in the not-for-profit third sector that the hospices epitomise.

In summary, there needs to be 24/7 provision, which should be addressed urgently. There is a large shortfall in district nursing. Only 53 per cent of PCTs have 24-hour district nursing, which is grossly inadequate if you are trying to care for critically ill patients at home. There has to be a closer link between health and social care. Care assistants can often be the key people to keeping patients at home.

On incentives, we should remember that healthcare professionals are proud. They want to deliver a good service. If you embed direct patient feedback into the system, as we have in Wales for palliative care using iWantGreatCare, it can become a powerful driver to quality improvement. One team does not want to perform less well than another, but patients need to provide feedback in an anonymised way so that they are not fearful that their comments might antagonise the clinicians looking after them.

There have been unintended outcomes from the current arrangements where financial incentives or punishments drive provision rather than need. Patients feel particularly lost out of hours and it is really important in commissioning healthcare that we get it right. There is a steady stream of horror stories coming through. It is not simple; it is not like shopping for shoes; and I hope that the Minister will think carefully about the unintended consequences of change.

15:40

[Lord Crisp]

My Lords, I, too, congratulate my noble friend Lord Mawson on inviting us to reflect on primary care over the past 10 years and more. I know he is hopeful that his timing is such that the Government’s policy is not yet so rigid that they cannot listen to new ideas and the practical lessons that he and others want to mention. I have to declare an interest. Most people know that I was chief executive of the NHS in England for six years. There is a lot that I could say, but I will concentrate on the same areas as my noble friend; namely, the integration of care, particularly thinking about social care, education and other boundaries around the whole person.

The other day, an American friend said to me, “We love you in England because you keep changing the way you develop primary care. You are a wonderful laboratory. You have tried out lots of different ways of doing it”. I guess that that is true. But I guess that there is a reason for that, which is not just a wish to meddle. It is that, as other noble Lords have mentioned, a lot has changed in the 70 years since the 1940s, when we set up the primary care system we have now. The three big changes have been referred to by others. The diseases are different. Seeing patients is much more about dealing with non-communicable diseases. They are about elderly people with complex or multiple problems. The patients have changed. They are much more demanding, but their behaviour is much more important in so many ways in terms of the management of care for diabetes or whatever. In addition, technology has changed. All those changes mean that our old model has led to shift. As we have noted, there have been many ways in which people have tried to make that shift. It is really important that we learn the lessons from those attempts to change and to make improvements.

Before this debate, the Royal College of Physicians wrote to me and, I suspect, to others saying that it was really important that we did not lose sight of the fact that primary care, secondary care and tertiary care need to join up. We need to have that all within the frame. It is interesting to reflect that the separation between primary care and secondary care is largely in legislation that is about 70 years old. It is not writ that a GP shall be this and a consultant shall be that. It was an organisational change. The way in which parts of the medical profession relate can change and some organisations, as I think that the noble Lord, Lord Alderdice, mentioned, employ or involve both. There is nothing rigid about this.

However, I want to talk about integration around the patient. Let me go back to the simple point that most patients today in richer countries are people whose needs often may be clinical, but alongside that there is a need for independence. I think that I have mentioned in this House before that my elderly father fell and broke an arm. Clinically, it was very easy to deal with, but the real issue was whether he could remain independent and live at home by himself. That is the sort of situation we are talking about in terms of many of the patients that the NHS deals with. Indeed, many patients with the highest expenditure in the NHS are those with complex problems that span clinical, social and other needs. So it is welcome to see primary care playing a major role in prevention and in helping patients find their way around the system.

Primary care is not just about GPs, and it is important to keep the two separate. There are different roles for many different people. One of the saddest pieces of research I have seen was published some years ago. It concerned young people suffering from depression and how they were treated in primary care and whether they were able to be taken seriously. There were too many accounts of people going to GP surgeries and being told to come back in three months if it was getting worse. In effect, they were being turned away. We need different routes in primary care for those who sometimes find it difficult to express their needs.

That takes me on to the issues raised by the noble Lord, Lord Mawson, about health and social care, and other areas such as health in education. He asked how far we should go to ensure that we have health provision in schools, whether in the form of health services or whether they are designed into the architecture of schools. He also asked if we should have local partnerships that are able to focus on what is needed. The noble Lord concentrated on social entrepreneurs, but I know that he, like me, is interested in how local partnerships made up of the right groups of people can have an enormous impact on a local environment in terms of health benefits and the related issues that go alongside them. By local partnerships, I am not just talking about individual organisations that bring health and social care together, but about partnerships that bring together everyone who has something to offer in this area. These can be quite difficult to conceptualise and describe in order to determine the policy that will promote them, so I would encourage the Government to look at some of the ones that work.

As I said, the noble Lord, Lord Mawson, referred to a number of social entrepreneurs and one or two exceptional GPs who have set up extraordinary practices that go way beyond what we would traditionally think of as healthcare. But I think that some of our PCTs have done exceptional things in trying to address inequalities, particularly in areas like mental health where we know that among the best things you can do for patients is help them to get jobs and housing. Among the range of entrepreneurial PCTs let me mention one particular group I know of and declare an interest in. Something like 20 UK PCTs are part of a group called Triple Aim. They are working alongside similar organisations in Scandinavia and the US, facilitated by an American organisation called the Institute for Healthcare Improvement. Here I declare my interest because I am working with the organisation in Africa rather than in this country. It would be interesting for the Minister and the Department of Health to look at what these PCTs are trying to do by taking on a triple aim—to improve the health of the population, improve the care given to individuals, and reduce costs. They are doing so by trying to integrate with local partners. There are some good examples that we can build on and, taking a completely different example, a number of schools in this country have health facilities within them. So I urge the Government to look not just at the social entrepreneurs referred to by the noble Lord, Lord Mawson, but at the organisational people working within the system who are trying to make these things work; they go very much together.

Finally, I come back to the issue of primary care trusts and GPs. I have seen some statements from the Government about giving GPs and doctors more control. I understand and appreciate that. One of the great merits of the NHS that shows up in any comparison with other systems around the world is its primary care. This is one of our great strengths, among others, and we must preserve it. But however wonderful some GPs are, not all of them are. They are not all capable of taking on all the roles that we might think we would like them to. I pay tribute to the last Government because they were concerned about variations in performance between hospitals and did a great deal to bring the performance of the poorest up to the best. Among GPs, not surprisingly because there are so many of them, that range of variation is much wider. Sometimes we talk about GPs as if they are all the same, but to me that feels like something of a mistake.

Another issue in developing policy around GPs in the context of primary care is the potential for conflicts of interest, and again I suspect that the Department of Health has good examples of where, by putting more money into primary care decision-making hands, potentially and only in some areas you end up with conflicts of interest about how the money is spent. But—and it is a very big but—we have also seen great benefits from having primary care and GPs taking a lead. In particular, it is interesting that in a number of practices where the GPs have budgets and have taken a bigger lead around commissioning, they have changed the services they provide and the job roles of people. Increasingly you see people other than individual GPs when you attend a GP practice. That is all for the good, in both quality and cost terms.

I am reminded that 15 years ago we were trying to get more GPs into east London and tried to do so by recruiting salaried GPs—in other words, by moving away from the current model of GPs being self-employed. We were told we could never do that: it was not what GPs were about and it was essential that GPs were independent. I see the noble Lord, Lord Rea, nodding his head. However, we succeeded to some extent in making that happen but now it has all changed. Today, in practices where GPs are responsible for budgets and direct care, there are many salaried GPs and many people doing different kinds of jobs. That would not have been possible had you tried to make those changes from above. Indeed, GPs in London complain that they cannot get jobs as partners any more; there are now salaried jobs but the partnerships are being kept in fewer and fewer hands.

While that may be a downside, the important point is that doctors, as part of the entrepreneurial culture to which the noble Lord, Lord Mawson, referred, have the ability to make changes that mere managers, politicians and others from outside would find it difficult to make. It is important to build on that.

I hope that, like the noble Lord, Lord Mawson, the Government will look back on the years of change and development and learn the practical lessons. I should like to ask two specific questions. Will the Government look at innovative PCTs as well as innovative entrepreneurs, and perhaps consider Triple Aim as an example? How will the Minister clarify the relationship between PCTs and GPs in the future? I suspect this is one of the areas in which there is some confusion in the service at the moment over how primary care will be led, planning will be done and life will move on over the next few years.

15:52

[Baroness Emerton]

My Lords, I, too, warmly congratulate my noble friend Lord Mawson on, first, introducing the debate but, more importantly, on demonstrating through his entrepreneurial approach what has been achieved in managing change of this magnitude in what at first sight must have seemed an impossible task.

We have had put before us lessons taught in managing change through people to provide a community service in every sense of the word. Like many other noble Lords, I found my visit to Bromley by Bow Centre a manifestation of real entrepreneurial skill— second to none in demonstrating holistic care in the most imaginative ways—which became not only productive in outcome but engaged the patients and community members in a non-conventional way. The emergence of a true community was evident. I found my noble friend’s book very gripping, for no punches were spared in the description of both the barriers and the successes.

I declare an interest as a retired nurse. Over the past 10 years, much progress has been made in community services to encompass a wide range of services, including public health and prevention services, but despite many primary care and community initiatives we still have a long way to go on early identification of disease, risk factors, reduction of health inequalities and the promotion of child health. In the development of urgent care, acute care at home and end of life care services, community services work in close partnership with the GPs, hospital services and social services to support the independent living of older people and the safeguarding of vulnerable adults. They also work with children’s trust partnerships. Currently, 200,000 staff are employed to meet these services, requiring £10 billion from the NHS budget. There is considerable evidence of widespread variation in productivity, which, if addressed, could generate a substantial direct improvement in service quality and sustainable efficiency, thereby reducing costs.

During the past 10 years, attempts had been made by the previous Administration to improve services through the recommendations in the NHS Plan, published in 2001, the general medical contracts in 2004, and the White Papers, Our Health, Our Care, Our Say in 2006 and Transforming Community Services, published last year. The Nursing and Midwifery Council, its regulator and its predecessor, the UKCC—of which I declare an interest as a former chair—have long supported the provision of healthcare in the community. During the previous decade, they introduced specialist community practice awards and created a specialist community health nursing part of the register. These measures acknowledged the shift in expertise needed to ensure safe community practice. While not yet enforced, the emerging standards for pre-nurse education will require pre-registration students to spend 50 per cent of training in practice-based settings, which will increasingly be within the community as services are reconfigured. This represents a sea change in nurse education and will herald a major improvement in healthcare delivery at the point of registration. The planned 4,200 increase in the number of health visitors is admirable. They play an important cross-professional, co-ordinating role, leading skill mix teams in delivery, postnatal, early-years and family healthcare.

However, it is important that health visitors retain a grounding in basic nursing and/or midwifery skills. Knowledge of diabetes, associated obesity, childhood ailments, immunisation, prescribing and disease management are all essential to ensuring safe delivery of patient care pathways. The Nursing and Midwifery Council is looking for the best way to take forward the preparation of health visitors. Will the Government support this initiative?

The introduction of matrons, advanced practitioners, specialist nurses and consultant nurses in the community has resulted in many patients with complex, long-term conditions being expertly cared for without the need to frequent their local hospital. Community matrons in particular are striving to help people with long-term conditions become more self-reliant and better informed about their health and how to improve it. This reflects a shift in emphasis towards nurses helping to empower patients to look after themselves and manage their conditions better.

The programme to support practitioners to transform services and deliver high- quality care and productivity set out evidence for best-practice care within community services through a series of six transformational reference guides entitled, Health, Well-Being and Reducing Inequalities; Services for Children, Young People and Families; Acute Care Nearer to Home; People with Long-Term Conditions; Rehabilitation Services and End of Life Care. All of them provide a guide to high-impact changes and are intended to enable practitioners to give high-quality care.

The continuing work is looking particularly at the needs of frail, elderly patients with complex health conditions. They are the main service users of community healthcare and now occupy the majority of acute hospital beds. Increasing evidence points towards a wide variation in the care offered to the elderly. Studies indicate that up to 30 per cent of people in hospital at any one time, many of them frail and elderly, could be safely cared for in the community with the right access to community services and appropriate support. There are efforts to mobilise staff using evidence to create a “social movement” among front-line staff and empowering clinicians to lead change and innovation. This leads to the use of care pathways to increase care co-ordination and best practice for patients. Combining primary, community, hospital and social care to increase efficiency and provide high-quality care, it is best described as “care without walls”.

At present, a high proportion of residential nursing homes employ healthcare support workers and social care workers. Evidence from a study conducted by Ian Kessler at Oxford University shows that many undertake aspects of care traditionally done by nurses but that they are not trained to do it safely. If there is to be an increase in community care, increasing the level of social carers and healthcare support workers, there must be an increase in safeguards on the roles undertaken by those staff. With no form of regulation in place, it is difficult to track and prevent those unable to provide safe levels of care. The move to community-based care poses a significant risk to patient safety.

Against a background of the demographic growth of the elderly population—requiring an increase in both long-term and acute home care—of the care of vulnerable children in pre- and post-natal care and of changes in the pattern of commissioning services, it will be important to ensure that at every level a nursing voice will be able to ensure the safety of patients as well as the delivery of high-quality care in the most cost-effective way. It is imperative that the new systems of commissioning primary and community services enable the voice of an experienced nurse to ensure that the resources and training facilities in clinical placements are sufficient to meet the need.

The Royal College of Nursing continues to express its concern over the lack of investment made into the community nursing workforce. A particular concern is the problem of the ageing nursing workforce, as 27 per cent of nurses working in community services within the UK are aged over 50. Over the next 10 years around 180,000 nurses will be eligible for retirement, leaving a huge hole in the workforce which, at current levels of commissioning, will not be met by future recruits. There are concerns that the problem will be magnified through the current period of financial constraints by recruitment freezes and the deletion of posts as a result of efficiency savings. There has also been evidence of an active reduction in student places being commissioned, despite a record number of applications to enter the nursing profession. This, it says, is a great disappointment and a blow to all that has been done to improve the attractiveness of nursing as a career.

The leadership skills required are of paramount importance and it is through people rather than policies that change can be effected. The challenges of overcoming the barriers between various services are enormous but the opportunity to grow community services must not be lost. Just as my noble friend mentioned, it takes time to break through the barriers and that cannot be rushed. Certainly, in my experience of leading and managing a project relocating 1,500 and then a further 1,200 learning disability patients from two large hospitals, it took 10 years to ensure that every patient was individually assessed, relocated according to their needs and placed into the most appropriate accommodation. That involved seven London boroughs and two county councils—none of which was keen to take back its residents—while ensuring that staff were appropriately trained to care for residents in the community, which was completely different from being within the large hospital and a big culture change for them. There were relatives reluctant about their relatives transferring from the safe environment provided by the large hospital to an open community and there was the receiving communities’ reluctance to receive learning disability clients.

While there was an overall strategy accompanied by a critical path analysis setting target dates, that project really required hours of careful negotiation through the barriers to result in a changed culture—one providing a more meaningful style of life for clients in a safe environment, while delivering high-quality care and management. Managing such an innovative project, as with those that we have heard described this afternoon, was certainly a huge learning curve for me—and, I am sure, for others. I believe that there is an urgent need for nurses and all healthcare professionals to gain the necessary leadership skills to be equipped to meet the challenges and opportunities of the future’s reconfigured community services.

16:05

[Baroness Thornton]

My Lords, this is an interesting subject for debate, as the debate has proved. Learning the lessons of the past 10 years at the moment when great change is about to be unleashed on the whole way in which healthcare is delivered in the UK seems appropriate, and I congratulate the noble Lord, Lord Mawson, on his usual entrepreneurship in the timing of this debate and the passion that he brings to the issues of innovation in providing public services—in this case, healthcare—as well as his hopes for less bureaucracy, less political change but not, I hope, less accountability. The noble Lord has been making this kind of wonderful speech for as long as I have known him. Rightly, he blames bureaucracy and politicians in his passion to roll out the models that he knows so well and that work so well. As he knows, I have a great commitment to social enterprise and entrepreneurship, but I think that he needs to give some credit where it is due about the progress of the past 10 years.

I remind the House that some progress has been made. I should like to look at two issues—the LIFT programme and the development of social enterprise in the past 10 years. The LIFT programme, delivered through community health partnership, is there to create, invest in and deliver innovative ways in which to improve health and local authority services. I know that the noble Lord, Lord Mawson, is familiar with the LIFT programme and has tales to tell about the difficulties of this bit of the bureaucracy. But it is there to deliver and provide clean, modern, purpose-built premises for health and local authority services in England. The reason why the programme is so important is because 90 per cent of patient contact with the NHS occurs in general practice. The research shows that primary care in the inner cities, where healthcare need is the greatest, may have suffered from a disproportionately high number of substandard premises in primary healthcare. That is why we instituted the LIFT programme. We knew that the condition and functionality of existing primary care estate was variable, with current facilities not meeting patients’ expectations and quality and access often being below an acceptable standard—and, therefore, service development sometimes very severely hampered by the limitations of the premises.

As a Government, we made an investment in primary and social healthcare facilities. We made it a priority in inner-city areas. It was clear to us that new buildings were required to provide people with modern, integrated primary care services. When we came to power, there is no doubt that the creation of new facilities was fragmented and piecemeal. Developments tended to be small scale and focused on more affluent areas; they tended not to integrate social care at all. The landscape has been transformed in the past 10 years. If I add to this the review done by my noble friend Lord Darzi, it is clear that we have made some progress.

I shall mention some of these outcomes and particularly draw them to the attention of the noble Lord, Lord Mawson. He said that he was tired of words and no delivery. Well, there has been a huge amount of delivery—in fact, £2.2 billion worth of delivery of new schemes. I take for example the centre at Church Road, Manor Park in Newham, which the noble Lord may be familiar with. It brought together three GP practices and contains district nursing as well as health visitors, dentistry, pharmacy and many diagnostic services. Then there is the Thurnscoe primary care centre in Barnsley, which has, among other things, eight GPs and traditional primary care services; it is able to do blood tests, ultrasound scans and minor procedures, which means shorter hospital waiting times. It also includes an ICT training suite, a GP training room, an audiology clinic, a podiatry clinic, district nursing and physiotherapy.

The one that I like best is the Kenton Resource Centre in Newcastle, which was built on the site of an old clinic on Hillsview Avenue. It has a new health facility, including the relocated GP practice, but it also includes community health professionals, Newcastle City Council and voluntary services, a local customer centre, which provides housing and benefit advice, a Newcastle City Council library, which serves three neighbouring districts, and a Northumbria Police office for local beat officers.

I could go on. In fact, the most recent centre was opened last week in Dudley—the new multimillion-pound state-of-the-art Brierley Hill centre. Therefore, I think that we can say that we have been delivering local community centres in the last 10 years, but I ask the Minister what the fate of the programme will be. How will it fare in the reconfiguration of the NHS that we are told is on its way?

Let us turn to social enterprise. I declare an interest as a serial offender in social enterprise. I have spoken many times in your Lordships’ House about the development of social enterprise and I have sponsored things such as the community interest companies Bill. I think that it is worth saying for the record that social enterprise is a business whose objectives are primarily social and whose profits are reinvested back into its services for the community, with no financial commitments to shareholders or owners—it is free to use its surplus income to invest in its operations to make them as efficient and effective as possible. Well known social enterprises include Turning Point, the Eden Project and the Big Issue.

The Department of Health has been promoting social enterprises through the initiatives that the Labour Government took, as we saw the advantages of them for patients and service users. We instituted the right to request as part of our broader vision for the NHS. I know that the first phase of the right to request has been enacted and I think that the second phase is about to be enacted, but I should like confirmation of that from the Minister. I should like to know what will happen to the social enterprise investment fund and to the right to request.

I should specifically like to know from the Minister what will happen to contracting, although he may not be able to give me an answer right now. The Labour Government made a commitment through the department that, when a social enterprise had been established in the health service, had gone through the right to request and was contracting for services, that enterprise would have a three-year or possibly a five-year contract, which would be guaranteed once it had gone through the whole process. Will that continue under the new regime? If the Government are serious about developing social enterprises to deliver primary healthcare and other services within the health service, a contract of three to five years will be vital for those businesses.

The noble Lord, Lord Mawson, talked about the Bromley by Bow Centre, which is a tremendous achievement. I should like to mention the Big Life centres. The Big Life is based in Manchester. It grew out of the Big Issue and works with people completely cut off from health, housing and employment services. There are now eight or 10 centres providing holistic services to the communities in which they are based. The Kath Locke Centre combines the best in conventional NHS healthcare with complementary therapies. It is well built and a good place to relax, and is extremely well used by its local community.

The Big Life Group issued a manifesto for the last general election, which I commend to the Minister. It states:

“We believe, developing a market in the NHS has really only meant opening up to large private sector companies and has largely missed the opportunity to bring in innovation through the social enterprise sector”.

I do not agree completely with that: it may be as unfair as some of the comments made by the noble Lord, Lord Mawson. However, the Big Life Group may have a point. We as a Government did not succeed as much as I wish we had. The challenge is now there for the coalition Government. If they are serious about having an innovative marketplace, they must address the issues raised by organisations like the Bromley by Bow Centre and the Big Life Group.

I agree with the noble Lord, Lord Mawson, that the department must encourage more entrepreneurship. Like him, I have been frustrated by slow progress across the piece. As the founding chair of the Social Enterprise Coalition some 10 years ago, I think we should blow our own trumpet. Where there was one Bromley by Bow, there are now many. Social enterprise was mentioned in every party manifesto, and is now part of the coalition Government's programme. We have made great progress. However, there are still huge challenges.

I have some questions for the Minister. It seems that in two years’ time, £60 billion of NHS funding might be funded through local commissioning, as the noble Lord, Lord Crisp, mentioned. What will happen to these schemes and programmes if this reconfiguration of the NHS is going to be so profound? How will the Bromley by Bows and the Big Life centres be developed under those circumstances? How will this entrepreneurship be taken into account in the new commissioning scheme? The noble Baroness, Lady Finlay, made a valid and wise point: the rush to change might jeopardise what has already been achieved through partnership and innovation. I agree with the noble Lord, Lord Crisp, that we do not want to lose some wonderful examples of PCT innovation in the forthcoming reorganisation. How will the coalition Government build on the platform that we created—or do they intend to dismantle the platform, with all the risks that go with that?

16:17

[The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)]

My Lords, I begin by expressing my gratitude to the noble Lord, Lord Mawson, for the opportunity to reflect on the changes to primary care over the past decade. Perhaps I should start by confirming the basic principle that the Government will uphold the guiding values of the NHS; that it should be available to all, free at the point of need and based on need and not ability to pay.

For more than 60 years, our system of primary care—the local family doctor—has been the bedrock of the health service. When we are ill, our GP is our first and often only port of call. They are the prescriber, the referrer and the gatekeeper to the vast and often complex labyrinth that is the NHS. Few things are as local as your GP practice. By definition, GPs are of the community and perfectly placed to reflect and respond to the needs of the community. The problem that they face now is that they serve two masters; the patients whom they see every day and the targets imposed from above. However, we believe that, freed from central control, incredible things are possible, as we can see from the rise of the social entrepreneur.

Earlier this month, my right honourable friend the Secretary of State visited the extraordinary Bromley by Bow Centre, of which the noble Lord is the founder and president. Based in one of the most deprived parts of the country, it demonstrates what can be achieved with vision, determination and commitment. It helps people to overcome poor health and unhealthy lifestyles, to learn new skills, to find work and to create an enterprising community. It has been an inspiration to many in Bow and it is an inspiration to this Government.

The noble Lord, Lord Mawson, is right. By responding to local people and by being led by them, the Bromley by Bow Centre and other social enterprises are transforming communities in a way that the state cannot. This is the big society in action. Far from supporting them, however, the state has too often acted as a barrier to social entrepreneurs, limiting what is possible. This needs to change.

A damaging recent development has been the introduction of “preferred provider”; in effect, preferring adequate care delivered directly by NHS organisations over excellent care provided by others. We will encourage “any willing provider” to compete to provide the best outcomes for patients. We will give public-sector workers the right to form employee-owned co-operatives so that they can then bid for and deliver services themselves. We will support the creation and expansion of mutual organisations, co-operatives, charities and social enterprises. These will have a place, above all, in the provision of community services, with the quality of those services driven by innovative approaches to delivery.

Rather than preventing social renewal, government should be a catalyst to encourage and galvanise it; “putting the wind in people’s sails”, as the noble Lord, Lord Mawson, put it. As he said, there are some excellent examples of where the state already does this without working in silence. In Southend-on-Sea, the St Luke’s Healthy Living Centre, in partnership with a local primary school, local residents and a wide range of grassroots representatives, provides counselling services, an allotment and food co-operative, advice services and a business support unit. Another social enterprise is Open Door in Grimsby. Open Door works in partnership with local public services, voluntary organisations and Santander bank. Most of all, however, it works with those it supports—the homeless, drug users, refugees—to give them the help they want rather than the help that others assume they need. Both have enjoyed the support of the Department of Health’s £100 million Social Enterprise Investment Fund, one practical example of where the state can help. The noble Lord, Lord Crisp, mentioned the work being done by some PCTs under the triple aim barrier. Like him, I commend those initiatives.

The crucial thing is what is delivered—the clinical outcomes and the benefits to patients and residents—not who delivers it. As the noble Lord, Lord Mawson, said, it is about doing, not just talking. This is all part of a massive redistribution of power and control away from the centre to individuals and local communities.

While at the Bromley by Bow Centre, the Secretary of State described our approach to healthcare. These principles are not plucked from thin air but, rather, are garnered from the experience of those parts of the NHS that already deliver truly excellent care. First and foremost, because decisions that include the patient lead to better clinical outcomes, we will place the patient at the heart of everything the NHS does. As the Secretary of State put it, there will be,

“no decision about me, without me”.

Secondly, because what matters most to people is that they receive the very best quality of care, not that their hospital can jump through bureaucratic hoops, the NHS will focus on constantly improving clinical outcomes. We will hold the NHS to account for what it achieves, not how it achieves it.

Thirdly, because there is a limit to the improvements that can be driven from the top down, and we have long ago reached that limit, we will empower professionals. Over the past decade, the NHS has been showered with money, which is marvellous. However, it has also been drowned in red tape and bureaucracy. The Government intend to set the NHS free, not shackle it with centrally imposed process-based targets.

Fourthly, preventing disease will be as important as curing it. What has really improved the nation’s health? Is it the National Health Service? Of course it is. Mass immunisation programmes and more recent things, such as the smoking ban, have also saved lives and helped well-being. Beyond a narrow focus on health, improvements in housing and sanitation have been just as important. Health cannot be placed in a silo. That is why public health will play a significantly greater role.

Fifthly, people do not differentiate between healthcare and social care—they just want help. Better social care can often prevent the need for expensive healthcare. For example, fitting a hand rail costing £70 can prevent a fall that would require a hip operation costing £7,000. Therefore, we must properly integrate health and social care, especially if we are to deal with the effects of an ageing population. These are the principles that will underpin our approach to healthcare, but to improve health outcomes we must bring these principles to life.

The Quality and Outcomes Framework initially helped to raise standards, especially in more deprived areas. However, it did so at significant cost and the improvements have now stalled. I was in considerable sympathy with much of what the noble Lord, Lord Rea, said about this. We will reform the QOF to reward GPs for improving health outcomes. We will also discuss with the profession how patients can help to shape the care they receive. We will also look again at the GP contract. Taxpayers must get value for money in return for the massive investment that they have made in primary care, and the contract must properly reflect and reward what we are asking GPs to do.

Whoever provides health services, high quality commissioning is essential and should be done as closely to the patient as possible. GPs and their primary care colleagues are in the best position to know what services their patients need and will have the power to commission them. In this way, they will also take ownership of the financial implications of their decisions, leading to better value for money. That is not something that they can do in the fullest sense at the moment. This requires leadership. As commissioners, GPs and their colleagues will become the leaders of a more autonomous NHS, supported nationally by a new NHS commissioning board.

Twenty-four-hour urgent care is currently unco-ordinated and of variable quality. We plan to overhaul that system. Nor should we overlook the role of the pharmacists. Every day millions of people visit their local pharmacy. With the right incentives and support, pharmacies can deliver both clinical and public health services. We will also build on the progress that has already been made in recent years.

The noble Lord, Lord Rea, in his excellent speech, pointed to the differential funding of primary care trusts and urged the Government to take account of differing health needs and deprivation. The noble Lord raises an important point. We are committed to ensuring a fair allocation of resources to the new GP commissioning consortium when it is formed. We also want allocations to be made based on the health needs of the registered population for these groups, so that those with the greatest need have their fair share of resources.

The noble Lord referred to the document produced by the Royal College of General Practitioners, which proposes GPs’ practices working together in a federation to support each other in the provision of care to serve the local population. These are sensible proposals and we want to build on them, for GPs not only to provide a wider range of care and services to their patients, but to commission wider health and care services for the population. It is right that GPs’ practices themselves decide on these federations. We are not prescribing those nationally from the centre.

This very much brings us to the concerns voiced by the noble Lord, Lord Crisp, and the noble Baroness, Lady Finlay, relating to the varying capabilities of GPs and how those who feel less confident and keen about commissioning can be supported. It is very much about GP collaboration. Everything that the noble Baroness said about this was absolutely right. The new GP commissioning system that we are proposing will be led by groups of doctors at a local level and overseen nationally by an independent NHS commissioning board. This is not about trying to turn GPs into managers; it is about placing the financial power to change health services in the hands of those NHS professionals whom the public most trust. Giving more responsibility and control over commissioning budgets should help GPs consider the financial consequences of their clinical decisions. This will lead to reducing waste and bureaucracy. Much will depend on the size of GP consortia, but I am confident that the necessary leadership will emerge from those consortia to facilitate the spread of best practice.

The noble Lord, Lord Crisp, sought clarification on the arrangements and the roles of GPs in commissioning services from primary care. We will be bringing forward proposals for change to the roles and responsibilities of GPs before the summer through a White Paper. Shortly after that we intend to publish a consultation document on GP commissioning arrangements. That consultation document will set out in a lot more detail the roles and responsibilities that we are proposing for organisations. We will welcome views and comments from all interested parties.

The noble Baroness, Lady Finlay, referred to the unintended consequences of change, the challenges posed by patients with complex conditions and the requirement to treat those patients in the right settings and along the right care pathway. She is spot on in all that she said. She referred specifically to payment by results acting as a barrier to integrated care. The work that we are doing to underpin our drive to an outcomes-based model of commissioning includes work to refine the tariff to embrace long-term conditions, co-morbidities and complex cases. This is a major undertaking but it is essential that we get there.

My noble friend Lord Alderdice remarked that there is a limit to managerialism. I am right with him on that. The Government are committed to a patient-led NHS, strengthening patient choice and patients’ management of their own care. That will involve pro-active, preventive and personalised care planning with a focus on shared decision-making. That will apply especially to the care of people with long-term conditions, a theme pursued very powerfully by the noble Lord, Lord Crisp, and one which brings us back to the wise advice of the noble Baroness, Lady Finlay, on the management of change. We are developing a national support programme aimed at accelerating improved long-term care management. The aim is to realise the benefits of improved quality and productivity more rapidly through a large-scale change management programme that will disseminate good practice.

Front-line staff are, of course, crucial to the delivery of personalised care planning. More needs to be done to support the wider culture change that empowers people with long-term conditions to take more control so we plan to support the workforce with guidance and training resources. There is a clear message here: personalised care planning underpins good management of long-term conditions. The care planning process is about involving people with long-term conditions in discussions about their own goals and outcomes for the way they want to live their lives and then agreeing a plan with them on how their care will be managed. It is about addressing their full range of needs: personal, social, economic, educational, mental health and others. That is the way that we will empower people and get them to understand what choice really means.

The noble Baroness, Lady Emerton, in a speech to which I cannot possibly do sufficient justice in the time available, referred to the essential role of community nurses. We are determined to address health inequalities and improve public health. Nurses are key to this, as are health visitors working with families, communities and Sure Start and school nurses working with school populations. They will make skilled and significant contributions to this. We are committed to increasing the number of health visitors in the workforce to provide the best health, well-being and support services for all children and families and to improve services for those who need additional support. The noble Baroness was right in all that she said about the skill set of nurses. Health visitors in particular combine a nursing or midwifery and public health education which gives them the ability to put together a medical and psychosocial knowledge with an understanding of the health system. That is a unique strength.

The noble Baroness, Lady Emerton, referred to the challenges to the nursing workforce and its role in providing community services. She will know that four years ago the Modernising Nursing Careers initiative was launched jointly by the four UK chief nursing officers, with clear priorities. Those priorities were developed to ensure that nursing careers supported health reforms. The programme developed national tools and levers to enable local transformation of the nursing workforce. We will follow that theme.

The noble Baroness, Lady Finlay, referred to a 24/7 service. We are committed to providing universal access to high-quality urgent care, whereby people can have the care that they need whenever they need it. I anticipate that we will shortly make further announcements on that theme.

The noble Baroness, Lady Thornton, asked about the LIFT initiative. I agree with her that much good has emanated from it, and it has the potential to continue delivering. There are a possible 144 new schemes in the pipeline, worth £1.2 billion in total. There are also two new express LIFT companies in procurement that are due to become operational in this financial year. She also asked about social enterprise. I hope that I have said enough to convince her that we are serious about this. A number of initiatives, including using funds from dormant bank accounts to establish a big society bank, will be helpful. This is also about training. We need a new generation of community organisers to support the creation of neighbourhood groups across the UK, especially in the most deprived areas.

My noble friend Lord Colwyn moved us to the subject of dentistry and specifically the regulation of the dental profession. Dental practices will be required to register with the CQC from April next year—the date set by the Health and Social Care Act regulations. I recognise the fear of overregulation that dentists may have and I am well aware of the importance of good morale. My clear understanding from the CQC is that it will look at evidence that outcomes are being met, rather than adopting a tick-box approach to compliance. Where possible, the CQC will use existing information held, for example, by the Dental Reference Service, to minimise the demands on dentists. The CQC is agreeing a memorandum of understanding with the General Dental Council. Perhaps I should point out that plans to include in the registration system primary care providers such as dentists were consulted upon in spring 2008, and the majority of respondents supported the decision—including the British Dental Association.

In view of the shortage of time, I will write to my noble friend about the HTM 01-05 guidance, because there is rather a lot to say about that. I have convinced myself in the past fortnight that we are on the right path. I know that there is a lot of concern among dentists about cost, but I believe and have been persuaded that the guidance is the correct way to go.

Primary care is the bedrock of the NHS. It provides some excellent services but is capable of so much more. The balance of power within the NHS will undergo a fundamental shift—away from central control and away from restricted provision. The noble Lord, Lord Mawson, asked: who will lead? It is probably obvious from what I have said that, above all, we want clinicians and professionals rather than the politicians to lead. My noble friend Lord Alderdice spoke powerfully about that. We will give the NHS the freedom to innovate and a mandate to achieve excellence. We need a new can-do and should-do attitude. We need a dramatic improvement in productivity and efficiency. Most important of all, we need to see a significant improvement in the health and well-being of patients.

16:39

[Lord Mawson]

My Lords, I have found all the contributions to this debate particularly helpful. In many ways, the issues raised provide the raw material on which we all need to work as we move forward to the next stage of the development of primary and community care. I am only sad that there is not more time to debate some of those issues, but I want to make just a couple of points.

I agree with the noble Baroness, Lady Thornton, about the role of LIFT. In the early days, I tried to persuade GPs and others all over the country to get behind LIFT. It has created a very different kind of world. Indeed, my colleagues in east London won the first £35 million contract and began to demonstrate how it might work. My plea to the Government is that they should stay with LIFT, as I think they will. I suspect that, as a structure, it is achieving only 55 per cent of what could be achieved and that it could do a great deal more, as I pointed out earlier.

Some of the points that I made reflected conversations that I have had with colleagues who run the Big Life Company and with others with whom I am very much in touch. We are all aware that we have come a very long way but that we need to go further. That is the key point.

I thank the noble Earl, Lord Howe, for clarifying some of the issues that I raised. There is a great deal to do, and a lot of practical details that underlie this debate need to be addressed. However, I welcome what I have heard and am certainly willing to play my part in helping some of this thinking to take root.

Finally, if I have any further advice for the Minister, it is the following. First, as I know he is doing, he should decide what his vision for the future of primary and community care is and stick to it. At a time of limited financial resources, I encourage him to embrace the integrated approach to health that I have been describing. It is about more than just the medical profession. Not only does it make good health sense for patients and put flesh on the bones of the concept of the big society at a local level, but it may well enable the Government to get more for less from the limited resources that are now available to them.

Secondly, in deciding their vision, the Government should also take great effort to understand the practical details of how it will work in practice in different contexts within the United Kingdom—particularly in some of our more challenging areas. I very much agree with my noble friend Lady Finlay that we should be careful about unintended consequences. For example, the policy to create free schools, which I welcome, may have real benefits in some affluent areas of the country but may well create social havoc in multicultural areas of London, with which I am very familiar.

Thirdly, the Government should make sure that the people they ask to run these programmes are practical, businesslike people with in-depth experience.

As an entrepreneur, I say that we should back success and let 1,000 flowers bloom. I look forward, together with others, to seeing how the direction of travel develops in the months ahead. In the mean time, I beg leave to withdraw the Motion.

Motion withdrawn.

House adjourned at 4.43 pm.