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Chris Evans (Islwyn) (Lab/Co-op)
1. What recent discussions he has had with his EU counterparts on Syria.
The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)
I speak regularly with my EU colleagues about Syria—most recently at the EU Foreign Affairs Council on 14 November, where we agreed a further round of sanctions on Syria.
Chris Evans
This week, we have heard Turkey call for President Assad to step down. Will the Foreign Secretary give us an update on how secure President Assad’s position is in Syria?
Mr Hague
It is not very secure. We absolutely agree with the Turkish Government. Indeed, my right hon. Friend the Prime Minister called in August for President Assad to step aside. We believe that the regime has lost all legitimacy, certainly in the eyes of the world, but clearly in the eyes of millions of its own people as well. So the regime should now understand that it has no future, that democracy should be introduced in Syria, and the regime should leave office.
Mr Philip Hollobone (Kettering) (Con)
What conclusions have the Foreign Secretary and his EU counterparts reached on Iran’s involvement in propping up the Syrian regime?
Mr Hague
There is no doubt that Iran has been involved in trying to prop up the Syrian regime. Iran is a country that has supported popular revolution in other parts of the middle east but then has been happy to collude in trying to repress such revolution in Syria—its ally. It has helped with technical equipment, expertise and advice on how to help the regime to deal with the situation, and it shows a hypocritical approach to events in the middle east.
Emma Reynolds (Wolverhampton North East) (Lab)
Turkey is a vital ally of the United Kingdom and, indeed, the European Union. What discussions did the Prime Minister have with the Turkish President last week on what further specific measures Turkey can take to exert additional pressure on the Syrian Government?
Mr Hague
We discussed this at some length—the Prime Minister with the President—and I discussed it with the Turkish Foreign Minister in the margins of the state visit. We are all working closely—Turkey and the European Union nations—with the Arab League. Turkey is considering a range of measures that it could take on Syria, but, as the hon. Lady knows, the Arab League has led the way at the moment in announcing sanctions. I would not be surprised if further measures now follow from Turkey, on the basis of the discussions that we had last week.
Jo Swinson (East Dunbartonshire) (LD)
I very much welcome the EU sanctions and, indeed, those from the Arab League, particularly in the light of the very grim UN report, showing that Syrian Government forces have killed at least 256 children. Following the recent visit to London by Syrian opposition representatives, what more can the UK and our EU partners do to support the development of a cohesive and peaceful political opposition in Syria?
Mr Hague
Cohesive and peaceful are two very important words. I met two separate groupings of the Syrian opposition last week: the Syrian National Council and the national co-ordinating body—a different grouping of the opposition. I encouraged them to find a common and cohesive platform together—at this extreme moment in their nation’s history, it is important for them to work together—and to maintain non-violent resistance to the Assad regime, to maintain their support around the world.
Mr David Ruffley (Bury St Edmunds) (Con)
2. What recent representations he has received on the implications for his Department’s policies of economic conditions in the EU.
The Minister for Europe (Mr David Lidington)
I have had a number of recent meetings with representatives of British business who have emphasised the immediate need for eurozone countries to act to restore stability to their currency and the need for the entire European Union to adopt policies to encourage growth and job creation through open markets and less-costly regulation.
Mr Ruffley
Under the treaty on the functioning of the European Union, the financial transaction tax would have to go to the Council of Ministers, which requires unanimity. Will the Minister confirm that Her Majesty’s Government will veto the new Franco-German euro tax that will only damage the City of London?
Mr Lidington
My right hon. Friend the Chancellor of the Exchequer made it quite clear at the most recent ECOFIN meeting that we would reject an EU financial transfer tax, and he was supported in his opposition by 11 other member states.
Mr Wayne David (Caerphilly) (Lab)
Can the Minister tell us what practical actions his Government have taken to encourage our European partners to complete the single European market?
Mr Lidington
I have discussed this in the past two weeks with senior members of the Commission, and I have encouraged them to introduce measures under the Single European Act. Yesterday, in Berlin, other Ministers and I talked to our German counterparts about joint action both to deepen the single market and to reduce the cost of regulations, especially for small and medium-sized businesses.
Mr Peter Bone (Wellingborough) (Con)
What discussions has the Minister had with his continental cousins about the fact that the euro is burning while Brussels is fiddling? Would it not be much better to have an orderly withdrawal from the euro, rather than the crisis that we have at the moment?
Mr Lidington
I think, as my hon. Friend would admit in private, the idea that the eurozone can somehow be dismantled in an orderly manner is rather far-fetched. The collapse of the euro and a prolonged recession in the eurozone would do profound damage to hopes for growth and job creation in the United Kingdom. It is our largest single trading partner.
Mr Douglas Alexander (Paisley and Renfrewshire South) (Lab)
Could the Minister for Europe tell the House how work on the Government’s stated aim of repatriating powers from the European Union is progressing?
Mr Lidington
My right hon. Friend the Prime Minister made it clear to the British people in his Mansion House speech the other week that we need a rebalancing of responsibilities in the European Union, with some things being done, yes, at the centre, but more things being done by member states in future. That work is ongoing.
Mr Alexander
Perhaps the Minister for Europe could be a little more forthcoming. How many staff in the Foreign Office are working full-time on this endeavour, will there be a White Paper on the repatriation of powers, and when, indeed, could the House expect such a publication?
Mr Lidington
I am afraid that the right hon. Gentleman will have to contain his excitement for a little longer. That work is ongoing, and of course, we shall keep Parliament acquainted with progress on it.
Nic Dakin (Scunthorpe) (Lab)
3. What representations he has made to the Chinese Government following recent self-immolations in Tibet.
The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)
The Minister of State, Foreign and Commonwealth Office, my hon. Friend the Member for Taunton Deane (Mr Browne), raised our concerns about the increasing number of self-immolations in Tibetan areas with the Chinese Vice Foreign Minister in Beijing earlier this month.
Mr Hague
We are seriously concerned about recent reports that young monks and nuns in Tibetan areas of Szechuan province have immolated themselves. As I said, we have taken that up with the Chinese Vice Foreign Minister, and with the Chinese embassy in London. We encourage, of course, the resolution of grievances that have led to that situation. We will continue to encourage the Chinese Government to take that constructive approach.
Sir Malcolm Rifkind (Kensington) (Con)
As the Chinese Government have been able to recognise and respect the autonomy of both Hong Kong and Macau in the People’s Republic, should they not allow autonomy for Tibet, to ensure that, within the People’s Republic, its unique culture and identity are properly respected and recognised, and will the Government try to encourage it to do so?
Mr Hague
My right hon. and learned Friend makes a very fair point indeed. As he knows, we recognise Tibet as part of the People’s Republic of China, but we call for meaningful dialogue between the representatives of the Dalai Lama and the Chinese authorities in the interests of autonomy in future. Of course, we always call for respect for human rights.
Martin Horwood (Cheltenham) (LD)
I am sure that the Foreign Secretary welcomed China’s recent recognition of the aspirations and rightful demands of the Syrian people. Does he think that that is a positive development, as China may be beginning to realise that repression does not deliver genuine stability, and it should have the confidence to recognise the aspirations and rightful demands of the Tibetan people, too?
Mr Hague
Such language is positive and I continue to believe, as I said in the House yesterday, that the veto of our proposed UN resolution on Syria by Russia and China was a mistake and did not take into account the legitimate aspirations of the people of Syria. On the question of Tibet, we encourage the meaningful dialogue of which I spoke a moment ago.
Steve Baker (Wycombe) (Con)
4. What assessment he has made of the implications for the governance of Equatorial Guinea of the recent constitutional referendum in that country.
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr Henry Bellingham)
We do not have an ambassador based in Equatorial Guinea, but we have an ambassador based in Cameroon who visits regularly and takes a close interest in developments there. He often raises directly issues such as human rights, good governance and lack of social development. We also raise those issues through the EU and the UN.
Steve Baker
As the Minister knows, hon. Friends and I published an excoriating report after our visit to Equatorial Guinea in the summer. Does he agree that certain principles of good governance, such as democracy, liberty and the rule of law, are universal and eternal?
Mr Bellingham
I agree that those principles are vital and they are ones on which we will focus and put a huge amount of emphasis. I thank my hon. Friend for his report, and I pay tribute to him and his colleagues for their energy and open-mindedness in reporting back to the Foreign Office on that visit.
Mr David Lammy (Tottenham) (Lab)
Can the Minister update the House on the Government’s assessment of growing concern about the position in Malawi—unrest, autocratic rule and real oppression?
Mr Bellingham
I am grateful to the right hon. Gentleman for raising that. Although we are talking about Equatorial Guinea, I was in Zambia recently and had a chance not to visit Malawi, but to have an assessment of what was going on there. We are very concerned indeed about the way in which the Malawi Government evicted our high commissioner, but a high level delegation from Malawi recently came to the Foreign Office and we were able to have candid discussions with them. My right hon. Friend the Foreign Secretary made it clear that there are certain measures that need to be put in place before we resume normal diplomatic relations.
Mr Speaker
The Minister is both well travelled and, as he has just shown, dextrous in his response to questions.
Paul Flynn (Newport West) (Lab)
May we assume from the Minister’s reply that the Government’s policy now is to encourage contacts with countries with records on human rights as despicable as that of Equatorial Guinea, and that hon. Members should accept private invitations for five-star business class visits paid for by the Governments?
Mr Bellingham
We have full diplomatic relations with Equatorial Guinea. We never hold back in telling that Government about our concerns regarding human rights and lack of good governance, and we have made it clear to the Government of Equatorial Guinea that they have a per capita income of $15,000 a year, yet that masks extremes of wealth between the very rich and the very, very poor. I welcome hon. Members going there with an open mind and reporting back to us.
Yvonne Fovargue (Makerfield) (Lab)
5. What recent discussions he has had with his EU counterparts on Iran.
The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)
We worked closely with our EU partners in responding to the International Atomic Energy Agency report about the Iranian nuclear programme, and I hope we will reach further conclusions on Iran at this week’s Foreign Affairs Council.
Yvonne Fovargue
What work are the Government doing to protect the safety and security of Foreign and Commonwealth Office staff in Iran, following the decision this week of Iran’s Parliament to call for drastic cuts in diplomatic ties? Will the Government respond to that with similar action if that call is agreed to by the Guardian Council?
Mr Hague
The hon. Lady is right to raise the issue. The Iranian Parliament voted on Sunday to downgrade relations with the United Kingdom. As she says, the further decision of the Guardian Council is awaited. I have made it clear that if they go ahead with that, we will respond robustly. We will do so in consultation with our European Union partners. There is no Iranian ambassador currently here in London. The embassy is headed by a chargé so we are not able to respond exactly in kind, but we will respond in other ways and we will do so robustly.
Mr John Baron (Basildon and Billericay) (Con)
Given that the latest International Atomic Energy Agency report provides no concrete evidence of a nuclear weapons programme—there is no smoking gun—does the Foreign Secretary accept that implied threats of military force could be counter-productive in that they could rally the people behind the hard-liners and drive whatever programme there is further underground?
Mr Hague
To be clear, the IAEA report of earlier in November speaks of its serious concerns at credible information about Iran’s nuclear weapons programme, so we should be clear about that. As my hon. Friend knows, we are not advocating military action. We are pursuing a twin-track approach of being open to meaningful negotiations but increasing the peaceful and legitimate pressure on Iran through sanctions, and we will continue with that approach.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
I welcome the Government’s newly announced sanctions in response to Iran’s nuclear programme. Ahead of the right hon. Gentleman’s forthcoming meeting with European counterparts in December to discuss the issue, what is he doing to encourage financial institutions across Europe to take action?
Mr Hague
The Government made an important announcement on that a week ago. Last Monday my right hon. Friend the Chancellor announced that the British financial sector is required to sever all financial ties with Iranian banks. Similar action is being taken by the United States and Canada. I expect some other nations to follow suit and, as I mentioned earlier, we are now discussing within the European Union additional measures that will follow shortly.
Jason McCartney (Colne Valley) (Con)
6. What the outcomes were of the Istanbul conference on the future of Afghanistan.
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Alistair Burt)
The principal outcome of the conference, which I attended on behalf of the United Kingdom, was an agreement by Afghanistan’s regional partners on the future of Afghanistan, involving commitments to non-intervention, to the inviolability of its borders and to support Afghan-led efforts on reconciliation and the political process. The group has agreed to meet again in June next year.
Jason McCartney
Given that Pakistan is vital to Afghanistan’s security, how will the Government assess the impact on relationships between Pakistan, Afghanistan and the United States, bearing in mind the tragic incident over the weekend involving NATO forces?
Alistair Burt
It was tragic indeed. My right hon. Friend the Foreign Secretary spoke with the Foreign Secretary of Pakistan on 26 November to convey the United Kingdom’s condolences to the families of those involved and to the armed forces and people of Pakistan. We support an urgent inquiry by the international security assistance force into the circumstances and encourage Pakistan to take part. In the meantime, all parties should do their utmost to rebuild trust and confidence between them and take no action that would make that more difficult.
Meg Munn (Sheffield, Heeley) (Lab/Co-op)
The Minister will recall that I wrote to him a year ago having met a number of Afghan women MPs who were extremely concerned about the future and who regularly put their lives at risk in seeking to represent people in their country. What is he doing to ensure that the rights of women in Afghanistan will be supported in future?
Alistair Burt
If I do not remember the individual letter, I certainly remember the sentiments, which have been echoed by a good number of colleagues over the past few months. Yesterday I received a delegation of non-governmental organisations expressing their concerns about this and a large petition. We have ensured that the Minister for Equalities, my hon. Friend the Member for Hornsey and Wood Green (Lynne Featherstone), the Minister responsible for combating violence against women, will attend the Bonn conference with my right hon. Friend the Foreign Secretary and that commitments to women in Afghanistan will be uppermost in our presentations. It is vital that the situation for women does not go backwards in Afghanistan and that the Government honour their commitment to equality.
Mark Lancaster (Milton Keynes North) (Con)
Will conditions be attached to the withdrawal of our provincial reconstruction team in Helmand, such as an increase in the capacity of provincial government in the region, or will the team simply be withdrawn in line with the removal of combat troops by 2015?
Alistair Burt
We fully expect that the withdrawal of the provincial reconstruction team and those who support it will be in line with the timetable announced. We welcome the fact that further districts of Helmand were included last week in President Karzai’s announcement of a further tranche towards transition. We of course keep the closest watch on conditions on the ground, but so far our assessment is that the timetable will be able to be kept.
Mr John Spellar (Warley) (Lab)
I welcome the Minister’s responses, but this was clearly the precursor to next week’s conference in Bonn on the future of Afghanistan. What are the Government’s objectives for the conference?
Alistair Burt
Our objectives are to fulfil the three themes of the conference: to look at future commitments from the international community to Afghanistan; to support the political process; and to discuss civilian transition in Afghanistan. It is a very important conference and we hope that all parties will be able to attend. It is not a NATO conference, for example, and we hope that it will be possible for Pakistan to send representatives, as its future security is intimately bound up with that of Afghanistan.
Mr Spellar
May I also thank the Minister for his very full response to my hon. Friend the Member for Sheffield, Heeley (Meg Munn) on protecting the significant gains that women have made in Afghanistan? What are the Government doing to ensure that the voices of Afghan women are heard at that conference and in subsequent discussions?
Alistair Burt
I appreciate the right hon. Gentleman’s questions. Civil society in Afghanistan and women’s involvement in it are growing. We have made representations over a lengthy period to the Government of Afghanistan to ensure that their own delegation includes a significant number of women representatives, which it will do, and they will voice their aspirations. Our delegation has also ensured that those issues are well up on the agenda, and it is important that the advances made by women in recent years, including that of 2.5 million girls now going to school, are not knocked backwards.
Alun Michael (Cardiff South and Penarth) (Lab/Co-op)
7. What progress has been made towards establishing a process to resolve the status of Somaliland.
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr Henry Bellingham)
Our position on recognising Somaliland is well known, but of course we understand fully the aspirations of the Somaliland people. The Somali people themselves must decide their future, but in the meantime we urge Somaliland to play a very full role in the Somali peace process. It is for neighbouring countries and the African Union generally to take a lead in responding to any changed political circumstances.
Alun Michael
I understand the position that the Minister has spelt out, but does he agree that everybody, including the transitional federal Government in the south, needs to respect and acknowledge 20 years of relative peace and exemplary democratic development in Somaliland, which means that we need a process that enables Somaliland, as the Minister has suggested, to be a part of the solution to the problems in the horn of Africa?
Mr Bellingham
The Prime Minister has called an international conference on Somalia, which will take place on 23 February, and of course Somaliland will be invited. I recently had a meeting with President Silanyo and extended that invitation to him, and he indicated to us that he may well attend. It would be a very important step forward if Somaliland played a really full role in the Somali peace process.
Tony Baldry (Banbury) (Con)
Will my hon. Friend confirm that, if the Somalilanders take part in next February’s London conference, they will be able to do so without prejudice to their claim for de jure status, and that if they come to London they will be afforded the courtesy of separate talks with him and my right hon. Friend the Foreign Secretary, so that they might put forward in detail why they believe they should be granted de jure status?
Mr Bellingham
Somaliland will certainly be invited, and I hope that it will accept the invitation. It is very important that all the different parts of Somalia attend the conference and play a full role, and we also expect the main Intergovernmental Authority on Development—IGAD—countries and a number of other international players to attend. I simply say to President Silanyo and to Somaliland that we understand their aspirations, which they need to push in such a way that it looks as though they are being constructive in the wider Somali peace process.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
8. What assessment he has made of the risks to regional stability posed by Iran.
The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)
Iran’s nuclear programme and its support for terrorism are serious threats to stability in the middle east. We and many other nations are resolute in our response to those threats, and Iran must show that it is serious about addressing international concerns—or face increasing isolation and pressure.
Jonathan Reynolds
Given Iran’s involvement in the brutal Syrian crackdown, as well as its support for Hezbollah, the threat to Lebanese security and yesterday’s assertion that Egypt could be the new Iran, is the Foreign Secretary concerned that a nuclear-armed Iran would further be able to curtail freedoms in the region?
Mr Hague
Yes, of course. There are many dangers in a nuclear-armed Iran, the prime one being that Iran is a signatory to the non-proliferation treaty, that it would be a great breach of that treaty, and that nuclear proliferation throughout the middle east might then multiply greatly and become a threat to the peace of that region and to the world. The hon. Gentleman is also correct to argue, however, that a nuclear-armed Iran could feel in a stronger position to pursue other activities that were against the peace and the human rights of other countries in the region.
Jack Lopresti (Filton and Bradley Stoke) (Con)
In tackling Iran’s nuclear programme, the international community must present a united front. Russia and China retain extensive trade links with Iran and appear unsupportive of additional UN sanctions. What progress have the Government made on persuading those other states to introduce and to implement robustly tougher sanctions on Iran?
Mr Hague
It is important to recognise that Russia and China have supported all the United Nations Security Council resolutions that have been passed so far on this subject, and that they are part of the so-called E3 plus 3 process of negotiation with Iran. Those countries have certainly played their part in this. It is true, however, that they are not currently in favour of further tightening of the sanctions regime on Iran. We will continue to discuss that with them, but in the meantime we are pursuing tighter sanctions with the United States, Canada and the European Union in the ways that I described earlier.
Mr Nigel Dodds (Belfast North) (DUP)
In the context of sanctions, diplomatic efforts and intergovernmental discussions, does the Foreign Secretary agree that public opinion here in the United Kingdom, and across Europe and the west, is extremely important, and that more needs to be done to explain the exact nature of the threat that Iran poses to the public so that the public come along with whatever we are trying to do?
Mr Hague
Yes, I fully take that point from the right hon. Gentleman. I think there is a very wide recognition of this issue. However, since it is a matter of escalating tension, and certainly of escalating pressure from our point of view over the coming months, we will make every effort to explain its importance and why we cannot simply ignore it.
Robert Halfon (Harlow) (Con)
Is my right hon. Friend aware that Hezbollah continues to be funded both with money and weapons, and that last night it launched four missiles from Lebanon on to Israel? Will he take urgent steps to ensure that the Lebanese Government fulfil United Nations resolution 1701?
Mr Hague
Yes, it is deeply concerning that rocket fire has again taken place from Lebanon into Israel. I believe that it is the first time since October 2009 that we have seen such rocket fire. We strongly condemn any such action that stokes tension in the region, and we urge restraint on all sides.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
9. What recent progress his Department has made in promoting trade within Africa.
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr Henry Bellingham)
When I was in Zambia, Mozambique and Namibia earlier this month, I saw for myself the excellent work that officials from the Foreign and Commonwealth Office and the Department for International Development are undertaking in support of our African partners to improve the conditions for intra-African trade. The African free trade initiative remains the main vehicle for Her Majesty’s Government’s efforts on this important issue.
Chi Onwurah
I thank the Minister for his response. There are still many obstacles to trade in Africa, including transport, trust relationships and intra-regional trade barriers, that countries such as China seem to be much more successful at overcoming. After his Nigerian mission in July, the Prime Minister pledged the UK to work with Nigeria and other partners towards enhanced west African trade integration. Will the Minister update us on progress?
Mr Bellingham
Yes, indeed. The hon. Lady is absolutely right. Trade between sub-Saharan African countries currently stands at 14% of the region’s total trade, compared with Europe’s 60%. That is why DFID is making £160 million available to support the African free trade initiative. We have made good progress in east Africa with the east African trademark and in southern Africa with the Southern African Development Community trademark, and we are now looking to make similar progress in the west of Africa.
Pauline Latham (Mid Derbyshire) (Con)
How often does the Minister take trade delegations out to countries in Africa, and what criteria does he use to select the countries that he goes to and the businesses that go along with him?
Mr Bellingham
My hon. Friend is absolutely right to raise this. We are putting a huge amount of emphasis not only on breaking down these trade barriers but on making sure that UK businesses are fully aware of the opportunities available. UK Trade & Investment is now being not just reactive but very proactive in identifying companies that might be able to get contracts in Africa. It costs five times as much to send a container from Mombasa to Bujumbura as it does to send one from Tokyo to Mombasa.
Helen Jones (Warrington North) (Lab)
10. What recent assessment he has made of the situation in South Kordofan and the Blue Nile states.
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr Henry Bellingham)
We are very concerned about the ongoing violence in South Kordofan and the Blue Nile states. We are working very closely with our international partners to push for an immediate cessation of hostilities, full humanitarian access, and the establishment of an agreed process to address the root causes of violence in both states.
Helen Jones
I am grateful to the Minister for that answer, but given the role that Britain has played in trying to resolve this conflict, will he tell the House what pressure is being brought to bear on Khartoum to end the conflict in both regions, to allow full humanitarian access and to return to the terms of the comprehensive peace agreement?
Mr Bellingham
I had the chance to visit Khartoum in July. I had a meeting with Sudan’s Foreign Minister, at which I made it very clear that the lack of humanitarian access, the lack of progress on the CPA and the action on both sides of sponsoring proxies were completely unacceptable. We also robustly condemned the recent bombing of Yida and Quffa. We need a negotiated political settlement to move this issue forward.
John Howell (Henley) (Con)
11. What assessment he has made of the UK’s relationship with Turkey; and if he will make a statement.
The Minister for Europe (Mr David Lidington)
Turkey is a key partner in trade and investment, and in building international security. Last week’s state visit by President Gul demonstrated the vitality of our bilateral relationship.
John Howell
Economic growth in Turkey was 9% last year and its trade in goods with the UK is expected to reach £9 billion this year. Should not those be clinching factors in ensuring that we have a positive relationship with Turkey, and that the EU does not foolishly turn its back on that country?
Mr Lidington
We strongly support Turkey’s ambitions for EU accession. We think that Turkish membership of the EU would be extremely good news for the single market and for British and wider European business opportunities.
Ann Clwyd (Cynon Valley) (Lab)
When the Turkish Foreign Minister met the Foreign Affairs Committee last week, he brought a representative all-party group of Members of Parliament with him on the delegation. Is that not a good idea? Why does the Foreign Secretary not take a cross-party group of Members of Parliament with him to the Bonn conference on the future of Afghanistan, particularly with regard to the issue of women in Afghanistan?
Mr Lidington
I think that my right hon. Friend the Foreign Secretary can speak with confidence not just on behalf of the Government but for the strong cross-party consensus in this House for a peaceful, constructive and democratic future for Afghanistan.
Mr David Burrowes (Enfield, Southgate) (Con)
Does the Minister agree that a key aspect of the UK’s relationship with Turkey is its responsibility to Cyprus as a guarantor power? Will the Government ensure that the opportunities arising from the exploration of hydrocarbon reserves on the coast of Cyprus are fully respected, and that the resulting benefits for all Cypriots are fully preserved?
Mr Lidington
Like all countries that are signed up to the UN convention on the law of the sea, we support the right of the Republic of Cyprus to exploit its exclusive economic zone. We continually urge the leaders of both communities in Cyprus to work actively towards a settlement.
Mr Andrew Love (Edmonton) (Lab/Co-op)
Further to the Minister’s previous comment, Cyprus would have been high on the Government’s agenda in their discussions with President Gul last week. We have to break the current deadlock in the talks. What more can the Government do to foster that aim? Will it include inviting the President of Cyprus to London?
Mr Lidington
It has not yet been possible to arrive at a date for President Christofias to visit London, but there is no objection in principle to that happening. Our role is to encourage and support the leaders of both communities to work with the Secretary-General of the United Nations to reach a comprehensive settlement. That is in the interests of every community in Cyprus.
Bob Blackman (Harrow East) (Con)
12. What recent assessment he has made of the status of the middle east peace process; and if he will make a statement.
Mr Rob Wilson (Reading East) (Con)
13. What recent assessment he has made of the political situation in Palestine; and if he will make a statement.
The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)
We continue to support the resumption of negotiations on a two-state solution, based on the timetable set out by the Quartet. Political will and leadership are needed from both sides to break the current impasse. We welcome the progress that the Palestinian Authority has made in building the institutions of a functioning state. We continue to call on Israel to revoke its decisions to withhold tax revenues and to accelerate the construction of settlements. We remain concerned about the impact of the restrictions on Gaza.
Bob Blackman
I thank my right hon. Friend for that answer. Does he agree that it is time that the Palestinians returned to meaningful negotiations with the Israeli Government to ensure that there is a proper peaceful settlement, as we would all wish, rather than pursuing admission to the UN?
Mr Hague
It is absolutely time for both sides to return to meaningful negotiations. The framework for that now exists, with the timetable set out by the Quartet at the end of September. Under that timetable, by 26 January both sides are meant to present their own substantive proposals on borders and security. I of course encourage the Palestinians to do that without preconditions, but I also encourage Israel to do so in a decisive and convincing manner.
Mr Hague
We are clear that more needs to be done on Gaza. Israel’s decision to move from a list of 120 permitted goods to a list of specific prohibited items was a positive step, but there has been no fundamental change in the crossings regime or in the economic stagnation of Gaza. We are working alongside our colleagues in the European Union to try to achieve some real changes on the ground, and that means helping Israel to meet its target of reaching pre-2007 levels of exports, with resumed access to traditional markets.
Jeremy Corbyn (Islington North) (Lab)
It is very hard to see how there can be any confidence in Israel’s proposals while the settlements continue, the settler roads and the wall continue to be built, there is not free movement of Palestinians on the west bank, and the encirclement of Gaza continues. Will the Foreign Secretary put real pressure on the Israeli Government not just to stop settlement building but to remove all the settlements from the west bank?
Mr Hague
The Israeli Government are in no doubt about opinion in this country and the opinion of this Government about that. Settlements on occupied land are illegal. We are very clear about that and have condemned recent decisions to accelerate settlement building, and I condemn them again today. That is a mistake by Israel, which does not bring peace any closer or help us arrive at a two-state solution. The right approach for Israel now is to embrace the negotiations of which I have spoken, and to do so in a decisive and generous spirit.
Richard Burden (Birmingham, Northfield) (Lab)
The current situation on negotiations is that the Quartet has asked both sides to put forward proposals on security and borders. The Palestinians have put forward initial proposals, but Israel has failed to do so. If we get to 26 January, the end of that period, and settlements continue to be built and there has been no progress in negotiations, what will the Foreign Secretary’s view be of Palestine’s application for full membership of the United Nations?
Mr Hague
There have been initial proposals from Palestinians, but both sides are required to present more substantive proposals by 26 January. If that does not happen and the Quartet process does not succeed, the peace process will be entering a new crisis and a very troubling and concerning phase. I do not want to anticipate now how we will react to that in future at the United Nations. I set out our current position in my statement of 9 November.
Richard Ottaway (Croydon South) (Con)
In view of the complete lack of trust between Israel and Palestine, we have to dig deep to find common ground between the two sides. Does my right hon. Friend agree that in the short term we should focus on confidence-building measures to provide a platform for the resumption of negotiations in the future?
Mr Hague
Yes, all confidence-building measures will be welcome; indeed, the Quartet and its representative Tony Blair have often worked on them. We would welcome such measures alongside the Quartet process of which I have been speaking, but we still have not seen any such measures in recent times.
John Woodcock (Barrow and Furness) (Lab/Co-op)
Has the Foreign Secretary ruled out accepting that Hamas can be part of any peace process unless and until it signs up to the Quartet principles?
Mr Hague
Hamas rules itself out by its behaviour at the moment, there is no doubt about that. That is the current position. Of course, there is discussion of Palestinian reconciliation. As the hon. Gentleman knows, we talked about that in the House yesterday. We look to a reconciled and new Palestinian Authority to have independent figures in it, to respect non-violence, to be in favour of a two-state solution and to respect previous agreements made by the Palestine Liberation Organisation.
Eric Ollerenshaw (Lancaster and Fleetwood) (Con)
14. What recent assessment he has made of the political situation in Bosnia and Herzegovina.
The Minister for Europe (Mr David Lidington)
We are very concerned about the limited progress that Bosnia and Herzegovina has made over the past year in implementing the reforms necessary for both EU and NATO accession.
Eric Ollerenshaw
Given that we have now had nearly 14 months without the formation of any Government in Bosnia, does my right hon. Friend think that we, neighbouring states or the international community could be doing anything extra before there is very serious economic damage to that country, on top of the political instability?
Mr Lidington
We continue to urge on the leaders of all political parties in Bosnia and Herzegovina the need for urgent progress to establish that state-level Government. I talked about that to EU Special Representative Peter Sørensen and the international community’s representative, Valentin Inzko, a week ago. Every actor with influence on the Balkans needs to work towards greater stability in Bosnia and Herzegovina.
Mr Denis MacShane (Rotherham) (Lab)
Yesterday two German soldiers were shot and wounded by Serb thugs in northern Kosovo. It is a huge problem. Will the Minister and the Foreign Secretary appeal to President Tadic, whether it is in Bosnia and Herzegovina or in Kosovo, to assume responsibility? The proposed talks next week about Serbia joining the EU cannot get under way so long as there is no democratic law-and-order authority in Kosovo—or, indeed, in Bosnia and Herzegovina.
Mr Lidington
I deplore the incident that the right hon. Gentleman described, and I discussed it with my German counterpart yesterday. The Commission’s report on EU enlargement clearly sets out the fact that Serbia needs to address its relations with its neighbours if it is to make progress towards EU accession, as it hopes to do.
Topical Questions
Mr Aidan Burley (Cannock Chase) (Con)
T1. If he will make a statement on his departmental responsibilities.
The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)
Tomorrow and Thursday I will attend the EU Foreign Affairs Council, where we will discuss Egypt, Syria, Yemen and the European neighbourhood policy, and we will also examine the latest developments in the western Balkans and in the middle east peace process.
Mr Burley
In his last middle east statement the Foreign Secretary called on the Israeli Government to make a more decisive offer than any that they have been willing to make in the past. Israel made profound offers during the peace talks, unilaterally withdrew from Gaza and has accepted the Quartet’s peace initiative. What representations has my right hon. Friend made to the Palestinian Authority to make similar genuine efforts towards peace?
Mr Hague
It is very important, as we discussed a moment ago, that both sides embrace the opportunity of negotiations and respond to the Quartet timetable of substantive proposals by 26 January. In my view, that requires Israel to make that decisive offer, but it also requires Palestinians not to set preconditions for entering into such negotiations, and both sides to have the necessary spirit of compromise.
Mr Douglas Alexander (Paisley and Renfrewshire South) (Lab)
I join the Government in deploring the Iranian Government’s recent threats to downgrade diplomatic relations between Iran and the United Kingdom, and I welcome the sanctions imposed by the Chancellor of the Exchequer, which cut all ties with Iranian banks. Will the Foreign Secretary confirm whether those recent measures cover foreign subsidiaries of British banks, and foreign banks operating in the UK?
Mr Hague
The measures apply to the UK financial sector—to credit and financial institutions here in the United Kingdom. They do not, therefore, apply to foreign banks that happen to operate in the United Kingdom. Of course, the necessary defining measures will set that out in detail. The sanctions will be quite far-reaching, particularly as we are joining the United States and Canada in the measures, and I expect other countries to join in as well.
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
T2. Does my right hon. Friend agree that the European Union has centralised too much power, and that it should be one of the Government’s stated aims to return powers and competences to London from Brussels as soon as possible?
Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)
T3. During the visit of President Santos of Colombia, did we, the British Government, make representations about the appalling human rights situation in that country, particularly the attacks on and killings of human rights defenders? If so, did he give a concrete response?
Mr Hague
Yes, I can assure the right hon. Gentleman that we raised those issues. I raised them myself with President Santos at my meeting with him last week. The Colombian Government are well aware of opinion in this country about those issues. However, it is fair to point out that President Santos’s Government are very clear about their commitment to human rights and have made a renewed, much stronger, commitment in Colombia to their observance in that country. I believe in his Government’s sincerity and their commitment to dealing with those issues.
Mr Rob Wilson (Reading East) (Con)
T7. As small businesses in my constituency are keen to export goods and services to new markets, what is the Foreign Office doing to develop business and trade opportunities overseas?
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr Henry Bellingham)
UK Trade & Investment is reinvigorating its efforts not just to increase foreign direct investment in the UK but to encourage firms to export all round the world. That is one reason why the Foreign Office has gone ahead with its network shift, so we have 50 new people in China, for example, and we have new missions including four new embassies in Africa.
Robert Flello (Stoke-on-Trent South) (Lab)
T4. I heard what the Secretary of State said about the commitment by President Santos on human rights abuses in Colombia. May I press the Foreign Secretary on that? Before we go ahead with programmes such as “Britain open for business” and others that support commerce between the two countries, will he ensure that, as far as possible, there are not only binding commitments but observed improvements?
Mr Hague
Yes, there are already observed improvements in the behaviour and performance of the Colombian authorities in this regard. The UK and Colombia signed a joint statement on human rights during the president’s visit, so we never underestimate the importance of this issue. Our strong engagement with Colombia and our commitment to strong bilateral relations with it are part of encouraging the continued improvement in human rights observance by the Colombian Government. These strategies fit together.
Caroline Dinenage (Gosport) (Con)
What does my right hon. Friend see as the political implications of recent events in Egypt?
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Alistair Burt)
My right hon. Friend has made repeated requests of the Egyptian authorities that they should announce a timetable for a rapid move from military to civilian rule. To that extent the elections yesterday, and the pride with which a huge number of people took part in them, are a very important step in the process. We wish it well, and we wish to see the transition to civilian rule move as quickly as possible.
Alun Michael (Cardiff South and Penarth) (Lab/Co-op)
T5. What assessment have Ministers made of the current political situation in Moldova, especially in view of the news of a delay in electing a new president?
The Minister for Europe (Mr David Lidington)
The further delay in electing a new president is dismaying, but we welcome the fact that the 5 plus 2 talks are due to commence formally again very soon. It is in the interests of the whole of Europe for Moldova to move as swiftly as possible towards entrenching democracy, human rights and the rule of law.
Tim Farron (Westmorland and Lonsdale) (LD)
Will my right hon. Friend act urgently to ensure that much more humanitarian aid reaches the Syrian refugees currently in Lebanon, and will he also act to bring about an international arms embargo covering all UN states to ensure that Syria is not armed further?
Mr Hague
We are certainly assisting: Ministers at the Department for International Development have committed a sum of £20 million to support international organisations helping with the relief of humanitarian suffering in or around Syria. My hon. Friend will understand that humanitarian access in Syria is one of the great problems, because of the appalling behaviour of the regime, which means that we are not able to get that help to all the people who want it. Syria should certainly no longer be purchasing any arms from any EU country.
Graham Jones (Hyndburn) (Lab)
T6. At the end of October the Foreign Secretary announced plans to put guards on merchant vessels. Yesterday he said that action would be taken briskly, but did not confirm a time scale. [Interruption.] Will he today confirm what has happened since October, especially with regard to the establishment of procedures, protocols and various rules? When can we expect to see the pledge fulfilled? [Interruption.]
Mr Speaker
Order. I understand that the House is excited, but I am sure that when the Foreign Secretary traverses the globe his statements are greeted in respectful silence. It would be magnificent if that could happen here as well.
Mr Hague
Yes, that is universally the case, Mr Speaker—particularly with announcements on tackling piracy, which the hon. Gentleman asked about. The Department for Transport has, in consultation with the shipping industry, produced national guidance for maritime security contractors. He may be happy to learn that this is due to be announced and published later this week. The regulation will require such companies to comply with DFT guidance and to apply to the Home Office for licence to carry firearms. This is an important change in our policy with regard to tackling piracy, and it will soon be able to take effect.
Karl MᶜCartney (Lincoln) (Con)
Does my right hon. Friend agree that we should use our presidency of the Council of Europe to push through reform of the European Court of Human Rights, so that it does not consider cases that have been properly considered by national courts but concentrates instead on serious and systemic human rights abuses?
Mr Lidington
That is the clear top priority of the British chairmanship of the Council of Europe, which I discussed with members of the Parliamentary Assembly and the secretary-general last Friday.
Mr Frank Roy (Motherwell and Wishaw) (Lab)
The Secretary of State will be aware that there are hundreds of journalists lying in Turkish jails without trial or sentences. Some of them have been there for nearly nine years. When the Secretary of State next meets his Turkish counterpart, will he mention this distasteful situation?
Mr Hague
Yes, Mr Speaker. Human rights are at the core of our foreign policy all over the world. The hon. Gentleman raises an important issue, which we have of course discussed with Turkey. However, as he raises the matter now, I will make a particular point of mentioning it again at our next meeting.
Angie Bray (Ealing Central and Acton) (Con)
What representations did Ministers make to the Turkish President when he was visiting the country recently about continuing human rights abuses in Turkey? Some 70 journalists are currently in prison, which is a worrying trend.
Barry Gardiner (Brent North) (Lab)
The Foreign Secretary will be aware that 90% of the species for which the UK has responsibility reside outside the UK in the overseas territories. They are therefore not the responsibility of the Department for Environment, Food and Rural Affairs but of his Department. Given that that 90% are his responsibility, can he assure the House that he is spending nine times as much as DEFRA on protecting biodiversity?
Mr Bellingham
We had a very successful overseas territories consultative council last week. The hon. Gentleman is absolutely right about the biodiversity issue, and I can assure him that we are putting a huge amount of emphasis on it. We spent £15 million last year on biodiversity and environmental schemes in the overseas territories; they are a key priority of the overseas territories.
Joseph Johnson (Orpington) (Con)
Does the Foreign Secretary want to welcome the announcement by New Delhi on Friday of the partial opening up of the vast Indian retail sector to foreign supermarket groups such as Tesco, which has been a key objective of UK commercial diplomacy for many years?
Mr Hague
Yes, my hon. Friend points to a very important development. We have long advocated the liberalising and the opening up of the Indian economy. This will be vastly beneficial to the people of India and to the growth of trade. We want to see progress made on a free trade agreement between India and the whole of the European Union.
Mark Durkan (Foyle) (SDLP)
Of all the principal concerns and exhortations that the Foreign Secretary has conveyed to the Israeli Government, to which, if any, have they paid most attention?
Mr Hague
I hope, of course, that they will pay attention to the entirety of our representations, and to the strong feeling in this House and across the world that it is important to make a decisive move to reach a two-state solution to help to avoid the future strategic isolation of Israel. It is, therefore, the entirety of our representations that I would urge upon them.
Duncan Hames (Chippenham) (LD)
I share the Foreign Secretary’s concerns about the restrictions on Gaza. He reports that fewer than half of the agreed 15,000 vehicles a month are making it across the border to improve the humanitarian situation there. Most recently, Israel’s Deputy Foreign Minister spoke of further restrictions on energy and even water supplies in Gaza. Will the Foreign Secretary urge the Israeli Government to reject such collective punishments of the people in Gaza?
Alistair Burt
I was in Gaza a few months ago and able to observe the pressures on the state. I visited a United Nations Relief and Works Agency school to see the difficulties there. We will indeed continue to urge Israel to ease the restrictions on goods going in, because it is to the political and economic benefit of Gaza and Israel if that situation is eased.
Joan Ruddock (Lewisham, Deptford) (Lab)
Two thirds of Afghan women think that their lives have improved, but nine tenths fear a return to a Taliban-style Government. When Ministers meet their counterparts in Bonn next week, will they make it clear that Afghan women’s rights must not be traded away in any future peace agreement?
Mr Hague
Yes, this is a very important issue. I shall be leading the UK’s delegation to Bonn next week, and we will underline that point in the make-up of our ministerial team, in everything that we say about the importance of human rights in Afghanistan, and in reiterating what I have said before—that a sustainable peace in Afghanistan will not be achieved without the extensive and wholehearted commitment of the women of Afghanistan.
Nick de Bois (Enfield North) (Con)
During the UK’s presidency of the Council of Europe, will the Foreign Secretary make arrangements for himself and the Prime Minister to visit the island of Cyprus, particularly at this crucial time in the talks?
Mr Hague
Clearly, we are heavily committed during our presidency of the Council of Europe, but my hon. Friend can be sure that we will visit Cyprus, because in the second half of next year it will hold the presidency of the European Union. We will be there, and I shall, of course, attend the regular meetings of Foreign Ministers that take place in whichever country holds the presidency. The answer to his question, therefore, is yes.
John Cryer (Leyton and Wanstead) (Lab)
Does the Foreign Secretary think that getting rid of elected Governments, in any circumstances, is a price worth paying for saving the euro?
Autumn Statement
(12 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Chancellor of the Exchequer (Mr George Osborne)
Let me start by placing squarely before the House of Commons and the British public the economic situation facing our country. Much of Europe now appears to be heading into a recession caused by a chronic lack of confidence in the ability of countries to deal with their debt. We will do whatever it takes to protect Britain from this debt storm while doing all we can—[Interruption.]—all we can to build the foundations of future growth.
Today we set out how we will do that by demonstrating that the country has the will to live within its means and keep interest rates low; by acting to stimulate the supply of money and credit to ensure that those low interest rates are passed on to families and businesses; by matching our determination on the deficit with an active enterprise policy for business and lasting investment in our infrastructure and education so that Britain can pay its way in the future; and at every opportunity by helping families with the cost of living.
The central forecast that we publish today from the independent Office for Budget Responsibility does not predict a recession here in Britain, but it has unsurprisingly revised down its short-term growth prospects for our country, for Europe and for the world. It expects gross domestic product in Britain to grow this year by 0.9% and by 0.7% next year. It then forecasts 2.1% growth in 2013; 2.7% in 2014; followed by 3% in 2015 and 3% again in 2016.
The OBR is clear that this central forecast assumes that
“the euro area finds a way through the current crisis and that policymakers eventually find a solution that delivers sovereign debt sustainability”.
If they do not, the OBR warns that there could be a “much worse outcome” for Britain. I believe that it is right. We hope that this can be averted, but if the rest of Europe heads into recession, it may prove hard to avoid one here in the UK.
We are now undertaking extensive contingency planning to deal with all potential outcomes of the euro crisis. Like the Bank of England and the OECD yesterday, the OBR cites the chilling effect of the current instability as one of the central reasons for the reduction in its growth forecast. I want to thank Robert Chote and his fellow committee members, Stephen Nickell and Graham Parker, and their team for the rigorous work that they have done. Their forecast today demonstrates beyond any doubt their independence, but—[Interruption.] This is an important point for the House. If we accept their numbers, we must also pay heed to their analysis. In addition to the eurozone crisis, the OBR gives two further reasons for the weaker forecasts. The first is what it calls the “external inflation shock”—the result, in its words, of
“unexpected rises in energy prices and global agricultural commodity prices”.
The OBR’s analysis—independent—is that this explains the slow-down in growth in Britain over the past 18 months. Secondly, the independent OBR—[Interruption.]
Mr Speaker
Order. The statement by the Chancellor must be heard, and he should not have to fight to be heard.
Mr Osborne
Secondly, the OBR today has shown new evidence that an even bigger component of the growth that preceded the financial crisis was an unsustainable boom, and that the bust was deeper and had an even greater impact on our economy than previously thought. The result of that analysis is that the OBR has significantly reduced its assumptions about spare capacity in our economy and the trend rate of growth. That increases the OBR’s estimate of the proportion of the deficit that is structural—in other words, the part of the deficit that does not disappear even when the economy recovers. Our debt challenge is therefore even greater than we thought, because the boom was even bigger and the bust even deeper, and the effects will last even longer. Britain has had the highest structural budget deficit of any major economy in the world and the highest deficit in the entire history of our country outside war—and the last Government left it to this Government to sort that mess out.
The OBR’s analysis feeds directly through to borrowing numbers that are falling, but not at the rate that had been forecast. In 2009-10, the last Government were borrowing £156 billion a year. During the first year of this Government, that fell to £137 billion. This year the OBR expects it to fall again, to £127 billion, then to £120 billion next year, followed by £100 billion in 2013-14, £79 billion in 2014-15, then £53 billion in 2015-16 and £24 billion a year by 2016-17. However, I can report that because of the lower market interest rates that we have secured for Britain, debt interest payments over the Parliament are forecast to be £22 billion less than predicted.
The House might also like to know, given the economic events described by the Office for Budget Responsibility, what would have happened to borrowing without the action that this Government have taken. The Treasury today estimates that borrowing by 2014-15 would have been running at well over—[Interruption.]
Mr Speaker
Order. I am sorry, I know that the Chancellor is proceeding, but his statement must be heard. There are strong passions on this subject. There will be plenty of time for people to come in on the back of the statement, but the statement must be heard with a degree of courtesy.
Mr Osborne
The Treasury today estimates that borrowing by 2014-15 would have been running at well over £100 billion a year more and that Britain would have borrowed an additional £100 billion in total over the period. If we had pursued that path, we would now be in the centre of the sovereign debt storm.
The crisis we see unfolding in Europe has not undermined the case for the difficult decisions we have taken; it has made that case stronger. We held our deficit-reduction Budget on our terms last year, not on the market’s terms this year, as so many others have been forced to. In that Budget we set out a tough fiscal mandate: that we would eliminate the current structural deficit over the five-year forecast horizon. We supplemented the mandate with a fixed debt target: that we would get national debt as a proportion of national income falling by 2015-16. To be cautious, I set plans to meet both those budget rules one year early. That headroom has now disappeared, but I am clear that our rules must be adhered to, and I am taking action to ensure that they are. As a result, the OBR’s central projection is that we will meet both the fiscal mandate and the debt target.
The current structural deficit is forecast to fall from 4.6% of GDP this year to become a current structural surplus of 0.5% in five years’ time, and the debt-to-GDP ratio, which is forecast to stand at 67% this year, is now set to peak at 78% in 2014-15 and to be falling by the end of the current Parliament. So borrowing is falling, and debt will come down. It is not happening as quickly as we wished, because of the damage done to our economy by the ongoing financial crisis, but we are set to meet our budget rules, and we are going to see Britain through the debt storm.
There is a suggestion from some in the House that if you spend more, you will borrow less. That is something-for-nothing economics, and the House should know the risks that we would be running. Last April, the absence of a credible deficit plan meant that our country’s credit rating was on negative outlook and our market interest rates were higher than Italy’s; 18 months later, we are the only major western country whose credit rating has improved. Italy’s interest rates are now 7.2%, and what are ours? They are less than 2.5%. Yesterday we were even borrowing money more cheaply than Germany. Those who would put all that at risk by deliberately adding to our deficit must explain this.
Just a 1% rise in our market interest rates would add £10 billion to mortgage bills every year: 1% would mean that the average family with a mortgage would have to pay £1,000 more; 1% would increase the cost of business loans by £7 billion; 1% would force taxpayers to find an extra £21 billion in debt interest payments, much of it going to our foreign creditors. In other words, 1% dwarfs any extra Government spending or tax cut funded by borrowing that people propose today—and that is the cost of just a 1% rise. Italy’s rates have gone up by almost 3% in the last year alone. We will not take this risk with the solvency of the British economy and the security of British families.
The current environment requires us to take further action on debt to ensure that Britain continues to live within its means. This is what we propose to do. First, there is no need to adjust the overall totals set out in the spending review. Taken all together, the measures that I will set out today require no extra borrowing and provide no extra savings across the whole spending review period. Secondly, I am announcing significant savings in current spending to make the fiscal position more sustainable in the medium and long term; but in the short term—over the next three years—we will use these savings to fund capital investments in infrastructure, regional growth and education, as well as help for young people to find work. Every pound spent in this way will be paid for by a pound saved permanently. That includes savings from further restraint on public sector pay.
For some work forces the two-year pay freeze will be coming to an end next spring, and for most it will be coming to an end during 2013. In the current circumstances, the country cannot afford the 2% rise assumed by some Government Departments thereafter, so instead we will set public sector pay awards at an average of 1% for each of the two years after the pay freeze ends. Many people are helped by pay progression—the annual increases in salary grades to which many are entitled even when pay is frozen. That is one of the reasons why public sector pay has risen at twice the rate of private sector pay over the last four years. While I accept that a 1% average rise is tough, it is also fair to those who work to pay the taxes that will fund it. I can also announce that we are asking the independent pay review bodies to consider how public sector pay can be made more responsive to local labour markets, and we will ask them to report back by July next year. This is a significant step towards the creation of a more balanced economy in the regions of our country which does not squeeze out the private sector. Mr Speaker—[Interruption.] Departmental budgets will be adjusted in line with the pay rises I have announced, with the exception of the NHS and school budgets, where the money saved will be retained in order to protect those budgets in real terms. This policy will save over £1 billion in current spending by 2014-15.
The deal we offer on public sector pensions is also fair to both taxpayers and public servants. The reforms are based on the independent report of John Hutton, a former Labour Pensions Secretary, and he says:
“It is hard to imagine a better deal”
than this. I would once again ask the unions why they are damaging our economy at a time like this and putting jobs at risk. I say call off the strikes tomorrow, come back to the table, complete the negotiations and let us agree generous pensions that are affordable to the taxpayer.
Let me turn to other areas of public spending, starting with overseas aid. This Government will stick by the commitments they have made to the poorest people in the world by increasing our international development budget—and the whole House should be proud of the help our country is providing to eradicate disease, save lives and educate children—but the spending plans of the Department for International Development meant that the UK was on course to exceed 0.7% of national income in 2013. That I do not think can be justified and so we are adjusting those plans so we do not overshoot the target.
Turning to welfare payments, the annual increase in the basic state pension is protected by the triple lock introduced by this Government. This guarantees a rise either in line with earnings, prices or 2.5%, whichever is greater. It means that the basic state pension will next April rise by £5.30 to £107.45—the largest ever cash rise in the basic state pension and a commitment of fairness to those who have worked hard all their lives. I wanted to make sure that poorer pensioners did not see a smaller rise in their income, so I can confirm today that we will also uprate the pension credit by £5.35 and pay for that with an increase in the threshold for the savings credit.
I also want to protect those who are not able to work because of their disabilities and those who, through no fault of their own, have lost jobs and are trying to find work, so I can confirm that we will uprate working-age benefits in line with September’s consumer prices index inflation number of 5.2%. That will be a significant boost to the incomes of the poorest, especially when inflation is forecast to be considerably less than that by next April. We will also uprate with prices the disability elements of tax credits, and increase the child element of the child tax credit by £135 in line with inflation too. But we will not uprate the other elements of the working tax credit this coming year; and given the size of the uprating this year, we will no longer go ahead with the additional £110 rise in the child element, over and above inflation, that was planned. By April 2012, the child tax credit will have increased by £390 since the coalition came into power. The best way to support low-income working people is to take them out of tax altogether, and our increases in the income tax personal allowance this year and next will do that for over 1 million people.
Let me turn to future public spending. Today, I am setting expenditure totals for the two years following the end of the spending review period: 2015-16 and 2016-17. Total managed expenditure will fall during that period by 0.9% a year in real terms—the same rate as set out for the existing period of the spending review, with a baseline that excludes the additional investments in infrastructure also announced today. These are large savings and we will set out in future how resources will be allocated between different areas of government.
I am also announcing a measure to control spending which is not for today or next year, or even for the next decade, but it directly addresses the long-term challenge Britain and so many other countries face with an ageing population. Our generation has been warned that the costs of providing decent state pensions are going to become more and more unaffordable unless we take further action.
Let us not leave it to our children to take emergency action to rescue the public finances; let us think ahead and take responsible, sensible steps now. Starting in 2026, we will increase the state pension age from 66 to 67, so that we can go on paying a decent pension to people who are living longer. Australia, America and Germany have all taken similar steps. This will not affect anyone within 14 years of receiving their state pension today. By saving a staggering £59 billion, it will mean a long-term future for the basic state pension.
We are showing a world that is sceptical that democratic western Governments can take tough decisions that Britain will pay its way in the world. That is the first thing that the Government can do in the current environment: keep our interest rates low and protect our country from the worst of the debt storm. But we need to make sure that those low interest rates are available to families and to businesses. It is monetary and credit policy that is, in a debt crisis, the principal and most powerful tool for stimulating demand.
Last month, the Bank of England’s Monetary Policy Committee decided to undertake further quantitative easing, and I have authorised an increase in the ceiling on its asset purchases to £275 billion. This will support demand across the economy, but we must do more to help those small businesses who cannot get access to credit at an affordable price.
We have already extended the last Government’s enterprise finance guarantee scheme, and we are today expanding it to include businesses with annual turnovers of up to £44 million and accrediting new lenders, such as Metro Bank. But this scheme is by itself not nearly ambitious enough and never will be within the constraints of state aid rules, so the Government are launching a major programme of credit easing to help small business. We have set a ceiling of £40 billion. At the same time, I have agreed with Mervyn King that we will reduce by £40 billion the asset purchase facility that the previous Government gave the Bank to buy business loans. Only a small proportion of the facility was ever used. I am publishing my exchange of letters with the Governor today.
We are launching our national loan guarantee scheme. It will work on the simple principle that we use the hard-won low interest rates that the Government can borrow at to reduce the interest rates at which small businesses can borrow. We are using the credibility that we have earned in the international markets to help our domestic economy. New loans and overdrafts to businesses with a turnover of less than £50 million will be eligible for the scheme, so that it stays focused on smaller companies. We expect that it will lead to reductions of 1 percentage point in the rate of interest being charged to these companies, so a business facing a 7% interest rate to get a £5 million loan could instead see its rate reduced to 6% and its interest costs fall by up to £50,000.
We have developed with the Bank of England a mechanism to allocate funding to different banks based on how much they increase both net and gross lending to firms. There will be a clear audit trail to ensure the banks comply, for we will use the experience of the European Investment Bank’s loans for SMEs programme here in the UK to ensure that it works. We are getting state aid approval, so that the national loan guarantee scheme will be up and running in the next few months. Initially, £20 billion-worth of these guarantees will be available over the next two years. Alongside it, we are also launching a £1 billion business finance partnership. That is aimed at Britain’s mid-sized companies—a crucial part of our economy, neglected for too long and now identified by the CBI director general and others as a future source of growth. The Government will invest in funds that lend directly to these businesses, in partnership with other investors such as pension funds and insurance companies. It will give these mid-cap companies a new source of investment outside the traditional banks.
If the business finance partnership takes off, I stand ready to increase its size; and we will develop further partnerships ideas and ideas for new bond issuance to help Britain’s small and medium-sized companies. No Government have attempted anything as ambitious as this before. We will not get every detail perfect first time round, but we do not want to make the best the enemy of the good. With the strain on the financial system increasing, the important thing is to get credit flowing to Britain’s small businesses.
The Government can use the low interest rates that we have secured to help young families, too, who want to buy a home but cannot afford the very large deposits that banks are now demanding. We will use mortgage indemnities to help 100,000 such families to buy newly built homes. We will also help construction firms that cannot get bank finance with a £400 million fund that will kick-start projects that already have planning permission; and we are going to reinvigorate the right to buy. This was one of the greatest social policies of all time. It brought home ownership within the reach of millions of aspiring families. It was slowly and stealthily strangled by the last Government, as discounts were cut and cut again. We will bring it back to life. Families in social housing will be able to buy their own homes at a discount of up to 50%. We will use the receipts to build, for every home purchased, a new additional affordable home—so new homes for families who need them; new home ownership for families who aspire to it; and new jobs in the construction industry, so that we get Britain building. That is what our new right to buy will bring.
In the years leading up to the crash, our economy became dangerously over-dependent on the success of a poorly regulated City of London. Meanwhile, employment by businesses in a region such as the west midlands actually fell. By 2007, the previous Government were relying on finance for £1 in every £8 raised in taxation. That left Britain completely exposed when the banks failed, and I can confirm that, next month, we will publish our response to the report that we commissioned from John Vickers to protect taxpayers better.
It is this Government’s policy to ensure that we remain the home of global banks and that London is the world’s pre-eminent financial centre. That is why we will not agree to the introduction of an EU financial transaction tax. It is not a tax on bankers; it is a tax on people’s pensions. Instead, we have introduced a permanent bank levy to make sure that the banks pay their fair share. I have always said that we wished to raise £2.5 billion each and every year from this levy. To ensure we do that, I need to raise the rate of the levy to 0.088%. That will be effective from l January next year. We will also take action to stop some large firms using complex asset-backed pension funding arrangements to claim double the amount of tax relief that was intended. This will save the Exchequer almost £500 million pounds a year.
Financial services will always be a very important industry for the UK, but we have to help other parts of the private sector in other parts of the country to grow. That means uncongested roads and railways for businesses to move products that cannot be reduced to a screen on a City trading floor. It means providing secure power sources at reasonable prices. It means creating new superfast digital networks for companies across our country. These do not exist today. If we look at what countries such as China or Brazil are building, we see why we risk falling behind the rest of the world. So today we are publishing the national infrastructure plan. For the first time, we are identifying over 500 infrastructure projects that we want to see built over the next decade and beyond: roads, railways, airport capacity, power stations, waste facilities and broadband networks. We are mobilising the finance needed to deliver them, too.
The savings that I have announced in the current Budget have enabled me today to fund, pound for pound, £5 billion of additional public spending on infrastructure over the next three years. New spending by Network Rail, guaranteed by the Government, will bring £1 billion more. We are committing a further £5 billion to future projects in the next spending period, so that the planning can start now. This is public money. By exploring guarantees and letting city mayors borrow against future tax receipts, we are looking for new ways to deploy it. But we need to put to work the many billions of pounds that British people save in British pension funds and get those savings invested in British projects. You could call it British savings for British jobs, Mr Speaker.
The Government have negotiated an agreement with two groups of British pension funds to unlock an additional £20 billion of private investment in modern infrastructure. We can today give the go-ahead around the country to 35 new road and rail schemes that support economic development. In the north-west, we will electrify the trans-Pennine express between Manchester and Leeds, build the Manchester airport and Crewe link roads and work with Merseyside to turn the vision of the Atlantic gateway into reality. In Yorkshire and Humber, there will be new stations and new tram capacity, and we will halve the tolls on the Humber bridge. I want to pay tribute to my hon. Friends the Members for Beverley and Holderness (Mr Stuart) and for Brigg and Goole (Andrew Percy), and indeed other local MPs who have campaigned for years to make this happen. Under this Government it has.
In the north-east, we will bring forward investment on the Tyne and Wear Metro. In the midlands, the A45, the A43, the A453, the Kettering bypass, the Ml and M6 will all be improved. In the south-west, the Bristol link road and the A380 bypass will go ahead. For families across the south-west facing the highest water charges in Britain, the Government will cut the household bills of all South West Water customers by £50 a year. In the east of England, we are going to make immediate improvements to the Al4. In the south-east, we will build a new railway link between Oxford, Milton Keynes and Bedford that will create 12,000 new jobs. We are going to start working on a new crossing of the lower Thames, and we will explore all the options for maintaining the UK’s aviation hub status, with the exception of a third runway at Heathrow.
Here in London, we will work with the Mayor on options for other new river crossings, for example at Silvertown. We are going to support the extension of the Northern line to Battersea, which could bring 25,000 jobs to the area. Devolved Administrations in Scotland, Wales and Northern Ireland will get their Barnett share, and we are working with them to improve the links between our nations, such as the M4 in south Wales and the overnight rail service to north of the border.
This all amounts to a huge commitment to overhauling the physical infrastructure of our nation. We will match it by overhauling the digital infrastructure, too. The Government are funding plans to bring superfast broadband to 90% of homes and businesses across the country, and extend mobile phone coverage to 99% of families. This will help to create a living, economically vibrant countryside.
Our great cities are at the heart of our regional economies, and we will help bring world-leading, superfast broadband and wifi connections to 10 of them, including the capitals of all four nations. We will go ahead with the 22 enterprise zones already announced, plus two further zones in Humber and Lancashire confirmed today. I can also confirm that capital allowances of 100% will be available to encourage manufacturing and other industries into the zones in Liverpool, Sheffield, the Tees valley, Humber and the black country. Those allowances will also be available to the north-eastern enterprise zone, and we will consider extending to the port of Blyth to create new private sector jobs there, too. [Interruption.] This Government’s new regional growth fund for England has already allocated £1.4 billion to 169 projects around the country. For every one pound we are putting in, we are attracting six pounds of private sector money alongside it. I am today putting a further £1 billion over this Parliament into the regional growth fund for England, with support as well for the devolved Administrations. If we do not get the private sector to take a greater share of economic activity in the regions, our economy will become more and more unbalanced, as it did over the last 10 years.
Government should not assume that this will happen by itself. We must help businesses to grow and succeed, and we can do that at a national level too, with our commitment, for example, to British science. At a time of difficult choices, we made ours last year when we committed to protect the science budget. Today we are confirming almost half a billion pounds for scientific projects, from supercomputing and satellite technology to a world-beating animal health laboratory, and Government can encourage many more of our small firms to export overseas for the first time. We are doubling to 50,000 the number of SMEs we are helping, and extending support to British mid-caps, who sometimes lack the overseas ambition of their German equivalents.
We will make it easier for UK-based firms to compete for Government procurement contracts and make new applications out of government data. We will provide funds for smaller technology firms in Britain that find it difficult to turn their innovations into commercial success. We have listened to the ideas from business groups about encouraging innovation in larger companies, and we will introduce a new “above the line” research and development tax credit in 2013 that will increase its visibility and generosity.
We will give particular help to our energy-intensive industries. I have not shied away from supporting sensible steps to reduce this country’s dependency on volatile oil prices and reduce our carbon emissions. I am the Chancellor who funded the first ever Green investment bank and introduced the carbon price floor. Our green deal will help people to insulate their home and cut their heating bills. I am worried about the combined impact of the green policies adopted not just in Britain but by the European Union on some of our heavy, energy-intensive industries. We are not going to save the planet by shutting down our steel mills, aluminium smelters and paper manufacturers. All we will be doing is exporting valuable jobs from this country, so we will help them with the costs of the EU trading scheme and the carbon price floor, increase their climate change levy relief and reduce the impact of the electricity market reforms on those businesses, too.
This amounts to a £250 million package over the Parliament, and it will keep industry and jobs here in Britain. It is a reminder to us all that we should not price British businesses out of the world economy. If we burden them with endless social and environmental goals, however worthy in their own right, not only will we not achieve those goals, but the businesses will fail, jobs will be lost, and our country will be poorer.
Our planning reforms strike the right balance between protecting our countryside while permitting economic development that creates jobs, but we need to go further to remove the lengthy delays and high costs of the current system, with new time limits on applications and new responsibilities for statutory consultees. We will make sure that the gold-plating of EU rules on things such as habitats do not place ridiculous costs on British businesses. Planning laws need reform. So too—[Interruption.]
Mr Speaker
Order. The House needs to calm down. One hon. Member has probably shouted enough for one day.
Mr Osborne
Planning laws need reform, and so too do employment rules. We know many firms are afraid to hire new staff because of their fear about the costs involved if it does not work out. We are already doubling the period before an employee can bring an unfair dismissal claim and introducing fees for tribunals. Now we will call for evidence on further reforms to make it easier to hire people, including changing the TUPE regulations; reducing delay and uncertainty in the collective redundancy process; and introducing the idea of compensated no-fault dismissal for businesses with fewer than 10 employees.
We will cut the burden of health and safety rules on small firms, because we have regard for the health and safety of the British economy too. This Government have introduced flexible working practices and we are committed to fair rights for employees. But what about the right to get a job in the first place or the right to work all hours running a small business and not be sued out of existence by the costs of an employment tribunal? It is no good endlessly comparing ourselves with other European countries. The entire European continent is pricing itself out of the world economy. The same is true of taxes on business. If we tax firms out of existence, or out of the country, there will not be any tax revenues for anyone. We have set as our ambition the goal of giving this country the most competitive tax regime in the G20. Our corporate tax rate has already fallen from 28% to 26%, and I can confirm that it will fall again next April to 25%.
We are undertaking major simplification of the tax code for businesses and individuals, including, this autumn, consulting on ideas to merge the administration of income tax and national insurance. We are publishing next week rules on the taxation of foreign profits, so that multinationals stop leaving Britain, and instead start coming here, and we will end low-value consignment relief for goods from the Channel Islands, which has been used by large companies to undercut shops on our high streets. We have supported enterprise by increasing the generosity of the enterprise investment scheme. Today, we are extending this scheme specifically to help new start-up businesses to get the seed investment they need. Even at the best of times they can struggle to get finance, and in the current credit conditions that struggle too often ends in failure. From April 2012, anyone investing up to £100,000 in a qualifying new start-up business will be eligible for income tax relief of 50%, regardless of the rate at which they pay tax, and to get people investing in start-up Britain in 2012, for one year only, we will also waive any tax on capital gains invested through the new scheme. We can afford this with a freeze on the general capital gains tax threshold for next year.
I also want to help existing small businesses which find the current economic conditions tough. Business rates are a disproportionately large part of their fixed costs. In the Budget, I provided a holiday on business rates for small firms until October next year. I am today extending that rate relief holiday until April 2013. Over half a million small firms, including one third of all shops, will have reduced rate bills or no rate bills for the whole of this year and for the whole of the next financial year too. To help all businesses, including larger ones, with next year’s rise in business rates, I will allow them to defer 60% of the increase in their bills to the two following years.
I also want to help any business seeking to employ a young person who is out of work. The OBR forecasts that unemployment will rise from 8.1% this year to 8.7% next year, before falling to 6.2% by the end of the forecast. Youth unemployment has been rising for seven years and is now unacceptably high. It is little comfort that this problem is affecting all western nations today. The problem is, of course, primarily a lack of jobs—[Interruption.] But it is made worse by a lack of skills. Too many children are leaving school after 11 years of compulsory education without the basics that they need for the world of work.
Our new youth contract addresses both problems with the offer of private sector work experience for every young person unemployed for three months. After five months, there will be weekly signing on. After nine months, we will help pay for a job or an apprenticeship in a private business. Some 200,000 people will be helped in this way but, as the Deputy Prime Minister has said, this is a contract. Young people who do not engage with this offer will be considered for mandatory work activity, and those who drop out without good reason will lose their benefits.
If we are to tackle the economic performance of this country and tackle Britain’s decades-long problems with productivity, we have to transform our school system too, so that children leave school prepared for the world of work. My right hon. Friend the Secretary of State for Education is doing more to make that happen than anyone who ever had his job before him. The previous Government took six years to create 200 academies. He has created 1,200 academies in just 18 months. Supporting his education reform is a central plank of my economic policy, so today, with the savings that we have made, I am providing an extra £1.2 billion—as part of the additional investment in infrastructure—to spend on our schools.
Half of that will go to help local authorities with the greatest basic need for school places. The other £600 million will go to support my right hon. Friend’s reforms and will fund 100 additional free schools. These schools will include new maths free schools for 16 to 18-year-olds. This will give our most talented young mathematicians the chance to flourish. Like the new university technical colleges, these maths free schools are exactly what Britain needs to match our competitors and produce more of the engineering and science graduates so important for our long-term economic success.
To ensure that children born into the poorest families have a real chance to become one of those graduates, we will take further steps to improve early education. Last year, it was this coalition Government who not only expanded free nursery education for all three and four-year-olds, but gave children from the poorest fifth of families a new right to 15 hours of free nursery care a week at the age of two. I can tell the House today that we can double the number of children who will receive this free nursery care: 40% of two-year-olds—260,000 children—from the most disadvantaged families will get this support in their early years.
On education and early years learning, this is how we change the life chances of our least well-off and genuinely lift children out of poverty and that is how we build an economy ready to compete in the world. It will take time. The damage that we have to repair is great. People know how difficult things are and how little money there is, but where we can help with the rising cost of living, we will. I have already offered councils the resources for another year’s freeze in the council tax. That will help millions of families, but I want to do more.
Commuters often travel long distances to go to work and bring an income home. Train fares are expensive and they are set to go up well above inflation to pay for the much needed investment in the new rail and new trains that we need, but RPI plus 3% is too much. The Government will fund a reduction in the increase to RPI plus 1%. This will apply across national rail regulated fares, across the London tube and on London buses. It will help the millions of people who use our trains.
Millions more use their cars to go to work, and pick up the children from school. It is not a luxury for most people; it is a necessity. In the Budget I cut fuel duty by 1p. The plan was for fuel duty to be 3p higher in January and 5p higher by August next year. That would be tough for working families at a time like this, so despite all the constraints that are upon us, we are able to cancel the fuel duty increase planned for January, and fuel duty from August will be only 3p higher than it is now. Taxes on petrol will be a full 10p lower than they would have been without our action in the Budget and this autumn. Families will save £144 on filling up the average family car by the end of next year. At this tough time, we are helping where we can.
All that we are doing today—sticking to our deficit plan to keep interest rates as low as possible, increasing the supply of credit to pass those low rates on to families and businesses, rebalancing our economy with an active enterprise policy and new infrastructure, and providing help with the cost of living on fuel duty and rail fares—all that takes Britain in the right direction. It cannot transform our economic situation overnight.
People in this country understand the problems that Britain faces. They can watch the news any night of the week and see for themselves the crisis in the eurozone and the scale of the debt burden that we carry. People know that promises of quick fixes and more spending that this country cannot afford at times like this are like the promises of a quack doctor selling a miracle cure. We do not offer that today.
What we offer is a Government who have a plan to deal with our nation’s debts to keep rates low; a Government determined to support businesses and support jobs; a Government committed to take Britain safely through the storm. Leadership for tough times—that is what we offer. I commend this statement to the House.
Ed Balls (Morley and Outwood) (Lab/Co-op)
Let me start by thanking the Chancellor—[Interruption.]
Mr Speaker
Order. I ask the right hon. Gentleman to resume his seat. I said very clearly that people should not shout and yell at the Chancellor. He should be heard in respectful quiet, as the public would hope. The same goes for the reaction to the shadow Chancellor. Let us try to operate at the level of events.
Ed Balls
Thank you, Mr Speaker.
Let me start by thanking the Chancellor of the Exchequer for advance notice of his statement, and the Office for Budget Responsibility for ensuring that the Chancellor is today setting out to the House the truth about the state of the British economy and the truly colossal failure of the Chancellor’s plan.
Let us be clear about what the OBR has told us today, which the Chancellor could not bring himself to say: growth is flatlining and will be down this year, next year and the year after; unemployment is rising; and there will be well over £100 billion more borrowing than he planned a year ago, and more than was set out in the plan he inherited at the general election. As a result, his economic and fiscal strategy is in tatters. After 18 months in office, the verdict is in: plan A has failed, and failed colossally. With prices rising and unemployment soaring, families, pensioners and businesses already know that it is hurting. With billions of pounds more in borrowing to pay for rising unemployment, today we find out the truth that it is just not working.
The Prime Minister likes to say, “You can’t borrow your way out of a crisis.” Will the Chancellor confirm that that is exactly what he has been forced to do? He has been forced into higher borrowing to pay for the crisis in growth and jobs in Britain, the higher unemployment and higher benefits bill that his failing plan has delivered.
The Chancellor’s out-of-touch and complacent hubris of a year ago now seems such a distant memory. The Prime Minister boasted that Britain was out of the danger zone and the Chancellor claimed that the UK was a safe haven, but we know the truth: cutting too far and too fast has backfired and all his claims of a year ago have completely unravelled. It is not as if they were not warned, including by their coalition colleagues. Before the election, we said that, like every country after the global financial crisis, we had to get our deficit down, which meant tough decisions on tax and spending cuts. The question is not whether that should be done, but how. That is why the Opposition warned that trying to cut spending and raise taxes too far and too fast risked choking off recovery and pushing up unemployment and borrowing. We said that the Chancellor’s plan was reckless, not cautious, and that he was ripping out the foundations of the house, leaving our economy not safe, but badly and deeply exposed to the growing global storm.
Let me remind the Chancellor what the managing director of the International Monetary Fund warned this summer. She said that
“slamming on the breaks too quickly will hurt the recovery and worsen job prospects.”
What has happened? Consumer and business confidence has slumped in the past year. Our recovery was choked off over a year ago. Since then, Britain has had slower economic growth than any G7 country other than Japan, and it had an earthquake. Unemployment is at a 17-year high and over 1 million young people are out of work. Today we hear that growth this year will be not the 2.3% he so confidently predicted in the June Budget this year, but just 0.9%. It will be even lower next year and lower than forecast the year after. It is the fourth time the OBR has downgraded his growth forecasts in just 18 months.
Today we learn that the Chancellor, even when judged by the one objective he set himself—getting the deficit down—is failing. With lower growth and rising unemployment pushing up the cost of failure, will he confirm that he will now have to borrow not £46 billion more than set out in his autumn statement last year, as he said in March, but a staggering £158 billion more? Will he also confirm that, despite the pain of the £40 billion of extra spending cuts and tax rises he boasted about a year ago, because the recovery has been choked off and unemployment is higher he will be borrowing more at the end of this Parliament than he would be under the balanced plan inherited from the Labour Government at the last election? That is a fact.
A year ago the Prime Minister told the CBI:
“In five years’ time, we will have balanced the books.”
That was not some kind of dodgy rolling target, but a clear commitment to eliminate the deficit by 2015. Can the Chancellor tell the House whether he will meet that fiscal mandate? Is not the truth that, with unemployment and borrowing up, going further and faster has been utterly counter-productive and self-defeating and has backfired? We have had all the pain, but none of the gain.
The OBR forecasts show that the Chancellor’s entire economic and fiscal strategy is now in complete disarray, yet all we get are excuses. He has blamed anyone and anything, including the Labour Government, the snow, the royal wedding, the Japanese earthquake, higher inflation, VAT, the eurozone and low-paid dinner ladies and teaching assistants—anybody but himself. [Interruption.] It is he who is to blame. It is his failing plan that has pushed up unemployment and borrowing. It is his reckless gamble that has made things worse here in Britain, not better.
If eurozone countries continue to fail to sort out their problems, of course that will have an impact here. [Hon. Members: “Ah.”] However, Britain’s economic recovery was choked off a year ago, before the euro crisis. The OBR has downgraded growth in Britain this year but upgraded growth in the euro area. Of the 27 countries in the EU, only Greece, Portugal and Cyprus have grown more slowly than Britain in the past year. Not only is it not too late for the Chancellor to change course, but the deepening euro crisis makes it even more important that he sees sense. Instead he is still clinging to the fantasy that any change of course would make things worse. He still clings to the illiterate fantasy that low long-term interest rates in Britain are a sign of enhanced credibility and not, as they were in Japan in the ’90s and in America today, a sign of stagnant growth in the economy. [Interruption.] This summer the head of the IMF warned the Chancellor—[Interruption.]
Mr Speaker
Order. The situation is very simple: however long it takes, the shadow Chancellor will be heard. That is all there is to it.
Ed Balls
Thank you, Mr Speaker. They do not like it, but this is the truth. The Government set up the OBR, so maybe they should listen to its forecasts.
This summer the head of the IMF warned the Chancellor that
“growth is necessary for fiscal credibility”,
but he said that a change in his plans would lead to a loss of credibility, even though he has been forced to confirm today that his growth and borrowing targets are wildly off track. Last month the IMF advised the Government that
“If (economic) activity were to undershoot current expectations and risk a period of stagnation or contraction, countries that face historically low yields (for example, Germany and the UK) should also consider delaying some of their planned consolidation.”
With the world darkening and with today’s news that here in Britain we are set to see stagnant growth not just this year, but next, is it not time the Chancellor listened to the IMF? How much worse does it have to get? How many more young people have to lose their jobs, how many more businesses have to go bankrupt, and how many more times does he have to come here to downgrade his growth forecast and upgrade his borrowing forecasts? How many more billions in borrowing do we need to pay for failure before he finally sees sense?
These would be difficult times for any Chancellor, but our fear is that once again in his statement today the Chancellor is making a catastrophic error of judgment. He is refusing to learn the lessons of history or economics; he is refusing to switch to a more balanced plan; he got it wrong 18 months ago, and he is getting it wrong again today. Repeating the mistakes he made last year will only make things worse. Is it not now time to listen to the IMF, to cut taxes and to have a slower pace of spending reduction? Is it not time for him to change course before it is too late?
What do we have instead? We have a cobbled together package of growth measures, which the Chancellor must know, and the OBR forecast confirms, do not address the fundamental problem—that his rapid, reckless and deflationary plan is choking off recovery and pushing up borrowing. We have been here before. This is the third emergency growth package in a year, so the last thing our economy needs is yet another fantasy growth package.
Hon. Members do not have to take my word for it. Let us look at the OBR’s own forecast. Does the OBR think that the Chancellor’s plans are going to boost growth? No, it has revised growth down next year, from 2.5% to 0.7%; and for the following year it has revised growth down from 2.9% to 2.1%. Does the OBR think that the Chancellor’s plans are going to increase employment and cut unemployment? Let me tell the House two things from the OBR forecast which the Chancellor chose not to tell the House. Unemployment is not only higher next year than this year, but higher the year after than this year; and employment is expected to fall by 100,000 next year.
We were promised a game-changer of a statement and a growth plan that would secure recovery. Instead, we have a plan for growth which leads to lower growth and higher unemployment. It is not a game-changer; it is just more of the same.
Let me turn to the measures that the Chancellor has announced. He has announced a new youth jobs fund, but why did he abolish the future jobs fund in the first place? The Government abolished it in their first month in office; their new plan will not be up and running until the middle of next year.
The Chancellor claims to have increased the bank levy, so why is he cutting taxes on banks this year compared with last year—down from £3.5 billion last year to £2.5 billion this year? Why will he not repeat the bank bonus tax and do something proper about youth jobs?
The Chancellor has announced a sensible halt to January’s fuel duty rise, but will he confirm that, as a result of last January’s VAT rise, motorists are paying 3p a litre more on petrol? He has belatedly announced a plan on Labour’s enterprise finance guarantee, relabelled as credit easing, but why did he wait so long, and why did he put his faith in Project Merlin, which has patently failed and, as the Bank of England confirms today, seen net bank lending to small businesses fall over the past year? As for his equally belated decision to set up a new infrastructure fund, this is from the same Chancellor who abolished the Building Schools for the Future programme at a cost of tens of thousands of construction jobs.
How much of this new investment has been pre-announced? How much will happen this year and next year? How much of it is pre-announced funding from the next spending review after the next general election? Will the Chancellor confirm that the new off-budget infrastructure fund will be subject to a National Audit Office value-for-money test to ensure that projects are not more expensive to the taxpayer than direct Government borrowing?
The Chancellor has also announced a rebate for energy intensive industries to correct the chaos caused by his botched carbon floor price. He has reinstated just 10% of his planned £4 billion cut in housing, but even in the past few minutes, as we have studied the small print, and despite all the bluster of the new measures, we have found that because this Chancellor is so determined not to break from his failing plan, he is once again giving with one hand and taking with the other.
How are these new growth measures being paid for? By hitting families and savers. How much will the Chancellor’s cut in tax credits cost a working family on average incomes? With inflation so much higher, is he still meeting the Prime Minister’s pledge to deliver real-terms rises in NHS spending in this Parliament?
As a result, and taking into account pre-announced measures in the Chancellor’s Budget and spending review, are the Government still hitting women harder than men? Are they still increasing child poverty and not reducing it? Given that he has already cut child care support by more than £1.5 billion, is he helping women who want to go out to work, or is he making it harder?
If we are all in this together, why with this Government is it always families, women and children who pay the price? It is clear: the Chancellor’s plan is not working. The OBR knows it, the markets know it, the IMF knows it, we know it and so, increasingly, do the Chancellor’s coalition colleagues. His arch rival, the Mayor of London, certainly knows it.
We all know why the Chancellor cannot change course. We know why he cannot accept the IMF’s advice. We all know why—even as the euro crisis deepens and he is borrowing £158 billion more than he planned—this oh-so political Chancellor will not budge because to change course now would be to admit that he has got the key economic judgments of this Parliament absolutely, catastrophically wrong.
If, after just 18 months, the Chancellor’s plan is leading to falling growth, rising unemployment and £158 billion more in borrowing, the country needs either a new Chancellor or a new plan—a balanced and credible plan on jobs, growth and the deficit. We need real tax cuts, real investment, a real plan for jobs, growth and deficit reduction: Labour’s five-point plan for jobs, growth and deficit reduction.
Protecting our economy, businesses, jobs and family finances is more important than trying to protect a failed economic plan. For his sake, for his party’s sake, and in the national interest, the Chancellor needs to change course, and he needs to do so now.
Mr Osborne
As far as I can tell, the shadow Chancellor complains that we are borrowing too much—and then proposes that we borrow even more. It is completely unconvincing and a reminder to Government Members why we are so pleased that he is in the job that he is doing, for he is a constant reminder of everything that went wrong with Labour’s economic policy—a permanent advertisement for why we should never trust Labour with our money again.
Let me answer the right hon. Gentleman’s specific questions. He welcomes the fact that we have open and honest figures from the OBR. When did we never get them when he was at the Treasury? He complains about the bank levy. He was the City Minister, so why did he not introduce a bank levy? It will raise £2.5 billion a year. In the Labour policy document on the bonus tax that he proposes, his party costs its measure at £2 billion a year. That is less—a tax cut for banks, if can I put it like that.
The right hon. Gentleman complains about off balance-sheet borrowing. That is from Mr PFI. He says that we should have kept the future jobs fund, but 50% of all people who left that scheme were unemployed within 12 weeks, which is in part why we have an unemployment problem.
Yes we are committed to real increases in the health budget, and yes the OBR confirms that we will meet our fiscal mandate and our debt target—[Interruption.] In the terms set out by me in the emergency Budget.
The right hon. Gentleman told the House this extraordinary thing—that the OBR forecasts that growth in the UK will be less than in the euro area. That, I am afraid, is simply not true. I am not going to use unparliamentary language, but it is in the OBR document in black and white: 2012, 2013, 2014, 2015—every single year, growth unfortunately is slow in the eurozone and slower than in the UK. That is one of the problems we are facing.
Let me respond to the three arguments that the right hon. Gentleman advanced in his reply. First, he said that we should try to borrow our way out of a debt crisis; he talked about extra borrowing. His plans—the plans of the previous Government—would have led to an additional £100 billion on top of borrowing over the course of the Parliament. Let us look at the facts. There is not a single credible political party in the entirety of Europe that is proposing more spending at the moment, apart from—and it is not credible—the Labour party. This is what Tony Blair said this morning on the radio—[Interruption.] Go on—have a go at booing him! Tony Blair said on the radio this morning:
“frankly whatever government is in power it is going to be pursuing a pretty tough programme at the moment”.
Blair or Balls—I think the British public made their mind up on Labour politicians long ago.
The second astonishing argument that the right hon. Gentleman deployed was to say that low interest rates in Britain were a sign of failure. Presumably that means that he wants interest rates to be higher in Britain. Presumably the fact that Italian interest rates are over 7% is a sign of success. Presumably the fact that Greek interest rates are 30% is an economic miracle. His policy for higher interest rates would put families’ mortgage bills up, increase debt interest charges for taxpayers, increase the cost of loans for small businesses, and put people out of work. Now people know—you vote Labour, you get higher interest rates.
The third and final argument that the right hon. Gentleman advanced is that the events happening in Europe will have almost no impact on anyone in Britain or on the British economy. [Hon. Members: “That’s not what he said.”] He mentioned it once in passing. That flies in the face of what the Bank of England says and what the OECD said yesterday. He quoted the IMF. The IMF supports our deficit reduction plan. It explicitly asked itself the question, “Should Britain change course?”, and said no. He quoted the independent OBR’s numbers, but he refuses to accept its analysis. Anyone who turns on the television and listens to the news knows that his argument is completely absurd, so we have to ask ourselves why he advances it. Why does he alone advance the argument that Britain is not affected by what has been going on in the world—by the external oil shocks, by the size of the financial crisis, by the eurozone crisis? There is a very simple reason: because if he admits that we are in a debt crisis, then he has to admit that we borrowed too much when he was in office, that the crash here was deeper than anywhere else, and that the effects were longer lasting. It would be an admission of his personal failure.
The right hon. Gentleman was the City Minister who let the City explode. He is the author of the golden rules that failed. He does not have the excuse of the Leader of the Opposition that he was only photocopying orders: he gave the orders; the orders came from him. Labour’s economic credibility will never recover while he remains the shadow Chancellor.
Mr Andrew Tyrie (Chichester) (Con)
The whole country, I think, will welcome the supply-side measures announced today, which are an essential counterpart to the deficit reduction plan. Britain’s recovery depends on thousands of small businesses in our constituencies that need the confidence and the cash to invest and grow. That is why the credit easing package that has been announced today is so welcome. Does my right hon. Friend agree, though, that the recovery can be secured in the long term only when we have banks that are operating normally —when we have a return to more normal lending conditions? Does not that reinforce the need for him to work extremely closely with the regulators and the banks to achieve this?
Mr Osborne
I agree with the Chair of the Treasury Committee that the impact of the financial crisis and the deleveraging in the British financial system and other financial systems are having a huge impact not just on our recovery but on recoveries around the world. I completely agree that we need to try to clear the impaired balance sheets of the banking system. We need to try to get new lenders on to the high street. That is why we took the decision we took on Northern Rock—to get Virgin Money out there on the high street. I will have more to say on the banking system next month when I respond to the Vickers report and to the very good report from the Treasury Committee.
Margaret Hodge (Barking) (Lab)
I welcome the announcement of more investment in infrastructure, but the more I hear about the proposal, the more it sounds like PFI by any other name. Pension funds will invest in public projects only if it is a good deal for them. As with PFI, any sweetener that the Chancellor offers to the private sector will be at the expense of the taxpayer, both in the short term today and for future generations, so what precisely is he offering and proposing to attract pension fund investment, and how is he going to ensure that his scheme represents value for money for the taxpayer?
Mr Osborne
Let me explain to the right hon. Lady that what we are seeking to do is to get the pension funds investing in British infrastructure. We are not proposing to provide, in this respect, guarantees for these projects. There are some guarantees set out for specific Government infrastructure projects such as the Thames tidal waste tunnel. What I am talking about with the pension funds is not guaranteed projects like PFI; it is simply about trying to get private sector money invested in British infrastructure. [Interruption.] Let me explain, briefly.
We have Canadian and Australian pension funds investing in Britain, but not British pension funds investing on a sufficient scale. We are going to try to bring them together, through a private sector agreement, into vehicles where they can co-operate and then invest in infrastructure. This is not about the Government underwriting those investments; it is about trying to get the industry together to make private sector investments. There is a memorandum of understanding which sets out how this is done.
Andrea Leadsom (South Northamptonshire) (Con)
I welcome the Chancellor’s statement. It is a great shame that the shadow Chancellor appears to be living in a parallel universe to that of Government Members. Does my right hon. Friend agree that in view of his desire to set up a better and a stronger economy for the future, it would be a good idea to look again at the prospect of account portability in the banking system to create a truly free consumer choice for the future in terms of personal current accounts and small business lending?
Mr Osborne
I agree with my hon. Friend that that is a very important part of making sure that customers get the best possible deal. It was the part of the Vickers report that got the least coverage because of the interest in things like ring-fencing. We are determined to introduce changes that allow people to switch their current accounts very easily, and we hope to have them in place before the end of the Parliament.
David Miliband (South Shields) (Lab)
The Chancellor has recognised that 260,000 young people have been unemployed for more than 12 months—that is over 100,000 more than 18 months ago. He has rejected the argument for a job guarantee and instead embraced wage subsidies, which he says will help about 53,000 young people. For the sake of those young people, will he look at the similar scheme announced by his right hon. and learned Friend the current Secretary of State for Justice, in 1995? That scheme promised 130,000 jobs, but only 2,300 applications came forward. Will the Chancellor look at that experience to make sure that we do not have a repetition of the very low take-up of wage subsidy schemes?
Mr Osborne
We have worked with the business groups and businesses to make sure that the youth contract is going to be effective. I respect the fact that the right hon. Gentleman told us some days ago that the problem of youth unemployment was not invented by this Government. I respect his honesty in saying that. This is a problem that all western countries are facing at the moment. Frankly, in Britain youth unemployment has been going up for the past seven years. A subsidised job in the private sector is part of the answer. The work experience places are already working well, and we are adding to those. Of course, there is some conditionality in all this, so we are introducing, for example, weekly signing on after five months.
Stephen Williams (Bristol West) (LD)
I welcome what the Chancellor has said about protecting our economy from the external pressures that we face and rebalancing and strengthening it for the future. Will he confirm that despite these difficult circumstances, this Government are acting to raise the income tax threshold so that the poorest in society do not pay income tax, are fully increasing out-of-work benefits by 5.2%, and are increasing the state pension by £5.30? Does not that demonstrate that this coalition Government are determined to protect the poorest in society despite the very difficult circumstances in which we operate?
Mr Osborne
My hon. Friend is right. We are uprating out-of-work benefits and the basic state pension. The coalition Government are committed to the triple lock. People can see the benefit of that today. He is also right that we are committed to real increases in the personal income tax allowance. We have already had two of those. The coalition agreement is absolutely clear on that. I also support it as a tool of economic policy. We want to lift more people out of tax altogether.
Mr Michael Meacher (Oldham West and Royton) (Lab)
What is the right hon. Gentleman’s precise estimate of the overall growth, if any, that will arise from today’s package, given that there is no net increase in demand? Is not his core £5 billion infrastructure package—just 0.7% of current expenditure—merely tinkering at the edges and completely incapable of pulling Britain out of its deepening slump?
Mr Osborne
As I said in my statement, I believe, particularly in a debt crisis, that monetary policy is the most powerful tool for supporting demand. The Bank of England has undertaken the quantitative easing programme, which the previous Government thought was the right policy as they authorised the Monetary Policy Committee’s request. We can also do a lot to try to improve the credit conditions for small businesses, which do a huge amount to employ people in our country. That is why we have taken action on credit easing. The right hon. Gentleman has to balance the cost that a 1% rise in interest rates would have for mortgage bills, debt interest bills, family business loans and the like, which I set out, with the need for the additional billions of pounds of borrowing that he is proposing on top of the borrowing that we are already doing and what that might do to the credibility of this country in international markets.
Brandon Lewis (Great Yarmouth) (Con)
Does my right hon. Friend agree that the welcome opportunity for private pension funds to invest in infrastructure will also give a good return for those pension funds by unlocking the growth that can come from such infrastructure, particularly in rural areas such as East Anglia?
Mr Osborne
My hon. Friend is absolutely right. That is why we have made a particular commitment to two roads in East Anglia: the A11 and the A14. The A14 is a real challenge, as he knows, because it is a vital artery for the entire national economy. We are announcing particular commitments today to improve the A14. We want to work with local councils and local communities to make even greater lasting improvements to the A14 in the future.
Helen Goodman (Bishop Auckland) (Lab)
The Chancellor ended his statement by talking about quack doctors. Of course, in the book “George’s Marvellous Medicine”, George makes a potion to shrink his grandmother. Does the Chancellor of the Exchequer not understand that he will not grow the British economy by cutting tax credits, because that will make it uneconomic for many women to go out to work?
Mr Osborne
As I said, we are not cutting tax credits, but uprating the child tax credit. The hon. Lady should have listened to what I had to say.
Claire Perry (Devizes) (Con)
I am confused and am hoping that the Chancellor can help me to sort something out. On page 82 of its document, the OBR states that it has cut its forecast for European growth to 0.5%. On another page, it states that it has cut the British forecast to 0.7%. Under the shadow Chancellor’s quack-onomics theory, interest rates should therefore be higher in Britain than in the eurozone, but they are not. Can the Chancellor explain why?
Mr Osborne
Because we have earned credibility for this country. That is what this Government have done. That has not been an easy thing to do, but it has brought our borrowing costs down while other countries’ borrowing costs have gone up. When this Government came to office, the interest rates in Italy were lower than the interest rates in Britain. They have gone up in Italy and come down in Britain. Of course, we now have the new Labour party policy, which is that it wants to see higher interest rates. I am not sure that the Labour Back Benchers have fully realised what a completely stupid policy that really is.
Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC)
With regard to the capital infrastructure investment, will the Chancellor confirm that the whole figure of £30 billion will be spent proportionately in Wales and the other devolved nations, and that in the case of Wales that will amount to £1.5 billion?
Mr Osborne
We absolutely will apply the Barnett formula to the infrastructure spending. I can confirm that. We specifically want to work with the devolved Administration on the M4 corridor in south Wales and, if possible, to do a deal on the future of the Severn bridge and its tolls. We are holding open the opportunity for discussion on that matter.
Andrew Percy (Brigg and Goole) (Con)
I thank the Chancellor for his announcement about the Humber bridge and commend the work of the Transport Secretary. Does he agree that that proposal will benefit low-paid workers, especially in the Humber, who have suffered even in the times of growth, when the number of private sector jobs in the Humber decreased?
Mr Osborne
I pay tribute again to my hon. Friend and the other MPs in the area, including my hon. Friend the Member for Beverley and Holderness (Mr Stuart) who first raised this issue with me some years ago.
Mr Osborne
Absolutely, I happily pay tribute to all the MPs of north Lincolnshire and Humberside who have campaigned for the reduction of the tolls. This was an injustice. The bridge was built many years ago and the debt was paid off, but the tolls were still very high. I am glad that we have been able to help. Along with our enterprise zones in Humberside and our commitment to the renewable energy industry in the area, this will really help the economy.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
The Chancellor’s statement reminded me of the Budgets not of the last Chancellor of the Exchequer but of the one before that, because it included so much, and almost the kitchen sink. To change the mood in the country, most of which is now deeply in recession—certainly Yorkshire and the Humber are—were we not expecting some imaginative, bold policies today to end youth unemployment?
Mr Osborne
I suggest to the hon. Gentleman that a fairly stark difference between me and the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) is that I am trying to make the books add up, whereas he did not. We have all been paying the price for that ever since.
Mr John Baron (Basildon and Billericay) (Con)
I know that the Chancellor will ignore the pleas of the Labour party, given that it more than doubled the national debt when it was in power, but will he revisit the massive net increases in our contribution to the EU that will come through over the next seven years? They will amount to something like £20 billion, which would fund a 5p to 6p cut in small business corporation tax.
Mr Osborne
We have negotiated the first real freeze in the EU budget. Important negotiations are coming on the future financial perspective. I am absolutely clear, as are some other member states, that the EU has to live within its means as well.
Caroline Lucas (Brighton, Pavilion) (Green)
Will the Chancellor explain why he is taking £250 million from hard-pressed families and giving it to some of the country’s biggest polluters, especially as green economies employ far more people than energy intensive industries?
Mr Osborne
As I said, we have introduced and funded the green investment bank, and we are supporting the green deal. The hon. Lady did not mention that there are £200 million of incentives to make the green deal work so that people can insulate their homes, their bills can come down and we can reduce our carbon emissions. I do not see how we would save the climate of our country and the world by pricing ourselves out of steel making, operating chemical factories, aluminium smelting and so on. If anything, it is likely that those industries would continue in other countries and be more polluting because those countries do not have the same regimes. I think that it supports our effort to reduce carbon emissions around the world that we keep those industries in Britain.
Mr David Evennett (Bexleyheath and Crayford) (Con)
I welcome my right hon. Friend’s statement and in particular the announcements on rail fares and the fuel duty. Does he agree that those policies and others that he has expressed today show that the Government are helping hard-working people with the cost of living wherever they can?
Mr Osborne
I absolutely agree with my hon. Friend. We have been able to take action on fuel duty so that taxes on petrol will be 10p lower than they would otherwise have been. We have taken action to reduce the increase in rail fares. I also stress that we have helped small businesses that employ people by extending the business rate freeze.
Mr Dennis Skinner (Bolsover) (Lab)
If we are all in it together, why has the Chancellor announced further restrictions on pay for working people and their families, while the bankers who caused the recession are taking home salaries of up to £4.5 million? Is it because the people on that side on millionaire’s row are looking after their friends in the banking system, while kicking the workers in the teeth?
Mr Osborne
I think the hon. Gentleman will find that it is half of the last Labour Cabinet who are working in the City at the moment.
If the hon. Gentleman is so passionate about this issue, why did he not press the Government he supported for 13 years to introduce a bank levy? On public sector pay, the shadow Chancellor was completely silent about whether the Labour party supported 1% average increases after the freeze ends. No doubt we will find out more about that later this afternoon.
Margot James (Stourbridge) (Con)
The Black Country chamber of commerce reports that 400 new businesses started in our region this year, 170 with help from the Government. I particularly welcome the national loan guarantee scheme. Does my right hon. Friend anticipate that that scheme might support business start-ups?
Mr Osborne
I think it will help new businesses borrow, but of course we have also announced today the seed enterprise investment scheme, a new scheme that will specifically help start-up businesses. It will give 50% income tax relief to anyone who invests up to £100,000 in a new company. Also, for one year only, we are allowing people to put capital tax-free gains of up to £100,000 into the scheme. It is all about trying to get investment into new companies such as the ones in the black country that my hon. Friend talks about.
Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)
On 20 October, the Secretary of State for Energy and Climate Change said in the House that there would be no Treasury backsliding on the £1 billion available for carbon capture and storage investment from the Government. Yesterday morning the Chancellor’s deputy, the Chief Secretary, suggested that part of his £5 billion investment would be funded by taking money from that £1 billion. Can the Chancellor confirm whether that is the case, and what implications that will have for potential CCS projects that are working to a timetable of being on a commercial basis before the end of this Parliament?
Mr Osborne
We absolutely want to support carbon capture and storage technology in this country. I confirm that we are still committed to a £1 billion investment, which is a very significant investment in a technology, but it cannot be on an unrealistic time scale. [Interruption.] Well, the previous Government—indeed, the Energy Secretary in the previous Government, who of course is the Leader of the Opposition at the moment—made all sorts of promises about getting carbon capture and storage demonstrations up and running, and that did not happen. We are operating on a more realistic time frame, but we are committed to a £1 billion investment in that technology.
Lorely Burt (Solihull) (LD)
There is so much to welcome in this statement, and I especially welcome the £1 billion increase in the regional growth fund and the infrastructure changes to the A45. Will the Chancellor set the record straight and say that our youth jobs fund is nothing like Labour’s future jobs fund, under which only 2% of the jobs in the west midlands were in private companies, and that our scheme will create real jobs for young people?
Mr Osborne
Not only was the future jobs fund primarily aimed at the Government employing people in the public sector, which of course was unsustainable with the very large deficit that Labour was running, but actually it did not work on its own terms, because 50% of the people who used the fund were unemployed within 12 weeks. The youth contract that the Deputy Prime Minister has worked on, which he presented last week, will make a real difference.
Stewart Hosie (Dundee East) (SNP)
There were two key announcements today. One was the national loan guarantee scheme and the £20 billion of credit easing, and the second was the investment in infrastructure of perhaps £30 billion. When does the Chancellor expect the business finance backed by the scheme to start flowing, and how much infrastructure spend does he expect this year and next, when it will have the biggest effect?
Mr Osborne
We are undertaking an ambitious programme of credit easing, and I hope to get it running in the next couple of months. We have to clear the state aid hurdles, and we are working flat out to do that, but I am confident that because we are partly following the European Investment Bank’s scheme in the UK, a lot of the work has already been done. The precise numbers on infrastructure in the next two years are set out in the book.
George Freeman (Mid Norfolk) (Con)
I warmly welcome the statement on behalf of families and businesses in my constituency, particularly the billions for infrastructure, the strong support for science and innovation and the very imaginative scheme for unlocking credit easing for small companies. Does that not show that this Government are laying the foundations for sustainable economic growth, while the Labour party has nothing to offer but more debt, more tax and higher interest rates?
Mr Osborne
I completely agree with my hon. Friend. What was really striking in the shadow Chancellor’s response was that the heart of his argument was, “We’re borrowing too much, so let’s borrow more.” I do not think that is a very convincing argument. The only reason why he advances it is that he, almost alone in the Labour party, cannot admit that the last Government borrowed too much.
Joan Walley (Stoke-on-Trent North) (Lab)
Can the Chancellor confirm that it is “rest in peace” for the “greenest Government ever”? As far as Stoke-on-Trent is concerned, can he tell the House why there is nothing in the autumn statement about why the Prime Minister came to Stoke-on-Trent and promised us a local enterprise zone? There have been two extra ones announced today, and still nothing for Stoke-on-Trent.
Mr Osborne
I completely understand why the hon. Lady is fighting hard for her constituency and her city. In the end, the proposal put forward by Stoke for an enterprise zone was not as compelling as the other enterprise zone proposals that were put forward at the same time. That was independently assessed by the civil servants. I am very happy to sit down with her, and indeed other Members from Staffordshire, to work with them on what we can do to make the proposal a success. I am very much open to considering whether we can get the enterprise zone bid into a state where it is successful and we can go ahead with it.
Harriett Baldwin (West Worcestershire) (Con)
There were many measures in the statement that will help businesses with their cash flow, which is truly to be welcomed, for example extending the small business rate relief and credit easing. Will the Chancellor clarify that where business rates go up in line with RPI next year, there will be the ability to defer 60% for two years interest-free?
Mr Osborne
We are helping businesses with their cash flow, but it is not a subsidy to those businesses, more a cash-flow measure.
Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)
The Chancellor has announced a number of supply-side measures designed to help small businesses. However, that is only one part of the equation. One of the main obstacles now for small businesses applying for loans or investment is the squeeze on personal incomes in their market. Can he explain to me how removing current expenditure and squeezing incomes further at this time, albeit for some very worthy projects in two or three years’ time, will benefit unemployment and alleviate the feeling of deep insecurity that there is in my area at this moment?
Mr Osborne
I would argue that we are not squeezing incomes. We have frozen fuel duty in January and taken measures to uprate non-working benefits in line with CPI, which is a very big increase, and pensioners are getting the largest ever increase in the basic state pension. However, we cannot afford the additional £110 on top of the uprating that we promised on the child tax credit.
Mr Marcus Jones (Nuneaton) (Con)
Does my right hon. Friend agree that measures such as extending the above-the-line research and development tax credits and the creation of enterprise zones such as the one at MIRA on the edge of my constituency will be extremely important in bringing new manufacturing jobs to the west midlands?
Mr Osborne
My hon. Friend is a powerful champion for Nuneaton, and I am glad that the enterprise zone is going to help his town. He specifically raised with me the issue of whether we could introduce an above-the-line R and D tax credit. I listened to his arguments and those of business organisations, and I am delighted that we are able to go ahead with that. We will set out the precise details of the rate and so on in the Budget.
Fiona Mactaggart (Slough) (Lab)
In view of the fact that the published Treasury tables suggest that the poorest fifth of the population have lost more from the Chancellor’s statement than anyone else apart from the richest fifth, will he tell the House what impact his announcements will have on child poverty?
Mr Osborne
The Treasury is very clear that in the precise way in which child poverty is measured against the baseline, it has gone up. We have been honest about that in the document. However, there is also an inflationary increase in the child tax credit and other benefits, so the picture is more mixed and better for tackling child poverty. I would also make the broader argument that investing in early years education and schools, and so transforming people’s life chances, will do more to lift people out of poverty. That is surely a lesson that we have learned over recent years.
Richard Harrington (Watford) (Con)
I commend the Chancellor on his statement, particularly the parts about young people and small businesses, which will be gratefully received in my constituency. I am sure that he shares my concern about the shadow Chancellor’s seeming lack of interest in interest rates and the amount of national debt. With that in mind, will my right hon. Friend confirm that a top priority of the Government is to reduce the £130 million per day that taxpayers in my constituency—and all taxpayers—pay to get the interest on the debt down?
Mr Osborne
Despite the deterioration in the borrowing forecast, the debt interest payments that we are making are £24 billion less than forecast. That is the burden of the debt, and it would be billions more if the shadow Chancellor ever got his hands on the British economy again.
Sir Stuart Bell (Middlesbrough) (Lab)
I welcome the Chancellor’s statement on the 100% capital allowances for the enterprise zones in the Tees valley. I refer him to his statement that he will target £20 billion from pension funds for infrastructure investment. May I draw his attention to the fact that the industry has something like £80 billion in its kitty? I invite him to go back and raise more money for more investment in the same project.
Mr Osborne
I would certainly like to see even more money coming from British pension funds, but £20 billion is an ambitious target. It is a shame that we have not been able to mobilise private sector resources from the pension funds in the past decade in the way that we should. The Government are making a determined effort to change that, and I hope that the memorandum of understanding that we signed with two groups of pension funds will lead to more infrastructure investment in the Tees valley and elsewhere.
Nadhim Zahawi (Stratford-on-Avon) (Con)
I commend my right hon. Friend for his statement and for doing so much for hard-pressed families and working people. Today, Italy had to borrow billions of pounds at almost 8% interest. The UK borrows at German rates because of the confidence in our economic policy. The strikes planned for tomorrow will damage confidence in the British economy. Will the Chancellor condemn the strikes and urge the Opposition to come out and condemn them?
Mr Osborne
My hon. Friend is absolutely right. Let us look at the Italian bond auction this morning—that is the sort of interest rate we might have to pay if Britain’s ability to pay its way in the world lost credibility. Was it not surprising that the shadow Chancellor did not mention the fact that there are strikes tomorrow? It is because he is a wholly owned subsidiary of the Unite union.
Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)
The giving with one hand and taking away with the other for child care is, frankly, playing with children’s lives and is disgraceful. By how much will the Chancellor increase the early intervention grant to pay for the child care pledge that he announced today? How much capital funding will he provide to local authorities so that they can expand and build nurseries? From what children’s pot will he rob that money?
Mr Osborne
We have introduced, for the first time, an entitlement for disadvantaged two-year-olds to get 15 hours of free nursery care. Such a policy was never introduced in the 13 years of a Labour Government. We have increased the figure to 40% of all children of that age and the cost is just shy of £500 million by the end of the period.
Jessica Lee (Erewash) (Con)
Erewash is at the heart of the manufacturing base in the east midlands. I therefore welcome the commitment to improving the infrastructure in the UK. To maximise that opportunity, reopening the train station at Ilkeston would really help us in Erewash, assisting businesses and commuters. Would my right hon. Friend or a colleague from the Treasury kindly meet me to discuss how the project can form part of the Government’s plans?
Mr Osborne
The Transport Secretary sitting next to me has just genuinely volunteered to meet my hon. Friend. We will look at improvements to Ilkeston train station. I did not set it all out in detail today, but there is scope for further smaller investments in rail stations and pinch points on our road network—we have set aside considerable sums of money for that. I will ensure that my hon. Friend meets the Transport Secretary soon to put her case.
Mr Nigel Dodds (Belfast North) (DUP)
On credit easing, how will the Chancellor’s announcement today apply in Northern Ireland? He knows that some 60% of bank lending to business in Northern Ireland is done by non-UK clearing banks, so I would be grateful if he elaborated on how he thinks it will apply in Northern Ireland. Will he work with the Finance Minister there to find a way through the current credit crunch for business?
Mr Osborne
First, I am happy and keen to work with the devolved Administration in Belfast on how the scheme will apply in Northern Ireland, given the specific issues that Northern Ireland faces with the involvement of the southern Irish banks. It is certainly a UK-wide scheme and we are particularly aware of the acute problems that the financial crisis south of the border have caused in Northern Ireland.
Mr Mark Spencer (Sherwood) (Con)
Today, we have seen a clear difference between a Chancellor who wants to manage and invest in our economy and an Opposition who spent and taxed their way through boom into bust. Will my right hon. Friend assure the House, for the sake of every home owner and small and medium-sized business with a mortgage, overdraft or long-term loan, that he will follow a fiscal policy that delivers low interest rates for the long-term future?
Mr Osborne
I absolutely will. We have had a startling admission by the shadow Chancellor that he wants interest rates to be higher in Britain at the moment. That would be a terrible thing for our economy, but I will give him this: his policies would certainly lead to higher interest rates in Britain.
Gemma Doyle (West Dunbartonshire) (Lab/Co-op)
The Chancellor is wrong to deny that the Government’s policies are making long-term youth unemployment worse. It is up by more than 80% since the start of this year. Would he now like to apologise for scrapping the future jobs fund?
Mr Osborne
As I said, the future jobs fund meant that 50% of people who went on it were unemployed within 12 weeks. The right hon. Member for South Shields (David Miliband) was very honest in saying that this Government did not create the problem of youth unemployment. Frankly, if we had more honesty from the shadow Chancellor, he would have a bit more economic credibility. I cannot help noticing that the British public think that the right hon. Member for South Shields would do a better job as shadow Chancellor than the man opposite jabbering at me.
Simon Kirby (Brighton, Kemptown) (Con)
With the UK 10-year market interest rates at record lows, does the Chancellor agree that the rest of the world seems to support his plan, not the Labour party’s?
Jack Dromey (Birmingham, Erdington) (Lab)
Last year, the Chancellor cut £4 billion from housing investment. Does he accept responsibility for the catastrophic 99% collapse in affordable house building in the past six months, which is 187% in the west midlands? Does he agree that today he is restoring but 10% of what he cut, when the need for building homes and jobs has never been greater?
Mr Osborne
The Government’s capital spending plans are higher than those that the Labour party put forward in March 2010, which the Dromey family enthusiastically endorsed and tried to persuade the country to vote for. It is striking that, with the hon. Gentleman’s background, he has not mentioned the strikes, which will do huge damage to our economy and jobs. Why do not he and his colleagues condemn them and make sure that our country is working?
Jane Ellison (Battersea) (Con)
I warmly welcome the Chancellor’s announcements on infrastructure. In particular, there is a hugely warm welcome for the announcement of Government backing for the Northern line extension to Battersea, which is key to unlocking many new jobs and homes in the Nine Elms/Vauxhall/Battersea development area. Does he agree that it is also important for the existing communities in that area, many of which are among the most disadvantaged in my constituency? It is good news for them, too.
Mr Osborne
I had the opportunity yesterday, with my hon. Friend and the Mayor of London, to visit one of the development sites between Nine Elms and Battersea. It is fantastic to see that project going ahead and I hope that the support and commitment we are giving to help with the borrowing required to fund the Northern line extension will help to create 25,000 jobs in that area of London.
Barry Gardiner (Brent North) (Lab)
The £5 billion programme of capital infrastructure is to be welcomed. What is not to be welcomed is that it will be paid for out of the pay packets of individuals in both the private and public sectors. Last year the Chancellor said that he believed that the British public were able to spend their money better than the British Government. When did he stop believing that?
Mr Osborne
Perhaps I can explain to the hon. Gentleman that taxes come from people working in the public and private sectors. Money spent on infrastructure is well spent. For every £1 spent on infrastructure we have made savings in current spending, so we are not adding to borrowing in order to fund it. It will help to create jobs and support the economy.
Nicky Morgan (Loughborough) (Con)
Did my right hon. Friend hear Opposition Members laughing when he initially mentioned help with the cost of living? Does he agree that that is backed up by the shadow Chancellor’s refusal to recognise that low interest rates have kept many families in their homes over the past couple of years, including the very women and children that he says he cares about?
Mr Osborne
My hon. Friend is right. Low interest rates are helping to keep people in their homes, mortgage payments down and businesses going. If hon. Members want to know what the alternative would be, they should look across the Channel to European countries in the middle of the debt storm, with interest rates going up. We can see that is a path that we must avoid, but we will only do so if we do not follow the policies advocated by that lot opposite.
Mr Andrew Love (Edmonton) (Lab/Co-op)
Will the Chancellor now take the opportunity to admit at the Dispatch Box that £158 billion is the deterioration in the forecast that has just been announced? How long will it now take to balance the books, and is not the statement today an admission that this country will have more severe austerity going forward?
Mr Osborne
I said that the borrowing forecast had deteriorated, and—unlike the Labour party—I set up an independent body to ensure that those figures are independently verified and not fiddled, as they were by the shadow Chancellor when he was in office. I can confirm that borrowing would be £100 billion higher if we had pursued the spending policies set out by the Labour party.
James Morris (Halesowen and Rowley Regis) (Con)
May I welcome the Chancellor’s statement today, especially in its support for small business? I recently visited a company in my constituency, Somers Forge, which is growing and providing young people with training and support. Does he agree that that is precisely the sort of business that will benefit from some of the measures that he has announced today?
Mr Osborne
Absolutely. We are doing a huge amount to support small businesses through our rate policy, the national loan guarantee scheme that we have announced and the support that we have given to companies that innovate and want to bring those innovations to market. We are doing all those things to help the small businesses of this country so that they can create jobs and grow.
Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)
The announcement of new investment in transport infrastructure is very welcome. Can the Chancellor confirm that that investment will not be funded by reducing or delaying existing projects, and what will his announcement mean for the future of the northern hub and investment in rail across the north?
Mr Osborne
I can give that confirmation. This is additional money that has come from savings in current spending. Specifically on the northern hub, the first part of that is the electrification of the Manchester to Leeds trans-Pennine express, but that will also benefit train travel times from Liverpool across the Pennines. We have also made other improvements like the Ordsall chord, which will help. We want to go further on the northern hub and the Department for Transport will produce proposals on that early next year.
Mark Lancaster (Milton Keynes North) (Con)
Mr Speaker, you, I and many other hon. Members have campaigned long and hard for east-west rail and today’s announcement is tremendous news for Milton Keynes. As the Transport Secretary is in her place, can my right hon. Friend the Chancellor confirm the possibility that we will have east-west rail and, at the junction between east-west and High Speed 2, could there perhaps be a Buckinghamshire Parkway station so that residents of Buckinghamshire could enjoy the benefits of High Speed 2 as well as the pain?
Mr Osborne
I do not think that a decision has been taken on stations, but I agree with my hon. Friend that we need to bring home to the people of Buckinghamshire the benefits of high-speed rail.
Naomi Long (Belfast East) (Alliance)
The Chancellor stressed the importance economically both of regional connectivity and infrastructure. Can he confirm whether the Northern Ireland Barnett consequentials of the infrastructure changes will be ring-fenced? Further, can he offer any good news on air passenger duty for those who rely entirely on regional flights for that connectivity?
Mr Osborne
It will be up to the devolved Administration to choose how to spend the money that is allocated to them, but of course as it is one-off money—being capital spending—they will need to think carefully about how they spend it. On aviation, the Department for Transport will set out an aviation strategy, but it is confirmed in today’s document that we were able to take the decision that saved the long-haul flight from Belfast to north America.
David Rutley (Macclesfield) (Con)
I welcome the Chancellor’s statement and the announcement today that the Manchester airport A6 link road will be brought forward. That will be a real boost for Manchester and north-east Cheshire. Does my right hon. Friend agree that capital investment is the right way to strengthen our regions, rather than relying on the increases in public sector spending that we saw from the last Government?
Mr Osborne
My hon. Friend is absolutely right. As my constituency is affected by that road link, I very much welcome it, although I stress that the decision was not taken by me for that reason. He will know, and local people will remember, that that road scheme was cancelled in the first week of the Labour Government in 1997, and I am glad that we have now been able to take steps to help south Manchester and north Cheshire grow.
Geraint Davies (Swansea West) (Lab/Co-op)
The Chancellor has already announced 500,000 job cuts in the public sector alongside pay freezes, both of which have deflated demand, reduced growth and helped to increase the deficit by £158 billion. He is now imposing a 3% income tax on all public servants dressed up as a pension contribution for a lower pension after working longer. Will he accept that that will mean a 3% reduction in the spending power of all public servants, which will be deflationary and which, as well as being unfair, unwise and discriminatory, will provoke an unnecessary strike tomorrow?
Mr Osborne
We are basing our pension reforms on the report from Lord Hutton. He particularly focused on the benefit, but he said that there was a case for the increase in contributions. He also said recently that it was frankly difficult to imagine a better deal. That was the former Labour Pensions Secretary. What I do not understand is what exactly the Labour party’s policy is on this. It is absolutely silent. Are you in favour of increased contributions? [Interruption.] If you are not in favour of the increased contributions, where in your so-called five-point plan are you spending the money to stop those contribution increases? It is completely economically illiterate—[Interruption.] The hon. Member for Dudley North (Ian Austin) talks about negotiations. Why do he and his party not condemn the strike, urge the unions to sit round the table and negotiate with us to get a deal, especially as the former Labour Pensions Secretary, John Hutton—a man I know the hon. Gentleman really admires—says that it would be difficult to get a better deal?
Mr Speaker
Order. I may or may not be economically illiterate, but I gently, tentatively and courteously point out to the Chancellor that I do not have a five-point plan.
Robert Halfon (Harlow) (Con)
I thank the Chancellor for listening to millions of hard-pressed motorists and the Fair Fuel UK campaign and for not raising fuel duty next year. Is he aware that that will save 37,000 Harlow motorists more than £1 million next year? Will he listen to Essex man once again and set up a commission to look at the long-term problems of petrol and diesel price rises and see whether anything more can be done?
Mr Osborne
I should pay particular tribute to my hon. Friend, who has led a dogged campaign on behalf of the people of Harlow and of the whole country to get some relief from the increases in petrol taxes that were planned by the last Labour Government. I am delighted that we have been able to help. I always listen to Essex man, who is represented in the form of my hon. Friend.
Mrs Mary Glindon (North Tyneside) (Lab)
Will the Chancellor acknowledge that public sector workers are themselves taxpayers who make a massive contribution to the good of the country, and will he stop treating them like leeches on the public purse?
Mr Osborne
Of course people who work in the public sector pay taxes and make an enormous contribution to the British economy, but the hon. Lady should recognise that public sector pay restraint and pension reform at a time such as this is one of the ways in which we can reduce the impact of the very large deficit that her Government ran up on the public sector work force.
Charlie Elphicke (Dover) (Con)
I give a wholehearted welcome to the announcement concerning the lower Thames crossing, which will make a big difference to Kent, as will the massive help for small business finance. May I make a plea to the Chancellor to look further at small business equity finance? In particular, will he consider whether there is scope for expanding, or possibly floating, the business growth fund?
Mr Osborne
I am very happy to look at ideas to enhance the business growth fund, which is principally operated by the banks, under which they have committed to invest in the equity of small companies. We have already announced the seed enterprise investment scheme, which will help angel investments in companies. I am glad that my hon. Friend supports the commitment that we made to the new crossing at the lower Thames.
Mark Durkan (Foyle) (SDLP)
The Chancellor has proclaimed support for business and jobs in the present climate. He also puts at a premium innovation, productivity and exports. Do his plans therefore extend to assisting firms in the sterling zone—I am talking particularly about the areas of medical devices, life sciences and sustainable technologies—that are finding the flow and scale of orders from eurozone countries compromised and the reliability of payments damaged because of austerity measures in those countries?
Mr Osborne
I am not sure that I agree with the hon. Gentleman that austerity measures are to blame, but I certainly agree that that is a real problem. Of course one of the consequences of the ongoing eurozone crisis has been an increase in bank funding costs across the European continent. The further disruption to the financial system is having an impact on exports to the eurozone, which is one of the reasons that this crisis is having a chilling effect on the British economy. Later today, I will be going to another meeting of European Finance Ministers in Brussels to try to get a better resolution of the problems.
Mary Macleod (Brentford and Isleworth) (Con)
In my constituency in the London borough of Hounslow, we have a real and immediate shortage of school places. I therefore welcome the Chancellor’s announcement today of the £600 million investment in school places. Will he confirm that that will mean an extra 40,000 places for school children and will he say when that money will become available?
Mr Osborne
We are addressing the problem of basic need, which was ignored by the previous Government. I know in places such as my hon. Friend’s constituency, the problem is acute. Let me write to her about the specific impact on her constituency and how many additional places the investment will create in the surrounding area.
John McDonnell (Hayes and Harlington) (Lab)
In my constituency, religious and community organisations are now providing food parcels to poor families. At the same time, we are seeing executive pay and remuneration soar. There was nothing in the Budget statement that addressed executive pay or remuneration. Are the Government going to bring forward some controls to tackle that obscene inequality?
Mr Osborne
I know that the previous Government were
“intensely relaxed about people getting filthy rich”.
We are introducing transparency in pay. We are bringing regulations before the House to force banks to disclose the incomes of their eight highest paid employees. We are also consulting on high pay more generally. We have introduced the bank levy, which the previous Government failed to introduce in 13 years and which the shadow Chancellor could have introduced when he was City Minister, but never did.
Anne Marie Morris (Newton Abbot) (Con)
I congratulate the Chancellor on his support for micro-businesses, which, as he well knows, I extensively champion. The extension to small business relief is great and the new seed enterprise investment scheme is fantastic. Can we hope to have more focus on the very important tiny companies that are too often overshadowed by the big brother SMEs? They are the area for new jobs and for growth in the economy.
Mr Osborne
My hon. Friend is indeed a powerful champion of micro-businesses. She has spoken to me about them on a number of occasions in the past year. We have set out a number of measures that will help such businesses, including the rate relief holiday, the seed investment scheme and the support for innovation. We are consulting and having a call for evidence specifically on compensated no-fault dismissal for firms of fewer than 10 employees.
Lilian Greenwood (Nottingham South) (Lab)
Why are hard-working families on tax credits, low-paid public sector workers and the thousands of young people in my city with no job paying the price of the Chancellor’s economic failure while he lets bankers keep their bonuses?
Mr Osborne
It was the Labour Government who let the City explode. They allowed that to happen when the shadow Chancellor was the City Minister. They had 13 years to regulate the City and I suspect that on not one occasion did the hon. Lady write to either Tony Blair or the last Prime Minister calling for that regulation. The Labour party presided over the biggest financial crisis in our country’s history. We are properly regulating the banks and introducing ring-fencing. We have brought in a permanent bank tax and transparency in bankers’ pay. None of those things existed in the 13 years of Labour Government.
Jeremy Lefroy (Stafford) (Con)
I welcome the Chancellor’s statement which includes measures that will really help Staffordshire such as the M6 managed motorways scheme and the announcement on energy-intensive industries. How much does my right hon. Friend expect to make from the anti-tax avoidance measures that he has taken and that the previous Government did not?
Mr Osborne
I am glad that my hon. Friend welcomes the support that we have given to businesses and families in Staffordshire. I am also glad that he welcomes the M6 managed motorways scheme. We have taken specific measures to deal with both tax avoidance and unfair tax treatment. For example, the measures that I have announced to deal with double tax relief and asset-backed pension contributions will raise £450 million and the measures to deal with low-value consignment relief, which was strangling music shops on our high street, will raise £100 million. We have taken action, which the previous Government failed to take, to ensure that everyone pays their fair share.
Paul Farrelly (Newcastle-under-Lyme) (Lab)
I look forward to meeting the Chancellor over the Prime Minister’s broken promise to award an enterprise zone to north Staffordshire.
Regarding lending to small business, can the Chancellor confirm that under his loan guarantee scheme, the credit risk will remain with the banks? If so, how will it work in practice given that the banks have been averse to lending and expanding their balance sheets? Furthermore, what safeguards will there be to ensure that they do not largely fatten interest margins and their profits under his scheme?
Mr Osborne
Of course I am happy for the hon. Gentleman to be part of those discussions on enterprise zones. Many areas of the country put in bids for enterprise zones. We were able to give the go-ahead to only the 22 that we announced previously and the two now for Humber and Lancashire, which I have confirmed today. There is also the expansion of the north-eastern one to the Port of Blyth, which is warmly welcomed on the Opposition Benches. I am happy to meet the hon. Gentleman to discuss the problem. On the national loan guarantee scheme, he is right to say that we have to get the audit trail right. We are looking very closely and seeking to model a lot of what we are doing on the European Investment Bank’s scheme, which already delivers lower rates to small businesses in Britain. It is a small scheme but the procedures are already in place. I can confirm that the credit risk of the small business loan sits with the banks.
Andrew Bridgen (North West Leicestershire) (Con)
Does the Chancellor agree that the Government must continue to oppose the calls from the Labour party to adopt its plan B? When in government, it took our country to the brink of bankruptcy, and adopting its plan B would risk pushing it over the edge. The B in Labour’s plan B stands for bankruptcy.
Mr Osborne
It is indeed a plan B for bankruptcy. It is striking that no mainstream or centre-left party in Europe, other than the Labour party, currently advocates more spending. I can reach only one conclusion: the Labour party does so only because the man that it has chosen to be its shadow Chancellor is the man more identified than almost anyone else apart from the previous Prime Minister with the financial and economic mess that this country got into.
Chris Williamson (Derby North) (Lab)
The Chancellor claims to support the manufacturing industry and told the House at the conclusion of this year’s Budget speech that he wanted to be
“carried aloft by the march of the makers” —[Official Report, 23 March 2011; Vol. 525, c. 966.]
in order to create jobs and support families. Will he explain, therefore, why he thinks it a good idea that the Government are undermining and potentially destroying the British train-building industry by building trains for the Thameslink line in Germany rather than at the Bombardier factory in Derby?
Mr Osborne
The hon. Gentleman should be straight with the House. That was a contract signed by the previous Labour Government—[Hon. Members: “No it wasn’t.”] It was a procurement process initiated by the previous Labour Government that left no other option for the British Government than the contract signed. That was the contract that we were forced to deal with under the rules of the previous Labour Government. In the autumn statement document, we set out changes to procurement rules to ensure that these sorts of things do not happen again. I can also confirm that we have committed to building 130 carriages on Southern Rail, and I very much hope that they can be built in Britain.
Sarah Newton (Truro and Falmouth) (Con)
From his statement, it is clear that my right hon. Friend has listened carefully to businesses in the port of Falmouth, where we want to strike the right balance between protecting our environment and developing a sustainable regional economy and new jobs. Will he detail what measures he has put in place to overcome the obstacles in our way?
Mr Osborne
I remember visiting the Falmouth estuary with my hon. Friend and talking to the local harbour master, the port authority and others about the ridiculous situation whereby we cannot dredge the Falmouth estuary and expand the port. The specific reference in my speech to the EU habitats directive was in part a reference to what was happening in Falmouth. As Members will know, I am working extremely hard to overcome these problems so that we can get the estuary dredged, as it has always been dredged, create jobs in Falmouth and address the ridiculous imbalance in our society whereby, in order to protect seaweed at the bottom of the Falmouth estuary, we cannot dredge it and create hundreds of jobs in Falmouth.
Derek Twigg (Halton) (Lab)
In view of the decision that the Chancellor has announced regarding the reduction in tolls on the Humber bridge, may I ask him—he, too, is a Cheshire MP—whether he will consider what can be done to reduce the proposed level of tolls on the Mersey gateway? More specifically, will he consider the condition limiting how much of the toll revenue Halton council can use to give discounts to local residents? As he knows, they can travel across the current bridge for free, but when the new bridge is built, both bridges will be tolled.
Mr Osborne
I very much want the second Mersey crossing to get the go-ahead, and the Government have committed the support, including financial support, to the specific plan. It has to be tolled to be paid for, however, as I am sure people understand, but I would draw a distinction with the Humber bridge: the debt on the Humber bridge was paid for many years ago and so the tolls were unreasonable. However, when providing new infrastructure, we have to find a way of funding it. It has to come either from general taxation—we are providing tax support—or out of the tolls. However, I shall consider the hon. Gentleman's specific point about the arrangements with Halton council, speak to my right hon. Friend the Transport Secretary and get back to him.
Iain Stewart (Milton Keynes South) (Con)
Just three weeks ago, I set up an all-party group to campaign for the reopening of the east-west rail link. May I thank the Chancellor for agreeing to our requests, and will he confirm that the project has a benefit-cost ratio of more than 6:1 and is in line to generate up to 12,000 high-quality jobs along the route?
Mr Osborne
This is evidence of what a powerful campaigner my hon. Friend is on behalf of his constituents and Milton Keynes, and I am delighted that we can develop these plans, which have the potential to create many, many thousands of jobs. It would be good to reopen a railway line in Britain.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
I am concerned that the Chancellor might be missing a trick. Hundreds of millions of pounds of European regional development funding are waiting to be drawn down by the UK, including £100 million for the north-east alone. Is the Government’s failure to take steps to secure match funding—for example, through the regional growth fund—a deliberate policy or simply an oversight?
Mr Osborne
We are keen to make use of European funds where available, but there are issues of affordability with match funding. I can assure the hon. Lady, however, that if she contacts me with specific examples of European funding that she wants us to draw on, I will see whether it can be done.
David Mowat (Warrington South) (Con)
The Chancellor will be aware that in the last year of the previous Government, the discrepancy in gross value added between London and the English regions reached 100%—the worst for two decades—so can he confirm that it remains at the forefront of his policy to fix this appalling situation?
Mr Osborne
Yes, absolutely. We must get the private sector in our regions growing. It is striking that, through all the years of the Labour Government—with the regional developments and their like—the disparity between the English regions actually grew. That is what happened under their regional policy. That was because they did not focus enough on getting the private sector growing. The Government can do that by supporting things such as the regional growth fund and through investment in transport infrastructure. I know that my hon. Friend has made a powerful case for improvements to Warrington town centre and traffic flow in the borough.
Stella Creasy (Walthamstow) (Lab/Co-op)
The Government have today announced plans that take three times as much from families as from banks. Given that, as we now see, half of all households cannot make ends meet at the end of the month, does the Chancellor think that, under his plans, more or fewer people will be forced to borrow from legal and illegal loan sharks?
Mr Osborne
That is a pretty ludicrous question. We have tried to help families through the freeze in fuel duty in January and with rail fares, and we are uprating working and non-working-age benefits in the way that I set out. We were unable to pay the additional £110 on the child tax credit child element, as I explained. That is because of the substantial increase that the uprating will provide.
Mr Julian Brazier (Canterbury) (Con)
I congratulate my right hon. Friend on focusing firmly on monetary policy. May I urge him to consider the box-ticking farce that is the lending policy of most banks and to focus his excellent credit-easing policy on those sectors, such as suppliers to the construction industry, that are particularly disadvantaged by it?
Mr Osborne
I want to ensure, in the way that I set out, that the national loan guarantee scheme is available to companies with a turnover of less than £50 million. As I mentioned in my statement, the business finance partnership, which has not had as much attention as the national loan guarantee scheme, is a £1 billion fund—it can be more if it succeeds—specifically targeted at mid-cap companies to provide non-bank financing for those companies alongside, for example, pension and insurance funds.
Mr David Anderson (Blaydon) (Lab)
At a time when inflation is 5% and when the average nurse in this country has had a two-year pay freeze, faces two years of a 1% pay limit, a 3% theft on her pension and frozen or capped increments, does the Chancellor agree that over this Parliament the average nurse’s living standards will fall by 10%, and that, if the plans for regional pay go through, people in the regions might be even worse off?
Mr Osborne
First, we have committed to real increases in the health budget, and the official—
Mr Osborne
Well, the pay comes out of the health budget, and the official policy of the Labour party is not to increase health spending in real terms. [Interruption.] This is rubbish: that is the stated position of the shadow Health Secretary; that is what he says. On pay, I want to hear from the shadow Chancellor at some point this evening whether he supports a 1% average pay rise in the next few years, because then we will know whether the complaints that the hon. Gentleman has just made have any force.
Michael Ellis (Northampton North) (Con)
I warmly welcome the Chancellor’s statement. Can he confirm that, despite the quack economics cited by those on the Opposition Front Bench, the chief economist of the OECD has said not only that we are on course, but that plan A is the right plan for this country?
Mr Osborne
My hon. Friend is right. The OECD was absolutely explicit in saying yesterday that we were right to be dealing with our debts, and if one looks, the forecasts for the UK were tough, but they were worse for many eurozone countries, which I am afraid is just an indication of the difficult world that we are in.
Richard Burden (Birmingham, Northfield) (Lab)
The Chancellor will be aware of the widespread calls from manufacturing businesses to increase the range and extent of capital allowances. Did I hear him correctly that his proposal to increase them to 100% is restricted to some enterprise zones and is not available to others? If that is the case, how will he ensure that this will lead to an increase in investment, rather than displacement investment? In a place such as the west midlands, which already has some of the poorest areas in the entire country, how would a public sector worker reach any conclusion from today’s announcement other than that he or she is being asked to work harder, for longer and for less, for doing the same job as somebody in the south-west or south-east?
Mr Osborne
First, we are today asking the independent pay bodies—which I think everyone in this House supports—to look at more local pay. That is the start of this process. Secondly, we increased capital allowances for short-life assets in the previous Budget. On the enterprise zones and the 100% relief that I have announced, there were specific proposals from the enterprise zones that I mentioned to attract new manufacturing and business into the zones. We are conscious that we want to avoid displacement activities, so we have given those capital allowances not to all enterprise zones, but to the enterprise zones that we think have the most compelling plans to create new businesses, and I hope that the hon. Gentleman would welcome that.
Joseph Johnson (Orpington) (Con)
Hard-working commuters and others in Orpington who depend on Southeastern trains have for years been hit by a fare increase regime of RPI plus 3%. May I therefore welcome my right hon. Friend’s decision to cap rail increases at RPI plus 1%, which will provide hard-working families with much needed support in these difficult times?
Mr Osborne
I welcome my hon. Friend’s support. I hope that this measure will help people living in Orpington who commute into London to work and that it will really enable us to help local people at this difficult time with their costs of living.
Mr Ronnie Campbell (Blyth Valley) (Lab)
I welcome the Chancellor’s statement on the port of Blyth, which is something for which I have been fighting for a long time—I asked the Business Secretary about that only last week, so this is good, quick thinking. However, is the Chancellor aware that south-east Northumberland, where Blyth and the estuary are, has the highest unemployment in the north-east and perhaps the country? Will he consider making the estuary and all the land around it into an enterprise zone, bringing the jobs to where the unemployment blackspots are?
Mr Osborne
I think I had better capture the moment when I get a compliment from the hon. Gentleman. We have acted quickly on a specific proposal that was made for the port of Blyth. We are going to consult on it and get the detail right. I am happy to consider the proposal that he makes. It has to be affordable, of course, and it has to work in terms of encouraging enterprise and new business, but we are absolutely committed to the north-eastern zone and to the port of Blyth being a successful part of it.
Angie Bray (Ealing Central and Acton) (Con)
I congratulate the Chancellor on a statement that is absolutely right for these tough times and, particularly for Londoners, on his investment in infrastructure projects. Will he consider, in discussion with the Transport Secretary, bringing forward the Crossrail infrastructure project to parts of London? That would be good not only for parts of London, but especially for my constituents. We have a station—Ealing Broadway station—that has been urgently in need of an upgrade for many years now.
Mr Osborne
I can give my hon. Friend an assurance that we are certainly not going to delay on Crossrail, which is currently being built—we can see that at the moment around London. We have looked at this, but with such a complicated project, I do not think that it is possible to advance it faster than it is going at the moment, because it is going as fast as it can.
Hugh Bayley (York Central) (Lab)
I welcome the Chancellor’s plan B. It is a small start, but at least it shows that his previous plan A—reduction of public infrastructure investment—was a mistake. Can he tell me what steps the Government will take to ensure that the construction companies that pick up contracts under his infrastructure investment scheme will take on apprentices, and also say how many jobs in the construction industry he thinks will be created by this £30 billion of investment?
Mr Osborne
I explained that, pound for pound and in each year, we were paying for infrastructure spending with savings in current spending or underspend, so the position is absolutely consistent with the plan that I set out before. On jobs, I have not put a figure on the total number of jobs created by all this infrastructure—I do not want to over-promise and under-deliver. It will create jobs, but we do not have a figure. We are dramatically expanding the number of apprenticeships. I want to ensure that they are in the construction sector, and I would certainly hope that large firms taking part in Government infrastructure investment projects—and, indeed, firms in our small business scheme—are also taking on apprentices.
Penny Mordaunt (Portsmouth North) (Con)
May I welcome the Chancellor’s vote of confidence in the space sector today? I hope that Portsmouth, via Astrium, might benefit directly from that investment, but wherever the money goes, can he confirm that this Government will be—if he will forgive the expression—a “launch customer” and that our procurement will support those companies in massively increasing their exports?
Mr Osborne
We are giving specific support to new satellite manufacturing, which is a real success story in Britain—it is one of those untold stories. I know that the sector is particularly successful in the area that my hon. Friend represents. From memory—I will certainly correct the record if I have got this wrong—we are providing £25 million to support the development of new satellites, as a result bringing, we think, an additional £150 million of private sector investment into the small satellites sector, which I think is also taking place in the area that she represents. That is a good example of the Government trying to encourage the private sector and get jobs across the country.
Simon Danczuk (Rochdale) (Lab)
The retail sector is finding it extremely difficult and is being hammered in the current economic climate, yet it is a sector that usually provides lots of jobs for young people. Did the Chancellor not consider a scheme to help underwrite credit insurance, in particular to help independent retailers?
Mr Osborne
If the hon. Gentleman has specific proposals on credit insurance, I will be very happy to look at them. When it comes to credit easing more broadly, I have set a £40 billion envelope, although I have committed only £21 billion today, as it covers the two schemes that were ready to go: the national loan guarantee scheme and the business finance partnership. We are looking at partnership schemes and other things that might work within the envelope, and of course we are vigilant about conditions in the broader economy—including issues such as trade finance—that might be affected by the eurozone crisis.
Gavin Williamson (South Staffordshire) (Con)
I am sure that the Chancellor is aware that Jaguar Land Rover is currently constructing an engine plant in an enterprise zone in my constituency of South Staffordshire. Does he agree that measures on enterprise zones, R and D tax credits and infrastructure development will help the continued manufacturing revival?
Mr Osborne
Yes, I of course agree with my hon. Friend. Again, another success story at the moment is the car industry. I am absolutely delighted by Jaguar Land Rover’s announcement, which is a real vote of confidence in the UK—the company could have constructed that engine plant elsewhere in the world. The announcements that I have made on R and D above-the-line tax credits will also help larger companies do their R and D in Britain.
Jim Shannon (Strangford) (DUP)
One of the biggest problems of modern society is youth unemployment. The Chancellor said that companies would be given national insurance discounts and other incentives to recruit and train young people. What other help will they be offered for that purpose?
Mr Osborne
We are helping companies to train young people through our apprenticeship programme, and I am happy to be engaged in active discussion with the devolved Administration in Northern Ireland about how that help can best be delivered there.
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
I thank my right hon. Friend for his statement and welcome his announcement of a national infrastructure plan, particularly in the context of south Essex. There is no doubt that investment in vital infrastructure is a key driver of growth. Will he agree to work with Members in areas that will benefit from the investment, to ensure that we obtain the best return on it both locally and nationally?
Mr Osborne
I certainly give that commitment, and I hope that south Essex will benefit from the commitment that we have already given today to work on a third crossing over the lower Thames. There are a number of possible locations for it, but it will definitely help economic activity both north and south of the Thames.
Julie Hilling (Bolton West) (Lab)
Before the general election, growth was increasing, the deficit was being reduced and unemployment was falling. Since the election, growth is down, borrowing is up and unemployment is going through the sky, and ordinary people are feeling the pain. Can the Chancellor truthfully tell us that his plan is working?
Mr Osborne
I had probably forgotten that we had inherited a golden economic legacy from the Labour party. What I remember is that we inherited a country that did not have a credible plan to deal with the deficit, which the credit rating agencies had put on negative outlook, and which the CBI, the OECD and all the other international organisations said lacked a credible plan.
Of course, as the OBR has made clear in its independent report, we are dealing with the consequences of the catastrophic failure of the last Labour Government to regulate financial services better, not least during the period when the shadow Chancellor was City Minister. That caused one of the deepest crashes of our country’s history. [Interruption.] We no longer hear the phrase “No more boom and bust” from the shadow Chancellor. He invented that phrase, and he gave us the largest boom and the biggest bust in our entire history.
Mr Rob Wilson (Reading East) (Con)
I congratulate the Chancellor on his statement, and in particular on the new tax breaks for private investors in start-up companies. As I have not seen the details yet, can the Chancellor briefly elaborate on how the system will work for smaller investors?
Mr Osborne
The seed enterprise investment scheme will provide 50% tax relief for all who invest in a qualifying start-up, even if they do not pay the 50% rate of income tax. The investment can be up to £100,000, although of course it can be much less. The companies involved can receive a maximum of £150,000. Those who have a capital gain can invest up to £100,000 of it in the scheme, and the amount will be tax-free for the next financial year. The scheme is aimed at small as well as slightly larger investors, and is designed to help start-up companies to obtain the finance they need.
Toby Perkins (Chesterfield) (Lab)
The last Chancellor to see interest rates go through the roof was not a Labour Chancellor, but the one who was advised by this Chancellor’s right hon. Friend the Prime Minister. If the Chancellor seriously thinks that the current level of interest rates is a sign of his success, will he consider any increase in interest rates to be a sign of failure?
Mr Osborne
We are doing all we can to keep our country safe in a debt storm. We need only look at the Italian bond auction today to see the market rates that Italy is paying. We are currently, in a debt crisis, borrowing money more cheaply than Germany. That represents a vote of confidence in the deficit plan of the United Kingdom.
Mark Pawsey (Rugby) (Con)
I thank the Chancellor for listening to the representations of energy-intensive industries, and I welcome the measures that he has announced. They will be examined closely by companies such as CEMEX, which is in my constituency. Can he give us an estimate of the number of UK jobs that will be saved as a result of his measures, both directly and in the supply chain?
Mr Osborne
We have not made an exact estimate of the number of jobs that will be saved, but I am certain that these measures will help to keep such industries in the United Kingdom. It is important that we do not price our industry out of the world market. That would do nothing to reduce our carbon emissions, but it would damage our economy. We have worked with the energy-intensive industries and the business organisations to develop our package, and I think that it achieves the right balance between ensuring that those industries remain competitive and meeting our international environmental obligations.
Sheila Gilmore (Edinburgh East) (Lab)
The Government have made a virtue of wanting to make work pay. How does it make work pay first to reduce child care tax credit, and then not to upgrade working tax credit in the same way as out-of-work benefit?
Mr Osborne
We are uprating the child care element of child tax credit, along with other elements of child tax credit, in line with September CPI inflation, so it is not true to say that we are not uprating child tax credit. We had to make a difficult decision on working tax credit, but we think that one of the best ways of supporting low-income working people is to take them out of the tax system altogether.
Richard Graham (Gloucester) (Con)
Last week I met members of the committee of the Federation of Small Businesses in my constituency to hear about their principal difficulties, one of which was gaining access to affordable finance. Today I believe that both they and manufacturers in Gloucester will be especially pleased to hear about the Chancellor’s creation of a national loan guarantee scheme to provide more and affordable finance. As he said, that will be the best key to increasing growth and the number of apprenticeships and reducing unemployment in our city and elsewhere. When does he expect the scheme to be open for business?
Mr Osborne
We hope to get it up and running in the next couple of months. We must clear the state aid hurdles—I am afraid that that is a fact of life—but we have been making good progress, and we hope that following the European Investment Bank scheme that already exists will make the process relatively simple. We are open to other credit-easing programmes such as partnership schemes, which some people have suggested, and we want to work with the Federation of Small Businesses and others to ensure that small businesses receive their money in the form of reduced rates for those who participate in the scheme.
I said explicitly in my statement that we would not make the best the enemy of the good. We must get the scheme up and running as quickly as possible in order to help companies in Gloucester and elsewhere that have found it difficult to gain access to finance over the last three or four years.
Jessica Morden (Newport East) (Lab)
The Chancellor referred earlier to the Severn bridge tolls. Can he be more specific about what he can do to help, in view of the assistance that he has given to the Humber bridge?
Mr Osborne
The issue of the Severn bridge tolls is different. There will come a point later in the decade when the question arises of what we do with the toll income and how it is allocated between England and Wales. I want to establish, in discussion with the Welsh Government in Cardiff, whether we can arrange to use the money from the tolls to support the M4 corridor in south Wales.
Rehman Chishti (Gillingham and Rainham) (Con)
I welcome the Chancellor’s statement, and, in particular, the help given to commuters in my constituency who will save £67 on their season tickets to London. Will he confirm that the shadow Chancellor’s illegal fuel tax policy contravenes annex III of the EU directive on VAT?
Mr Osborne
It does. It is an illegal policy, which is a novel thing for an Opposition to advance. As I have said, fuel duty and taxes would be 10p higher if we had not acted in the Budget or in the autumn. [Interruption.] I still have not heard whether the shadow Chancellor supports what we have done on fuel duty. He will probably say yes, but he will not say how he would fund it. As, unfortunately, he did not discover at the Treasury, we must make the sums add up in order to keep the country’s books balanced and ensure that we stay out of a debt storm.
Heidi Alexander (Lewisham East) (Lab)
In the first nine months of this year, on the Chancellor’s watch, long-term youth unemployment in my constituency increased by 192%. I ask the Chancellor this: how can it be right that young people in my constituency are paying the price for the Government’s abject failure to get the economy moving?
Mr Osborne
Unfortunately, the young people the hon. Lady refers to are paying the price for the biggest boom and bust in our country’s economic history, which the Government she supported presided over. What this coalition Government are doing is introducing a youth contract to help those people in Lewisham and elsewhere. It will provide work experience after three months for the unemployed, it will require weekly signing on after five months, and it will provide subsidised jobs in the private sector, encouraging businesses to get people into work and offer apprenticeships. In return, it will ask those young people actively to look for work, and there are sanctions if they do not do so. That is what we are offering the young people of Lewisham, who were so badly betrayed by a Labour Government.
Mr Philip Hollobone (Kettering) (Con)
I thank the Chancellor for his £110 million vote of confidence in Kettering with the approval of two major road schemes: the widening of the A14 Kettering bypass, and the go-ahead for the A43 Corby link road, which is also known as the Geddington bypass. When does he anticipate the diggers will move in and construction can start?
Mr Osborne
If I may, I will write to my hon. Friend with a specific answer on when the diggers will start on the widening of the A14 Kettering bypass and on the Corby link road, but these are commitments for this spending review so it is in the next few years and not at some future date. I know how important both those roads are for the local economy and for local people, and I am really pleased that, thanks in part to the campaign and the support of the local Member of Parliament, we have been able to give them the go-ahead.
Mr Speaker
We look forward to hearing about the dates for the diggers, as I am sure do the people of Kettering.
Jonathan Ashworth (Leicester South) (Lab)
May I push the Chancellor a little further on borrowing, because so far in the exchanges he has not quite brought himself to admit that he is going to be borrowing £158 billion more than he planned to borrow a year ago? Will he confirm that that is the case—yes or no?
Mr Osborne
I set out the borrowing figures to Parliament and what the hon. Gentleman should admit is that the plan he is pursuing would add to the borrowing. We cannot borrow our way out of a debt crisis, and as long as the Labour party goes on advocating that approach, I suspect that its credibility will fall and fall.
Mr Peter Bone (Wellingborough) (Con)
I am slightly concerned about whether the health of the shadow Chancellor is in order, as he has spent the past hour muttering to himself. However, may I ask the Chancellor whether he thinks that new Government policy should be announced to Parliament first?
Martin Vickers (Cleethorpes) (Con)
On behalf of my constituents, I thank the Chancellor for the many initiatives that he has introduced for northern Lincolnshire and Humberside. Of course I cannot let the moment pass without a particular word of thanks for what he has done on the Humber bridge tolls, as it will be a great boost to the local economy. The national infrastructure plan rightly says that we have to wait until the new planning framework is in position before we can speed up the planning process. A number of major investments are pending in my constituency. Can he assure me that the full weight of the Government will be behind them to speed them along?
Mr Osborne
My hon. Friend absolutely has my assurance. If he wants to contact me with specific proposals that will create jobs in Cleethorpes and elsewhere in Lincolnshire, would he please let me know and I will do what I can to advance them, within the rules and the planning laws. As he knows, I am trying to reform those laws to make it easier to get the go-ahead for development that is sustainable and in tune with our broader environmental objectives. I want to make the planning system more rapid, and I should put on the record that the campaign that he has fought with other Members to get those Humber bridge tolls reduced shows that Cleethorpes has a powerful champion in my hon. Friend.
Julian Sturdy (York Outer) (Con)
As a Yorkshire MP, I strongly welcome the Government’s decision to electrify the trans-Pennine rail link between Leeds and Manchester and the huge boost that that will bring to our northern economy. As a York MP, too, may I ask the Chancellor whether the Treasury has examined the strong economic case for linking Leeds to York?
Mr Osborne
I do not have the specific details in front of me, but I will certainly engage with my hon. Friend on that proposal, and I hope that we can advance it.
Neil Carmichael (Stroud) (Con)
There are many substantial measures to welcome in this package, but I wish to focus on the national loan guarantee scheme, because it will help many small businesses in my constituency, particularly those in the manufacturing and engineering sector. Does the Chancellor agree that what we should be hoping for from banks is more sophistication when they allocate money to small businesses and more analysis of what the prospects of small businesses actually are?
Mr Osborne
Yes, I think that we all want to see a move to a banking system that is more responsive to local businesses and local people and that is not just based on a computer model that allocates credit and the computer says no. We want to return to having local bank managers empowered to make decisions, and a number of banks are doing this. One of the notable successes at the moment is Handelsbanken, which is out there lending money to small businesses and taking more of this local approach.
Alun Cairns (Vale of Glamorgan) (Con)
The Chancellor’s statements of support in favour of energy-intensive industries will be welcomed in south Wales, the midlands and the north, which are areas that have seen a particular decline in manufacturing over the past decade. The statements will be particularly welcomed by Dow Corning, a chemical manufacturing company in Barry in my constituency. How will they work in practice in order to support these companies in reducing their energy bills?
Mr Osborne
We are going to provide specific compensation for electricity-intensive businesses affected by the EU trading system and by the carbon price floor. We are also going to increase the climate change levy relief and work to make sure that those businesses are not adversely impacted by the electricity market reforms. We have a suite of measures, but the overall intention is clear: we want to help businesses such as the one in my hon. Friend’s constituency. I should say that I was first alerted to what we can do by a visit before the election to the steel works in Port Talbot, where I was very struck with the argument made there that the business could simply be moved to Holland if we did not act. We have been able to come forward with help that I think is going to support industries in south Wales.
Stephen Hammond (Wimbledon) (Con)
I warmly welcome my right hon. Friend’s statement, the many measures in it and, in particular, the reaffirmation of his commitment to ensuring that we overcome Labour’s debt storm. Many hard-working families in my constituency who aspire to buy their own homes will be pleased with today’s measures to ease the housing market. Will he confirm how many people nationally he expects the mortgage indemnity scheme to help, when it might start and how many jobs it is likely to create?
Mr Osborne
From memory, I think it is going to help 100,000 people, and that is a real boost. With the other housing measures we are taking, including the support for stalled sites—the £400 million package we are providing—we hope that that is going to create several hundred thousand jobs in the construction industry over the period going forward. The 50% right-to-buy discount we are introducing revives one of the most effective social policies of the past few decades—one that the Labour leader recently had to admit had worked and that the Labour party was wrong to oppose. A crucial additional element is that we are going to use the money to build social housing, which is why I think it is a policy appropriate to the modern age.
Bob Blackman (Harrow East) (Con)
One of the key inflationary pressures on the cost of housing is the level of housing benefit available, which was scandalously allowed to rise out of all proportion under the previous Government. Will my right hon. Friend confirm that there will be no slackening of controls over housing benefit, so that housing costs can be controlled?
Mr Osborne
I can absolutely assure my hon. Friend that we are going ahead with the cap on housing benefit, which is an important part of controlling costs. It is not fair that working people pay taxes to fund the rent for people who live in houses that those working people could never afford out of their salaries. It is quite right to introduce a cap to try to control those costs. Of all the benefits provided under the previous Government, this was one that really went through the roof, so to speak. Dealing with it and controlling it is a very important policy and it is a tragedy that the Labour party opposes the measure and no doubt wants to get rid of it at the next election.
Graham Evans (Weaver Vale) (Con)
Mrs Evans informs me that my three children will be on an unforeseen holiday tomorrow and I wondered whether my right hon. Friend would join me in urging the unions to call off tomorrow’s irresponsible strike. Does he agree with the shadow Chancellor’s “huge sympathy” for those going on strike tomorrow?
Mr Osborne
We should not be having a strike tomorrow. Negotiations are ongoing and we want those negotiations to conclude. I urge the unions, even at this late hour, to call off the strike and stop doing something that will damage the British economy and potentially cost jobs. Let us get around the table and try to get a deal, because I think that what is on offer is not only generous to the public sector and people who rely on public sector pensions but is also fair to the taxpayer. As Lord Hutton, the former Labour Pensions Secretary, has said,
“it is hard to imagine a better deal”.
I urge the trade union movement to take the deal.
Mr Speaker
I am grateful to the Chancellor and to colleagues, whose succinctness has enabled 96 Back-Bench Members to question the Chancellor in 97 minutes of exclusively Back-Bench time. That shows what can be done.
Points of order
(12 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text
Mrs Anne McGuire (Stirling) (Lab)
On a point of order, Mr Speaker. Yesterday, just after Department for Work and Pensions questions, you said, in response to my hon. Friend the Member for Wallasey (Ms Eagle), that you were concerned that Government statements were being given to the media before coming to the House. In response to a question from the hon. Member for Wellingborough (Mr Bone), the Work and Pensions Secretary said that all statements from his Department would be made to the House.
When the Minister with responsibility for disabled people, the Under-Secretary of State for Work and Pensions, the hon. Member for Basingstoke (Maria Miller), was asked a direct question yesterday on what she was going to do about disability living allowance and people in residential care homes, she said that she would come forward with her final response. However, the 80,000 people who were affected by the relevant proposal could have found out the answer this morning, had they turned to page 8 of The Times, where the Minister says that she will announce that she is going to reverse the decision.
Mr Speaker, have you received any indication from the Secretary of State or the Minister as to why they did not seek the opportunity to make that statement at yesterday’s DWP questions, during Report of the Welfare Reform Bill in the House of Lords, or at any point during the progress of that Bill through the House of Commons, but instead waited to give a statement to The Times?
Mr Speaker
I am grateful to the right hon. Lady for her point of order. The short answer to her inquiry is no, I was not given any indication by any Minister on that matter. Naturally, the timing of Government statements is a matter for Ministers, as is whether a Minister chooses to make an announcement via oral questions or during a debate in the House. However, the basic point stands that policy announcements should first be made in the House and not through the newspapers. I understand the very real concern that exists on this matter because it is shared by me, and I have discussed it with the Leader of the House.
More widely—I will entertain the point of order from the hon. Member for Derby North (Chris Williamson) in a moment if he wishes to pursue it—let me emphasise my approach to today’s proceedings. I hope that the House will understand that I felt the matters in question had been rather fully aired outside the House, and it is therefore entirely to be expected that the opportunity should be provided for matters to be fully aired in the House. I know that the Chancellor would accept that as being entirely right and proper. The issues have been explored very fully. That, at least, is a satisfactory state of affairs.
Chris Williamson
On a point of order, Mr Speaker. In his response to my question, the Chancellor inadvertently misled the House when he said that the previous Government had signed the contract for the Thameslink rolling stock programme. Can you, through your good offices, invite him to come back to the House to set the record straight so that there is no doubt about the situation—that the contract has been signed, at least to preferred bidder status, by this Administration and not by the previous one?
Mr Speaker
That is a testing point of order from the hon. Gentleman. All hon. Members, including Ministers, are responsible for the content and accuracy of the statements they make to the House. If an error has been made it is the responsibility of the Member who made it to correct it. I am sure that the Chancellor’s attention will have been drawn to the point of order raised by the hon. Gentleman and there may or may not be a response from him. If, however, the hon. Gentleman is dissatisfied, I feel sure, on the strength of my 18 months’ acquaintance with him, that he will pursue the matter like the veritable woodpecker he has proved to be. Perhaps we can leave it there for today.
Mr Peter Bone (Wellingborough) (Con)
On a point of order, Mr Speaker. I wonder whether you could advise me how I can get on the record the fact that the Backbench Business Committee has arranged a debate on Monday about ministerial statements.
Mr Speaker
Well, the hon. Gentleman has done so. He will have warmed the cockles of the hearts of committed parliamentarians in all parts of the House. For my part, I will go about my business with an additional glint in my eye and spring in my step by virtue of knowing what he has just told me.
As there are no further points of order, we come now to the ten-minute rule motion, for which the hon. Member for Mitcham and Morden (Siobhain McDonagh) has been so patiently waiting.
Electoral Register (Access to Public Services)
(12 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text
Siobhain McDonagh (Mitcham and Morden) (Lab)
I beg to move,
That leave be given to bring in a Bill to introduce a requirement that electoral registration be a condition of access to public services; and for connected purposes.
I am introducing this Bill because I believe in the power of democracy. Earlier this summer, we saw the consequences of alienation. The Secretary of State for Work and Pensions described
“a divided society, with a destructive minority apparently detached from notions of right and wrong”.
Of course, the riots were individual acts of criminality, but I agree with him that a large number of people feel so detached from society that they have nothing to lose. There is a democratic deficit. I therefore believe that we should actively include our whole community in our democracy, to combat such alienation.
At present, registering to vote is just about the nearest thing that we have to a social contract. It is an acknowledgement that we live in a democracy and that we abide by the outcome of that democracy, yet around 3.5 million people are not registered to vote. According to the Electoral Commission that minority, who are not engaged, are likely to be made up of the disadvantaged: young people, people on low incomes, private sector tenants, some but not all ethnic minorities, and people with disabilities.
My Bill aims to bridge the gap between that excluded group and the rest of our community because social breakdown takes place in that gap. If someone wants to access housing benefits, a state pension, a national insurance number or even a driving licence, they will need to be on the electoral register if the Bill is passed. I do not think that that is a great imposition. After all, if someone needs to be on the electoral register to get a credit card, why is it a problem to be on it to get a driving licence?
Linking access to public services with the electoral register will increase participation and provide an explicit link between the democratic process and the benefits that we enjoy because we live in a democracy, and, yes, it is tough love. It will mean that if people want the benefits of living in a democracy, they need to sign up to democracy. If they do not like living in a democracy, fine, they need not sign, but they should not expect all the good things in return.
Already, the electoral register has many useful purposes —for instance, it is the source of deciding who does jury service—and it is already possibly the country’s most cost-effective anti-crime database. The police use it if they want to catch up with someone or need to find out who a suspect might live with or know. Banks and credit companies use it to prevent fraud. Many councils already use it to check that people are paying their council tax or are on the right benefits. Charities and direct marketing companies use it to help their businesses and to raise funds for countless good causes. Finally, of course, its most important role is to give people a chance to vote. It is therefore in everyone’s interests for the electoral register to be as comprehensive as possible.
My Bill will target precisely the people who are unlikely to register, to bridge the 3.5 million gap. Sadly, we also need the Bill now to remedy a number of other measures being introduced by the Government that every commentator expects will widen that gap. First, they plan to make registering to vote optional. That is a dangerous step. It will legitimise disengagement and institutionalise an underclass. In countries where registration is optional, the already disadvantaged are those most likely to lose out. In the US, only six in 10 people on incomes below $20,000 register, and registration rates are just as low among under-25s and people who rent their homes—precisely the demographic of those who were involved in our riots.
The Government have suggested that councils might not need to chase up electoral registration forms with an annual canvass of every property. Again, I think that that is a retrograde step. My council, Merton, has told me that its canvass is effective. Before it took place, only 65% of homes returned their forms; afterwards, 97% did so. Finally, the Government have said that they would stop mums and dads registering their children to vote. When individual registration was introduced in Northern Ireland, the register collapsed by 11%, and the Electoral Commission said that that adversely affected disadvantaged groups—just the sort of people with whom we most need to engage to prevent exclusion.
Combined, the Government’s measures are likely to take about a third of voters off the register—more in areas of deprivation. People on the edge of society will further disengage, and we will institutionalise the underclass. What is worse, because the register will be less accurate and comprehensive, far from preventing fraud the proposals will increase it. The Government’s own papers admit that fraudulent electoral registration is “rare”, and that 20 times more people are satisfied with how they register to vote than dissatisfied. Only 2% of us think that registering to vote is “very unsafe”.
There is little incentive to register fraudulently, because councils such as mine already use the electoral register to ensure that everyone pays council tax. In fact, the electoral register is widely seen as more accurate and less prone to fraud than virtually any other data set. A number of councils have looked at using other databases to improve the electoral register, but the consensus seems to be that the electoral register is already the best. They have told the Select Committee on Political and Constitutional Reform that other databases
“tell us what we do know, rather than what we don’t”.
Many other databases are terrible by comparison. The Department for Work and Pensions database, for instance, includes people who are dead or who have left the country, and it does not include any information about nationality. As the information industry and crime fighters have known for years, the electoral register is the most accurate, because it is based on better intelligence from the people who actually live at each address and know who else does. Instead of undermining the electoral register in the mistaken belief that fraudulent voting is widespread, we should place greater emphasis on it in order to tackle other fraud.
The problem with our electoral register is not that there are too many people on it; it is that there are still 3.5 million who are not. My Bill is therefore a remedy for the Government’s proposals. It will reinstate those missing millions, the majority of whom may be eligible for benefits, tax credits, a state pension, a driving licence and so on. It will make the register even more accurate, and it will ensure that even more disadvantaged people engage in the democratic process.
In the past few months, I have heard many speeches about social breakdown and an excluded underclass without a stake in their community. I have not heard anyone calling for a “something for nothing” society. What this Bill says is that we should live in a “something for something” society: public services in return for a civic duty. Registering to vote might seem like a small thing, but if we send the message that people have to sign up to democracy if they want the rewards of living in a democracy, who knows, we might even strengthen it.
Registering to vote is a symbol of engagement, and recognition that people are not on the margins but a full part of our society. We do not need to take millions of people without a stake in their community off the electoral register—that will only institutionalise the underclass. We need an explicit social contract, and the Bill will achieve that. It will tackle fraud and reduce social exclusion, but more than that, it will ensure that more people have a chance to vote. If they do not like what is going on in their community, they will not have to destroy local shops—they can get rid of us. On that positive note, I commend the Bill to the House.
Question put and agreed to.
Ordered,
That Siobhain McDonagh, Ian Austin, Hazel Blears, Mr Russell Brown, Rosie Cooper, Nic Dakin, Mike Gapes, Meg Hillier, Mrs Sharon Hodgson, Mr Andrew Love, John Mann and Mr John Spellar present the Bill.
Siobhain McDonagh accordingly presented the Bill.
Bill read the First time; to be read a Second time on 20 January 2012, and to be printed (Bill 255).
London Olympic Games and Paralympic Games (Amendment) Bill (Programme) (No. 2)
Motion made, and Question put forthwith (Standing Order No. 83A(7)).
That the following provisions shall apply to the London Olympic Games and Paralympic Games (Amendment) Bill for the purpose of supplementing the Order of 28 April (London Olympic Games and Paralympic Games (Amendment) Bill (Programme)):
Consideration of Lords Amendments
1. Proceedings on consideration of Lords Amendments shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement at today’s sitting.
Subsequent stages
2. Any further Message from the Lords may be considered forthwith without any Question being put.
3. The proceedings on any further Message from the Lords shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement.—(Mr Newmark.)
Question agreed to.
London Olympic Games and Paralympic Games (Amendment) Bill
(12 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text
The Minister for Sport and the Olympics (Hugh Robertson)
I beg to move, That this House agrees with Lords amendment 1.
Mr Deputy Speaker (Mr Lindsay Hoyle)
With this we may take Lords amendments 2 and 3.
Hugh Robertson
The amendments address a technical concern raised by the Delegated Powers and Regulatory Reform Committee in the other place.
Hon. Members will recall that the London Olympic Games and Paralympic Games Act 2006 provides for the making of advertising and trading regulations. Under the Act, all such regulations, including amending regulations, are subject to the affirmative resolution procedure. The Bill, when we debated it earlier this year, would have amended the 2006 Act to provide that advertising and trading regulations, apart from the first set, could be made via the negative resolution procedure.
The Delegated Powers and Regulatory Reform Committee, in its report of 14 October, accepted the need to amend the 2006 Act to facilitate the amendment of the regulations via the quicker negative resolution procedure.
Keith Vaz (Leicester East) (Lab)
I wonder whether the Minister has heard of the controversy surrounding the sponsorship of the Olympics by the Dow Chemical Company. As we approach this Friday, the 27th anniversary of Bhopal, there is concern among Indian athletes and Indian parliamentarians about the issue. Will it affect the regulations? If, for example, Dow withdraws its sponsorship or is asked to withdraw its sponsorship, will these regulations affect that in any way?
Hugh Robertson
The short answer is no. I am entirely aware of the controversy that the right hon. Gentleman mentions. I believe the Indian Olympic committee is meeting this week and plans to make a decision. I am told that it is not planning a boycott or anything like it, but clearly that is a matter for the Indian Government and their Olympic committee.
It is recommended that the Bill be amended to provide that the affirmative resolution procedure must be used unless the Minister considers it necessary, by reason of urgency, to use the negative procedure. As I made clear when clause 2 was debated in this House, it was always my intention that the negative resolution procedure would be used only when there was an urgent need to do so. As such, the Government were happy to accept the Committee’s recommendation and to provide the additional clarification, and tabled amendments in Committee in the other place accordingly.
The effect of these amendments is that advertising and trading regulations will be made via the negative procedure only if the Minister considers that that is necessary by reason of urgency. In such a case, the regulations will confirm, on their face, that this is the Minister’s view. They also provide for the corresponding procedure in the Scottish Parliament, for advertising and trading regulations made by Scottish Ministers.
What we mean by “urgency” is that, for reasons of time, it would be impractical to use the affirmative procedure and necessary instead to use the negative procedure. This is likely to be because the amending regulations have to take effect quickly, before the earliest date that affirmative regulations could practicably be made. In essence, then, the amendments simply provide further assurance that the negative procedure would be used only when there is an urgent need to do so, and as a result provides extra assurance to Parliament. That was always the intention.
Tessa Jowell (Dulwich and West Norwood) (Lab)
I am pleased to support the Government’s technical amendments, which I think strike the right balance between parliamentary accountability and the need to be able to respond flexibly to urgent changes in situations. As we draw this process to a close, I will take the opportunity to commend all the officials who worked on the earlier legislation with me when I was Secretary of State and now support the Minister in taking it forward. This legislation is important for protecting the essential vision and ambition shared by Members on both sides of the House for our Olympic games. It relates to protection against ticket touting and the need to ensure the smooth operational running of the servicing for Olympic and Paralympic venues.
There are just eight months until the start of the Olympics. They are under budget, the venues and the Olympic village have been built on time and the torch relay has been announced. There is a real sense of excitement across the country. There may not be many other opportunities allowed by the long title or any other event to debate the Olympics, but I know that the Minister is always available to discuss matters of outstanding concern, such as that raised by my right hon. Friend the Member for Leicester East (Keith Vaz) and the legacy. I can assure the Minister that all those discussions will be in the spirit of the cross-party support that has been such an important feature of the preparation for the games.
Keith Vaz
Before my right hon. Friend brings her remarks to a close, may I pay tribute to her—she has rightly paid tribute to the Minister and the fact that the projects are on time—for all she has done over the past six years to help to secure the Olympics and to work with the Government on an all-party basis? We are very proud of what she has done.
Tessa Jowell
I thank my right hon. Friend for his generous comments. I warmly support the amendments to the Bill.
Mr Don Foster (Bath) (LD)
The right hon. Member for Leicester East (Keith Vaz) rightly praises the right hon. Member for Dulwich and West Norwood (Tessa Jowell), who praised the Minister, and I would like to praise them both for the excellent work they are doing.
It is interesting that we are debating two minor technical amendments to a Bill we debated not long ago. On Second Reading I pointed out that the explanatory notes stated that the Bill
“makes a small number of technical amendments to the advertising and trading, ticket touting, and traffic management provisions of the London Olympic Games and Paralympic Games Act 2006.”
We are now debating minor amendments to a Bill that itself made minor amendments to another Bill, but they are none the less important, because they reflect the spirit of what the Minister said when we debated the Bill. In relation to the advertising regulations contained therein, I think that we were all encouraged to hear that he is keen to introduce those as sensibly as possible. Indeed, on Second Reading he said that the advertising regulations would be treated with a “light-touch approach”. He later said that they would be handled “sensitively”, and on another occasion he said that they would be dealt with “proportionately”. We are grateful for all three assurances.
We are also grateful for the assurance that if, for example, the venue or timing of an event need to be altered, we have the ability to debate the matter in Parliament if those necessary changes relate to advertising. We all recognise that if, for example, a major burst water main causes a change in venue or timing at short notice, it is important, as others have suggested, that we have the power to ensure that we can continue to do what the Act is for: protecting the main sponsors of the event so that people do not leap on to a sudden change in order to introduce ambush marketing, for example. They are small amendments, but they are sensible and important and we certainly support them.
Lords amendment 1 agreed to.
Lords amendments 2 and 3 agreed to.
Terrorism prevention and investigation measures bill (Programme) (No. 2)
Motion made, and Question put forthwith (Standing Order No. 83A(7)),
That the following provisions shall apply to the Terrorism Prevention and Investigation Measures Bill for the purpose of supplementing the Order of 7 June (Terrorism Prevention and Investigation Measures Bill (Programme)):
Consideration of Lords Amendments
1. Proceedings on consideration of Lords Amendments shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement at today’s sitting.
Subsequent stages
2. Any further Message from the Lords may be considered forthwith without any Question being put.
3. The proceedings on any further Message from the Lords shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement.—(Mr Newmark.)
Question agreed to.
Terrorism Prevention and Investigation Measures Bill
(12 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
16:43 - The House divided: - Ayes: 204 / Noes: 306 - Question accordingly negatived.
The Parliamentary Under-Secretary of State for the Home Department (James Brokenshire)
I beg to move, That this House agrees with Lords amendment 1.
Mr Deputy Speaker (Mr Lindsay Hoyle)
With this it will be convenient to consider:
Lords amendments 2 to 10.
Lords amendment 11, and amendment (a) thereto.
James Brokenshire
The Bill returns to the House after its consideration in the other place. It was subject to lengthy and detailed scrutiny here in the summer, with 10 sittings in Committee, a Report and a Third Reading, all of which were characterised by a high standard of debate.
Their lordships have now given the Bill the full benefit of their expertise, and I am pleased to say that its main provisions are largely as they left this House, reflecting an acceptance that, however unfortunate this might be, there are a small number of individuals involved in terrorism whom we cannot successfully prosecute or deport, and the measures in the Bill are needed to deal with such individuals.
The Bill returns from the other place subject to 11 Government amendments, which are largely minor and technical changes to clarify drafting and better to reflect the policy intention. I will briefly explain why we have made those amendments, dealing first with Lords amendments 1 to 10 before moving on to Lords amendment 11 and Opposition amendment (a).
Lords amendments 1 and 2 make a small but necessary change to clause 8. The clause provides that the court must, when granting permission to impose a terrorism prevention and investigation measure notice—a TPIM notice—at the outset of the process give directions for a directions hearing in relation to the automatic full review of the case. As the Bill was originally drafted, that directions hearing would have had to have taken place within seven days of the TPIM notice being served, unless the individual agreed to postpone it.
The programming of such hearings is, of course, a matter for the courts. It became clear that the original provision had unintentionally introduced a restriction on the discretion available to the courts to manage similar directions hearings in the control order context. We were therefore asked by Her Majesty’s Courts and Tribunal Service to make a change to the Bill in order to provide the courts with a degree of flexibility in that respect and to facilitate effective management of court time.
We have therefore amended clause 8 so that the court may programme the directions hearing later than seven days after service of the TPIM notice, if it so directs. Of course, the intention is that directions hearings will be listed within those seven days where possible, but when the court is unable to do so, for example over a holiday period, the amendment will give the court the discretion to list the hearing slightly later.
Clause 8 still ensures, at subsection (5), that directions given at the hearing must provide for the substantive review hearing to be held as soon as reasonably practicable.
Bob Stewart (Beckenham) (Con)
How much later might it be possible to review the decision? The period is one week to start off with, but could it amount to 28 days, three months, or will it be flexible, with the court having the jurisdiction to decide that issue as well?
James Brokenshire
It is the purpose of the amendment to give the court discretion, although a practice has been established through the jurisprudence on control orders which informs that process. It is therefore intended to provide the court with the flexibility, as I explained in my introductory remarks.
Richard Fuller (Bedford) (Con)
May I probe and press my hon. Friend a little further on this point? As he knows, a number of colleagues in the House have the same concern about the TPIMs regime as they had about the old control orders regime: the uncertainty that arises for individuals in the court process. Does he accept that the amendments to clause 8 will increase that level of uncertainty for people who are put under TPIMs? Does he agree that there is scope for providing, if not a seven-day limit, at least a definitive statement about for how long, at each stage of the process, such individuals will be detained?
James Brokenshire
As I have already explained, we received this request following the consideration by Her Majesty’s Courts and Tribunals Service. The Government have not been seeking to provide any uncertainty—far from it. The provision is intended to reflect the practice of the courts. Therefore, following consideration of the representations that we received, we have introduced the Lords amendment that is before the House.
Richard Fuller
I greatly appreciate the Minister’s clarification. I fully accept that this is not a request by the Government. I am saying, from a political perspective on that role of the courts, that we are talking about the start of a process that imposes penalties on people and that, at almost every stage, has a level of indeterminacy about what is being put in place for them and how long it will last. Will my hon. Friend give some perspective on the suggestion that this change, even though it has been requested by the courts, further exacerbates the uncertainty in the imposition of such controls?
James Brokenshire
I do not accept that it provides uncertainty. It provides the courts with the ability to operate the regime effectively. As this matter was raised in the Lords, we are seeking this House’s consideration to ensure that the measure is properly applied. That is the basis on which we have introduced the amendment. I think it is appropriate to provide flexibility in the way that has been proposed.
Amendment 10 relates to the police reporting measure. It makes it clear that in addition to requiring the individual to report to a police station at specified times and in a specified manner, the Secretary of State may require the individual to comply with directions given by the police in relation to such reporting. That is necessary to ensure that the individual can be required to co-operate with the practicalities of reporting—for example, requiring him to report to the front desk of the police station, to speak to the officer there, and to sign to confirm his attendance. That has always been the intention behind the measure, and it is the current practice for control orders. It is necessary to ensure that the provision reflects the reality of how the measure is intended to operate. It is also in line with the general procedures for individuals required to report to a police station for any other reason—for example, individuals on police or court bail. Lords amendment 3 is necessary in consequence. It specifies that the definition of “TPIM decision” at clause 17(3) includes such a direction given by a constable in relation to the reporting measure.
Lords amendments 4 and 5 are essentially technical amendments which are necessary in consequence of changes to other legislation currently before Parliament. Section 154(1) of the Criminal Justice Act 2003, which has not been commenced, increases the maximum sentence on summary conviction in England and Wales from six months to 12 months. When the Terrorism Prevention and Investigation Measures Bill was drafted, the intention was that that provision would be repealed by the Legal Aid, Sentencing and Punishment of Offenders Bill. Because of this, clause 23 provides that the maximum sentence on summary conviction for contravening a measure specified in a TPIM notice is six months. However, section 154(1) of the 2003 Act will not now be repealed. On that basis, these amendments are needed to revert to the previous practice when legislating for offences that are tried summarily. They provide for a maximum 12-month term in England and Wales, but include a transitional provision limiting the sentencing power to six months pending commencement of section 154(1) of the 2003 Act.
Lords Amendments 6 and 9 relate to the overnight residence measure. That is intended to ensure that the individual can be required to reside at a specified address and to remain there for specified periods overnight. The clear purpose of that is to manage risk. As part of that measure, it may be necessary to require the individual to remain within the residence and to prohibit them from entering any garden or outside area that forms part of the property or any communal area in a shared property during the specified hours overnight.
As it was drafted, the provision did not necessarily make it clear that the measure could be applied in that way. These are essential drafting amendments to remove that uncertainty and to make clear the policy intention. They put it beyond doubt that the individual may be required to remain within their residence—that is, essentially, behind their front door—during the specified overnight period. I should make it clear that, where individuals are required to remain at their residence or are electronically monitored in other contexts, they will usually be required to remain in their house or flat and will not be allowed out into their garden. The particular requirements imposed by the Secretary of State in each case must, of course, always be necessary and proportionate. The court will subsequently consider the proportionality of each measure as part of its review of the notice.
On the point about directions hearings that my hon. Friend the Member for Bedford (Richard Fuller) made, I should add that clause 8(5) still provides that the substantive hearing is to take place as soon as possible. I just wanted to reassure him in case he thought that the proposal was open-ended. That is certainly not the intention. I hope that the need to act expeditiously in this regard is clear to him.
Lords Amendment 7 deletes subsection (11)(a) of clause 26, which allowed a temporary enhanced TPIM order to amend any enactment. That subsection was drafted on the basis that the temporary enhanced TPIM order would need to amend other legislation to ensure that the enhanced TPIM system would function correctly. The Government considered it further following an amendment helpfully tabled in Committee in the other place by Baroness Hamwee. We concluded that the subsection was not necessary for this purpose and therefore amended the Bill on Report to remove it.
Lords Amendment 8 is necessary to ensure that the power to make a temporary enhanced TPIM order does not impinge inappropriately on devolved matters in Scotland. Clause 26, as amended, provides that a temporary enhanced TPIM order may not make any provision relating to devolved matters in Scotland, other than those already contained in the Bill, without the consent of the Scottish Government. In relation to those provisions touching on devolved matters that are already contained in the Bill, I can confirm that the Scottish Parliament passed a legislative consent motion on 17 November. I am grateful to Scottish Ministers and officials for their help in that regard.
Finally, Lords Amendment 11 relates to the transitional period provided by schedule 8. In the period following the coming into force of the Bill, the control orders in force immediately before the commencement of the Bill will remain in force, unless revoked or quashed before the end of that period. Such a period is needed to ensure that there can be a safe, orderly and managed transition of individuals from the old system to the new system. As the Government have consistently made clear, the police have confirmed that extensive preparations are being made and that arrangements will be in place to manage the move from the control order system to the TPIMs system.
James Brokenshire
I will just finish this point and then I will gladly give way to the right hon. Gentleman.
We have received advice from the police that as the transitional period will fall over the Christmas and new year holiday period, a small extension to the period is necessary. That will assist in the effective management of the process of transition for individual cases over the holiday period. It does not reflect on preparedness. Lords amendment 11 therefore extends the transitional period from 28 to 42 days.
I give way to the right hon. Gentleman.
Paul Goggins
I am delighted that the Minister did not give way when I sought to intervene, because he has been able to enlighten the House and demonstrate that Opposition Members who have been pressing him for months on whether the police and Security Service would be ready have partly been proved correct. Let us look at the bigger picture, however. With the Olympic games, a new system and the end of relocation, why does such a moderate Minister want to take so many risks with the safety of the public?
James Brokenshire
I certainly do not accept that characterisation, and I am very happy to come on to amendment (a). We regard national security as a top priority. The right hon. Gentleman has heard me say that, and I stand by those words. He will know the responsibilities that Ministers hold in dealing with such matters, and the very careful consideration that we apply when considering changes to legislation.
Amendment (a) to Lords amendment 11, which stands in the names of the right hon. Gentleman and other Opposition Members, would replace the 42-day transitional period with one of 365 days. It brings us back to an issue that was debated at length during the Bill’s passage through this House and the other place. To that extent, it takes us back over a number of points that have been debated and discussed in great detail, and my response is unchanged: I believe that the amendment is simply not necessary.
As I have repeatedly made clear, the Metropolitan police and the Security Service have confirmed to the Home Secretary and myself that extensive preparations are being made and that arrangements will be in place to manage the move from the control orders system to the TPIMs system effectively. Indeed, the Home Secretary received a detailed briefing from the Metropolitan police only last week on the transitional plans that it has drawn up. However, the police recently advised us that a slightly longer transitional period was needed, as it will fall over the Christmas and new year period. We have consequently increased the transitional period to 42 days, which will assist in the effective management of the process of transition in individual cases. It was for that reason that the Lords amendment was introduced.
Mark Field (Cities of London and Westminster) (Con)
I would not in any way wish to accuse the Minister of being soft on terrorism, but equally, given the relatively small number of people who are currently subject to control orders—about nine—does he not see that it might be more sensible to have an overlapping system of control orders and TPIMs for the difficult period of unknown threat around the Olympic games? There is some sense in that, given that at most nine people would be affected.
James Brokenshire
We have considered the issue very carefully, and as I said on Report, we have received assurances from the police and Security Service that effective arrangements will be in place to manage the transfer to TPIMs when the new regime comes into effect. What I said on Report remains the case: the police and Security Service have been developing the additional capacity and capability needed to prepare for the transition to the new TPIMs regime. That preparation has been ongoing for a considerable time.
I should be absolutely clear that the additional resources are not simply about providing additional human surveillance capacity. The police and the Security Service are using the additional money to enhance their use of a range of covert investigative techniques, including human and technical surveillance. Inevitably, some of the benefits from the additional resources will take time to be fully realised, as it will be necessary to take the time to train and deploy additional staff in order to derive full benefit from technical investment. However, the key point is that at the point of the transition to the new TPIMs arrangement, effective arrangements will be in place in both the police and the Security Service.
Jeremy Corbyn (Islington North) (Lab)
Can the Minister explain the exact thinking behind that relatively modest extension of the transitional period to 42 days? I do not quite understand why its coinciding with the Christmas and new year period makes it difficult to introduce what will presumably be a simpler system than the one that we currently have.
James Brokenshire
Christmas and the holiday season obviously have operational impacts, and we are therefore simply adding those 14 days to the 28 days for which the Bill originally provided to assist in the effective transition and management at that time. It is not about readiness; it is simply to aid the transition process for those people who are already on control orders and who may subsequently move on to terrorism prevention and investigation measures.
On Report and Third Reading, I was told, “Well, you say that the police are prepared and that appropriate arrangements are in place to manage the transfer effectively from control orders to TPIMs”, and I heard clearly the comments that were made then. I will put in the Library a letter from Assistant-Commissioner Cressida Dick, which sets out the preparedness of the Metropolitan police and underlines that arrangements will be in place to manage the transfer effectively. I note that the Opposition have consistently made several points about that. Again, I underline that effective arrangements will be in place to manage the transition. In the light of my continued assurances on the matter, I hope that Opposition Members will be willing to withdraw amendment (a).
Diana Johnson (Kingston upon Hull North) (Lab)
I thank the Minister for clearly setting out the bulk of the amendments. Having read the transcripts of the evidence sessions in Committee, it is clear that the Government were pushed and pressed, as is right, through effective scrutiny from all members of the Committee and Members in the other place, to table amendments to clarify the Bill’s intention. On that basis, the Opposition are satisfied with Lords amendments 1 to 10.
However, I want to comment on Lords amendment 11 and amendment (a) to it. As the Minister said, the Lords amendment increases the transitional period for which schedule 8 provides, during which a control order that is enforced immediately before the commencement of the Bill will remain in force, unless revoked or quashed before the end of that period, from 28 days to 42 days. The Opposition Front Benchers’ amendment would increase that transitional period to 365 days. It is worth pointing out that those who have put their names to the amendment include two former police and terrorism Ministers and a former Minister who dealt with terrorism in Northern Ireland in the previous Government. Those Members clearly have a lot of detailed information and experience in dealing with such matters, and they thought it appropriate to put their names to the amendment.
Why have we tabled amendment (a)? It is because we want to support the Government in keeping the country as safe as possible as they move to the new regime of TPIMs. I heard clearly the Minister’s comments about his commitment to national security being a top priority. Of course, the Opposition support that priority. However, we believe that a more flexible approach would be a better way forward on the transitional period that is in the Bill.
I certainly do not wish to reopen the debate on control orders, but we know that nine people are currently subject to them—a small number of people who are intent on doing grave harm to this country. It is not possible to prosecute them, but to keep the country safe, we need to impose intrusive restrictions on them. I think that there are 11 control orders in total, but nine have the power to relocate as one of the conditions. We know that the Home Secretary has used control orders with relocation provisions in cases CD and BM. In the case of CD, a challenge to the decision to relocate went to the High Court. It was dismissed and the relocation was upheld.
It is important to quote the Mayor of London, who obviously has a keen interest in those matters. He said on the case of CD:
“It’s clear from the court papers that he rejects and would like to destroy everything that makes this a great city. We don’t want this man in London.”
In moving to the new TPIMs regime, the relocation provisions will not be available to the Home Secretary in future. We want to ensure that no unnecessary risks are taken over the next 12 months. As hon. Members have already said, we will have major events in our city, including not only the Olympics and the Paralympics, but the diamond jubilee. So we need to ensure that London is kept as safe as possible in 2012.
Richard Fuller
The hon. Lady says that we need to ensure that there are no unnecessary risks, and she says, fairly, that she and other Labour Members share the Minister’s commitment to the security of the nation. But the Minister said that the period was necessary to ensure that effective arrangements were in place, and he believes that that period is 42 days. What evidence does the hon. Lady have that the period needs to be longer to ensure effective arrangements?
Diana Johnson
That is a very helpful intervention, because I want to move on to the evidence that was given to the Committee by Stuart Osborne, the deputy assistant commissioner for the Metropolitan police service and senior national co-ordinator for terrorism investigations. He also represents ACPO. The hon. and learned Member for Sleaford and North Hykeham (Stephen Phillips) asked Mr Osborne how long it would take for a new regime to bed in before it becomes law, to which he replied:
“I think I said it would take a year to procure and train sufficient additional assets before it would be ready to do that. We have to order some of the assets so that they are made in advance. To train a surveillance officer and then have them fully able to operate in a challenging environment probably takes at least 12 months before they are deployable. Once they are deployable, they have to work within the environment under a new set of regimes that will need to bed in.”––[Official Report, Terrorism Prevention and Investigation Measures Public Bill Committee, 21 June 2011; c. 10, Q31.]
On the basis of that evidence, which mentions the period of a year, hon. Members are concerned that we could be putting ourselves in a risky situation by rushing headlong into the new TPIMs regime.
Stephen Phillips (Sleaford and North Hykeham) (Con)
Will the hon. Lady give way?
Diana Johnson
I will, because I have just referred to the hon. and learned Gentleman.
Stephen Phillips
It is important that the evidence is not taken out of context. My hon. Friend the Minister subsequently received assurances—as he will no doubt be able to confirm—from the security services and the Metropolitan police that there would be no problem with the Government’s proposed timetable for the introduction, and I am therefore surprised that the hon. Lady has referred to that passage of evidence without drawing the House’s attention to those assurances.
Diana Johnson
It is important that evidence given to the Committee, which I read out verbatim from the transcript, is put before the House when we are debating the amendment on 365 days. The hon. and learned Gentleman has clearly put his point on the record.
Evidence was also given by Lord Carlile, and he talked about the cost of the new surveillance techniques that would have to be employed. He said that the costs would be between £11 million and £18 million per person per year, and he also mentioned that as far as he was aware the cost of a control order was £1.8 million per person. So a huge amount of money will need to be invested in ensuring that these new surveillance techniques are properly available.
Given the evidence put before the Committee and in the other place, we know that some senior police officers still have concerns about the readiness—[Interruption.] Well, in recent weeks there have been reports that senior police officers are not satisfied. I understand what the Minister said, and I shall ask him to address the point in a moment, but while we welcome the Government’s move from 28 days to 42 days—and I understand what the Minister says about that being appropriate during the holiday period—it is sensible to reconsider where we are at this stage. Given that some senior police officers feel that we are not prepared enough, that the Mayor of London has made his views clear and asked the Government to think again on this issue and that the Olympics, Paralympics and diamond jubilee celebrations are ahead of us, it is appropriate for the Minister to reflect on what the provision will mean. We have a two-week extension. Would it not be sensible to give the police and the security services more time and some flexibility to ensure that we have the resources, the people and the training in place? Is it not better to legislate now to keep control orders for that flexible period until we are absolutely certain and confident that surveillance is fully in place and all systems are operational?
Tom Brake (Carshalton and Wallington) (LD)
Let me make a few brief comments in relation to a couple of amendments. On amendment 10, subject to any security requirements, will the Minister confirm whether the requirement to report to a police station will not be so onerous in terms of the timing that it actually precludes someone subject to TPIMs being able to undertake employment or coursework? If we want them to integrate, we must allow that to happen, subject to the appropriate security requirements.
My other point is in relation to amendment 11. When I saw a reference to 28 days being changed to 42, I had concerns that we were re-running a completely different debate. I welcome the fact that the Minister and the Government have responded positively to the Metropolitan police’s request that for operational reasons a longer period is needed to enable the transition from control orders to TPIMs to happen.
I congratulate the Minister on not listening to the siren voices on the Opposition Benches who are tempting him to abandon TPIMs all together and to stick with control orders.
Hazel Blears (Salford and Eccles) (Lab)
Will the right hon. Gentleman give way?
Tom Brake
In one minute. It is regrettable that the paperwork that has been produced to support the contention that control orders should remain in place, or that the implementation of TPIMs should be delayed, relies on evidence from Mr Osborne. I am sure that the evidence was appropriate at the time but things have moved on. I do not know whether Mr Osborne is now actively engaged in the process of ensuring that the appropriate measures are in place. If he is, it might be worth asking him whether he feels that suitable preparations have been made. If he is not actively engaged, it might be that he is now somewhat removed from what is happening in practice.
Hazel Blears
I am grateful to the right hon. Gentleman for giving way. I was desperately trying to sit on my hands. Does he not accept that people who are on control orders, and people in future who will be on TPIMs, are some of the most dangerous people in our country and they would not be on those orders if they did not pose a significant and substantial threat to the life, health and safety of our citizens?
Tom Brake
I am happy to confirm that clearly some of those people will be very dangerous, as the right hon. Lady says, but I must point out that some people subject to control orders have subsequently had them quashed. She is right that some—potentially all—of them will undoubtedly present a serious threat, but in practice some of them might not be quite as guilty as she believes.
Pete Wishart (Perth and North Perthshire) (SNP)
The right hon. Gentleman is absolutely right, and if there were significant evidence against these individuals, they would be prosecuted. Does he agree that it is difficult for the Labour party to give up the anti-civil libertarian agenda that it has built up over the past 10 years, and that it will do anything to maintain its control orders, regardless of the evidence presented?
Jeremy Corbyn
Does the right hon. Gentleman agree that control orders are a very serious and very great power used against people who have not been convicted? This is state power against an individual on the basis of suspicion, not evidence or conviction, so it is a serious matter. Does he also agree that TPIMs—despite my reservations about them—are an improvement on control orders and ought to be introduced as soon as practicably reasonable? I do not understand why they should be delayed for a year on the basis of the Olympic games. Presumably other events are approaching in 2013, 2014 and so on that would provide the same opportunity.
Tom Brake
I thank the hon. Gentleman for that intervention. One wonders why, having suggested that 365 days might be appropriate, the Labour party, excluding the hon. Member for Islington North (Jeremy Corbyn), has not considered other significant events coming down the line for which it might feel that control orders should also be available.
I want to rephrase what I said about the Labour party playing for headlines in the Daily Mail and the Daily Express. It might be more appropriate to deploy that argument in relation to the populist policing agenda rather than this serious issue of security.
In conclusion, I think that these amendments are sound, and I am happy to support them. I understand why the Minister has, in response to the Metropolitan police, chosen to extend from 28 to 42 days the transitional period for the implementation of TPIMs, but I hope that he will confirm that there will be scope, subject to security requirements, to allow people subject to TPIMs to undertake work or coursework where appropriate.
Hazel Blears
I am grateful for the opportunity to say what I hope will be a few words in this debate—we have been over this territory several times already. I want to place on the record my thanks to the Minister for the inclusive way in which he dealt with the Committee stage and to other Members on both sides of the House who had the opportunity to contribute. It is not often that people feel able to take such a role in Committee, and I think that the Bill was all the better scrutinised because of it.
The Minister knows how strongly and personally I and my right hon. and hon. Friends feel about this matter, and the debate in Committee was nuanced and balanced. It was not simply about seeking draconian powers to last for ever as part of an anti-civil libertarian agenda. The debate has genuinely been driven by the concern of Members on both sides of the House for our national security and by the recognition that in Olympic year, when the eyes of the world will be upon London and when there will therefore be a heightened threat, the pressures on the capacity and ability of the security services and police to deal with some of the most dangerous people in the country will be significant.
The Minister has attempted to meet the arguments by talking about additional resources. We have heard the evidence of DAC Osborne, who said that relocation was probably the single most useful power under the previous regime and that it would take a year to get the assets and surveillance in place, and I think it perfectly legitimate, even at this late stage, to press the Minister on some of the practicalities of how that coverage will be ensured and maintained during the Olympics.
My hon. Friend the Member for Kingston upon Hull North (Diana Johnson) said that those who have signed our amendment obviously have some experience in this field. The Minister has heard today from me, and from his hon. Friend the Member for Cities of London and Westminster (Mark Field) and my right hon. Friend the Member for Wythenshawe and Sale East (Paul Goggins), all members of the Intelligence and Security Committee. We all share the same dedication to trying to ensure the security of our country, which is a very serious matter indeed. All we are asking for in our amendment (a) to Lords amendment 11 is to get us over the period in which we face the most heightened threat, which is a simple, straightforward, common-sense thing to do.
The Government have every right to move to the TPIMs regime. They have a majority in the House, together with their coalition partners. If the Government want to change the law from control orders, they have every right to do that. I am not objecting to that; all I am saying is that, when we face this heightened threat, with pressure upon pressure on our security and police services, is it not basic common sense to say, “Let’s tide it over until after the Olympics”? There will still be a threat—we will face a threat for years to come—but it will not be as great as the threat that we face at the time of the Olympics.
Jeremy Corbyn
I thank my right hon. Friend for giving way; she is being generous with her time. If there is a threat, it must obviously be dealt with, but does she not accept that one deals with threats by using the law, in particular the criminal law? We do not always descend into special measures such as those that we are discussing, which have a dangerous tone to them of the unaccountable power of the state against an individual. Does she not accept that it is important to stick to the principles of the criminal law and not endlessly go off into special laws?
Hazel Blears
My hon. Friend has always taken a principled stand on these issues, and I respect him for it. Hon. Members on both sides of the House have recognised that in a tiny number of cases we will not be able to prosecute, because that would lead to disclosure and therefore, because it is based on intelligence, a risk to agents and techniques. I said in Committee that I wanted to see the figure reduced to the smallest irreducible number possible, because I accept that we are talking about special measures that are outwith the normal framework of our legal system and transparent justice. I therefore accept my hon. Friend’s concern, but it is the case, I am afraid to say, that there are people who pose a significant and substantial threat to us who cannot be prosecuted at the current time, and some measures have to be taken to protect the public against them. None of us goes down this path with relish. I have said it before, but let me say to the hon. Member for Perth and North Perthshire (Pete Wishart), who intervened earlier, that this is not a matter of Labour Members rubbing their hands with glee and wanting to put people under house arrest. Rather, it is about saying, “What is the absolute necessity to protect the public?”
Bob Stewart
I very much support most of what the right hon. Lady is saying. None of us in this House wants control orders or TPIMs, but we do not have a choice. However, it is much better that we legislate for these matters and deal with them properly under the law, rather than have what happens in some nations, where people are just lifted and then disappear. That is what we are trying to do. The people concerned are very dangerous—or apparently very dangerous: we cannot prove it, but we do not want to take the risk—and I am afraid that we have to put up with this lack of liberty.
Hazel Blears
The hon. Gentleman speaks, as he did in Committee, from a position of great personal knowledge—in many ways, far greater than mine or my colleagues’—from having had operational responsibility on the ground in similar circumstances. He understands that, although we are all reluctant to go down this path, on occasion it is necessary. However, we have a democratic framework—people can challenge the orders; they can go to court; they can litigate; they can launch appeals—which is absolutely as it should be.
Hazel Blears
I will, but then I want to ask the Minister a couple of questions in the time remaining.
Patrick Mercer
The right hon. Lady makes some extremely good points. I agree with my hon. and gallant Friend the Member for Beckenham (Bob Stewart)—and the hon. Member for Islington North (Jeremy Corbyn)—that such measures are the very last things that we want to impose. Next year will be full of difficult periods, including not just the Olympic games, but the royal jubilee. Although I still feel that the powers are inadequate or wrong, they are better than what we had before, so should we not have them? Why are we delaying this? Should we not have powers that are more effective introduced quickly, rather than slowly?
Hazel Blears
I do not accept the premise that the TPIMs regime will be more effective. DAC Osborne said in evidence that control orders were effective, that the police were used to dealing with them and that relocation was the single most useful power. He also said that control orders provided not only surveillance, but disruption, and were therefore more effective. DAC Osborne recognised that the TPIMs regime would involve a greater level of risk. The Minister said that that risk would be dealt with by the extra resources. We must wait and see, but the police themselves said that, far from being more effective, the move from control orders to TPIMs would be less effective because it would increase the measure of risk.
Paul Goggins
My right hon. Friend is being very generous with her time this afternoon, as always, and is advancing a powerful argument. She will recall that when the Minister responded to my intervention earlier by telling me that national security would always be his highest priority, I was slightly taken aback, because I would not have doubted for a second that that would always be the case.
In view of all the risks that will face us next year and the fact that an entirely new system is being introduced involving additional officers, can my right hon. Friend help me by explaining why, given a choice of dates, the Minister should pick the earlier rather than the later date to introduce his measures?
Hazel Blears
I am afraid that this is one of the rare occasions when I cannot help my right hon. Friend. I cannot for the life of me think why, if I were a Minister faced with this level of risk and if I had a practical solution that would not cost me a great deal of extra money, I would not seek the House’s agreement to an extension of the transitional period as a precautionary, preventive measure, just to get us through what I believe will be a time of heightened risk.
I am grateful to the Minister for placing information from the police in the Library to reassure us about their readiness, but I want to ask him a question. What provision exists to cover the—possibly—six people who are currently subject to control orders and to relocation provisions, and who are likely to return to London? In Committee, I raised an issue that has still not been resolved. Paragraph 1 of schedule 1 allows a TPIM to be applied which specifies a residence where a person must reside, but paragraph 3 contains a power to exclude a person from a locality. I believe that there is still a contradiction between a person’s right to reside at his or her own residence and the power that would allow that person to be excluded from, for example, east London. What if the person’s residence is in east London? Which power will have priority, the power to exclude under paragraph 3 or the power relating to residence in paragraph 1?
I have still not received an answer to my question, and I am very worried about the position. If those six people, many of whom may well have residences in east London, choose to live there, will the TPIMs regime include a power to exclude them from a broader area than the locality in which the Olympics will take place? I should appreciate a clear answer from the Minister today. If it is necessary for me to write to him I shall certainly do so, but I should be reassured if he could give me that further information.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. Just a moment. We are straying from the amendments. I have allowed a bit of leeway, but I think that if interventions continue to take advantage of the leeway that I have given, we shall carry the debate beyond where it should be.
Hazel Blears
Thank you, Mr Deputy Speaker. I am about to end my speech.
I thank the Minister and all his officials, who have certainly served him well and have no doubt contributed to the progress of the Bill. However, as the Minister will understand, I am not reassured by his comments. I know that he is doing his best to protect national security, but I think that he could have taken a simple step that would have given more reassurance not just to Members here but, more important, to people who will be living in their communities during what is likely to be a considerably more dangerous time for them as a result of this transition.
Richard Fuller
Let me explain why I oppose amendment (a), and explain to the hon. Member for Kingston upon Hull North (Diana Johnson) why she is hearing opposing voices not only from members of the two parties on the Government Benches, but from members of Opposition parties including her own. The reason is that the amendment is entirely without merit. It appears to constitute a rather unfair and somewhat unprincipled assertion that the Minister is playing fast and loose with the security of the nation, notwithstanding the protestation that of course we are all trying to make things secure and do what is in the country’s best interests.
In her rather brief contribution, the shadow Minister gave nary a reason why the Minister’s position is not the correct approach to take. All the speeches we have heard rely on a solitary piece of evidence provided in Committee, but surely hon. Members on both sides of the House will understand that the Minister has been in extensive discussions subsequently and that the most important consideration must be the one that he put forward today, which is that effective arrangements are in place. That would be the most important consideration if we were dealing with a normal piece of legislation, but in fact we are dealing with a change to one of the most pernicious pieces of legislation that our country has had in recent times—the legislation on control orders.
The shadow Minister’s amendment is merely further evidence that the Opposition have not yet reconciled their conscience on this issue, nor on the fact that they took a wrecking ball to the rights and liberties that this country has held strongly and to its heart for many years. Yet again, Opposition voices cloak in the name of security the most repressive period in recent British history when it comes to individual rights. As the hon. Member for Islington North (Jeremy Corbyn) mentioned, people are put under these restrictions on the basis not of conviction, but of suspicion.
I must just say to my right hon. Friend the Member for Salford and Eccles (Hazel Blears)—I hope I may call her that, given that we have spoken together on a number of Bills recently—that some of us have not had the benefit of high office that she has had, and when she talks about the importance of getting to the smallest irreconcilable minimum the number of people who will be subject to TPIMs or control orders, as it was under her Government, nine is not the smallest irreducible minimum for us. Some of us feel that that number can be reconciled only when it is zero and that everyone in this country has the right to a trial before they are imprisoned for extensive periods.
Mark Field
I entirely recognise the sincerity of what my hon. Friend says and I, too, have many civil libertarian sympathies, but does he not recognise that this regime is not all that much different from the control order regime that it seeks to replace?
Richard Fuller
Without getting into the details, Mr Deputy Speaker, I can say that of course many of us would like to go further. The Minister and I have had disagreements on this, but in conclusion may I commend him on the way in which he has seen the passage of this Bill through? I hope that in future we may be able to go further.
Keith Vaz (Leicester East) (Lab)
I shall be brief, Mr Deputy Speaker, because I know that the House is anxious to vote on this matter. I wish to draw the Minister’s attention to the evidence on the Olympics given this morning by Her Majesty’s inspector of constabulary to the Select Committee on Home Affairs. He called for a central hub to be created to police the Olympics, bringing together resources, intelligence and other aspects of policing. He and others felt that that was necessary.
On the questions raised by others concerning TPIMs and control orders, of course there is concern that some of these individuals will be allowed to return to London just as the Olympics are beginning, and the Government need to monitor the situation carefully.
My final point relates to the request for thousands of additional volunteers to come forward to police the Olympics—there is talk of 10,000 people. All I urge is that they are properly trained before they take on their responsibilities. I am sure that the Minister is conscious of the importance of the Olympics. The hon. Member for Newark (Patrick Mercer) was right to have raised it, and I hope that the Government will bear it in mind when we consider the resources and practicalities of the next few months.
James Brokenshire
This has been a useful debate in the latter stages of the Bill’s consideration in both Houses. I am conscious of time and recognise that the Opposition might wish to press their amendment to a vote, so I need to be swift in my summation, for which I apologise.
My right hon. Friend the Member for Carshalton and Wallington (Tom Brake) highlighted issues regarding the police reporting requirement. We have looked into this very carefully, including the need for appropriateness. In other words, a constable, in giving directions, must be reasonable, necessary and proportionate in his or her approach in this regard. I hope that gives him some assurance regarding the manner in which the directions power will be undertaken. I appreciate his long-standing interest in these matters and his desire to ensure they are dealt with in a reasoned and appropriate way.
Let me address the comments of the hon. Member for Kingston upon Hull North (Diana Johnson) about the availability of information to the independent reviewer. I shall certainly look at the Hansard report of her comments because we want to ensure that the independent reviewer has all the information appropriate to be able to do his work and to report, as has happened with the independent reviewer in relation to control orders. I shall consider her requests regarding those issues to ensure that we are equipping the independent reviewer with all the appropriate information to enable him to conduct his duties in an effective manner and report to the House, as I am sure right hon. and hon. Members would expect.
On preparedness, I know why the right hon. Member for Salford and Eccles (Hazel Blears), who was a Minister at the time of the appalling 7/7 incident, takes these issues so very seriously and is so focused. However, she will equally understand that I am limited as to what it is appropriate for me to say in the House about operational and practical issues in relation to specific arrangements for individuals. I understand her questioning but I hope she will appreciate that, in terms of capability and other issues linked to the work of the police and the Security Service, it is not, unfortunately, appropriate for me to respond to her fully in this place.
The right hon. Lady highlighted an issue in relation to the compatibility of individual aspects of the schedule. Clearly, the exclusion measure would not be used to exclude the individual from, for example, the street in which he or she lives. The notice must be enforceable and the measures will need to be applied sensibly. They will be put in place only where restrictions are necessary, so one measure cannot cut across another—there needs to be consistency, one measure with the other. However, I shall reflect on whether further clarification is required.
In essence, we return to the issue of preparedness. I have said that it will take time to realise fully some of the benefits from additional resources, but the key issue for me is that at the point of transition to the new TPIM arrangements, effective arrangements will be in place. That has been our focus in our discussions with the police and the Security Service, whom I thank for their work not only in relation to preparations for the Bill but for keeping us safe each and every day.
Lords amendment 1 agreed to.
Lords amendments 2 to 10 agreed to.
Schedule 8
Transitional and saving provision
Amendment (a) proposed to Lords amendment 11.—(Diana Johnson.)
Question put, That the amendment be made.
Public Bodies Bill [Lords]
(12 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
18:00 - The House divided: - Ayes: 215 / Noes: 291 - Question accordingly negatived.
The Parliamentary Under-Secretary of State for Justice (Mr Jonathan Djanogly)
I beg to move,
That this House does not insist on their Amendment No. 47 to which the Lords have disagreed.
Following consideration of Commons amendments in the other place last Wednesday, hon. Members will know that the Government no longer intend to abolish the Youth Justice Board as part of the Bill. Therefore, I will not be asking hon. Members to insist on the Government amendment agreed by this House on Report. The amendment has reintroduced the Youth Justice Board into schedule 1 to the Bill. As my noble friend Lord McNally made clear in the other place, the Government have never waivered in our commitment to maintaining a distinct focus on the needs of children and young people in the youth justice system. We have never proposed to remove youth offending teams or dismantle the dedicated secure estate for young people.
Sir Alan Beith (Berwick-upon-Tweed) (LD)
It is an unusual experience for a Committee to publish just after midnight a report containing recommendations that are accepted by midday the following day. As my hon. Friend has mentioned youth offending teams, I wanted to remind him that the Justice Committee, as well as pointing to the dangers of abolishing the Youth Justice Board, stated that if it survived it would have to take a lighter touch and a less centralised approach to the management of youth offending teams than it had taken in the otherwise good work it had done.
Mr Djanogly
I thank my right hon. Friend for that contribution and acknowledge that the recommendation appeared in his report. I will certainly take it back to the Under-Secretary of State for Justice, my hon. Friend the Member for Reigate (Mr Blunt), who will take up the matter in due course.
Simon Hughes (Bermondsey and Old Southwark) (LD)
My hon. Friend will know that many of us welcomed the announcement he has made and the decision the Government took in the other place. We understand that it was a finely balanced issue, because there is a good argument for reducing or eliminating quangos that are not needed, but on balance many of us will be reassured by the decision. I and others hope that the Youth Justice Board will continue its increasingly effective work in delivering a reduction in crime and a reduction in offending by young people.
Mr Djanogly
I will touch on my right hon. Friend’s point later.
During the debates on the future of the Youth Justice Board, we set out to persuade Parliament that, now that an effective youth justice system is in place, the oversight provided by the Youth Justice Board was no longer required and direct ministerial accountability for youth justice should be restored. My fellow Under-Secretary of State made that point on Report. However, we acknowledge the opposition to our original proposal to abolish the Youth Justice Board. Its abolition was never about saving money, as the Ministry of Justice does not have major savings contingent on its abolition. In that context, we have decided not to pursue abolition using powers provided in the Public Bodies Bill. Instead, we will reflect further on the Youth Justice Board’s future role.
I want to make it clear that the Government still believe that there should be more direct ministerial accountability for youth justice, that there is a strong case for the reform of the Youth Justice Board, and that we will consider our options for achieving reform outside the Bill. For example, a range of powers are open to us under the Crime and Disorder Act 1998. We will consider whether and how we can use those powers to achieve more direct ministerial accountability.
We will also consider the position of the Youth Justice Board within the context of the Cabinet Office’s policy on public bodies and its stipulation that all non-departmental public bodies should be reviewed at least once every three years. Let me be clear that the Government’s position on the Youth Justice Board will not be business as usual. Having said that, I assure all right hon. and hon. Members that over this period the Ministry of Justice and the Youth Justice Board have maintained effective working relationships, which will carry on as we take forward proposals for reform. The Government therefore support the motion agreed to in the other place, and I ask that this House does not insist on the amendment agreed to on Report.
Jon Trickett (Hemsworth) (Lab)
I am grateful to the Minister for his degree of elegance in basically climbing down from the Government’s previous position.
Our position all along—particularly in the shadow of this summer’s riots, which involved many young people—has been that it is essential not to make precipitate decisions on how we handle youth justice. We continually warned that it would not be appropriate effectively to abolish the Youth Justice Board, which continues to do such excellent work, but that does not mean that it should not be reformed from time to time, or at least reviewed.
I therefore welcome the progress made in the other place on the YJB, which I am glad to see has now been removed from the Bill, but I have some reservations about the Minister’s comments just now, and especially those made in the other place by the noble Lord McNally, who, when speaking about the future of the board, said that
“there is a strong case for the reform of the YJB, and we will consider our options for achieving reform outside the Public Bodies Bill.”—[Official Report, House of Lords, 23 November 2011; Vol. 732, c. 1074.]
The Minister’s words today were almost a precise repetition of that, and it sounds like a threat. It sounds as though the Government have made up their mind, and that what we have heard today is not so much a climb-down as a temporary retreat in order to attempt to do on another occasion the same thing that they intended to do in this Bill.
Richard Harrington (Watford) (Con)
I get the impression that the shadow Minister is of the opinion that in this case any reform is unacceptable, and that the Government’s new line is just about doing the same thing but in another way. Is he against any reform?
Jon Trickett
If the hon. Gentleman had listened, he would have heard that I am not at all against reform or continual review, as no organisation ought to be. As events change, and as our understanding of crime and youth justice develops, as it will do over time, no doubt the YJB and other ancillary bodies will be reviewed, but it looks to me very much as if the Government have dogmatically made up their mind that the board must change and, in effect, be abolished.
Robert Flello (Stoke-on-Trent South) (Lab)
Does my hon. Friend agree that the Youth Justice Board has done fantastic work to date, for which it should be commended? The fact that it is not going to be abolished is a positive move. In terms of reform, youth offending teams will have to manage with smaller resources and teams, and it will be under incredible pressure, so does he also agree that the YJB is going to have to change the way in which it works, if only to respond to that?
Jon Trickett
I totally agree with my hon. Friend, who makes a powerful point. No doubt there is financial pressure on all public services, and probably rightly so given the climate in which we all live, but the truth is that dealing with justice and, in particular, with protecting the interests of young people is an important and primary function of government, so we ought not to make decisions in haste or for purely financial imperatives.
Simon Hughes
I am grateful to the hon. Gentleman for his moderate and considerate response to the Minister. My analysis is that there was strong support in both Houses and across the parties for the Youth Justice Board, so it is unfair to come to the conclusion that the hon. Gentleman implies, specifically because Lord McNally in the other place said:
“We will consider whether we can use these powers in the context of a more direct ministerial responsibility but will do so in consultation with the Youth Justice Board and with the intention of working harmoniously with it.”—[Official Report, House of Lords, 23 November 2011; Vol. 732, c. 1074.]
I get the impression that the Government have understood people’s support for the board and its effectiveness, and that it is likely, even if changed over time, to continue.
Jon Trickett
I am grateful to the right hon. Gentleman for his comments and for the moderate way he expressed them. We will see over time exactly what the Government’s intentions are.
The Government have set out to remove the independence of the youth justice system. The Minister repeated that they want, in effect, to bring it under direct ministerial accountability. There is no financial case that I can see for what the Government are trying to do. I have reservations about something as important as the operation of the criminal justice system, whether or not it deals with young people, being brought under ministerial direction. That is not a debate to be had this afternoon because the Government have withdrawn the proposal. However, any attempt to bring the criminal justice system under direct ministerial accountability will be resisted in this Chamber and in the other place, because it is a long-established tradition that the criminal justice system should, as far as possible, operate independently of the Executive.
The Government have not recognised the case for independence. As my hon. Friend the Member for Wallasey (Ms Eagle) said in Committee, the Government are committed to bringing the YJB under the remit of central Government. It is, in effect, a nationalisation. The Government want to nationalise the criminal justice system, whereas we want to defend its independence, as one would expect. In my view, none of the YJB’s core functions will be able to be carried out within central Government.
I do not wish to repeat all the arguments that have been debated elsewhere, but I simply urge the Government to keep in mind, in whatever review they carry out in future, that the independence of youth justice and of the criminal justice system in general needs to be maintained. After all, as has been widely acknowledged, the YJB does an amazing job. It has reduced youth offending, it has protected young people, and on the whole it has made the youth justice system better. In Committee, the YJB was praised, as it has been here today and was in the Lords the other week, by Members on both sides. I am glad that the Government have now recognised formally that it does invaluable work, and that they have withdrawn this proposal. We look forward to seeing in due course whatever the Government do next in relation to this matter.
Sir Alan Beith
The hon. Member for Hemsworth (Jon Trickett) is slightly confusing the very necessary and important independence of the courts with the status of a body such as the Youth Justice Board. The Executive are, and must be, accountable to Parliament for the efficient provision of things such as custody and alternatives to custody. They may choose to do this by way of a semi-independent or arm’s length body, but that is much more an administrative decision than a decision about judicial independence, for example. The two concepts are different and should not be confused.
I rise to underline and clarify the points made by the Justice Committee in its 10th report, which was published on 23 November, just after midnight. In that report, we set out our concerns about what would happen if the Youth Justice Board was abolished and what the Ministry of Justice would have to do in order to ensure that youth justice got the focus that the YJB had given it in the good work that it had done. We also set out what needs to happen in the circumstances in which we now find ourselves, whereby the Government have taken the decision not to abolish the YJB. Our concern was that one of the YJB’s weak points—perhaps the only one that came out strongly in evidence—was that quite a lot of people working in the sector felt that it was too “top down” in its approach to youth offending teams. The success that we have seen in youth justice has been achieved by youth offending teams bringing together every agency at local level and working together. That has been encouraged and supported by the YJB. However, the YJB itself told us that its oversight of youth offending teams will be lighter touch in future and that it is working to
“promote peer support and allow more room for professional judgement”.
That lesson needs to be learned. Indeed, when the Minister gave evidence to us, he gave examples from his own experience to underline that that approach was necessary. He also set out his own case for having greater ministerial accountability and greater ministerial awareness of what the YJB is doing.
The Youth Justice Board will continue. Many people will welcome that because it has provided a very specific focus and enabled things to be achieved in youth justice that have not been achieved in the rest of the criminal justice system. There has been a much better understanding of where to strike a balance between custody and alternatives to custody in youth justice than in other fields. There has also been much better local co-operation between the various agencies that deal with young people. We need to build on those experiences.
I wish the board well in the future. However, I underline the point that the Select Committee made in its report and hope that Ministers have noted it.
Simon Hughes
If I may, I will add a couple of brief comments.
First, I am grateful to the Government for listening and responding positively, constructively and graciously, as my noble friend Lord McNally did in the other place on 23 November. I also thank my right hon. Friend the Member for Berwick-upon-Tweed (Sir Alan Beith) for his work and that of the Justice Committee in looking at this issue and putting their wisdom on the table, ready for whatever decision the Government made. That wisdom is just as valid and can still be picked up by the Youth Justice Board and the Government in the circumstances that the Government have announced.
Lord McNally made clear one reason for this decision:
“The other point that has come through in contribution after contribution is that the real influence and power in all this has been the reputation of the YJB itself. It has been able to call on friends in its time of need because of that reputation.”—[Official Report, House of Lords, 23 November 2011; Vol. 732, c. 1074.]
I associate myself with those whom I call parliamentary friends from across the parties, Lord Warner, who was the midwife—if that is not an inappropriate gender assignation—at the birth of the Youth Justice Board, Lord Elton, Baroness Linklater, Baroness Scotland and others. They have made it clear that although at the beginning it was not evident that the board would be hugely successful, it became more and more successful. I join in the thanks and the tributes to Frances Done, the chair of the Youth Justice Board, and to John Drew, its chief executive.
My right hon. Friend the Member for Berwick-upon-Tweed was right to point to the evidence on the ground of the success of youth offending teams and of that model. The figures, given all the trends in crime, have been extraordinary and have gone in the other direction. Youth crime has come down significantly. Sometimes we are confronted by campaigns or arguments in our local papers which suggest that youth crime is out of control and that youngsters are running amok. That is absolutely not evidence-based. In England, the figures have gone in the other direction. That is a tribute to those who have worked on the ground in youth offending teams, in collaboration with the local police and local authorities; those who work in the youth service, who do a valuable job; and those who have been on the Youth Justice Board over the years.
I wish to pay one tribute that I may not be thanked for, although I hope that I will be. Steven Bradford, who used to work with me in the House of Commons, went on to work in the Youth Justice Board. He was a wise and useful researcher when he worked here. The Youth Justice Board has been well served by a group of people like him who have been loyal and committed to an important part of public policy.
The Youth Justice Board has the confidence of young people, the confidence of the agencies that work with young people—Lord Ramsbotham is another person who was clear in his support of the Youth Justice Board—and the confidence of all those who watch these matters and seek a better penal policy. I hope that today is not regarded as a defeat for the Government, but as the Government understanding that it is right for the Youth Justice Board to go on. It will, of course, always be subject to review and it is right that Ministers have to answer in this place for the success of justice policies, whether in relation to adults or young people. They have done in the past and they will do in the future.
Mr Djanogly
I will briefly address the points that have been made, because I know that we have to move on to the next debate. First, I point out the consensus that there is in support of our position. I thank right hon. and hon. Members for that.
The hon. Member for Hemsworth (Jon Trickett) made a point about nationalisation. I am not quite sure what he was getting at. He seemed to suggest that we should go back to business as usual. That is not our position. It is true that the YJB has done good work, as was pointed out by the hon. Member for Stoke-on-Trent South (Robert Flello) and my right hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes). However, it does need reform, as has been acknowledged by nearly all speakers.
We established a YJB transition programme at an early stage, to cover three strands of work: abolition, the moving of YJB corporate services to the Ministry of Justice, and the restructuring of YJB staff. The second and third of those strands will go ahead whether or not abolition takes place. It is difficult to disentangle the costs and attribute accurate costs to each, but that is the current position.
I am grateful to my right hon. Friend the Member for Berwick-upon-Tweed (Sir Alan Beith), who explained his concern and, I believe, that of his Committee, that the YJB’s approach is too top-down. I assure him that I will take that point back to the Under-Secretary of State, my hon. Friend the Member for Reigate (Mr Blunt), to help him in considering the options for reform before he brings forward his proposals in due course.
Question put and agreed to.
Schedule 5
Power to modify or transfer functions: bodies and offices
Mr Djanogly
I beg to move,
That this House does not insist on their Amendment No. 53 to which the Lords have disagreed and agrees to amendments 53A to 53C proposed by the Lords in lieu of that Amendment.
Under Commons amendment 53, we would have retained the office of the chief coroner in statute but transferred its functions to the Lord Chief Justice and the Lord Chancellor. However, we recognised the desire to have a single judicial figure responsible for leading the coroner system, a view that was expressed in both Houses and by a range of stakeholders. We therefore tabled further amendments in the Lords that would allow us to implement the office of the chief coroner without delay and bring into force the range of chief coroner powers envisaged under part 1 of the Coroners and Justice Act 2009.
We will not, however, implement the appeals provision under section 40 of the 2009 Act, which will be repealed. That will leave in place the existing system of redress, so that decisions can still be contested by way of judicial review or by application to the High Court by, or under the authority of, the Attorney-General.
The proposal before us will provide the system with leadership and will bring further improvements to jurisdiction, training and monitoring, and it will allow us to bring about all those things without further delay.
Jon Trickett
I beg to move an amendment, to leave out “agrees” and insert “disagrees”.
This is a similar debate to the last one, in the sense that the Government have now withdrawn an unreasonable proposal. The truth is, of course, that they did not have a majority in the other place to deliver either proposal, so although some good grace has been shown, there are also mathematical reasons to do with how the votes were going to go in the other place.
Hopefully, Members will never have recourse to the coronial system as a result of a sudden unexplained death of a loved one. We can all imagine that if we did, we would probably be in a difficult emotional condition. We would hope that we would be helped in discovering the true cause of that sudden and tragic death by a modern, professional, strong and independent-minded coroner.
Unfortunately, there have been too many cases reported in which the families, friends and colleagues of a loved one have felt let down by the coronial service that they have received. I do not need to dwell on the many occasions when the service was felt to have failed, but it became clear that the whole coronial service needed to be modernised, made more professional and above all made more accountable.
The Opposition are totally in favour of modernising public services that need to be modernised. We are in favour of reform, and I will not have anything else said. The view that the coronial service needs to be reformed and made more accountable is not simply that of a few party hacks in this place or elsewhere. It is the view of, for example, the Royal British Legion and of INQUEST, an organisation of which many Members will have heard. Between them, those organisations represent many bereaved families, including the families of our fallen heroes. So I have been perplexed throughout the Bill’s progress by the Government’s continuing failure to respond, not to our arguments, but to the voices of the bereaved and those who represent them, to the extent that, as the House knows, the Bill Committee refused to allow witnesses from the Royal British Legion to appear before it so that we could hear what they had to say on behalf of those families.
In the previous Parliament, it became the settled will of this House and the other place that the way to achieve far-reaching reform of the whole coronial service should be—at least in part—through establishing a new post, the chief coroner. The chief coroner’s tasks were well debated at the time and I will not rehearse them. Then, there was a change of Government and, bizarrely, as part of their review of quangos, this Administration decided to abolish the post of chief coroner, notwithstanding the fact that that post is not a quango. We repeatedly warned that that would be a major error and we therefore fully support the Government’s decision to take the office of chief coroner out of schedule 5, thereby securing the post’s existence.
I am happy that the hard work of organisations such as the British Legion and INQUEST, as well as that of many individuals, has finally paid off.
Jonathan Ashworth (Leicester South) (Lab)
Like my hon. Friend, I supported the British Legion’s campaign throughout the Bill’s passage. I want to put something on the record briefly. Many representatives of faith communities in the city of Leicester have approached me because of their concerns that coronial services need to be improved across the piece and be sensitive to faith communities’ needs. I wanted to put that to the Minister, but he was speedier than I anticipated. Does my hon. Friend agree that representatives of faith communities should sit on the bereavement committee that the Minister is establishing to advise on those matters?
Jon Trickett
I am grateful to my hon. Friend, who played a distinguished role throughout the Committee’s proceedings and spoke on Second and Third Reading. I know that he pays close attention to such matters as a hard-working constituency representative in the city of Leicester. I agree with his points.
Let me outline the reasons why we felt uncomfortable with the direction that the Government were taking. We heard that they were going to perform a fairly undignified climb-down on the post of chief coroner, and it looked like a wholesale victory, but, as is becoming the Government’s custom, the announcement was not made in this House or the other place, but to the media. We heard about it on the BBC the night before the Bill went into Committee in the other place. I think that that is deplorable.
Many people were misled into saying that it was a wholesale victory for common sense and that the Government had finally listened. However, when we saw the detail of the proposals, it immediately became clear that there was a flaw at their centre. The Government have decided not to delete the post of chief coroner—we welcome that—but they have also decided, as the Minister just said, to repeal section 40 of the Coroners and Justice Act 2009. That means that there will be no right of appeal against a coroner’s decision—as we have heard, from time to time, those decisions are contested—to the chief coroner, as the House originally intended.
The Government know perfectly well that there is no need to repeal section 40, which will allow for appeals in due course, since the 2009 Act understood that such action had to be taken carefully. A procedure was therefore put in place so that the process of appealing to the chief coroner would not be invoked until the Secretary of State allowed that to happen. We strongly believe that that should continue. In effect, the removal of the right of appeal will reduce the office of the chief coroner to an administrative post with limited oversight of the coronial system, and that is to be regretted. We agree with INQUEST, which has circulated a note to all hon. Members today, that section 40 of the original Act should be retained and that a pilot for the appeals procedure could then be undertaken by the chief coroner when the post is filled. That review could be undertaken alongside the Ministry of Justice’s review. That would allow the Government to make an informed decision on how to proceed with reform of the coronial system. It seems that the Government are unwilling to make an informed decision, but have just decided, dogmatically, that there will be no appeals system. I strongly believe that a pilot would prove beyond doubt the efficacy of a national appeals system to the chief coroner. Why on earth would the Government withdraw that power? It is baffling.
Sir Alan Beith
The hon. Gentleman talks as if the appeals system exists and is about to be removed, but in fact it does not exist, because the chief coroner was not appointed and the clauses were not put into effect. The situation that he is describing as some strange and horrific future possibility is actually what we have now.
Jon Trickett
Of course it is, and I am baffled by that intervention, given that I have just said that section 40 allows for an appeals system to be introduced in due course. What was envisaged was a proper coronial system with an appeals process and a chief coroner who would have authority over the whole system. The Government are seeking to stop that logical process, which could be tested first by a pilot, and to put in an illogical system, with a chief coroner who would effectively be reduced to a purely administrative post.
In response to a series of parliamentary questions and freedom of information requests, Ministers have revealed that at no stage have the Government estimated the likely costs of additional judicial reviews, as opposed to an appeals system. On that basis, it is odd to argue that savings will be inherent in this decision.
Charlie Elphicke (Dover) (Con)
Surely having a right of appeal would just mean more cost and delay. The really important role that the coroner has had historically is to make a judgment and provide closure. Is not that the most important of the coroner’s responsibilities?
Jon Trickett
The two interventions have been revealing. Both interventions, and the Minister’s original speech, envisage more judicial reviews taking place in the absence of a proper and orderly appeals process. The problem with judicial review is that it is more expensive than the appeals system. It can take years and it is burdensome, bureaucratic and emotionally painful to the bereaved families. The average cost to an individual is £30,000. We are talking about people, such as families of service men and women, who may want to contest the decisions of a coroner. Under clause 40 of the Coroners and Justice Act 2009, there is a simple system that allows for an appeal to the chief coroner, which would create a precedent for the whole coronial service. Rather than that, the Government are resting their case on the fact that the appeal process will go through judicial review. That is not an appropriate way in which to handle a very sensitive service.
Charlie Elphicke
I thank the hon. Gentleman for giving way again. He is being typically generous and kind. Judicial review is not a form of appeal. Sometimes it is used as collateral challenge, but it is not a form of appeal. It is used when there has been a procedural irregularity. The key message must be that the whole point of the coroner system is to get closure so that people can move on with their lives. A person has to get leave to apply for judicial review, and they must show that there has been some procedural irregularity or proper grounds for that kind of action to be taken.
Jon Trickett
The British Legion, which is closer to any of the service families than we are, says that it would prefer an appeals system. The hon. Gentleman has to say why he thinks that he understands better the needs of bereaved families than the British Legion. I suggest that he does not understand better, and nor do I. It is better to defer to the judgment of the British Legion.
Jon Trickett
I will not take any more interventions because there are other people who wish to catch the Deputy Speaker’s eye. The Government clearly want judicial review, but the problem is that it is a complex system. We will have the individual coroner’s court, the chief coroner and then the intervention of the judiciary through judicial review. It is a complicated administrative and legal process. Families who are bereaved and who simply do not understand what happened to their loved one want an explanation and the matter to be brought to closure. A judicial review can take years before an issue is resolved and cost tens of thousands of pounds.
Mr Djanogly
Will the hon. Gentleman explain to the House why he thinks that the chief coroner’s decision is less likely to be judicially reviewed than any other decision?
Jon Trickett
There may be some judicial reviews under the chief coroner, but they will be fewer in number. It will be a far more efficient system. At the end of the day, we want to do what the families want. The families are saying to us—the British Legion, INQUEST and individual families—that they do not want what the Government are trying to achieve. If the Government’s reasoning is to save money, it would be more efficient, better emotionally and cheaper to allow section 40 to remain on the statute book so that a decision can be made in the fullness of time, with all the options having been carefully considered.
It has been suggested that removing the right of appeal, which was in the original Act and which the Government now wish to achieve, will effectively neuter the role of the chief coroner. More sinister than that is a rumour that is now circulating that the Government intend simply to fail to fill the post of chief coroner. Will the Minister now tell the House when he intends to fill that post?
Jon Trickett
I have said that I will not take any more interventions. The Government have moved considerably during the course of this Bill, and we will support the decision to retain the post of chief coroner. We welcome the Government’s decision in relation to that matter. For the reasons that I have given already, I will seek your permission, Mr Deputy Speaker, to divide the House on the question of the retention of the right of appeal to the chief coroner.
Andrew Percy (Brigg and Goole) (Con)
I shall try to keep my remarks as brief as possible. I begin by welcoming the decision—I will not call it a climbdown—to retain the post of chief coroner. I moved an amendment in this place to reinstate the post, and in that vote I was grateful for the support of the Labour Front-Bench team and some of my hon. Friends.
It is important to rehearse one or two of the arguments, as the hon. Member for Hemsworth (Jon Trickett) did, about why we need this reform and why Conservative Members, at the time, supported the creation of the post of chief coroner. There have been numerous examples of people and families receiving appalling and disgusting treatment at the hands of the coronial system. On Report, I mentioned a couple of such examples, and consequently, since then, other people in my area have come forward with their own examples.
We agreed, therefore, that there was a definite need for the reform and for the post of chief coroner. Of course, had the post been filled before this all started, we would not be in such a weak position, having advanced that argument. Nevertheless, I welcome the decision—whatever the reason—to reinstate the post. I look forward to hearing from the Minister, who tried to intervene on the Opposition spokesman, when exactly the post will be filled. One of the reasons I wanted to speak was to get an answer to that question.
Mr Djanogly
I can confirm that the Lord Chancellor and the Lord Chief Justice will immediately discuss how and when the post will be filled.
Andrew Percy
I thank the Minister for that.
The question of the appeals process is not quite as simple or clear-cut as has been presented. Despite referring to the appeals process when I moved my amendment a few weeks ago, it was not one of the main drivers behind my joining the campaign. The fact that under the previous legislation it was accepted that the process would not start for some time demonstrates the difficulties that arise. There is the perception or concern that some people might use the appeals process almost to continue the grieving process. Members have talked about getting closure, but actually the appeals process can postpone that closure, which can be difficult for families.
I understand, therefore, that this is a difficult issue. The Opposition spokesperson made a sensible proposal—about having a trial—but that is not necessarily the answer, because, as the Minister said, those decisions can be judicially reviewed. The key point about the chief coroner was his role in driving the necessary reforms, which can continue with or without the appeals process.
Stephen Mosley
Is not one of the key points about the chief coroner, as envisaged by the Minister, that he will be responsible for training and monitoring? My hon. Friend mentioned constituents who have had disagreements with the coronial system. Those problems would be solved if we had a chief coroner to look at training and monitoring.
Andrew Percy
Of course, the position was created precisely to drive that top-down change and to ensure that people’s experience of the coronial system was even and equal across the country. That is the element that we have to focus on. We have to accept that we are where we are—the other place has determined the matter—and that there will be no changes to the appeals process, although I hope that the Minister will not take that possibility off the table permanently. Perhaps we could reconsider that matter further down the line.
We now need to focus on getting the position filled and driving forward that change. I welcome the position that we are in, and I join the Opposition Front-Bench team in paying tribute to the role of the Royal British Legion, as well as organisations such as INQUEST and, interestingly, the British Medical Association, which supported, and continues to support, the post of chief coroner. The Royal British Legion has done an exceptional amount of work in raising the matter and doggedly fighting for it.
This is also a question of our commitment to the covenant. Obviously it is not just service personnel families who are affected, but they are uppermost in our minds when we think about the post.
I welcome the fact that we have this position again. I hope that the appointment will be made as quickly as possible and that the genuine change that all of us, in all parts of the House, have agreed needs to be made, is indeed made. Finally, let me again make a plea to the Minister to consider the appeals process in due course, although I fully accept the complex nature of such appeals.
Robert Flello
Let me begin by adding my praise to INQUEST, the Royal British Legion and a host of other organisations, which are almost too numerous to mention, that have been behind the campaign to ensure that the Government finally saw sense on refilling the post of chief coroner—not appointing someone to the post, because it was filled. Somebody was appointed, but then, shall we say, let go. I also pay tribute to the hon. Member for Brigg and Goole (Andrew Percy) for the work that he did, which is much appreciated.
I am extremely disappointed that, having been told time and again, and shown the error of their ways, the Government waited until the 11th hour—or not quite the 11th hour: it was probably around half past 7—finally to change their mind. However, they then behaved like a small child. Having been found out, they now want to kick the toys around spitefully. Section 40 can be introduced over time, in a measured way, using pilots. However, simply saying, “Okay, have the chief coroner, but you can’t have appeals,” looks petulant and leaves the Minister and the Ministry of Justice looking stupid. [Interruption.] Allow me to rephrase that, Mr Deputy Speaker. I did not mean for a moment to say that the Minister looked stupid; however, the stupidity of the actions stands out.
INQUEST has said as recently as today that it envisages that section 40 would
“remain on the statute book until, at a time to be agreed in the future, the provision would be brought into force by the Secretary of State under section l82 of the Act so a full pilot and review of the appeals process could be undertaken by the Chief Coroner.”
That is totally sensible. It continues:
“This would enable a properly costed, informed decision to be taken about rolling out a new avenue of appeal across coroners courts in England and Wales. Terms of the pilot and review would be decided between the Chief Coroner and the Ministry of Justice and, under our proposal”—
the proposal put forward by it and RBL—
“an appeals process would not come into effect for several years.”
All that is eminently doable, and to say otherwise is frankly wrong. INQUEST continues:
“An appeals process overseen by the chief coroner would offer families a route to resolve poor decision making.”
That relates to the interventions from the hon. Member for Dover (Charlie Elphicke)—[Interruption]—who is probably tweeting at the moment.
Robert Flello
I have got his attention—marvellous.
As INQUEST says, this is about
“poor decision-making by coroners before and during the course of the inquest so that any legal questions on these points could be dealt with quickly and efficiently. Currently, the only avenue of appeal for bereaved families about the decision-making of coroners and their conduct of an inquest is through judicial review which, as well as being expensive and complex, will often result in lengthy delays and adjourned inquest hearings while the issue is dealt with by the High Court.”
Let me give a quick example. Sheila Taylor bravely came to this House and spoke at a meeting with INQUEST on 20 October, following the tragic death of her son Mike, in April 2007. She says, among many other deeply poignant things:
“The Coroner’s Office didn’t inform us that we had a right to be present at the post-mortem. That had already been done before we were informed of Mike’s death, which made us suspicious. Was there some sort of cover-up? Had he been murdered? Had he been given the wrong drugs? The Coroner’s Officer was so rude in response to our questioning that we had to get our solicitor to speak to him on our behalf. We decided we needed a second toxicology report, but that caused a delay of 8 weeks before we could hold the funeral. You can imagine how upsetting that was.”
We can also imagine how upsetting it is for a family who have something that they are not happy about—indeed, something they have deep concerns about—but for whom the only avenue currently open is the judicial review approach, as the right hon. Member for Berwick-upon-Tweed (Sir Alan Beith) said. Families such as the Taylors have to decide whether they want their son’s funeral delayed even further and the coroner to take even longer to look at their case, while they go through the expensive and lengthy process of judicial review. It does not need to be like that.
Charlie Elphicke
The hon. Gentleman was kind enough to suggest that I was tweeting. In fact, I was looking up the difference between judicial review and section 13 applications under the previous arrangements and section 40 appeals under the current arrangements, and it struck me that there was not much difference between the two. I wonder whether we are actually talking about a slightly illusory right of appeal.
Robert Flello
Perhaps the hon. Gentleman should go and use a fully sized computer to conduct some proper research, rather than using a small hand-held device in the Chamber, which is probably not allowed by “Erskine May” in any case.
The Government have previously referred to cost, but—this has been said several times already, but I shall say it again because it is so important—the whole cost issue is a nonsense in many respects. Answers to parliamentary questions, responses to freedom of information requests and discussions with the Ministry of Justice have shown that the Government have not analysed the current costs of judicial reviews of coroners’ decisions or made any attempts to ascertain what the future costs might be, and have thus been unable to make any comparison with the section 40 appeals process.
If section 40 remains on the statute book, things can be done properly, carefully, steadily and slowly. There is no need for them to be done tomorrow. There is no need to say, as the Minister has, “We want to ensure that all this can be done quickly, so we must omit section 40.” I am sorry, but that is wrong, and I suggest that he should read the Act again.
I do not know whether the Minister suddenly thought “We are going to lose at the other end of the Corridor”, or whether there was a moment on Remembrance Sunday when he stood thinking about the ultimate sacrifice that people had made, and about the small sacrifice that the House could make by doing the right thing. Whatever the reason for his decision, however, I know for certain that he will not want to upset the Whips today, and that he therefore will not tell the House that he will not press the amendment that would remove section 40. That is a tragedy.
No doubt the Government will win the vote despite the brave stance of many Government Members, but notwithstanding that victory and notwithstanding the removal of section 40, which I am sure will happen, I ask the Minister to ponder this: he may win the vote, but he will have lost the moral and ethical argument. He will also have lost any chance of being viewed positively by the—sadly—tens of thousands, if not hundreds of thousands, of bereaved families out there, and those who represent them, who know that section 40 is the answer. He has done the right thing in regard to the chief coroner, for whatever reason, and I now ask him to do the right thing in this regard.
Stephen Mosley
I believe that the Minister wants the chief coroner to be able to ensure that coroners are fully trained and know how to deal with issues so that no mistakes are made. Appeals are necessary only if things go wrong, so is not the solution to ensure that they do not go wrong in the first place?
Robert Flello
I might have a little more sympathy with that argument had the Minister not said on previous occasions that there was no need for a chief coroner, and that the precautions listed by the hon. Gentleman were not necessary. He cannot have it both ways.
Mr Djanogly
As the hon. Gentleman well knows, the Government’s reforms provided for training under alternative proposals.
Robert Flello
I do not disagree with the Minister—he did say that the Government wanted to provide for training—but the point was made time and again from the Dispatch Box that there was no need for the chief coroner to do any of the things that were mentioned by the hon. Member for City of Chester (Stephen Mosley). Thankfully the Minister has seen sense in that regard. However, if the hon. Gentleman is right and the existence of a chief coroner means that all coroners will finally be up to standard, there will be few if any appeals, so where is the harm in including section 40? I suggest that there is no harm in it at all.
I think that the Minister needs to do the right thing. I know that he will not do it today, but I know that it will be done at some point in the future.
Mr Deputy Speaker (Mr Nigel Evans)
Order. Before I call the next speaker, may I point out that discreet use of hand-held devices is allowed in the Chamber? If it were not, I would have disallowed it in this instance.
Sir Alan Beith
The Select Committee on Justice has taken extensive evidence on the failings in the coronial system and the need for reform. We felt strongly that there should be a chief coroner and I continued to press that argument with Ministers on many occasions. The Government found alternative ways of trying to achieve the same things, and it would be wrong to suggest that in their use of the powers of the Lord Chief Justice they were not hoping to achieve significant reform.
Clearly there is consensus about reform. Anyone who has seen the experience of families who have had delayed inquests or poor service from coroner’s offices, and who is aware of the completely patchwork system of support for coroners around the country, realises that fundamental reform is required. That can now be achieved through the office of chief coroner, which I felt all along was the sensible way to do it. That involves professional leadership, training and tackling the jurisdictional issues so that, for example, the chief coroner can move inquests to a coroner who is in a position to provide the service when there is too much pressure in another coronial area.
Where there is not consensus is on the appeal issue. I know how strongly the Royal British Legion feels about that and I respect its campaign, but significant legal questions are raised by whether we substitute the decision of one coroner for that of another—that is a quite different process from judicial review. We do not have time to debate that in detail today, but I simply say that there is wide consensus on the need to reform the coroner system. There are many good coroners and many excellent coroner’s offices, but it is a very uneven system. The chief coroner should now be a mechanism for undertaking that reform, but the issue of appeals is one on which there is much more to be argued over and we might be holding out to families the false promise that they will somehow be in a better position than they would be with the present system. It would be wrong of us in this House to do that, so I urge the Minister to get on with the crucial reforms of the system, which the chief coroner can achieve.
Simon Hughes
I strongly endorse the views just expressed by my right hon. Friend the Member for Berwick-upon-Tweed (Sir Alan Beith). I represent a coroner’s court in Southwark and we have had very good coroners—Monty Levine, who was very famous, and Andrew Harris, the current coroner, who is a friend of mine. However, like other colleagues, I have had experiences, involving constituents and others, of really bad coroner’s decisions. The Taylor family have been mentioned by the hon. Member for Stoke-on-Trent South (Robert Flello), and Michael, who died, was a constituent of mine. I am also talking about the inquests after the Marchioness sank in my constituency, the battle that the lovely late Eileen Dallaglio had to fight on behalf of her daughter and the battles that all the others like her had to fight. In the end, they had to go through a judicial review because they were terribly treated by the coroner who dealt with that case.
I welcome the fact that the Government have changed their mind and that the scheme introduced eventually by Labour—we had to push but it was eventually put on the statute book—can now be implemented in respect of creating a chief coroner. I urged, as others have, that that decision be taken. It is reasonable to proceed gradually along the road that has now been accepted by the Government. They are clear that they are going to report back on Army coroner’s inquests—the Armed Forces Bill does that. As Lord McNally said in the other place, this is not just about training; it is about monitoring, reporting and direction. That will give us a good base. There will also be an annual report to Parliament.
May I end by saying that I also have the privilege of being the Member of Parliament for the headquarters of the Royal British Legion, and I know that INQUEST has worked with the RBL very well. They are very honourable organisations, they have fought an honourable fight and they have won an honourable victory. The House owes its gratitude to them and to the Government for understanding the strength of feeling on this case.
Mr Djanogly
With the leave of the House, Mr Deputy Speaker, let me just repeat that the Government are committed to urgent and meaningful reform of the coroner system to ensure that inquests are timely, efficient and effective and that bereaved families are provided with the information and support they need throughout this emotionally difficult process. I was pleased to hear the hon. Member for Hemsworth (Jon Trickett) speaking in favour of reform. He needs to be aware that the position on the statutory basis for reform was the same between all the parties in the House, despite differences over the position on the chief coroner. I was very pleased to hear my right hon. Friend the Member for Berwick-upon-Tweed (Sir Alan Beith) recognising that and making the point strongly.
The hon. Member for Leicester South (Jonathan Ashworth) made the very good point that as important as coronial reform is for military inquests, this goes much further than military inquests. I acknowledge his concern that faith groups should be considered and I take that back with me.
Various hon. Members spoke about cost and the implications for judicial review. My hon. Friends the Members for Brigg and Goole (Andrew Percy) and for Dover (Charlie Elphicke) pointed out the need for closure for families and made their points very well. I understand the concerns about the cost of judicial review, but the chief coroner would not have had the final word on appeals. The option of judicially reviewing the chief coroner’s decision would still have been available, and bereaved families might have been encouraged to exhaust all mechanisms for challenging the coroner’s original findings. As a result, we would not have expected any reduction in the number of judicial reviews; indeed, there could have been an increase.
Various hon. Members, including the hon. Members for Hemsworth and for Stoke-on-Trent South (Robert Flello) asked why we are not—
National Policy Statements
(12 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for Transport (Norman Baker)
I beg to move,
That this House takes note of and approves the National Policy Statement for Ports, which was laid before this House on 24 October.
It falls to me to introduce the motion because the Under-Secretary of State for Transport, my hon. Friend the Member for Hemel Hempstead (Mike Penning), the Minister with responsibility for shipping, is this evening hosting a reception on the occasion of the 27th assembly of the International Maritime Organisation.
The national policy statement sets out national policy which must be considered in determining whether development consent should be granted to port infrastructure projects that are examined by the Infrastructure Planning Commission or, with effect from next April, when it is intended that the Infrastructure Planning Commission will be abolished, the major infrastructure planning unit in the Planning Inspectorate. It is also intended that the national policy statement will stand as a material consideration for port developments below the capacity thresholds that are set out in section 24 of the Planning Act 2008, which fall to be considered by the Marine Management Organisation. The national policy statement applies to ports in England and Wales, but not in Scotland or Northern Ireland, where ports policy is devolved.
Members will know that the previous Administration consulted on a proposal for the national policy statement on ports between November 2009 and February 2010. Alongside and beyond this consultation, Parliament also undertook scrutiny of the draft national policy statement. Scrutiny in this House was undertaken by the Select Committee on Transport, which held three oral hearings, took written evidence and in March 2010 published a report of its findings with 22 recommendations and conclusions, to which the Government have responded. I would like to take this opportunity to thank members of the previous Transport Committee, including the then and present Chairman, the hon. Member for Liverpool, Riverside (Mrs Ellman), for the important work that they undertook, the thoroughness with which they approached it, and their readiness to do that within a relatively short period.
This debate is taking place because the Government have agreed with the House to anticipate, as we did earlier this year for the suite of energy national policy statements, the relevant requirements of the Localism Act 2011, which will not come into effect until next year. I will speak briefly about the Government’s planning reform agenda; the purpose of national policy statements; and the background to the Government’s ports policy and the need for new infrastructure, which is central to the national policy statement.
On the planning reform agenda, the Government are committed to making the planning system as a whole work better. “Better” means faster, fairer and easier to understand for all involved, including applicants and objectors, while of course giving due regard to environmental considerations. It most emphatically does not mean denying people a right to be heard. My ministerial colleagues at the Department for Communities and Local Government are satisfied that the system of engagement and consultation set up by the Planning Act 2008 fully secures that right, so we have not sought to modify that. Engagement with local people and their representatives from an early stage is crucial if applications are to come to the Infrastructure Planning Commission or Planning Inspectorate with the project as well defined as it can be, and with proposals for avoiding, mitigating and/or compensating for adverse impacts.
Dr Julian Lewis (New Forest East) (Con)
Is the Minister aware that after a year-long planning inquiry, a proposal for a massive container port at Dibden bay on the edge of the New Forest was turned down? I understand that there would not be provision for any such inquiry in the future. Can he assure me and my constituents that a streamlined planning process for such a proposal would be no more likely to be carried than it was under the previous, rather more detailed opportunities for challenging it?
Norman Baker
I do not believe that the change in arrangements makes that more likely, but obviously every application is considered on its merits and according to the circumstances that apply at the time.
The Government have set demanding targets for the consideration of what could be complex cases, but applicants and their consultees must contribute by thinking well ahead and ensuring that applications are fit for purpose. The Department recommends that ports should start in this spirit by consulting on port master plans. These are neither statutory documents, nor part of the formal Planning Act regime, but nevertheless they could help enormously to promote local understanding of what a port is trying to achieve and how best to avoid or mitigate adverse impacts. Master plans are not confined to large ports. Newhaven in my constituency is an excellent example of a port engaging thoroughly with its community in that way.
Mr John Denham (Southampton, Itchen) (Lab)
Paragraph 4.4.1 of the national policy statement states:
“Ports in England and Wales operate on commercial lines, without public subsidy and with investment from their own operating profits or from the private sector investors.”
Will the Minister assure me that the Government will uphold that policy rigorously and fairly, particularly given the desire of the port of Liverpool to use a publicly funded cruise terminal to compete with the privately funded cruise terminals in Southampton, which breaches the principle of fair competition?
Norman Baker
I am sure that it is Government policy to uphold all policies fairly, and I imagine that that is what my hon. Friend the shipping Minister and others will seek to do.
Where we have made a change is in the intention to abolish the Infrastructure Planning Commission so that, from next April, major project applications will revert to the Secretary of State for decision following consideration by the major infrastructure planning unit, which is to be set up within the Planning Inspectorate. That reinstates an important element of democratic oversight in the process, although I should make it clear that the Secretary of State intends to consider applications on the facts, on the advice of the major infrastructure planning unit, and in accordance with the national policy statement.
Another aspect of the Planning Act that we have retained is the principle that applications should not succeed if their adverse impacts outweigh their benefits. I do not believe that many applications will fail that test if they are thoroughly prepared in accordance with the national policy statement, but none the less this represents a robust safety net in case we fail to foresee any significant adverse impacts. The Infrastructure Planning Commission, and the major infrastructure planning unit that will succeed it, will not be a completely one-stop shop, but it nevertheless reduces the separate applications potentially required. Marine licensing, as set up under the Marine and Coastal Access Act 2009, streamlines previous licence and consent requirements, and associated development can now be fully integrated with the main application.
The purpose of national policy statements more generally is to provide a framework for preparing, considering and deciding planning applications. Therefore, this national policy statement does not purport to be a complete statement of Government policy as it relates to each and every aspect of ports. In essence, it is a planning document.
The UK is of course a trading nation, and well over 90% of our international trade by weight arrives or leaves by sea—the lion’s share of a total traffic of around 500 million tonnes a year. Ports are under-appreciated. They ply much of their trade behind high security fences, and even large ships can be surprisingly inconspicuous to those living in the port’s hinterland. We need port capacity to carry that trade and provide for coastal traffic, which can help to take lorries off our roads and reduce the incidence of pollution and congestion.
Sarah Newton (Truro and Falmouth) (Con)
I very much welcome the national policy statement and those statements that will have a positive impact on ports, such as Falmouth, set out in today’s national infrastructure plan. One helpful recommendation relates to the habitats directive and helping to balance the economic and social impacts of a port against potential impacts on habitats. It proposes setting up an industry body that would work with Ministers to review some of the over-zealous interpretations of the habitats directive and its impact on licensing port activities. Will the Minister shed some light on when that body will be set up and which industry bodies will be represented on it?
Norman Baker
I am afraid I cannot answer that question in detail, but I will ask my hon. Friend the shipping Minister to respond to it. We are determined to strike a balance between the sensible needs of a working port and respecting the natural environment as far as possible, and it would be quite wrong if one of those were able to triumph unduly over the other. We can strike a sensible balance in our arrangements, and my hon. Friend the Member for Truro and Falmouth (Sarah Newton) is right to raise the matter, so I will ensure that the shipping Minister writes to her with the answer that she has asked for.
Mr Denham
The Minister could unlock £150 million of totally private investment in Southampton’s container port next September if only he and his colleague’s officials cut through the red tape holding up that investment and the dredging of the River Test, which is necessary for large container ships. I am sure that he will not have been briefed on the issue, but I urge him to take it away and see what can be done to resolve it.
Norman Baker
I will happily take that issue away. It is important that we unlock private investment, that we help our ports and, at this particular time, as the Chancellor said today, bring forward investment where possible, so I will look at the problems that exist in the area and see whether they can be overcome. It may be that they cannot, but it is perfectly proper to raise the issue in the Chamber.
Ports are diverse. They cater for liquid-bulks, dry-bulks and break-bulks, ro-ro, including trade vehicles, and of course containers, and they play host to many kinds of warehousing, distribution and process activities. Their markets can be lively and volatile, and they need to be nimble in the short term to react to changing market conditions and patterns of demand, yet they must also plan for the long term. Port infrastructure is long-lived, lasting 20, perhaps 30, years and more, so it is important that such decisions are taken carefully, with full regard to all their significant consequences.
In the short term, the ports industry is well placed to respond to economic recovery. The first phase of Hutchison’s Felixstowe South project is already open, and that will help to secure the nation’s ability to accommodate the largest container vessels; we have seen the announcement by Dubai Ports World that it plans to complete the first phase of the London Gateway container terminal by the end of 2013; ABP Southampton, to which the right hon. Gentleman perhaps alluded, is pressing ahead with its own expansion plans; and other ports, including Bristol, Teesport and Mersey, already have consent for development.
We cannot afford to be complacent, however. Investors in ports need to be able to plan development for every type of traffic, and to do so in a planning context that is stable and well understood. Equally, ports’ neighbours need to know how their essential interests will be protected through the planning system.
The national policy statement brings together established policy for ports and established policy for mitigating their adverse impact. The fundamental policy that we set out in the ports national policy statement is market-led, building on the success of the industry since it was freed from the constraints of state ownership and the national dock labour scheme. Port operators are best placed to decide the type of facilities they need, so this is a non-location directive national policy statement, and I make no apology for that.
At the same time, development must be in sympathy with the environment, including the marine environment —to pick up the point that my hon. Friend the Member for Truro and Falmouth made. The national policy statement sets out in some detail how that translates into requirements for planning applications and their accompanying environmental statements. Unless there is provision for sufficient capacity, disruption at major ports has the potential to translate very quickly into serious disruption to people’s everyday lives.
The national policy statement expresses confidence that the ports industry, with each owner/operator taking its own commercial view, will deliver the resilience that the country needs against disruption, and the national policy statement is very clear that the planning system should give weight to delivering that important resilience.
Finally, in completing the national policy statement, we have been fully conscious of the fact that ports are nodes in a network, and that connecting infrastructure is essential to their success.
Jim Shannon (Strangford) (DUP)
The Minister said that authority over, and responsibility for, ports is devolved to Northern Ireland, the area that I represent, so from a ports point of view, what is the relationship between Westminster and Northern Ireland? In other words, do we have continuity of strategy and parity so that the relationship between the mainland and Northern Ireland is real and we all benefit?
Norman Baker
I assure the hon. Gentleman that there are, indeed, well established and close links between the Department for Transport and the devolved Administrations in Scotland, Wales and Northern Ireland. We certainly draw attention to and discuss with the devolved Administrations any issue that appears to have importance outside the English coastline, as it were, so I hope that that reassurance satisfies him.
Several consultees, as well as the Transport Committee, argued that the national policy statement on ports should be designated alongside the launch of our consultation on the proposal for a national networks national policy statement. I have some sympathy with those arguments, but so much of transport policy is interconnected that one could make a case for linking many other documents in this way, and the practicalities do not always work out. In the Government’s response to the Transport Committee’s recommendations, we explained why we are confident that both national policy statements will work as free-standing but mutually consistent statements.
Our reforms to the major infrastructure planning process will ensure that there is a concise framework for development that can be readily understood by all those involved in the planning system. Ministers will be responsible for decisions to consent or to refuse major infrastructure development, thus closing the circle of democratic accountability. I look forward to listening to contributions and responding to issues raised during the debate. I commend the national policy statement on ports to the House.
John Woodcock (Barrow and Furness) (Lab/Co-op)
This motion is brought before the House on the day that the Chancellor has unveiled his national infrastructure plan on which the UK’s economic recovery is supposed to rest. I have to say that those are grand hopes for a 150-page wish list with little coherence and even less sense of how it will be delivered. Although it is welcome that the House is getting the chance to debate the national policy statement on ports—an important innovation pioneered by the previous Government and made possible by the passage of the Planning Act 2008—it is time that Ministers faced up to the opportunities that are being missed because of failure to join up key decision making on transport infrastructure.
First, though, let me say what we support. We are pleased that national policy statements are going ahead and that Ministers have chosen to accept the Transport Committee’s recommendation that debates on them should take place in Government time.
We have heard today, in the Chancellor’s autumn statement, that Britain faces continued stagnation. Unfortunately, it will take more than a national policy statement on ports, no matter how finely crafted, to return our flatlining economy to health. However, although not sufficient, thriving ports are necessary to any recovery. Any successful route out of these doldrums will require an economic rebalancing that includes Britain’s exporting more to the rest of the world.
With about 90% of world trade taking place by sea, we need more than ever to ensure that Britain has sufficient modern, efficient port capacity that is capable of handling the size of ships and containers that are coming to dominate global trade. That port capacity needs to be linked to a land-based transport network that provides reliable and efficient links for exported and imported goods. That means having fast and free-flowing road links to major ports and increasing capacity on key rail routes, not only in relation to train paths but to enhancing the loading gauge to allow larger containers to be carried. That is why the last Labour Government worked with Network Rail to allow containers of 9 feet 6 inches to be carried between Southampton and the midlands. Today’s statement on rail freight interchanges is therefore welcome.
Our ports are essential to this island nation. They are part of our heritage and our future as a global trader. In 2010, the UK’s ports handled 512 million tonnes of freight, making our ports sector the largest of any in Europe. Ports and directly related services account for about 58,000 jobs, widely distributed across the country. From Immingham to Southampton and from the Medway to Liverpool, ports are at the centre of local economies.
We support the principles behind the policy statement in that port expansion is essential economically but must be conducted in ways that benefit local economies, drive regeneration and are environmentally sensitive. That is because businesses seeking new markets will be looking to the new Administration to deliver on the significant expansions consented to by the previous Government: a two thirds increase in the handling capacity at Felixstowe, consented to in 2006; the London gateway port that the Minister mentioned, handling up to 3.5 million containers a year and consented to in 2007; a doubling of capacity at Liverpool, also consented to in 2007; and further major expansions given the green light at Bathside bay in Harwich, at Teesport, and at Bristol.
Although we agree with the underlying principles of the statement and will therefore support its approval, the way in which it has been presented exposes serious shortcomings in the Government’s approach to planning transport infrastructure. I hope that the Government will reflect on that and make changes so that their already disjointed infrastructure planning does not deteriorate further.
The need to link ports with other infrastructure projects, particularly in road and rail, is obvious. However, the Minister has not given a satisfactory explanation of why he has ignored the recommendation of the Transport Committee to integrate the NPS on ports with the promised NPS on national networks.
Charlie Elphicke (Dover) (Con)
The hon. Gentleman will correct me if I am wrong, but I believe that the Eddington report was published in 2006 or 2007. The previous Government did not get on with improving road infrastructure to the ports. I say gently that it is a bit rich for him to criticise this Government for not moving more quickly on that.
John Woodcock
Progress was made, but unquestionably more needs to be done. I think that it was incumbent on the incoming Government to respond positively to the recommendations made by the Transport Committee just before the last election. It is a matter of great regret that they have not done so.
The Government have chosen to abolish the Infrastructure Planning Commission, yet the entire statement is written on the basis that the IPC exists. I hope that the Minister will make it clear in winding up, if he has time, or in writing if necessary, whether the end date that he gave of April next year is a firm date or simply a target, and whether that change will require further consultation on the NPS.
The House is being asked to approve the NPS without reference to wider ports policy, most notably on ownership models, including mutualisation. As the Minister is well aware, that is of great interest to many Members and local communities, most notably around Dover and the trust ports. The lack of any guidance on ownership and changes of status in the NPS demonstrates why it is not a substitute for a proper ports policy. I hope that the Minister, whom it is an unexpected pleasure to see today, or the Under-Secretary of State for Transport, the hon. Member for Hemel Hempstead (Mike Penning), will commit to coming before the House with a comprehensive statement on ports policy, in which the NPS sits.
It is unfortunate that the statement gives such limited consideration to the economic and social impacts of port development proposals, particularly on local employment. After the fiasco of the Thameslink procurement process, Ministers claim to be alive to these issues, yet they seem to be little more than an afterthought in this document.
The Transport Committee recommended that the statement should include preference for port development to reduce inland road transport, yet that is missing from the statement. It contains no wider policy on how to achieve a reduction in the reliance on road freight. We hope that Ministers will consider revising the NPS to ensure that development decisions are taken in a way that specifically promotes and encourages a modal shift for onward transportation away from roads and on to rail and coastal shipping.
On climate change, there is little in the NPS on emissions. The Government need to make it clear whether they will accept the advice of the Committee on Climate Change to include the UK’s share of shipping emissions in the 2050 target.
Finally, we support and welcome the growing demand from the offshore energy sector for additional port capacity, including in my constituency of Barrow and Furness. The Government need to take a more proactive role to ensure that the UK takes a larger slice of this booming market. That is referenced in the NPS, but there is little detail. Will the Minister say how the Government intend actively to promote the potential for ports in the offshore energy sector?
The statement shows some progress but, with the economy flagging, the Government need to raise their game on ports and infrastructure across the piece.
Charlie Elphicke (Dover) (Con)
The NPS is extraordinarily important. Representing Dover, I know just how important it is. Only today, the approval has been announced of a plan for the development of the western docks at Dover. It is a gold-plated plan on a rather larger scale than it needs to be, with a price tag of £400 million of investment, and the application has taken getting on for five years to go through the system—an awfully long time. Although the planned capacity will possibly not be needed until 2025 or 2030, owing to the economic difficulties that the country has faced in recent years, and although a gold-plated scheme certainly is not needed, it is an important step forward for the development of the port of Dover. It is much easier to amend an application once permission has been granted than to make a new one.
The fact that it has taken so long for the application finally to be approved underlines the need for a far swifter system of getting applications passed and sorted out. As the Transport Committee made clear in its report, there have been calls from business interests and others for major infrastructure projects to be handled properly, not with extensive public inquiries and long drawn-out decision-making processes but in a shorter and sharper way—something a bit less than the terminal 5 or Sizewell B inquiry nightmares. The NPS is therefore extraordinarily welcome.
My hon. Friend the Member for New Forest East (Dr Lewis) was right that the application at Dibden bay took a long time and got thrown out. It took four years, and I believe that it cost the applicant some £45 million, so that was dead money. That makes no sense whatever. The new, swifter method will be much better.
The shadow Minister, the hon. Member for Barrow and Furness (John Woodcock), rightly made the point that it is desirable to consider the wider aspects of the matter. My understanding is that the NPS is more focused on planning applications for ports than on whether development rights will be granted. I agree with him that, some years on from the Eddington report, which was produced back in 2006, not a lot has happened to the road infrastructure to ports. Although I picked him up for making a slightly partisan point about that, the fundamental point was accurate. We in Dover have been waiting for the upgrade of the A2, which is an important potential artery to the port. It was in the roads programme back in 1997, but was taken out and has not yet got back in. We have been waiting for that road to be dualled and upgraded for years, but it has not happened. We feel very strongly about that, and the Eddington report was fundamentally correct on the matter.
I turn to the NPS itself. The contents page reveals a massive focus on the environmental side of things. There are sections on, for instance, the environmental impact assessment, habitats and species regulations, pollution control, climate change control, biodiversity—so the list goes on. There is, one suspects, a greater concern about flood risks, coastal change and all the environmental things—including, I dare say, the lesser-spotted shellfish—than on socio-economic impacts, tourism and, above all, regeneration.
Jackie Doyle-Price (Thurrock) (Con)
I totally agree with the point that my hon. Friend has just made, and I wish to highlight one example in my constituency. The port facilities have existed for more than 100 years, and they offer every opportunity for growth and more jobs. However, they sit close to sites of special scientific interest, which are impeding that development. The fact that those SSSIs have been sitting close to that port development for so long surely illustrates that nature is resilient enough to accept port expansion.
Charlie Elphicke
I thank my hon. Friend for that fundamentally good point.
We need to think harder about the people involved. We need to consider ownership models, as the shadow Minister said, but also regeneration, tourism, jobs and money. We need to think about strengthening and boosting our economy, and making the most of our ports, just as much as we think about the environmental side.
Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)
The Select Committee on Transport published its report on the national policy statement on ports when the last Government were in office. We reported in March 2010—indeed, it was the first national policy statement to be reported on. The cross-party Transport Committee is not influenced by which party is in power. We reported at the time of the previous Government and we registered several serious concerns, and concluded that, unless proper consideration was given to our recommendations, the national policy statement was not fit for purpose. We therefore made a very clear statement then.
Considerable time has elapsed and several changes have been made. We are now looking at the revised national policy statement, so my comments will refer to some of our criticisms and also to some of the changes that have been made since we produced our report.
The key change since that time is the decision to abolish the Infrastructure Planning Commission. It was decided that, following consideration by the infrastructure planning unit and the Planning Inspectorate, the Secretary of State would make the decisions. It was also decided to abolish regional economic strategies and regional planning strategies. Some of our criticisms were of the planning process and the lack of clarity. The changes bring more clarity to the system whereby decisions are made. The background against which the planning statement is being assessed is therefore now rather different.
Time has resolved another major criticism that we made. We were extremely concerned that the policy statement was made before the Marine Management Organisation, which was to examine port development below the threshold for the infrastructure commission, had actually been set up. The Marine Management Organisation has now been set up and consulted, so that major criticism and concern has been addressed.
We expressed several concerns about environmental issues, and the Government’s response states that our concerns have been considered in a different part of the statement—in the documents appended to it. We register the Government’s response. We still have some concerns, but we accept that the Government have pointed out another way of addressing them.
We were very worried that the Government were not providing an update on ports’ traffic forecasts, which are extremely important. There was some dissension about the forecasting of ports traffic that was proposed as a basis for the ports statement. The Government’s response has not been to accept the precise form in which we wanted those forecasts to be updated, but it states that they will provide
“new forecasts in the near future”.
In a spirit of reasonableness, we accept that that concern has been addressed. We will wait and see how those new forecasts are provided.
Those major concerns have therefore been addressed, at least in part. The changes go some way towards dealing with some of the major concerns that we, as a Committee in the previous Parliament, had when we stated that we did not think that the statement was fit for purpose.
It is very important that the ports policy statement is correct. As hon. Members have pointed out this evening, ports are extremely important: 90% of the UK’s trade by tonnage and 512 million tonnes of freight go through our ports, and ports traffic contributes £17.9 billion to GDP, taken together with the employment that it generates. Indeed, the direct employment is at least 132,000 jobs, with many more indirect jobs. The ports sector is extremely important and that is why having the correct ports policy matters.
I want to deal with some concerns to which we have not received a satisfactory response. I think it is important to register them. One is the absence of a definitive ports policy, other than to say that the Government’s policy on ports is market-led. The Committee in the last Parliament felt that that was not good enough, because ports are such an important part of a thriving economy. Little progress has been made since in defining a ports policy. In fact, the ports policy such as it is was defined in an interim policy set out in 2007, and the Government have now said that that interim policy, together with additional statements that have been made, is their definitive ports policy. I suppose that we could look at it that way, but it does not meet in full the point of concern that the Committee has raised, and I hope that we can see further progress on that.
The Committee also raised the concern that the policy statement on ports seemed to concentrate almost wholly on container traffic. While that is the basis of the ports’ trade, we are concerned that other developments, such as offshore wind, were not considered properly. I am still unclear where such additional developments feature in the Government’s statement.
I reiterate the concern that the Committee raised about the absence of national policy statements on national networks at the time that the ports policy statement was put forward. I accept that some progress is being made. We are now being told that the national network statements will be laid in January. That is progress, but it would have been better if it had been done before we approve the ports policy statement. At least we have had some assurances that those statements are coming.
It is important that we know the Government’s plans for other transport networks apart from ports, partly because of the economic importance of ports, but also because their impact on the economy, including the regional economies, is affected a great deal by how goods are transported to and from those ports. It is therefore necessary to look at road, rail and inland networks, and at the issue of multi-modal transport, and how that can be encouraged. It is important that we know how that will be addressed, and I hope that the Minister can give us some more information on that basis.
We heard evidence during our inquiry from the northern ports that they felt that southern ports were very much at an advantage because of the extensive public investment in road and rail networks around them. The Committee in the previous Parliament felt that that was a very important issue, and this Parliament's Committee is of the same view. I noted the comments made by my right hon. Friend the Member for Southampton, Itchen (Mr Denham) this evening about the application from Liverpool for a turnaround cruise facility at the port. The application has been made because the possibility of such a facility, and the return of the cruise ships to Liverpool, is so very important to the regeneration of the city. I hope that when a decision is made on this issue—and there has had to be a consultation, as is proper—a reasoned approach will be taken, and recognition given to the fact that Southampton currently has 65% of the market for the turnaround facility, while Liverpool has only 5%.
Dr Julian Lewis
The hon. Lady of course has a constituency interest in this matter, and I represent a constituency close to Southampton. Does she appreciate that what is really worrying is that Liverpool received a great deal of both European and public money in order to build its port of call facility, and it gave undertakings that it would not use that facility as a turnaround point to start and end cruises? It now appears that it never had any intention of sticking to those undertakings, so if it were—bizarrely—to achieve retrospective permission to do what it promised not to do, surely it should have to pay back all the money and not just a quarter of it over a very long period, as is proposed.
Mrs Ellman
As a constituency MP I recognise the supreme importance of the turnaround facility to Liverpool. However, I also recognise that a reasoned judgment has to be made on the proper way in which to go ahead. The statements that the hon. Gentleman made about Liverpool’s intentions are not accurate, but this is not the place in which to pursue the detail of that. I hope that a reasonable decision is made. Liverpool City council has made an offer to deal with the very point that the hon. Gentleman has made, but that is for somebody else in another place to address. I simply ask for reason to be applied to resolve the issue.
Charlie Elphicke
I do not want to intrude on the private grief between Southampton and Liverpool. I represent Dover, which has a little less cruise business. It is also further away and can take a more dispassionate position. Does the hon. Lady not recognise that there is something of a state aid issue here and that that needs to be handled with extreme care?
Mrs Ellman
The state aid issue is a matter that will have to be dealt with by the appropriate authorities. After discussing it with all the relevant parties, I hope that a reasoned judgment can be made.
Earlier today, when the Chancellor delivered his autumn statement, he referred to the regional economic significance of ports and made reference to the support that he intended to give to developments in the Mersey and the Manchester ship canal in relation to Peel Holdings. It is because ports have such an important economic effect on a region that the issues that I raise are so significant and I hope that the Government are able to consider them.
In light of the time that has elapsed since the report was compiled by the Committee under the previous Government and the changes and statements that have been made, I believe that the port statement should not be opposed. None the less, I want to hear from the Minister about how he will address some of the outstanding issues that I have raised tonight.
Dr Julian Huppert (Cambridge) (LD)
It is a pleasure to speak in this debate. We have heard from speakers in whose constituencies are some of the great ports, such as Newhaven, Barrow-in-Furness, Dover and Liverpool. The port of Cambridge, however, is less active than it used to be. It was one of the country’s significant ports, dealing mainly with the Dutch trade, until the Fens were drained. If we do not get our climate change policy right, Cambridge may once again become an important port.
I will try to be brief as there is little time left. I will not highlight why ports are so important to this country; I assume that that is obvious. Although the ports are very important for leisure and tourism, there are other factors involved. Goods that come into that port then have to move on. Currently far too much freight is moved by road, and road congestion is very damaging. In 2006, Transport for London estimated that road congestion in and around London cost £1.6 billion a year, and that figure will go up. More locally for me, the A14 in my constituency is used by a large number of heavy goods vehicles, which are largely travelling from the very successful port in Felixstowe. Those vehicles cause a large number of accidents and most of the congestion, which is why I welcome the £20 million that will be spent on trying to alleviate the problem and ensure that we do not have those accidents.
The key solution is to do more with rail freight and I should like to hear what the Government are planning to do in that regard. Rail freight over the past decade has grown by two thirds and saved 2 million tonnes of pollutants and 31.5 million lorry journeys. There is still more to do. The Felixstowe east-west rail freight link could be boosted. There is some work happening now, but more needs to be done.
I also wish to highlight the role that canal freight plays. Canals are much more efficient in terms of CO2 than roads. Tesco has been using barges since 2007. In addition to rail freight or canal freight, will the Minister also consider the idea of inland ports so that we can minimise the amount of road travel? That is one of the key aspects that I should like to hear more about in his statement.
Dr Julian Lewis (New Forest East) (Con)
I understand that, for reasons that are slightly beyond my ken, people seem to be very anxious to finish at 7 o’clock this evening rather than at the normal time of 10 o’clock. I suppose that that is something to do with the fact that we are beginning to sit rather earlier.
The issue of Dibden bay, which I referred to in an intervention, is the single most important constituency issue in New Forest East in the 14 years that I have represented it. As my hon. Friend the Member for Dover (Charlie Elphicke) said, it was a long time before the considerations on whether a giant container port should be built at Dibden bay produced decisive outcomes. We had a year-long public inquiry, as I said in an intervention, but we also had, as he said, several years leading up to that public inquiry. If the new procedure, first through the Infrastructure Planning Commission put forward by the previous Government and then under the replacement arrangements proposed by this Government, allowed for public consultation—
Business without Debate
(12 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text
Empty Homes
(12 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text
Jason McCartney (Colne Valley) (Con)
It is an honour to have secured this Adjournment debate on empty homes. It is an issue that I and many Members on both sides of the Chamber have raised in recent weeks and months. Indeed, only last week, three Members asked about empty homes during the ministerial statement on housing.
I shall digress for one second. This debate may be my last in the House with my Movember moustache, which is coming off on 1 December. Like many Movember men across the country, I have sprouted some hair on my top lip—you can just see it, Mr Deputy Speaker—to raise awareness of the Prostate Cancer Charity and men’s health issues. All Members would agree that with the tragic events over the weekend we need to be more open about men’s health, particularly issues such as depression.
I became involved in the issue of empty homes because of my deep concern about overdevelopment in my Colne Valley constituency in west Yorkshire. It is home to the lovely towns of Slaithwaite, Marsden, Holmfirth, Honley, the Huddersfield suburbs of Lindley and Birchencliffe and many more beautiful areas. I was concerned that our beautiful Pennine countryside was set to be dug up for new identikit homes.
The idea of green fields being developed is bad enough, but it defies all logic to be doing it while thousands of existing empty properties are being left to rot. In fact, my local council, Kirklees, has just voted for a local development framework that will impose 22,470 new homes in the district over the next 15 years, with some going on green belt. I say, bring Britain’s empty homes back into use first.
There is a groundswell of support for the empty homes campaign. I have to admit that I am a big fan of Channel 4 shows such as “Grand Designs” and “Restoration Man”. The presenter of the latter show, George Clarke, will be telling the nation about the scandal of Britain’s empty homes in a forthcoming series on Channel 4 next Monday and Tuesday evening—that is the plug out of the way.
The Government have responded really well to this problem, with targeted initiatives and cash to back it up. The inspirational—I do not use that term loosely, as he is a master of his brief and has seen off eight Opposition Housing Ministers—Minister for Housing and Local Government has spoken with me at great length on the issue, as has the Minister here this evening, who I know will give more details of Government help later.
What is an empty home? Homes are left empty for a number of reasons—for example, when they are between tenants, being refurbished, in probate or when the owner is in care or hospital. For the purposes of this campaign and this debate, however, we are primarily talking about long-term empty homes. These are properties that are stuck empty, and I believe that getting those houses back into use could be a quick and relatively inexpensive way of providing more housing.
How many empty homes are there? Across the UK as a whole, there are close to 1 million empty homes and approximately 350,000 long-term empty homes—this at a time when 2 million families are on housing waiting lists. Those figures are based on statistics from the Governments in England, Scotland, Northern Ireland and Wales, plus advice from the Empty Homes Agency about the number of empty properties across the UK that are not currently accounted for in official figures.
In my patch, we have been trying to get accurate figures from Kirklees council—I need to put the record straight on this. Following the original freedom of information request on the issue, we were told that there were 6,864 short-term empty properties—properties with a council tax exemption—and 3,463 long-term empty homes, or properties no longer exempt from council tax. By adding 1,000-plus second homes or holiday homes, the total comes to over 11,000. Obviously not all those homes are available for bringing back into use, and nobody has ever suggested that.
Kirklees council has now revised the figures, giving me—and everybody else who has been asking—another figure on long-term empty homes. However, whether it is 11,000, 7,000 or 3,463, it is one too many when people are waiting for homes and when the developers are eyeing up our greenfield sites. The Government have stepped up to the challenge, making £150 million available in the housing strategy, which will be delivered quickly. I hope that my hon. Friend the Minister will have more details on the scheme, which he and his colleagues have been working on.
Graham Jones (Hyndburn) (Lab)
I congratulate the hon. Gentleman on securing this debate about such an important issue, which is crucial to my constituency, where there are some 2,600 to 2,700 empty properties. Would he be shocked, as I was, to discover that local authorities cannot bid for the empty homes fund?
Jason McCartney
I thank the hon. Gentleman for making that contribution. Those are some of the issues that I hope the Minister will say something about later. Councils, community groups and all sorts of community people need opportunities to tap into those funds, and those are some of the points that I will be making later.
I acknowledge that, through the new homes bonus, 16,000 empty homes have been brought back into proper use in just one year. That shows what can be done. However, the Housing Minister has admitted that it is a scandal that 700,000 or 750,000 properties are empty when so many people are in desperate housing need. The Government announced last week that they were adding another £50 million to the existing £100 million fund for empty homes, making a total of £150 million.
Let me set out some of the benefits of bringing empty homes back into use. The refurbishment and reoccupation of those homes could clearly contribute significantly to meeting England’s housing needs. The reuse of empty homes can also help to protect the beauty and openness of England’s natural landscapes for future generations, by negating the need for development on greenfield sites, which is important in my area of west Yorkshire. The renewal of existing communities can take advantage of existing infrastructure such as transport links and schools. Refurbishment constitutes a much more efficient use of construction materials than new build, and the reinvigoration of existing communities can add to the local economy.
Martin Vickers (Cleethorpes) (Con)
As always, my hon. Friend is making a strong and persuasive case on behalf of his constituents. Does he agree that, as well as there being many empty homes, changing shopping patterns have resulted in many empty shops? Many are substantial buildings that could be refurbished at a reasonable cost and brought back into use as homes.
Jason McCartney
My hon. Friend makes a really good point. Empty shops are an issue in my part of the world, as they are in his. Indeed, there are concerns that there are slightly too many charity shops, for example. I have also been thinking about how the flats and apartments above shops could be brought back into use. That would mean families and young couples living in our town centres, which would not become no-go zones in the evening. That would help, so I thank him for making that valuable point.
Jim Shannon (Strangford) (DUP)
Is the hon. Gentleman aware of Northern Ireland’s “Living over the shop” scheme? We have used it over the past couple of years to provide accommodation above shops, enabling young people to live in town centres, so perhaps there should be discussions with the Northern Ireland Assembly, in order to enlighten the Minister about the possibilities.
Jason McCartney
I thank the hon. Gentleman for that useful intervention. I hope that the Minister will take it on board. I am willing to learn best practice from all over the United Kingdom. The scheme described by the hon. Gentleman sounds exciting, and if it has worked in Northern Ireland, I hope that we too can take advantage of it.
I am particularly excited about the opportunities to reinvigorate certain trades and specialisms using local materials. Good-quality insulation and other energy-efficient measures should also be key to the renewal of empty homes. There are plenty of plus points. In my area, I should like educational establishments such as Kirklees college to become involved. Perhaps students could use empty homes for hands-on projects. I note that Kirklees college runs a course called “Construction and building crafts”. What better way for students to employ their skills than to return homes to use so that families can live in them?
As I have said, the Government have already acted. The reoccupation of empty homes has been included in the scope of the new homes bonus, and 16,000 homes have been returned to use. However, I should like councils to be given more incentives to bring about reoccupation of empty homes. I should also like to see the use of brownfield sites. That really would be a sustainable housing policy.
I am pleased that communities and local voluntary organisations will be able to tap into the funding so that it does not go only to councils, but I should like to hear more about the Government’s plans to allow councils, if they wish, to introduce an empty homes council tax premium on homes that have been empty for more than two years. That could serve as an incentive to the returning of homes to productive use.
Graham Jones
I am very interested in what the hon. Gentleman is saying, but might not the premium actually prove to be a disincentive? Some people might go off the radar, their properties might be registered as occupied, and they might therefore pay a 100% rather than a 125% rate of council tax.
Jason McCartney
The hon. Gentleman has made a good point. Councils might wish to consider introducing such schemes themselves, given that they have the local knowledge. Perhaps they should introduce it on a trial basis. It might work better in some areas than in others. I am pleased that the Government are considering different options, and that they are happy to devolve power to councils so that the various needs of communities can be dealt with on a more local basis.
Some key changes need to be made to the draft national policy planning framework. Instead of the presumption clause in favour of sustainable development, let us consider a presumption clause in favour of returning empty homes to use and ensuring that brownfield land is developed before greenfield land.
Given that commercial banks rarely lend money on empty homes, the Minister might wish to consider a sustainable low-cost loan fund. It could be kick-started with cash from the empty homes fund and managed by a commercial bank in partnership with an appropriate body such as the Empty Homes Agency. The loan fund would help private empty home owners who needed money to return their properties to use. They could borrow modest sums from the fund, and repay the loans from subsequent rental income set at affordable levels. Would-be buyers on low incomes could also purchase empty homes cheaply and return them to use with the help of modest loans from the fund. Cash for the fund could also come from the proposed empty homes premium, which could impose a 150% council tax rate on properties that had been empty for over two years. I should like the Minister and his team to consider all those ideas, and then report to the House on their conclusions.
Let me suggest a right to help local people to rescue abandoned properties. Will the Minister consider an amendment to current legislation on the community right to reclaim land? Should local people be able to use a new “community right to reclaim abandoned property” clause, which would enable them to apply to a tribunal to bring long-term abandoned properties in their areas back into use?
Therefore, lots of action has already been taken. I hope that I have given lots of ideas for more, and I shall now sum up to allow colleagues to make a brief contribution. Let us put renewal and regeneration ahead of greenfield development. Let us use existing buildings and infrastructure as efficiently as possible, with the economic, environmental and social benefits for all. Let us finally get Britain’s empty homes back into use.
Sarah Newton (Truro and Falmouth) (Con)
I congratulate my hon. Friend the Member for Colne Valley (Jason McCartney) on making a powerful speech containing lots of good ideas. The situation that he described in his constituency is identical to the one faced in mine. I welcome the measures in the Localism Bill providing for neighbourhood planning, and I am chairing the steering group of the Truro and Kenwyn parish neighbourhood plan. We face the same challenges that he portrayed so well. Through the development of our neighbourhood plan, we have identified a great number of empty properties in our villages and the city centre of Truro, as well as other buildings that we believe can commercially and viably be brought back into use to create much-needed homes for local people. However, in constructing our plan, we are aware that it will have to be inspected by the inspectorate, and the types of properties that my hon. Friend described being brought back into use will be considered by the inspectors as “windfall” properties and therefore cannot be counted as contributing towards the housing targets that we are developing to meet local need.
I would very much like the Minister to consider that point, and when the Government are considering the national policy planning framework I would like them to examine the fact that these windfall properties need to be judged on their merits. I hope that if a good neighbourhood plan—such as, I am sure, ours will be when it is introduced—can demonstrate viable sites for bringing empty buildings back into use, they will not be deemed to be “windfall” properties but can be taken into consideration for our housing targets.
The Parliamentary Under-Secretary of State for Communities and Local Government (Andrew Stunell)
I thank my hon. Friend the Member for Colne Valley (Jason McCartney) for bringing to the House’s attention this important subject, which is very close to my heart, as I know it is to his. I was delighted that this move to bring empty homes back into use was written into the coalition agreement between our two parties and that we have now had the opportunity to put some real cash into the programme to deal with it. I also congratulate him on his moustache and wish him well with his fundraising.
Like my hon. Friend, I have been in contact with George Clarke and Channel 4, and I am happy to add a second endorsement of the programme on empty homes that they are developing. He, I and they are appalled at the scandal that 250,000 properties are empty when millions of people are on waiting lists, anxiously looking for homes and unable to find them. As well as being eyesores and easily falling into disrepair, empty homes are often an expensive menace to communities and public services, attracting antisocial behaviour, squatting and vandalism.
The Government know very well that we need to build more homes, more quickly, and the housing strategy statement made in the House by my right hon. Friend the Minister for Housing and Local Government last Monday shows real earnest intent. At the same time, we have to make better use of our existing homes, as that is better for communities, for the environment and for the families who have the new home to live in. We have been working on ways to bring empty homes back into use, and tackling those homes is one of the key pledges that we made in the housing strategy.
My hon. Friend appeared to have some difficulty in understanding the situation in his constituency. The figures available to the Department refer to the whole local authority area of Kirklees. He might be interested to know that in the six years from 2004 to 2010, the number of empty homes reported to the Department went up from 6,200 to 7,300, so there were extra empty homes at a time when housing demand was rising. However, the good news for him is that Kirklees council will receive £7.6 million under the new homes bonus over the next six years because it has succeeded in bringing 307 homes back into productive occupation.
The Government have taken a number of important steps, including the new homes bonus, in response to the empty homes problem. Back in September, I announced that we were allocating a £100 million budget so that housing associations, councils and community and voluntary groups could apply to bring empty homes back into use as affordable housing. I was astonished by the intervention of the hon. Member for Hyndburn (Graham Jones), who said that councils are not eligible to apply for that money. That absolutely is not the case.
Graham Jones
That information was provided to me by a cabinet member of our local council, which had looked through the consultation. I was advised that it was not entitled to bid under the proposals. If I am wrong, I will stand corrected.
Andrew Stunell
Then the hon. Gentleman stands corrected.
We recognise that there is a wide range of possible approaches to tackling empty homes and that different approaches are needed in different circumstances. Sometimes the right vehicle for doing that will be the council, but sometimes it will be other registered housing providers, housing associations or local community groups. The bidding guidance was published on 21 November and registered providers of social housing have until 23 January 2012 to submit applications. I earnestly suggest to the hon. Gentleman that he should revisit his sources, because it would be tragic if Sefton lost out because of a misreading of the paperwork.
Andrew Stunell
No, I think not.
Alongside the publication of the guidance on the bidding system for the £100 million, we have also allocated almost £3 million of empty homes funding for this financial year to organisations that are ready and able to deliver now, so that work can begin straight away. As a result of that spending, 200 properties will be brought back into use.
We are also setting up a national intermediary in the next few weeks to administer the community element of the funding. There are legal reasons why it is not possible for that to be directed through the Homes and Communities Agency. It will allow smaller not-for-profit community and voluntary organisations to access some of the £100 million and will allow community groups to stimulate new and innovative ways of tackling empty homes. I have seen plenty of those already, so I know that there are organisations ready to go. My hon. Friend mentioned the possibility of a rolling loan fund. There are some complexities with that which do not appear immediately, but some of the models through that community route might well exploit that opportunity.
Funding will be allocated on a demand-led basis. To put it another way, we are not going to stuff people’s mouths or stuff organisations with money. We want the money to go to real schemes that will really deliver results. Let me add in parenthesis that the outgoing Government were great at allocating budgets to projects that could never be delivered, but we do not want to go down that route. Let us make it so that every pound counts towards bringing an empty home back into use.
On top of the £100 million with the launch of the housing strategy last week, my right hon. Friend the Minister for Housing and Local Government was able to announce an additional £50 million of funding to tackle some of the worst concentrations of empty homes. Although I do not know the detailed circumstances of my hon. Friend’s constituency, I could well believe that some of the higher concentrations would be found in Kirklees and the measure might therefore apply to Colne Valley. I am sure he will want to explore that. A more intensive approach will be required than simply dealing with a home here and there, and it will involve refurbishing and reconfiguring homes, as well as improving housing in the public realm and tackling wider issues in the local area.
The funding details of that £50 million are being finalised and further details will be announced shortly, but there will be some differences between that fund and the £100 million fund. The £50 million fund will tackle concentrations of empty homes, and it will not be appropriate for all homes to be brought back into use as affordable housing, which is the clear intention of the £100 million fund.
My hon. Friend rightly praised the Government’s initiative of the idea of introducing a council tax premium, which is being consulted on. I hope that local authorities and others who are interested will respond positively to that proposal. He made a good point about the premium needing to be tailored to local circumstances. Councils will have local discretion to introduce a council tax premium on homes in their areas that have been empty for more than two years, to provide a stronger incentive for empty-home owners to bring them back into use. Of course, that could still be coupled with a discount or a free period at the onset of the home being empty. It will be important for local councils to configure their profile of charging accordingly.
I have already commented on the new homes bonus. In the first year of such funding being given to councils, £19 million can be attributed to empty homes coming back into use. As I have said, there are 307 such homes in Kirklees, which has got further to go than nearby Bradford, which brought 1,500 homes back into use with an equivalent budget coming back to the council. Again, my hon. Friend might want to speak politely—challenge, possibly—his council and ask, “What’s wrong with Kirklees compared with Bradford? Let’s get those empty homes back into use.”
Andrew Stunell
It was a rhetorical question; I have no intention of responding to it.
In addition to those measures and separately, my right hon. Friend has announced housing market renewal transition funding of £71 million to help families trapped in half-empty and abandoned streets as a consequence of Labour’s controversial regeneration scheme introduced in 2002 that far too often managed decline, rather than fulfilling its task of regeneration.
Following the spending review announcement, separate housing market renewal funding ended this year, but £35.5 million is being allocated to develop a transitional scheme intended to help those people. That will be a match-funding scheme, generating about £71 million overall, as I said, to resolve the worst problems in the five most challenged areas: Merseyside, east Lancashire, north Staffordshire, Hull and Teesside.
My hon. Friend the Member for Cleethorpes (Martin Vickers) spoke about the conversion of shops into houses. Certainly, the Government are very much aware of those opportunities, and we are consulting on some changes of planning use classes that might make conversion to housing a simpler proposition in future.
It only remains for me to comment on the right to rescue that my hon. Friend the Member for Colne Valley suggested might be useful. It will be difficult to combine that with the action that we are taking to prevent squatting, on which I am sure he is equally keen to see action.
Empty homes are a vital resource for the housing market. We need to get more of them back into use sooner, and I look forward to working with hon. Members and friends all around the House in doing so in the next few years.
Question put and agreed to.