House of Commons

Tuesday 31st January 2012 Commons Chamber

Tuesday 31 January 2012

The House met at half-past Two o’clock

Prayers

Tuesday 31st January 2012 Commons Chamber

[Mr Speaker in the Chair]

Business Before Questions

London Local Authorities Bill [Lords] (By Order)

Further consideration of Bill, as amended, opposed and deferred until Tuesday 7 February (Standing Order No. 20).

London Local Authorities and Transport for London (No. 2) Bill [Lords] (By Order)

Transport for London (Supplemental Toll Provisions) Bill [Lords] (By Order)

Second Readings opposed and deferred until Tuesday 7 February (Standing Order No. 20).

Oral Answers to Questions

Tuesday 31st January 2012 Commons Chamber

The Secretary of State was asked—

[Mr Philip Hollobone (Kettering) (Con)]

1. How many offenders served part or all of their sentence working on community projects in Kettering constituency in 2011; and for which organisations work was carried out.

[The Minister for Policing and Criminal Justice (Nick Herbert)]

Four hundred and five offenders completed all or some of their compulsory unpaid work or community payback in Kettering last year. Twelve organisations benefited, including the local wildlife trust, St Mary’s church, Mind and the British Heart Foundation.

[Mr Hollobone]

It is clearly beneficial for offenders and the local community for offenders to do constructive work in the community, but will my right hon. Friend agree to visit Kettering with me to see some of those offenders in action so that we can really see whether they are putting their backs to the wheel and doing this work properly?

[Nick Herbert]

I am happy to accept my hon. Friend’s invitation to visit Kettering and to see a scheme with him. It is important that community sentences are punitive and that they are properly enforced. We are increasing the maximum length of curfew requirements and making community payback more rigorous and demanding. We want to go further by seeing a clear punitive element in every sentence, and we are consulting about that.

[Several hon. Members]

rose—

[Mr Speaker]

Order. This question is about Kettering, from which Carshalton and Wallington and Manchester are a long way away.

[Lilian Greenwood (Nottingham South) (Lab)]

2. What steps he plans to take to support law centres.

[The Parliamentary Under-Secretary of State for Justice (Mr Jonathan Djanogly)]

The Ministry of Justice does not provide direct support for law centres. However, law centres are able to bid for contracts issued by the Legal Services Commission to provide legal services in specified areas of law and will continue to be able to do so in the future.

My Department is also working closely with the Cabinet Office to support the cross-Government review into the funding of the not-for-profit sector announced on 21 November last year.

[Lilian Greenwood]

I thank the Minister for that reply, but what would he say to my local law centre in Nottingham, which, as a result of his legal aid changes, says it will no longer be able to offer specialist advice to people experiencing problems at work, with debts or with benefits? When our local citizens advice bureau is already hugely overstretched, does that not mean that hundreds of people—particularly vulnerable people—will be unable to get the advice they need and will be denied access to justice?

[Mr Djanogly]

Specifically, legal aid will be provided for a lot of debt advice after our changes. We are reducing our spend on legal aid, and law centres will be affected by that, but the Government recognise and highly value the important role of not-for-profit organisations such as law centres. That is why we launched a £107 million transition fund last year and the £20 million advice services fund this year. It is why the Cabinet Office has also announced a review of not-for-profit advice centres, which is a welcome and important development.

[Sir Alan Beith (Berwick-upon-Tweed) (LD)]

Is it not an assumption behind the Government’s reforms that the availability of advice needs to replace a great deal of litigation? If that is to be achieved, is it not necessary to ensure that there is a long-term, not merely a short-term, solution to some of the funding problems of law centres and citizens advice bureaux?

[Mr Djanogly]

My right hon. Friend makes an important point. We are changing the way funding works and looking for alternatives to be taken up. However, we appreciate that, in the meantime, while the reorganisations are happening, there is a need to support law centres, which is why we are looking at transitional provisions to ease that passage.

[Mr Andy Slaughter (Hammersmith) (Lab)]

Writing in yesterday’s Daily Mail, Matthew Elliott, the chief executive of the TaxPayers Alliance, pointed out that:

“advice costing £80 to deal with a housing problem can save thousands for councils who are legally required to house homeless families…cutting £10.5m for legal aid in clinical negligence cases will cause knock-on costs to the NHS of £28.5m.”

He says:

“Almost everyone who has looked at these particular cuts”—

even Norman Tebbit—

“thinks that too many of them will end up costing taxpayers more than they save.”

Is he right?

[Mr Djanogly]

No, he is not right. The figures have been repeated by the Law Society. The point is that legal help is not the same as legal aid. We certainly appreciate the strong need for legal help so that problems can be dealt with early, and that is why we are very supportive of not-for-profit organisations.

[Stephen Phillips (Sleaford and North Hykeham) (Con)]

3. What steps he is taking to promote reform of the European Court of Human Rights.

[The Lord Chancellor and Secretary of State for Justice (Mr Kenneth Clarke)]

The United Kingdom has made reform of the Court the top priority for our current chairmanship of the Council of Europe. Our aim is to secure agreement on a package of reform measures. We have been talking to many member states and to key figures in the Court and the Council of Europe, and we are reasonably confident that we can gain agreement.

[Stephen Phillips]

I am extremely grateful to my right hon. and learned Friend for that answer. He will have seen that the Prime Minister rightly condemned the Court’s decision effectively blocking the deportation of Abu Qatada despite the assurances that the United Kingdom obtained from Jordan. How long does he expect this reform process to take, and what steps are being taken now to ensure that the Court does not torpedo decisions of the UK courts in a way that undermines rather than supports human rights?

[Mr Clarke]

My hon. and learned Friend is at least as good a lawyer as I am—and practised more recently too—and will know that cases are often more complicated than they appear. We actually won the Abu Qatada case on the question of the assurances that we got about his possible torture. Irritatingly, we then lost it on a separate issue about whether prosecution evidence against him had been obtained by torture. Obviously, the Government, led by the Home Secretary and advised by the Attorney-General, are considering what to do next to take the case further. The reform does not turn on one case. However, one of the key reforms that we are urging is that the Strasbourg Court should not just be regarded as a court of appeal after the full process has been gone through in this country’s courts and issues of human rights have been properly considered. The issue that my hon. Friend raises is at the heart of the case that we are arguing with our colleagues in the Council of Europe.

[Jeremy Corbyn (Islington North) (Lab)]

Does the Justice Secretary agree that much of the media speculation and attacks on the European Court of Human Rights are damaging to the interests of many people all over Europe who are suffering serious human rights abuses? This country, which prides itself on having a Human Rights Act, should support the European convention and the Court, and recognise that it is in everybody’s interest that we protect human rights in this country, as well as in Hungary, Russia or wherever else they are under threat.

[Mr Clarke]

This country is a great advocate of human rights throughout the world, and should continue to be so. The Prime Minister, the Foreign Secretary and I have confirmed in recent speeches at Strasbourg our commitment to the European convention on human rights and our desire to see human rights maintained all the way from this country to the Russian Federation, which is the furthest-east member. However, we seek to strengthen the Court by making it operate properly. It should concentrate on the important cases and those that raise serious issues of principle obtaining to the convention. At the moment, it has 150,000 cases in arrears. It takes years to get them heard, and it sometimes gives judgments despite the whole issue having been properly considered by national institutions and national courts.

[Mr Christopher Chope (Christchurch) (Con)]

Will my right hon. and learned Friend be visiting judges in the European Court of Human Rights to explain the agenda for the British chairmanship of the Council of Europe? When our right hon. Friend the Prime Minister visited Strasbourg—very successfully—last Wednesday and gave a brilliant speech, delegates expressed concern that he did not have time to visit the Court itself.

[Mr Clarke]

First, I am delighted that my hon. Friend and I agree that the Prime Minister gave a brilliant speech in Strasbourg last week. It went down very well there. Yes, I meet judges. As I mentioned in an earlier answer, I hold discussions with judges. There is widespread acceptance in Strasbourg of the need for reform, so long as people are satisfied that we will continue to uphold the convention and we regard the Court as the right forum in which to consider serious issues of principle in all 47 member states. I am sorry that my right hon. Friend the Prime Minister was unable to meet judges, but I am sure that I can facilitate the opportunity for him to do so, if he or the judges wish it. However, the Foreign Secretary, the Attorney-General and I are in touch with the judges and our opposite numbers in all the relevant countries.

[Sadiq Khan (Tooting) (Lab)]

May I ask the Justice Secretary for a short answer to a straightforward question? Does he share the apparent view of the Prime Minister and many of his Back Benchers that if the Government cannot persuade the other 46 Council of Europe members to reform the European Court of Human Rights, as set out last week, the UK should withdraw from the European convention on human rights?

[Mr Clarke]

The Prime Minister has never expressed that view to me or publicly, so far as I am aware, and if he did, I would not agree with it.

[Mr John Spellar (Warley) (Lab)]

4. What steps he is taking to transfer more foreign national prisoners to their home countries.

[The Parliamentary Under-Secretary of State for Justice (Mr Crispin Blunt)]

The Government are committed to removing more foreign national offenders at the earliest opportunity. Last week I met the European Union Commission, and the Justice Secretary met European Union Justice Ministers, to impress upon them the importance of member states implementing the new European Union prisoner transfer agreement promptly. We continue to negotiate prisoner transfer agreements with countries outside the European Union. We are also examining our offender management processes here in the United Kingdom, which will help to identify how more foreign national offenders can be transferred to their home countries.

[Mr Spellar]

Is not the reality that the number of foreign prisoners being removed is actually dropping, and that although we signed an agreement with Jamaica in 2007, Jamaica has still not got round to ratifying and acting on it? When is the Minister going to get a grip of the situation?

[Mr Blunt]

I regret that we are having to deal with the inheritance of the legal instruments that were negotiated and presented to us by the last Administration. The Jamaican prisoner transfer agreement is an example of that. Even if the Jamaican Parliament passed the legislation to implement and ratify that agreement—which is beyond the control of this Government, I might gently point out—it would still require the consent of the Jamaican prisoners in our prisons to go home under that agreement. That would not be forthcoming, so we need a rather more effective piece of negotiation, which is all part of the strategy that we are putting in place with the 20 countries from which the largest number of foreign national offenders in our prisons originate, to get some proper, joined-up governmental attention on this issue.

[Tony Baldry (Banbury) (Con)]

When the sentencing judge orders an individual to be deported, why can that judge not make a finding of fact as to their nationality, so that, as of that moment, the Home Office and the Ministry of Justice can make it clear to the high commission or embassy concerned that that prisoner will be returned to that country at the conclusion of their sentence?

[Mr Blunt]

I am extremely grateful to my hon. Friend for that suggestion, which is certainly one that I will be taking up in our ongoing examination and review, so that we improve the current, unsatisfactory state of affairs with foreign national offenders as quickly as we legally can.

[Sadiq Khan (Tooting) (Lab)]

May I remind the Minister that it was the last, Labour Government who negotiated the groundbreaking EU prisoner transfer agreement, which came into force last December, to transfer foreign European prisoners back to their countries during their sentence? We have had lots of tough talk from the Minister and the Government, but what progress have the Government made on ensuring that the EU agreement is implemented across all EU states?

[Mr Blunt]

One of the reasons why I was visiting the European Union Commission on Friday and speaking to the official responsible for implementation of the agreement was to help deliver that. It is just a slight pity that in the negotiations undertaken by the last Administration, they managed to give Poland a five-year delay and Ireland a complete opt-out.

[Dr Andrew Murrison (South West Wiltshire) (Con)]

In designing prisoner transfer agreements, will the Minister ensure that the legitimate expectations of the victims of crime in this country are satisfied? Too often we find them fearful that their natural desire for retributive justice is going unfulfilled.

[Mr Blunt]

That is an important part of any consideration about the transfer of prisoners, and one that I certainly give attention to in considering applications that are made to me.

[Keith Vaz (Leicester East) (Lab)]

As the hon. Member for Banbury (Tony Baldry) said, the process for removal should begin at the time of sentence. That was one of the recommendations of the Select Committee on Home Affairs in our last report. At the moment, the whole process starts far too late. We need better liaison between the UK Border Agency and the prison authorities.

[Mr Blunt]

I am grateful to the right hon. Gentleman and to his Select Committee for its work in this area. He will know just how multi-faceted this all is, and I am grateful for the continuing attention of his Committee. The points he makes are entirely reasonable and I will be following them up.

[Stephen Timms (East Ham) (Lab)]

5. What assessment he has made of the availability of free legal advice.

[The Parliamentary Under-Secretary of State for Justice (Mr Jonathan Djanogly)]

The Ministry of Justice is responsible for legally-aided advice services through its relationship with the Legal Services Commission. This is publicly funded legal advice, rather than “free” legal advice. “Free”, or pro bono, legal advice is not within the scope of the Ministry’s ambit. Legally aided lawyers do not act for free; they act for money and are paid for by the taxpayer, so it is important that we get value for money for the taxpayer.

[Stephen Timms]

I am grateful to the Minister for his visit last year to the excellent advice service at Community Links that is used by my constituents. Is he aware that funding cuts mean that that service will stop providing all welfare benefits advice next year, shortly before the massive upheaval that will follow the introduction of universal credit? Is not that a recipe for disaster?

[Mr Djanogly]

The legal aid scope changes will not come in until April 2013, but that is indeed something that is on the horizon. I have visited the right hon. Gentleman’s local law centre, and it is a very good organisation. As I said to him the last time he asked about this issue, changes are going to have to take place, and that is why we are looking to put in place transitional arrangements.

[Alun Cairns (Vale of Glamorgan) (Con)]

The legal aid budget amounts to a spend of £39 per person in the UK, while it is nearer to £5 in Spain, France and Germany. Does the Minister agree that the present position in the UK is wholly unsustainable, and that savings have to be made in the light of the financial circumstances that we inherited from Labour?

[Mr Djanogly]

Savings do have to be made. A similar comparison can be made with a Commonwealth country such as New Zealand, where the figure is about £18 per head. We must ensure that the scarce resources are spent as well as possible, and that people do not go to court when they do not need to do so.

[Derek Twigg (Halton) (Lab)]

6. What steps his Department is taking to support victims of crime.

[Charlotte Leslie (Bristol North West) (Con)]

9. What steps his Department is taking to support victims of crime.

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

11. What steps his Department is taking to support victims of crime.

[Mr David Burrowes (Enfield, Southgate) (Con)]

17. What steps his Department is taking to support victims of crime.

[The Lord Chancellor and Secretary of State for Justice (Mr Kenneth Clarke)]

Yesterday, in a statement to the House, I launched a consultation on far-reaching proposals on the support provided to victims and witnesses of crime.

[Derek Twigg]

The prisoner who murdered the husband of my constituent, Helen Hill, is coming to end of his tariff and is currently undergoing day release. The exclusion zone that my constituent has asked to be applied to the murderer has been ignored. If the Government are serious about giving full rights to the victims of crime, should they not ensure that victims’ wishes on exclusion zones are adhered to?

[Mr Clarke]

We are very serious about ensuring that the system works correctly. Victims should be given information—in this case, about the possibility of the offender being released—and consulted on their views. There are arrangements, through the probation service, for liaising with the victim. Of course, I cannot guarantee that the victim will always agree with the decisions that are taken, but they should be taken while keeping in mind the interests of the victim and, in this case, above all, the need to protect her. I will happily check on what has happened in this case, but I would say to the hon. Gentleman that we are trying to improve the present system to make it live up to his expectation that full regard will be given to victims’ interests.

[Charlotte Leslie]

Victims often feel that their rights are taken less seriously by the system than those of the perpetrator. What measures are the Government taking to ensure that victims, especially those of violent rape, and their families are financially compensated and supported following the often life-shattering traumas that they have experienced?

[Mr Clarke]

I announced yesterday that we were making changes to the compensation scheme, but we are making no changes whatever to the compensation for victims of rape and sexual offences at any level of the tariff. We accept that it is important to compensate those victims, and we are trying to strengthen the support that we give to the victims of sexual offences. We are also supporting outside bodies that give support to such victims. I think that my hon. Friend will find that nothing I said yesterday remotely reduces our commitment to the victims of rape and sexual offences, and that, since we have been in office, we have been steadily improving the services that we provide.

[Rushanara Ali]

Given that 61% of victims feel that the justice system is ineffective, and that the victims code will not be placed on a statutory basis, how will the rights of victims be properly protected by this Government?

[Mr Clarke]

I do not think that 51% of victims have a factual basis for saying that. I share the hon. Lady’s concern, however, that whenever questions are asked, if they are asked in the right way, we get that kind of answer. We have to get across to the public that the system does indeed punish offenders properly and attempt to reform them, and that we are steadily attempting to improve the support that we give to victims. It is extremely important that the criminal justice system should give the highest regard to victims, because protecting and giving justice to them and their families is one of the principal aims of the service.

[Mr Burrowes]

Will the implementation of the Government’s welcome victims strategy ensure that convicted offenders take personal responsibility for their crimes and make reparations to victims? Will it also, once and for all, take out of circulation the dreadful term “victimless crime”?

[Mr Clarke]

I share my hon. Friend’s view of the significance of this issue so that, wherever possible, criminals should make reparation for their crime and compensation should be paid to the victim. We are looking to take further action to reinforce the need for courts to try to make a compensation order whenever possible, and we are looking at ways of steadily improving how we collect the money from compensation orders when they are made. We are seeing steady improvement, but we need to go further.

[Hazel Blears (Salford and Eccles) (Lab)]

The Secretary of State may be aware of the tragic case of my constituent, Clare Wood, who was murdered by a violent partner. It turned out that he had a huge history of domestic violence against other women. Will the Secretary of State support amendments to the Bill in the other place to ensure that victims like Clare can in future know about the history of their violent partners and make an informed decision on whether to continue in the relationship?

[Mr Clarke]

That is a familiar subject, which I believe is being reviewed by my right hon. Friend the Home Secretary. The right of women to know whether their partner or intended husband has a long history of domestic violence sounds like a worthwhile cause. I have no doubt that my right hon. Friend will be looking to the practical issues that would be involved in introducing an effective system.

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

In opposition, we often made reference to the terrible effect on victims of crime of the fact that they thought the perpetrators had been sentenced to a certain term of imprisonment only to find them being released half way through it. Will the Secretary of State update the House on what progress we have made towards honesty in sentencing?

[Mr Clarke]

These conventions got worse when our opponents were in office. I say that before the right hon. Member for Tooting (Sadiq Khan) starts attacking me. I, too, have expressed views in the past about honesty in sentencing. What happens currently is that for most sentences, half the term is served in prison; beyond that, prisoners become eligible for release, but they are on licence and liable to recall for the full term of their sentence if they do not adhere to it. There are measures in the Legal Aid, Sentencing and Punishment of Offenders Bill, currently in the other place, that address the penalties to be imposed for various offences. In place of indeterminate sentences for public protection, for example, we are going back to how sentences used to be so that people will have long determinate sentences, and will normally serve two thirds of it before they are released. That is at least a step in the right direction for my hon. Friend.

[Sadiq Khan (Tooting) (Lab)]

It is fair to say that, until she left her post in early October last year, the Victims’ Commissioner was a bit of a thorn in the side of this Government and this Justice Secretary in particular. The consultation paper on victims and witnesses, which was published yesterday, was completely silent on the future of that important post. Will the Justice Secretary reassure the House that he will not abolish this important advocate for victims and witnesses? When will the post be filled?

[Mr Clarke]

First, I can assure the right hon. Gentleman that I got on excellently with Louise Casey when she served in that role; it is a pity that she went away to carry out another even more important role in dealing with problem families. That can be checked with Louise Casey, but I would be surprised if she did not confirm my view. She made a contribution to policy. We are looking at this post again, and as I reminded the right hon. Gentleman the last time he raised the fact that we were still considering it, the last Government legislated for it in about 2004 and then took five years before they appointed anybody. There is a variety of views—from those responsible for victim support and others—on the best way to give proper force to victims’ views in government. We are considering those views before we make any announcement.

[Guy Opperman (Hexham) (Con)]

7. What steps he is taking to encourage the inclusion of peer mentoring in prisons as part of the training of prison officers.

[The Parliamentary Under-Secretary of State for Justice (Mr Crispin Blunt)]

Prison officer training aims to give officers an awareness of the benefits of peer mentoring currently provided by voluntary sector and faith organisations, such as the Shannon Trust’s toe-by-toe reading plan and the Samaritan-trained listener scheme. Our rehabilitation policy will encourage and facilitate mentoring for offenders by ex-offenders and other members of the public, as all parts of the justice system focus more on outcomes than inputs. The early payment-by-results pilots at Doncaster and Peterborough prisons both use peer mentoring, and the experience of these and all other pilots will guide future training and practice.

[Guy Opperman]

Does the Minister believe that the expansion of private provision in prisons and the payment-by-results scheme will lead to more peer mentoring and better prison officer training, and that rehabilitation rates will improve as a result?

[Mr Blunt]

Yes, but the payment-by-results scheme is not limited to private sector prisons. We are piloting it in two public sector prisons as well. The National Offender Management Service is to contribute £1.4 million to eight voluntary sector organisations to help with mentoring, and is also involved in a Europe-funded project that is assessing the relative benefits of mentoring by peers and non-peers.

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

Will the Minister consider the effectiveness of training when it comes to security issues? Will he look into how on earth Bilal Zaheer Ahmad, who is serving 12 years in prison and was described as

“a viper in our midst”

by the judge who jailed him under the Terrorism Act 2000, managed to send a six-page letter from his Belmarsh cell that advised potential terrorists on the best way to outwit our police and security services? Will this latest lapse be investigated by the Justice Secretary?

[Mr Blunt]

Of course that will be investigated, as, indeed, is every security breach.

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

Following the tragic deaths of two teenagers at young offenders institutions in the last week, will the Minister examine the role of peer mentoring in helping people to detect those who are at risk of self-harm or suicide?

[Mr Blunt]

Of course our condolences go out to the families in question. However, I understand that this is the first time such a thing has happened on the under-18s estate since 2007, and the fact that there have been two tragic incidents in close succession does not mean that we should not recognise the good record that has been maintained in the intervening years. Every effort will be made to learn all the lessons from what has happened during the four different types of inquiry that will take place into each of the deaths.

[Mr Speaker]

I call Michael Connarty. He is not here, so I call Dave Watts.

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

10. What steps he plans to take to maintain public safety when implementing his plans for the future of the Probation Service.

[Martin Caton (Gower) (Lab)]

12. What steps he plans to take to maintain public safety when implementing his plans for the future of the Probation Service.

[Toby Perkins (Chesterfield) (Lab)]

13. What steps he plans to take to maintain public safety when implementing his plans for the future of the Probation Service.

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

15. What recent steps he has taken to review the work of the Probation Service; and what his policy is on the reform of the service.

[The Lord Chancellor and Secretary of State for Justice (Mr Kenneth Clarke)]

Public safety will always be of paramount importance when we are considering the way in which probation services are delivered. We are working on proposals to deliver more effective and efficient probation services, and will present them for consultation shortly.

[Mr Watts]

How does the Secretary of State plan to help the probation service to deal with the increased risk to the public, given his proposal for the abolition of indeterminate sentences for public protection?

[Mr Clarke]

We debated that at great length in the House. IPPs were regarded by most people in the field of criminal justice as a complete disaster when they were approved in the last Parliament, and our proposed reform of them was strongly welcomed by most who practised in that field. We are replacing them with tough determinate sentences, of which people will serve two thirds before they are eligible for release. Even then, they will not be released unless the Parole Board is satisfied that they have completed their sentences. We were acquiring an impossible system before that, under which thousands of people were accumulating in prison with no real prospect of a rational basis for their release.

[Several hon. Members]

rose—

[Mr Speaker]

No one enjoys listening to the Secretary of State more than I do, and I have been doing so for more than two decades, but we have a lot to get through, so economy is of the essence.

[Martin Caton]

There is a real fear both inside and outside the House that introducing a payment-by-results approach to our Probation Service risks denying adequate rehabilitation support to those with the most complex needs. What will the Secretary of State do to mitigate that risk?

[Mr Clarke]

I think that it is key to public service to concentrate on what we are delivering that is of value to the people we are trying to serve. Focusing our resources on programmes that succeed in reducing the reoffending rate, thereby reforming former offenders and ensuring that they do not create future victims of crime, will help us to ensure that we secure value for money, and will also stimulate innovation and best practice. I think it very reactionary to suggest that we should abandon the payment-by-results approach.

[Toby Perkins]

As the Secretary of State will know, when probation is seen to fail and ex-offenders reoffend, it is often because the various organisations involved have failed to work together. What steps will he take to ensure that the marketisation of probation services, with many different providers potentially doing different things, does not lead to more fragmentation and more tragedies?

[Mr Clarke]

I agree. We normally need people to co-operate quite closely to achieve successful outcomes if we are trying to reform offenders. Those who are trying to attract funds by achieving successful results in their programmes will, I hope, enter into collaborative arrangements with other providers. It must be a good thing that we are contemplating the possibility of bringing in more voluntary, charitable, private sector providers alongside the probation service and deciding where to channel most of our money on the basis of the success they achieve.

[Karl Turner]

I recently met Steve Hemming, chief executive of Humberside probation trust. He is due to retire in April after 30 years of long, loyal and patient service to the trust, but he is concerned that his patience might be about to run out. When will the Government publish their long-awaited probation review?

[Mr Clarke]

First, may I pay tribute to the retiring chief executive of the hon. Gentleman’s probation trust? There are many dedicated people in the probation service doing very valuable jobs on behalf of the public they serve. I am glad our consultation document is so eagerly awaited; we have been taking some time over it as we are trying to get it right, but we shall produce it soon.

[Andrew Bridgen (North West Leicestershire) (Con)]

Does my right hon. and learned Friend agree that the probation service has substantially been financially protected when taking into account the overall demands on the budget of the Justice Ministry?

[Mr Clarke]

I am not sure whether that is right, but I shall check. What my hon. Friend may have noticed is that this year we cut some other services’ budgets more sharply than we cut that of the probation service, but that is because the previous Government had been cutting the probation service budget pretty sharply, once they finally woke up to the fact that we were in a credit crunch and a financial crisis. They hit the probation service first.

[Philip Davies (Shipley) (Con)]

In the last year for which I have figures for the Department, 6,600 criminals deemed high or very high risk by the probation service were serving community sentences. Does my right hon. and learned Friend think public safety would be better improved if some—or, indeed, most—of those people were in prison?

[Mr Clarke]

Sentencing guidelines should ensure that those who deserve to go to prison because of the severity of their offence, and those who need to go to prison in order to protect the public properly, do go to prison. Those who get community sentences are graded according to risk. More attention must be paid to those who are near the risk threshold of needing to go to prison rather than those who pose quite a low risk of reoffending. With respect however, I think my hon. Friend is slightly misinterpreting what is called the risk assessment for people on community sentences. People who should go to prison should be sent to prison by the courts, and they are.

[Andrew Selous (South West Bedfordshire) (Con)]

Does my right hon. and learned Friend agree that it is ridiculous that unaccountable managers in the National Offender Management Service can undo all the good work done by probation officers by putting an ex-offender back in prison purely for having been a conscientious employee who was kept on late at work?

[Mr Clarke]

If those are the facts of the case, I entirely agree with my hon. Friend. He is obviously concerned about this case, and if he thinks something has gone badly wrong, I know him well enough to share his concern. I have had a word with the prisons Minister about this case, and we will investigate the facts and come back to him. The events as described obviously should not happen; that is not how the system is supposed to work.

[Mrs Jenny Chapman (Darlington) (Lab)]

I have listened to the Secretary of State’s responses on indeterminate sentences for public protection and payments by results and he is clearly feeling very optimistic. While we all like someone with a sunny disposition, when considering public protection issues it is also important to plan for failure. Does the Secretary of State plan to monitor the financial help given to providers of probation services in the community so that we avoid a criminal justice equivalent of Southern Cross?

[Mr Clarke]

When people provide services, of course it is necessary before giving them the contract to do one’s best to check on their financial health, but this issue has moved beyond arguments about whether a provider should be from the voluntary sector or a for-profit or not-for-profit provider. I wish to maximise the service given to the public by those who provide community-based sentences in this country, and we need to encourage innovation and best practice wherever we can.

[Kerry McCarthy (Bristol East) (Lab)]

14. What arrangements his Department has put in place to deal with any future shortfall in prison places.

[The Lord Chancellor and Secretary of State for Justice (Mr Kenneth Clarke)]

On Friday 27 January, the prison population was 87,668 against a capacity of 89,399 places, providing headroom of 1,731 places, so there are sufficient places for those being remanded and sentenced to custody. We will keep the prison population under careful review to ensure that there is always sufficient capacity to accommodate all those committed to custody by the courts.

[Kerry McCarthy]

I thank the Secretary of State for that response. I understand that possible shortfalls are predicted in particular regions as opposed to on a national level. The Minister will know that maintaining family links during a period of imprisonment is a critical factor in reducing reoffending on release. Will he assure the House that steps will be taken to ensure that prisoners are kept as close to their family and their place of origin as possible?

[Mr Clarke]

In many cases, a high priority is given to trying to house prisoners in places where they are reasonably in contact with their family and home. Of course, the more pressure the service comes under, the more difficult it is to maintain that, but I am sure it remains an objective of those who allocate prisoners to the correct prison once they receive their sentence.

[Geraint Davies (Swansea West) (Lab/Co-op)]

16. What assessment his Department has made of the effect on women of his proposed changes to legal aid.

[The Parliamentary Under-Secretary of State for Justice (Mr Jonathan Djanogly)]

The Government published an equality impact assessment alongside their response to the consultation, which set out the best assessment of the effects on women of the proposed changes to legal aid. This recognised the potential for the reforms to have an impact on women alongside those with other protected characteristics. We have taken the view that any such impacts would be justified in the light of the policy objectives, especially in the context of reducing the deficit.

[Geraint Davies]

The Minister knows that the courts are already in crisis due to a shortage of court and judge time. Will he accept that the removal of legal aid will encourage more and more women to provide their own defence, which will add to the crisis of delays and will mean further delay for children, bringing hardship to families and children?

[Mr Djanogly]

There is no shortage of court time or judge time. I simply do not accept what the hon. Gentleman says.

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

I understand why my hon. Friend is bringing forward the changes, but is he aware of the perverse consequences on new entrants to the Bar, particularly women, given the opportunities in relation to being mobile and entering a legal profession in which one or one’s family have not been involved? Doors are being slammed in women’s faces.

[Mr Djanogly]

Certainly, as far as solicitors are concerned, the number of entries to the profession by women is now greater than by men. I believe the same is the case for barristers, but I will check and come back to my hon. Friend.

[Paul Goggins (Wythenshawe and Sale East) (Lab)]

18. What assessment he has made of the effectiveness of the Greater Manchester intensive alternative to custody project in reducing reoffending and the use of short-term prison sentences.

[The Minister for Policing and Criminal Justice (Nick Herbert)]

We are currently considering the feasibility of an evaluation of intensive alternative to custody projects by comparing reoffending rates with those for similar offenders receiving custodial sentences.

[Paul Goggins]

I am grateful to the Minister for that answer. As he knows, the Manchester project is aimed at 18 to 25-year-olds who would otherwise go to prison. Those offenders have a reoffending rate of 18%, whereas the rate for offenders of a similar age who go to prison, which costs 10 times more, is 58%. Will he bear that evidence in mind and, as a Minister who believes in payment by results, make sure that funding goes to such projects as a priority?

[Nick Herbert]

I accept the force of the right hon. Gentleman’s comments and I have visited those responsible for running the scheme in Manchester as he knows—indeed, I think it was at his instigation. It is important that we evaluate these projects properly, and our general position is that we want to have more punitive community sentences, which are effective and combine rehabilitation with a punitive element. If possible, we want such schemes to be mainstreamed so that they can be taken beyond their pilots.

[Mr Speaker]

With reference to alternative to custody projects, Mr Paul Maynard.

[Paul Maynard (Blackpool North and Cleveleys) (Con)]

Thank you Mr Speaker, and indeed it is. If we are to increase public confidence in more intensive forms of community sentencing, we clearly need to link them, as we have just heard, to evidence showing how they reduce reoffending. In the commendable analysis of the pilot in Manchester published in July 2011 by the Ministry of Justice, the difficulty of calculating reoffending statistics is made clear. Will the Minister reassure me that he will do all he can to square this circle so that we can persuade members of the public that this is the way forward?

[Nick Herbert]

Yes, my hon. Friend makes a good point. There have been difficulties, which is why we are assessing the feasibility of evaluation. We need the data for the reasons he gives: it is important that the public know how effective the disposals are and, in the future, that will be important for proposals on payment by results. Where they are successful and reduce reoffending, which we have had great difficulty delivering through short-term custodial sentences, such measures should be considered.

[Kevin Brennan (Cardiff West) (Lab)]

19. What assessment he has made of the effect of his reforms to conditional fee arrangements on people's ability to pursue civil cases against newspapers and other media organisations.

[The Parliamentary Under-Secretary of State for Justice (Mr Jonathan Djanogly)]

The Government are reforming the operation of conditional fee agreements through the provisions of the Legal Aid, Sentencing and Punishment of Offenders Bill. The relevant impact assessments are published on the Ministry of Justice website. We believe that meritorious claims, including against media organisations, will still be able to secure representation under CFAs.

[Kevin Brennan]

Victims of phone hacking are absolutely clear that they would not have been able to take their cases forward were it not for no win, no fee arrangements being available; nor would the critical mass of cases been built up to break the scandal open. Why are the Minister and the Government on the side of powerful media moguls against vulnerable victims?

[Mr Djanogly]

Quite the opposite: in fact, the high and disproportionate costs in the present system hinder access to justice and can lead to a chilling effect on journalism and academic and scientific debate. In the Naomi Campbell case, the European Court of Human Rights found the existing CFA arrangements with recoverability in that case to be contrary to article 10 of the convention.

[Andrew Stephenson (Pendle) (Con)]

T1. If he will make a statement on his departmental responsibilities.

[The Lord Chancellor and Secretary of State for Justice (Mr Kenneth Clarke)]

May I update the House on the progress the Government have made toward implementing their proposals for payment by results, which I was defending a few moments ago? We have recently identified two probation trusts, one in Wales and the Staffordshire and West Midlands probation trust, to develop the community payment by results approach to probation services. We already have two well-established pilots in privately managed prisons and we hope to develop more; further pilots are being developed in public sector prisons. We are seeking proposals from the market for additional innovative contracts. We have selected a national framework of providers to support this work, which will assist us in meeting our commitment to roll out the principles of payment by results throughout the criminal justice system.

[Andrew Stephenson]

I hope the Secretary of State agrees with me that it is disgraceful that criminals who have created victims of crime are compensated under the criminal injuries compensation scheme. How much have criminals received over the past 10 years?

[Mr Clarke]

It is £75 million in the past 10 years, I think, and about 20,000 offenders have been compensated—I am remembering the brief for my statement yesterday. It is plainly insupportable that one week someone can commit a crime at his victims’ expense, and within a very short time claim that the taxpayer should compensate him because someone has committed a crime against him. We are bringing that to an end.

[Robert Flello (Stoke-on-Trent South) (Lab)]

Last week, there were two tragic deaths of young people in custody: Jake Hardy, a 17-year-old held at Hindley, and 15-year-old Alex Kelly, a prisoner at Cookham Wood. Although, rightly, there will be investigations and inquests, urgent questions need to be answered. Had mental health assessments been undertaken? Were the boys receiving treatment? Had there been any fighting involving these children? Were any forms of restraint used? Will the Secretary of State make urgent inquiries into the circumstances of the deaths to address concerns that this may be a new systemic problem, and inform the House?

[The Parliamentary Under-Secretary of State for Justice (Mr Crispin Blunt)]

Yes. The hon. Gentleman will be aware that four separate types of inquiry are to be conducted. Later today I will meet the chairman and chief executive of the Youth Justice Board and discuss those cases.

[Mr Mark Spencer (Sherwood) (Con)]

T2. Following the horrific murder of my constituent Kynan Eldridge, I wonder whether the Minister can assure the House and Kynan’s family that the perpetrators of such crimes, if they are foreign nationals, will be deported after their sentence ends? What work is he doing to ensure that that happens?

[Mr Blunt]

My hon. Friend will have heard the exchanges earlier about foreign-national offenders. We are doing everything that we can to improve the legal situation, so that we have more powers to deport people and can improve the administrative process through proper co-operation between the UK Border Agency and the National Offender Management Service.

[Jessica Morden (Newport East) (Lab)]

T4. Last month, Welsh Women’s Aid surveyed 324 victims of domestic violence who were receiving specialist support, and it found that 46% of them would not be eligible for legal aid if the Government’s proposals were carried out. Why will the Government not listen to the evidence, which plainly points to the fact that many victims of domestic violence will be denied access to justice?

[The Parliamentary Under-Secretary of State for Justice (Mr Jonathan Djanogly)]

We have had the Welsh report and are looking at it, but we dispute the figures in it. As I have said on many occasions, when it comes to legal aid, we are concentrating our efforts on helping to deal with domestic violence, and that will be the case following our reforms.

[Andrew Selous (South West Bedfordshire) (Con)]

T3. Do Ministers share my concerns about the unacceptable burdens placed on small businesses by ambulance-chasing lawyers, who pursue those businesses for spurious claims when they have no right to do so?

[Mr Djanogly]

The Government are taking firm, significant steps to address the burgeoning claims market, which, as my hon. Friend says, particularly encourages low-value claims against businesses and others—claims for which we all end up paying. That is why we are reforming no win, no fee conditional fee agreements and banning referral fees, and why we are countering illegal text advertising and consulting on banning inducement advertising.

[Derek Twigg (Halton) (Lab)]

T6. I thank the Secretary of State for saying, following my earlier question, that he would look at the case that I mentioned, but will he examine, or get his Department to examine, whether there is consistency among parole boards and prison governors when it comes to licence conditions relating to exclusion zones? There is nothing worse than a family bumping into the murderer of a loved one in the street, or in the locality. Will he look at the consistency of parole boards’ and governors’ decisions?

[Mr Kenneth Clarke]

I will certainly look at that, because I agree with the hon. Gentleman that there should be consistency. That is why we have exclusion zones—precisely to make sure that the victims of a criminal do not find that they accidentally bump into him again, or even worse, are pestered by him when he is released from prison. We all take cases of the kind that he raises very seriously, and we will look into this one.

[Dr Sarah Wollaston (Totnes) (Con)]

T5. Devon Rape Crisis was launched last November and has already helped many victims of sexual violence across Devon, but it and Rape Crisis England and Wales are calling for changes to make it easier to identify the number of victims of crimes that are sexually motivated. Will the Secretary of State meet Rape Crisis and me to discuss how we can make such crimes more easily identifiable, and to hear about the excellent work of Rape Crisis?

[Mr Blunt]

My hon. Friend has raised an important issue, and I would be very pleased to meet her and colleagues from Rape Crisis to look at the linkages, and at the proper examination and analysis of data in this area. It is important that we continue to improve our knowledge.

[Mr Gareth Thomas (Harrow West) (Lab/Co-op)]

T7. Will the Secretary of State explain how he thinks that axing 1,000 posts at the Crown Prosecution Service will help him to bring more criminals to justice?

[Mr Kenneth Clarke]

I am sure that my right hon. and learned Friend the Attorney-General has ensured that, in making changes to the budget and staffing of the Crown Prosecution Service, he is not reducing the quality of service that it provides. These things are not best measured by whether a body has ever-expanding payrolls or budgets; that tended to be the approach of the former Government, in which the hon. Gentleman served. We are trying to produce better value for money, in order to cope with the appalling financial crisis that we inherited from our predecessors.

[Michael Ellis (Northampton North) (Con)]

T8. The trade unions directly benefit from current no win, no fee arrangements, earning huge amounts via their legal arms through inflated success fees. What assessment has the Minister made of the amount of success fees paid to trade unions, particularly in personal injury cases?

[Mr Djanogly]

Unfortunately, the trade unions did not provide their lawyers’ success fee details, or their referral fee income details, to the consultation. However, given that they have received more than £550,000 in donations from personal injury lawyers, it seems that the unions’ lawyers are not entirely disinterested in the outcome of our attempt to rein in the compensation culture.

[Ian Lucas (Wrexham) (Lab)]

How is it that an individual on remand for murder can hang himself while in custody? Will the Secretary of State hold an urgent inquiry?

[Mr Blunt]

Of course, in all these cases there are immediate operational inquiries, and then there are proper coroners’ inquiries. In all such cases, there will then be an inquiry by the prisons and probation ombudsman. These matters are taken extremely seriously. The number of self-inflicted deaths in custody has been falling, but there have been a number of tragic cases recently. Of course, we will look at all this extremely seriously.

[Mr Peter Bone (Wellingborough) (Con)]

T9. This splendid Conservative-led coalition Government have done much in the fight against human trafficking. The poor women who are victims of human trafficking and sexual exploitation and who are then rescued go into the national referral mechanism, but what happens to them after 45 days? Are they thrown out if they do not qualify?

[The Minister for Policing and Criminal Justice (Nick Herbert)]

No, I am happy to reassure my hon. Friend that that is certainly not the case. There is an ongoing process of assessment and support during the 45-day period, after which victims continue to receive support as necessary in Salvation Army outreach centres or from mainstream services. We are determined to improve the service provided to victims of these appalling crimes and have protected funding in order to do so.

[Fiona Mactaggart (Slough) (Lab)]

John Anslow is the first category A prisoner to escape for 17 years. Does the Secretary of State know why?

[Mr Blunt]

The matter is understandably being inquired into, and in due course we will report back.

[Mr Robert Buckland (South Swindon) (Con)]

T10. Residents and organisations in my constituency will welcome the Government’s decision to update the law relating to scrap metal. When will the necessary amendments to the Legal Aid, Sentencing and Punishment of Offenders Bill be brought forward?

[Mr Kenneth Clarke]

I share my hon. Friend’s concern to see the Government move on this matter as quickly as possible. I assure him that we are working carefully with colleagues on the drafting and hope to be able to table amendments to the Bill, which is currently before the House of Lords, as soon as possible.

[Dr William McCrea (South Antrim) (DUP)]

Many innocent victims of crime feel isolated and dissatisfied at the end of the justice process. Will the Secretary of State assure me that protection of, and justice for, the victim will be fundamental to the reformed criminal justice system?

[Mr Clarke]

I hope that I can assure the hon. Gentleman and that he will have the opportunity to study the consultation document I published yesterday. I concede that there has been a steady process of improvement over the years, compared with the situation not too long ago, when victims were regarded simply as people who had to come to court if they were needed, but we still have not gone far enough. We must ensure that the experience of being in court does not add to a victim’s suffering, that all proper support is given to those who have been badly and lastingly affected by what has happened to them and that there is a proper system of compensation. The object of the criminal justice service must be to give proper service to the victims of crime.

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

It has come to light that barrister David Friesner recently defended a fraudster, despite having just been convicted for stealing £81,000. We had an absurd situation in which a criminal was representing a criminal, which brings the legal system into disrepute. Will the Minister look into the actions of the Bar Standards Board and consider mandatory suspension for those guilty of serious crimes?

[Mr Speaker]

Order. My firm impression is that this matter is currently sub judice and, if I am correct in that surmise, I know that the Minister will exercise his customary lawyerly caution, and it might well be that silence is the best policy.

[Mr Djanogly]

I shall indeed be cautious, Mr Speaker, but I can say that I certainly agree with and understand my hon. Friend’s concerns. This is a regulatory matter, rather than a legislative loophole, but we are in contact with the BSB about it.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

Will the Minister recognise the effectiveness of multi-agency working, which is usually led by the probation service? I recently visited the Huddersfield probation office and was surprised by how effective such working is in cutting the levels of crime and reoffending.

[Mr Blunt]

The hon. Gentleman is absolutely right to draw the House’s attention to the benefits of more effective integrated offender management, which is another way of expressing the multi-agency working to which he draws attention. This good practice is widening across the whole system and, I am delighted to say, becoming the norm.

[Mrs Helen Grant (Maidstone and The Weald) (Con)]

One in four girls, some as young as 13, are hit by their boyfriend. What action will the Minister take to tackle violence among children?

[Mr Djanogly]

Tackling domestic violence is an absolute priority of this Government, and we are co-ordinating action with the Home Office. Indeed, my hon. Friend appeared in a debate that was held in Westminster Hall only a few days ago, and she will have seen the full picture at that time.

[Yvonne Fovargue (Makerfield) (Lab)]

In the Ministry of Justice’s own impact assessment of the cuts to civil legal aid, there are 15 statements that the Ministry does not have evidence for the savings and 30 admissions that the savings are based on speculation. Should not the Secretary of State listen to Citizens Advice and King’s college London, which can demonstrate that the cuts will cost the taxpayer more than they will save?

[Mr Djanogly]

We have seen the King’s college figures, and we do not agree with them. The fact of the matter is that we have published full impact assessments, and we stand by them.

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

More than half of male prisoners and almost three quarters of female prisoners have no qualifications at all. What efforts are being made, through the training of prison officers, to raise awareness of the importance and availability of prison education in our prisons?

[Mr Blunt]

We have recently re-let the offender learning and skills contracts, which are funded through the Department for Business, Innovation and Skills. That is about £157 million worth of education which is being put into skilling-up offenders, not least so that they can then take part in our work in prisons strategy and we can get much more effective and economic use of prisoner time in prison—with enormous benefits for them on release.

[Mark Durkan (Foyle) (SDLP)]

Is the Secretary of State aware that yesterday the Northern Ireland Human Rights Commission registered profound concerns about the “Justice and Security” Green Paper’s proposals on closed material proceedings? Will he accept that moving to provide for secret trials and secret inquests has acute implications in the context of Northern Ireland, not least its impact on transitional justice and on the efforts to deal with the legacy of the past?

[Mr Kenneth Clarke]

As the hon. Gentleman knows, we are consulting on those proposals in relation to that difficult subject. All I can say is that I certainly appreciate its special significance for Northern Ireland and the situation in Northern Ireland, and we will pay the most careful regard to the submissions that we receive from all those interested in Northern Ireland before we come to our conclusions.

[Duncan Hames (Chippenham) (LD)]

Throughout the 18 months to the end of September 2011, consistently more than half of appeal cases relating to employment and support allowance took longer than six months to be decided by the Courts and Tribunals Service, meaning that more than twice as many people as the service’s own target are waiting that long. What action is the Minister taking to ensure that they receive their decisions in good time?

[Mr Djanogly]

The service is under pressure because of an increase in appeals, but I am very pleased to say that in five of the past six months more appeals have gone out the door than have come in.

[Mr Speaker]

Last but not least, Mr Toby Perkins.

[Toby Perkins (Chesterfield) (Lab)]

Last week I met the family of Jake Hardy, a 17-year-old with learning difficulties who died last week after hanging himself in Hindley young offenders institute. The family tell me that Hindley was aware that Jake had been a victim of systematic bullying, was of low mental capacity and had self-harmed earlier in the week, yet it declined to place him on suicide watch. What steps will the Minister take to ensure that the full facts of the case emerge, and what will he do to prevent another family from feeling the grief felt by the Hardys?

[Mr Speaker]

Order. Again, I rather suspect—I am not a lawyer, and I say that as a matter of some very considerable pride, but as far as I am aware—the question is likely to be sub judice. I do not criticise the hon. Gentleman, but I exhort the Minister to be characteristically cautious in his response.

[Mr Blunt]

I am grateful, Mr Speaker. The case has been referred to several times in the course of today’s questions, and I do not have anything more to add to the answer that I have given. The hon. Gentleman knows that I am seeing the chairman and the chief executive of the Youth Justice Board later on today, and the case will of course be on the agenda for our discussions.

Informal European Council

Tuesday 31st January 2012 Commons Chamber

15:33

[The Prime Minister (Mr David Cameron)]

With permission, Mr Speaker, I should like to make a statement on yesterday’s informal European Council.

Countries right across Europe need bold action to recover their economic dynamism, to get to grips with their debts and to secure growth and jobs for the future, and that was rightly the focus of this Council. So, first, we agreed important measures needed to restore Europe’s competitiveness; next, we discussed the separate intergovernmental treaty on fiscal discipline in the eurozone; and, finally, we issued a statement on Iran, Syria and Burma. I am going to take each in turn.

Britain’s agenda in Europe is to promote growth, competitiveness and jobs. We have said repeatedly that the best way in which the EU can drive growth and create jobs is to complete the single market, establish trade deals with the fastest growing parts of the world and cut the regulatory burdens on business. At this Council we made important progress on all those issues.

We agreed to establish a fully functioning single market in services, where there are still 4,700 professions across Europe for which access is regulated by Government, and in digital, where there are more than a dozen copyright regimes in what should be one single market. We will take action to secure what should be a fast-growing area right across Europe. The changes on services and digital alone could add more than 6% to EU GDP within a decade. We also agreed to complete the energy single market, which has the potential to cut costs for businesses and consumers across Europe.

On free trade, we said that 2012 should be a “decisive year” in which to move ahead on trade agreements with major partners such as Japan, India, Canada and the United States. On regulation, we agreed to a growth test, for the first time, to ensure

“that all actions at the European Union level fully support economic growth and job creation.”

We also agreed to reduce regulatory burdens, especially for small and medium-sized enterprises and micro-enterprises, and to complete a patent package to support innovation. That has been discussed in Europe for more than a decade and finally we are making decisive progress.

We want the eurozone to sort out its problems, which are having a chilling effect on our economy. Tackling them is one of the best ways in which we can help to secure growth in Britain and right across Europe. As I have said repeatedly, short-term steps—the so-called October package—must be taken, and taken properly. Europe’s banks must be recapitalised properly, the uncertainty in Greece must be brought to a decisive end, and the firewall that needs to be constructed must be big enough to deal with the full scale of the crisis and the potential contagion. In the longer term, proper fiscal discipline in the eurozone is clearly an important part of the solution. Britain recognises that that is necessary. The question has never been whether there should be greater fiscal discipline in the eurozone, but how it should be achieved.

I went to the European Council last December prepared to agree a treaty of all 27 countries, but only if there were proper safeguards for Britain. I did not get those safeguards, so I vetoed the treaty. As a result, eurozone countries and others are now making separate arrangements outside the EU treaties for strengthening budgetary discipline, including by ensuring that there are much tougher rules on deficits. At this Council, 25 EU member states agreed a new treaty outside the EU. Britain and the Czech Republic have not signed up and we will not be taking part.

Let me deal directly with the issue of the institutions. The new agreement sets out roles for the European Commission and the European Court of Justice. Although some of those roles are permitted through existing treaties, there are legal questions about what is planned. As I have said, it is in Britain’s interests that the eurozone sorts out its problems. It is also in our interests that the new agreement outside the EU is restricted to issues of fiscal union and does not encroach on the single market. The new intergovernmental agreement is absolutely explicit and clear that it cannot encroach on the competences of the European Union and that measures must not be taken that in any way undermine the EU single market. Nevertheless, I made it clear that we will watch this matter closely and that, if necessary, we will take action, including legal action, if our national interests are threatened by the misuse of the institutions. [Interruption.]

[Mr Speaker]

Order. There is a fine line between jollity and hysteria. I fear that the hon. Member for Rhondda (Chris Bryant) is in danger of having crossed it. He must calm himself, by whatever means necessary.

[The Prime Minister]

The principle that the EU institutions should act only with the explicit authorisation of all member states remains. Let me be clear: this is a treaty outside the EU. We are not signing it, we are not ratifying it, we are not part of it and it places no obligations on the UK. It does not have the force of EU law for us, nor does it for the EU institutions or for the countries that have signed it, and there will be no inner group of European countries distorting the single market from inside the EU treaty. That is the fundamental protection that we secured with our veto in December, and that protection remains.

We also made an important statement on developments in Iran, Burma and Syria. Britain has played a leading role in getting Europe to act together on each of those issues. On Iran, last week all EU countries agreed an unprecedented oil embargo, which shows our determination to keep up the pressure on the regime to turn away from any plans to develop nuclear weapons.

In Burma, for years Aung Sang Suu Kyi has been an inspiration to her people and to the world. Britain has supported her at every stage and has been at the forefront of EU sanctions. Now there are signs of a new moment of opportunity for democracy, and we should be prepared to relax those sanctions, but only in stages and only in response to reforms. When I spoke to Aung Sang Suu Kyi on Saturday, she emphasised the importance of credible and free by-elections in April. I can assure the House we will be watching that very closely.

On Syria, the Council condemned the continuing violence and the repression of the Syrian people. Reports suggest that more than 60 people were killed on the streets of Syria last week alone. In total, more than 5,000 people have been killed, 400 children murdered and tens of thousands of people detained. Today, the Foreign Secretary is in New York to support the Arab League’s call for Security Council action condemning repression and supporting a transition of power. All 27 EU member states backed that call for UN action, and if the violence does not end, we agreed that we would tighten EU sanctions further. Our message is clear: we will stand with the Syrian people. It is time for all members of the UN Security Council to live up to their responsibilities instead of shielding those who have blood on their hands. The killing must stop, and President Assad must stand aside.

This was an important Council for Britain. On competitiveness, the single market and trade, Britain is setting the agenda. On action to face down dictators and dangerous regimes in Iran and Syria, Britain is leading the way, and by saying no to a new EU treaty we have protected Britain’s interests. I commend this statement to the House.

15:41

[Edward Miliband (Doncaster North) (Lab)]

I thank the Prime Minister for his statement and associate myself with his remarks about Iran, Syria and Burma. On those issues there has been a bipartisan approach, and the Government have our full support in the effort they are making.

Having heard the Prime Minister’s statement on Europe, the whole House now knows the truth—that with this Prime Minister, a veto is not for life, it is just for Christmas. He said—[Interruption.] Calm down, dear, calm down. He said that it was a real veto on the use of European institutions, and his Back Benchers believed him. Even his Cabinet believed him. What did the welfare Secretary—where is he?—say just this weekend? He could not have been clearer. He said:

“The fact is the Prime Minister vetoed them using the institutions”.

There was not a glimmer of doubt in his mind. He was asked whether the structures of the EU would be used for the fiscal compact, and he said:

“The Prime Minister has already made it clear…he vetoed any such possibility of that happening.”

It is no wonder the welfare Secretary said that, because it was what the Chancellor said the day after the summit. He said on the Saturday morning:

“If we had signed this treaty…we would have found the full force of the…European court, the European Commission, all of those institutions enforcing those treaties using that opportunity to undermine Britain’s interests…We were not prepared to let that happen.”

Can the Prime Minister now confirm that the treaty will be ruled on by the European Court of Justice? Article 8 of the treaty says yes. Can he tell us whether the European Commission will implement the treaty? Article 8 says yes.

What about the Prime Minister’s line in the sand? We know that at 4 am on that fateful Friday morning, he laid down the law to his fellow European leaders and said, “You won’t be able to use the buildings.” So can he now tell us whether the buildings of the European institutions will be used? Apparently, the answer to that is yes, too. On the European Court, the Commission and the buildings, the phantom veto of December is now exposed.

What does the Prime Minister cling to? What did he say at the press conference yesterday? He said:

“There isn’t an EU treaty because I vetoed it; it doesn’t exist.”

The agreement involves the European Court of Justice, the European Commission, the European buildings, 25 out of 27 countries, and he says that it is not really a treaty. [Interruption.] Here is the treaty. It talks like a European treaty, it walks like a European treaty—it is a European treaty.

For Britain, the Prime Minister has secured no protections at all. He says that he has secured protections about discussions on the single market, but the treaty says that the contracting parties shall take actions in the following areas:

“Fostering competitiveness. Promoting employment. Reinforcing financial stability.”

It sounds like the single market to me. Can he confirm that the United Kingdom will not even have observer status at the regular meetings of the 25 to find out what is going on and whether the single market is being discussed? The Prime Minister needs to answer the question: who will protect the British national interest at those meetings? I think his Back Benchers will be interested in that. [Interruption.] It is all right, Mr Speaker, Britain will not be represented at those meetings, but the Prime Minister has a last line of defence—the European Commission. You could not make it up: the Prime Minister reduced to relying on the people he calls “the bureaucrats from Brussels” to represent him at the meetings. In the Prime Minister’s topsy turvy world, that is all he has left: his thin blue line against the 25 countries exceeding their mandate.

Instead of ending up in that position, the Prime Minister should not have walked out of the meeting in December. [Interruption.] No, he should not. [Interruption.]

[Mr Speaker]

Order. I apologise for interrupting the Leader of the Opposition. I exhorted the Opposition Benches to some calm; I now do so to the Government Benches. I say to the hon. Member for Shrewsbury and Atcham (Daniel Kawczynski) in the nicest, kindest and most public-spirited way possible that if he insists on gesticulating, which he should not, it is pretty silly to do it when he is standing next to me.

[Edward Miliband]

Instead of constructing phantom vetoes, the Prime Minister should have been getting a solution to the problems of the eurozone—our largest export market. Of course, he cannot do that. He is committed to failing austerity at home, so he cannot oppose collective austerity abroad. There are growing fears that the scale of austerity required under the treaty will not work. Will the Prime Minister therefore tell us whether the economic strategy in the fiscal compact will work? If he does not believe that it will work, why is he not arguing for change?

The summit has been bad for Britain. There is still no solution to the problems of growth in Europe. In the cold light of day, the Prime Minister’s veto that never was has been exposed. He made a grand promise, which turned out to be worthless. No wonder that even his Back Benchers say that they cannot believe a word he says.

Britain stands with less influence than we have had for a generation. It is bad for business, bad for jobs and bad for families. Britain deserves better.

[The Prime Minister]

I tell you what: I will deal with my Back Benchers, you deal with yours. [Interruption.]

[Mr Speaker]

Order. Mr Ellis, you were apologising to me yesterday for losing your cool. You should not be a recidivist. I want to hear the Prime Minister even if you do not.

[The Prime Minister]

Thank you, Mr Speaker.

Let me say to the Leader of the Opposition that there are two problems with the approach he is taking. The first is that he cannot actually tell us whether he is in favour of this treaty or against it. The Government are clear: we are not signing it and we do not agree with it. That is why we vetoed it being within the EU treaties. That is our position. What is his position? He has had all of his Christmas to make up his mind about whether he would sign the treaty or not.

Last night—[Interruption.] This is very important, so let me explain. Last night at the meeting of the European Council, every European country had to say whether it would sign up to the treaty or not. Britain and the Czech Republic said we would not. Everyone has to make a decision, but the right hon. Gentleman cannot do so. He has had 53 days to make up his mind.

The right hon. Gentleman’s second problem is that he keeps saying this is an EU treaty, but it is not an EU treaty. There was a treaty of Maastricht, a treaty of Nice, a treaty of Amsterdam and a treaty of Lisbon. On each occasion, the Labour party was in favour. There will be no EU treaty of Brussels because we vetoed it.

The right hon. Gentleman asked specifically what effect this treaty could have on the EU single market. The treaty is clear. Article 2 states:

“The provisions of this Treaty shall apply”

only “insofar”—[Interruption.]

[Mr Speaker]

Order. The House must now calm itself. With all that gesticulation and hand-waving from the shadow Chancellor, I thought he was playing with his cooking utensils—[Interruption.] Well, he was pointing somewhere. Like the House and the country, I genuinely want to hear the Prime Minister, as I hope they also wanted to hear the Leader of the Opposition. Let us hear the Prime Minister.

[The Prime Minister]

Thank you, Mr Speaker. We know why the Opposition Benches are so depleted—Opposition Members have been eating the shadow Chancellor’s lasagne and are recovering. The point is absolutely clear in article 2, which states that the provisions

“shall not encroach upon the competences of the Union to act in the area of the economic union.”

The fact is that Labour always fails to stand up for Britain. That is what we know. The previous Labour Government gave away the EU rebate. What did they get in return? Nothing. They signed up to the bail-out mechanism. What did they get in return? [Hon. Members: “Nothing.”] They signed up to the social chapter. What did we get for that? [Hon. Members: “Nothing.”] The Opposition opposed our referendum lock, and even now they are telling us that Brussels does not have too much power, and that if the Leader of the Opposition were Prime Minister for long enough, he would join the single currency. He has had 53 days to make up his mind whether he wants to sign this treaty or not. As usual, he cannot make up his mind whether he is muddled or weak. The fact is he is both.

[Several hon. Members]

rose—

[Mr Speaker]

Order. There is enormous interest and I am keen to accommodate it. What is required is brevity, of which the right hon. and learned Member for North East Fife (Sir Menzies Campbell) is a past master.

[Sir Menzies Campbell (North East Fife) (LD)]

We will see whether your prediction is justified, Mr Speaker.

I begin by praising the pragmatism of the Prime Minister, although I confess to being somewhat surprised that my support for it is not shared throughout the Government Benches. It is especially welcome that he pursued over the weekend a policy of re-engagement with our European partners, which is essential to his long-term objectives of the promotion of growth and the extension of the single market.

[The Prime Minister]

My right hon. and learned Friend is entirely right. We must ask a simple question: what is in the interests of the UK? It is in our interests to let the eurozone get on with the job of sorting out its problems, and to ensure that this new treaty is restricted to the issues of fiscal union. It is therefore in our interests to use leverage over the institutions and the legal issues to keep them focused on fiscal union. That is the approach we have taken and it is entirely right.

[Mr Jack Straw (Blackburn) (Lab)]

Every single article bar one of the treaty, which I have read, refers to institutions of the European Union, including the Commission and the Court of Justice. Leaving aside its form, how can the Prime Minister possibly say that, in substance, the treaty is not equivalent to a European Union treaty? Given the provisions of article 12—it provides for non-euro contracting parties to participate in discussions on competitiveness, but not those outside the treaty—what has been achieved by his veto except that we are outside the door?

[The Prime Minister]

It is not an EU treaty, because it does not amend EU law; it is not a treaty within all of the treaties of the EU, and that is very important, because it would have been wrong to sign up for that without the safeguards for the single market, financial services and the other things that I set out. Let me just explain how important article 2 is in this agreement of the other countries. Let me read it in full:

“The provisions of this Treaty shall apply insofar as they are compatible with the Treaties on which the Union is founded and with European Union law. They shall not encroach upon the competences of the Union to act in the area of the economic union”—

that is, this treaty is outside EU law. Why is it outside EU law? It is because I made it outside EU law.

[Mr William Cash (Stone) (Con)]

My right hon. Friend will know that the European Scrutiny Committee is making an inquiry into the nature and lawfulness of the agreement otherwise known as this non-EU treaty. Will he accept that the problem we have in European policy making is that it is on a slippery slope towards a more coercive, more federal and less democratic Europe? Will he give us his assurance that never, while he is Prime Minister, will we fold this non-EU treaty into the treaties as a whole?

[The Prime Minister]

To answer my hon. Friend’s second question first, obviously this treaty cannot be folded back into the EU without the agreement of every EU member state. We did not sign this treaty, because we did not get the safeguards that we wanted, and that position absolutely remains. My hon. Friend is right to make the point about the danger of a slippery slope that can be created by signing EU treaties and the use of the EU institutions. The whole point is that because this is not an EU treaty—because it is outside EU law—we are not in danger of that happening.

[Chris Bryant (Rhondda) (Lab)]

So, basically, the Prime Minister was afraid that if he went to the European Court of Justice and asked the European Court of Justice whether the European Court of Justice should have power to adjudicate on the so-called non-EU treaty, he would lose? That is basically the sum and total of it, is it not?

[The Prime Minister]

Let me explain again, because I know the hon. Gentleman takes great interest in European affairs. The point is that it is in our interest that these eurozone countries get on with the job they need to do. It is absolutely important that they stick to the fiscal union and do not encroach on the single market. Clearly, there are uses for the institutions they have set out in this treaty, some of which are legal under existing EU law and some of which are highly questionable. We are going to use that leverage and that legal position to make them stick to the position of sticking to the fiscal union. That is the most sensible thing to do, and I would have thought that, with all his experience in European politics, he understood that.

[Richard Ottaway (Croydon South) (Con)]

May I welcome the Prime Minister’s confirmation that there is no provision in the treaty that allows the single market to be undermined? However, he will be aware that the President of France has been driven to impose a financial transaction tax on France alone. Does he agree that the dismay with which that was met by the financial services sector in Paris illustrates exactly why such a tax is a bad idea?

[The Prime Minister]

One does not need to look any further than the European Commission itself, which actually carried out an investigation into a financial transactions tax and found that it could cost 500,000 jobs in the European Union. That is why the whole idea of pursuing this at the moment is completely wrong. Of course, it would be different if the whole world was going to accept a financial transactions tax, but that is extremely unlikely to happen. That is why I do not think it is the right approach. But let us be clear: in this country, we do get our financial services to make a proper contribution. For instance, we have stamp duty on share transactions, which actually raises considerably more than the French are planning to raise with their early foray into this area.

[Mr Denis MacShane (Rotherham) (Lab)]

Will the Prime Minister confirm what I think the Chancellor has said over the past couple of days, which is that when more money is required by the IMF, Britain will not fall short?

[The Prime Minister]

The Chancellor said that we are founder members of the IMF and strong supporters of it as an institution, but that the IMF must always lend to countries, not currencies; that we would not be part of an EU bail-out fund; that we would take part only if other countries came forward too; and that that would happen only after eurozone countries and eurozone institutions had done what they needed to do to stand up and support their currency. That is the position, and I think that it is right.

[Mr Bernard Jenkin (Harwich and North Essex) (Con)]

Will the Prime Minister say something about the nature of the EU of which we are now a member, given that a subset of member states can bypass a veto and hijack the institutions for their own purposes without the consent of the dissenting member states? He is entirely right to maintain a reservation to ensure that that does not happen.

[The Prime Minister]

The point is that, as my hon. Friend knows, there are organisations within the EU, such as the eurozone group and the Schengen group, of which we are not a part, that use the European institutions. The fact is that this treaty is outside the EU treaties, which gives us that extra protection. Furthermore, we have the ability to exercise leverage to ensure that they stick to fiscal union, rather than getting into the single market, which is what we want to protect. That is absolutely important and the approach that we should take.

[Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)]

The Greek writer Aristophanes gave us the concept of cloud cuckoo land. I wonder whether some European leaders visited that mythical country on Monday. Will the Prime Minister tell us how on earth he thinks that a country such as Greece will regain competitiveness if it cannot devalue, which it cannot do within the euro?

[The Prime Minister]

The hon. Lady makes a serious point. I have read the agreement that these countries have come to, and I completely understand the need for fiscal discipline within the eurozone. Clearly, we cannot have countries building up excessive deficits year after year, and one can understand the concern of Germany and other northern countries, but on the text of the treaty, it is actually very concerning that some countries will struggle to meet it. Of course, Europe needs not only arrangements for fiscal discipline but, above all, arrangements for additional competitiveness, for opening up markets and for getting economies growing. That was the subject of the first half of the EU meeting, in which we were major participants, and we are very much driving that agenda to help Greece, Spain and other countries in the south of Europe.

[Mr Andrew Tyrie (Chichester) (Con)]

The eurozone crisis has now become a major global risk, but the member countries seem wholly incapable of addressing it and its root causes properly. Will the need for IMF intervention and direction of the crisis be discussed at the G20 summit that the Prime Minister will be attending on 25 February, and was it discussed at the summit from which he has just come?

[The Prime Minister]

There was not a discussion about IMF resources at the informal EU Council. To be fair to eurozone members, what they need to do is difficult for countries to do: they need to contribute huge amounts of money to a firewall to prevent contagion; they need to put capital into their banks to strengthen them at this time of stress; and they have to give up large areas of sovereignty to make sense of the eurozone. Those are all reasons we stayed out of the eurozone, and why I believe that we should not join the single currency. It is only fair, however, to explain that they have taken quite a few steps down that road. The argument that I made in Davos was that, as well as the short-term things that they need to do, they need a set-up that makes sense for the long term of the eurozone.

[Mike Gapes (Ilford South) (Lab/Co-op)]

The Prime Minister said that he will watch closely and, if necessary, take action, including legal action, if our national interests are threatened by the treaty. Will that legal action be taken through the European Court of Justice, and how does that marry with his next statement that EU institutions should only act with the explicit authorisation of all member states? Will not other states refuse to allow that?

[The Prime Minister]

I do not think that the hon. Gentleman understands how these institutions work. The point is simple: it is clearly in our national interests to maintain the single market at the level of the 27 to make it work for us. As long as this treaty stays out of that area, and instead focuses on fiscal union and discusses the things that the hon. Member for Birmingham, Edgbaston (Ms Stuart) mentioned, it will not be a problem for Britain. If it encroaches on our national interests, however, we will have the ability to take action and the case to do so.

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

After what was clearly a much more successful and satisfactory summit than the one in December—the Prime Minister came back with clear EU commitments to democracy around the world, and to the single market and the extra jobs that it can sustain, particularly in the energy industry at home—will he agree that his constituents, like mine, want the Government to concentrate, as Europe appears to be united in doing, on jobs, growth, training and skills, instead of obsessing about constitutional and treaty niceties? Those are not important.

[The Prime Minister]

I think the right hon. Gentleman is entirely right, and the refreshing thing about this Council is how much time was spent on the nitty-gritty of the single market—on digital, on services, on education and on energy markets. Having Mario Monti, the new Greek Prime Minister and others there with a real focus on the single market, including the new Spanish Prime Minister, gives us a much better prospect for making progress on this agenda than we have had for many years.

[Mr Dennis Skinner (Bolsover) (Lab)]

Is not the truth of the matter that throughout 2011 the Prime Minister marched his troops to the top of the anti-European hill, and now, like John Major before him, and with the help of the Deputy Prime Minister, he has marched them down again? I think there is a word for it: it is called appeasement. If this meeting had been held in Munich, the Prime Minister would have been coming back waving a piece of paper.

[The Prime Minister]

I always wonder whether practice is going to make perfect with the hon. Gentleman. At least he has been consistent: he has always voted against all EU treaties, and I am giving him the rare pleasure of not having an EU treaty to vote against.

[Harriett Baldwin (West Worcestershire) (Con)]

The Prime Minister has referred to the five European countries that are now less competitive than Iran. On competitiveness, his announcement today is welcome, but how quickly will those steps be taken to increase the competitiveness of the single market?

[The Prime Minister]

My hon. Friend is entirely right to raise the issue in this way. We have tended in the past in the European Union to sign up to Council conclusions or informal statements, like the one agreed late last night, that are full of good words about taking such steps but do not contain enough concrete dates. The difference last night is that dates have started to appear for when specific things should be done, whether it be completing EU free trade arrangements with other countries or completing deregulation or single market programmes. That is very welcome.

[Keith Vaz (Leicester East) (Lab)]

The position taken on Iran at the summit was clearly the right one. However, as the Prime Minister knows, there are 73,000 Iranians living in London. What provisions have been made to nominate a third country, so that British Iranians can go to visit Tehran, and their friends and relatives can come and visit here?

[The Prime Minister]

The right hon. Gentleman asks an important question. Perhaps I can write to him about that. What I would say is that, in a move that may have surprised some people, the EU has been decisive—for instance, in creating the oil embargo when some members of the EU have been quite reliant on Iranian oil, which is a real step forward. However, on the issue of third countries and travel, perhaps I can write to the right hon. Gentleman.

[David T. C. Davies (Monmouth) (Con)]

We have learned today that in Britain’s national interest the Prime Minister is prepared to use a veto to allow national agreements and to rule out for ever Britain’s membership of the euro. Does he or anyone else in this room have any idea what the Leader of the Opposition stands for?

[The Prime Minister]

It is going to be interesting. We are now going to have a period of days when the Leader of the Opposition is finally going to have to get off the fence and tell us: would he sign up to this treaty or not? The treaty is right here—I can give him a copy. It is a treaty that we will not be signing; he now has to make up his mind whether he is going to sign it or not.

[Kate Hoey (Vauxhall) (Lab)]

How does the Prime Minister feel about attending a European Council of a supposedly democratic EU when the leaders of two of the countries not only have not been elected, but were more or less imposed by the bureaucracy in Brussels? Does he not feel seriously that we are moving more and more away from a democratic Europe, and that this is why the people of this country, ultimately, will have to decide on our future?

[The Prime Minister]

The difference between the situation in this country, where we face great economic challenges, and countries in the eurozone is that we have been able to adopt a policy stance that, yes, combines a very tight fiscal policy with difficult public spending reductions, but can also be accompanied by a loose monetary policy, with the Bank of England standing behind the economy. The problem for many eurozone countries is that they do not have that policy mix. That is making life difficult for them, and I fully understand that. They want to stay in the euro; they want to make the euro work. Whatever our private views about the euro, we should do what we can to help them get on with the job of sorting out the single currency and its arrangements, because it is currently having such a bad effect on our economy.

[Andrea Leadsom (South Northamptonshire) (Con)]

Can the Prime Minister reassure the House that in exercising his veto, exhorting the eurozone to sort out its financial crisis and promoting growth through the single market, he is acting in Britain’s national interests? Does he also share my concern that the Leader of the Opposition does not seem to know where Britain’s interests lie?

[The Prime Minister]

My hon. Friend is right. At the end of the day, we have to decide whether we are going to agree to this treaty or not. The fact is that every European country had to make that decision, and we have made ours. I repeat that it is in our national interest for the eurozone to deal with its problems, to keep this treaty focused on fiscal union and then to maximise the potential of the single market. I think that Britain should be relaxed about being in those parts of Europe where we want action—just as we are a leading member of NATO, and just as we led that action in Libya—but that we should quite happily stay out of areas that we do not feel are in our interests, such as the Schengen no-borders agreement or the euro.

[Mr Ben Bradshaw (Exeter) (Lab)]

Given that Germany grew 3% last year, and has its lowest unemployment for 20 years and more manufacturing and a smaller pay gap than Britain, why is the Prime Minister so against the practice of worker representation on company boards?

[The Prime Minister]

One of the points about Germany is that it did not spend the last decade making its economy unbalanced with a massive boom and a massive bust. The right hon. Gentleman is right to raise the IMF forecasts, however, because they are very instructive about what is happening in Europe this year. They are actually forecasting higher growth for Britain than for almost any other country in the European Union, but they have made very chilling forecasts for countries such as Spain and Italy, for which they are forecasting quite a steep decline.

[Mark Reckless (Rochester and Strood) (Con)]

Will the Prime Minister explain what it is that he has vetoed?

[The Prime Minister]

I have vetoed Britain’s involvement in a treaty. As a result, it is not an EU treaty. We had in front of this House the Maastricht EU treaty and the Lisbon EU treaty; we had Amsterdam and we had Nice. All of those were treaties that Britain was involved in as a member of the EU, and they were EU treaties with the full force of the law. This is not like that; this is outside the European Union. It is an arrangement that has been reached by 25 other countries and we are not involved. As a result, we have safeguarded Britain’s interests, which could have been put at risk by a new EU treaty.

[Mr Nigel Dodds (Belfast North) (DUP)]

What indications did the Prime Minister receive from the German Government that if they want their political project of fiscal and monetary union in the eurozone to succeed, they will finally have to face the sad fact that they will have to put in the necessary resources, rather than just imposing greater austerity on countries that have been steadily stripped of their democracy?

[The Prime Minister]

I tried to set out what I think is the sensible view in my speech to the Davos summit. Look, I do understand the German concern. It sees countries across Europe that have run up huge debts and huge deficits, putting at risk the stability of the single currency. It does not want that to happen again, so it wants these assurances for the future. Just as everyone needs to understand the German position, however, we also need to show some understanding of those countries that are going to struggle in the years ahead. They are going to need extra help and assistance, and there is going to have to be solidarity across the eurozone, because the single currency requires that, as I explained in my Davos speech. We manage a single currency across the United Kingdom because we show solidarity with different areas of the country, and the eurozone has to understand that similar solidarity will be required there, to make the single currency work in the long run.

[Mr Robert Buckland (South Swindon) (Con)]

I was encouraged to see reference in the communiqué to this year being a decisive year for free trade agreements. Will my right hon. Friend do all that he can to move ahead with the free trade agreement with Japan, which is vital to large parts of our motor manufacturing industry?

[The Prime Minister]

I will certainly do that. I have discussed this issue with the Japanese Prime Minister and with the European Union. One of the issues with Japan is non-tariff barriers, in regard to the access to Japanese markets that British goods and services want. There is a particular advantage for us, in an economy with such a high level of services and branded goods, in ensuring that we really secure progress on the free trade agreement, not only with Japan but with India. The Indian economy is fairly closed off to services, and we want to see it opened up.

[Sir Stuart Bell (Middlesbrough) (Lab)]

The Prime Minister has talked about competitiveness, growth and jobs, but he skated over the fiscal compact and its fiscal consolidation, which could have a severe effect on jobs and growth. Further to the question from my right hon. Friend the Member for Blackburn (Mr Straw), and given that the Prime Minister thinks the eurozone is so important to us, what influence does he think he can bring to bear, as he is not part of the 25?

[The Prime Minister]

The hon. Gentleman seems to be having his cake and eating it. On the one hand, he says that the treaty is tough in terms of fiscal discipline and consolidation, while on the other hand he is worried about the fact that we have not signed it and are not subject to it. I think it is right for this country to take measures to consolidate our fiscal position. These are difficult measures, but we can at least look the British people in the eye and say we are doing it for our own benefit and our own good. We are not doing it because we are instructed by some foreign body to get our budget under control; we are doing it in our own national interest.

[Mr Richard Shepherd (Aldridge-Brownhills) (Con)]

The Prime Minister will well remember that nearly 20 years ago, the United Kingdom, Italy, Spain and the Irish Republic left the exchange rate mechanism—the precursor of the euro. There was an exit strategy. Now the crisis facing Europe seems to be one of solvency in some of these countries, there is no exit strategy and it appears that there is no money. Will the Prime Minister reassure the British public that no funds will be given to the IMF and that we will give no more money to the European Union?

[The Prime Minister]

I obviously remember very well the exchange rate mechanism experience. Indeed, it is that experience that makes me so passionate about not joining the single currency or the euro—because it is so difficult to exit from it if it does suit our needs or our arrangements. I believe that Britain is a big enough economy to have its own interest rates and its own monetary policy to suit our needs. My hon. Friend asks for guarantees. What we have done is already to have got out of the bail-out mechanism to which the last Government signed us up and, as I clarified a few moments ago, we have set out very clearly our conditions to the IMF.

[Barry Gardiner (Brent North) (Lab)]

The Prime Minister says that his veto has left the European Commission in the room to protect against encroachment on single market issues and competitiveness. Will he remind us of the name of the noble baroness who represents the UK on that Commission and of which party will therefore represent Britain’s last line of defence?

[The Prime Minister]

The point the hon. Gentleman has clearly not understood is that the treaty itself sets out that the treaty cannot be used to encroach on the single market; it is there in black and white. As I have said, if that is not the case we have the ability to take action, including legal action, to protect our national interest.

[Sarah Newton (Truro and Falmouth) (Con)]

My constituents really appreciate the Prime Minister’s straight talking on this issue, so will he answer the question that they want answering: if asked, will the Prime Minister stump up more money for Greece?

[The Prime Minister]

Our answer is very clear. We were not involved in the Greek bail-out, and we will not be involved in European bail-outs of Greece. We have got out of the EU mechanism that the last Government got us into, and we have set out our conditions on the IMF very clearly.

[Kelvin Hopkins (Luton North) (Lab)]

In the last few days, the Greek Government have said that they refuse to have their economic governance taken over by the European Union. Does the Prime Minister support the Greeks in that, and if so, will he say so here and now?

[The Prime Minister]

The only way I can answer that question is to say that the Greeks have to decide themselves whether they want to stay in the euro. If they do, they have clearly got to meet some pretty exacting targets for reducing Government deficit, reducing Government debt and accepting a very austere approach. If Greece wants to stay in the euro, those are the conditions it will have to meet. I am not Greek; I am British. We have made our decision to stay out of the euro; this is their decision, and we should not tell them what to do.

[Nicholas Soames (Mid Sussex) (Con)]

It is clear that the Prime Minister has considerable support within Europe in seeking a more adaptable, flexible and competitive economy. Will he reassure businesses in my constituency and elsewhere that the casting of the veto will have done nothing to prevent his ability to drive forward that agenda in Europe?

[The Prime Minister]

What last night’s meeting proved is that there is a very strong and growing consensus for action around the European Council table on issues of competitiveness. British Ministers—and, to be fair to Labour, British Ministers for the last 20 years—have been going to Europe arguing for completing the single market, deregulation, lifting the burdens on business and all those issues, and we have always had strong supporters in the northern liberal countries, as it were, but we have come unstuck when it comes to other countries. I think we now see—partly because the centre right is in power in so much of Europe—really strong support for that sort of agenda, and we can certainly drive it forward.

[Stewart Hosie (Dundee East) (SNP)]

The Joint Ministerial Committee memorandum of understanding on EU policy says that Ministers and officials from all the devolved Administrations should be involved in discussion with the UK Government on the formulation of UK policy. What discussions did the Prime Minister or his officials have with Edinburgh, Cardiff and Belfast before the European Council meeting?

[The Prime Minister]

As the hon. Gentleman knows, there are arrangements for these things. Actually, the Government have been very generous in ensuring that the Scottish Administration have been fully involved in, for instance, fishing quota negotiations. However, I thought that the hon. Gentleman wanted to leave the UK altogether. If that is the case, he will have to seek access to the European Union, and seek access to joining the euro as well. I think that he ought to read the treaty and work out whether he wants to sign it. Perhaps when he has made up his mind he will be able to tell the Labour leader what to do.

[Mr Edward Leigh (Gainsborough) (Con)]

The Prime Minister said this afternoon that, if necessary, we would take legal action. What would trigger that legal action? Is not the problem for the majority the fact that if they stretch the European institutions to achieve greater compliance, the minority may be tempted to stretch them to achieve greater independence?

[The Prime Minister]

I think that the conditions are very straightforward. As I have said, we want those institutions to sort out the problems of the European Union, and we want them to stick to fiscal union and not go into single market issues. If they were to go into single market issues and threaten Britain’s national interests, of course we would act. That seems to me to be a much more sensible approach than taking an alternative path, because all the while we shall be maintaining some leverage over this organisation, outside the European Union, to ensure that it sticks to the job that it is meant to do.

[Nic Dakin (Scunthorpe) (Lab)]

What, in terms of content, is not in the EU treaty as a result of the Prime Minister’s not signing it?

[The Prime Minister]

I do not know whether the hon. Gentleman has spotted this yet, but there is not an EU treaty.

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

The Prime Minister will be aware that the latest report on Iran by the International Atomic Energy Authority contains no smoking gun whatsoever. Given that the sabre-rattling and sanctions from the west have served only to strengthen the position of the hardliners, and—as is illustrated by the fact that Iran is thinking of bringing forward the deadline for the oil embargo—have failed to date, is this not the time for a fresh approach, which should include ruling out the option of force?

[The Prime Minister]

I listened carefully to my hon. Friend’s question, and indeed I listened to him carefully when he made the same case on the radio this morning, I do not read the IAEA report in the same way as he does, and I do not altogether trust Iran’s motives in this area, but the easiest way for Iran to settle the issue is to open up and show everyone just what it is doing. If it is only pursuing nuclear power and is not pursuing nuclear weaponry, the world will be able to move on, but until those assurances are given, the world will not be able to move on. That is the reason for the tough action that we are taking, which shows that there are alternatives to military force. We want to ensure that we maximise the use of all those options before considering anything else.

[Mr Wayne David (Caerphilly) (Lab)]

Will the Prime Minister explain the difference between a veto and an opt-out?

[The Prime Minister]

There is a very important difference. Let us consider what happened with Maastricht, for instance. There was a European Union treaty to which Britain was a full signatory. We opted out of certain parts of it, but we were still subject to a huge amount of additional EU law. That is why there were so many agonised debates in the House about whether it was a good thing or a bad thing. The same can be said of all EU treaties. The difference in this case is that there is no EU treaty. We are not going to put something in front of the House, and nothing will be voted on, so it will not affect the UK.

[Steve Baker (Wycombe) (Con)]

May I draw my right hon. Friend’s attention to the initiative for a free and prosperous Europe which was launched yesterday with the support of think-tanks and non-governmental organisations across the continent? In a nutshell, it asked the EU to stop centralising power, and instead to build prosperity on liberty and responsibility. There is an appetite throughout Europe for the kind of policies that my right hon. Friend’s Government are advocating. Does he share my hope that the leaders of the European nations may abandon their outdated ideology of centralisation and follow him instead?

[The Prime Minister]

I am grateful to my hon. Friend for his comments, and I will certainly look at the report he mentions. We in this House must understand that 17 members of the European Union have opted for a single currency—that was the big moment, when different parts of Europe chose to take a slightly different path—and even in spite of the difficulties, those member states are fully committed to trying to make it work. We have to respect the view they have taken and allow them to go on and do some of the things that can make sense of the eurozone. It is not the choice that we are making; we are making a different choice. We want a competitive Europe, we want a trading Europe, we want an open Europe, but we do not want a more centralised Europe, and not signing this treaty—not having an EU treaty—helps us down that path.

[Jeremy Corbyn (Islington North) (Lab)]

When the Ministers discussed the situation in Iran, was any concern expressed about the bombings and assassinations currently taking place and the military build-up in the area, which clearly leads to much greater tension? Will the Prime Minister think again about the suggestion of the hon. Member for Basildon and Billericay (Mr Baron) that there should be a renewed diplomatic initiative by either Britain or the European Union to try to build relations with all the power structures in Iran, rather than head down this very dangerous road towards a war?

[The Prime Minister]

I am afraid I do not agree with the hon. Gentleman for this—reasonable, I hope—reason: Iran has been offered a normal diplomatic relationship. Indeed, it was offered many times by the right hon. Member for Blackburn (Mr Straw) when he was Foreign Secretary. The fact is that that did not move Iran off the path of trying to acquire all it needs for nuclear weapons. So I think the path of sanctions, travel bans and asset freezes, and all the tough measures we are taking right across the EU, is the right path. It is the right alternative to the alternatives that I think the hon. Gentleman does not welcome, and hopefully it will make the Iranian regime change its strategy.

[Mrs Anne Main (St Albans) (Con)]

In December, the Minister for Europe said in response to my right hon. Friend the Member for Wokingham (Mr Redwood) that

“we understand why those countries want to use the institutions, but it is new territory and raises important issues that we will need to explore with our colleagues in those other European countries.”—[Official Report, 13 December 2011; Vol. 537, c. 718.]

Further, today my right hon. Friend the Prime Minister has said there are legal implications as a result of the discussions he has had. Does he share my concern that by invoking the institutions we may well end up in a Jarndyce v. Jarndyce-type legal squabble with the European Court of Justice that will not go in our favour?

[The Prime Minister]

That is not my concern; instead, my concern is that although there are uses of the EU institutions that are already sanctioned by existing treaties and to which we could not possibly object, this agreement between the 25 countries goes further than that and raises legal concerns. So we are right to raise them and use the leverage to try to keep this new organisation on the straight and narrow path of fiscal union rather than moving over into the single currency. I do not really fear what my hon. Friend says, because of course people can take cases about what has been signed to the European Court, but that is not going to drag Britain into a treaty that we are not part of. That is another advantage of not having signed the treaty.

[Graham Stringer (Blackley and Broughton) (Lab)]

The Prime Minister was right to veto the treaty because it was against this country’s interests. The agreement arrived at between the 25 countries is fundamentally deflationary and will not lead to growth—it will lead to mass unemployment across Europe—and is also against this country’s interests. Rather than reneging on his original commitment to stop the 25 using European institutions, should not the Prime Minister now be using all the power of his office to stop them?

[The Prime Minister]

I am grateful to the hon. Gentleman, as at least we have at last got a clear Labour view. Clearly he, like me, would not have signed the treaty and thinks Britain is better off outside the treaty. Is that the Labour position? The Leader of the Opposition can just nod. That is not much to ask for. They have had 53 days to make up their minds. There are three options: yes, no or “I don’t know because I’m weak and indecisive.”

[Jessica Lee (Erewash) (Con)]

I welcome the reduction in regulation on small and medium-sized enterprises set out in the statement. Will my right hon. Friend reassure the constituents of Erewash that the priority throughout negotiations is the protection of jobs and businesses in Britain?

[The Prime Minister]

That is absolutely our priority. The more we can get the single market to work, the better it will be for British jobs, including in Derbyshire. There is an important agenda here, and it is not just about getting the European Commission and European Union to do things in terms of completing the single market. It is also, sometimes, about trying to get them not to do things—it is about rolling back some of the bureaucracy that has been placed on business that can cost jobs and mean extra regulation.

[Mr William Bain (Glasgow North East) (Lab)]

Figures released by the EU today reveal that one in 10 people in the EU is out of work, including 16 million people within the eurozone. Why has the Prime Minister not been more vocal about an increased role for the European Central Bank, including the use of eurobonds to help restore confidence to the markets and increase growth?

[The Prime Minister]

I always think it is the first sign of madness for a politician to say, “Please go and read one of my speeches,” but on this occasion I will make an exception. If the hon. Gentleman reads my speech at the Davos summit, he will see that that is exactly what I said.

[Chris Bryant]

So, you’re mad?

[The Prime Minister]

Thank you very much—you are so charitable.

On unemployment, the hon. Member for Glasgow North East (Mr Bain) is absolutely right. There was a very good and strong discussion in the European Council and it is really worth looking in particular at examples of countries that have lower youth unemployment than Britain—there are many with higher youth unemployment —to see what lessons we can learn from them.

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

Does the Prime Minister agree that the question of European bail-outs would be much less likely to arise if different countries with different economies had different currencies? Will he therefore recommend this tried-and-tested model for the eurozone countries?

[The Prime Minister]

We have a very strong view in this country that we should keep our own currency, but that does not let us off the need for fiscal discipline, proper monetary policy and keeping inflation under control. It is not a free lunch or a free ride. We have to take tough decisions, but clearly we have to show some respect for the 17 eurozone countries that want to make the euro work. It is no good wishing away what is there. The responsible thing to do is not to stand in their way when they are trying to put out the fire in their own house, but to ensure that they do so in a way that does not threaten our national interests. That is exactly what I have done.

[Bill Esterson (Sefton Central) (Lab)]

I still do not know whether the Prime Minister thinks that he did not sign a treaty or just an agreement. Is not his real failure his commitment to austerity and his lack of a plan for jobs and growth either in the EU or in the UK?

[The Prime Minister]

In Europe, we have a plan for jobs and growth, which is called completing the single market. The question that the hon. Gentleman and his leader have to answer is about the new treaty being proposed, which 25 countries are going to sign and Britain is not. [Interruption.] I do not care how bad the lasagne is, at some stage the shadow Chancellor and the Leader of the Opposition are going to have to make up their minds. Are they for it, are they against it, or are they weak and indecisive and cannot make up their minds?

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

Like many others, I welcome the commitment to cut the burden of regulation, but does the Prime Minister agree that there could be potential to revisit the way in which directives were transcribed into UK law by the previous Labour Government, with a view to removing some of the gold-plating that businesses complain about so much?

[The Prime Minister]

My hon. Friend makes a very good point. There have been occasions on which EU directives have been added to by Government Departments and implemented with more vigour than in other parts of the European Union. We have tried to put a stop to that under this Government.

[Chris Bryant]

Name one.

[The Prime Minister]

Horse passports—that was a good one. I do not think we eat horses in this country, but the previous Government, in their wisdom, decided that every one needed a passport. That is just one example. In future we can ensure that we do only what is absolutely necessary, rather than gold-plating.

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

Will the Prime Minister share with the House and the country what influence, if any, his Back-Bench Eurosceptics have had on his thinking during these discussions?

[The Prime Minister]

I think the Conservative party is entirely united in thinking that Britain is not right to sign this treaty.

[Penny Mordaunt (Portsmouth North) (Con)]

I congratulate the Prime Minister on defending Britain’s interests, and I note what he says about Iran and Syria. Does he think that if we had a common EU defence policy, HMS Dauntless would now be readying to sail to the south Atlantic?

[The Prime Minister]

The point is this: we should make sure that NATO is the cornerstone of our defence and we should be very clear about our own defence responsibilities—I have spoken about the Falklands. We need to win the argument in Europe that there is no point in having endless competing defence headquarters. What we need throughout NATO, particularly in Europe, is greater defence capacity, and we need to encourage other European partners to invest in that.

[Jonathan Ashworth (Leicester South) (Lab)]

Will the Prime Minister explain how he will take action, as he says, if this non-EU treaty under which the 25 nations can take advantage of the full force of the EU institutions, encroached on our national interest and undermined the single market?

[The Prime Minister]

Let me explain: there are uses of the EU institutions set out in previous treaties—mostly put through this House by the Labour Government—but this treaty outside the EU goes further than that, and that raises legal issues. We have said very clearly, including in the EU Council last night, that if that were to encroach on the single market and threaten this country’s national interest, we could take action, including legal action.

[Tony Baldry (Banbury) (Con)]

The UK is fortunate in having many excellent professional bodies—engineers, architects, surveyors, lawyers and so forth—but often they find it difficult to practise within the European Union because of a host of national barriers to professional practice. In the context of the single market, improving competitiveness and creating jobs, has the Council taken steps to remove some of those national barriers to professions being able to practise throughout the EU?

[The Prime Minister]

My hon. Friend is entirely right to raise that big gap in the single market. We passed the Single European Act all those years ago—more than 20 years ago—yet the professions and services have still not been properly opened up. The action we are taking is for all Governments to agree to open up those professions, and on this occasion the European Court of Justice may actually be helpful in that the Commission is taking infraction proceedings against a number of member states—Germany included, I think—to make sure that they genuinely open up their professions and complete the single market.

[Ben Gummer (Ipswich) (Con)]

On the radio today, the shadow Foreign Secretary claimed that Britain had lost influence in Europe. In the matters of the single market, competitiveness, Iran and Syria, what does the Prime Minister feel was achieved by the British presence at the European Council?

[The Prime Minister]

The specific foreign policy stances taken by the EU are all agreed by unanimity, which proves that agreement by unanimity is possible if there is political will and drive. Almost the entire approach to Iran and Syria and Burma was something that the British requested be discussed at the Council and we requested that there be a statement. I think that shows that with political will, but with unanimity, it is possible to get a lot done.

[Kevin Brennan (Cardiff West) (Lab)]

Does the Prime Minister realise that the more he denies that this is effectively a European treaty, the more he reminds us of comical Ali denying that an invasion had taken place while the tanks rolled by behind him?

[The Prime Minister]

The hon. Gentleman is in for a big surprise. When no treaty arrives in the House of Commons, he will have to do a bit of explaining.

[Martin Horwood (Cheltenham) (LD)]

On Iran, did the European summit discuss the planned regional conference on non-proliferation of weapons of mass destruction, and does the Prime Minister agree that it might offer a vital pathway out of an increasingly dangerous stand-off?

[The Prime Minister]

We did not discuss that specific matter. It is entirely right and worth while to try to bring regional neighbours into the debate, but I have to say that it is some of the regional powers that are the most concerned about Iranian activity, not only in their own countries but in stirring up trouble elsewhere, so it is probably only part of what needs to happen, which is to get the Iranian Government to change their strategic direction.

[Mark Durkan (Foyle) (SDLP)]

The Prime Minister has highlighted a growth test to ensure that all actions at European Union level fully support growth and job creation. This new “I can’t believe it’s not an EU treaty” will prescribe prolonged and tight austerity for many economies, affecting not only services there but trade and commercial capacity more widely in Europe. Would this non-EU treaty pass any meaningful EU growth test?

[The Prime Minister]

If the hon. Gentleman is so against the treaty, I am surprised that he is not praising me for making sure that Britain is not involved in it; I would have thought that would be the first thing that he would say. We have to understand that the countries of the eurozone want to take an approach that prescribes rules on debt and deficit. We can all have our own views about whether it is the right approach or whether it is too tight, and all the rest of it, but that is what they want to do; I do not think that we should stand in their way as it is done, but it is better done outside the European Union.

[Several hon. Members]

rose—

[Mr Speaker]

Order. There is still a very significant number of colleagues seeking to get in. I would like to try to accommodate as many as I can, but if I am to do so, brevity is essential.

[Mr Julian Brazier (Canterbury) (Con)]

My right hon. Friend the Prime Minister outlined in his speech at the Council several criteria needed for a successful monetary union, none of which have really been met by the changes, however welcome, outlined there, so may I urge him to continue to plan, while doing everything that he can to co-operate constructively, for the likely eventual break-up of the eurozone?

[The Prime Minister]

We have to plan for all eventualities, but I would make two points. As I have said, I think we have to respect the fact that the countries of the eurozone want to make it work. They have taken quite a number of steps that are painful and difficult for individual sovereign countries to take, and it must be in our interests, because we want the European economy to grow, for them at least to take the short-term measures to take the heat out of the crisis. There were some signs of the crisis easing at the beginning of this year, as Italian and other bond spreads have come down, but we are far from through it.

[Mr Christopher Chope (Christchurch) (Con)]

Will my right hon. Friend expand on the basis on which we were able to find common cause with our good friends in the Czech Republic?

[The Prime Minister]

The point came when different countries had to decide whether they wanted to sign up to the treaty or not; it is not a treaty within the EU, so there is no compulsion to do so. The Czechs, on 9 December, were not sure whether they wanted to sign it. They then considered whether they wanted to, and last night they decided what to do, as everyone had to; the only person who cannot seem to make a decision is the leader of the Labour party, who has no idea whether he is against it, in favour of it, or does not know. One day, he will have to decide.

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

What message does my right hon. Friend have for the great manufacturers of this country, such as DCS Europe in my constituency, given that President Sarkozy says that Britain does not have much manufacturing left?

[The Prime Minister]

The point that I would make gently to my friend Nicolas Sarkozy is that, if one looks at the figures, Britain actually has a higher percentage of industry than France does, but we think that we need to rebalance even further; we want to see a growth in manufacturing, technology and aerospace, but we do not believe that we should do that by damaging the financial services industry, which employs many people not just in the City of London, but right across our country.

[Andrew Bridgen (North West Leicestershire) (Con)]

The overwhelming majority of my constituents, and indeed the country, already believe that the European Union has far too much power over the United Kingdom. Does my right hon. Friend agree with that, and if he does, is he as amazed as me that the leader of any political party in this country that claimed to be in touch with public opinion could argue otherwise?

[The Prime Minister]

rose—

[Edward Miliband]

Briefing note N.

[The Prime Minister]

I think it is briefing note N, and there is plenty in it; it is full. I think the best one in briefing note N is on whether or not the leader of the Labour party would like to join the euro. I know that the House enjoys this, so I might share it one more time: when asked whether he would join the euro, he said,

“It depends how long I'm prime minister for.”

This is the one thing that the shadow Chancellor and I, who often disagree, have in common: we are not going to let it happen.

[Mr Philip Hollobone (Kettering) (Con)]

The German Chancellor was on the radio this morning saying that she firmly expected the fiscal union to be inside the EU treaties within five years. What part of the British veto is giving her such hope and encouragement?

[The Prime Minister]

The point is that the countries that have signed the agreement want to fold it into the EU. That cannot happen without the permission of every country, and those people who say that the veto did not have effect perhaps need to explain why they want to fold the treaty back into the European Union. It seems to me that that is a very powerful point.

[Neil Carmichael (Stroud) (Con)]

I welcome the statement because of its focus on competition, the single market, and energy. It is great that the Prime Minister has demonstrated British leadership in those fields, and he has added useful advice to the discussions, but will he ensure that we continue to have dialogue with our European partners? It is absolutely essential that they know and understand where we are coming from and what we can contribute.

[The Prime Minister]

My hon. Friend is entirely right. As I have said, last night’s meeting proved that it is perfectly possible to stay out of parts of agreements that other European countries want to go into, but have real influence on the things we care about, such as the single market.

[Margot James (Stourbridge) (Con)]

I welcome the fact that the agreement places no new obligations on the UK, but is it not the case that the agreement, whatever its merits or disadvantages, should not distract us or our EU partners from the necessary task of ending the barriers in the single market and reducing regulation?

[The Prime Minister]

My hon. Friend makes an important point. Of course the eurozone countries want to see rules on fiscal discipline, but as I have said many times, it is not just fiscal deficits that have to be addressed, but trade deficits, and that is where the single market agenda can help not only countries such as ours, but theirs too.

[Joseph Johnson (Orpington) (Con)]

I welcome the Prime Minister’s commitment to trade deals with fast-growing parts of the world. An ambitious trade deal between the EU and India, which would help us double our trade with India by 2015, has eluded negotiators since 2007. Does he agree that next week’s EU-India summit in Delhi should see a clear timetable for the delivery of an ambitious deal as soon as possible?

[The Prime Minister]

My hon. Friend is entirely right, and I know that he has a lot of experience in this sphere. We are totally committed to trying to get this free trade agreement going. I think that there are real opportunities for both sides. I have mentioned the fact that we want to open up retail and services in banking and insurance in India. Frankly, we will have to do quite a lot of work to convince the Indians that that is in their interests too, but I profoundly believe that it is, as they want to be a rapidly growing success story of the future.

[Gavin Barwell (Croydon Central) (Con)]

I welcome what the Prime Minister said about applying a growth test to everything that the EU does in future. Will he tell my constituents what prospect he thinks there is of applying that test retrospectively to existing EU regulations, which the British Chambers of Commerce says costs business £7.5 billion a year?

[The Prime Minister]

It is important to try to look at some of the existing stock of regulations, but I think that one of the things that badly needs to be done in Europe is making sure that it is not just when Economic Affairs Ministers get together that we think about growth, but that when Social Affairs Ministers and Environment Ministers get together we think about the potential costs of what they are signing up to. That does not happen at the moment and badly needs to.

[Rehman Chishti (Gillingham and Rainham) (Con)]

I very much welcome the Prime Minister’s statement. My question relates to the discussions held on Syria. What action will EU member states take to protect civilians if Russia vetoes any UN Security Council resolution on the matter?

[The Prime Minister]

My hon. Friend is right to raise this matter. Clearly the Russians have taken a different view up to now and have not supported robust action at the Security Council. My right hon. Friend the Foreign Secretary is trying to build the strongest possible resolution with colleagues at the Security Council and to say to the Russians, “If you go on vetoing or preventing these motions, you will be completely outside not just world public opinion, but the very clearly expressed opinion of the Arab League itself.”

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

Is not my right hon. Friend’s strategy of rejecting the fiscal union treaty, which would not be in Britain’s economic interests, and at the same time pushing for a free trade agreement with Canada, Japan and India, which has the potential to create thousands of jobs in this country, absolutely the right one?

[The Prime Minister]

I am grateful to my hon. Friend. I think that Britain is better off outside the eurozone, but clearly we need to get trade going with parts of the world that are growing faster, which is why these trade deals are so important to us.

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

The good folk of Brigg and Goole are under no illusions about how hopelessly out of touch this House, and the Opposition side in particular, is on the European Union, but they were heartened by the Prime Minister’s veto. They are similarly under no illusion about what happens in Europe: it is where assurances are given, but ultimately breached, and a whole new set of proposals come back. What can he say to my constituents to assure them that this will not become another treaty that we end up getting sucked into?

[The Prime Minister]

We cannot be sucked into this treaty because we are out of it, and we can only go into it if all 27—soon to be 28—EU member states agree. That is the effect of the veto.

[Mr Peter Bone (Wellingborough) (Con)]

I am happy to report that Mrs Bone was singing in the bath yesterday, congratulating the Prime Minister on standing up for British interests and keeping us away from German economic domination of Europe. But she was concerned, because it must be pretty miserable for the Prime Minister to go to Europe when his Deputy Prime Minister forces him to take with him an unelected left-wing Liberal. At the next conference, would it be possible for my right hon. Friend to take a moderate constituent from my constituency—perhaps Mrs Bone?

[The Prime Minister]

I am just relieved that my hon. Friend did not ask me what happens if I am run over by a bus, which I gather is the question that he has asked everybody else. I have been warming up for that one for some time. To be fair to the Deputy Prime Minister, I do not know whether there is room in the deposition for Mrs Bone, and I would not want to get her out of her bath.

[James Morris (Halesowen and Rowley Regis) (Con)]

I welcome the Council’s statement on Iran, but does the Prime Minister agree that the sanctions that the EU has agreed on Iran really need to bite? Iran is in the last chance saloon, so at the European Council what systems and processes were agreed in relation to monitoring the implementation of those sanctions?

[The Prime Minister]

My hon. Friend is right to raise that issue. The key part of the sanctions is the oil embargo, which is a very big step for European countries to take. There is a time lag before it comes in, but I believe that it does so in July, and it is a big step, because there are countries, such as Italy, Spain and others, that have been very reliant on Iranian crude in the past. It is an important step. Europe has quite a good record of making sure that the sanctions that it imposes are put in place, but I will make sure that that happens.

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

My constituents warmly welcome the Prime Minister’s determination to protect our interests in Europe. Will he explain how the United Kingdom will, in practical terms, actually be able to prevent those countries that sign up to the fiscal union treaty utilising the European Commission and the European Court of Justice in a way that damages UK interests?

[The Prime Minister]

The guarantee that they will not damage UK interests is this. First, the treaty itself is clear that it has to be in line with EU law; it cannot override it, and it cannot get into areas such as the single market. Secondly, as I have said in answer to previous questions, if the institutions do things that are not permitted, there can be a challenge, including a legal challenge. But, above all, Britain is protected because, although others are going ahead with this treaty outside the European Union, we are not part of it.

[Chris Kelly (Dudley South) (Con)]

I thank my right hon. Friend for his statement and for bringing greater clarity to Britain’s position, because these are complicated issues. My constituents in Dudley South were very grateful for his exercise of the veto last month, but is the ECJ, as an institution of the whole European Union, not now being unjustly used?

[The Prime Minister]

As I said, in pre-existing treaties there are ways in which the European institutions can be used by groups of member states. That is a fact, and those treaties, as I said, tend to be passed by the Labour party. But, if member states go beyond that, there are real legal issues, and legal issues that I have set out; and, if that were to happen, we would be able to take action to protect our national interest.

[Stephen Mosley (City of Chester) (Con)]

I trust my right hon. Friend the Prime Minister to do what is right for Britain, but I do not necessarily trust his successors. After all, we saw the previous Government give up our hard-fought opt-out from the social chapter and give up our hard-fought budget rebate. What guarantees are there that the UK will not be sucked into this new treaty?

[The Prime Minister]

One of the best guarantees is the referendum lock, which we have in place in this country, which this House of Commons passed, which the Labour party opposed and which says that, if we propose any passage of power from Westminster to Brussels, there has to be a referendum. That is absolutely key to protecting our interests and to making sure that future Governments cannot give away powers that they should not.

[Christopher Pincher (Tamworth) (Con)]

The Prime Minister has made clear his determination to secure free trade agreements with, among others, India, but will he agree to pursue with equal vigour similar opportunities in the emerging markets of Africa?

[The Prime Minister]

My hon. Friend makes a very important point. If we look at which continents are going to grow over the next decade, we find that Africa has a very healthy growth rate and that countries such as Nigeria, South Africa, Ghana and others will grow rapidly. We already have very low tariff access from African countries to the European Union, and one thing we ought to try to encourage and look at is a pan-African free trade area, so that more of their trade can take place within Africa and they can have an effective single market, as we do in the European Union.

[David Rutley (Macclesfield) (Con)]

Given that EU regulations account for 70% of the regulatory burden on businesses, will my right hon. Friend tell the House what steps are being taken to exempt micro-businesses from EU legislation?

[The Prime Minister]

My hon. Friend makes an important point. This is a breakthrough in Europe. We have been arguing for a moratorium on new EU regulations for micro-businesses—those employing fewer than 10 people—and that was agreed to at the European Council. We need to ensure that it is put in place rapidly.

[Andrew Selous (South West Bedfordshire) (Con)]

The Prime Minister is to be congratulated on what he and others achieved with the sanctions on Iran. Will he tell the House whether there have been discussions between the European Union and Asian countries so that Iran cannot sell to Asia the oil that it is now not selling to Europe? Otherwise, we will be back to where we were before.

[The Prime Minister]

My hon. Friend is right to raise that issue. There are two things that we need to do. First, we must ensure that countries that can increase production, such as Saudi Arabia, sell more oil to the countries in Europe that were reliant on Iranian crude. We then need to persuade Asian countries that might buy Iranian crude not to do the deals that they might otherwise have planned. We need to take action on both fronts.

[Dan Byles (North Warwickshire) (Con)]

I strongly welcome the agreement to reduce regulatory burdens on SMEs and micro-enterprises. Although I do not expect the Prime Minister to give us a list today, will he tell the House when we can expect to see more detail on precisely which regulatory burdens small businesses in my constituency might see reduced and when?

[The Prime Minister]

The formal European Council on the single market, competitiveness and the economy is in March. This was a special European Council to kick-start progress on the single market. I hope that after the March Council we will have a specific list for my hon. Friend.

[Bob Blackman (Harrow East) (Con)]

I welcome the commitments to bring down trade barriers and encourage trade outside the European Union. Will my right hon. Friend expand on the opportunities that British business will have for increased jobs, trade and commerce throughout the world?

[The Prime Minister]

This is an important point. In our trade with India and China over the past couple of years, we have seen increases of more than 20%. As there is a difficult situation in European markets, we have to look to the faster-growing markets of the world to grow our exports. That means great challenges for businesses. They have to get out there and sell. The Government have to get behind them. We need to help by opening up those markets, and particularly by allowing services full access to those markets. That is why the free trade deals are so important.

[Robert Halfon (Harlow) (Con)]

Will my right hon. Friend say whether there were any discussions about the cost of oil and the geopolitical threats that might increase that cost? Will any action be taken by the EU to reduce the cost of oil and thereby reduce the price at the pump for motorists?

[The Prime Minister]

We did not discuss the cost of oil. As I have said, Saudi Arabian production is an important issue. The completion of the energy single market should help to bring energy prices down, because it will make the energy markets in Europe more efficient and ensure that there is a proper networked energy grid around Europe.

[Alun Cairns (Vale of Glamorgan) (Con)]

More than 1 million people are employed in the financial services sector across the United Kingdom. Does the Prime Minister agree that many of those jobs could have been exposed to a significant degree if he had not used his veto in December and secured the agreement yesterday?

[The Prime Minister]

It is important to remember that the financial services industry is not just the City of London; it employs 100,000 people in Birmingham and more than 100,000 people in Scotland. It is important that we stand up for those people. Obviously, there is still the danger of eurozone countries going ahead with financial transactions taxes. However, Britain is making the case strongly that there are ways to ensure that the financial services industry pays its fair share through bank levies and the stamp duty on share transactions, without having a financial transactions tax, which would drive these activities to areas of the world that do not apply it. It does not work and the European Commission has said that it does not work. That is why we should reject it.

[Mr Speaker]

I thank the Prime Minister and the House for their succinctness, which enabled 72 Back Benchers to question the Prime Minister in 66 minutes of exclusively Back-Bench time. That shows what we can do when we put our minds to it. I am grateful to colleagues.

Points of Order

Tuesday 31st January 2012 Commons Chamber

16:59

[Chris Bryant (Rhondda) (Lab)]

On a point of order, Mr Speaker. You will know that the ministerial code of conduct makes it clear that Ministers have to provide timely answers to written questions tabled by Members of the House, which is underlined by a motion of the House.

Last December, I tabled three questions to the Secretary of State for the Home Department for named day answer on 14 December, and then another two on 20 December for answer on 10 January. I have still had no reply, so last week I decided that I would table a question asking when I was going to get an answer to those questions. I was very excited yesterday to get a reply, which said, “I will reply as soon as possible.” Surely the ministerial code means that we must get substantive replies, not evasive ones that make it look as though a question has been answered when it has not actually been answered.

[Mr Speaker]

I am grateful to the hon. Gentleman for his point of order, and I would say two things in response to him. First, he is of course right that the reply that is forthcoming should be not only timely but substantive. It is not good enough for Ministers to provide holding replies in such circumstances, particularly when they are provided very late, simply saying, “I will reply as soon as possible.” It must be a substantive reply.

Secondly, moderately vivid imagination though I possess, a fact to which I made reference in responding to someone last week, I really cannot imagine a colleague whom it is more impolitic or foolish to fail timeously to answer than the hon. Gentleman, for there is no colleague more absolutely certain to make a very substantial and justified fuss about it for some considerable period after the non-event.

[Chris Bryant]

Is that a compliment?

[Mr Speaker]

The hon. Gentleman should take his compliments when they come to him. It was.

[The Parliamentary Under-Secretary of State for Justice (Mr Crispin Blunt)]

On a point of order, Mr Speaker. In the course of oral questions earlier, there were a number of questions about the deaths of Alex Kelly and Jake Hardy in youth custody, and in my replies I said that there had not been a death in custody of such a kind since 2007. Of course, that overlooked the case of Ryan Clark, who died in April 2011 and for whom an inquest verdict is still awaited. I should like to take this opportunity to correct the record.

[Mr Speaker]

I am most grateful to the Minister for doing so, and for doing so as promptly as he has. It will be noted and appreciated by the House.

Bills Presented

Department for Environment, Food and Rural Affairs (Relocation to Bristol) Bill

Presentation and First Reading (Standing Order No. 57)

John Mann presented a Bill to require the Secretary of State to relocate the headquarters of the Department for Environment, Food and Rural Affairs to Bristol; and for connected purposes.

Bill read the First time; to be read a Second time on Friday 27 April, and to be printed (Bill 279).

Department for Business, Innovation and Skills (Relocation to Sheffield) Bill

Presentation and First Reading (Standing Order No. 57)

John Mann presented a Bill to require the Secretary of State to relocate the headquarters of the Department for Business, Innovation and Skills to Sheffield; and for connected purposes.

Bill read the First time; to be read a Second time on Friday 27 April, and to be printed (Bill 280).

Department for Transport (Relocation to Birmingham) Bill

Presentation and First Reading (Standing Order No. 57)

John Mann presented a Bill to require the Secretary of State to relocate the headquarters of the Department for Transport to Birmingham; and for connected purposes.

Bill read the First time; to be read a Second time on Friday 27 April, and to be printed (Bill 281).

Department for Culture, Media and Sport (Relocation to Manchester) Bill

Presentation and First Reading (Standing Order No. 57)

John Mann presented a Bill to require the Secretary of State to relocate the headquarters of the Department for Culture, Media and Sport to Manchester; and for connected purposes,

Bill read the First time; to be read a Second time on Friday 27 April, and to be printed (Bill 282).

Department for Education (Relocation to Nottingham) Bill

Presentation and First Reading (Standing Order No. 57)

John Mann presented a Bill to require the Secretary of State to relocate the headquarters of the Department for Education to Nottingham; and for connected purposes.

Bill read the First time; to be read a Second time on Friday 27 April, and to be printed (Bill 283).

Department for International Development (Relocation to Newcastle) Bill

Presentation and First Reading (Standing Order No. 57)

John Mann presented a Bill to require the Secretary of State to relocate the headquarters of the Department for International Development to Newcastle; and for connected purposes.

Bill read the First time; to be read a Second time on Friday 27 April, and to be printed (Bill 284).

Department for Work and Pensions (Relocation to Leeds) Bill

Presentation and First Reading (Standing Order No. 57)

John Mann presented a Bill to require the Secretary of State to relocate the headquarters of the Department for Work and Pensions to Leeds; and for connected purposes.

Bill read the First time; to be read a Second time on Friday 27 April, and to be printed (Bill 285).

Department for Communities and Local Government (Relocation to Liverpool) Bill

Presentation and First Reading (Standing Order No. 57)

John Mann presented a Bill to require the Secretary of State to relocate the headquarters of the Department for Communities and Local Government to Liverpool; and for connected purposes.

Bill read the First time; to be read a Second time on Friday 27 April, and to be printed (Bill 286).

English Police Forces Bill

Presentation and First Reading (Standing Order No. 57)

John Mann presented a Bill to reduce the number of police forces in England to ten; and for connected purposes.

Bill read the First time; to be read a Second time on Friday 27 April, and to be printed (Bill 287).

Local Government (Amendment) Bill

Presentation and First Reading (Standing Order No. 57)

John Mann presented a Bill to amend the Local Government Act 1992 to allow for the establishment of unitary authorities throughout England; and for connected purposes.

Bill read the First time; to be read a Second time on Friday 27 April, and to be printed (Bill 288).

Armed Forces (Germany) Bill

Presentation and First Reading (Standing Order No. 57)

John Mann presented a Bill to require the Secretary of State to repatriate to the United Kingdom before the end of 2015 all British military personnel serving on British military bases in Germany; and for connected purposes.

Bill read the First time; to be read a Second time on Friday 27 April, and to be printed (Bill 289).

Child Benefit (Amendment) Bill

Presentation and First Reading (Standing Order No. 57)

John Mann presented a Bill to amend the Child Benefit Act 2005 to disqualify nationals of European Union member states other than the United Kingdom who are resident in the United Kingdom with children living overseas from eligibility for child benefit payments; and for connected purposes.

Bill read the First time; to be read a Second time on Friday 27 April, and to be printed (Bill 290).

Parliament (Amendment) (No. 2) Bill

Presentation and First Reading (Standing Order No. 57)

John Mann presented a Bill to make provision to limit the membership of the House of Lords to 300 unpaid members; and for connected purposes.

Bill read the First time; to be read a Second time on Friday 27 April, and to be printed (Bill 291).

Local Government Finance (Amendment) Bill

Presentation and First Reading (Standing Order No. 57)

John Mann presented a Bill to amend the Local Government Finance Act 1992 to provide for an additional council tax band applicable to second homes; and for connected purposes.

Bill read the First time; to be read a Second time on Friday 27 April, and to be printed (Bill 292).

Local Government Finance (Amendment) (No. 2) Bill

Presentation and First Reading (Standing Order No. 57)

John Mann presented a Bill to amend the Local Government Finance Act 1992 to provide for three additional council tax bands applicable to homes valued at over £500,000, £1 million and £1.5 million respectively; and for connected purposes.

Bill read the First time; to be read a Second time on Friday 27 April, and to be printed (Bill 293).

Public Sector Salaries Bill

Presentation and First Reading (Standing Order No. 57)

John Mann presented a Bill to stipulate a maximum salary for public sector employees; and for connected purposes.

Bill read the First time; to be read a Second time on Friday 27 April, and to be printed (Bill 294).

Public Sector Bonuses Bill

Presentation and First Reading (Standing Order No. 57)

John Mann presented a Bill to prohibit the payment of bonus payments to higher rate taxpayers working in the public sector; and for connected purposes.

Bill read the First time; to be read a Second time on Friday 27 April, and to be printed (Bill 295).

Corporate Tax Reductions Bill

Presentation and First Reading (Standing Order No. 57)

John Mann presented a Bill to require the authorisation by Parliament of corporate tax reductions by amounts exceeding £100,000 by Her Majesty’s Revenue and Customs; and for connected purposes.

Bill read the First time; to be read a Second time on Friday 27 April, and to be printed (Bill 296).

Ministerial and Other Pensions and Salaries (Amendment) Bill

Presentation and First Reading (Standing Order No. 57)

John Mann presented a Bill to abolish the payment of grants to persons ceasing to hold Ministerial and other offices; and for connected purposes.

Bill read the First time; to be read a Second time on Friday 27 April, and to be printed (Bill 297).

Parliamentary Standards (Amendment) (No. 2) Bill

Presentation and First Reading (Standing Order No. 57)

John Mann presented a Bill to provide that Ministerial salaries shall not exceed the basic salary paid to Members of Parliament by more than 25 per cent.; and for connected purposes.

Bill read the First time; to be read a Second time on Friday 27 April, and to be printed (Bill 298).

[Mr Speaker]

Hon. Members have a date for their diaries, and it is clear that the hon. Member for Bassetlaw (John Mann) is an exceptionally busy bee.

[Mr George Howarth (Knowsley) (Lab)]

On a point of order, Mr Speaker.

[Mr Speaker]

Order. We will come to the right hon. Gentleman. We are saving him up and we will keep the best until last.

Recall of Elected Representatives (no. 2) Bill

Presentation and First Reading (Standing Order No. 57)

Zac Goldsmith presented a Bill to permit voters to recall their elected representatives in specified circumstances; and for connected purposes.

Bill read the First time; to be read a Second time on Friday 27 April, and to be printed (Bill 300).

[Mr George Howarth]

On a point of order, Mr Speaker. Will you assist the House by letting us know whether somebody has amended the number of hours in the day on Friday 27 April?

[Mr Speaker]

Not yet, but don’t encourage them—[Laughter.] I am glad that the House is in such an upbeat and buoyant mood.

Electricity Generation (Wales)

Tuesday 31st January 2012 Commons Chamber

Motion for leave to bring in a Bill (Standing Order No. 23)

17:06

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

I beg to move,

That leave be given to bring in a Bill to provide that powers relating to energy generation in Wales be devolved to the National Assembly for Wales; and for connected purposes.

The Welsh people are very protective of their natural resources. It was the UK Government’s decision in the 1960s to allow Liverpool Corporation to drown a Welsh valley and the Welsh-speaking village of Capel Celyn that led to my party, Plaid Cymru, winning the historic Carmarthen by-election in 1966. That seismic moment in the history of these isles also led to our Scottish sister party’s securing representation in the House, and the speeding up of the political dynamic that led to the creation of devolved Government and legislatures in Scotland and Wales.

We are living in historic times, and if the British state is to survive there needs to be a radical realignment that appeases the aspirations of the Celtic peoples of these islands to govern themselves and shape their own future. In the case of Scotland, it is probably too late.

Wales is an energy-rich nation. According to the Welsh Government, we have the potential to produce twice the electricity we require for our needs. According to the Department of Energy and Climate Change here in London, we are a net exporter of electricity. Yet in Wales, energy prices are among the highest in the British state, and we have some of the highest energy poverty levels. Clearly, something is going wrong somewhere. Unfortunately, some Unionist politicians seem happy to accept that unjust situation.

The topic of my maiden speech was fuel poverty. Having worked for the CAB movement before entering the House, I became acutely aware of the blight of fuel poverty on our communities. I remember doing a radio phone-in interview for the BBC, when somebody phoned in to explain that he depended on using a hairdryer to heat his flat during the winter. The fact that using such a device is more costly than orthodox heating methods misses the point. It shows the desperation that many households face in my country.

With, according to the campaign group National Energy Action Wales, a quarter of Welsh households in fuel poverty, we need radical solutions. I would like to put it on record that I am disappointed to read reports in the press this week that the Welsh Government have decided to scrap their fuel poverty advisory body, on which I once served.

Nobody in an energy-rich nation should suffer from fuel poverty so my party and I view control of our natural resources, energy-generation planning policy and energy policy as a whole as a key element of dealing with some of the major social justice issues we face.

Control over energy policy is also a key element of our vision of creating a new, dynamic economy for our country. Indeed, sustainable development is written into the constitution of Wales as a legislative country. We reject the vision of dependence and fiscal transfers from a self-serving London elite that some of our opponents accept as an article of faith. We want a future for Wales in which we can stand on our own two feet and chart our own course in history.

Our natural resources offer huge opportunities for our country, but if those opportunities are to be realised, those resources need to be utilised in the interests of our country and our people. We cannot allow our natural resources to be pillaged for the benefit of others as our iron, coal and gold reserves were. This will be a major political dividing line for the future, and there are clear dangers for politicians who continue to treat Wales as a second-class nation.

Although responsibility for energy generating stations is completely devolved in Scotland and Northern Ireland, we in Wales have responsibility only for energy generation stations that generate up to a risible 50 MW. Where I come from politically, what is good enough for Northern Ireland and Scotland is good enough for Wales. We were given no reason in the debate I introduced last September why Wales had received such inferior status.

In the past 12 months, all three Unionist parties pledged in the National Assembly elections in Wales to increase the arbitrary 50 MW level to 100 MW for renewables. Is that progress? It is, but perhaps not at the speed I want. When given the opportunity to introduce that policy in the Localism Act 2011—schedule 13 to the Act, to be precise—the UK Government failed to introduce the pledges of their Welsh branches.

I thank the hon. Members for Ceredigion (Mr Williams) and for Worthing West (Sir Peter Bottomley) for supporting my Bill and for displaying consistency with the promises made to the people of Wales last year by their respective parties. I had hoped to amend the Act with a new clause, but alas it was not debated, so I am grateful for the opportunity to present this Bill.

There is no stronger message in Welsh politics than equality with Scotland and I look forward to using that battle cry in a different context after autumn 2014, certainly in respect of energy powers. The previous Welsh Government were in favour of increasing the limit to 100 MW, as are the Labour Government in Wales in relation to renewables. Civic and environmental organisations also support the policy—the Campaign for the Protection of Rural Wales and Friend of the Earth included it in their National Assembly manifestos.

The communities I represent in Carmarthen East and Dinefwr also support the policy. My constituency contains two of the seven strategic search areas earmarked for renewables developments in Wales in the Welsh Government’s 2005 technical advice note 8—TAN 8—policy document. That was a crude exercise if the truth be told, with lines drawn on a map, mostly on Forestry Commission land, to earmark where onshore wind developments would henceforth be located.

The major problem is that developments above and below the 50 MW threshold are decided by different planning criteria. Those below the limit are processed by the local planning authority, which in this case is Carmarthenshire country council, and those above the limit are, for the next few months, the preserve of the Infrastructure Planning Commission. They will be the preserve of UK Government Ministers thereafter.

I am delighted that the UK Government scrapped the IPC in the Act. Indeed, scrapping that body was one of my major pledges during the last Westminster elections. I am delighted that the coalition Government have delivered for me on that one, but the key question of where those powers should reside has left me and my constituents extremely disappointed. Instead of devolving the powers to Wales, the UK Government have retained them within the Department of Energy and Climate Change here in London, in the hands of Ministers far removed from the issues in the communities that I represent.

TAN 8 area G is located in the Brechfa forest in north Carmarthenshire, an area that is world famous for its rally car stages. At least three major developments are to be located within the area. The first—the Alltwalis scheme—was below the 50 MW level. As a result of a string of problems associated with that development, my party’s councillors on the local authority have been presenting mitigating measures to improve the local planning authority’s policies to protect the communities of the affected area,. They include introducing a substantial buffer zone and operating conditions. This is called democracy—when local politicians react to the problems faced by those they serve.

However, the remaining developments are above the 50 MW level and will be determined by Ministers in London. The improvements to planning policy that we are working on in Carmarthenshire will not be adopted here. Development will be very much a free-for-all, with no protection for local residents. Indeed, in answer to a written question from me, the Secretary of State has not even bothered to visit the development in my constituency to gauge the concerns of those affected. That is clearly unsatisfactory. What faith can my constituents have in a system that gives them absolutely no control over developments on their doorstep? How can a system under which major planning decisions are taken by an alien Westminster Government, and not by democratic bodies in Wales, be just?

The Bill will mean the people of Wales gaining control over the Crown Estate in Wales so that the huge potential of tidal and wave power on the Welsh coastline is utilised as part of our energy strategy. Control over our energy resources matters because, without it, we are limited in what we can do to reach our potential as a country, to grow a new economy for Wales and to help the vulnerable.

I would like to finish by quoting that great Welsh political philosopher D. J. Williams, from Rhydcymerau, in my constituency. This is a translation, and I hope the great man will forgive me:

“It may be said that there is a divine right to anything on earth. The right over the land of Wales belongs to the Welsh nation, and no alien, whoever he be.”

Diolch yn fawr iawn.

17:16

[Albert Owen (Ynys Môn) (Lab)]

I rise to oppose the motion and do so as someone who is pro-devolution, pro-Welsh and pro-UK, and I can hardly be called the London elite.

[Hywel Williams (Arfon) (PC)]

Only when you’re doing somersaults.

[Albert Owen]

I will come to somersaults in a minute.

I believe in practical devolution. Less than 12 months ago, a referendum was held on giving the National Assembly for Wales extra powers in areas that were already devolved. I and the Labour party supported that, and I worked alongside the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards). That referendum gave the National Assembly for Wales the tools to carry out and deliver, which is the Welsh Government’s priority, and rightly so. They are delivering in the areas of health, education and economic development, and I want to see them work in partnership with the UK Government and local government.

In no area is it more important to work in partnership than on energy, where responsibilities for large infrastructure reside at the UK level, while planning and environmental issues are shared between the Welsh Government and local government. The present balance is right. Energy security is one of the biggest issues facing the UK. We need a proper UK strategy on generation, transmission and developing new technologies as we move—I think this is the aim of everybody in the House—towards a low-carbon economy.

The hon. Gentleman often says that Wales is a net exporter of electricity, and he did so again today. However, he often fails to mention—he did so again today—that between 32% and 40% of the electricity used in Wales is produced from nuclear power at Wylfa in my constituency. My constituency is in line for a new Wylfa B power station, which could produce three times the current level of nuclear power and make Wales self-sufficient in low-carbon nuclear power, as well as creating hundreds of jobs.

Plaid Cymru’s policy on nuclear power is as clear as mud. Its leader—my Assembly Member—supports nuclear power on Anglesey. Its president told me on Friday that she and her party were against it. I believe that the party’s parliamentary leader, the right hon. Member for Dwyfor Meirionnydd (Mr Llwyd), is in favour of it. Talk about mixed messages!

What is needed on energy policy is clarity and stability to attract the right investment and deliver a low-carbon economy. Whichever Government are in power in Westminster, electricity market reform is needed to deliver investment in grid infrastructure, transmission, generation and new and established technologies for the future. As a member of the Energy and Climate Change Committee, I hear regularly from experts and academics, the industry and environmentalists about the need for clear policies at the UK level.

The Labour party supports increasing the Assembly’s devolved powers over renewable energy. We put that in our Assembly manifesto and argued for it in the House when we debated the Energy Bill—my hon. Friend the Member for Ogmore (Huw Irranca-Davies) did so—but unfortunately it was not taken up. Nevertheless, this House is the place to debate energy issues, and there will be opportunities for that in the future. My party will argue that line consistently. However, some renewable technologies, such as biomass and wind technology, are growing considerably, and we need to consider devolving to the Welsh Assembly Government powers in respect of larger megawatt capacities.

As the Minister of State, Department of Energy and Climate Change, the hon. Member for Wealden (Charles Hendry) knows, my area aspires to be an energy island—it has adopted that concept—and in partnership with the Welsh Assembly Government is working to become an energy enterprise zone in order to create jobs and encourage the technologies and research and development in Anglesey. All levels of government are working together on that. That is a microcosm of how the UK is developing its technologies to meet its low-carbon objectives. And yes, nuclear energy is at the core of that.

That case is a good example of partnership working between the Welsh Government, all levels of government and stakeholders, and I believe that it strikes the right balance. Such a clear demarcation line is what is needed, and it is what businesses, including international businesses wanting to develop and invest in Wales and the rest of the United Kingdom, say that they want. However, the ten-minute rule motion is far from clear and sends the wrong messages to investors who want to invest in my constituency, in Wales and in the rest of the United Kingdom. I urge right hon. and hon. Members to oppose it.

Question put (Standing Order No. 23).

17:22

Division 445

Ayes: 44

---

Liberal Democrat: 30
Conservative: 4
Democratic Unionist Party: 3
Plaid Cymru: 3
Labour: 2
Scottish National Party: 2
Social Democratic & Labour Party: 1

Noes: 239

---

Labour: 149
Conservative: 87

Local Government Finance Bill

Tuesday 31st January 2012 Commons Chamber

[3rd Allocated Day]

Further considered in Committee

[Dawn Primarolo in the Chair]

Clause 8

Council tax reduction schemes

17:34

[Mr Nick Raynsford (Greenwich and Woolwich) (Lab)]

I beg to move amendment 79, page 4, line 35, at end insert—

‘(1) Each local authority in preparing its council tax reduction scheme should start on the basis that, all other factors being the same, the total cost should be no greater or less than in the previous financial year.’.

[The Second Deputy Chairman of Ways and Means (Dawn Primarolo)]

With this it will be convenient to discuss the following:

Amendment 85, page 5, line 19, at end insert—

‘(5A) Any grant payable to a local authority in England in support of a council tax reduction scheme for a financial year beginning with 1 April 2013 shall not be less than the amount paid in council tax benefit subsidy for the financial year beginning with 1 April 2012.

(5B) The total amount of any grant payable to a local authority in England will be assessed each year or financial year beginning with 1 April 2013 in line with the Government’s New Burdens Doctrine.’.

Amendment 80, line 31, at end insert—

‘(5A) The Secretary of State must ensure that local authorities receive no less in subsidies under the council tax reduction schemes than they would have expected to receive under the earlier scheme.’.

Amendment 78, in schedule 4, page 49, line 39, at end insert—

‘(2A) In circumstances where a deficit arises in the billing authority’s collection fund the authority shall be able to make an application to the Secretary of State for a payment to cover that deficit.’.

New clause 11—Payment of additional grant

‘The Secretary of State shall be required to pay an additional grant to a local authority if, at the end of any financial year, the total expenditure incurred by the authority under any scheme approved pursuant to Schedule 4 of this Act is greater than the amount of grant received from the Secretary of State to fund the scheme. The amount paid to the authority shall be the difference between the sum originally received and the total cost to the authority of the scheme.’.

[Mr Raynsford]

Amendment 79 and the linked amendments, 78 and 80, aim to put this part of the Bill, which devolves responsibility for council tax rebates to local authorities, on the same basis as the earlier parts of the Bill, which we have debated over the past two weeks. Those parts sought to localise business rate revenue. Hon. Members will recall that, during the debates on the business rate localisation, Ministers were emphatic in insisting that the baseline from which the new business rate arrangements would operate should not involve any local authority losing revenue. In other words, the scheme was designed to be revenue neutral in year 1. That is precisely what the amendments seek to achieve for the new local council tax reduction schemes.

My hon. Friend the Member for Sheffield South East (Mr Betts), the Chair of the Select Committee, seeks to achieve a similar result through his amendment 85, which is linked to this group. My hon. Friend the Member for Warrington North (Helen Jones) has tabled new clause 11, also linked to this group, which seeks to protect local authorities from any additional costs that might fall on them during the course of a year. That might happen, for example, as a consequence of more people becoming eligible to claim benefits if a local factory were to close, or if more people were to lose their jobs for other reasons. Currently, local authorities are reimbursed for unforeseen expenditure, and Government grant meets the full cost of the benefit scheme, which is of course an integral part of the overall national scheme of welfare benefits, including housing benefits, that are the responsibility of the Department for Work and Pensions.

Some would query the logic of separating council tax benefit from the other benefits at a time when the Government are arguing for simplifying the whole benefit structure through the universal credit. However, I do not propose to pursue that argument today. There are good reasons for localising this aspect of benefits to local authorities, but there is no justification for doing it in a way that imposes harsh cuts in benefits from the outset and leaves local authorities, and therefore benefit recipients, vulnerable to further cuts because they have to take the downside risk of any increased expenditure caused by additional benefit claims in-year.

[Andrew Gwynne (Denton and Reddish) (Lab)]

Do not the Government’s proposals introduce some quite substantial financial risks for local authorities, not least that there are no real needs-based criteria for authorities, as we discussed in earlier sittings of the Committee? Every local authority is different in its make-up and economic circumstances might change within financial years, so there needs to be a mechanism to reflect that need.

[Mr Raynsford]

My hon. Friend makes an important point about the assessment of need. The framework imposed by the Government will certainly require local authorities to make very deep cuts in benefit payments to certain categories of people. We will go on to explore some of the implications in later debates; suffice it to say for now that it really is a travesty of localism to say to local authorities, “We are giving you this new responsibility, but we are shackling your ability to do the job properly by imposing, first, an immediate 10% budget cut and, secondly, a total transfer of risk for any future increases in cost; and, thirdly, by requiring you to do this to a rushed timetable that does not allow you adequate time to consult local residents to test the impact of different models for the new scheme, posing a serious risk that the software will not be ready in time to allow orderly implementation.” I am afraid to say that this is a very sad example of a badly conceived scheme being rushed through by a Government who are not themselves going to face the consequences. Local authorities will face the consequences of a lot of very angry and very unhappy residents.

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

On that point, does my right hon. Friend agree that the Government know exactly what they are doing and that they are doing it so that when people get angry locally, the Secretary of State can stand by and say that it is not his fault, but the local council’s fault?

[Mr Raynsford]

My hon. Friend makes a very good point. Frankly, I am very surprised indeed that Lib Dem members of the coalition are going along with this—[Interruption.] I am pleased to hear the hon. Member for Portsmouth South (Mr Hancock) say what he does; I hope he will demonstrate that in the Division Lobby later.

I am surprised that Conservative Members who have experience of local government, and who must be well aware of the pressures that the Government’s measures will impose on their local government colleagues, are prepared to support such a draconian and ill-thought-out package. Cutting 10% of the cost of council tax benefits at the outset is bad enough, but obliging councils to take the downside risk of a further rise in costs in-year, and imposing conditions that will inevitably force heavier cuts on some categories of recipient, adds insult to injury.

To cap it all, imposing an unreasonably tight implementation timetable without allowing adequate time for local authorities to prepare demonstrates a cavalier disregard for the interests of those authorities, which, not surprisingly, are demonstrating growing alarm. The Government should pause to think about why local authorities, which ought to be welcoming a measure whose intention is localist, are expressing such grave reservations about the implications of this scheme.

[Mr Mike Hancock (Portsmouth South) (LD)]

Let me first declare my interest as one who is still a member of a local authority.

Is the right hon. Gentleman, like me, aware that some authorities have expressed the fear that they will have to make cuts in this year’s expenditure to prepare the ground for the implementation of the measure? Once again, the Government are showing no semblance of care about what they are imposing on such authorities.

[Mr Raynsford]

The hon. Gentleman makes a very good point. Any prudent local authority treasurer who takes account of the element of risk that is being transferred will inevitably say that there must be cuts in addition to those required by the Government, to provide a cushion against possible circumstances that cannot yet be anticipated.

Amendment 79 requires local authorities, in planning their council tax rebate schemes, to start from the premise that, all other factors being equal, the overall cost of the new scheme should be no more and no less than the cost in the previous year. In other words, it requires a neutral baseline that avoids arbitrary cuts, but also protects Government against the risk that local largesse will increase their own costs. That arrangement is utterly fair, and will operate in just the same way as the arrangement that we all agreed was appropriate for the introduction of the localisation of the retention of business rates.

The system that I propose will not inhibit local authorities from making changes in the current rebate scheme to reflect their local circumstances or priorities. Provided that the overall effect is cost-neutral, they will be free to make as many changes as they wish. This is a truly localist approach, allowing local discretion without imposing unreasonable and arbitrary central diktats.

Amendment 80 refers to central Government support for local expenditure on council tax rebates. It requires the Secretary of State to ensure that local authorities receive no less subsidy than they would have expected under the previous scheme. Again there will be a neutral baseline: a starting point at which the Government will not be exposed to higher costs, but equally local authorities will not be exposed to the risks that are implicit in the Government’s proposals. Amendment 78 is designed to cover the risk of unforeseen increases in expenditure in-year if the number of claims increases by making it clear that authorities may apply for reimbursement of those costs.

[Bob Blackman (Harrow East) (Con)]

Having read amendment 78, I assume that if it were passed any losses on collection of council tax would enable a local authority to apply to the Secretary of State for reimbursement. As the right hon. Gentleman will know from his long experience, the effect would be to cause virtually every local authority in the country to suffer losses on council tax collection. His amendment would open the door for every local authority to apply for reimbursement.

[Mr Raynsford]

If the hon. Gentleman looks carefully at the wording of the amendment, he will see that it allows local authorities to apply, but does not require the Secretary of State to pay. In new clause 11, my right hon. Friend the Member for Leeds Central (Hilary Benn) proposes to go further by requiring the Secretary of State to reimburse. I can see the logic of that, but it is open to the criticism that the hon. Gentleman has advanced. I hope he will accept that I have framed my amendment in an extremely moderate way, in order to make it clear that there should be a presumption that if costs are increased through no fault of the authority involved—not as a result of a failure to collect the money owed to it, but because of circumstances outside its control such as an increase in the number of unemployed people in the area—it should be able to seek reimbursement. The amendments are silent on the obligation of the Secretary of State to meet such applications. Some might say my proposals are rather too moderate, and that I should have shackled the Secretary of State, but I hope Members on the Government Benches will realise that I have tried to frame a very moderate series of amendments that simply seeks to create a neutral starting baseline and to avoid the draconian cuts that will otherwise be imposed on local authorities.

These are sensible amendments that should command the support of the Committee, and certainly of everyone who understands, and sympathises with, the needs of local government.

17:45

[Mr Clive Betts (Sheffield South East) (Lab)]

I support the amendments of my right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford), and I also agree with what he said. Amendment 85 stands in my name and seeks to achieve similar ends to my right hon. Friend’s amendment 79 and consequent amendments. My amendment seeks to localise council tax on the basis that local authorities will have the same amount of money in 2013 as in 2012-13, so that we have a consistent base from which to develop and implement the new scheme.

I am in favour of localising council benefits and of not incorporating the reduction scheme into the universal credit scheme. I know that there are differences of view on that even within parties, but linking council tax benefits with the term “benefit” has discouraged many people from applying for something to which they are entitled. In the previous Parliament, the Select Committee conducted an inquiry into the council tax benefit system and suggested that it should, perhaps, be renamed precisely because the word “benefit” discouraged some people—especially those who applied for nothing else and who were not entitled to anything else—from applying for it. After all, it has one of the lowest take-ups of any benefit, particularly among pensioners. Often, they are forgoing merely £2, £3 or £4 a week, but that can be a relatively important sum for people on relatively low incomes.

As I have said, I support the introduction of this reduction scheme and its both being clearly outside universal credit and being linked to council tax in such a way that people pay a reduced amount of that tax. I should point out that earlier today the Minister defended the imposition of an unwanted referendum for local mayors in Sheffield by his Lib Dem colleagues on the city’s council, yet he will now extol the benefits of council tax. That is a somewhat different position from the one he would have adopted only a few months ago.

Although there is general support for the Government’s proposed change, there is also a problem. If one of the aspirations of renaming the council tax benefit as the council tax reduction is to encourage more people to take it up, the consequences for local government are clear. Previously if councillors had gone out on a publicity drive to improve the take-up of what is currently known as this benefit, central Government would have paid for that. Furthermore, if more people take up the benefit—or reduction—there is a cost in that that also fully falls on local authorities. That is a perverse impact of the Government’s proposal.

[Mr Graham Stuart (Beverley and Holderness) (Con)]

Will the hon. Gentleman confirm my understanding that in a rural coastal area such as the one I represent, which has a high number of elderly people and quite a low take-up of this benefit, if there is a big increase in take-up and there is protection for the elderly, the impact on the council or on the other people entitled to the benefit would be rather large and profound?

[Mr Betts]

I could not have put it better myself; that is precisely right—there will be a perverse incentive. If a council gets the older people who are entitled to claim to do so in greater numbers, other council services will be cut, council tax might increase at some point or, if no more money is spent on the scheme, the benefits of people who are not pensioners will be affected. That is precisely the point.

The problem is not with the Government’s attempt to rebadge the scheme or to localise it, but with the 10% reduction at the beginning, all in one go, and the way in which the Government have framed the restrictions on the extent to which local authorities can implement the reduction. Local authorities can always find extra money to increase the cost of the scheme, but is the Minister really suggesting that it will be possible for any local authority in the current circumstances to find extra resources at a time when services all round are being cut for reasons we all know about?

The 10% restriction or cut in the available Government funding comes in from day one in 2013. Pensioners are going to be protected, and no one in the Opposition is going to argue about protecting pensioners because we want to increase the number of pensioners taking up their entitlements, but that obviously means that the 10% reduction will fall on other people who claim the reduction. That is self-evident. I asked the Minister about this yesterday, because the Local Government Association has kindly put forward the information that about half those claiming the benefit are pensioners, which means that half are not pensioners. So if pensioners are protected, that means a reduction of about 20% for other claimants, does it not?

[Andrew Gwynne]

My hon. Friend makes an excellent point. Is it not worrying that if one section of society is to be prioritised, another, very needy, section is to be penalised, and does not that place councils in the very tough position of deciding who are the deserving poor and who are not?

[Mr Betts]

Absolutely. We are told that vulnerable people—perhaps people on very low incomes with children—are going to be protected, or have to be protected, by councils under the scheme, but are they going to be or not? Are the Government going to insist on that? We are not quite sure. We are told that local authorities have to take account of the tapers under universal credit, but what does that mean? Are they obliged to respect completely the 65% taper element within universal credit or not? If so, will that mean that a smaller and smaller number of people will have the totality of the cuts in benefits imposed on them? That is the reality. Will the Government explain what they think is going to happen?

[Mr Kevan Jones]

Does my hon. Friend agree that one problem that the Government seem to ignore is that a lot of the people affected will not be on benefits but will be in low-paid work and that this will be a disincentive for them to work?

[Mr Betts]

Of course it will, unless the Government are saying that those people should be exempt as well. To what extent will councils be obliged to take account of the tapers in universal credit in the system they devise? Will Ministers give a clear answer on that? If councils have to take account of it, full stop, that will really throw the onus back on attacking benefits and on reductions for the unemployed. Is that the situation? Is that what Ministers are trying to achieve?

The LGA has done some calculations to the best of its knowledge and information. It says that because of the exemptions for pensioners and others for whom the Government say local authorities cannot make reductions under the scheme, those who are left whose benefits can be reduced—the 1.3 million claimants out of the 5 million who currently claim—will lose, on average, £320 each a year. That is £6 a week being lost by people who are already on low incomes—that is why they are claiming benefits in the first place. That will be on top of any other benefit losses from any other benefit reductions the Government intend. Have the Government analysed whether that £320 figure is right? Do they contest it?

[Mr Mike Hancock]

The information from the LGA is very helpful, but it is an average. In some areas, the cut will be far worse than £6 a week because the number of pensioners and others who are protected will be greater. In some local authority areas in my constituency, people could lose upwards of £10 a week.

[Mr Betts]

The hon. Gentleman is absolutely right—the figure of £320 a year or £6 a week is an average, and there will be people who lose significantly more than that. Have the Government done any calculations to show whether the LGA figure is right or wrong? If it is wrong, will they tell us what they believe the correct figure to be? Have they done any analysis regarding the multiple withdrawal of benefits and situations when the council tax benefit reductions that come as a result of this scheme are laid on top of any other benefit reductions that hit the same families? Have they done any calculations of the total losses that such families may face?

My right hon. Friend the Member for Wentworth and Dearne (John Healey) was absolutely right the other day when he said that local authorities are getting a hospital pass here. They are getting a Government scheme with complications, in terms of the totality of the financial arrangements, of which most people will have no understanding. All that people will see is that their council’s scheme will impose cuts in their benefits. It will be councils that get the blame, and no doubt that is where Ministers will firmly put the blame, but it will be grossly and totally unfair.

Another problem is the time scales involved, as my right hon. Friend the Member for Greenwich and Woolwich has pointed out. Local authorities will not be able to work at this over a period of time. They have just over 12 months in which to consult on a new scheme, introduce it and explain it to people in their area. There is also the issue of the technology that will come with it, and we know that the technology in new systems being brought in quickly has a habit of going wrong. So not only will many people be faced with the abrupt introduction of these changes affecting their income overnight, but there will be major failings in service delivery as systems do not deliver on time and people end up without any benefit at all.

[Mr Graham Stuart]

I am grateful to the hon. Gentleman for giving way again, as I have to leave the Chamber in a moment to meet the chairman of the Commission for Rural Communities. People in rural areas earn on average less than people in urban areas, pay £100 a head more in council tax and see urban areas getting 50% more in central Government grant than rural areas. There is also a higher average age of population in rural areas, so the impact on the rural poor of further skewing could be particularly profound. Will the hon. Gentleman comment on that?

[Mr Betts]

I do not want to get into a debate about whether people in rural areas or urban areas suffer most. The reality is that people throughout the country are likely to suffer and that it will be councils, whether they are Conservative councils in rural areas or Labour councils in metropolitan areas, that get the blame, but it will not be the fault of local councillors, whichever party they represent.

Coming back to my point about speed, I say to the Minister that this is an accident waiting to happen. Some of us have been through significant benefit changes before. When Sheffield outsourced its benefits administration to Capita a few years ago there was complete chaos for 18 months. Some of us have experienced elderly people coming into our surgeries and breaking down in tears because although they have always paid their bills on time they have been unable to do so owing to the fact that their benefit application had not been dealt with appropriately. That is what will happen in the rush that the Government are embarking on. Some councils will get it right but others’ systems will fail because of the speed at which this is being done.

[Oliver Heald (North East Hertfordshire) (Con)]

Will the hon. Gentleman amplify his comments about universal credit, because I understood that with universal credit as someone went into work the taper arrangements were such that they would always be considerably better off than they were on benefits? If that is the case and those taper arrangements are to be respected by councils, surely he is wrong to say that people who are just over the limit—those who are in work and on the lowest levels of income—will be worse off.

17:59

[Mr Betts]

I am sure the Minister is far better able than I am to explain, because it was his consultation and his response that I have been trying to read. I understand that the council tax reduction scheme is separate from universal credit. The Government do not want withdrawal of council tax reduction as people get into work to affect their income as they earn more to the extent that it increases the tapers by 65% in total and therefore undermines the principle of universal credit. The Government intend the council tax reduction scheme to have regard to that, so it is likely that it will not be possible for the changes to the scheme—the worsening of the scheme—to affect people in work. More of the change and reductions in the benefits available will therefore hit non-working people of non-pensionable age. That is the explanation of the Government’s position, I think, but it would be helpful if Ministers set out their understanding.

[Alison Seabeck (Plymouth, Moor View) (Lab)]

It was interesting to hear my hon. Friend mention Capita, which was at the wrong end of the car crash of IT failings in Sheffield. Capita has stated publicly that it has concerns about this proposal and the speed at which it is being pushed forward. I am sure my hon. Friend will reinforce those concerns in his questions to Ministers.

[Mr Betts]

Absolutely. Anyone involved in developing a new system, consulting on it, explaining it and getting the technology right will have real concerns. I just hope that Ministers listen to local councils and the LGA and are prepared to say, even if they go ahead with this flawed scheme, that they will at least delay it by another year, to allow time for further thought to be given to producing a scheme that might deliver without the problems that I have identified arising.

[John Healey (Wentworth and Dearne) (Lab)]

My hon. Friend talks about the tight time scale and the argument for the Government seriously considering putting implementation back for a year. Does he accept that although it is a year today that councils have to have an approved scheme in place—otherwise they will have to use the present scheme—we do not yet know when the Government will require schemes to be submitted for approval, or how quickly they undertake to turn those decisions round, or the principles by which they will require the schemes to operate and therefore be able to get approval—

[The Temporary Chair (Mr Edward Leigh)]

Order. We are in danger of straying into the next group. Please keep in order, Mr Betts.

[Mr Betts]

My right hon. Friend is right to say that the time scale is incredibly tight and there are so many potential problems associated with the measure that Ministers really ought to think them through. In the end, the problems will be created not for councils, but for people on low incomes who need benefits simply to sustain themselves. They are the ones who will be damaged if this is got wrong.

Altering the responsibility for any future changes in the number of people claiming council tax reductions is a fundamental shift. Now, if more people claim the reductions, the Government pick up the bill; in future, councils will. The present arrangements, with the Government picking up the bill, make council tax revenue very stable for local authorities. One of my criticisms of previous Lib Dem proposals to scrap council tax and introduce local income tax was that it would make local councils’ revenue unstable, putting them at risk in times of recession, as we had in 2008, and undermining their financial base if unemployment rises. That is a real problem.

Some of us went on a parliamentary trip to the United States after the recession. We talked not only to local authorities, but to states whose budgets were cut to shreds by the recession and the associated decline in their income tax and sales tax revenues. They became unstable because they could not borrow for revenue, just as our local authorities cannot. The current compact between central and local government is that although local authorities cannot borrow for revenue, they know that their revenue will be stable. They set their council tax and they know they will receive the money—council tax has a very low rate of non-collection. That is why I understand the amendment tabled by Labour Front Benchers to compensate councils for changing revenue in-year. There is a real risk not only of longer-term instability for councils, especially those in areas that start to experience economic decline because of the collapse of a particular industry and more people therefore claiming reductions, but in the increased uncertainty for councils year on year. Councils will no longer have certainty. If they do not know whether unemployment will rise in their area and they do not know how successful a campaign to persuade more people to take up the reduction scheme will be, councils cannot forecast their revenue with the normal degree of accuracy.

Ministers do not appear to understand that. Until now, there has been a clear system in this country in which councils cannot borrow for revenue, but they can be sure that revenue will come in so they do not have to borrow. They can set their budget for the year with a good degree of certainty. Ministers appear not to have tackled that issue at all. Local government in this country has been absolutely sound and stable throughout all the recent economic difficulties. The proposed scheme introduces an element of doubt at a time of great turbulence in local authority revenues, when grants are being cut and there is great pressure on services. The Government should think carefully before adding this extra potential for loss of revenue—this extra risk—by pursuing the scheme in such a short time scale.

[Mr Robert Syms (Poole) (Con)]

I do not support amendment 79, but think it a useful vehicle for debate on an important subject. In my experience, local government is good at adapting to change, provided that it is given sufficient time to do so. I am sure that local authorities will be able to adapt to the Government’s timetable, but there are many pressures in different areas. First, most authorities are cutting spending; secondly, they will have to grapple with the 10% reduction; and thirdly, the Government have stated clearly that that should not affect pensioners. In an area such as Poole, with a heavy preponderance of pensioners, the burden will fall on a small minority of those claiming that benefit. Fourthly, as most local authorities will have to freeze their council tax, or will freeze it anyway, and have limited balances, they may well err on the side of trying to ensure that they get their figures correct and that there is no cross-subsidy in terms of the benefit falling on the council tax payer. A perverse incentive may arise to make larger reductions in support for the vulnerable than the figures necessarily entail, because authorities do not want to take the risk.

The current system is predictable in the sense that it is running and the Department for Work and Pensions can transfer money equally on a monthly basis. The direction of travel in localisation is fine and I am sure that many local authorities can draw up good schemes, but in year one the new arrangements will not be as predictable. Some authorities will draw up schemes that turn out to be more generous than they thought, and others will draw up schemes that are less generous than expected. Ministers have to consider what will happen when a scheme is got wrong, because as sure as eggs are eggs, there will be one authority that gets its figures substantially wrong and has a problem.

[Mr Kevan Jones]

The problem for authorities such as mine in County Durham, where a large number of people receive council tax benefit, will perhaps be bigger than for some of the smaller authorities, where there are relatively few council tax benefit recipients.

[Mr Syms]

I am certain that the measure will have a different effect on different authorities. We need a little bit more clarity from Ministers: will there be emergency funds that can be drawn on if there is a difficulty in the short term?

Of course, what makes it complicated is the fact that the Government are looking for savings because of the overall economic situation. We have to make savings; we are looking to make savings of £420 million, and that makes things much more difficult. Again, speaking from my experience of local government, it is sometimes in a position to deliver savings, given a chance, but as we have heard in this debate, if there is pressure on council tax and council tax benefits, something will have to give. I therefore have concerns about the Government’s direction of travel, and I hope that the Minister can reassure us that they have thought about what would happen in an emergency.

Clearly, if a local authority has to deal with a reduction and is given maximum flexibility to do so, sometimes it can deal with it, but if it is initially told, “You must protect pensioners,” the impact of the reductions may fall on a smaller number of people. We recently heard exchanges across the Chamber about universal credit; that credit may offset some of that, but that might mean that the non-working faced the worst situations. The issue needs careful thought. I am sure that the Government’s timetable can be kept to, but we have to think very carefully; if lots of new schemes are invented following consultation, some people will get them right, some will get them wrong, and some will over-egg the savings, and that may well have an impact on our communities.

The Library briefing says that the reduction might partly be an incentive for local authorities to create jobs, but I am not sure that local authorities can wave a magic wand and create jobs in six months, a year or two years. Over a period of time, if authorities have active economic development departments, build capacity on industrial estates and try to attract firms, they might be able to have some impact. However, from a practical point of view, when it comes to dealing with the problems that arise when the measures are implemented—and perhaps in the year or two after that, in what we all know will be quite difficult economic circumstances—I do not think that councils have the ability to change the number of people in or out of work in their area. That is a long-term thing, not a short-term change that can be made in months, so I have some concerns.

Poole borough council, my authority, is having to deal manfully with the need for a number of savings; dealing with the measure, on top of that, will be difficult. I hope that we get the scheme right in Poole, but if we do not, I hope that the Government have thought about how they will deal with the consequences.

[Helen Jones (Warrington North) (Lab)]

It is a great pleasure to be under your chairmanship, Mr Crausby. We have heard hon. Gentlemen on both sides of the House express real concerns about how the scheme will work in practice, and particularly about what will happen in authorities with a large number of pensioners. Hon. Friends have spoken about the need to start the scheme on the right basis—a neutral basis—and to ensure that councils are adequately funded for the scheme that they are being asked to bring in.

I want to speak about new clause 11 in particular, which seeks to address some of the real financial risks that are being transferred to local authorities. Many hon. Members will remember that last week we debated clause 3, which changed the requirement to pay a grant to a power to do so. In that debate, as in all our debates so far on the Bill, the Government refused to clarify how they would distribute money, fund local authorities and meet the costs of the duties that they seek to impose on them. That is exactly what the Government are trying to do with the localisation of council tax benefit. We are back to the old game of ensuring that the blame for their cuts is taken elsewhere. New clause 11 attempts to ensure that local authorities are reimbursed for expenses incurred as part of the council tax reduction scheme.

The 10% cut in funding that many hon. Members have referred to, along with protection for pensioners, which the Government rightly want to ensure, means that others will face much larger cuts in their benefit. We will debate many of those issues under the next group of amendments.

[Mr Kevan Jones]

Does my hon. Friend agree that that includes the 1.9 million people in receipt of council tax benefit who do not have passported benefits?

[Helen Jones]

Yes, I agree, and we will consider those people as we proceed with discussions this evening. That is the group most often forgotten about in these discussions, and the most at risk.

18:15

There is also a huge risk to local authorities; councils will find themselves bearing all the risks of the scheme, because there is to be a move from annually managed expenditure, whereby local authorities were reimbursed for correctly processed claims, to a grant—a grant, moreover, that has to come within the Government’s expenditure totals. Any rise in benefit claims—any unforeseen problems such as the closure of a major employer—will mean local councils bearing potentially large costs, with no guarantee of reimbursement from the Government.

If the Government move to multi-year settlements—it seems from the response to the consultation that they want to do so—that financial risk will simply increase. According to their response to the consultation, the Government believe that the problem can be tackled by billing and precepting authorities sharing risks, and that deficits can be tackled either by a general increase in council tax, which, as many hon. Members have said, is difficult in the current circumstances, or by allowing billing authorities to vary the amount of precept paid to precepting authorities to

“reflect any fluctuations in collection rates”,

as the Government put it. In other words, that transfers part of the financial risk not back to Government, but to another authority, thereby creating further instability in that authority’s system, and the result is likely to be cuts.

Although the Government have said that they will assess the transitional costs of the scheme—whether authorities will be reimbursed for all those costs remains to be seen, because there is not a great track record on this—that does nothing to tackle the inherent financial risks, and the built-in disincentive to encourage people to make claims. In the past, many local authorities have done excellent work encouraging people to claim the benefits to which they are entitled. I am sure that many of them will still do so, but now, if a council encourages more people to claim, it will have to bear the costs, and that is a ridiculous system.

[John Healey]

My hon. Friend is making the clear and strong case that the new scheme will increase the financial risks to local authorities. Does she accept that local authorities will therefore have to increase their financial reserves, and to do that, they will have to increase the cuts that they make to expenditure, and possibly to services?

[Helen Jones]

My right hon. Friend has got it exactly right. In fact, throughout the passage of the Bill, we have seen that much more instability will be built into the system, whether that is on business rates or council tax localisation. The inevitable consequence is local authorities building up bigger reserves, because no local authority finance officer would advise their authority to do anything else; it has to be prepared for the worst-case scenario.

[John Healey]

My hon. Friend is making the case very cogently that council treasurers will take a prudent view; does she agree that that runs completely counter to the advice that councillors are getting from the Secretary of State, who is talking about reserves being “piggy banks”, and who says:

“These untapped funds exist to ensure councils can respond to unexpected situations like the pressing need to tackle the nation’s unprecedented level of debt”?

That advice clearly runs contrary to the principles of good local government, and it simply will not and cannot be followed by councils.

[Helen Jones]

My right hon. Friend is again absolutely right. The Government are a little schizophrenic on this, saying to local authorities, “Don’t build up big reserves,” while at the same time building instability into the system, which will require local authorities to build up bigger reserves.

[Mr Mike Hancock]

I agree entirely with the point made by the right hon. Member for Wentworth and Dearne (John Healey). The real problem is that local authorities that cut their reserves will be penalised by their district auditor, who will say that cutting reserves below a certain level is not stable local government. The right hon. Gentleman is right to suggest that the Government cannot have it both ways. This is putting pressure where it is simply not needed.

[Helen Jones]

That is a very fair point. The problem is that instability is being built into the system. My hon. Friend the Member for Sheffield South East (Mr Betts) said that one of the things about local government finance in this country is that it has always been relatively stable and did not have those risks—

[Gavin Barwell (Croydon Central) (Con)]

indicated dissent.

[Helen Jones]

It is no good the Parliamentary Private Secretary chuntering away—it will have no effect. I spent years dealing with stroppy 15-year-olds on wet Friday afternoons, and he is no different.

Let us really look at this. If the Government are serious when they say, as the Housing Minister did when he spoke to the Communities and Local Government Committee, that councils should not avoid paying those who really need it, then they have to be prepared to meet the unforeseen costs. Why should a person living in a particular authority be penalised simply because a major employer in the area closes down or more pensioners claim? My hon. Friend the Member for Sheffield South East said that it is estimated that only between 57% and 66% of pensioners claim because council tax benefit is classed as a benefit. All those who are experienced in this area say that, once it is seen simply as a reduction in the bill, claims from pensioners are likely to rise. That is a good thing, but the costs have to be met, and it is unreasonable that entitlement for other people should depend on how many pensioners live in their area. They will be penalised because of an increase in council tax, cuts in other services or cuts in benefit to working-age people when the scheme is later revised. It makes no logical sense.

[George Hollingbery (Meon Valley) (Con)]

Purely for the purposes of investigation, does the hon. Lady have any figures—I understand that there will be a wide variety across councils—for the percentage of spending power that is represented by the 10% cut?

[Helen Jones]

I could give such figures to the hon. Gentleman, but I am afraid that I do not have them at the moment, and they vary greatly from council to council. He raises an important issue. Local authorities that have many council tax benefit claimants will see a bigger cut in their spending power, and that is part of the problem.

[Mr Kevan Jones]

Although £55.1 million a year is paid out in council tax benefit in County Durham, less than £3 million is paid out in Hart district council in Hampshire.

[Helen Jones]

That makes the point very well.

[George Hollingbery]

Does the hon. Lady agree that the spending power of each of those councils is incredibly different and that the percentage change in their spending power represented by a 10% cut in the council tax bill, despite the varying levels of council tax bills, might be roughly similar? We do not know.

[Helen Jones]

I do not think that is correct. We will debate that with the next group of amendments, but I will make a little progress now.

The point of a national scheme is that risk is spread. If we move to a localised scheme, we must have some way of dealing with risk, but there is no way of doing that in this scheme. The Government cannot seriously argue that the closure of a major employer, for example, is a council’s responsibility. I know that, according to the Government’s “not me, guv” approach, nothing is their responsibility, but even they must accept that they are responsible for the national economy, not Warrington borough council, Nottingham, Carlisle or anywhere else. If a major employer closes, the local authority must have some way of dealing with it.

Our new clause would ensure that the Government’s power to pay a grant is used to meet any shortfall if a scheme costs more in benefit than the Government had originally agreed to pay to a local authority. Ministers ought not to be too concerned about this, because after all they have to approve the schemes, and they are not being asked to make an open-ended commitment. They approve the scheme and how it works, but a cash-limited budget cannot cope with sudden surges in demand. In fact, the Government admit that in their own impact assessment, which states:

“If demographic changes or economic circumstances mean that eligibility for council tax support increases significantly then the consequence of switching”—

from annually managed expenditure to departmental expenditure limits—

“will be that authorities bear more of the risk of a shortfall in funds.”

The risk of a shortfall or serious economic turbulence destabilising a local authority’s finances and, what is more, the poorest people in the area having to pay the price is not something that any Opposition Member, or I suspect a few Government Members, can accept. We have tabled new clause 11 because we believe that it would deal with the problem, and it might be helpful if I let you know, Mr Crausby, that we will seek to divide the Committee on that when the time comes.

[Annette Brooke (Mid Dorset and North Poole) (LD)]

It is a pleasure to serve under your chairmanship, Mr Crausby.

On the first string of amendments, we are focusing on the 10% cut, which leads to all the other problems identified in subsequent strings. I accept that in addition to the 10% cut there are unexpected changes in the number of claimants and that apparently there is no cushion for that situation. Although I do not support the amendments that have been put forward, it is important to flag up the problems, which must not be ignored.

Let us consider the situation for a council faced with setting up a new system. Any savings it will be able to make through localisation of council tax benefit will need to be offset against the administrative costs it will incur. I accept that there must be some savings, because otherwise there would not be the same need for external audit when money is sent to the council to cover payments, but will the Minister state explicitly where the money will come from for the inevitably large cost of setting up individual schemes, particularly in the first year. There is of course the possibility that councils will work together, which would reduce the administrative costs of setting up new schemes, but they would then lose the advantage of localisation, because even an adjoining local authority will have a different demographic make-up. As soon as we focus on the 10% cut, we think about the demographic make-up.

I share some of the concerns that have been raised across the House. Once we ring-fence pensioners—we probably all agree that they should be protected—we effectively put a gearing effect on everyone else. By the time we have picked out families with a disabled member and other vulnerable groups, the reduction in council tax benefit, which might have started as an average of £2 a week, will start escalating on the backs of just a few people to £6, then £10, all depending on the make-up of the local authority area.

[Mr Raynsford]

I am finding it a little difficult to reconcile most of the hon. Lady’s speech and, in particular, her point about the impact of the 10% cut, which she clearly sees as damaging, with her earlier statement that she cannot support the proposed changes. Amendment 79 would quite simply allow the scheme to start on a revenue-neutral basis without the 10% cut, so what objection can she possibly have to it?

18:29

[Annette Brooke]

At this point in time, it is easy to put such amendments forward, but one has to identify where the money is going to come from, and I shall touch on that in a moment, because there are two sides to the issue: first, what needs to be addressed, but, secondly, how we finance it. That is quite important.

Returning to the point I was making, I wish to emphasise that we all have constituents who come to us with a breakdown of their weekly expenditure, and we all know how little there is to spare in some of those budgets, so the possibility of losing £6 to £10 of benefit is truly frightening.

[Mr Kevan Jones]

The hon. Lady talks about constituents going to her surgery. When they start going in 2013, after their benefits have been reduced, will she tell them not just that she voted in support of the measure, but that it was brought in only because the Liberal Democrats supported the Secretary of State?

[Annette Brooke]

At this stage, we are debating, and I hope all trying to be constructive about, the direction in which we would like the Bill to go, and it is important to be constructive, rather than to look for an immediate political hit.

Returning to the point I was making—

[Mr George Howarth (Knowsley) (Lab)]

rose—

[Annette Brooke]

I have given way several times, and I shall proceed in order to retain the flow of my speech. There are concerns, and it is right that we discuss how we address them.

A further concern is how the burden of the proposal is to be shared between the billing authority and any other authority that might be involved, such as a district or county council. I give the example of East Dorset district council, which last year had a revenue support grant of just £29 per head, meaning that it has very little flexibility with which to pick up any extra costs. So this is a matter not only of working with other councils, but of coming up with a clear solution to the issue.

I share the concern about whether the scheme can be introduced within the proposed time frame, which looks tight. The major software companies say that it cannot be done, but we know the timetable we are on: July for the Bill, October for the regulations and then the consultation on schemes. Can it be done? I want Ministers to address those questions and to give more thought to how the issue is going to be handled.

[Mr Syms]

There also needs to be consultation between local authorities. The hon. Lady represents two or three districts, and we in Dorset know that somebody can move from a home in Poole to one in Bournemouth or in east Dorset, but, if there are totally different housing benefit and council tax schemes in those areas, that too could have a perverse effect, so local authorities next door to each other will have to talk as well.

[Annette Brooke]

Yes, indeed. Such local authorities will need to talk to one another, and it will be difficult to get the right balance between a truly local scheme and work with adjoining authorities—I suppose I am talking about working across, horizontally and vertically. It is not clear from the Bill how a district council will cope with the issue

The string of amendments under discussion is about funding, and the concern all comes from the 10% cut. There are potential extra revenue streams, however, and they need to be addressed. I appreciate that point, given the modifications to the second homes and empty homes premiums, but it is unlikely that we will get an absolute match between the money that is lost and any money that might be gained, so we need to look at that aspect.

[Helen Jones]

Does the hon. Lady accept, however, that the second homes premium and, even, the empty homes premium do not apply in many local authorities? There are very few second homes in Warrington, so there will be no extra revenue going to the local authority from that premium.

[Annette Brooke]

The very point I was making is that there are variations throughout the whole country, so there needs to be some sort of stabilisation, contingency, transition—whatever we want to call it—because of the differences throughout the country and the possibility that the measure in the Bill will hit some very vulnerable people very hard. I make a plea to the Minister, even if he cannot give me the answers that I might want to hear today, to go away and look at all those issues, which have been raised on both sides of the House.

[Mr Kevan Jones]

It is a pleasure to serve under your chairmanship, Mr Crausby.

What we have seen from the hon. Member for Mid Dorset and North Poole (Annette Brooke) is a classic Liberal Democrat tactic: sit on the fence, give an impression—obviously with a leaflet out this weekend—of how she opposes and spoke against the proposal, and then go along and vote with the Government. I remind her, however, that if she and her Liberal Democrat colleagues choose to vote against the Bill, this Government will not get it through. Although she raises articulately the issues that will affect her local council, she cannot get away from the fact that, when these draconian proposals come in and affect many councils, including her own, there will only be one person whom they have to blame, and that will be her for voting for them.

I hope that, come the general election, people reflect on that point, because this is not about the Conservatives doing nasty things to Dorset, but about the Conservatives and Liberal Democrats doing nasty things to local government, and the hon. Lady is taking part in it. I am sorry, but I am not prepared to see her shed crocodile tears for the proposals and then troop through the Division Lobby. If she believed in what she was saying, she would vote against the measures and stand up for local government, a sector that I understand she comes from herself.

It was said last week that what local government requires is stability, and it does, but this is another example—we had one last week with the localisation of the business rate—of massive instability being introduced to local government. My hon. Friend the Member for Sheffield South East (Mr Betts) said that there was nothing wrong in principle with devolving council tax benefits to local councils, and I totally agree, but if it is brought in with a 10% cut, as the Bill proposes, and on the current time scale, it will have a massive effect on many local councils and individual recipients of council tax benefit.

[Mr Mike Hancock]

I do not agree with the benefits being devolved to local authorities, so what does the hon. Gentleman, who is arguing against localising the benefits under discussion, see as the real benefit of doing so?

[Mr Jones]

I would have no problem with a national scheme that was administered locally. The current system with the DWP is cumbersome, but I agree with the hon. Gentleman, because the Bill is going to create an absolute technicolour dreamcoat of schemes throughout the country, including some next door to one another, as we have just heard, in Poole, where two local authorities could have two completely different schemes because of their local circumstances.

However, this is a cleverly construed proposal, and we have to keep exposing what the Secretary of State is up to, because he talks about the devolution of decision making, which is what the measure is, but it is the devolution of decision making—with blame. He is instigating a cut of 10% in council tax benefits and saying to local councils, “Right, you decide how it will actually be administered.” Then, when they take those tough decisions, he will stand back and say, “It’s not my fault, it’s the local council’s fault.” I remind Government Members that that will include Liberal Democrat and Conservative councils. They will have to make tough decisions. The Secretary of State is prepared to hide behind those councils. I accept that he has written off most Liberal Democrats and does not care about them, but the effect will also be felt by local Conservatives.

Amendment 79 is actually quite modest. It states that if we are going to introduce the new scheme, we should start on a neutral basis. It asks for a level playing field so that everybody knows where they are, with no 10% cut. We will talk later about time limits. The fact that this all has to be done by 31 January 2013 will scare many local authority treasurers to death. They are having to second-guess what contingency they will need to bring the scheme in.

The Bill makes no assessment of the differences between councils. Councils with a large number of council tax benefit recipients, which are mainly in the north of England, will not only have the problem of administering such large numbers of people, but will be disproportionately affected. I will give some examples. County Durham has 63,494 council tax benefit claimants, which is 15% of the population. That costs £55.1 million. In comparison, Hart in Hampshire has only 3,029 council tax benefit claimants, which is 4.2% of the population. That costs a mere 3% of expenditure. Likewise, the famous Wokingham, which we cited last week, has only 5,159 claimants, which is 3.9% of the population. That makes up 5.3% of the council’s total expenditure. The 10% cut and the administrative nightmare of bringing it in will be a lot easier to manage for councils with a small number of council tax benefit recipients.

The Secretary of State talks about localism and devolving matters to local councils, but if we read the Bill carefully, we see that he has kept back powers for himself. If he is not happy with the scheme or a council does not implement it by 31 January 2013, he has the power, by order, to implement it. It is not clear whether he will intervene in that way if he is not happy with how a council implements the scheme.

The hon. Member for Mid Dorset and North Poole is correct that the problem with the scheme is that it comes with the 10% cut. It is important to look at the people who are in receipt of council tax benefit. The myth peddled in the media and by the Conservative party is that they are largely people on benefits. The statistics to September 2011 show that 5.9 million people are in receipt of council tax benefit in Great Britain. Of those people, 2.2 million are pensioners, who will not be affected by the scheme. Of the people who will be affected, 1.9 million or 33% are in receipt of standard non-passported benefits—that is, they are not claiming benefits—and the remaining 3.9 million or 67% are on various benefits. Of the people on benefits, 1.3 million receive income support, 600,000 receive jobseeker’s allowance, 300,000 receive employment and support allowance, and 1.7 million receive pension credit. A large number of people, through no fault of their own, will see their incomes squeezed.

18:45

Once the 10% is cut and the pensioners are taken out, if the number of recipients in an area grows through unemployment, for example, the local council will have two choices: it could cut benefits further, which is what some will do, or it could raise council tax to plug the gap. As we saw last week, the problem is that the ability of councils to raise council tax differs. In north-east England, where 50% of properties are in band A, the option for councils to raise council tax is limited, compared with Surrey, where the figure is 2%.

Will the scheme disproportionately affect councils with a large number of council tax benefit recipients? Yes it will. The 10% cut will lead to a lot of uncertainty over the next 12 months, because council treasurers do not know what income they will get. It will be difficult to bring the scheme in within the time scale set by the Government. As my hon. Friend the Member for Warrington North (Helen Jones) said, if there are large numbers of job losses in certain areas, will the councils be compensated? They will not be, under the proposed scheme. The burden will fall on deprived areas, causing them a double whammy.

When we discussed business rates last week, we talked about Alcan, a large employer in Northumberland that employs 500 people. If we lost that one employer, most of those people—most of whom live locally in Northumberland—would apply for council tax benefit. That would add a burden to the council, which is Liberal Democrat-controlled at the moment, but will not be for much longer if the proposals are passed.

The amendment is modest and asks only for a level playing field at the start. Having seen previous Governments mess around with local government finance, I warn the Minister that when things are done in haste, they always come to be regretted. I think that the Government will come to regret this proposal. When this mess happens, we need to say from day one that it is the fault not of hard-working local councillors, but of the Minister, the Government and the Conservative and Liberal Democrat Members who voted for it.

[George Hollingbery]

Some persuasive points have been made in the debate so far and I urge the Government to take them on board. However, I also find the Minister persuasive and I look forward to hearing what he has to say.

I wish to speak briefly about a funding issue that is not strictly related to the amendments. I hope that you will allow me to stray slightly off the selection list, Mr Crausby, on the basis that we are unlikely to have a stand part debate. I wish to talk briefly about parish councils. The hon. Member for Mid Dorset and North Poole (Annette Brooke) talked about horizontal and vertical integration, but I want to go downwards to look at parish councils and where their funding comes from.

At the moment, certainly in my constituency of Meon Valley, several parish councils take in council tax—or rather in precept—pretty much the same as the district council. As far as I can see from the Bill and the consultation on the Bill, there is no provision to pay any of the grant for reducing council tax to parish councils. There is mention of district councils, first-tier councils and precepting authorities such as fire authorities and the police, but as far as I can see there are no arrangements to compensate councils at parish council level for moneys they might forgo because people require council tax benefit. It seems to me that this issue needs to be dealt with.

In my area, Bishop’s Waltham and Denmead parish councils would rely entirely on the beneficence and good nature of the city council to fund their activities if they were not directly grant-aided. I would love to hear the Minister’s thoughts.

[John Healey]

It is a real pleasure to serve under your chairmanship, Mr Crausby.

I rise to support the amendments and new clause in the names of my right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford) and my hon. Friends the Members for Sheffield South East (Mr Betts) and for Warrington North (Helen Jones). The problem, which my right hon. Friend the Member for Greenwich and Woolwich hits on directly in his amendment 79, is that council tax reduction schemes will be undermined from the start by the 10% funding cut and the constraints that the Government are putting in place to compensate for the problem that it will create.

Throughout the part of the Bill dealing with council tax, we consistently see hallmarks of the scheme that run contrary to the Government’s declared aims. It shows a lack of true localism and a transfer of considerable financial risk from central Government to local government, which promises to have a severe impact on support for many current recipients of council tax benefit. The Bill also sets out an unrealistically and unfeasibly tight time scale.

The Secretary of State is more sophisticated than the image and manner that he often cultivates would suggest, but his politics on this matter are brutal and brutish. In my view, the intention is simply to transfer to local authorities the financial risk of the increasing cost of support for council tax costs. The Government want to get local authorities to take the blame for the cuts being imposed by central Government.

Financial risk is crucial for any local authority when it considers the future. Authorities are being asked to take on the new risk without the flexibility to allow them to discharge the responsibilities that they are taking on fairly, effectively or appropriately for their area. Whether the 10% cut leads to pressure on councils’ funding, pressure for them to find cash from other sources or greater cuts for those who are not protected will depend on how the cut is distributed across local authorities, local decisions on the design of the scheme, the make-up of the population within an authority’s area, the proportion of people who are protected by central Government and the degree to which the move from a council tax benefit to a council tax discount encourages take-up among people who are already entitled to support but do not claim it.

Central Government would not make this move if it affected themselves. As my hon. Friend the Member for Warrington North said, they are transferring what is currently annually managed expenditure—the current costs of the council tax benefit scheme are driven by factors that are not under the control of councils—to funding that is covered by the local government departmental expenditure limit. That will put an unrealistic and unfair funding noose around the neck of local government, because the year one base level will involve a 10% cut. My fear is that what could and should be a good move for local government and the people it serves—a locally designed council tax support scheme—is damaged and discredited before it starts by the design of the scheme.

[Mr Mike Hancock]

May I say how nice it is to see you in the Chair, Mr Crausby?

I wish to raise my concern about the fact that we are approaching 7 o’clock and will hardly get halfway down the selection list. The time available is totally inadequate. Goodness knows what the Government were thinking about, giving us just three days in Committee. It is an absolute travesty. I only hope that they will give us at least one whole day, and possibly two, on Report to allow debate on many of the matters that have not been discussed in Committee.

If the House is to do justice to the Bill, we should at least get a chance to discuss some of the very important amendments that have been tabled. I see them not as wrecking amendments but as helpful, creative amendments that would show the Government the strength of feeling in the House. Legitimate concerns have been raised from both sides of the House on this group of amendments alone, and if I were the Minister leading the Bill I would like to give the House more time to discuss them properly. If we are not careful, we will end up with a dog’s dinner, which cannot be right or fair to local authorities.

The most important issue in this group of amendments is raised in new clause 11, with which I agree entirely. It gets to the very essence of what the Committee has discussed on previous days. It is about the stability and sustainability of local government and its ability to stay clearly focused on its task. Support for new clause 11 is essential to give local authorities a fair chance of implementing the scheme.

The Government have expressed no clear and positive view about what they can do to help local authorities. I ask Ministers what is wrong with new clause 11 if they believe in fairness and in giving local authorities a proper opportunity to get the scheme right. Who will benefit if it is got wrong? No one, least of all the people who claim benefits. Most of the blame will fall on local authorities, and once again we are going down the well trodden path whereby the Government decide to disrobe themselves of their responsibilities and pass them off to local government, but forget to put the resources in place to help things happen.

I do not suppose that at the end of this debate the Minister will dish out to Members a scheme that has already been concocted, so that they can take it back to their local authorities and say, “This is the scheme we want you to use. We’ve paid for it, we’ve got it in place, and all you’ve got to do is tweak it a little. It’s tried and tested, and we’re prepared to give it to you.” That is not going to happen, is it?

[Mr Kevan Jones]

Does the hon. Gentleman not understand that the Secretary of State is a highly political individual who knows exactly what he is doing? He knows that he is going to save money by making this change, and he will give constituents in Portsmouth and Durham the impression that it is nothing to do with him but is down to the nasty councillors who are making the tough decisions.

[Mr Hancock]

The Secretary of State will be making a grave error of judgment if he thinks he is going to get away with that in Portsmouth, because I will be telling people there loud and clear where the responsibility for the change lies. Above all, I am disappointed that a Secretary of State who was groomed in politics in local authorities and who, having led one, has a fundamental understanding of their problems is not being more responsible towards something that I thought he cherished and cared for. Like the hon. Gentleman, I am disappointed, but I can assure him that people in Portsmouth will not have any illusions about where the blame lies.

Portsmouth is a local authority that is making reductions, and many hon. Members’ local authorities are in the same position. People are losing their jobs, and here we are contemplating another burden that will be placed on them with not even an indication of what it will cost to put in place. I know from bitter personal experience, having led a local authority, how much money can be lost when authorities get the wrong advice on a system. Hampshire county council squandered literally tens of millions of pounds over a 20-year period on schemes that failed in one way or another, and I do not want that to happen again.

Where is the inspiration that we ought to be getting from the Minister about how we can resolve the problem easily? Where is the offer to meet the House halfway on this issue? Nowhere. That is disappointing. If there are to be localised benefit systems, I want us to find a way to get a scheme in place in good time, but in proper time. That cannot happen in the time scale before us. If we are to have a change in the system, it must be seen to be fair and properly implementable. The scheme cannot punish those who desperately try to get into work but are on low pay.

19:00

The proposal is nothing other than a disincentive. How many of us would like to cope with losing £20 a week out of the minimum wage? How many of us would still believe that it was worth trying to continue to work? There is a disincentive, for which it is hard to find an excuse. I cannot. I hope the Minister can because I look to him to offer some wisdom about why people on a very low income, who will lose possibly as much as £20 a week, will not see the provision as specifically targeted at hurting them. I thought that we were elected to prevent that.

[Mr Syms]

I am listening carefully to the hon. Gentleman’s passionate speech. Clearly, apart from potential costs for software and computers, a scheme will have to be drawn up and publicised. All the schemes will be different, which means that there will have to be a lot of publicity locally to ascertain what people are entitled to. We need some answers.

[Mr Hancock]

I agree entirely. Some hon. Members like me, have close-knit communities that are right next to communities in other local authorities. People on one side of the road will have a different scheme from those on the other side. It will be horrendously difficult to explain why one scheme prevails in Fareham and another in Portsmouth. Indeed, the hon. Member for Meon Valley (George Hollingbery) will have great problems, given the different districts that his constituency abuts. I therefore ask Ministers to consider seriously coming back on Report with something that shows they have heard the cry from local authorities. It is heartfelt and not just for effect. The Local Government Association has not done all that work to sustain its arguments without a great deal of effort.

In the spirit of trying to be constructive, I hope that if we are to have a day—or even two—on Report, creative thinking in the Department will soften some of the provision’s effects. Otherwise, I shall vote against it not only tonight but on Third Reading.

[Mr George Howarth]

rose—

[The Temporary Chair (Miss Anne McIntosh)]

I call Gerald Howarth.

[Mr Howarth]

George—not only a different party, but an entirely different politics, Miss McIntosh.

It is a pleasure to follow the hon. Member for Portsmouth South (Mr Hancock). Both he and the hon. Member for Mid Dorset and North Poole (Annette Brooke) made a plea for constructive suggestions. I tried to intervene on the hon. Lady’s contribution with a constructive suggestion, but I think she thought that I was going to be disagreeable, and she refused to accept my intervention.

Many hon. Members have mentioned the consequences of protecting pensioners in the overall scheme, and I will not labour the point. It is important to say at the outset that nobody on the Opposition Benches and, I am sure, elsewhere, disagrees with the principle that pensioners should be protected. It is an important principle, to which we all subscribe. The difficulty that we are trying to address is not the Government’s decree that pensioners should be protected but their failure to deal with the consequences of that in the context of a 10% overall cut.

Some contributions have referred to the impact. For example, the hon. Member for Poole (Mr Syms) wanted more information about how the proposal would work in practice. I would like to rely on a briefing that the special interest group of municipal authorities—SIGOMA—has given me. It is a local government representative group, but of a particular set of local authorities. It concludes that, to protect pensioners’ council tax credit, the rest of council tax payers nationally will face a reduction of 17% rather than 10%. We are talking about averages, and we discussed the problem of averages earlier. The range means that, at the bottom end, the figure will be 13.4%, and at the high end, it will be 25.2%. Those who have concerns should take those figures into account.

I will talk about Knowsley shortly. It is a Knowsley problem—there is a distinct flavour of Knowsley to it—but every hon. Member will be confronted with it if the scheme is implemented in its current form.

[Mr Kevan Jones]

Does my right hon. Friend agree that the scheme will disproportionately affect constituencies such as his and mine in Durham, which not only have many people in receipt of council tax benefit, but a growing elderly population?

[Mr Howarth]

Yes. There might occasionally be disputes about the scale, but every demographer recognises that people are living longer and that there are therefore many more elderly people in the system.

[Mr Syms]

The right hon. Gentleman is making a powerful point, but is it not more likely that, rather than having a cut of 15% or 17% across the board, the numbers will be more limited, so some people will have a cut of 100% because not as many will qualify?

[Mr Howarth]

The hon. Gentleman is right. That underscores the point that he and others made earlier: to some extent, we are taking a leap in the dark. Several hon. Members have said that one of the difficulties with local government finance is that, when you change it, the impact is unpredictable. I do not need to rehearse the history of the poll tax to show that. The position that we are considering is exactly the same in that it is unpredictable and volatile.

[John Healey]

The effect is uncertain, but it is possible to make some projections. In my authority of Rotherham—a member of the SIGOMA group—if the pensioners are protected in the way in which the Government clearly believe that they will be, everyone else who is currently entitled to support, including many who work but get low wages, and therefore require and have a right to that support, will take a cut of not 10% but 19.5%.

[Mr Howarth]

My right hon. Friend makes a strong point, which I hope to tackle shortly.

Currently, many people, especially young people, have to accept jobs, often well below the level of their qualifications, on a minimum wage, at the same time as having to forge an independent existence from their families. I fear that they, or young couples with families, in which the principal earner is on a low wage, will be most affected and put in an impossible position, unless the discretionary powers that the Bill describes are spelled out clearly so that the outcomes cannot be arbitrary. We deserve to know at least what the Government are planning, and that should appear on the face of the Bill. Who are the classes of people? There are vague descriptions in schedule 4, but nothing is spelled out clearly.

I said I wanted to talk about Knowsley and the Liverpool city region. I am indebted to the director of finance in Knowsley for the impartial briefing he has given to me—it is a Labour authority, but he has provided advice on the basis of his financial experience and qualifications. His view is that the 10% cut combined with pensioner protection means that the benefit of other claimants will have to be cut by 18%. If there is provision for others in a local scheme—they could be singled out or ring-fenced—that 18% cut could increase to as much as a 100%, because people could be excluded altogether, as the hon. Member for Poole said.

[Mr Kevan Jones]

Does my right hon. Friend agree that those same people will also be affected by the Welfare Reform Bill? For example, some will lose money under the under-occupancy rule in addition to their losing their council tax reduction. Many such people are in work.

[Mr Howarth]

I am grateful to my hon. Friend. If he bears with me, I will cover precisely that point shortly in the context of the Liverpool city region, but I am sure the same trend applies in his constituency.

[Mr Syms]

Another question is whether we can differentiate council tax payers from non-council tax payers. What happens when there is a split household, in which one person is a pensioner and one is not? What happens when someone becomes a pensioner in-year? There will be so many months when they are not a pensioner and so many when they are. That also needs to be explained.

[Mr Howarth]

The hon. Gentleman, who is always fair and reasonable, makes a fair and reasonable point. I hope that the Ministers, who represent the two parties in the coalition, will at least take notice of the concerns that have been expressed from the Government Back Benches, even if they do not take notice of what Opposition Members say.

The Office for National Statistics estimates that pensioner take-up of Knowsley council tax benefit could be as low as 53%, but there could be a significant increase in take-up as a result of a localised scheme, which would place a disproportionate burden on other categories of people. If a greater number of pensioners take up the scheme, which is perfectly possible, the 18% I mentioned could be still higher.

My hon. Friend the Member for North Durham (Mr Jones) has been patient, so I shall speak about the effects of other measures. It is important that the changes are not taken entirely in isolation. We will talk about welfare reforms tomorrow, but a series of measures will combine to hit some of the poorest in society.

When Labour was in government, I remember the Opposition hammering us by saying, “Well, the Institute for Fiscal Studies says something different from what the Government say.” If that is good for Conservatives and Liberal Democrats when they are in opposition, it is good for Labour Members. “The Impact of Austerity Measures on Households with Children”—an IFS report published this month and produced on behalf of the Family and Parenting Institute—found that the planned changes in the tax and benefit system, including those to council tax benefit, will hit the incomes of families with children the hardest. The IFS estimates that the measures will increase child poverty by 2014-15, with the poorest families being around 10% worse off.

[Mr Kevan Jones]

Will my hon. Friend give way?

[Mr Howarth]

I will give way in a minute. I just want to finish my point. The measure in the Bill combined with other measures will have a devastating effect on some of the poorest families in our communities.

[Ian Mearns (Gateshead) (Lab)]

This morning at the Select Committee on Education, I asked the Secretary of State for Education whether his Department had done an impact assessment of the benefit changes on children’s welfare and educational prospects. He said that as far as he was concerned, that had not been done but it should be done. Is that a good idea?

19:15

[Mr Howarth]

My hon. Friend makes his point well with his experience of that Committee sitting. I absolutely agree with the sentiment behind his question.

I want to return to what the hon. Member for Mid Dorset and North Poole said on that point. She is respected on both sides of the Committee for her long and distinguished record of campaigning on behalf of children. I hope she reflects on the fact that child poverty is likely to increase because of the combined effects of the Bill and the other measures that are currently trundling their way unevenly through the benefits system.

Liberal Democrats who have spoken in the debate, and the hon. Member for Poole, made sensible suggestions to get around that problem. The problem, as many Opposition Members and others have highlighted, is that we are being asked to support a measure that contains massive uncertainty. If we get it wrong, some of the poorest in our communities will suffer the most.

My intention in speaking to the amendments is to support amendment 79, which is in the name of my right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford), amendment 85, which is in the name of my hon. Friend the Member for Sheffield South East (Mr Betts), and new clause 11, which is in the name of my hon. Friend the Member for Warrington North (Helen Jones), but I have a serious suggestion that I believe would command support on both sides of the Committee. I suggest that the provisions should be delayed until they can be aligned with the universal credit system. At that point, a realistic estimate can be made of the impact of the combined changes on those poorest families. That is the only way in which we can ensure that there is fairness in the system, and that those who stand to lose the most are not the most penalised.

I should tell Ministers, one of whom will respond to the debate shortly, that all the evidence from reputable sources suggests that the poorest people in our communities will suffer the most, and that child poverty will increase. I am sure they do not want that to happen. My suggestion is therefore reasonable. I doubt they are briefed to accept it today, but I hope they will reflect on it.

[Mr David Ward (Bradford East) (LD)]

We are in the same position as we were in last week, in that we are discussing a measure to which most Members agree in principle. Perhaps not all Members agreed on business rates, but we are discussing consequences.

My understanding—we have been told—is that the sums show that the measure balances itself out nationally, whether at £420 million or £500 million.

[Mr Kevan Jones]

No it does not.

[Mr Ward]

Whether the hon. Gentleman believes it or not, that is what we are told. The real issue is the local ramifications—winners and losers area by area.

[Mr Jones]

Will the hon. Gentleman give way?

[Mr Ward]

Let me just get on. I want to develop my thoughts if I may.

[Mr Jones]

But that statement was wrong!

[Mr Ward]

It does not really matter because we are talking about local ramifications—how the measure affects each area and what each area will be required to do to make up for lost council tax benefit.

The question is where the money will come from to make up the gap, and there are a couple of answers. First, there are the new freedoms that will be extended to local authorities, and locally determined schemes will generate a lot of additional funding. Members have raised the issue of pensioners being protected, and that will pass the burden on to other people.

[Mr Kevan Jones]

Will the hon. Gentleman give way?

[Mr Ward]

No. Just sit and listen.

[The Temporary Chair (Miss Anne McIntosh)]

Order. Will the hon. Member for North Durham (Mr Jones) contain himself?

[Mr Ward]

I sincerely doubt it, but thank you, Miss McIntosh.

Members have noted that if pensioners are protected, the burden will have to be picked up by others, who may be on low incomes. [Interruption.] That is not necessarily the case, because we do not know what the new freedoms will generate, and they may generate sufficient funds to make up the gap.

As a result of the proposals, Bradford faces a £4 million loss in council tax. The figure for the funding that will be generated from the new-found freedoms, if they are extended to new areas, is actually very substantial, and it is not far off that £4 million figure.

[Helen Jones]

Will the hon. Gentleman give way?

[Mr Ward]

No.

However, that is not really the point. It does not really matter whether those two figures equate. If they do, it will be pure fluke and pure coincidence. If a local authority can generate sufficient funding from the new freedoms to cover the loss in council tax, it will be sheer fluke, and a policy cannot be based on fluke. The certainty of loss will be there, without the certainty of gain. The certainty of the Government withdrawing the 10% will be there; the uncertainty of what can be generated at this time is clear for all to see.

In addition, the collection costs for the alternative sources of funding for the exemptions on classes A, C and L could be enormous. We must take account of the cost of the arrears and the cost of collecting those additional sources of funding. The Government’s position is, “Don’t worry. You may be losing council tax, but your new-found freedoms will easily generate the funds required to balance that.” However, that is simply not guaranteed authority by authority, and it is based on sources of funds that it will be difficult to collect in some cases. There are huge differences when it comes to residents telling their council, “I’ve got an empty property. Give me a discount” and residents saying, “I’ve got a second home. Please tax me.”

[Mr Kevan Jones]

There are a lot of second homes in Bradford.

[Mr Ward]

There are, actually, several hundred second homes in Bradford.

If authorities cannot generate funding from the new-found freedoms, the other answer is for them to find it somewhere else in their budget. They have this wonderful freedom to find other areas where they can balance the books. The problem is that council tax is likely to be high in areas of high need. Areas of high need will have high formula grant, and areas of high formula grant will have suffered a large cut in the local government settlement. All those things together mean that the risk, or the uncertainty people have talked about, is disproportionately likely to hit more deprived communities.

I think it was the hon. Member for Meon Valley (George Hollingbery) who said that 10% is 10%. There may be a lot more council tax in monetary terms in Durham or Bradford than in Meon Valley, but 10% is 10%. However, that is not really the issue, because more deprived, less affluent areas will be disproportionately harmed, given that they have disproportionately more council tax recipients. That is not fair, but the issue of fairness cannot be assessed until the thing has run its course, and we have developed all the possible ways that an authority may have of generating funds.

Of course, there is the issue of whether the software can be introduced, but there are also the unanswered questions. How will the future growth in claimant numbers affect the 90% base in terms of eligibility? Opposition Members talked about the low level of claims by certain groups, such as pensioners, where 65% of those who are eligible actually claim. What will the scheme do to protect authorities from the growth in claimant numbers as a result of increased take-up or deteriorating economic circumstances? What is the situation with the administration grant for council tax support? When will authorities know about that? Where is the evidence that has been collected about the relative difficulty of collecting some of the income from the new potential sources of income? Where is the evidence that that will be done?

Finally, the proposals are clearly Treasury driven. Most people here have at heart local government and the local government system. That is why we have a generally positive response to localisation measures as they affect local authorities, although we understand that local government must make a contribution to tackling the deficit, as it has through the local government settlement. However, instead of treating local authorities as cash cows, why could we not have treated them as partners in deficit reduction? Why could we not have gone go them and said, “We will keep the council tax, and we intend to reduce council tax benefit over a period of time. In the first year, having given you that warning, we will extend new powers and freedoms to you to collect tax and remove some exemptions. You will yield the money that is generated from them to the Exchequer, so you will keep your council tax, and there will be no 10% cut, but it is on its way. In the meantime, you should generate additional funds from the new freedoms you will be given and yield those funds to the Exchequer in the first year. You will then be weaned off that over a period of time.” In the spirit of the business rates, why do we not do that, with some reward to those authorities that take up the challenge of extending the council tax base by generating money from new sources?

There was a different way to tackle this issue.

[Mr Kevan Jones]

Vote against it.

[Mr Ward]

I am going to. Unlike the hon. Gentleman, I am not a party lackey. Sometimes, we have to vote the right way, not simply the way the party tells us.

19:29

[The Parliamentary Under-Secretary of State for Communities and Local Government (Andrew Stunell)]

We have had a wide-ranging debate, and I shall do my best to respond to the key arguments made, quite a few of which spilt over into subsequent groups of amendments, if I may say so. If, as a result, I miss out some of the points, I hope that hon. Members will return to them later. I look forward to it.

The amendments have one fundamental problem: they make it impossible to secure a reduction in Government expenditure on council tax support. Even the Opposition have conceded that those savings must be made in order to tackle the deficit. Spending on council tax benefit has risen from £2 billion in 1997 to £4 billion, and it is essential to bring that back under control. The savings from localisation are a vital contribution to deficit reduction, and it is essential that we have a credible deficit reduction plan. I understand the points of view expressed. It would be much easier to have this scheme without deficit reduction, but it is an unavoidable part of the scheme.

[Helen Jones]

First, does the Minister accept that the increases in council tax benefit have been driven not by an increase in claims but by increases in council tax? Secondly, will he explain why he believes that the burden of deficit reduction should fall on the poorest people?

[Andrew Stunell]

On the first point, I agree that it was due to the fact that council tax doubled while Labour was in government. On the second point, as I shall demonstrate—I hope that this expands on the point that my hon. Friend the Member for Bradford East (Mr Ward) made—the Bill not only deals with deficit reduction but creates opportunities for local authorities to collect more council tax in other areas. I will come to that in a minute or two.

Taken overall, our reforms will give local authorities a stake in providing support for council tax, which they have not had before, and will strengthen the incentive for local authorities to support residents back into employment, which in turn will reduce demand for support. Localisation gives local authorities significant control over how that reduction in funding is achieved, and it enables councils to design schemes reflecting local priorities.

I want to pick up on a point made a couple of times about whether the Secretary of State would approve schemes. The Secretary of State is not required to approve schemes, and local authorities do not have to submit schemes for approval. The important points are that the schemes should be transparent and that local authorities should be accountable to the law and local areas but not to the Secretary of State.

Amendments 79, 80 and 85 would, in effect, guarantee that there would be no reduction in funding to local authorities and leave authorities with no plan to reduce that funding. In the context of the wider deficit reduction programme, that is neither affordable nor sustainable.

[Mr George Howarth]

rose—

[Mr Raynsford]

rose—

[Andrew Stunell]

I give way to the right hon. Member for Knowsley (Mr Howarth).

[Mr Howarth]

The Minister just asserted that the Secretary of State does not have any locus in this system. Will he explain, therefore, why paragraph 2(8) of schedule 4 reads:

“The Secretary of State may by regulations prescribe other requirements for schemes”?

What is that if not the power to intervene?

[Andrew Stunell]

It is a power to intervene but the Secretary of State does not propose to intervene on schemes. [Hon. Members: “Why’s it in there then?] The Secretary of State always has reserve powers. Right hon. and hon. Members have asked what is the system of checking, of feedback and of amendment to the scheme, and that is always provided for in regulations. That is the basis on which we are proceeding.

[Several hon. Members]

rose—

[Andrew Stunell]

I want to make some progress.

It is essential that local authorities plan their schemes carefully and take account of possible changes in demand, as pointed out in the debate. As we have set out previously, we believe that those in-year pressures that hon. Members have mentioned can be managed by enabling any deficit in the collection fund to be shared between billing and major precepting authorities. Our scheme will do that. We are taking powers in the Bill to allow billing authorities to make arrangements with major precepting authorities and to vary the amount of precept to be paid to the major precepting authorities in-year to rectify any shortfall in council tax receipts. That could help to protect billing authorities, which could include small district councils—my hon. Friends mentioned that some district councils are indeed small organisations.

Amendment 85 would require the Government to carry out a new burdens assessment on their allocation of grant, but the Government have already committed to consult on their proposals for distributing the grant. We must be clear that local authorities have to make choices, but they will be able to choose whether to pass on the reduction to council tax payers, to use the flexibility over council tax, which my hon. Friend the Member for Bradford East mentioned, or to manage the reductions within their budgets.

To the best of my reckoning, 12 local authorities come within the constituencies of Members who have spoken in this debate, and 10 of those local authorities are in a position whereby if they were to take advantage of the new flexibilities over second homes and empty homes, they would achieve an income increase exceeding the 10% reduction in their council tax benefit grant. I am not saying that it is right for local authorities simply to gobble up all that money, but I want to make the point—

[Mr Raynsford]

Will the Minister give way?

[Andrew Stunell]

In a moment. I realise that I failed to give way to the right hon. Gentleman earlier. I will do so in a moment.

As the impact assessment makes clear, the reduction in the council tax benefit fund to local authorities in England is in the order of £420 million. Furthermore, as is also set out clearly in the impact assessment, the total of both the discounts and the other arrangements recoverable from the local tax changes also equal about £420 million. My hon. Friend the Member for Bradford East is right that there is not an exact match between the increase and the decrease, but it remains the case that three quarters of local authorities find themselves in a position whereby should they go down that route, they would have the funding.

It is also open to local authorities, however, to look elsewhere and to put additional money into their council tax reduction funding, and of course they can change the basis on which they allocate that funding.

[Mr Raynsford]

I thank the Minister for finally giving way. He previously said that the Secretary of State did not intend to use his powers to define schemes. That extraordinary claim was the reason I wanted to intervene. We will shortly come to a group of amendments dealing with the Secretary of State’s default powers and his power to impose a scheme if a local authority does not have one in place. Will the Minister tell us whether the Secretary of State does not intend to use those powers either? If so, why on earth are they in the Bill?

[Andrew Stunell]

Of course, it would be sensible to debate that matter when we come to the next group of amendments, and I look forward to it. I want to make it clear, however, that the Bill states that if a local authority has failed by 31 January next year to put in place a scheme, by default the existing scheme will continue, and that is what the Secretary of State has the power to ensure happens.

Amendment 85 would require the Government to carry out the new burdens assessment, but we are already committed to doing that. We must be clear that local authorities do the job that they have been set. They have the opportunities to raise money in alternative ways and to devise a scheme that is suitable to their circumstances. As for the administrative cost, we have already made it clear that we will be fully following the new burdens doctrine that this Government have set out. The Government will therefore be working with local authorities to assess the net impact of housing benefit centralisation and the localisation of support for council tax, including the transitional costs, which will be covered, where necessary, by the new burdens doctrine.

[Mr Betts]

The Minister talks about working with local authorities. Presumably the Government have a view about that, despite what they say local authorities might be able to achieve by way of extra revenue generation. He has already admitted that at least a quarter of authorities cannot raise enough money to offset what they have lost under the scheme that we are discussing. Does he therefore accept that non-pensioners in those authorities—which are likely to be the poor authorities, with the highest percentage of people claiming council tax benefit—are going to suffer what the Local Government Association predicts will be cuts of around £6 a week?

[Andrew Stunell]

No, I absolutely do not accept that. The average reduction if local authorities do not put any extra funding into the pot, from any source at all, is £2.64 per household per week. Every local authority—even those that do not have complete recompense of the one pot of money from the other—will still get significant inputs from the discount scheme, which local authorities can, if they choose, take into account. I therefore ask the right hon. Member for Greenwich and Woolwich (Mr Raynsford) to withdraw his amendment, and I ask my hon. Friends to vote against it if he does not.

[Mr Raynsford]

We have just heard an absolutely lamentable performance from a Minister who is trying to wash his hands of responsibility for an outrageous scheme that has been designed in a way that reflects very poorly indeed on the members of the parties that comprise the coalition. This is a crude scheme which is seriously cutting the benefits that, at the moment, go to literally millions of poorer people—some in work, some over pension age, some not in work but under pension age. All those people—about 6 million nationally—are dependent on the existing scheme. The Government, in their wisdom, have suddenly imposed the idea that the scheme can be cut immediately, from year one, by 10%. They are then imposing further rules that involve a much larger cut on all those people who will not be protected by the Government’s diktat.

The Minister tries to weasel away from all that by using the figure of £2.40 or so for the average loss. He knows very well that, in proportion to the average claim that people receive at the moment, that means an average cut of 16.7% in benefits to poor people. On top of that, there are the other appalling features: all the risk being transferred to local authorities, which will have to cope with unexpected increases in cost without any Government support whatever; the possibility of an increased number of claims, because, perfectly rightly, people who currently do not claim the benefit may do so when it is no longer called a benefit and they can feel more comfortable about making a claim. Who bears the cost? Not the Government: once again, it is the local authority that has to bear the cost.

On top of that, we have the appalling timetable for implementation. The Government have not got their regulations ready. They will not have them ready, we are told, until late summer; and yet local authorities will be expected to implement this—a whole new scheme, requiring new software, new application forms and new procedures—in a matter of months. All the experts are telling the Government that it will not work and that it will be a catastrophe. Against all that advice, coming from authorities all over the country and here in the Chamber—virtually every Member who has spoken has expressed serious reservations and called on the Government to think again, delay and allow time for this scheme to be got right—the Minister just tries to dismiss it. This is a lamentable performance, and I intend to press amendment 79 to a vote, so that we can say that to the Government.

Question put, That the amendment be made.

19:44

Division 446

Ayes: 233

---

Labour: 222
Democratic Unionist Party: 6
Social Democratic & Labour Party: 2
Liberal Democrat: 2
Green Party: 1
Independent: 1

Noes: 291

---

Conservative: 243
Liberal Democrat: 46

[The Temporary Chair (Miss Anne McIntosh)]

In view of the debate that we have just had, and the nature of the next two groups of amendments, I inform the Committee that I am unlikely to allow a separate debate on clause 8 stand part.

[Helen Jones]

I beg to move amendment 66, page 5, line 6, at end insert—

‘(1A) In exercising its powers under section 1(b) the authority must have regard to the impact of the scheme on—

(a) those persons in the area who are in employment or actively seeking employment, and

(b) the levels of poverty in the area, including the levels of child poverty.’.

[The Temporary Chair]

With this it will be convenient to discuss the following:

Amendment 49, page 5, line 17, at end insert—

‘(4A) In exercising its powers under subsection (1)(b), each authority must have regard to the impact of its scheme on the living standards of those persons in its area who, prior to the introduction of the scheme, were receiving council tax benefit.

(4B) In exercising its powers under subsection (1)(b), each authority must have regard to the impact of its scheme on the living standards of those persons in its area, below pensionable age, who are in employment or are actively seeking employment.’.

Amendment 59, page 5, line 28, leave out ‘2013’ and insert ‘2014’.

Amendment 60, page 5, line 29, leave out ‘2013’ and insert ‘2014’.

Amendment 67, in schedule 4, page 47, line 6, at end insert ‘and set out the steps which the local authority will take to ensure that—

(a) persons entitled to a reduction will be made aware of their entitlement, and

(b) assistance is available to such persons who wish to make an application.’.

Amendment 56, in schedule 4, page 48, line 7, at end insert—

(e) require authorities to have regard to the impact of its scheme on—

(i) the numbers of persons in its area expected to receive a greater or lesser reduction in council tax than that which they had been entitled to receive under council tax benefit, and the amounts by which their entitlement are likely to increase or reduce,

(ii) the living standards of such persons,

(iii) the financial incentive on persons below pensionable age to seek or maintain employment.’.

Amendment 68, in schedule 4, page 48, line 15, at end insert—

‘including local charities, organisations providing advice on benefits and organisations representing older people.’.

Amendment 54,  page 48, line 39, at end insert—

(f) include estimates of the likely impact of its scheme on the living standards of those persons in its area who have been receiving council tax benefit.’.

Amendment 57,  page 48, line 44, leave out ‘2013’ and insert ‘2014’.

Amendment 58,  page 49, line 5, leave out ‘2013’ and insert ‘2014’.

Amendment 70,  page 49, line 13, at end insert—

‘In considering the need for replacement or revision of the scheme the authority must have regard to the impact of any such revision or replacement on the living standards of people in the area including—

(a) those of working age in employment and actively seeking work,

(b) those in receipt of benefits including disability benefits, and

(c) persons of pensionable age.’.

Amendment 71,  page 50, line 23, at end insert—

‘Before issuing such guidance the Secretary of State must have regard to the impact on—

(a) those of working age in employment and actively seeking work,

(b) those in receipt of benefits including disability benefits, and

(c) persons of pensionable age.’.

[Helen Jones]

This group of amendments deals with the impact of the proposed changes in council tax benefit on some of the poorest people in the country. One of the keys to this issue is something that we started to debate when discussing the previous group of amendments—the fact that people in the same circumstances will no longer receive the same type of benefit. Entitlement will depend on where a person lives and on the population of that area. That is a major change to the way that we treat people in this country. The circumstances of someone who lives in Birmingham could be exactly the same as those of someone living in Bradford, but their benefit could now be different. Someone who lives in Chichester could be treated differently from someone who lives in Carlisle.

20:00

The basic unfairness is staggering, especially when combined with a 10% cut in the funding available to local authorities. As we heard in respect of the previous group of amendments, there has been a switch from annually managed expenditure, whereby local councils were reimbursed for correctly processed claims, to grants that will have to come within the departmental expenditure limits. The impact is clear: far from achieving the Government’s stated grand aim in the consultation—to

“give councils increased financial autonomy and a greater stake in the economic future of their area”—

the measure simply transfers the financial risks to local councils and hits the poorest people hardest, especially the working poor. What is frequently forgotten in this debate, not least by the Government, is that many people receiving council tax benefit are in work.

The Government say that they want to protect pensioners—and rightly so—but the consequence of the decision, coupled with a 10% reduction in funding, means that those in local authorities with a high proportion of pensioners will suffer more than those in an area with fewer pensioners. How can that system be fair? As we heard from my hon. Friends earlier, the reductions for those of working age will range from 13.4% to 25.2%—a national average of almost 17%. Of course, that situation could get worse. The Government have said that they are minded—only minded—to base their funding on previous expenditure. As a result of that, spending will no longer rise to meet changes in demand. It is, in effect, a cash-limited system. If unemployment rises and more people need to claim, and if more pensioners claim—quite rightly under this system, as we heard earlier—that must be paid for.

[Mr Kevan Jones]

Does my hon. Friend agree that, contrary to the impression given by the Minister in his winding-up speech on the previous group of amendments—that use of the flexibility on second homes, and growing the economy, could make up the difference—the only option available to most councils is to raise council tax and that councils with a high proportion of band A properties will be at a severe disadvantage when it comes to the amount of money they will be able to raise?

[Helen Jones]

My hon. Friend is, of course, right. In trying to remedy the problem, the most disadvantaged councils will be those with the lowest tax bases. That has been true throughout all our discussions on the Bill. If demand goes up, councils will be faced under this scheme with either bearing the extra cost or, more likely, redesigning their schemes to restrict the number of those eligible. The Chartered Institute of Housing said it very clearly: council tax benefit awards will be

“squeezed precisely at the point at which there is the most need for help amongst low income households.”

London Councils estimated that if this scheme had been in place earlier, a shortfall of £400 million would have been faced in the five years to 2009-10.

The Government say that councils can do something about this. The Minister for Housing and Local Government says, in what I have to say reads like a rather garbled piece of evidence to the Select Committee, that considering whether to pass on the 10% reduction to claimants or to find the money elsewhere was “old-school thinking”—or what the rest of us might call “doing your sums”. I am sure that councils facing these cuts will have been relieved to hear that they could reduce the bill

“not by unfairly not paying people who are vulnerable and need it”,

which seems to me to be the precise effect of this scheme; no, he said, councils should be ensuring that there is

“a definite interest in starting up that new industrial estate, business park and getting economic activity going so there are jobs.”

Let me say this slowly, so that Ministers can understand it. If a firm closes down or lays off staff, a new business park does not open up the next day. People are out of work; they claim benefit; and if there is not enough money to pay that benefit, councils either have to cut what is available or find the money somewhere else from budgets already facing massive cuts. It is staggering to hear a Government who have presided over a rise in unemployment to 2.6 million and who have seen the economy flatline lecturing local councils about the need to open business parks. Only the Minister for Housing and Local Government, whose overwhelming self-confidence is matched only by the staggering depths of his ignorance, could come out with such nonsense.

It is not surprising that the Select Committee was unimpressed, saying:

“We have seen little evidence to support the hope that the new and better-paying jobs for individuals, immediately sufficient to offset the 10% reduction in the benefit budget will inevitably follow from these incentives.”

It continued to stress what we have talked about throughout this Committee stage—that

“the means of economic growth are never solely in the gift of individual local authorities.”

It is, of course, precisely the authorities that have already borne the brunt of the Government’s cuts that will find themselves in most difficulty with this council tax scheme.

The New Policy Institute estimated that five out of the 10 hardest-hit local authorities are among the top 10 most deprived areas in the country: Hackney, Newham, Liverpool, Islington and Knowsley. In the Liverpool city region, for example, the current proposals would result in cuts of between 17% and 23% for people of working age—those who are not pensioners. Let me give one example. A single person in Halton in a band A property would have to find £179.92 a year extra. In Sefton, which has a higher than average number of pensioners, a minimum reduction of 23% will be required for people of working age. A couple living in a band A property would have to find an extra £226.72 a year.

Those might not seem large sums to Government Members, but to people who have to count every penny, who sometimes run out of money before the end of the week, they are simply impossible to find. That is why we have tabled these amendments—to ensure that the needs of people of working age and those in poverty are taken into account. Where is this extra money going to come from? Do Government Members believe that it can be somehow magicked out of thin air? This does not even provide incentives to work, even if there were jobs to go to. The Government are not clear about the vulnerable households that should be protected. They have made it clear that they want to protect pensioners, but they are singularly unclear about other vulnerable groups. If, as is likely, local authorities will have to protect those on employment and support allowance, jobseeker’s allowance and income support, there will have to be an even bigger cut for the unprotected group—overwhelmingly the working poor. We have a Government who claim that they are freezing council tax, but they are actually increasing it for those least able to pay.

[Heidi Alexander (Lewisham East) (Lab)]

Some people who pay no council tax at present may find themselves paying it for the first time, while others who pay some at present may find themselves paying more. It is hugely, and sadly, ironic that, while claiming that they are enabling councils to freeze tax, the Government are increasing it for the poorest members of our communities.

[Helen Jones]

I could not have put it better myself. An especially ridiculous aspect of the proposals is that the extent to which a council is hit will depend largely on the number of pensioners who live in the area. It is essentially a matter of chance. Moreover, if people on passported benefits are protected, it is possible that those in work will face a cut of up to 40%, which would wipe out any gains from the raising of personal allowances. The Government have absolutely no right to boast about a tax cut when they give with one hand and take with the other.

We are attempting to ensure that at least the needs of those of working age are not forgotten when councils draw up the scheme. I fully accept that Labour councils will try to do that anyway, although they have been hamstrung by the Government, but I do not believe that Government Members have demonstrated during our debates on the Bill that they understand how much these sums mean to the very poorest people. If I may use the Prime Minister’s words, they do not get it. They do not understand what it is like to run out of money before the next wage packet or benefit payment. They do not understand what it is like to have to choose between paying a bill and buying the children a new pair of shoes.

[Mr Kevan Jones]

Did the Minister not make it clear earlier that he “did not get it” when he dismissed a 16% decrease in council tax benefit as though it were loose change?

[Helen Jones]

My hon. Friend has hit the nail on the head. The problem is a lack of understanding of the fact that trying to find even an extra couple of pounds a week is simply impossible for those on such tight budgets.

This ill-thought-out scheme, which even Government Members agree is being rushed through, is full of holes. First, the Government have failed to align it with their much-hyped universal credit. Most of us would assume that a universal credit would be—well—universal, but that is not the case in this instance. Council tax benefit is to be split from universal credit: there will be one national scheme, another local scheme, two sets of administrative costs, and a huge scope for anomalies. Secondly, the Government are introducing a 10% cut while protecting pensioners. Thirdly, they want schemes that will not create work disincentives.

In a parliamentary answer to my right hon. Friend the Member for Leeds Central (Hilary Benn) on 17 June, the Under-Secretary of State for Communities and Local Government, the hon. Member for Bromley and Chislehurst (Robert Neill) said:

“The Government intend that the general principles of supporting work incentives will be set out in guidance”

—guidance that the Secretary of State will provide, although the Minister tells us that he did not want to interfere in the schemes—

“which will help local authorities to design support.”—[Official Report, 17 January 2012; Vol. 538, c. 629W.]

How on earth can that work? Families will face two means tests, one for universal credit and one for council tax benefit, along with one set of national rules and goodness knows how many local rules. There will be one taper for universal credit; if councils fix a different taper for council tax, how can there be an integrated benefits system? If the taper is fixed at the same rate, when will it be calculated, before or after the calculation for universal credit? It simply will not work, and the people who will pay the price are the most vulnerable members of society: people who have lost their jobs, and families who are trying to do the right thing by going out to work for poverty wages. They will find themselves in an absolute mire.

20:15

[Mr Jones]

As was pointed out earlier, different councils may operate myriad different schemes. Would that not make people’s search for work more difficult? In central London, for example, some schemes might be advantageous while others would make it hard for people to move around to find work.

[Helen Jones]

My hon. Friend is right; indeed, Government Members expressed similar reservations during our earlier debate. Such a disincentive is precisely the opposite of what the Government say they want.

[Mark Tami (Alyn and Deeside) (Lab)]

It is the people my hon. Friend has mentioned—those who are on the poverty line and do not have any spare cash—who will be in arrears with their council tax. Every day in our surgeries we see people who tell us that the bailiffs are about to arrive. How can the Government’s proposals possibly help?

[Helen Jones]

They will not help those people, and they will not help councils. We discussed the financial risks for councils earlier, but one of the main financial risks is an increase in the number of defaults because people are simply unable to pay—and, indeed, there is no evenness in that situation. In North-East Derbyshire 49.4% of recipients of council tax benefit are pensioners, while in North Kesteven the proportion is 53.2%. People living there face a bigger cut than people living in, say, Luton, where the proportion is only 28.2%. The scheme will subject people to cuts that are entirely arbitrary and unfair, while transferring the risk to local authorities. Many people will find themselves in real financial difficulty, while councils’ collection rates will fall.

Amendment 67 would require local authorities to make people aware of their entitlement to council tax benefit, and to give the necessary assistance to those who wish to make an application. I believe that good councils will do that anyway, but the Bill puts such pressure on local authorities that some—albeit, I believe, very few—will be deterred from seeking out claimants and informing them of their rights. Authorities are currently reimbursed monthly for expenditure that they actually incur, but the Government intend to pay grants, and we do not know what methodology they will use to set the level of those grants. Although they have promised to set allocations annually for the first two years, there is no certainty about what will happen after that.

The Government have already said, in their response to the consultation, that

“multi-year allocations would provide greater certainty and better allow local authorities to benefit financially where demand for support was reduced over several years.”

I think my hon. Friends will see immediately where that is going, because we have seen it before. I am talking about the creation of incentives for councils to reduce claims. In a time of economic uncertainty, and when the economy is flatlining, we cannot reduce those claims by bringing in lots of jobs, because the jobs are simply not there for people to get. Not only will local authorities that are experiencing increasing unemployment or falling wages leading to new claims be penalised, but the Government are already considering how to build in incentives to reduce claims.

There will clearly be pressures on local authorities. They will take all the financial risks associated with the possibility of demand exceeding supply, and they will also have to deal with the extra costs of setting up the scheme—which may or may not be fully reimbursed—as well as the costs of revising it regularly, of notifying people about it and of appeals. That final subject has hardly been mentioned so far in our debate, but appeals could well be considerable when people find that their entitlement is being cut. If we add in the Government’s desire to move to multi-year settlements, we can all see that there is a genuine risk of the number of claims being driven down.

That is why we have tabled the amendment. We want to ensure that local authorities must take proper steps to publicise their schemes, and also that they assist those facing difficulties in applying, perhaps because of disability or because they are not sufficiently literate or numerate and do not understand the forms. We have all come across such constituency cases. Having rights is of no use if people are ignorant of them or cannot exercise them, so it is only fair and reasonable that these safeguards should be built into the Bill from the start. Through them, we hope to counter the Government’s incentives to reduce the number of claims from people who have an entitlement to benefit.

Amendment 68 seeks to ensure that before a scheme is drawn up there is consultation not only with precepting authorities and what the Bill vaguely refers to as “others” with an interest, but with organisations that assist and represent people on the receiving end of this Government’s cuts. In respect of this Bill, it is fair to say that so far such organisations have been largely ignored. The big society clearly does not include those who give up their time to assist some of our most vulnerable citizens, and who deal every day with the impact of job losses and the consequences of child poverty and try to help those for whom every day is a struggle. Any redesign of the scheme ought to take account of the views of those who will be dealing with its impact.

As has been said, the impact will be extremely severe because it will come on top of the Government’s other changes to welfare benefits. Let me give an example of a one-parent family living in a three-bedroom house in Knowsley. Assuming that they can stay in their home even though they will be more than £800 a year worse off under the Government’s changes, they will then be hit again by this scheme because in Knowsley there is likely to be a 20% council tax benefit cut. They will therefore have to find a further £170 per year. Those who deal with people in our welfare system and who give advice to people in poverty should be consulted on the design of these schemes.

We often forget the great number of children who will be forced further into poverty by this scheme. In the Liverpool city region, 14.8% of children in poverty are in working families—those claiming working family tax credit or child tax credit. Those families will also be reliant on council tax benefit. What will happen to them when this scheme comes into force is very clear. More people will be unable to pay, so there will be more pressure, more debt and quite possibly more people falling into the hands of loan sharks. Anyone who does not think that will happen has never walked around a big estate and seen how these people operate. They often wait outside the place where people collect their benefit, and take the money straight off them. That is the reality of life on the edge. That is what many of our charitable organisations and benefit advice agencies deal with every day. It is only right that they should be consulted.

Amendments 70 and 71 seek to ensure—[Interruption.] Yes, it is the same story, I say to the hon. Member for Burnley (Gordon Birtwistle), and it will be the same story for many of my constituents, and his, when this scheme comes into effect. I am terribly sorry the hon. Gentleman does not want to hear about the reality of the impact this scheme will have. That is hard luck for him, but it is even worse luck for the people who will be on the receiving end.

[Mr Kevan Jones]

Does my hon. Friend also agree that the Bill’s provisions will hit a lot of northern cities—including Burnley, perhaps—much harder than some of the leafier suburbs of the south?

[Helen Jones]

My hon. Friend is right, but many different authorities will be affected. We heard earlier from Members on the Government Benches who represent south coast constituencies where there are lots of elderly people. They and their colleagues will be very surprised when they begin to realise the impact in their own constituencies of what they have voted for.

Amendments 70 and 71 seek to ensure that in any revision of the scheme by the Secretary of State the impact on all those who may receive, or be entitled to, benefit is considered. We therefore state that it is not only those of pensionable age who need to be considered, but those in employment or seeking work and people in receipt of other benefits, such as disability benefit. We do so because although under the current scheme 5.9 million people receive council tax benefit and 38% of them are over 65, 62%—3.7 million people—are under 65. These amendments seek to put their needs on the agenda, as they appear to have been forgotten by the Government. Also, 67% of claims are passported claims—they are from people receiving income support, jobseeker’s allowance or employment support allowance, for instance. Only 1.7 million of the 3.9 million on passported benefits are receiving pension credit, so most of these people are also of working age.

Other claims—the standard claims—are decided following a means test. Crucially, people who are working may get council tax benefit, subject to an income taper. Claimants lose 20p in council tax benefit for each additional pound they earn over the applicable amount. No one knows what the position will be for those people under localised schemes. The Government may issue guidance but, as usual in respect of this Bill, we are debating this topic without knowing what the guidance will say or even if the Government’s preferred options will be affordable for local councils. All local councils will be forced to cut the benefits available to non-pensioners and, as my hon. Friend the Member for Lewisham East (Heidi Alexander) said, they could cease payment entirely to certain groups.

We believe it is right to protect pensioners but, as we are making clear in the amendments, we also believe that others’ needs have to be considered. The Government seem to want to ignore those people as they have done with every other measure they have introduced. They strive to paint a picture of people on benefits as feckless and workshy. They talk about the price paid by hard-working taxpayers as though they were somehow a different species from those receiving benefits. I have to say, as someone who would clamp down ruthlessly on benefit fraud, that the vast majority of people on benefit receive it legitimately, and that most unemployed people receiving council tax benefit have paid taxes and would like nothing better than to be in work paying them again, as would all the disabled people I meet. Those in employment who receive council tax benefit are precisely the hard-working taxpayers—people who go out every day to work in low-paid jobs—whom the Government will penalise for doing the right thing by going out to work for poverty wages.

20:31

I have had people tell me that they are not well paid in work, and I am sure other hon. Members have had the same. They know that they are on a poor wage but they go out to work because they believe it is the right thing to do and they want to set an example to their children and show what hard work means. Those people are going to be hit over and over again. It is time that the Government stopped trying to demonise people. It is time that they faced up to their responsibilities to create growth instead of trying to stigmatise people who are desperate for a job. It is time they ensured that the needs of people who are struggling either to stay in work or to get a job are properly recognised. That is why we have moved these amendments to the scheme that the Government are attempting to bring in. We want to ensure that people of working age and people in poverty, because these people are in poverty, are properly considered when schemes are drawn up or revised. I hope that the Government will accept the amendments, because if they are serious about not wanting to hit those people, there is nothing to prevent them from accepting the amendments. If they do not, we will seek at least to press amendment 66 to a vote.

[Annette Brooke]

I wish to make some brief comments and refer to the impact assessment on the localisation of council tax benefit, which looks at many of the issues raised by the hon. Member for Warrington North (Helen Jones). I note in particular that the impact assessment flags up some local authority responsibilities. The Child Poverty Act 2010 imposes a duty on local authorities to have regard to and address child poverty and, with their partners, to reduce and mitigate the effects of child poverty in their local area. The Disabled Persons (Services, Consultation and Representation) Act 1986 and the Chronically Sick and Disabled Persons Act 1970 include a range of duties relating to the welfare needs of disabled people. The Housing Act 1996 places on local authorities a duty to prevent homelessness, with special regard to vulnerable groups.

Given that local authorities have those duties on them, is there any need to propose the amendments? These issues are important for the very reasons that have been identified—the 10% cut, the different numbers and proportions of pensioners in different authorities and the different balances that mean that some authorities could get more money through the changes to discounts for second homes and empty homes. Some authorities will have great difficulty in protecting vulnerable people. The number could be quite small, but that possibility is there because of the different demographics of different areas.

I understand that local authorities might have to go through an equality needs assessment and I should like to know from the Minister how they should address these issues, which are in the impact assessment on the localisation of council tax benefit. Will there be any question of councils having to go through judicial review? It seems to me that there are going to be protections in the detail of the schemes to be introduced, but also some challenges for local authorities given the difficulties that we are outlining over and over again—the 10% cut, the different proportions of pensioners, and authorities’ different abilities to raise money with the new freedoms and flexibilities. With all those differences across areas, could some areas be faced with judicial review if they cannot address the duties placed on them by existing legislation?

[Alex Cunningham (Stockton North) (Lab)]

I support the amendments on the impact of the scheme. This debate is about people’s lives, about families and people who live on the edge financially, but it is also about local authorities’ ability to deliver services at the standards we have come to expect in our communities. It is a debacle: the Government’s proposals on council tax benefit will simply heap greater burdens on the most vulnerable households and families at a time when the Secretary of State for Work and Pensions is already making life tougher for them. I would have hoped that the Secretary of State for Communities and Local Government had at least talked to his counterpart at the Department for Work and Pensions to ensure that their policies did not conflict in the way they clearly do. The amendments would help to deal with some of that conflict.

“Make work pay.” That is what the Prime Minister has said over and over again, and he is determined to make that happen. No one could or should argue with that statement, but it is vital to create incentives so that it is always better to be in employment than on benefits. The Government’s proposals on council tax benefits will totally undermine that objective. They are simply yet another attack on hard-working families.

I know that council tax benefit is available to those on low incomes who need financial help to pay their council tax bill, but I am shocked that Ministers appear to believe that a 10% cut to the benefit will somehow—perhaps magically; we talked about magic earlier on—reduce the number of people who need it. In these harsh economic times, with high and rising unemployment as well as rising energy and food bills, this tax relief is to be squeezed precisely at the point when there is the greatest need for help among low-income households. As others have said, pensioners and vulnerable households are to be protected, and rightly so, from the cuts, but that means that the whole of the 10% saving that local authorities must make will fall on the unprotected group—mainly the working poor.

[Mr Kevan Jones]

In his response to the previous debate, the Minister suggested that gap could be filled by councils being able to levy extra tax on second homes, and his hon. Friend the Member for Bradford East (Mr Ward) said there were plenty of those in Bradford. How many does my hon. Friend think there are in Stockton?

[Alex Cunningham]

That is an interesting question, which I wish I could answer. I do not see many empty homes, never mind second homes, in our area, so I think it might be a challenge for us to find some. I am sure we have a few, but I doubt they would fill the gap as the Minister suggests they could. In an authority such as Stockton, with high numbers of older people, the burden on the people the measure hits will be tremendous.

The burden will get higher and higher on ever fewer people. In many cases, the gains made by the working poor from the recent £1,000 increase in the income tax personal allowance will be completely wiped out by the reduction in council tax benefit and the knock-on effects. Surely that is exactly the opposite of what the DWP says it is trying to do? Are the Secretaries of State talking to each other? I wonder. Alongside the rise in VAT and other benefit changes, we are faced with these regressive policies that will hit some people extremely hard—people who already work hard for little reward. These proposals are simply a slap in the face for their efforts to improve their lives.

The Local Government Association has calculated that councils are being asked to share the £500 million cut among 1.3 million claimants, which works out at an average loss of £320 each. That is a significant sum for low earners, especially when the Government claim they are trying to protect work incentives for them. It has been estimated that council tax support for pensioners makes up 50% of the total funding, and roughly a further 25% recipients would also be exempt from the reductions in support because of councils’ duties to support vulnerable groups and tackle child poverty. Such people should of course be exempt, but that could lead to the 10% budget cut falling on the remaining 25% of recipients—on the support provided to low-paid people in work. Those people are working hard for their families, trying to do their best. They have pride in what they are doing, yet this Government are just kicking them.

[Ian Mearns]

I have just had a brainwave about where an awful lot of these second homes that will fill the gap will come from. When the housing benefit changes kick in, and people are evicted from their properties because they can no longer afford the rent as the property was under-occupied, those empty properties that belong to private sector landlords will be empty second homes. Of course we can raise the revenue from them. Does my hon. Friend think that is a possibility?

[Alex Cunningham]

I have known my hon. Friend for many years, and I am used to his brainwaves, which normally apply to education. Of course, he is perfectly right.

The people who will be affected already face higher food and energy bills. Sadly, however hard they work, they are unlikely to get any of the fancy bonuses that will be pouring into the coffers of bankers and everybody else over the next few weeks and months. Quite simply, the proposals merely transfer one of the national costs of rising unemployment to councils and local taxpayers, creating a serious risk that every resident will see further service cuts beyond those already threatened.

In my constituency of Stockton North, the theoretical 10% reduction in council tax benefit will equate to around £1.2 million; within the Stockton borough, the figure is £1.7 million. In reality, as pensioners are excluded from the change, those affected are likely to suffer a 20%, rather than a 10%, reduction. I must add that Stockton-on-Tees borough council’s revenue budget, along with that of every other council across the country, already faces tremendous reductions. In Stockton, there is to be a reduction of £26.5 million. Where will it find the extra money to bolster this budget, when it will need to pay out to an increasing number of people who will have to claim council tax benefit? The cuts that the council is suffering are in addition to cuts of £12.3 million to specific grants; the early intervention grant was cut by £3 million, and of course there was the future jobs fund, which the Government do not appreciate.

Frankly, the Government are giving to those on low incomes with one hand, and taking away with the other. There is no regard at all for the implications for people’s standard of living, and people are living on the edge. I know; I see these people at my surgeries. They do not have that extra £2, £3, £4, £5 or £6 a week to spend on council tax. They need to spend that money on feeding their children. The money to pay extra council tax is not there.

The amendments would save the Government from themselves. They would help the Government to fulfil their commitment to joined-up government—that is if the Secretaries of State bother to talk to each other. The amendments would also ensure that the huge hit to the working poor did not happen. If the Government accept the amendments, they will be recognising the real need, and will have the opportunity to do something about it. Without the amendments, many more people will be plunged into poverty, undoing much of the good work that the Labour party did in government to improve the living standards of the poorest in society. The Government may well find that they have not made work pay; instead, some families will find themselves better off back on benefits and out of work. Where is the pride in that?

Furthermore, the Institute for Fiscal Studies predicts that as a result of the changes in council tax benefit, individual councils could reduce the benefits to such an extent that it would encourage low-income people to move out of the area. The think-tank also points out that the changes would create a complex, two-tier benefit system, with both local and central Government setting policy. That runs counter to the idea of the streamlined universal credit to which my hon. Friend the Member for Warrington North (Helen Jones) referred, which is being introduced by the Work and Pensions Secretary.

The incentive that changes to council tax benefit will give local authorities to encourage low-income people to move elsewhere is totally undesirable and unacceptable, yet the Government seem intent on banishing the poorest in our society from our towns and cities. Let me give one example of the chaos that could result from the council tax changes and other changes: it is estimated that 20,000 families could move out of central London to find accommodation elsewhere. What an effect that could have on jobs, children and services. If several thousand children move out of central London, inner-city schools may no longer be viable, and other areas may not have the capacity to take them in. We know that the plans of the Secretary of State for Work and Pensions will have that effect, but surely the Secretary of State for Communities and Local Government does not need to help him.

Removing council tax benefit from vulnerable people is not the answer. In-work poverty is getting worse as wages are frozen and the cost of living rises sharply. Around 61% of children living in poverty live in working households with parents who are working hard to feed them, clothe them and send them to school. The figure in 2005-06 was 50%, so more people are now working to support their families, but they are doing so on paltry incomes. Surely no one in this Committee believes that that number should go any higher. That is why the Government must think again about these damaging changes to council tax benefit and adopt the amendments that will protect, if no one else, the working poor.

20:45

[Mr Ward]

Those Members who sat on the Localism Bill Committee will not be too surprised by what I have to say. Before us is a series of amendments that seek to impose on local authorities an obligation to have regard to different categories and groups when coming up with their new schemes. The Opposition seem to be oscillating between complete outrage that the Secretary of State is using powers to impose various things on local authorities and seeking to impose through legislation requirements that local authorities do certain things before introducing their schemes.

[Helen Jones]

Is the hon. Gentleman seriously arguing that local authorities should not have regard to people employed on low wages, people actively seeking work or levels of poverty in their areas? What is the reason for that?

[Mr Ward]

Not at all. I anticipate that any local authority worth its salt would have regard to all the things proposed in the amendments. In fact, that will differentiate good local authorities from bad ones, but it is not for the Secretary of State to specify those things, or indeed for us to do so through legislation, which frankly would be patronising and very centralist. As we said many times in relation to the Localism Bill, people have a right to judge at the ballot box whether their authorities are doing what they should be doing—it is not for this House to tell them.

[Mr Kevan Jones]

I was going to say that it was a pleasure to follow the hon. Member for Bradford East (Mr Ward), but his contribution kept getting worse.

Clause 8 of the Bill, headed “Council tax reduction schemes”, sets out the provisions for local councils to draw up their local council tax schemes. Proposed new subsection (2) states:

“Each billing authority in England must make a scheme specifying the reductions which are to apply to amounts of council tax payable, in respect of dwellings situated in its area, by—

(a) persons whom the authority considers to be in financial need, or

(b) persons in classes consisting of persons whom the authority considers to be, in general, in financial need.”

However, the Bill gives no guidance on what local authorities should take into consideration when drawing up their schemes. We could have a plethora of different schemes up and down the country and, as was referred to earlier by Government Members, neighbouring authorities could have completely different schemes and criteria for how people apply for council tax benefit. We know that the Secretary of State will exclude pensioners, but the amendments tabled by my right hon. and hon. Friends would add some criteria or at least set out what the baseline should be.

I am sorry that the hon. Member for Bradford East does not seem to care and trusts that every local authority, good or bad, will consider every single thing, including child poverty. If he had any experience of the Secretary of State’s time in charge of Bradford council, for example—clearly he had—he would know that he had little concern for the poor and the needy.

[Mr Ward]

I wonder whether the hon. Gentleman carried out a full impact assessment before voting to get rid of the 10p rate of income tax, which affected the most deprived people in the country.

[The Temporary Chair (Mr Jim Hood)]

Order. That intervention is not relevant to the amendments.

[Mr Jones]

Interventions have to be relevant, as Mr Hood points out, but I would not stand for election, as the hon. Member for Bradford East and other Liberal Democrats did, on the idea of supporting the poor by increasing income tax thresholds, and then support the Conservatives in pushing through this Bill, which is going to affect some of the poorest and neediest in our society—and somehow turn a blind eye to that. As I said earlier in response to his hon. Friend the Member for Mid Dorset and North Poole (Annette Brooke), none of this legislation could go through without the Liberal Democrats, and I am sure that in Bradford at the next general election the Labour party and others will remind the hon. Gentleman’s electorate that he and his party were the ones who put through this Bill, which takes away council tax benefits from the poorest and most vulnerable in our society. So he cannot have it both ways.

The amendment would take unemployment into consideration, and it is important to look at unemployment and how it affects local councils’ claimants for council tax benefit. As you will know, Mr Hood, unemployment in the north-east stands at 11.7%, 3.4 percentage points higher than the national average, while unemployment rates in the south-east are just 6.3%. If we look across the constituencies, we find that the most recent claimant count in my constituency was 2,674 people, or 5% of the population; in Beaconsfield, it was 903 people, or 1.5% of the population; in Aldershot, it was 1,749 people, or 2.6%; and in Wokingham—I have to say to the people of Wokingham that I have nothing against their town, but it is always a good example to cite in such debates—it was just 936 people, or 1.3%.

That shows the disproportionate effect of council tax benefit in different areas, and if there is nothing in the Bill to say that unemployment needs to be taken into consideration, it prompts the question, will those councils where unemployment is relatively low take it into consideration when fixing their council tax scheme? The Minister said that the Secretary of State will not need to intervene, but that is not the case, because as my right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford) points out, the right hon. Gentleman will intervene if he does not agree with a scheme. He has the power to do so, and to change the financial year of a scheme, so what the Minister has said is not the case.

[Ian Mearns]

In the light of the Minister’s reflection that the Secretary of State is highly unlikely to use his powers of intervention, on what date does my hon. Friend think the right hon. Gentleman became such a shrinking violet that he would not use the powers that were open to him?

[Mr Jones]

The Secretary of State’s track record is there to see. On his edicts, he talks very much about localism, but in this Bill we already see that he has kept for himself swingeing powers to intervene. Over the past 18 months, we have had diktats to councils on weekly elections, including the idea that to save money they should have fewer pot plants, and lectures on the size of their balances, so I do not accept that he is a born-again devolutionist who is giving powers to local authorities. He will quite clearly intervene when he needs to.

[Helen Jones]

Does my hon. Friend also agree that the Secretary of State’s attitude to poorer people in our communities can be seen clearly from when he ran Bradford city council? We do not have to look into the crystal ball when we can read the book.

[Mr Jones]

Exactly. But the Secretary of State is also highly political, and the Bill does not take into account unemployment and other things because, again, that is part of its general sweep. It is about giving local councils not only responsibilities, but blame, because if a local council comes up with a certain scheme, the right hon. Gentleman can say, “It’s not my problem, it’s your local authority dealing with it,” even though he has poisoned the pill that he has given them with a 10% cut in the grant for council tax benefit.

The Secretary of State is also political in saying that councils are free to not put up council tax because they will get grant for three years, but that he can give no guarantee for the year before the next general election. That is because he wants to shift the blame for the decisions that this Government are taking—both Liberal Democrats and Conservatives—on to local councils. Slowly but surely, local councils and councillors of all persuasions are waking up to the fact that they will have to make tough decisions. They will have to not only divide the smaller cake after the 10% reduction in council tax benefit, but invent a scheme that is seen to be fair.

My hon. Friend the Member for Warrington North (Helen Jones) spoke about people who are in receipt of council tax benefit. There is a misnomer that is repeated on a number of occasions. Reading the press, one would think that every single person who gets housing benefit or council tax benefit is in receipt of unemployment benefit. They are not. Some of the poorest people in society are working very hard to keep a roof over their head. These changes will affect their ability to keep that roof over their head.

Another concern is that if there are no criteria for the various schemes, there will be a plethora of different schemes up and down the country.

[Gavin Barwell]

That’s localism.

[Mr Jones]

The hon. Gentleman says that that is localism, but it will lead to real issues, especially if the Secretary of State is of the Norman Tebbit variety and thinks that people should get on their bike and work. If there are disincentives because of the different schemes in different parts of the country, it will be difficult for people to do that.

The chaos that will ensue in London will be something to behold. Potentially, there will be 33 different schemes for the administration of council tax benefit in London. From talking to colleagues in London, I know that people move across the council boundaries freely. They do not take into consideration the fact that they are moving from one council to another. Some colleagues tell me that 25% or more of their local electoral register churns over every single year. How will people be clear about what the scheme is in one borough as opposed to another? If we add to this the changes in the Welfare Reform Bill, which will have a disproportionate effect in London and drive people out of higher-cost rental areas, there will be administrative chaos.

Individuals will not be clear about which scheme applies to them and some people will get into arrears with their council tax, as my hon. Friend the Member for Alyn and Deeside (Mark Tami) said when he intervened on my hon. Friend the Member for Warrington North. We will get to a situation where the number of evictions increases and where people and their children face insecurity about their homes. It will be very difficult for councils that have a large turnover of individuals to collect council tax. There is nothing to compensate authorities that have a large turnover for that effect. There will be a double whammy for those councils: they will face the 10% cut and it will be difficult for them to collect council tax.

We must also consider the difference in the number of people who claim council tax benefit in different authorities. As I said earlier, County Durham has 63,494 claimants, which is 15% of people aged 16 and above. Last year, that cost £55.1 million. The situation will be the same in other large councils in the north-east, and in other areas such as the constituency of my right hon. Friend the Member for Knowsley (Mr Howarth). There are a large number of people on either unemployment benefits or low wages who receive council tax benefits. We can compare that with some southern councils, and I will give a few examples. Wokingham—

[Mr Mike Hancock]

You’re going to buy a house there, aren’t you?

[Mr Jones]

I am hoping to be made a freeman. I have given it enough plugs in these debates.

[The Temporary Chair (Mr Jim Hood)]

Order. I am sure second home preferences are a matter for some other debate, but not for this one.

21:00

[Mr Jones]

In the 2010-11 financial year, Wokingham had 5,159 people claiming council tax benefit, which was 3.9% of the population and cost £5.3 million. That authority covers the constituencies of Wokingham, Maidenhead, Reading East and Bracknell. Hart, in Hampshire, had 3,029 claimants, which was 4.2% of the population and cost £3 million. It covers the Aldershot and North East Hampshire constituencies.

South Buckinghamshire council had 3,024 claimants for the year 2010-11, which equated to 5.6% of the population aged over 16 and led to expenditure of £3.4 million. South Oxfordshire had 5,848 claimants, which represented 5.6% of the population aged over 16 and cost £6.1 million. That area covers the constituencies of Henley and Wantage. Finally, Vale of White Horse council in Oxfordshire had 5,578 claimants, which was 5.8% of the over-16 population and cost £5.7 million. It covers the constituencies of Wantage and Oxford West and Abingdon.

[Ian Mearns]

My hon. Friend emphasises the differences between local authority areas, and he has compared Durham and Wokingham. A prime indicator of levels of deprivation is the number of looked-after children per 10,000 population, and I just happen to have that statistic for Wokingham. The number there is 22 per 10,000 population, whereas in Middlesbrough it is 104 per 10,000 population. That illustrates the contrast between the levels of deprivation and need in different areas, and I hope he will bear it in mind.

[Mr Jones]

I will, and that is why it is important to have in the Bill the criteria by which authorities will draw up their local schemes.

The reason why I give the differences between areas is that it is quite clear that Durham will have to draw up its scheme very differently from the other authorities that I have mentioned. They also indicate that, as I said in last week’s debate, the Bill will favour southern councils over northern ones such as Durham. It is not a coincidence that all the constituencies that I read out happen to be Conservative.

[Helen Jones]

Does my hon. Friend agree that councils will face a further penalty through the cost of appeals once the scheme comes in, which again will be worse for councils with more claimants? I suspect that there will be a lot of appeals, and there will be a cost in both staff time and legal representation. Councils will also face the cost of chasing up unpaid council tax, which will increase hugely.

[Mr Jones]

I agree, and that will have a disproportionate effect on northern councils such as County Durham. It will also be a complete nightmare for local authorities in London. I know that the Bill allows for data sharing between local councils and the Department for Work and Pensions, but given the movement of people in London it will be very difficult indeed for councils to chase people up.

What are the options open to councils such as Durham, given the 10% cut, to make up the difference? The Minister and the hon. Member for Bradford East said that it would be made up by charging a different rate on second homes.

[Mr George Howarth]

My hon. Friend the Member for Warrington North (Helen Jones) just made the point that councils could be bogged down in appeals. Does my hon. Friend the Member for North Durham (Mr Jones) believe that it is also conceivable that the Bill could be deemed discriminatory under the Human Rights Act 1998? The Bill contains a declaration—as do all Bills, for purposes of the Human Rights Act—that the Secretary of State says that

“the provisions of the Local Government Finance Bill are compatible with the Convention rights.”

Does my hon. Friend think that that might slightly overstate the case?

[Mr Jones]

My right hon. Friend raises a very good point, because we will have different schemes in different areas. I wonder whether there will be challenges to the criteria that are used to draw them up. The hon. Member for Mid Dorset and North Poole said that various equality Acts applied to the measure. They may well do, but that is not stated in the Bill. If people who find that they are not in receipt of council tax benefit after the measure is introduced feel that their local authority has discriminated against them, that will doubtless lead to court cases. Again, the costs will fall on local authorities, and again, no doubt the Secretary of State will be nowhere to be seen and will blame councils for not implementing the scheme properly.

The hole could be plugged by further cutting benefits for those who are in work and others. Second homes give another method—obviously, there are a plethora of second homes in Bradford.

[Ian Mearns]

There are loads in Gateshead.

[Mr Jones]

Obviously, and in other places. They will fill the black hole. We could also increase council tax. However, that is no good for councils in the north-east, where 50% of properties are in band A.

[Ian Mearns]

Fifty-six per cent.

[Mr Jones]

My hon. Friend says that the figure is 56%. Only 2% of properties in Surrey are in band A. The ability of councils in the north-east to raise additional funds is severely limited.

[John Healey]

My hon. Friend is talking about plugging the hole caused by the 10% cut and highlighting the feeble arguments from Ministers about the flexibility around the second home discount. Has he asked himself why the Government have not considered the single person’s discount, which is worth £2.4 billion in total—more than five times the 10% cut?

[Mr Jones]

My right hon. Friend makes a good point. The Bill is being rushed through. If we were considering a root and branch, proper review of local government finance, we could examine my right hon. Friend’s suggestion. I suspect that the Government do not want to do that because it affects a lot of pensioners and they think that pensioners may be more interested in voting Conservative than not. For the same reason, they will not go anywhere near revaluation of domestic properties.

My hon. Friend the Member for Warrington North made a very good point about the comments of the Minister for Housing and Local Government, who seems to think that people can somehow magic up economic development in local areas to increase revenues. That is supposedly the entire basis of the Bill: that councils will be free to create extra demand instantly through economic development. It is a damn sight harder to attract businesses to the north-east than it is to the south-east of England.

There is a problem with who is consulted about the scheme. My hon. Friend the Member for Warrington North made a good point about the mess caused by the system having to be tackled by the charitable sector, local credit unions, which will have to sort people out when they get into debt, local branches of Age Concern, citizens advice bureaux and others. It is only right that they are statutorily consulted on the drawing up of the scheme. If they are not, at the end of the process they will have further burdens because they will have to try to sort out the mess created by the Bill—many are having their grants cut already.

I am sure the Minister, in his feeble way, will refuse to accept the amendments because the Bill is part of a strategy. He is part of that strategy, even if he does not understand it. In effect, the Secretary of State wants to give as many freedoms as possible to local government so that he can wash his hands of it and stand up to the electorate and say, “It’s your local council’s fault.” I hope local councillors of all political persuasions are waking up to what the Secretary of State is up to. He is blaming them for his decisions. Until they wake up to that fact and start protesting—some Liberal Democrats bravely voted against the Bill tonight—we will end up with confusion and mess in local government and blame, and some of the poorest and weakest in our society will be affected.

[Mr Mike Hancock]

Once again, I am concerned about the lack of time, because I would have loved to have had a proper debate on amendments 59 and 60, which go to the heart of the problems we face. The amendments, which were tabled by the right hon. Member for Greenwich and Woolwich (Mr Raynsford), would defer the scheme for a year. Unfortunately, he is not in the Chamber to move the amendments, so it looks like we will not have the chance to pursue the matter. The need to give local authorities more time was one of the things about which Members spoke most eloquently when we debated the previous group of amendments.

It is disappointing that the Minister did not give even a hint that the problems exposed by hon. Members would be given consideration. I have a lot of sympathy for the hon. Member for Stockton North (Alex Cunningham), who spoke of the problems of “outsourcing” 20,000 people from London. He said that that would have an effect on London’s infrastructure and mean impending problems for receiving authorities. Any authority that has received large numbers of people after population movements will know only too well of the struggle to put in place the infrastructure needed to absorb them. Suggesting that 20,000 people leaving London will be easy is an easy soundbite, but I simply do not believe it. The Government need to think again if they are suggesting that that is a ground for supporting the Bill, because it cannot be right.

The hon. Member for Warrington North (Helen Jones) mentioned the cost of appeals and how long they will take. When do they kick in? For how long must people appeal? What would the regime be? Would it be a simple paper exercise or could people appear and give details of their circumstances in front of, say, a group of councillors or officials? We need to know. How will they be resolved?

Why should local authorities take into account the impact of the scheme on the aspects outlined in amendment 66? That is a key question. The hon. Member for Stockton North made the point that we cannot ask local authorities to exclude so many people and not ask them to consider the effects on the poorest groups of working people. If they do not consider that, they would be doing a great disservice to the people. The Secretary of State for Work and Pensions was in the Chamber just now, but it is sad that he has not heard more of the debate, because the points being made are relevant for his Department.

However, if the Bill goes through without the amendment, it will cause local authorities serious problems. Any local authority worth its salt would want to take the issues I mentioned into consideration and would like to have some flexibility to help the groups affected. Why not say that in the Bill? Is anyone seriously saying that that would be an unreasonable expectation for local people to have? [Interruption.] I am getting a signal that my hon. Friend the Member for Bradford East (Mr Ward) might be of a different opinion from me. I happen to think that setting out those matters in the Bill is the right thing to do, and I have yet to hear a coherent argument to suggest that we should not take that into consideration. Once again, that is why, when we vote tonight, I will vote to support the amendment.

21:15

I must finish, however, where I started. I am disappointed that we will not have the opportunity to vote on the deferments. I do not know whether somebody else can move the amendments I mentioned, in the absence of the right hon. Member for Greenwich and Woolwich, but I hope so.

I should tell the hon. Member for North Durham (Mr Jones) that if I was a betting man, I would be in Ladbrokes tomorrow to see who had made a wager about how many times Wokingham was mentioned in the House of Commons. His speech reminded me of a Pakistani bowler bowling no balls, and there seemed to be a premeditated effort on his part to secure the most mentions possible of Wokingham.

[Mr Kevan Jones]

Does the hon. Gentleman think I should get a sponsorship deal with the borough of Wokingham?

[Mr Hancock]

I honestly believe that the hon. Gentleman is in the market for a property in Wokingham, or if not Wokingham, Hart.

[Mr Jones]

I could not afford it.

[Mr Hancock]

I am sure the hon. Gentleman could; he is being far too modest.

On the hon. Gentleman’s point about income tax and higher income tax payers, I am disappointed that we will not get anywhere near the amendments that I and others tabled on excluding higher income tax payers from the 25% discount. I would hope that the Government would give local authorities the ability totally to restrict people on higher income tax from having the 25% discount.

Once again, I am disappointed that we will not have the opportunity to pursue many of these issues, and I implore the Minister to try to secure the maximum amount of time on Report to allow us properly to discuss the amendments that we have not reached.

[Andrew Stunell]

Again, we have had an interesting and wide-ranging debate. I have to say that the amendments we have discussed cut across the approach we set out for reforming support for the council tax and the whole localisation agenda. In the first debate, there seemed to be broad support for the view that the localisation part of the proposals was the right way forward, and I particularly welcomed the words of the hon. Member for Sheffield South East (Mr Betts), the Select Committee Chairman, who made it clear that that was his view. In the event, that turned out to be rather a contrast with the views of the hon. Member for Warrington North (Helen Jones), who argued strongly against localisation. Then, rather puzzlingly, she said that some of us did not know what was going on in the real world. Perhaps that is not a puzzling thing to say, but I have to say that it is not the reality. With my wife, I brought up five children on family income supplement for two years, so I think I do know what it means when there is not enough money to buy things.

[Graham Jones (Hyndburn) (Lab)]

Will the Minister give way?

[Andrew Stunell]

No, I will not give way. I am just going to make a little progress.

The hon. Lady said that we did not understand the leeches on the estate who collected the money on payday, but at the same time she seems to be in favour of channelling money through universal benefit, rather than localising it through a council tax reduction scheme. As the Select Committee Chairman rightly said, that is not only localist, but helpful in securing income for local authorities. The hon. Lady reinforced the point with her story of the leeches on the estate.

[Helen Jones]

I am sorry, but the Minister cannot have it both ways either. The Secretary of State is taking the power to give guidance on what should be included in the scheme, and the Government have already said that pensioners must be protected under the scheme—we agree with that—so the Minister cannot then argue that he wants everything left to local councils, because that is exactly what he is not doing.

[Andrew Stunell]

Unfortunately, the hon. Lady has partly misread the scheme. Paragraph 2(8) of schedule 4 provides the Secretary of State with the power to make regulations in relation to the requirements of schemes, and he intends to use this power to require authorities to provide support for pensioners. The purpose of that provision is precisely to safeguard pensioners—a point on which, it would appear, there is cross-party support. It does not require the Secretary of State to approve schemes, and it is not a power to intervene in schemes. I think that I have made that point clear to the House, and if I have not, I repeat it now to make it so.

Several rather whacky points have been made. The hon. Gentleman for Stockport North said—[Hon. Members: “Stockton North”] Sorry, I should know better. The hon. Member for Stockton North (Alex Cunningham) said that Labour had worked hard to close the gap between the rich and poor. Well, I do not know how hard it worked, but it certainly did not work, because the gap between the rich and the poor widened in that time. It did not narrow. He seemed extremely sceptical about whether it was possible for authorities such as Stockton to generate the additional income from discounts and exemptions to compensate them for the loss of council tax benefit grant.

By my count, 18 local authorities have been drawn into the debate in one way or another—all of them by Opposition Members praying in aid councils that they believed would be at a disadvantage. Of those 18, 14 could in fact generate from the discounts and exemptions in their areas more money than they would lose from the loss of council tax benefit grant. Among those authorities is Stockton, which would have a surplus, if it extinguished all the discounts. The hon. Member for Stockton North referred to second homes, but an important part of the new flexibility—and part of the reason Stockton could have a surplus—relates to empty homes. Empty homes discounts provide another potential source of revenue.

When one considers the generality of local authorities, one discovers that were all those discounts and exemptions to be extinguished—as I said in the previous debate, I am not arguing that they should be, but I want the House to understand that the flexibility is there—it would result in an additional income to local authorities in England of £420 million. By what my hon. Friend the Member for Bradford East (Mr Ward) called a fluke, that happens to be the same amount as the 10% reduction. The Government are not arguing that every local authority should simply extinguish those discounts and exemptions. We are simply pointing out that that provides for a significant flexibility, and I would be surprised if a large majority of councils did not choose to make that flexibility a part of the mix when devising a scheme.

Local authorities need to plan carefully to ensure that they can meet demand through the funding that they make available to local schemes. As the hon. Member for Warrington North acknowledged, however, funding for the first two years of localised schemes is derived from the Office for Budget Responsibility forecast for spending on council tax benefit, which reflects existing spending and, therefore, assumptions about underlying demographic changes, including growth in the pensioner population, and council tax increases. Thereafter, of course, the spending review process will provide further opportunities to consider cost pressures.

Local authorities are already well accustomed to using these powers to determine in what circumstances council tax liability should be reduced, whether in individual cases or a class of cases. Local authorities are best placed to understand local needs, including those of low-income families. Paragraph 2(5) of proposed new schedule 1A to the Local Government Finance Act 1992, which is inserted by schedule 4, already requires local authorities to set out the procedures for making an application for a reduction under the scheme.

Amendments 56 and 70 would require local authorities to take into account the impact of their schemes on the living standards and work incentives of taxpayers, and on poverty levels when designing or revising their schemes. However, local authorities already have clearly defined responsibilities in relation to, and for their awareness of, the most vulnerable groups and individuals in their areas. My hon. Friend the Member for Mid Dorset and North Poole (Annette Brooke) made the point that there are statutory responsibilities on local government when drawing up such schemes, or indeed taking any of its functions forward. An important example is the public sector equality duty in section 149 of the Equality Act 2010, which requires authorities in the exercise of their functions to have due regard to the promotion of equality between persons who share a protected characteristic, while the Child Poverty Act 2010 imposes a duty on local authorities to have regard to, and to address, child poverty. She referred, quite properly, to the Disabled Persons (Services, Consultation and Representation) Act 1986 and the Chronically Sick and Disabled Persons Act 1970, both of which include a range of duties relating to the welfare needs of disabled people. She also referred to the Housing Act 1996, which gives local authorities a duty to prevent homelessness.

Putting all that together, it is quite clear that every local authority is familiar with the need to ensure that any scheme it draws up complies with existing statutory guidelines. That is a continuous process that requires all the relevant decision makers to consider equality, disability and other issues, in forming policy and making decisions. We expect to continue with that sensible approach. There is no reason for unnecessary additional bureaucracy to be imposed on local authorities.

[Heidi Alexander]

With the best will in the world, is not the problem that, with £490 million less to administer in council tax benefit—a reduction that will come about as a result of the proposals in the Bill—councils will be simply unable to meet the needs of the rising numbers of people who will be unemployed in future?

[Andrew Stunell]

If I can correct just one small point, the figure is £420 million for England, although the sum for the United Kingdom as a whole is larger. The hon. Lady is quite right that there is to be a reduction in the funding of council tax benefit support. That is not in dispute. My point—and the point the Government are making—is that local authorities have additional income streams open to them in later parts of the Bill. They also have the opportunity to tailor their schemes to suit their local circumstances, and if they choose to draw resources from other parts of their income streams, it is open to them to do that.

Let me turn to amendments 49 and 56. It is unclear how a local authority could take into account the impact of claimants who were receiving council tax benefit before the introduction of a local scheme. For example, that would require a local authority to know, several years after the implementation of the reform, whether a person would have been entitled to claim council tax benefit under the old system and whether a change in circumstances meant that a person would no longer be eligible at all. The Bill already provides for local authorities to make transitional provision as they see fit, following changes to their schemes or the introduction of a new scheme. That seems a far better way of proceeding.

Amendment 67 would require authorities to publish, as part of the scheme, the steps that they would take to ensure that people were informed of their entitlement and what assistance they would be offered. That is a sensible requirement, but paragraphs 2(1) and 2(5) of new schedule 1A to the Local Government Finance Act 1992, inserted by schedule 4 to the Bill, already require the authority to set out the classes of persons who are entitled to a reduction, and the procedure for making an application. The provision that the amendment seeks to introduce is therefore already part of the legislation.

21:30

Local authorities will want to publicise the scheme in a manner that ensures that those eligible for support claim what they need to in order to avoid going into arrears with their council tax. Points have been made about the cost of publicity and of introduction. The Government do not think it right to stipulate how local authorities should publicise the scheme; it is for them to decide, and a one-size-fits-all set of regulations would certainly place unnecessary requirements on them. Local authorities are best placed to decide how to publicise information about their own schemes.

Amendment 68 would require a local authority to consult charities and organisations that provide advice on benefits or represent older people. However, local authorities already have a duty to consult other persons who are

“likely to have an interest in the scheme”.

The Government’s intention to protect pensioners from any reduction in support as a result of the reform, using the powers in the Bill, has already been made clear. It has been welcomed by the shadow Secretary of State for Communities and Local Government and by the hon. Member for Warrington North, who spoke on behalf of the Opposition in today’s debate. As the system for pensioners will be prescribed at national level, it is unclear what the benefit would be of prescribing further consultation at local level with groups representing pensioners. To prescribe the categories of organisations to be consulted would be restrictive and unnecessary. Many local authorities already have good consultative schemes and, in any case, people are not backward in coming forward to put their point across.

Amendment 71 states that the Secretary of State should have regard to the impact of any guidance on those of pensionable and working ages, and those on benefits, particularly disability benefit. Again, however, the Government have already made clear their intention to use this guidance to set out the importance of supporting work incentives through the design of local schemes. We will consider how best to ensure that local authorities are aware of their duties in relation to vulnerable groups. It is unclear what the amendment would add to the clear commitment that the Government have already made.

Taken together, amendments 57, 58, 59 and 60 would delay the start for localising council tax reductions. My hon. Friend the Member for Portsmouth South (Mr Hancock) asked me why I thought that should be resisted. I believe it should be resisted because it is right to get the scheme in place quickly, to ensure that our programme of deficit reduction proceeds unhindered. It is an essential part of the Government’s programme that that saving should be made. Any hon. Friends or other colleagues around the House who might wish to unravel that programme of deficit reduction need only look a little way across the channels—Irish or French—to see the consequences of so doing.

The Government are clear that this reform needs to be implemented in 2013, to secure the agreed savings. The savings from the localisation of council tax benefit will make an important contribution to our deficit reduction plan. I have already made the point as clearly as I can that that deficit reduction plan is essential, and that the Bill provides powers for local authorities to create other income streams by tackling discounts and exemptions. There will be a possibility for them to do that, if they so choose.

As for ensuring that the timetable is adhered to—the right hon. Member for Greenwich and Woolwich (Mr Raynsford) raised some issues in this regard—we are already working with local authorities and IT suppliers to identify how we can ensure that any new processes and systems are in place for April next year. We are committed to ensuring a steady flow of information to local government on our plans for delivery and the framework in which local authorities will operate. We will also look at what tools we can provide for local authorities to help them in their planning.

[John Healey]

The Minister talked about the IT suppliers and working to ensure that their new systems are in place by April next year, but they are going to need to be ready, fully designed, tested and operational well before the end of this year during the period when local authorities will be consulting on and designing their schemes and reassuring themselves that they can be put in place. Is not the reality more likely to be that the options on schemes will be restricted by the designs that the software suppliers will have ready to go?

[Andrew Stunell]

That is an important consideration for local authorities when they look at the speed and pace of change in the schemes they devise, but I have to say that practically everything that Labour Members have contributed to the debate has been on the basis of trying to preserve the existing scheme and associated costs. [Interruption.] I think that local authorities will probably take a cautious approach to changing their local schemes in the first year. I have to say, however, that we believe it is absolutely the case that those that wish to make a more radical change will be able to do so. I am encouraged to hear that IT suppliers are considering the possible changes to existing software and are working with local authorities to—[Interruption.]

[The Second Deputy Chairman of Ways and Means (Dawn Primarolo)]

Order. It is getting very noisy. If Members wish to speak to each other, it would be a good idea to go outside and do it.

[Andrew Stunell]

Thank you, Ms Primarolo.

As I was saying, IT suppliers are considering possible changes to existing software and they are working with local authorities. I recognise, of course, that local authorities and suppliers need as much information as possible as soon as possible. For that reason, we intend to publish draft regulations while the Bill is still before the House. We shall shortly make available a design tool to make it easier for local authorities to model their case load and the impacts of any changes to the framework, which should also clarify the extent of any IT changes that the design of their scheme might require.

[John Healey]

I must say that it is welcome to hear the Minister say that the Government are committing themselves to draft regulations published while the Bill is before the House. Will he make it clear whether that means this House or the other House?

[Andrew Stunell]

I am looking for a nod somewhere, but let us stick with this House.

Amendment 71 states that the Secretary of State should have regard to the impact of any guidance on those of pensionable and working ages and those on benefits, particularly disability benefits. However, the Government have already made clear their intention to use the guidance to set out the importance of supporting work incentives through the design of local schemes and will consider how to ensure that local authorities are aware of their duties in respect of vulnerable groups. It is unclear whether amendment 71 would add to the Government’s commitment in this regard.

There are things that councils can begin to do now to help in their preparation—in understanding the circumstances of those in their area who currently claim support, in ensuring that elected members are aware of the decisions they need to take and in engaging with precepting authorities such as police and fire authorities. The Government have been clear that local authorities must ensure that they are on the front foot in preparing for this reform.

In summary, I must recommend that the Committee reject the Opposition amendment on this occasion.

[Helen Jones]

Yet again we have heard a reply of the most astonishing complacency from the Minister, which appears to have been prepared so long before the debate that he did not realise that he was responding to amendments that my right hon. Friend the Member for Leeds Central (Hilary Benn) was not even present to speak to. Yet again we have heard him dismiss the concerns of local authorities and Members, dismiss our concerns about the poorest people in the poorest communities, and, in particular, dismiss concerns about those who work for low wages and the effects that this scheme will have on them.

Let me warn the Minister that he has been put up to respond to the amendments in order to provide a human shield for the Tories in the Government, and that it will come back to haunt him. I wish to press amendment 66 to a vote, and I urge my colleagues to support it.

Question put, That the amendment be made.

21:40

Division 447

Ayes: 233

---

Labour: 221
Democratic Unionist Party: 7
Social Democratic & Labour Party: 2
Liberal Democrat: 1
Plaid Cymru: 1
Green Party: 1
Independent: 1

Noes: 294

---

Conservative: 246
Liberal Democrat: 46

[George Hollingbery]

I beg to move amendment 72, page 5, line 26, at end insert—

‘(3A) Local authorities will have the right to pool schemes for council tax refund purposes both in terms of administrative arrangements and the pooling of funds.’.

[The Second Deputy Chairman of Ways and Means (Dawn Primarolo)]

With this it will be convenient to discuss the following:

Amendment 52, in schedule 4, page 47, line 16, at end insert—

(f) the number of persons estimated to be eligible to make an application, and estimated to be entitled to a reduction under the scheme.’.

Amendment 74, line 43, at end insert—

‘(8A) Before making regulations under sub-paragraph (8), the Secretary of State must consult with local authorities regarding any proposed requirements for schemes.’.

Amendment 55, page 48, line 15, at end insert—

(d) notify all persons within their area receiving council tax benefit on or immediately following 1 April 2012, of the implications of the draft scheme, including the estimated impact of that scheme on their living standards.’.

Amendment 75, line 22, leave out sub-paragraphs (4) and (5).

Amendment 53, line 37, leave out ‘about the making of reasonable charges’.

Amendment 76, page 49, line 14, leave out sub-paragraphs (2) and (3).

Amendment 77, line 28, leave out section (6).

Government amendments 86 and 87.

[George Hollingbery]

It is a great pleasure finally to be able to speak to amendment 72. I have missed a Select Committee visit to the Netherlands to do so—my furthest trip so far has been to Manchester.

It is a pleasure to serve under your chairmanship today, Ms Primarolo. Let me make it clear to the Committee at the outset that the amendment is probing. I do not intend to press it to a vote. My aim is to give the Government an opportunity to clarify their thinking on administrative arrangements for distribution of council tax reduction schemes. There is clearly some sense in local authorities being able to pool their sovereignty—[Interruption.]

[The Second Deputy Chairman of Ways and Means]

Order. The Committee needs to be a little quieter, so that we can hear Mr Hollingbery moving his amendment.

[George Hollingbery]

I am grateful, Ms Primarolo. As I was saying, there is clearly some sense in local authorities being able to pool their sovereignty in relation to their schemes to administer council tax rebates, especially in two-tier areas such as mine in Meon Valley. If one accepts that local conditions in, say, Hampshire will be at least somewhat similar, it makes sense for a uniform scheme to be adopted by all councils in the county. That may well allow schemes to be run more cost-effectively: for example, not only could one processing centre rather than many be used, but it would create one point of contact with other agencies that need to be consulted. Furthermore, assuming that fraud investigation is to be run locally, such an arrangement would allow the accumulation of expertise and critical mass that would otherwise be diffused between many offices.

That type of arrangement would also greatly assist the achievement of a commonality of expectation and understanding of a scheme across a wider area. Several right hon. and hon. Members this evening have talked about the potential for confusion in very localised council tax schemes.

[John Healey]

The hon. Gentleman is making a persuasive case, which is consistent with pooling principles elsewhere in the Bill, and I hope he makes some headway with Ministers. Does he not agree that, with only four minutes left when we started this group of amendments, only the third of 10 on the selection paper, there are some important issues that we have not reached, and that if they are to be aired we will have to return to them on Report?

[George Hollingbery]

I am grateful to the right hon. Gentleman for his intervention, in which he makes a reasonable point. However, if I may, I shall continue to develop my theme a little further.

I believe we would achieve a commonality of expectation across a pooled area, such that people could begin to understand what they would get from a council tax rebate scheme. Simply put, we would avoid the strange situations where streets are split in such a way that there is one expectation of the scheme on one side of the street and a different expectation on the other. The Bill makes no mention of such schemes, but chapter 3 of the Government’s response to the consultation on localising support covers the issue, and it makes the case that such schemes are possible under existing powers. It would be useful if the Minister briefly outlined his thoughts on how that would work, and which existing powers might allow local authorities to draw up schemes—assuming, of course, that he will have the time to do so, which is unlikely.

Even if legislation allows such schemes to be put together, it might be useful for there to be a standard, approved scheme, produced by Government, to reduce cost still further.

22:00

Proceedings interrupted (Programme Order, 10 January).

The Chair put forthwith the Questions necessary for the disposal of the business to be concluded at that time (Standing Order No. 83D).

Question put, That the clause stand part of the Bill.

22:00

Division 448

Ayes: 305

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Conservative: 250
Liberal Democrat: 47
Democratic Unionist Party: 6

Noes: 227

---

Labour: 223
Social Democratic & Labour Party: 2
Democratic Unionist Party: 1
Plaid Cymru: 1
Green Party: 1

Clause 8 ordered to stand part of the Bill.

Schedule 4

Amendments relating to council tax reduction scheme

Amendments made: 86, page 51, line 8, schedule 4, leave out sub-paragraphs (1) and (2).

Amendment 87, page 51, line 40, at beginning insert ‘In Schedule 2 (administration),’.—(Andrew Stunell.)

Schedule 4, as amended, agreed to.

Clause 9 ordered to stand part of the Bill.

Clause 10

Power to set higher amount for long-term empty dwellings

Amendment made: 17, in clause 10, page 7, line 17, at end insert—

‘( ) In section 13(3) (amounts which may be reduced by regulations) after “section 11, 11A” insert “, 11B”.’.—(Andrew Stunell.)

Clause 10, as amended, ordered to stand part of the Bill.

Clauses 11 to 16 ordered to stand part of the Bill.

New Clause 11

Payment of additional grant

‘The Secretary of State shall be required to pay an additional grant to a local authority if, at the end of any financial year, the total expenditure incurred by the authority under any scheme approved pursuant to Schedule 4 of this Act is greater than the amount of grant received from the Secretary of State to fund the scheme. The amount paid to the authority shall be the difference between the sum originally received and the total cost to the authority of the scheme.’.—(Helen Jones.)

Brought up.

Question put, That the clause be added to the Bill.

22:14

Division 449

Ayes: 225

---

Labour: 222
Social Democratic & Labour Party: 2
Liberal Democrat: 1
Green Party: 1

Noes: 309

---

Conservative: 245
Liberal Democrat: 45
Democratic Unionist Party: 7

The Deputy Speaker resumed the Chair.

Bill, as amended, reported.

Bill to be considered tomorrow.

[Mr David Winnick (Walsall North) (Lab)]

On a point of order, Madam Deputy Speaker. I know that Mr Speaker is very keen to defend the rights of Back Benchers. Tomorrow, as you know, we will debate Lords amendments to the Welfare Reform Bill. The first amendment, on employment and support allowance, deals with cancer patients and others. Obviously, I do not want to go into its merits or otherwise now. I have checked with the Clerks, and I am concerned because, whatever time that debate starts, it must end at half-past two. After Prime Minister’s questions and the ten-minute rule Bill, there would be an opportunity to debate the amendment for nearly two hours. However, if there is a statement or other parliamentary business, a matter that concerns many of our constituents could be debated for just half an hour. I therefore ask you, Madam Deputy Speaker, whether anything can be done to give at least nearly two hours to debating such a crucial issue.

[Madam Deputy Speaker (Dawn Primarolo)]

The hon. Gentleman, who is an experienced Member, is correct to say that Mr Speaker takes defending Back Benchers’ rights very seriously. However, he also knows that timetabling Bills is not a matter for the Chair, but for the House. I am sure that all those present will bear his comments in mind.

Business without Debate

Tuesday 31st January 2012 Commons Chamber

delegated legislation

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Local Government

That the draft City of Liverpool (Mayoral Referendum) Order 2012, which was laid before this House on 5 December, be approved.—(Mr Dunne.)

The Deputy Speaker’s opinion as to the decision of the Question being challenged, the Division was deferred until Wednesday 1 February (Standing Order No. 41A).

Motion made, and Question put forthwith (Standing Order No. 118(6)),

That the draft City of Nottingham (Mayoral Referendum) Order 2012, which was laid before this House on 5 December, be approved.—(Mr Dunne.)

The Deputy Speaker’s opinion as to the decision of the Question being challenged, the Division was deferred until Wednesday 1 February (Standing Order No. 41A).

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Value Added Tax

That the Value Added Tax (Land Exemption) Order 2012 (S.I., 2012, No. 58), dated 11 January 2012, a copy of which was laid before this House on 11 January, be approved.—(Mr Dunne.)

Question agreed to.

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Corporation Tax

That the draft Enactment of Extra-Statutory Concessions Order 2012, which was laid before this House on 11 January, be approved.—(Mr Dunne.)

Question agreed to.

Motion made, and Question put forthwith (Standing Order No. 118(6)),

European Union

That the draft European Union (Definition of Treaties) (Republic of Korea Framework Agreement) Order 2012, which was laid before this House on 5 December, be approved.—(Mr Dunne.)

Question agreed to.

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Local Government

That the draft City of Leeds (Mayoral Referendum) Order 2012, which was laid before this House on 5 December, be approved.—(Mr Dunne.)

Madam Deputy Speaker’s opinion as to the decision of the Question being challenged, the Division was deferred until Wednesday 1 February (Standing Order No. 41A).

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Local Government

That the draft City of Bristol (Mayoral Referendum) Order 2012, which was laid before this House on 5 December, be approved.—(Mr Dunne.)

Madam Deputy Speaker’s opinion as to the decision of the Question being challenged, the Division was deferred until Wednesday 1 February (Standing Order No. 41A).

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Local Government

That the draft Local Authorities (Conduct of Referendums) (England) Regulations 2012, which were laid before this House on 5 December, be approved.—(Mr Dunne.)

Question agreed to.

European Union Documents

Motion made, and Question put forthwith (Standing Order No. 119(11)),

Energy Efficiency

That this House takes note of European Union Document No. 12046/11, relating to a draft Directive on energy efficiency and repealing Directives 2004/8/EC and 2006/32/EC; and supports the Government’s view in welcoming the overall level of ambition of the Directive, whilst rejecting unnecessary levels of prescription, and seeking full compatibility with key United Kingdom policies.—(Mr Dunne.)

Question agreed to.

Motion made, and Question put forthwith (Standing Order No. 119(11)),

Passenger Name Records

That this House takes note of European Union Documents No. 17697/09, a draft Council Decision on the conclusion of the Agreement between the European Union and the United States of America on the processing and transfer of Passenger Name Record (PNR) data by air carriers to the United States Department of Homeland Security (2007 PNR Agreement), No. 17429/11, a draft Council Decision on the signature of the Agreement between the USA and the EU on the use and transfer of PNRs to the United States Department of Homeland Security, No. 17430/11, a draft Council Decision on the conclusion of the Agreement between the USA and the EU on the use and transfer of PNRs to the United States Department of Homeland Security, No. 9821/11, a draft Council Decision on the signature of the Agreement between the EU and Australia on the processing and transfer of PNR data by air carriers to the Australian Customs and Border Protection Service and No. 9823/11, a draft Council Decision on the conclusion of the Agreement between the EU and Australia on the processing and transfer of PNR data by air carriers to the Australian Customs and Border Protection Service; supports the Government’s decision to exercise its right, in accordance with the protocol on the position of the United Kingdom, to take part in the adoption and application of the Proposal for Council Decisions on the Signature and Conclusions of the Agreement in relation to the United States of America; and endorses the decision taken on 23 August in relation to Australia.—(Mr Dunne.)

Question agreed to.

Early Intervention

Tuesday 31st January 2012 Commons Chamber

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

22:31

[Andrea Leadsom (South Northamptonshire) (Con)]

Last year’s riots were unprecedented in their violence and in the damage done to our society. We saw headlines such as “Mob Rule” and “Flaming Morons”. I hope never to see such things again. We owe a debt of gratitude to the police, who had to clear up under such difficult circumstances.

No one made those young people loot and steal and cause so much damage and fear, and there can be no excuse. The punishments meted out were right and I fully support them, but since those days the headlines have changed. We are not talking about the riots and the problems caused by those people, but asking why they did it. What caused that disorder? Is it moral decline, that the young have no respect, the benefit society or something more fundamental?

I want to prevent that type of appalling activity from becoming the norm in Britain or any other society, as I am sure all hon. Members do. To do that, we need to look seriously at prevention. I want to put the case that prevention is not just kinder than cure but incredibly cheaper.

[Ian Paisley (North Antrim) (DUP)]

I congratulate the hon. Lady on securing this debate. Does she welcome the “searching for answers” conference, which will commence tomorrow under the auspices of His Royal Highness the Prince of Wales, and which will be about the riotous situation that occurred in this land? Is that a welcome opportunity to try to get some of the important answers to the problems that she is describing in the House tonight?

[Andrea Leadsom]

The hon. Gentleman makes a good point. Anything that helps to prevent a repeat is to be welcomed.

I want to focus on a topic that we do not often discuss in the Chamber: the importance of love. Love in a prevention context begins with conception. It needs to go on throughout the baby’s life, but the critical period is conception to the age of two years. There is a very important reason for that: a loved baby who has his needs met will generally learn that the world is a good place and that people are generally kind. That baby will grow up expecting to be able to form secure bonds, make friends and hold down a job, and will generally have more capacity to lead a normal life.

On the other hand, the baby who is neglected or abused, or inconsistently treated, suffers two profound impacts. First, the baby who is left to scream is unable to control or regulate his or her feelings. When a baby knows something is wrong, he does not know whether it is because he is too hot, too cold, bored, tried or hungry—he just knows something is wrong, and he looks to an adult carer to sooth his feelings, relax him and get him back off to sleep.

When a baby is left to scream all the time, the stress hormone in the baby’s body—cortisol—rises to a level where it harms his immune system, and that harm can be permanent. What is more, if the baby constantly experiences raised stress levels, he becomes tolerant of his own stress level. You or I, Madam Deputy Speaker, might be excited by a scary episode of “Doctor Who”, but somebody with a high tolerance of their own stress level might need to go out to stab somebody to get the same level of excitement. Being permanently left to scream therefore has a profound impact on a baby.

The second impact is even more amazing. When a baby is born, his brain is barely developed; he simply has the amygdala, with the fight or flight instinct. Between six and 18 months old, the frontal cortex—the social part of the brain—starts to develop and puts on its peak growth spurt. That growth is literally stimulated by a loving relationship between baby and carer. Playing games such as peek-a-boo or gazing into baby’s eyes and saying, “I love you” and “Aren’t you beautiful?” literally stimulates the development of the baby’s brain. Conversely, as we saw from the appalling situation in Romanian orphanages, the orphans, who had no human contact at all, literally suffered brain damage; they were unable to communicate in any way, because they had had so little human contact.

[Anna Soubry (Broxtowe) (Con)]

I congratulate my hon. Friend on the debate and on all the sensible things she is saying with great passion and clear knowledge. Does she agree that it is imperative if children born into the most terrible circumstances are to be adopted, we make sure they are adopted as quickly as possible, given the excellent evidence she has placed before us this evening?

[Andrea Leadsom]

I thank my hon. Friend for that point, and I will come to it later.

If someone does not love their baby, and they do not bond properly with him in those first two crucial years, they are literally impairing their capacity to lead a normal life. The sad truth is that research shows that 40% of children in Britain are not securely attached by the age of five. That does not mean that they all go on to become criminals, psychopaths, sociopaths, paedophiles or drug addicts, but it does mean that their capacity to deal with the things life throws at them and the problems they will encounter is much lessened. They are less likely to be able to cope with holding down a job, making friends, and forming and keeping a relationship. At the extreme end, a baby will have been severely neglected or abused, and that is where we will find sociopaths. Sociopaths are not born, but made by their earliest experiences in the first two years of life.

Before we all go out and throw up our hands in despair, I want to make the case that there is a huge amount that can be done. Things do not have to be like this. If we as a society committed to making the very earliest intervention to provide the support needed for families, we could do so much in the first two years of life, when the baby’s brain has the ability to reach its full potential. We could turn things around and do great things.

The Oxford Parent Infant Project—a charity that I chaired for nine years, and of which I have been a trustee for 12 years—does precisely that work in Oxfordshire. In the past few months, I have launched a sister charity, the Northamptonshire Parent Infant Project, to do the same work. We work together with families—normally the mum, but it can be the dad or the grandparents—and the baby to help the carers understand, first, their own feelings about caring and parenting, and, secondly, the baby’s needs. We literally enable the adult to love the baby; we reintroduce them to each other, with astonishing results.

When Oxpip and Norpip get their referrals, the parents are desperate—they are about to commit suicide, infanticide or both. We have referrals from health workers, midwives and social services, which, in Oxfordshire, certainly often use Oxpip as their emergency service. If they have tried everything else, they will come to us to see what we can do. As I said, the results have been astonishing. An enormous amount can be done, therefore, to reverse this cycle of deprivation. The problem is that so often a failure to attach in those early years is the result of the parents’ own terribly unhappy lives.

[Jim Shannon (Strangford) (DUP)]

In Northern Ireland, an organisation called Home Start—it probably covers the whole of the United Kingdom—provides that level of support when it is needed most. I know of many ladies in my constituency and across the whole of Northern Ireland who benefited greatly from Home Start. Is that an example of what we need to do everywhere in the United Kingdom?

[Andrea Leadsom]

I completely agree that Home Start does some excellent work—in my constituency, it is actually based directly below Norpip—and we work together with it. But I am talking about psycho-therapeutic support for the most difficult early relationships. Often it is parents’ own unhappy lives that give them problems bonding with their babies.

[Andrew Selous (South West Bedfordshire) (Con)]

I hugely congratulate my hon. Friend on the mature way in which she is discussing issues that politicians often find hard to discuss. Does she agree that it is often easier to give children this incredibly important love if both parents are loving and committed to each other? That can be hugely helpful.

[Andrea Leadsom]

My hon. Friend makes a good point. Of course, as I said, it is often parents’ own unhappy lives that cause them to struggle to bond with their baby. For example, a mother who did not form a bond with her own mum as a baby will struggle to bond with her own baby. Her capacity to love her baby will be impaired. Often, relationship or marital breakdown, extreme poverty, drug abuse, perhaps domestic violence and other such issues make it incredibly difficult for the mum and the family to find the love that the baby desperately needs. Often, the baby becomes the last person whom anybody thinks about.

In truth, of course, early intervention and early attachment is no respecter of class or wealth. One can be extremely poor and extremely securely attached to one’s baby, but equally one can be extremely wealthy, with all the privileges it brings, and bring up the least happy child in our society. It simply does not go with the turf.

I urge the Government, in the light of our correct decision to turn to localism in the early intervention agenda, to allow local communities, in as many ways as possible, to make decisions for themselves. We must educate people much more on the importance of early attachment and the need for that early bond. Oxpip, for example, trains social workers, health visitors and midwives, and on the evaluation forms almost everyone says, “If only I had known this sooner.”

In the case of baby Peter, I remember thinking, “How could any mother allow someone to stub out a cigarette on her baby? How poorly attached was she to that baby!”, but then my next thought was, “What if he had survived?” All the talk was about how physically damaged he was, but what about how mentally damaged he was? This is the problem. We have to educate people, particularly in the perinatal, infant health care and mental health care professions on the crucial importance of early attachment.

That requires, first, proper training for social workers, health visitors and midwives on understanding early attachment itself. We need proper training of the sort that Oxpip provides. Secondly, sadly we often find that schools say to a young girl, “Well, if you’re not going to make it as a hairdresser, have you thought of child care?” Too many nurses, therefore, are very young people—often girls—who themselves have not had a happy childhood and who are looking for love with somebody else’s baby, but of course it does not work that way. To be a proper nursery worker, somebody needs to have the empathy skills, not simply the right national vocational qualification or GCSEs. That is incredibly important.

Thirdly, on another call to action for the Government, we desperately need to ensure that children themselves understand this point. The right hon. Member for Birkenhead (Mr Field) has talked of children entering school who do not recognise their own name unless it is yelled at them with real hatred—and probably with some stinking epithet attached at the end. The point is not that the child is not school-ready but that massive damage has already been done. If we do not intervene until school age, therefore, we are just dealing with the consequences—but that is not prevention; it is firefighting. What I would like to see, therefore, is all children in their science GSCE being taught about early brain development—being taught that the brain is not fully developed at birth and that the earliest relationship will have profound consequences for the healthiness of the brain as people grow up.

Finally—this is the other call to action—the protocols in nursery care often mean that someone will do the nappies for the morning run, while someone else will do the noon run and someone else the after-lunch run. That has to stop. Nurseries need to understand that for attachment to take place, there must be a bond between the nursery worker and the baby, so that that person can make a genuine contribution to the baby’s attachment ability, rather than detracting from it. Nursery protocols can therefore be either extraordinarily helpful or extraordinarily harmful in improving the quality of attachment.

There is an awful lot of understanding about the issue now. Most people would accept that early intervention is crucial, but when I go and talk at conferences, or even when I talk to colleagues in the House, people understand “early intervention” to mean different things. I have had councillors saying, “We do early intervention to prevent people from having house fires. We go round and advise them on smoke detectors, and so on.” Other people say, “Of course, early intervention is stopping teenage girls getting pregnant.” Others think that early intervention is about sports clubs to stop boys joining gangs. The terminology has become so confused that people do not really understand what early intervention is. All those other interventions have their place. They are all critical in repairing the damage that has been done. However, if we are serious about creating a better society for our children and our children’s children, “early years prevention” must mean just that: from conception to the age of two. We can do no better than that for our children.

22:46

[The Minister of State, Department for Education (Sarah Teather)]

I congratulate the hon. Member for South Northamptonshire (Andrea Leadsom) on giving an absolutely fascinating speech. I always respect what she says, and I am always grateful for her contributions on these issues. It is good to hear someone who has so much interest, expertise and passion speak on this subject. I share her passion for this subject, which is incredibly important.

Early intervention is a hugely important issue, and the term refers to many of the things that she described. However, I should say that I am the Minister with responsibility for early years, so I have a particular bias towards ensuring that early intervention really focuses on early years issues. The point about attachment is gathering pace in debate, as well as in the knowledge among professionals on the ground. The work that Oxpip has done, along with the hon. Lady’s work in continuously raising this issue, is important in ensuring that professionals understand the importance of attachment and that the Government consider it when we develop our early years policies.

I absolutely agree with the hon. Lady’s points about the importance of warm parenting and bonding. Those issues go to the heart of many of the things that we have been trying to do over the last 18 months. She will be aware that I and the Under-Secretary of State for Health, the hon. Member for Guildford (Anne Milton), who has responsibility for public health, jointly published a document in the summer called “Families in the Foundation Years”, which covers many of the things that she picked up. There is a lot more work to do in this area—some of it is just beginning—but some of the themes that the hon. Member for South Northamptonshire picked up are being addressed by what is very much work in progress, across both the Department for Education and the Department of Health. In a sense, the things that she has talked about go right to the heart of the intersection between those two Departments. Indeed, it was a toss-up as to whether it would be me or my colleague the Minister with responsibility for public health responding this evening. We both take such issues incredibly seriously, which is why we are collaborating on much of the work on the nought-to-five age group.

The hon. Member for South Northamptonshire outlined the impact that insecure attachment can have on neurodevelopment and, in particular, the ways in which it affects levels of cortisol and the long-lasting impact that this can have on brain development. That is worth emphasising. Not all the research is concrete enough for us to be able to tell in retrospect whether somebody’s difficulties are a result of attachment issues, but there is good evidence that stress in early years results in attachment issues later. It is not always possible to bring that back retrospectively, when somebody’s behaviour is difficult, but there is certainly good correlative evidence that the lack of a warm bond from the beginning can result in serious behavioural problems later.

The issues that the hon. Lady has raised go to the heart of a number of matters that are a priority for the Government in the areas of family policy, health policy and child development. We have many of the systems in place that will begin to pick up on those issues. This is about universal and targeted services. She made the powerful point that issues of attachment are no respecter of class or income, which is precisely why we need children’s centres that are universal, but that can focus on those who are in the most need. They must have a universal front door through which anyone can walk, and they must not stigmatise those people who walk in and ask for the services. They must then focus their resources on the most difficult and challenging problems, including those that the hon. Lady mentioned. That is exactly what we have been trying to achieve.

Regarding the statement that we published in the summer, a number of things will be key if we are going to get this right. First, it is about identifying need early and putting in place the support to help the families that need it. Frankly, the first problem that we need to get over is that of data sharing. As I have said, this problem goes to the heart of issues covered by the Department for Education and the Department of Health, and data sharing is one of the big nubs that the previous Government tried to get to grips with. My colleague the Under-Secretary of State for Health and I are determined to pick up on this issue, because until the information about which families are most in need can be passed between the different professionals, it will be difficult to put in place the help that we know is available.

Over the past six months, I have seen some really good examples of where the services are working really well, and it is worth taking a minute to talk about them. The most exciting of the examples was in Manchester. I visited the Clayton Sure Start children’s centre just after the riots to find out about the work that it had been doing in this area. As part of a drive to improve the integration of services with GPs in the area with the most deprived wards, the GPs themselves had arranged for junior doctors who were training to become GPs to spend time at children’s centres to see the services that were being delivered. Among the messages that they were trying to get across was that, when a woman presents with post-natal depression, it is not just the woman whom they need to treat. They need to look beyond the patient and to understand that a newborn child is also involved and that, unless they get the services right, there could be a risk of attachment disorder later. That is not to say that every woman who presents with post-natal depression will have a child who ends up with attachment disorder, but GPs need to be aware of these issues.

The hon. Lady made a point about training for professionals. Health visitors are trained to understand these things, as are early years workers, although I think that there is much that we can do to improve on that. I will come back to that in a moment. Many GPs have very little knowledge of child development and attachment issues. That was a really exciting project on social prescribing, and I will be fascinated to see the results. I hope that many other areas will follow Manchester’s example, and learn just what can be done.

Similarly, some really good work has been done in Hull, involving an agreement to share information between local health services and children’s centres. The project has been led by one inspirational woman who is absolutely determined to ensure that the information was shared. The result of the agreement was that health visitors and family outreach workers were not duplicating each other’s work. They were sharing information and getting to the families in need quickly. They were also able to put in place the kind of support that the children’s centres offer, to help parents to understand the need to speak to their children in a particular way, and to understand about the warm parenting styles and firm parenting styles that are important right from the beginning.

The hon. Lady will be aware that the Government have committed to significantly increasing the number of health visitors. We plan to increase the health visitor work force by 4,200 by 2015 to ensure that the healthy child programme is fully and consistently implemented. At the moment, because of the patchy availability of health visitors, not everyone gets the support that they need. Ensuring that that service is well linked to the work that we are doing with children’s centres is at the heart of what we are trying to do.

Similarly, the Government have doubled the amount of funding available for the family nurse partnership—a programme that works intensively with particularly vulnerable young mothers and young parents to make sure that they get support right from conception, as the hon. Lady said, so that we do not pick up problems several months down the line when some of the problems have already begun to cement. It is an important programme, which we know makes an enormous difference to families at what is often a particularly difficult time. The nurses are very experienced and receive additional training in motivational interviewing, neurological development, attachment, mental health and strength-based working in a therapeutic relationship. Those are important skills, which help to ensure that the nurses are able to support mothers at that time.

[Andrea Leadsom]

I agree that the family nurse partnership is excellent, but does the Minister agree with me that it is entirely possible to come up with other strategies that would be less expensive and less prescriptive, including different therapies that might be more appropriate for certain types of parents rather than a prescribed particular programme that costs the taxpayer a lot of money to implement?

[Sarah Teather]

As the hon. Lady says, the family nurse partnership is one of our more expensive programmes. It is focused on very young mothers, and the doubling of the programme has been aimed primarily at expanding the help available to young, mostly teenage mothers who we are know are vulnerable. That is not to say, however, that other forms of help cannot also be extremely effective. The hon. Lady speaks with great passion about the work of the charity with which she is involved. Children’s centres have other models for helping to support women, particularly in areas where data sharing is working well and someone might be brought into a children’s centre before they give birth. It does not necessarily mean that the support they get is through the FNP system. There may be other ways of supporting those women. It is important for children’s centres to build on the best evidence available, but they must also be left free to innovate and develop their own work—based on what is known works.

Let me provide an example—outreach work. We are trying to improve the quality of the work done on outreach and family support. At the moment, there is a great variety of types of work on outreach. We have been working with the National College for School Leadership to develop some leaders in this area so we can draw together the evidence of best practice and disseminate it to encourage all areas to adopt the elements that we know work. That is not to say that every programme has to be badged or that everybody has to call their family support worker—sometimes called something slightly different. We know that certain key components of this work make a difference, so the key components of best practice will make a difference to families in difficulty.

I have only a few minutes left, so I would like to pick up some other points raised in the debate. The hon. Member for South West Bedfordshire (Andrew Selous) raised a point about relationship support. I think that is critical for both the reasons the hon. Gentleman suggested, but also because when parents are in conflict, it is incredibly damaging for children as they grow up. That is the main reason why the Government are providing support for relationships—formal face-to-face relationship support, but we have also provided money for telephone counselling. This is an important feature of parenting programmes that work well. If we are to support parenting, we know that it is key to support the parents’ relationship and get them to talk to one another. They must have some support to ensure that the relationship is solid; parents should have the skills to negotiate with one another, not just with the child. Working with only one parent in such circumstances tends to be less effective. It may not have no good results, but the results will be much better if a component of relationship support is included.

Last September the Government announced a trial of a new offer of universal parenting support, which will take place in three areas for parents with a child under five. That was a response to evidence that parents’ relationships with their children was critical to the home learning environment—the hon. Member for South Northamptonshire mentioned children aged between nought and two, but in fact the relationship is critical throughout, and is one of the most important factors that determine how well a child does—but also a response to what parents tell us, which is that they want more support in this regard.

We will begin the trial, and we will see what happens. We will see whether parents take up the offer, whether it is popular, and whether it has an impact on parenting style. It is one of the things that we will need to evaluate at a later stage. We will want to know whether it deals with some of the points that have been raised this evening about harsh parenting styles that have an impact on children’s development and on discipline, but we also want to test the theory that if we provide this—

23:01

House adjourned without Question put (Standing Order No. 9(7)).