House of Commons

Thursday 21st March 2013 Commons Chamber

Thursday 21 March 2013

The House met at half-past Nine o’clock

Prayers

Thursday 21st March 2013 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Thursday 21st March 2013 Commons Chamber

The Secretary of State was asked—

[Glyn Davies (Montgomeryshire) (Con)]

1. What progress his Department has made on developing trade links with non-European Union countries.

[The Secretary of State for Business, Innovation and Skills (Vince Cable)]

We have increased UK Trade & Investment’s focus on growth markets and we are championing ambitious EU trade agreements to help stimulate an export-led recovery. Over three years, our goods exports to Brazil are up by half; to India, by over half; to China, they have almost doubled; and to Russia, they are up by 130%.

[Glyn Davies]

We learned yesterday from Office for Budget Responsibility figures that the eurozone economy shrank by 0.6% in the last quarter, and the economies of the United States and Japan are flat. Does my right hon. Friend agree that if we are to return to sustained growth in the United Kingdom, we have to increase the business we do with high-growth economies such as Brazil, Russia, China and India?

[Vince Cable]

Yes, I absolutely agree. The Prime Minister and I, and other Ministers, spend a lot of our time trying to develop exports in these growth markets and to attract inward investment from them; that is clearly where the growth is. That does not mean that the EU market is not important; it clearly is, and that is why we are pressing for improvements to the single market.

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

In his autumn statement 2010, the Chancellor stated that he wanted to see an export-led recovery. Given that last year exports fell and the current account deficit was the greatest for a quarter of a century, how does the Minister responsible for exports think his Department is doing?

[Vince Cable]

We are being extremely energetic in promoting that agenda. It is certainly true, as the Office for Budget Responsibility has made clear, that the slow-down in the British economy was primarily due to the failure in net exports. In our major export markets, zero or negative growth has been a significant factor. As I said in my first answer, we have very rapid growth in exports to some of the big emerging markets. A lot of that is due to the supportive efforts that are being made not only by British business but by Ministers, including me.

[Mr Philip Hollobone (Kettering) (Con)]

Is it not a serious source of concern that while we have a £20 billion trade surplus with the rest of the world, we have a £48 billion trade deficit with the European Union?

[Vince Cable]

Yes, it is a source of concern. We now have the benefits of a much more competitive exchange rate, and given the efforts that we are making to promote British exports and import competing industries, I would expect that deficit to narrow.

[Mr Iain Wright (Hartlepool) (Lab)]

As the Secretary of State and the hon. Member for Montgomeryshire (Glyn Davies) have said, the UKTI strategy recognises the need

“to increase exports, especially to the high growth and emerging markets of the new global marketplace”.

Yet despite this objective, and as well as sterling’s dramatic weakening in recent months, which should help exports, the Bank of England has described export performance as “disappointing”, the OBR has described it as “weak”, and yesterday’s Budget revealed forecasts of net trade rising by a paltry 0.1% until 2017. Why are we not experiencing an export-led recovery, and what will the Secretary of State now do differently to boost exports?

[Vince Cable]

I would have thought it was fairly obvious that when there is an economic slump in the markets that constitute half our exports, it is rather difficult to expand into them, despite the competitive advantage that we have. There are deep structural problems. Many exporters genuinely have problems in getting access to bank finance or difficulties in getting access to trained workers. These are long-term structural problems that we inherited and are now trying to deal with.

[Mr Dominic Raab (Esher and Walton) (Con)]

2. What steps he is taking to reduce business regulation for start-ups and small businesses.

[The Minister of State, Department for Business, Innovation and Skills (Michael Fallon)]

Through the red tape challenge, we have committed to scrapping, improving or simplifying at least 3,000 regulations. We introduced the ground-breaking one in, one out rule, which has saved businesses around £1 billion in regulatory costs; and from January we upped that to one in, two out. In addition, the micro-business moratorium introduced in April 2011 has protected the very smallest firms, and I hope that we can build on that when the moratorium expires next March.

[Mr Raab]

I thank the Minister for that answer. The Institute of Directors estimates that regulation costs British business £112 billion each year. I understand that the Government moratorium on new regulation applied to micro-businesses and start-ups, to which the Minister has referred, expires next year. Will he extend it for another three years in order to boost growth and get firms hiring?

[Michael Fallon]

We are looking hard at what we can do to extend that protection for the very smallest businesses from burdensome regulation from next year. In addition, we are pressing the Commission to make more proposals to implement its own commitment to a moratorium. We have seen a couple of examples from the European Union so far and we need to see more.

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

The Minister will agree that most of the small firms we meet want light regulation, if none at all, but they also want good finance. What does he have to say about Rich Ricci, who has just been awarded a £16.7 million bonus by Barclays? What has Barclays ever done for small business in order for a man to get a £16.7 million bonus on the same day as the Budget took welfare money away from the poorest in our country?

[Michael Fallon]

I am not sure what that has to do with the red tape challenge, but Barclays is one of the banks that we are pressing hard to do more to lend more to small businesses, and we expect it to steadily increase the take-up of the various Government schemes on offer.

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

Will my right hon. Friend look at removing gold-plated provisions on items such as jam, which has to be marketed as a preserve unless it has the right amount of sugar or fruit in it?

[Michael Fallon]

It was the previous Government who transposed the European directive but who failed to transcribe the flexibility that France and Germany have to lower the minimum sugar content in jam. We will consult on that shortly. Under this Government, not only is there more flexibility towards the European Union, but there will be more jam tomorrow.

[Mr David Hanson (Delyn) (Lab)]

Given that Members in another place—not just Labour peers, but a former Conservative Chancellor of the Exchequer and former Cabinet Ministers and Cabinet Secretaries—have this week rejected the Government’s shabby proposals on cash for workers’ rights, is it not right that the Government now reconsider their shabby proposal?

[Michael Fallon]

This House agreed before Christmas to make available this additional right. Nobody has to take it up—they cannot be bullied or harassed into it. There is no need for them to take it up, but equally there is no need for the other place to deny them the opportunity if they wish to do so.

[Jonathan Ashworth (Leicester South) (Lab)]

3. What recent assessment he has made of the operation of the regional growth fund.

[The Minister of State, Department for Business, Innovation and Skills (Michael Fallon)]

The regional growth fund is a success, not least in the east midlands where 16 projects and programmes have access to nearly £117 million. Nationwide, 198 projects and programmes have already been finalised and can draw down their funding, including 15 from round 3 which have already benefited from the accelerated process I announced last October. The rest of the round 3 awards will be finalised in the middle of next month, including, I hope, the Leicester and Leicestershire local enterprise partnership programme, which will support businesses in the hon. Gentleman’s constituency.

[Jonathan Ashworth]

I think that the right hon. Gentleman intends to visit my constituency tomorrow to attend the Federation of Small Businesses conference. I am sure he will find that we have a significant number of small and medium-sized enterprises in Leicester, Leicestershire and the east midlands, and a significant manufacturing base. Despite what he has said, the east midlands appears to be bottom of the pile when it comes to regional growth fund allocations. In round 3, we received just 2% of allocations. When will the east midlands get a fair deal?

[Michael Fallon]

I am looking forward to attending the FSB’s annual conference with the Secretary of State in the hon. Gentleman’s constituency tomorrow, and to hearing more about how it applauds what was in yesterday’s Budget. I hope the hon. Gentleman will be there, too.

On the regional fund’s allocation for the east midlands, this is a competitive fund. There are no specific targets for each region and 19 bids have been selected in the east midlands. Subject to finalising the award I mentioned, the Leicester and Leicestershire LEP programme will support SMEs across the hon. Gentleman’s constituency with 25% capital investment grants ranging from £25,000 up to £150,000. I hope he will encourage—

[Mr Speaker]

Order. The answer is too long.

[Duncan Hames (Chippenham) (LD)]

The regional growth fund has certainly attracted interest in Wiltshire, with bids from Melksham’s Cooper Tires and the Corsham Institute. Whether it brings sustainable energy solutions or exploits the digital economy, is this not a welcome diversification of Wiltshire’s economy?

[Michael Fallon]

It certainly is. The purpose of the regional growth fund is to help better balance our economy by encouraging manufacturing, especially in those regions that have been over-dependent either on public sector employment or single types of employment.

[Michael Connarty (Linlithgow and East Falkirk) (Lab)]

4. If he will bring forward proposals to require companies to include supply chain issues in their annual narrative reporting.

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson)]

The Department has no plans to require companies to report specifically on supply chains. However, responsible supply chain management is an important issue, which good businesses should understand and take seriously. From October, listed companies will be required to report on community, employee and human rights issues. Later this year, we will publish a framework for action on corporate responsibility, which will consider supply chain management.

[Michael Connarty]

I thank the Minister for that reply. We found out yesterday in a press release that businesses are being urged to sign a human trafficking charter. That came not from the Department for Business, Innovation and Skills but from the Home Office. It appears that the Minister for Immigration is taking over the responsibilities of Business, Innovation and Skills Ministers. He is proposing that businesses should sign up to a charter that seems very similar to the contents of my private Member’s Bill, the Transparency in UK Company Supply Chains (Eradication of Slavery) Bill. Surely it is up to BIS to include human trafficking in the narrative reporting of companies in its proposed statutory instrument. If the Minister for Immigration wants that requirement on human trafficking, surely BIS Ministers do too.

[Mr Speaker]

Order. We are grateful. We have got the point.

[Jo Swinson]

I commend the hon. Gentleman for campaigning against this vile and abhorrent crime. He rightly points out the action that the Government are taking on human trafficking. That is being done in conjunction with BIS, but the Home Office is obviously the lead Department on human trafficking. The Minister for Immigration has rightly been taking the matter forward. Both he and I spoke at a conference this week about human trafficking and the risks to the hospitality sector in particular. We will continue to work with business to raise the awareness of this issue and to clamp down on problems in the supply chain. It is a reputational risk for businesses and we must ensure that there is proper enforcement through the Home Office procedures.

[Alison McGovern (Wirral South) (Lab)]

5. What assessment he has made of access to apprenticeships for young women.

[The Parliamentary Under-Secretary of State for Skills (Matthew Hancock)]

The number of women starting apprenticeships has more than doubled since this Government took office. The tax cuts for low earners that were announced yesterday by my right hon. Friend the Chancellor of the Exchequer will take thousands of apprentices—men and women—out of tax altogether.

[Alison McGovern]

I thank the Minister for his answer, I think. It sounded lovely, but unfortunately the Business, Innovation and Skills Committee reported in November:

“Gender segregation remains a huge problem with only 3% of engineering apprentices”

being women

“compared to 92% of hairdressing apprentices.”

The Select Committee said:

“Such inequality, especially in a publicly funded scheme is not acceptable”.

Since November, what has the Minister been doing about that?

[Matthew Hancock]

Under Labour, a minority—[Interruption.] Hold on! Under Labour, a minority of those starting apprenticeships were women, and now a majority of those starting apprenticeships are women. I thought that the hon. Lady would welcome that. Specifically on engineering, not only is the apprentice of the year, Jenny Westworth, a brilliant engineer, but we have a scheme with Rolls-Royce, BAE Systems and others to promote women in engineering. This is something that I feel passionately about and we will do yet more.

[Peter Luff (Mid Worcestershire) (Con)]

This week, I met two hugely impressive female engineering apprentices from the company MBDA, which achieves a 50% intake of female engineering apprentices. That shows that it can be done. Does my hon. Friend agree that one of the best ways of achieving that is for businesses to engage with schools as part of an effective design and technology curriculum?

[Matthew Hancock]

I agree entirely. That demonstrates the effort that is being made. Indeed, the Secretary of State met the female engineers my hon. Friend talked about. The number of apprentices in engineering and manufacturing has gone up by more than half in the past two and a half years. [Interruption.] The “Oohs” and “Aahs” of Labour Members only reflect their disappointment at being such failures themselves.

[Pat Glass (North West Durham) (Lab)]

The Minister’s Department found recently that one in five apprentices receives no training whatever. That is worrying for apprentices and damaging to the brand. What action is the Minister taking to address that?

[Matthew Hancock]

The gathering of that evidence started in 2008. It is shocking that that happened under the previous Administration, and we have stopped it.

[Mike Freer (Finchley and Golders Green) (Con)]

6. What assessment he has made of national apprenticeship week 2013.

[The Parliamentary Under-Secretary of State for Skills (Matthew Hancock)]

National apprenticeship week last week was a triumph. Tens of thousands of new apprenticeship places were announced; there was double the coverage of last year; and the message went out loud and clear from this House and beyond that apprenticeships deliver.

[Mike Freer]

I am grateful to the Minister for that answer. Last week I had an apprenticeships fair. Does the Minister agree that the National Apprenticeship Service does a wonderful job in supporting MPs, private organisations and charities in boosting apprenticeships in this country?

[Matthew Hancock]

I commend the National Apprenticeship Service for its work, and I know there were more than 400 local residents and 22 employers at my hon. Friend’s job fair. I have my own jobs fair tomorrow, and national apprenticeship week next year will take place on 3-7 March. I hope that all hon. Members will get involved.

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

Businesses in my constituency report difficulty in recruiting apprentices in electrical, mechanical and control engineering. What can the Minister do to develop a pipeline of such apprentices?

[Matthew Hancock]

We have made it clear that we expect a new norm for school leavers to go either into apprenticeships or to university. On average, 10 people apply for every apprenticeship vacancy. There is huge enthusiasm, but much more that we can do.

[Ann McKechin (Glasgow North) (Lab)]

Further to the question from my hon. Friend the Member for Wirral South (Alison McGovern), surely the Government should adopt a comprehensive strategy to tackle gender segregation, just as they have—rightly—supported the Davies report on senior women on company boards.

[Matthew Hancock]

A comprehensive strategy is about ensuring that we support women as well as men who want to do apprenticeships, and that is exactly what we are doing.

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

7. What recent assessment he has made of manufacturing activity and future capacity in that sector.

[Chris Williamson (Derby North) (Lab)]

8. What recent assessment he has made of manufacturing activity and future capacity in that sector.

[The Secretary of State for Business, Innovation and Skills (Vince Cable)]

After years of manufacturing being in relative decline we are seeking to bolster manufacturing capacity and drive the transformation to a skilled economy. On Monday we launched an aerospace strategy with £2 billion Government-industry funding for an aerospace technology institute. Rounds 2 and 3 of the advanced manufacturing supply chain initiative opened for applications today.

[Tristram Hunt]

One of the major problems affecting ceramics manufacturing in my constituency is, after yesterday’s Budget, no longer the climate change levy, but is security of supply when it comes to gas. We have dangerously low levels of gas storage capacity in this country, and in recent weeks we have come close to energy cut-outs. Will the right hon. Gentleman meet the Secretary of State for Energy and Climate Change as a matter of urgency so that we can have proper energy security for our ceramics industry?

[Vince Cable]

I congratulate the hon. Gentleman and his fellow potteries MPs on putting ceramics on the agenda. We recognise that because ceramics institutions are driven by gas rather than electricity it is more difficult to compensate them under the Government’s scheme. He is right to raise the issue of gas storage, which goes back many years. Compared with France we have relatively little strategic storage and I would be happy to talk to the Energy Secretary about that.

[Chris Williamson]

I hope the Secretary of State supports early-day motion 1185 which calls for the 600 taxpayer-funded carriages for the Crossrail project to be built at Derby’s Bombardier factory, safeguarding more than 10,000 jobs. Given that the Mayor of London will have a big say in where those trains are built, will the Secretary of State tell the House whether he is making the socio-economic case to the Mayor for building those trains in the UK, and specifically in Derby?

[Vince Cable]

We will certainly make the case for tendering to be conducted in a proper, strategic way. One lesson we have learnt over the years is that the rather opportunistic approach that used to happen in public sector tendering for public transport was not helpful, and we will certainly make the strategic case directly with Government and public agencies.

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

Manufacturing is very important to my constituency. Will my right hon. Friend update the House on the outcome of the third annual manufacturing summit, which took place in February 2013?

[Vince Cable]

It was a very productive session at Gaydon and we were able to see successful British car manufacturing—Jaguar Land Rover and Aston Martin were just across the road. It was the largest summit we have had so far, and a celebration, as well as a serious business discussion, of the progress we are making on apprenticeships, innovation and other support for manufacturing.

[Graham Evans (Weaver Vale) (Con)]

9. What steps he is taking to promote advance manufacturing.

[The Minister for Universities and Science (Mr David Willetts)]

Advanced manufacturing is crucial to economic growth. That is why the Chancellor announced a further £1.1 billion for our industrial strategy in his Budget. That follows an additional £600 million investment in the autumn statement for eight great technologies.

[Graham Evans]

Will my right hon. Friend commend the vital contribution to the national economy made by advanced manufacturing industries, such as APPH in Runcorn, which manufactures vital parts for the Saab Gripen fighter? The company has recruited four new engineering apprentices from Manchester, Liverpool and Salford universities. Does he agree that it is vital to encourage more young people to take up engineering as a career?

[Mr Willetts]

I agree with my hon. Friend. The aerospace announcement in the Budget, to which my right hon. Friend the Secretary of State has just referred, is crucial in supporting those industries. My hon. Friend can be proud of a constituency that has, in Daresbury, an important high-tech centre.

[George Freeman (Mid Norfolk) (Con)]

This week, AstraZeneca announced a deep global restructuring, committing its manufacturing facility to Cheshire, but moving its global R and D to Cambridge, with a £300 million investment and 2,000 staff. Does my right hon. Friend agree that that is a sharp reminder of the deep global restructuring in the pharmaceutical sector and the importance of the life science strategy we put in place 18 months ago? May I congratulate his Department on the speed with which the task force was set up?

[Mr Willetts]

The announcement was obviously disappointing for people at Alderley Park, but we have worked with AstraZeneca in setting up a task force, which I hope will secure a future for the site. Meanwhile, we should celebrate the fact that AstraZeneca decided, having looked around the world, that the UK was the best place to invest in new R and D facilities.

[Dan Jarvis (Barnsley Central) (Lab)]

10. What his policy is on vocational education routes; and if he will make a statement.

[The Parliamentary Under-Secretary of State for Skills (Matthew Hancock)]

We are reforming vocational education to be more rigorous and responsive. We will introduce a TechBacc to recognise high-value technical education. We are strengthening further education colleges and, through the Richard reforms, strengthening apprenticeships, so that university or an apprenticeship becomes the new norm for school leavers.

[Dan Jarvis]

I thank the Minister for his response. He may not be aware that a number of major public and private sector employers in Barnsley recently signed a pledge to have 2.5% of their work force as apprenticeships. However, with the number of young people aged 16 to 18 starting apprenticeships falling, can the Minister learn anything from the innovative approach taken in my constituency?

[Matthew Hancock]

Yes, I am sure I can learn an awful lot from such an approach. It sounds terrific and I would like to hear more.

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

My constituency experience is that many young people and their families find it very difficult to understand exactly the qualification routes in vocational education and how young people might plug in later to more academic careers or whatever. Will the Minister consider simplifying the system to ensure much greater clarity for those interested in following such careers?

[Matthew Hancock]

That is an important point. The TechBacc aims to do precisely what the right hon. Gentleman suggests, alongside making apprenticeships the new norm. We want to make clear the progression routes that people can take to get into the career that they want. I am happy to look at any other steps we can take, but simplification is the order of the day.

[Mr Gordon Marsden (Blackpool South) (Lab)]

Does the Minister realise that success in vocational education is a game of two halves? We will get the expansion in quality apprenticeships we need only if he has prepared the ground, which means proper support for vocational education in schools, on which the Government are failing. The latest research from the Chartered Institute of Personnel and Development shows that parents remain doubtful. Therefore, in his second day job as a Minister in the Department for Education, will he restore key stage 4 work experience and dedicated funding for face-to-face guidance, for which half the people surveyed by the CIPD and the employers I speak to are crying out?

[Matthew Hancock]

We are introducing work experience as part of the study programmes in sixth forms and for 16 to 18-year-olds. The new duty on schools to provide independent and impartial advice is an important step we have taken from this summer.

[Martin Vickers (Cleethorpes) (Con)]

11. What support his Department is providing to encourage investment and growth in north and north-east Lincolnshire authority areas.

[The Minister of State, Department for Business, Innovation and Skills (Michael Fallon)]

North and north-east Lincolnshire are benefiting from over £41 million of Government investment from the regional growth fund, including the £30 million Humber local enterprise partnership that I launched in February with my hon. Friend, which will support businesses in his constituency. The Humber has also secured the largest enterprise zone allocation in England—1,200 acres over two sites—which will help to support the development of the offshore renewable industry in both north and north-east Lincolnshire.

[Martin Vickers]

We obviously welcome the Government’s continuing support and any further initiatives. To emphasise that Cleethorpes is a good place to start businesses, today is the fifth anniversary of the launch of the Cleethorpes Chronicle by two local businessmen. Does the Minister agree that if people show determination and enthusiasm and have a quality product, it is appropriate to start a business, even in these difficult times, as we have seen with the success of the Cleethorpes Chronicle?

[Michael Fallon]

I congratulate the Cleethorpes Chronicle on reaching that milestone and we should send our best wishes to Nigel Lowther, Mark Webb and the team. It is a great local paper, committed to the community and the businesses that it serves.

[Andy Sawford (Corby) (Lab/Co-op)]

rose—

[Mr Speaker]

I do not wish to be unkind to the hon. Gentleman, but he represents a Northamptonshire constituency: he does not feature in north-east Lincolnshire. He is close, but not quite close enough. I will give him a go later, if he is a patient fellow, as I am sure he will be.

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

12. What plans he has to implement a share scheme for Royal Mail employees.

[The Minister of State, Department for Business, Innovation and Skills (Michael Fallon)]

Parliament decided two years ago that employees of Royal Mail should share in its success. It would be wrong to deny employees this any longer. They should be sharing in the company’s success and dividends, and it is our intention to have such a scheme in place at the time that we conduct a sale of Royal Mail.

[Roger Williams]

I thank the Minister for that encouraging reply. The better financial performance of Royal Mail owes much to the loyalty of postmen and women getting the mail out to every address in the country, even in during these difficult weather conditions. Can the Minister give us a little more certainty about the timing of this scheme and how those loyal postmen and women will benefit?

[Michael Fallon]

It is our intention to conduct a sale during the forthcoming financial year, 2013-14, and I confirm that at the time of that sale we intend to make a share scheme available to the 130,000 employees of Royal Mail who, as my hon. Friend says, have worked so tirelessly to turn it into a successful and profitable business and should share in that success.

[Mr Russell Brown (Dumfries and Galloway) (Lab)]

What assurances can the Minister give to small businesses and many individuals across the UK who rely on a well performing, six-day-a-week service to their homes and businesses? Will that remain so once Royal Mail is privatised?

[Michael Fallon]

Yes, it will, because Parliament put in place, in the Postal Services Act 2011, the statutory requirement for a universal postal service that is secured by Ofcom, an independent regulator, and that will exist irrespective of the ownership of Royal Mail.

[Ian Murray (Edinburgh South) (Lab)]

We very much support genuine employee ownership, especially for hard-working Royal Mail employees. However, we vehemently oppose this Government undermining employee ownership by attaching it to the Beecroft agenda of giving up rights at work. The Chancellor announced this policy by proclaiming:

“Workers of the world, unite!”

Well, they have: they have united against this policy, along with the Employee Ownership Association and the vast majority of responses to the consultation. The Minister is not listening to this large body of opinion, so may I press him again, following the question from my right hon. Friend the Member for Delyn (Mr Hanson), to heed the advice of Conservative Lords Lawson, King, Forsyth and Gummer who voted yesterday, with a large majority of other Lords, to dump these divisive shares for rights policies?

[Michael Fallon]

I note that the hon. Gentleman wants to divert the House from the question about Royal Mail and the more interesting question of whether those on the Opposition Front Bench will support this opening up of Royal Mail to private capital and the scheme to ensure that those who work for the company will share in its success.

[Richard Fuller (Bedford) (Con)]

13. What recent assessment he has made of the costs and benefits of international students to the UK economy.

[The Minister for Universities and Science (Mr David Willetts)]

International students provide enormous economic and cultural benefits to the UK. Education exports from further and higher education contribute some £9 billion to the economy. We therefore stated in January that we will place no cap on the number of genuine students coming from across the world to study in this country.

[Richard Fuller]

I thank the Minister for that answer. We all understand the importance of clearing up the chaotic mess of immigration left by the last Government and the attention that the public pay to reducing the total numbers, but many of us would like to see student numbers excluded from our migration statistics. The economic case has been made by Universities UK and the 1994 Group. Will the Minister reassure me that he is sensitive to these representations?

[Mr Willetts]

My hon. Friend is right. The first priority was to eliminate abuse so that people can have confidence that students are legitimate. We have now said that we will disaggregate the statistics so that students are separately identified. The next step is a positive education export strategy, which we will produce before the summer.

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

The Royal Botanic Gardens in my constituency carries out world-leading research that benefits the UK in many ways. International students and interns are an important part of that work, but the gardens’ particular organisational status sometimes makes it difficult to obtain visas for them. If I write to the Minister with the details, will he, perhaps in conjunction with his colleagues in the Home Office, look at this issue to help support its important work?

[Mr Willetts]

I am always happy to work with the Minister for Immigration, my hon. Friend the Member for Forest of Dean (Mr Harper), to iron out such problems, but the general point is very simple: genuine, legitimate students are allowed into this country and there is no limit on the numbers.

[Shabana Mahmood (Birmingham, Ladywood) (Lab)]

The Minister tries to paint a rosy picture, but the facts are that the recent drop in net migration is due to 38,000 fewer international students coming to this country. His policy is choking growth in our seventh-largest export industry, worth billions of pounds, at a time when our economy is flatlining. It is clear that the Minister is too weak to make the case for our world-class universities around the world and too weak to lobby his Government colleagues to change course. Does he agree with me that the one genuine achievement of the net migration pledge has been a net decrease in his own credibility?

[Mr Willetts]

The hon. Lady should understand that we have a clear policy: there is no limit on the number of students. I went with the Prime Minister on his most recent trade mission to India, accompanied by leading vice-chancellors, to communicate clearly and directly to one of our most important markets for overseas students that they are welcome to come and study in the UK.

[Stephen Barclay (North East Cambridgeshire) (Con)]

14. What assessment he has made of the potential benefits of the development of a new agri-tech centre in Wisbech for regeneration in the fenland region.

[The Minister for Universities and Science (Mr David Willetts)]

We announced funding for agri-tech only this week as part of the Chancellor’s excellent Budget. I congratulate my hon. Friend on being the first to bid for some of that funding. I am sure his idea for a new agri-tech centre will be considered carefully, and we will set out our plans in our agri-tech strategy.

[Stephen Barclay]

I welcome the additional funding announced in the Budget yesterday and pay tribute to the excellent work my hon. Friend the Member for Mid Norfolk (George Freeman) has done on this issue. Will the Minister agree to meet me and the leaders of Cambridgeshire county council and Fenland district council, given the strength of the bid for an area that is located at the heart of the farming fens, in close proximity to the talent centres of Cambridge and Norwich, and adjacent to the College of West Anglia, which is the regional lead for science and technology and is currently building a new £12 million engineering faculty?

[Mr Willetts]

Of course I am happy to meet my hon. Friend. I understand the significance of the wider strategy for his area. East Anglia is one of our national leaders in agri-tech and agri-science, with excellent research institutes across the area.

[Angela Smith (Penistone and Stocksbridge) (Lab)]

15. What progress his Department has made on improving the export performance of UK manufacturers; and if he will make a statement.

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson)]

As part of the Government’s industrial strategy, the Department has focused its efforts on helping British manufacturers access global supply chains through schemes such as the advanced manufacturing supply chain initiative and the manufacturing advisory service. We are concentrating in particular on 20 of the world’s highest growth markets. One sign of progress is that, for the first time since the 1970s, the UK is a net exporter of cars.

[Angela Smith]

The Chancellor’s economic plan was predicated to a large degree on boosting exports. It was reported at the end of January, however, that new export orders had fallen for the 13th month in a row. What advice is the Department giving to the Chancellor on how to move from plan A to plan B and give our manufacturers the support they really need?

[Jo Swinson]

My right hon. Friend the Secretary of State for Business, Innovation and Skills outlined in response to an earlier question the significant progress we are making, particularly in non-EU economies, which are seeing much better growth than the EU. The Government have a range of different programmes, with the industrial strategy, the advanced manufacturing supply chain initiative and UK Trade & Investment providing help for businesses to export. In fact, in the past year they have supported firms in creating and securing more than 100,000 jobs for the UK economy.

[Andy Sawford (Corby) (Lab/Co-op)]

The Geddington road in my constituency links Corby not only to north-east Lincolnshire but to export markets all around the world. Will the Minister prevail on Northamptonshire county council to reopen the road to goods vehicles, which is important to ensuring that goods can get to markets from my constituency?

[Jo Swinson]

The hon. Gentleman ingeniously uses the question to highlight a local issue. It is obviously up to local authorities to make their own decisions, but he uses this opportunity to put his views firmly on the record. No doubt his colleagues on the council will look closely at his comments.

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

16. What progress he made on the adoption of an industrial strategy for the UK.

[The Secretary of State for Business, Innovation and Skills (Vince Cable)]

We are developing long-term partnerships with business across a variety of sectors and policy areas. On Monday, I announced £1.6 billion of new Government funding over the next 10 years—well beyond this Parliament—to back our industrial strategy, concentrating initially on aerospace, automotives and agri-food.

[Jonathan Reynolds]

In recent weeks, the former director general of the Institute of Directors, Sir George Cox, in his excellent review of tackling short-termism in the British economy, added his voice to the call for a proper industrial strategy to support long-term growth. Since he took office and abandoned much of what the last Labour Government were doing, the Secretary of State has delivered many good speeches on delivering an industrial strategy, but we do not yet seem to have one. When will we get this sorted?

[Vince Cable]

We already have one. We are reversing much of the damage done with the decline of manufacturing industry under the Labour Government. I applaud the George Cox study. It follows, and in many ways echoes, the survey of long-termism and short-termism that I did through Professor John Kay.

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

17. What support his Department is providing to small businesses to compete in global markets.

[The Minister for Universities and Science (Mr David Willetts)]

The Government have increased funding to UKTI, with an extra £140 million over the next two years, so that it can double the number of small and medium-sized businesses supported from 25,000 to 50,000 by 2015. We will also help 8,000 small companies attend overseas exhibitions in the next financial year. My hon. and learned Friend is absolutely right about the importance of promoting small businesses and export markets.

[Stephen Phillips]

I am grateful to my right hon. Friend for that answer. SMEs in my constituency, such as Destec Engineering, which I recently had the opportunity to visit, are the drivers of both our local and national economies. Does he agree that the measures announced in yesterday’s Budget, particularly the employment allowance and the reduction in corporation tax, will go a long way to helping such businesses grow and compete in the global economy?

[Mr Willetts]

My hon. and learned Friend is absolutely right. We believe that the employment allowance measure, on its own, will ensure that more than 400,000 SMEs no longer have to pay employers’ national insurance contributions, which is the boost they need.

[Nick Smith (Blaenau Gwent) (Lab)]

19. Which measures in the Government’s growth plan his Department has not yet implemented; and if he will make a statement.

[The Secretary of State for Business, Innovation and Skills (Vince Cable)]

Yesterday, the Government published a progress report on implementation of the plan for growth and the autumn statement 2011. All measures are being implemented and almost two thirds of the measures are now complete—up from a quarter at Budget last year. We are on track for delivery.

[Nick Smith]

The Government have announced the electrification of the Ebbw Vale to Cardiff line, but in advance of that we need to redouble the line to improve train frequency. Will the Government work with the Welsh Government to ensure that the finance for this shovel-ready project is delivered before the next election?

[Vince Cable]

I am delighted to hear an acknowledgement that after many decades of decline in the railway system we now have a major investment in railways and a rail revolution taking place. The hon. Gentleman raises a specific point that I am happy to follow up with the Welsh Government.

[Mr Speaker]

Steve Baker, not here. Sir Bob Russell, not here. I call Chris Williamson.

[Chris Williamson (Derby North) (Lab)]

T3. If he will make a statement on his departmental responsibilities.

[The Secretary of State for Business, Innovation and Skills (Vince Cable)]

My Department plays a key role in supporting the rebalancing of the economy through business to deliver growth while increasing skills and learning.

[Chris Williamson]

A recent report by the respected consumer group Which? highlighted the extent of irresponsible lending in the high-cost credit market. Do Ministers think that the Office of Fair Trading’s recent threat to revoke the licences of 50 payday lenders goes far enough to stamp out bad practice in the sector?

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson)]

The hon. Gentleman is quite right to highlight some of the unscrupulous and unacceptable behaviour in the payday lending industry. The OFT’s action, telling the industry it has 12 weeks to shape up or lose its licences, is welcome, but that is not all that is happening. The OFT also intends to refer the industry to the Competition Commission, and we have given it extra powers to suspend licences immediately. The Financial Conduct Authority will be able to take much more action, with the sweeping powers we have given it to ban products, impose unlimited fines and order redress to consumers. The Government take this issue extremely seriously and are acting on it.

[Mr Speaker]

Good of the hon. Member for Colchester (Sir Bob Russell) to drop in.

[Sir Bob Russell (Colchester) (LD)]

T2. Thank you, Mr Speaker; I followed the instructions on the Order Paper, which said, “from 10.15”. Timing is always important. What are the coalition Government doing to promote apprenticeships in manufacturing industries? If the Minister would like good examples, I can draw his attention to Paxman in my constituency—MAN Diesel and Turbo—and Fläkt Woods, among whose apprentices is Kallum Parks, who last month was presented with the Essex apprentice of the year award for 2012.

[The Parliamentary Under-Secretary of State for Skills (Matthew Hancock)]

I have just announced to the House that national apprenticeship week next year will from 3 to 7 March. I commend Fläkt Woods for the work it does and the apprenticeships it teaches. The number of apprenticeships in Colchester over the last couple of years has more than doubled, so clearly my hon. Friend’s efforts are making progress.

[Mr Chuka Umunna (Streatham) (Lab)]

Last year this Government presided over a double-dip recession. The Office for Budget Responsibility has just halved its forecast for what growth will be on the Government’s watch this year, so the situation is urgent. Yesterday the Government announced a number of measures that the Secretary of State says will help—the employment allowance for employers in respect of national insurance, an increase in capital spending by £3 billion a year and the establishment of Lord Heseltine’s single local growth fund. Which of these measures will help struggling businesses in 2013?

[Vince Cable]

There is a long answer, but I will give a short one. Let us start with the employment allowance, which will provide substantial support for micro-companies, building on considerable success with job creation— 1.25 million new jobs over the two and a half years of this Government and 600,000 forecast by the OBR.

[Mr Umunna]

The answer is that none of those measures will help businesses in 2013, because they do not kick in for at least a year, when what the economy needs is a stimulus now. What confidence can we have that the Government will actually deliver? Let us take Budgets 2011 and 2012. The Secretary of State and others boasted about their infrastructure plan, but two years on, less than 2% of the projects are completed or operational and now he says that Budget 2013 will get business investing. If that is the case, why, having accounted for this Budget, has the OBR revised down its forecasts for business investment this year, next year and in the following three years? It is not exactly a vote of confidence, is it?

[Vince Cable]

The OBR was quite clear about the reason for its downward revision of growth: it was explained in terms of net trade. That was the overwhelming factor, but if the hon. Gentleman wants evidence of projects that are now going through, he should look at some of the increases in capital investment approved in the autumn statement—and happening in my Department with my colleague the Minister for Universities and Science—big R and D projects going ahead in partnership with the private sector and many others now going ahead under the regional growth fund, creating jobs across the country.

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

T6. I believe it is Lord Heseltine’s birthday today. I wish him congratulations. Large rafts of money are going to city regions such as Leeds and Sheffield for transport infrastructure and other projects. We feel that we will be left in the lurch, so may I ask the team what support will be given to rural areas of North Yorkshire to improve the roads and other infrastructure?

[The Minister of State, Department for Business, Innovation and Skills (Michael Fallon)]

That is a perfectly fair point, but let me reassure my hon. Friend that the single pot funding from 2015 will be allocated not simply to the cities, but through local enterprise partnerships. It is her local enterprise partnership that will be able to make a bid to the Government.

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

T4. I do not want to use my topical question to talk about the obscene Barclays bonus; I want to ask whether the Secretary of State is aware of the fine example of CEEP—clean and energy efficient production—and sustainable manufacturing in our country’s industrial production. We are a world leader and we have amazing markets in China and India for this product. Will he put even more effort behind CEEP—he has done well up to now—so that we can conquer those markets?

[Vince Cable]

Yes, absolutely. I appreciate the hon. Gentleman’s acknowledgement that we have done well up to now. I have visited Huddersfield twice to see some of the successful companies there, and I am very happy to see more.

[Mr Robin Walker (Worcester) (Con)]

T7. I welcome the appointment of Andrew Witty to lead a review of how universities can support local growth. The university of Worcester has already delivered exciting regeneration projects, including Europe’s first joint university and city library, the Hive, and the new Worcester Arena. As it sets out to look into a new university business park, may I encourage my right hon. Friend to come to Worcester to meet representatives of the university, which has already become a powerful engine of local growth?

[The Minister for Universities and Science (Mr David Willetts)]

I welcome my hon. Friend’s welcome for the important new review that Andrew Witty will be carrying out and, yes, of course I look forward to visiting the university of Worcester. I have not visited it for several years, but I believe that I shall be there in June, and I look forward to that.

[Nick Smith (Blaenau Gwent) (Lab)]

T5. May I press the Minister on payday lenders? Will the Government really get those companies to make it much easier for consumers to understand the cost of those awful payday loans?

[Jo Swinson]

The short answer is yes. The hon. Gentleman is quite right to say that consumer awareness is vital. Some of the people who take out such loans would be much better off with an entirely different financial product. That is why advertising is such an important element in tackling the issue. The Government are working with the Advertising Standards Authority and we will also work with the Financial Conduct Authority, which will take over those powers from next year, to ensure that we clamp down on advertising that misleads people and lures them into taking out products that are not right for them.

[Mark Menzies (Fylde) (Con)]

T8. The north-west is at the heart of Britain’s aerospace industry, and I welcome this week’s announcement of the £2 billion aerospace technology institute. May I urge the Minister to consider the Warton enterprise zone in my constituency as a potential location for it?

[Michael Fallon]

We will certainly do that. The aerospace industry received an enormous boost on Monday with the announcement of £1.5 billion that is to be shared, along with another £1 billion from the private sector. I hope that that will give the industry the confidence to invest, right across the remainder of this Parliament and through to the end of the next one, in what is already one of Britain’s great success stories.

[Sheila Gilmore (Edinburgh East) (Lab)]

T10. The Secretary of State has often told us of his plans to rebalance the economy. Is he as worried as I and many commentators are that a huge plank of the Chancellor’s growth strategy seems to be predicated on a policy that could reinflate the housing bubble?

[Vince Cable]

We certainly would not want to see that happen again. I have to say that I am a little surprised to be given a lecture on this, having seen the housing bubble that developed 10 years ago and got completely out of control and did so much damage. Clearly, the intention of the stimulus announced yesterday is to provide supply as well as demand in the housing market.

[Eric Ollerenshaw (Lancaster and Fleetwood) (Con)]

T9. Lancaster is an excellent university town, and we have a high number of creative and innovative entrepreneurs. What additional help can we get from the Department to provide them with the right marketing, financial and manufacturing advice to help them to get their products to market?

[Mr Willetts]

My hon. Friend is absolutely right. Among the resources that we do not use enough are the business schools in our universities, which can be a source of expertise and support for local businesses. I hope that this will be among the issues that Andrew Witty addresses in his review.

[Mr Dennis Skinner (Bolsover) (Lab)]

The Secretary of State is fond of talking about rebalancing the economy. A walk down the high street in any town or city will show that the growth industries are payday loans, betting shops, pawnbrokers and food banks. Is not that a really sad, evil commentary on these three wasted years?

[Vince Cable]

Perhaps the hon. Gentleman will come back with me to Markham Vale in his constituency, which I visited at his suggestion—[Interruption.] Real regeneration is taking place there with Government support.

[Andrew Jones (Harrogate and Knaresborough) (Con)]

I have raised the issue of interest rate swaps with my right hon. Friend the Secretary of State before, and I am grateful for the action he has taken. However, the problem is still hurting businesses in my constituency, so will he keep the issue firmly on his radar and work with colleagues across government to bring it to a conclusion as swiftly as possible? [Interruption.]

[Vince Cable]

I am sorry; I did not catch the hon. Gentleman’s question.

[Mr Speaker]

I am sorry if the hon. Gentleman’s words were lost; let us hear them.

[Andrew Jones]

I have raised the issue of interest rate swaps with Ministers before and have been grateful for the action taken, but this issue is still hurting businesses in Harrogate and Knaresborough. May I ask the Secretary of State to keep this issue on his radar and to work across government to try to resolve this as quickly as possible?

[Vince Cable]

Yes, the hon. Gentleman is right: interest rate swaps were a major scandal. The Financial Services Authority has, as he knows, already set in train a process for remedies. I am working very actively with it, but it is very much in the hands of the FSA and the banks to produce a just solution. [Interruption.]

[Mr Speaker]

I gather that the hon. Member for Bolsover (Mr Skinner) was banging on about car salesmen and his disapproval of the answer. If he would like to apply for an Adjournment debate, there is always a sympathetic ear; let us see what is available for him.

[Julie Elliott (Sunderland Central) (Lab)]

The proportion of workplaces that have some employees on zero-hours contracts has increased massively in recent years with some 23% of companies having more than 100 employees using them. What are the Government going to do to regulate those contracts, which confer fewer employment rights and cause considerable financial uncertainty for workers?

[Jo Swinson]

The UK employment and labour market is flexible, which can be helpful. For some employees, zero-hours contracts can be helpful. Clearly, where there is abuse happening, it should be clamped down on. That is certainly what the Government will make sure is done.

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

Recently, Axminster Carpets, a great local company, went into administration. Its bankers were less than sympathetic. The Government have capital funds in place for banks to lend; can the Secretary of State do much more to make sure banks properly lend to business?

[Vince Cable]

There are a great many initiatives taking place. Apart from the advanced manufacturing supply chain finance announced this morning, we will be talking tomorrow about a new raft of initiatives for non-bank lending. The hon. Gentleman will have seen this morning’s ministerial statement on the future role of the business bank. He is right that the closure of the carpet factory is a serious blow, but it relates more to the viability of the company than to the ability of getting credit from banks.

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

As chair of the all-party parliamentary group on aerospace, I want to welcome the announcement earlier this week of the aerospace technology institute. Will the Secretary of State or the Minister say more about the timetable for its creation and what types of investment it will support?

[Michael Fallon]

Yes, I co-chaired the aerospace growth partnership on Monday to press the industrial side of the partnership to get on with the money made available—some £2 billion spread over seven years. I have challenged them to make sure that the money starts to get put into action so that the institute is established as rapidly as possible this year.

[Neil Carmichael (Stroud) (Con)]

In welcoming the industrial strategy being supported by £1.6 billion, I ask whether the Secretary of State agrees that we need to encourage our SMEs to start thinking about investing in tooling for components, especially in the automotive sector, because that is how we will further boost the values of our already impressive exports in cars?

[Vince Cable]

My hon. Friend is absolutely right that the issue in the industrial strategy is promoting not simply the prime contractors but the supply chains. These have been badly hollowed out in recent years, but there is quite a lot of evidence of re-shoring, and we want to support that with the advanced manufacturing supply chain initiative.

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

The Secretary of State has just cut by half the consultation period for large-scale redundancies. Does he imagine in his wildest dreams—I imagine he has some pretty wild ones—that this will do anything to foster economic confidence?

[Jo Swinson]

This was the subject of a lively debate in the Committee corridor earlier this week. As I made clear at that point, this is a minimum consultation period; where it is helpful to continue the consultation, benefiting the business and jobs, of course that can and should continue. The quality of the consultation is being improved through ACAS, which will help to make sure that business benefits but also that more jobs can be saved as a result of that improved process. There is no benefit in just prolonging the uncertainty when it is very clear that a business needs to restructure to make sure that the remaining jobs can be secured.

[George Freeman (Mid Norfolk) (Con)]

On the day of Lord Heseltine’s birthday, I have no idea what presents he might have been expecting, but I am sure that the Government’s acceptance of his report’s recommendations will have been a strong gift. I invite the Secretary of State, on behalf of the House, to pay tribute to Lord Heseltine’s tireless work for British business over a long career and to encourage the Government to implement his reforms with the radicalism and speed demanded.

[Vince Cable]

Yes, I would be delighted to pay tribute to him. Quite apart from this major report, large parts of which we are accepting, Lord Heseltine has played a major role in chairing the group of business people overseeing the regional growth fund and has led the initiative, now being taken in Birmingham, to mobilise chambers of commerce. Indeed, he makes a contribution far bigger than that of many Ministers in this and previous Governments.

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

Last year the Business Secretary wrote to the Prime Minister complaining that his Government lacked “a compelling vision” to drive up growth and provide business confidence. Given that the growth forecast has been cut to 0.6%, and given that the economy is at best flatlining and at worst teetering on the edge of a double-dip recession, does the Business Secretary still think that the Government lack a compelling vision?

[Vince Cable]

The compelling vision has been manifest in the industrial strategy. As the hon. Gentleman will have noted on Monday, the Chancellor and the Prime Minister are fully behind it, and are providing financial support to make that vision a reality.

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

Will the Secretary of State comment on the progress that has been made in Europe on the introduction of transparency to the extractive industries?

[Jo Swinson]

I strongly welcome the support that has been received from both industry and non-governmental organisations for the pursuit of increased transparency in those industries. Talks have been continuing in the European Union this week. We want to make strong EU rules that match the tough United States requirements. There should be no exemptions: listed extractive companies should publish information about all payments that they make to all Governments in all their countries of operation.

Petition

Thursday 21st March 2013 Commons Chamber

Phil Wilson (Sedgefield) (Lab)

- Hansard - - Excerpts

I present this petition on behalf of 156 residents who are opposed to the proposed Wingate Grange wind farm in my constituency.

The petition states:

The Petition of residents of the UK,

Declares that the Petitioners strongly object to the proposed planning application for the erection of 5 wind turbines of a maximum height of 115 metres and the associated infrastructure which will include a crane, hard standing, a substation and control building, transformers, underground cabling, access tracks and a meteorological mast; further that they object to the proposed location for the turbines of Wingate Grange Farm situated to the west of Wingate, south-east of Wheatley Hill, north of Deaf Hill and on the southern side of the A181.

The Petitioners therefore request that the House of Commons urges the Government to take the necessary steps to prevent the erection of the wind turbines.

And the Petitioners remain, etc.

[P001166]

Speaker’s Statement

Thursday 21st March 2013 Commons Chamber

10:31

[Mr Speaker]

The House will be aware that yesterday the Evening Standard published the main points of the Budget before the House had been informed of them by the Chancellor.

I have received formal apologies from the editor and the political editor of the Evening Standard. They have also apologised, separately, to the Chairman of Ways and Means. I shall place those communications in the Library. Their error was extremely regrettable, but I am minded not to take that matter further. However, the error would not have occurred had the newspaper not been in possession of prior detailed information about the Budget.

This pre-briefing of Budget proposals is a matter of concern to me, and, I judge, to the House as well. I am therefore writing to the Chancellor of the Exchequer to ask him to set out what happened on this occasion, and whether this is a practice of the Treasury. I will revert to the House as necessary.

Business of the House

Thursday 21st March 2013 Commons Chamber

10:32

[Ms Angela Eagle (Wallasey) (Lab)]

Will the Leader of the House give us the business for next week?

[The Leader of the House of Commons (Mr Andrew Lansley)]

The business for next week will be as follows:

Monday 25 March—Conclusion of the Budget debate.

Tuesday 26 March—If necessary, consideration of Lords amendments, followed by debate on a motion relating to flood insurance, followed by the pre-recess Adjournment debate, the format of which has been specified by the Backbench Business Committee.

The business for the week commencing 15 April will be:

Monday 15 April—Second Reading of the Finance Bill.

Tuesday 16 April—If necessary, consideration of Lords amendments, followed by consideration of Lords amendments to the Growth and Infrastructure Bill, followed by consideration of Lords amendments to the Enterprise and Regulatory Reform Bill, followed by consideration of Lords amendments to the Defamation Bill, followed by consideration of Lords amendments to the Groceries Code Adjudicator Bill [Lords], followed by, if necessary, consideration of Lords amendments.

Wednesday 17 April—Consideration in Committee of the Finance Bill (day 1).

Thursday 18 April—Consideration in Committee of the Finance Bill (day 2).

I should also like to inform the House that the business in Westminster Hall for 18, 22 and 25 April will be:

Thursday 18 April—Debate on the Energy and Climate Change Select Committee report on the road to UNFCCC COP and beyond, followed by debate on the Energy and Climate Change Select Committee report on low-carbon growth links with China.

Monday 22 April—Debate on an e-petition relating to immigration from Bulgaria and Romania in 2014.

Tuesday 25 April—Debate on the Transport Select Committee report on road safety, followed by debate on the Transport Select Committee report on plug-in vehicles, plugged in policy?

[Ms Eagle]

I thank the Leader of the House for announcing next week’s business and congratulate him on the fact that there have been no sudden U-turns, on the business at least.

This is our last business questions session before we rise for recess, so may I take this opportunity to wish you, Mr Speaker, staff, the Leader of the House and all colleagues from across the House a happy Easter? Would the Leader of the House care to comment on rumours that there are plans afoot to start selling a coalition Easter egg? It would have shiny yellow wrapping but the chocolate would be true blue. Despite the slick advertising it would be entirely hollow, and it would come with two free mugs and a health warning.

The situation on the European Union bank bail-out for Cyprus is volatile and fast-moving. The Government gave assurances at the weekend that no British service personnel or civil servants working in Cyprus would lose out, and then had to dispatch an aircraft full of cash to fulfil that promise. As Parliament will rise on Tuesday for the Easter recess and not return until 15 April, and because a bank run in a eurozone country would have serious implications for the UK, will the right hon. Gentleman consider recalling the House if there is a serious deterioration in the situation?

While the Chancellor was busy revealing the scale of his economic failure in this House, the other place was voting to defeat his absurd shares for employment rights scheme, which was announced with great fanfare at the Tory party conference. Mrs Thatcher’s favourite Chancellor, Lord Lawson, was so impressed with his successor’s flagship policy that he voted against it—he was not the only one. So will the Government now see sense and abandon this appalling policy before the Growth and Infrastructure Bill returns to the Commons on 16 April?

Mr Speaker, you have just made a statement about yesterday’s Budget leak. It included market-sensitive information being leaked on Twitter before the Chancellor had even opened his mouth. We welcome the apology, which you have drawn to our attention this morning, from the Evening Standard, but is it not the case that budget secrecy is now a principle more honoured in the breach than the observance? Will the Leader let the House let us know what action will be taken on behalf of the Government to ensure that this never happens again, particularly in respect of the inclusion of market-sensitive information in any embargo?

This morning, the Chancellor refused to say whether his mortgage support schemes would be open to those who wish to buy second homes up to the value of £600,000. As the Chancellor could not tell us, perhaps the Leader of the House could clear up the confusion: is it really the Government’s intention to subsidise the purchase of second homes up to the value of £600,000 while homelessness rates soar? Or will this be the first U-turn of the Budget?

The next Prime Minister’s questions will not now take place for a whole month, so the Prime Minister should have time to read all the Budget documents for himself. Close inspection will show him that the Office for Budget Responsibility has halved growth forecasts for this year and downgraded them for next; revealed that borrowing will be £245 billion higher than was thought in the spending review to pay for the costs of his Government’s failing economic plan; and shown that real wages will fall by 2.7% over the course of this Parliament. We have had three years of pain and not an inch of gain. The Chancellor claimed he was trying to

“light the fires of ambition”—[Official Report, 20 March 2013; Vol. 560, c. 941.],

but it is his own reputation and the dreams of millions that are going up in smoke, and next week 3,000 millionaires will get a tax cut while the rest of us pay the price of this Government’s failure. This was a downgraded budget from a downgraded Chancellor.

[Mr Lansley]

I am grateful to the shadow Leader of the House for that, and I share her hope that those in the House service who look after us so well here in the House will get a bit of a rest while we are busy in our constituencies.

[Thomas Docherty (Dunfermline and West Fife) (Lab)]

And eating Easter eggs!

[Mr Lansley]

The hon. Gentleman reminds me of the shadow Leader of the House’s desire for us to keep up Easter traditions, one of which, as I recall it, is a white rabbit. The shadow Chancellor is clearly fond of dressing up—he appears as Father Christmas over the Christmas season—so perhaps he could dress up as the white rabbit. It would be in keeping with his tradition of popping up everywhere but never being pinned down on anything in particular, just as the Leader of the Opposition found it intensely difficult yesterday to respond to the Budget and any measures in it. He seemed to be devoted to reading out a pre-prepared script about everything else.

The shadow Leader of the House asked specific questions about Cyprus. She will recall that my right hon. Friend the Financial Secretary to the Treasury made a statement to the House on Monday and we are committed, as she knows, to ensuring that those we have sent to Cyprus as part of the armed services or the civil service are looked after. That is why the flight went there. Indeed, we are also ensuring that the UK benefits payable to UK nationals in Cyprus are protected likewise. Of course, in coming days, as was made clear by my right hon. Friend, we will continue to keep the House updated. We have no plans to seek Mr Speaker’s permission to recall the House. One must always consider that only when the circumstances would demand it, and we have no such plans.

The hon. Lady asked about the Growth and Infrastructure Bill and, as I set out, we expect consideration of Lords amendments to that Bill to be on Tuesday 16 April. In the course of the Budget debate, there will also be an opportunity to realise how we are supporting employee ownership, not least through tax measures that will relieve capital gains tax for those who want to sell their business interests to their employees as part of the promotion of employee ownership.

The hon. Lady asked about the circumstances of the Evening Standard’s pre-publication of material on the Budget and the House will have heard Mr Speaker’s statement. The House will know that I, like Members of the House, deplore the fact that contents of the Budget were published before my right hon. Friend the Chancellor of the Exchequer made his statement to the House. Members will have seen the statement of apology made by the editor of the Evening Standard, as Mr Speaker set out. It has been a long-standing practice to provide information under embargo, but as the House will be aware my right hon. Friend the Chancellor has asked the permanent secretary at the Treasury to investigate the circumstances of the event in relation to the material that was briefed, to whom it was briefed and what led to the Evening Standard’s premature release of that information. The House will understand the importance that I attach to major announcements being made first to this House and I will ensure that the House is updated on that investigation.

The shadow Leader of the House made a number of points about the Budget and economic circumstances. The business of the House today, tomorrow and on Monday will enable them to be discussed. On Monday, there will be an opportunity to discuss housing and to see how this Government will give a tremendous boost to home buyers and those who seek to buy properties with relatively high loan-to-value mortgages.

I am looking forward to our discussing in the Budget debate the scrapping of the further extension that the previous Government had planned to fuel duty. Fuel will be 13p a litre less than it would have been under their escalator. We will also have the opportunity to debate the benefit to pubs of the reduction in beer duty instigated by a number of Members, including my hon. Friends, and resulting from the e-petition to this House that was debated on 1 November. Those representations led to that important measure from the Chancellor. We will also have the opportunity to discuss the following: that we have reduced the deficit by a third; that employment is up, with private sector employment up by 1.25 million; the tax cut by April 2014 for 24 million people through the personal allowance going up to £10,000, taking 2.7 million people out of tax altogether; the help for many hundreds of thousands of home buyers; and the help for every business through a cut in national insurance to promote jobs. It is a Budget for jobs and growth and it will be the business of this House for the next three days.

[Several hon. Members]

rose—

[Mr Speaker]

Order. As usual, a very large number of hon. and right hon. Members are seeking to catch my eye. I remind the House that a statement by the Foreign Secretary will follow and it might be of interest to the House to know that the Budget debate today is very heavily subscribed, with almost 40 Members seeking to contribute. If I am to accommodate the level of interest expressed in the business statement, brevity from Back and Front Benchers alike will be imperative. We can be led in that mission by Fiona Bruce.

[Fiona Bruce (Congleton) (Con)]

What is the reaction of the Leader of the House to the proposals to change the chapel of St Mary Undercroft in this place to a multi-faith prayer room? There is already a multi-faith prayer room in Parliament and an Islamic prayer room in the Lords.

[Mr Lansley]

My hon. Friend is right. There is a multi-faith room on the estate at 7 Millbank which is available to those who work here. The question of a change of use of the chapel of St Mary Undercroft is not a matter for the Government. Any proposals would be subject to consideration by several stakeholders, including this House and the royal household, owing to the chapel’s status as a royal peculiar. The other place would have an interest as well. It raises complex issues on which I will not offer immediate answers, but I can tell my hon. Friend that under the provisions of the Marriage (Same Sex Couples) Bill that is being debated, no religious organisation will be forced to opt in to conducting same sex marriages, and the Church of England has thus far made it clear that it will not choose to opt in.

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

The Transport Secretary recently visited Wolverhampton and, in an interview with the Express and Star, described Wolverhampton train station as “awful”. I agree, but will the Leader of the House ask the Transport Secretary what he is going to do about it?

[Mr Lansley]

I will, of course, ask the Transport Secretary, as the hon. Lady asks. I know that Network Rail and the train companies are undertaking quite a programme of improvement. I can say that because I know that the awful circumstances at Cambridge station will benefit from a substantial programme of rebuilding very soon. I will seek a reply for the hon. Lady.

[Andrew George (St Ives) (LD)]

May I seek the advice of my right hon. Friend in respect of the NHS competition regulations, which were laid before the House? The first version has not been revoked. As a result, the second version of the regulations, SI 500, as I understand it, even if it were successful, would not stop the implementation of the previously laid and defective competition regulations. I would be grateful for his advice on that.

[Mr Lansley]

If I am wrong about this I will correct it, but my understanding is that when the second draft of those regulations was laid, it included the revocation of the first draft.

[Andrew George]

indicated dissent.

[Mr Lansley]

I have read it. It does include that, so I know that to be the case. Since those regulations are subject to a negative resolution, they will come into force unless they are negatived. The original regulations will therefore not come into force, and the subsequent clarified regulations will.

[Paul Flynn (Newport West) (Lab)]

When can we debate the subject that is being discussed in almost every television studio, newspaper and pub in the country—that is, Britain’s decision 10 years ago to join Bush’s war in Iraq? A timely request for such a debate was made by two Tories, a Green Member and a Labour Member, yet it has not been timetabled. Is it not of paramount importance that we discuss the consequences of our own decision in this House which, among other things, sent 179 British soldiers to their deaths?

[Mr Lansley]

I am sure the hon. Gentleman will recall that the hon. Member from—[Interruption]. The Scottish nationalists asked a similar question last week. The hon. Member for Newport West (Paul Flynn) will recall that a number of Members made an application for such a debate to the Backbench Business Committee a number of weeks ago. Such a debate has not been timetabled. I will reiterate what I said before: it is important to debate these issues, but we are aware of the prospect of a report from the Chilcot inquiry and the importance of debating those issues in the light of that report.

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

May we have a debate on the value of house building to the UK economy? I have several high-profile house builders in my constituency, as well as two of the country’s leading brick manufacturers. I am sure they will all be delighted at the Government’s announcement yesterday in the Budget of the Help to Buy scheme—£3.5 billion of investment to help people get on to and move up the housing ladder.

[Mr Lansley]

My hon. Friend is absolutely right. He and other Members will have realised how important the construction industry is to securing growth. Frankly, we all have many families in our constituencies who are looking for homes but do not have the opportunity to buy them. The number of households is growing, but we do not have the number of homes we need. We were left an appalling situation after autumn 2008, when new house building fell off a cliff. We need to build that up again. The measures set out in the Budget yesterday, which will be debated on Monday, will turbo-charge the housing construction sector, which is what we are all looking for.

[Kevin Brennan (Cardiff West) (Lab)]

On that very matter, if we do have that debate, may we have some clarification on the mortgage subsidy the Chancellor proposed in the Budget, because this morning on the “Today” programme he could not say whether or not it will be available to people buying second homes? Would it not be ironic if the Government, at the same time as they are imposing a bedroom tax—a “spare-room subsidy”, as they call it—brought in a second home subsidy for the most affluent?

[Mr Lansley]

I am surprised that the hon. Gentleman has not read page 39 of the Red Book, where he will find the answer to his question—[Interruption.] He just has to read it, which he clearly has not done. I remind the House that on Monday the Secretary of State for Communities and Local Government will be here and Members will have an opportunity to focus specifically on housing issues.

[John Glen (Salisbury) (Con)]

As a result of the necessary cuts to the Ministry of Defence budget, 80 MOD police officers are due to leave Wiltshire. In the light of the recent basing review, will the Leader of the House arrange for a statement from a Defence Minister on reviewing that decision because, with 4,000 soldiers returning to Wiltshire, clearly it would be appropriate to have sufficient MOD police to look after them?

[Mr Lansley]

I know that the House will share my hon. Friend’s appreciation of the work of the MOD police. The MOD has concluded that there is scope for savings to be made in the policing of some defence establishments. The measures relating to that are subject to ongoing consultation with staff and trade unions. No final decisions have been made.

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

I am sure the Leader of the House would like to note that today the Scottish Parliament will learn the date of Scotland’s historic independence referendum. Over 90% of MSPs voted against the bedroom tax but, like the poll tax, it will still be imposed in Scotland. If we have another debate and 100% of MSPs vote against the bedroom tax, can we have that pernicious, awful tax withdrawn from our nation?

[Mr Lansley]

I am sure that the House will be interested to learn the date of the referendum in due course later today. We live in a United Kingdom, and some matters are devolved and some are reserved. The same principles apply in Scotland as apply anywhere else in this country. In circumstances in which we are paying £23 billion in housing benefit and need to make savings, we must have a view to fairness, and how can it have been fair that housing benefit was not available to subsidise spare rooms in the private rented sector but was available for that in the social rented sector?

[Jeremy Lefroy (Stafford) (Con)]

In April the people of the United Kingdom will fulfil their commitment to give 0.7% of GNI to the developing world, which I think all Members of the House will welcome. At the same time, the Small Charitable Donations Act 2012 will come into effect. May we have a statement, perhaps from the Economic Secretary to the Treasury, to explain how that will benefit those who donate to charities in all our constituencies?

[Mr Lansley]

My hon. Friend is right. I share with him, and with the House, the hope that that Act will give further support to charities. It is an essential part of how we support the charitable sector here and around the world. I am not entirely sure how we will mark it, but it will be a very important moment, because, despite the tough times we and others around the world are experiencing, we have demonstrated our generosity, and indeed our responsibility, to the poorest people right around the world by fulfilling, under the coalition Government, the long-held ambition of devoting 0.7% of our GNI to overseas development assistance.

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

Following the question asked by my hon. Friend the Member for Cardiff West (Kevin Brennan), may we have a debate on the Chancellor’s policy announced yesterday on helping people to buy a home? On page 39 of the Red Book it specifically says that the scheme is

“open not only to first-time buyers but also to existing homeowners”.

As my hon. Friend said, how can a Government be taxing people in social housing for a spare bedroom but subsidising those who already own a home to purchase a new one?

[Mr Lansley]

I am very impressed that Opposition Members have made progress by actually finding page 39 and reading it. It says—[Interruption.] All I will say to the hon. Gentleman and to Labour Members is that they are asking for an opportunity to debate this issue, and it will be available in the Budget debate.

[Philip Davies (Shipley) (Con)]

West Yorkshire police recently lost in the High Court and the Court of Appeal a case against Leeds United about who pays for policing on match days. This will lead to West Yorkshire police having to repay Leeds United £1 million. It will also lead to my constituents having to lose police officers so that they can move across to help to police Leeds United football matches because of a small element of hooligan supporters. Will the Leader of the House get the Home Secretary to come and make a statement about this so that we can find out what she is going to do to reverse this intolerable situation?

[Mr Lansley]

My hon. Friend makes an interesting and important point. I will, if I may, make clear to the Home Secretary his interest in this matter. Of course, were he to be here for Home Office questions on Monday he might find that he attracts Mr Speaker’s eye.

[Michael Connarty (Linlithgow and East Falkirk) (Lab)]

Early-day motion 1177 refers to concerns about the contracts of parliamentary House staff.

[That this House draws attention to the discrepancies in proposed salary increases amongst staff working on the Parliamentary estate, ranging from one per cent for lower paid staff to an average of five per cent for senior level staff; expresses concern at these double standards; notes that lower paid staff appear to be paying the price for austerity measures, while senior level staff are not facing the same cutbacks; and calls for the House authorities to examine these pay rises in detail and ensure all levels are forced to bear the same levels of cuts.]

Having discussed this matter with some of the people involved, it seems that our hard-working Hansard staff and our messengers appear to be threatened with a substantial loss in their earnings. Is it not time that we had a debate in here about the principles of how we employ our staff, who have certainly served us well in the 21 years that I have been here, and seem to be under the threat of a cut to their earnings?

[Mr Lansley]

I have read the early-day motion. As the hon. Gentleman will understand, these are matters for the House of Commons Commission. In that respect, there are opportunities to ask questions of the hon. Member for Caithness, Sutherland and Easter Ross (John Thurso), who answers on behalf of the Commission. In this particular instance, I would say two things. As a member of the House of Commons Commission, I know that it has always sought to pursue the principle that the House should be an exceptionally good employer, and we set out to do that. That does not mean, however, that arrangements for pay should not reflect the issues that govern public service generally, and, indeed, it should not inhibit us from being prepared to modernise pay systems in this House.

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

May I ask the Leader of the House to grant time for an early debate on the proposed reforms to the common agricultural policy? Broad political agreement is expected to be reached at EU level by the end of June. The key will be how these reforms are implemented and will impact on farmers in this country. They involve technical concepts such as who will be defined as the active farmer, how the moneys will be spent, and what will be the contribution from the UK Exchequer.

[Mr Lansley]

My hon. Friend will know that my right hon. Friend the Environment Secretary and his colleagues are actively engaged in precisely the negotiations that she describes. Of course, as we all appreciate, this is happening against the backdrop of the success that the Prime Minister achieved in the EU budget negotiations, which is terrifically important. We do need further reform of the common agricultural policy, and that is what this Government have set out to achieve. In terms of a debate in this House, I suspect that in the course of this process the European Scrutiny Committee will have an opportunity to look at these proposals, and it is of course open to it to make a decision on whether to refer them to the House for debate.

[Nic Dakin (Scunthorpe) (Lab)]

In the light of news that the Mersey gateway, like the Forth road bridge improvements, might well be built with Chinese steel, may we have a debate in this House about procurement policy for major infrastructure projects?

[Mr Lansley]

What we want to do is not only to secure best value in procurement, but to ensure that British manufacturers and companies are best placed to deliver it. Today offers an excellent opportunity for the hon. Gentleman to debate growth and, indeed, Michael Heseltine’s important review, with my right hon. Friends and others.

[Oliver Colvile (Plymouth, Sutton and Devonport) (Con)]

Last month, the all-party group on pharmacy, of which I am the vice-chairman, held an open meeting on the decriminalisation of pharmacists for dispensing errors. As my right hon. Friend will know, pharmacists can be sent to prison for that offence, but unfortunately it appears that general practitioners cannot. Could we have a debate so that we can try to clear up this anomaly and get the Government to announce the timetable for doing so?

[Mr Lansley]

My hon. Friend raises an important point, which I know has been of continuing concern to pharmacists for a number of years. I have been concerned to make progress on the issue and the Department of Health has established a programme board to examine the balance between medicines legislation and pharmacy professional regulation in order not only to deliver protection for the public, but to deal with an issue of great concern to pharmacists, and rightly so, because inadvertent errors could leave them vulnerable to criminal prosecution. I hope that that work will be taken forward and I will ask the Department to get back to my hon. Friend about the timetable.

[Andy McDonald (Middlesbrough) (Lab)]

Will the Leader of the House secure a statement from the Secretary of State for Justice on whether he will carry out a risk assessment of his transforming rehabilitation programme?

[Mr Lansley]

The hon. Gentleman will be aware of the requirement for proposals to be subject to impact assessments, which I imagine is what he meant to say, because risk assessments are internal examinations. When those proposals are introduced to the House, an impact assessment will accompany them.

[Mr Philip Hollobone (Kettering) (Con)]

Moldova is not in the European Union and it is a centre for human trafficking. It is right next door to Romania, and hundreds of thousands of Moldovans, through grandparental rights, are now applying for and getting Romanian passports with the intent of immigrating to the United Kingdom from 1 January next year. Could we have an urgent statement from a Foreign and Commonwealth Office Minister about what representations Her Majesty’s Government are making to the Romanian Government to plug this loophole in the EU’s external frontiers?

[Mr Lansley]

My hon. Friend makes an important point, which is relevant to an e-petition debate in which he may like to participate, if he is able to do so, on Monday 22 April in Westminster Hall. He will also be aware of the work taking place inside Government to ensure that, while we meet our obligations relating to free movement, we do not so in a way that leaves us open to abuse.

[Nick Smith (Blaenau Gwent) (Lab)]

Could we have a debate on alcohol pricing and the cost of antisocial behaviour on our high streets?

[Mr Lansley]

The hon. Gentleman will have heard me remind the House that the Home Secretary will answer questions on Monday. He could also discuss alcohol pricing in the Budget debate, especially in the light of the Chancellor’s decisions on alcohol duties, including the reduction in beer duty. I am sure that the House would welcome the hon. Gentleman’s contribution.

[Christopher Pincher (Tamworth) (Con)]

Following the Chancellor’s welcome help yesterday for the least well-off to keep more of their own money, could we have a debate on hospital parking charges, and especially on the decision by Burton Hospitals NHS Foundation Trust to levy up to £6 a day on users of the Sir Robert Peel hospital car park? The proposals were made without consultation, contrary to the trust’s previous assurances, and will hit the very people whom the Chancellor set out to help yesterday.

[Mr Lansley]

I know how important this issue can be for many constituents, particularly if they are frequent users of hospital services. A code of practice has been established through the NHS Confederation and that should ensure that those frequent users are able to access discounts and the like. I encourage my hon. Friend to talk to the Burton Hospitals NHS Foundation Trust about that, while recognising that these are decisions for NHS organisations. As a Government we have not sought to impose a structure on hospitals. Indeed, we have not chosen to divert money that should be available to support patient care to the subsidising of car parking.

[Ian Murray (Edinburgh South) (Lab)]

Several of my constituents who are small business owners came to see me on Saturday to tell me that the Clydesdale bank is refusing to renew their facilities, despite promises that it would do so. They are now on punitive interest rates of 29.9% APR and face the threat of losing their homes. May we have an urgent debate in the House on why the banks are telling us that they are doing all they can to support businesses and to ensure that people do not get thrown out of their homes, when in reality they are doing the opposite?

[Mr Lansley]

Many Members across the House share the hon. Gentleman’s frustration about the relationship between many small businesses and the banking system, but I bring him good news. Today, my right hon. Friend the Secretary of State for Business, Innovation and Skills has made a written statement, which may be followed up in today’s debate, about the operation of the new business bank and the support that it will give to stronger lending to small businesses. I am sure that when the hon. Gentleman has a further meeting with small businesses in his constituency, they will share with him their delight at the Budget measures, including the £2,000 per employer reduction in national insurance contributions.

[Andrew Stephenson (Pendle) (Con)]

The Chancellor’s announcements yesterday on housing have been warmly welcomed by the construction industry, estate agents and the many people who are looking to get on the housing ladder across the UK. Indeed, I received an e-mail from a local estate agent, Mark Horsfall of Twenty Four Estates in Barrowford, while the Chancellor was still on his feet. I am aware that the schemes may require legislation, so will the Leader of the House clarify when we will be able to debate the specifics of those very welcome proposals?

[Mr Lansley]

I agree with my hon. Friend that the proposals are very welcome. Many people find it difficult to see how they can get on the housing ladder as a first-time home buyer. We know that the whole housing market can be very responsive to first-time home buyer activity spreading through the marketplace. The Help to Buy scheme will provide dramatic help. Although we have the funding for lending scheme and low interest rates in this country, which have happened only because of the credibility that the Chancellor’s policy has given this country, those things are not translating into access to mortgages for those who, of necessity, are looking for high loan-to-value ratios. All of that will make a very big difference and it may be debated on Monday.

[Alison McGovern (Wirral South) (Lab)]

Will the Leader of the House arrange for a statement to be made by a Minister on food prices? Families and older people in the Wirral are seeing the price of their shopping going up and up. They will have noticed that any gains that they make from income tax thresholds are being inflated away. Will the Leader of the House get the Government to explain what they are doing?

[Mr Lansley]

Of course, the Budget debate affords an opportunity to debate precisely those issues. I hope that the hon. Lady will take that opportunity to express her appreciation of the fact that by April 2014, the increase in personal allowances will have taken 3,071 of her constituents out of income tax altogether.

[Andrew Jones (Harrogate and Knaresborough) (Con)]

After the positive news in yesterday’s Budget about the scrapping of the beer duty escalator and the other cuts in duty, I was contacted by my constituent Mr Simon Theakston, who runs the iconic Yorkshire brewing business of the same name. He said that the changes would be seen as a vote of confidence in the industry and trigger investment from it. May we have a debate about that great British institution, the pub, and its role in communities, especially in village life?

[Mr Lansley]

Yes; the House demonstrated its concern about that issue on 1 November last year, when it debated beer duty. It will no doubt do so again during the Budget debate and there will perhaps be further opportunities to debate the brewing industry and pubs, when the House will be able to share in the coalition Government’s recognition, through the Budget changes, of the importance of pubs not only as an industry but to local communities.

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

I have raised this matter before, but Members of Parliament from Greater Manchester are desperately seeking a chance to debate the imminent privatisation of passenger transport ambulance services in the conurbation. Soon, those services will no longer be delivered by the NHS, but by Arriva buses as the Government’s agenda for the NHS starts to take shape in our constituencies. I have applied repeatedly for an Adjournment debate since the beginning of January, but unfortunately I have not been successful. Surely it is reasonable to try to scrutinise a decision of such magnitude.

[Mr Lansley]

I recall that the hon. Gentleman raised the issue with me previously, and if the Department of Health can add anything further by way of information, I will ensure that it is made available to him. He could, of course, seek an Adjournment debate on this matter, as it relates to his constituency and neighbouring constituencies. I remind him that we are talking about passenger transport services, not the emergency responses of ambulance trusts. There are instances across the country where passenger services are not necessarily provided by the ambulance service but work alongside it, which can work perfectly effectively.

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

Research has suggested that more than half of cigarettes smoked in Gillingham have avoided tax. Can we have an urgent debate on tackling illegal tobacco?

[Mr Lansley]

I cannot promise an immediate debate, but I reassure my hon. Friend that Her Majesty’s Revenue and Customs and UK Border Force published their latest strategy to tackle tobacco smuggling in April 2011, building on success already achieved in tackling tobacco fraud. Since the launch of the first tobacco anti-fraud strategy more than a decade ago, the illicit market for cigarettes has reduced from 21% to 9%, and from 61% to 38% for hand-rolling tobacco.

[Glyn Davies (Montgomeryshire) (Con)]

Yesterday’s Budget was very good news for Wales and added more than £100 million to the Welsh Assembly budget— £161 million for capital investment. Will my right hon. Friend arrange an opportunity for the House to consider the impact on Wales of investment decisions in England by the UK Government? Cross-border investment is hugely important to my Montgomeryshire constituents as well as to the efficient operation of devolution.

[Mr Lansley]

I cannot promise an immediate debate, but I hope that opportunities will continue to manifest themselves for us to debate those important cross-border issues. Some decisions that have been made—for example, on the electrification of the rail line in south Wales to Cardiff and Swansea—are tremendously important for economic recovery in Wales. If the Welsh Assembly Government have any resources available, it might be an opportunity to reconsider what seems to be the completely misplaced priority of cutting the NHS budget by 8% in real terms in Wales, with all the damaging consequences illustrated in Wales itself.

[Jason McCartney (Colne Valley) (Con)]

rose—

[Mr Speaker]

Order. I was advised that the hon. Gentleman had left the Chamber; he certainly left his seat and for some significant period was not visible. He has insisted that he was in the Chamber, even though he was not in his seat, so on this occasion—this is not the first time this has happened, as he knows—I will call him, as he is a very assiduous contributor to the proceedings of the House. In future, the hon. Gentleman would help himself if instead of perambulating around, he remained in his seat.

[Jason McCartney]

Thank you, Mr Speaker. I am suffering with a tickly cough, and I would like to thank your Clerk for providing me with a glass of water, for which I came to the Front Bench.

Will my right hon. Friend the Leader of the House join me in congratulating on behalf of other Yorkshire MPs the Secretary of State for Culture, Media and Sport and the Treasury on agreeing to underwrite by up to £10 million the Tour de France coming to Yorkshire? Can we have a debate on the wonderful economic and social benefits that that global sporting event will bring to Yorkshire?

[Mr Lansley]

That was a question worth waiting for, Mr Speaker. When the Cabinet was in Leeds, we heard a presentation about the Tour de France grand départ and were tremendously impressed by what Yorkshire had done to secure that event for this country. From my point of view, since a subsequent stage will go through my constituency in Cambridgeshire, we are doubly grateful to Yorkshire for that. I do not know whether we will be able to have a debate soon, but we very much welcome my hon. Friend’s support, and that of his colleagues, for what will be a wonderful three days of cycling in 2014.

Afghanistan

Thursday 21st March 2013 Commons Chamber

11:15

[The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)]

With permission, I will make a statement, as we do quarterly, on our progress in Afghanistan. This represents the combined assessment of the Foreign and Commonwealth Office, the Ministry of Defence, and the Department for International Development.

I pay tribute to the great courage and professionalism of our armed forces in Afghanistan. Four hundred and forty British service personnel have lost their lives there since 2001, including two since my right hon. Friend the Defence Secretary made the last quarterly statement on 19 December. We will never forget the sacrifice they and their families have made to protect our nation’s security, or the efforts of the civilian staff, who have also served bravely in Afghanistan over the past decade.

The Government’s objective and strategy in Afghanistan are unchanged. We seek an Afghanistan that can maintain its own security and that is not a safe haven for international terrorists. That requires us to help the Afghan Government to increase the capability of their national security forces, to make progress towards a sustainable political settlement, and to build a viable Afghan state.

Although formidable challenges remain, there is progress to report to the House on all three of those fronts. First, significant progress is being made in building up the capability of the Afghan security forces. In the past three months, insurgent activity in Afghanistan has followed the historical cycle of winter seasons, with a reduced level of violence nationwide. High-profile attacks have been limited over the period. Recent attacks, such as those against the national directorate of security and traffic police headquarters, have been largely dealt with by Afghan forces, without direct support from the international security assistance force. Afghan security forces are now leading 80% of all security operations in Afghanistan, and are due to take lead responsibility for combat operations across the country by this summer, with ISAF taking an advisory role. More than three quarters of ISAF bases have been closed or transferred to the Afghan Government, and the ANSF is on track to assume full responsibility for security in Afghanistan by the end of 2014.

That progress is allowing the gradual redeployment of UK military forces and equipment. The Prime Minister announced in December that our military presence will be reduced by nearly half this year, and that the UK, along with our allies, will move steadily towards a supporting role. The role of UK personnel is changing from a combat role to training and advising the Afghan security forces. In the short term, UK personnel will continue to support Afghan operations through casualty evacuation, air support and the provision of surveillance capabilities, while working to help the Afghans to develop their own suitable capabilities. In addition, UK personnel provide the infrastructure necessary to work in Afghanistan, including food, medical care, welfare and transportation. Although our focus is increasingly on supporting our Afghan partners, we will maintain sufficient capability to project military force if the conditions require it until the end of 2014.

The ANSF currently has more than 330,000 personnel and is progressing towards a final number of 352,000. As those forces become more capable and approach full strength, our mentoring has switched from company to battalion level, and by the end of this year, our forces will no longer need to mentor them below brigade level. The vast majority of training is also now led by the Afghans themselves.

Of course, our task is still a difficult one. The Taliban will continue to seek to undermine popular confidence in the Afghan authorities, and as Afghan forces assume the lead in combat operations across the country, they are likely to become the focus of Taliban attacks. Moreover, the formation of professional armed forces takes time, and reducing attrition rates and improving leadership across the Afghan forces will be important priorities for years to come. The UK is therefore proud to take the lead in building up the new Afghan national army officer academy which will develop the next generation of Afghan military leaders.

Secondly, we continue to help drive progress towards a sustainable political settlement and efforts by the Governments of Afghanistan and Pakistan to strengthen their relationship. On 3 and 4 February, the Prime Minister hosted a summit at Chequers with President Karzai of Afghanistan and President Zardari of Pakistan. That was the third in a series of trilateral meetings hosted by the Prime Minister in the past year. The aim was to assist the Afghan-led peace and reconciliation process, and strengthen joint Afghan and Pakistani efforts to address extremism, and to advance regional peace and stability.

The summit led to an agreement on co-operation between military and security services, and strengthened co-ordination of Taliban prisoner releases from Pakistani custody. It also led to a public statement supporting the opening of a Taliban political office in Doha. That sends a clear message to the Taliban that now is the time to take part in a peaceful political dialogue. The UK will continue to support this Afghan-led peace process and to facilitate improved relations between the Afghan and Pakistani Governments, including supporting further trilateral meetings in future.

Thirdly, we continue to work to help strengthen Afghanistan’s democratic institutions. In just over a year’s time, on 5 April 2014, the Afghan people will begin voting in the third presidential elections since the fall of the Taliban. Elections to the provincial councils will take place on the same day. These elections must be credible, inclusive and transparent. All Afghan constituencies, including women and minorities, must feel part of the electoral process and have the opportunity to make their voices heard. Although it will be Afghan-led, the UK will continue to provide support and advice to the local authorities. We are lobbying the Afghan Government to ensure that key electoral laws, which will underpin the credibility of the 2014 elections, are passed by the Parliament and not by presidential decree.

The UK is supporting the Afghan authorities to prepare for the elections through providing funding to the United Nations Development Programme ELECT II programme—Enhancing Legal and Electoral Capacity for Tomorrow—which builds the capacity of the Independent Election Commission. The UK will provide £12 million between November 2012 and December 2013 to the ELECT II fund. In addition, last year we provided $215,000 to the Free and Fair Elections Foundation of Afghanistan, and we have provided an additional $750,000 to the Afghan Parliamentary Assistance Programme, which supports capacity building for Afghan Members of Parliament, including on drafting legislation, improving budget analysis and oversight and strengthening links between parliamentarians and their constituents.

Economic growth is also vital if Afghanistan is to become a stable and secure state that is not dependent on foreign aid. The country has significant natural resources that must be developed, including metals, minerals and hydrocarbons. On 6 March, my right hon. Friends the Prime Minister and the Secretary of State for International Development, and the Afghan Minister of Mines, hosted a forum for representatives of the extractives industry to help attract credible international investment to Afghanistan. The Department for International Development has also agreed a three-year, £10 million programme of support to the Ministry of Mines to improve transparency and accountability, so that the main beneficiaries of that mineral wealth are the Afghan people themselves.

I wish to emphasise that it is critical that Afghanistan takes the necessary steps to ensure women are able to play their full role in society and developing the economy. The Foreign Office, along with other Departments, continually lobbies the Afghan Government on human rights issues. Women’s rights were an important theme of the visit of my noble Friend Baroness Warsi to Afghanistan earlier this month, and the Secretary of State for International Development met President Karzai in her visit in December to discuss the challenges faced by Afghan women.

UK aid funding has already helped to ensure that 5.9 million Afghan children are regularly attending school, including 2.3 million girls. That compares to virtually none under the Taliban. Our aid money is also being used to recruit and train teachers, build and maintain schools, and increase the availability and quality of education. DFID has announced a further £45 million for the global girls education challenge fund, which is helping to improve education for more than 250,000 marginalised girls.

The FCO and DFID are also working together to ensure that the Afghan Government uphold their commitments on women’s rights, including through implementation of the Elimination of Violence Against Women law, which is a central commitment under the Tokyo mutual accountability framework. The International Development Secretary has stated that tackling violence against women and girls will be a strategic priority for the Department’s work in Afghanistan.

The UK will do whatever it can to increase rights for women in Afghanistan, and we must also do more to improve the lives of all the Afghan people. We will therefore play a key role in ensuring that Afghan commitments from last year’s NATO summit in Chicago and the Tokyo conference on development are implemented by the Afghan Government. We look forward to the initial review of progress against the Tokyo mutual accountability framework in July, and we will chair jointly the first ministerial review of it in 2014.

We also continue to take steps to address the immediate humanitarian needs of the Afghan people; DFID has announced a new £12 million humanitarian programme from existing funding that will provide nutrition and food support to more than 900,000 vulnerable people affected by conflict, natural disaster and harsh winters.

The end of the ISAF mission next year does not mean an end to the support provided by the international community. Planning continues for the NATO-led follow-on mission that will help to train and advise the Afghan security forces after combat missions draw to a close. The UK will continue to support governance and development in Afghanistan through the next decade—with £178 million per year agreed until 2017—helping to ensure that the progress made to date is not lost. That is in addition to our £70 million commitment to sustain the ANSF after 2014.

The path of transition will not be easy. But progress is being made, and we will stand by the people of Afghanistan as they build a more peaceful and secure future.

11:25

[Mr John Spellar (Warley) (Lab)]

I thank the Secretary of State for his statement and for early sight of it. I join him in paying tribute to our forces who continue to serve in the most difficult of circumstances. In particular, I offer the condolences of the whole House to the two service personnel killed since the Defence Secretary last made a statement of this kind to the House. The suffering of the families and the sorrow of the loved ones left behind are in the hearts and minds of all Members. I pay tribute to the ongoing work of our civil servants and to NGOs working, struggling and hoping to build a better future for Afghanistan, often in difficult and dangerous circumstances. I put on record the shadow Foreign Secretary’s regret at not being here to respond to the statement, but given the scheduling of the statement I am responding on his behalf.

Like the Government, we recognise that the transition period between now and the full draw-down of NATO forces will be extremely testing, with significant challenges for all. It is therefore imperative that the Government ensure that the alliance keeps focused on the key objectives. First, they must remain a key priority to ensure that the Afghan state is able to maintain its own security and prevent the country from being used once again as a safe haven for terrorists. The support being given to the Afghan national security forces is vital, as is their increasing capability, but can the Minister reassure the House that that is sustainable, particularly as in the months ahead, as the Foreign Secretary acknowledged in his statement, we are likely to see the period during which in past years we have witnessed some of the most intense levels of fighting and attacks? To what extent is he confident about the internal cohesion of those Afghan forces and their capabilities in the face of such sustained pressures?

In light of the recent tragic reports of continued loss of life through what are referred to as green on blue attacks, can he provide his current assessment of the threat posed to our forces by such attacks, and what steps are being taken to minimise the risks, as much as is possible in the context? Given that British forces will remain in a training role for some time in Afghanistan following the 2014 draw-down, can he provide us with reassurance about the levels of force protection? Frankly, it will not be sufficient to state merely that troops are not in a combat role. As I am sure he will accept, and as soldiers know only too well, unfortunately it is primarily the enemy that defines whether troops are in a combat role. Given that he rightly stated that the insurgents remain committed to conducting a campaign of violence in Afghanistan, what role does he see the UK playing post-2014 in preventing the return of insurgent dominance in regions of the country? Will he also clarify whether the planned force reduction figures from his last statement have altered, and, if so, how does that align with wider ISAF withdrawal planning?

Turning to the issue of Afghan civil society and the protection of human rights, will the Foreign Secretary set out what steps are being taken to embed the considerable advances that have been made in recent years—some of which he has referred to today—particularly with respect to women’s rights? I am sure the whole House will want to join me in welcoming the news of Malala Yousafzai, the brave young girl brutally attacked by the Taliban in Pakistan in October, who this week went back to school—in Birmingham—for the first time since the shooting, and her wonderful treatment at the Queen Elizabeth hospital in Birmingham. In Afghanistan, despite similar continued campaigns by the Taliban, it is worth repeating that enrolment of girls in school has risen from 5,000 under the Taliban to 2.3 million. In addition, vastly more women now have access to medical facilities, particularly in rural areas.

There is a very real fear in Afghanistan and elsewhere that that could be put at risk by a potential re-emergence of the Taliban in certain regions following the NATO draw-down. Amnesty International has produced an excellent briefing for parliamentarians entitled “Now is the Time for Women’s Rights”, which I commend to the Secretary of State and other Ministers. It rightly quotes the comments of the Chair of the International Development Committee, the right hon. Member for Gordon (Sir Malcolm Bruce):

“The treatment of women in Afghanistan after troops pull-out in 2014 will be the litmus test of whether we have succeeded in improving the lives of ordinary Afghans over the last ten years.”

What assurances has the Foreign Secretary sought to ensure that those gains will be protected as part of any future negotiations over a political settlement with the Taliban and other insurgent groups, and that the electoral process is, as he says, truly inclusive?

The ongoing situation in Afghanistan is of vital strategic interest to us, but for neighbouring countries its stability is also crucial. The Opposition regularly urge the greater involvement of neighbouring powers in ensuring stability and social progress in Afghanistan, and we welcome the tripartite summit that the Prime Minister hosted in February with President Karzai and President Zardari of Pakistan. In those discussions, did the Prime Minister raise the rights and participation of Afghan women as being essential to any reconciliation process and to securing a stable Pakistan?

These discussions must continue, because, in addition to the support of the wider international community, they are key to ensuring Afghanistan’s long-term security and regional stability. Will the Foreign Secretary therefore outline what diplomatic architecture is being discussed to help ensure the sustained and ongoing engagement of regional partners? There is a danger that if neighbouring countries pursue individual agendas, leading to instability in Afghanistan, all of them will suffer from the fallout, as well as us in the wider international community.

[Mr Hague]

I am grateful to the right hon. Gentleman for his comments. He rightly joined in the tributes to our armed forces and everyone who has worked so hard and so bravely in Afghanistan, and I join in his tribute to Malala Yousafzai. I am proud that we took the decision to bring her to this country and that she has been so well looked after in Birmingham—in Edgbaston, to be specific. I visited her family there shortly after she arrived for medical care and was enormously impressed by their determination, resolve and bravery, as well as by that which she herself displayed.

The right hon. Gentleman is right that the transition is a testing period, and he correctly pointed out many of our priorities. The Afghan national security forces are showing steadily increased capabilities, including in their cohesion and ability to hold territory and conduct operations. As I mentioned, they now lead 80% of operations, and by this summer will have lead responsibility for security across the whole country. This transition has been taking place in one area after another, through four transition tranches, on the basis of experience and the capabilities of the Afghan forces, which should be increasingly respected internationally and within Afghanistan.

A great deal of work has been done to minimise so-called green on blue attacks, including through collecting biometric data earlier from Afghans involved in training. The MOD has taken every possible measure to minimise the threat of those attacks, while of course ensuring that training and mentoring can continue in the appropriate way. The right hon. Gentleman also asked about force protection. My right hon. Friend the Secretary of State for Defence, who is here, is clear that those forces must be adequately protected, but we will make decisions in due course about the number, level and nature of the forces necessary to do that.

The right hon. Gentleman asked about the draw-down of forces. There has been no change since my right hon. Friend’s statement in December and the Prime Minister’s announcement then that our force levels would fall to approximately 5,200 this year. That is well aligned with statements made by our partners, particularly the United States, which of course contributes more than two thirds of all international forces deployed in Afghanistan. Since the last statement to the House, President Obama has announced a draw-down of approximately half the US forces—quite similar to our statement, therefore—reaching 34,000 over the next year, up to early next year.

We are intensely focused on women’s rights and the position of women in Afghan society, as I set out at some length in my statement. I will not go over all those things again, except to reiterate the importance that the Department for International Development attaches to this issue in all its huge programme of work— £180 million a year—which is particularly focused on this area. The International Development Secretary has made it a strategic priority of DFID’s work over the next few years. Again, that is a challenge, but the UK has a strong record in this area and can continue to contribute a great deal.

I am grateful for the right hon. Gentleman’s welcome for the trilateral process that we have been conducting with Afghanistan and Pakistan. The involvement and support of neighbouring countries is the most important piece of the jigsaw. He was right to point to it, because when it is clear that Pakistan and Afghanistan will co-operate more closely together, including on their security, that the whole leadership of Pakistan seeks stability in Afghanistan and that Afghanistan knows it can have a successful peace process only with the support of Pakistan—these things are increasingly clear owing to our trilateral process and the efforts of both Governments—that in itself will be a powerful signal to the Taliban that it is time to take part in a peaceful political process. The opportunity is now there for them to do so.

Other regional support comes through different formats, including the Heart of Asia process—I attended the conference of countries from around Asia which took place in Kabul last June. Through that process we are able to encourage support from other nations in the region as well.

[Bob Blackman (Harrow East) (Con)]

Clearly, the long-term economic stability of Afghanistan is key. Arguably, the chief output from the economy is the poppy crop. Can my right hon. Friend report to the House on what progress has been made to ensure that it is used for beneficial, medical purposes, rather than for the illicit black market trade in drugs?

[Mr Hague]

The poppy crop is of course, if we are realistic, mainly for the illicit black market trade. Only a small proportion of it would be for the objectives that my hon. Friend rightly talks about. There was an increase in poppy cultivation in some areas last year, brought on, it seems, by the high prices that were available in 2011. Nevertheless, the Government of Afghanistan’s eradication programmes have been expanded successfully. The total area under cultivation last year was about 40,000 hectares less than at the peak. It is therefore fair to say that some progress has been made, but we are a long way from achieving the cultivation of such crops purely for the beneficial and medical uses that my hon. Friend speaks about.

[Keith Vaz (Leicester East) (Lab)]

I thank the Foreign Secretary for his update. Can he tell us what is being done about the criminal gangs that are preying on Afghani citizens, making them pay thousands of euros in order to traffic them from Afghanistan to the border of Greece and Turkey and eventually into the EU? It is an appalling practice that is causing enormous distress, because at the end of the day the Afghani citizens are deported from the EU back to Afghanistan and the cycle starts again. What can we do about that?

[Mr Hague]

The right hon. Gentleman points to what is a serious problem not only in Afghanistan but in many other countries. Human trafficking of this kind has many sources, in many different parts of the world, particularly in Asia and Africa. We are increasing our law and order co-operation. In fact, my right hon. Friend the Home Secretary visited Afghanistan for the first time a month ago, to talk partly about counter-narcotics co-operation, but also about how we work together on policing and maintaining law and order in future. This issue is a natural part of that work. The right hon. Gentleman rightly draws attention to a serious problem and I will write to him with further details on what we think we can do about it.

[Sir Nick Harvey (North Devon) (LD)]

Afghanistan has been of great security and strategic significance for centuries. May I echo the Foreign Secretary’s tribute to the work done by British and international personnel, both military and civilian, in recent years to try to ensure the stability of Afghanistan? I broadly share his optimistic view of the future, but some commentators do not. What discussions has he had with his international counterparts on what the international response would be if the situation deteriorated and those historical anxieties recurred?

[Mr Hague]

Of course the situation remains difficult, as I made clear in my statement, but it is important that responsibility for security should be passed to the Afghans themselves. It is for them to make decisions about their own country. Regarding future support, the international commitments made at the NATO summit in Chicago last year and at the Tokyo summit on development are very strong. Each commitment involves the provision of $4 billion a year, well into the future, to maintain the Afghan national security forces in one case and to contribute to sound economic development in the other. That $8 billion commitment from the international community is a huge one. That is the support it is going to provide, and we now have to help to ensure that the Afghan leadership can make good use of it.

[Mr David Winnick (Walsall North) (Lab)]

May I press the Foreign Secretary on one point? He has pledged that Britain’s combat role will end in 2014. Is that absolutely firm, no matter what occurs or whether the Taliban engage in talks?

[Mr Hague]

Yes, that has been firm for a long time. The hon. Gentleman will have heard the Prime Minister talking about this, as well as my right hon. Friend the Defence Secretary and me, and he will remember how clear the Prime Minister has been on the matter for a long time. It is in any case the commitment of the whole of ISAF. There are decisions to be made about the presence after that, but that is the end of our combat role. We have already made a commitment to lead the officer training academy afterwards. I have given such enormous attention to building up the Afghan national security forces and a viable Afghan state, as well as pursuing the political process and an Afghan-led peace process, so that we can be absolutely sure about this.

[Mr James Gray (North Wiltshire) (Con)]

The beginning of the end in Afghanistan is a welcome moment indeed, but let us cast our minds forward to what will happen after 2014. Am I right in thinking that the bulk of our training forces will be in the north, in and around Kabul and the officer training base? If so, will we retain any presence in Helmand province, and what will happen to Lashkar Gah and Camp Bastion?

[Mr Hague]

My hon. Friend is right to suggest that the bulk of the effort will be near Kabul. As I have said, we have made no decisions about any other military presence apart from that after 2014. We will make those decisions in due course, along with our partners in NATO, and we will keep the House updated on that through further statements. Of course, the transition is already taking place in many parts of Helmand. Lashkar Gah, for instance, was one of the first places to undergo transition, and other parts of Helmand have been involved in tranches 2 and 3 of the transition process. So even in Helmand, it is increasingly the Afghan forces that have been taking the lead, and they are equipped to do so.

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

When does the Foreign Secretary expect the first meetings in Doha to take place between the Taliban and the High Peace Council of Afghanistan? Also, has the UK considered making post-2015 aid dependent on respect for the human rights of women?

[Mr Hague]

On the hon. Lady’s first question, that will depend on the actions of the Taliban. Afghanistan and Pakistan support the opening of a Taliban political office in Doha, with our encouragement and with the support and readiness of Qatar. The Taliban leadership now need to decide whether they are prepared to take this opportunity to enter into a peaceful political process, or whether they will let it slip by and lose such an opportunity.

As to decisions about development—if my right hon. Friend the Secretary of State for International Development were here, she would prefer to put it in the positive sense—we are committed to development in Afghanistan with the programme of £178 million a year, and women’s rights are an important part of that programme. It is not our normal habit around the world to say, “This aid will be withdrawn unless you do X, Y and Z”. If countries behave in a completely unacceptable way, of course, we have been known to withdraw our assistance.

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

On the point about commitment by the Governments of Afghanistan and Pakistan, the Foreign Secretary will know that there may be a new Government in Pakistan in May, as there is an election going on, and that within a year there will be a new President in Afghanistan. Have there been discussions with some of the main opposition elements to see if they are committed to this process of working together for national security, peace and stability? Linked to that, will the Foreign Secretary join me in paying tribute to the Government and Parliament of Pakistan for the latter being the first in the history of Pakistan to serve its full term?

[Mr Hague]

Yes, I readily join in that tribute. This statement was very much focused on Afghanistan rather than on anything internal happening in Pakistan, which explains why I did not mention that earlier, but I absolutely join in that tribute. It is an important milestone in the democracy of Pakistan, which all parties across the House strongly support, that a democratically elected Government have served a full term and that another democratically elected Government of whatever shape or form will follow; that has never happened before in the history of Pakistan. The discussions we have hosted between the Pakistani and Afghan Governments have been broader than comprising just the political leaders, as they have included the military and intelligence leadership of those countries. Wherever possible, we have briefed opposition leaders. Just last week, for instance, I had discussions with the leading member of the opposition parties in Pakistan, Mr Nawaz Sharif. If opposition parties come into office, they will of course have to make their own decisions, but I believe there is a strong consensus across government—and, I hope, across political parties—in both countries in support of that.

[Several hon. Members]

rose—

[Mr Speaker]

Order. The Foreign Secretary is as courteous a member of the Cabinet and as fine a parliamentarian as it is possible to find. He cannot be accused of excluding from his answers any matter that could conceivably be of material relevance to any hon. or right hon. Member. I am hoping, however, that we can wrap up this debate by midday, as 37 Members wish to speak in the Budget debate.

[Paul Flynn (Newport West) (Lab)]

I thank and congratulate the Government and the staff at Brize Norton on the very sensitively conceived new facility for receiving the fallen from Afghanistan and on providing some consolation to their loved ones.

Frederick and Kimberly Kagan were at the right hand of General Petraeus during his time in Afghanistan, and they had access to all the secret documents and secret meetings. They were employed not by the Government, the military or Petraeus, but by the defence contractors, who were thought to be hugely influential. As our policy is tied to American policy, should we not look at the influence of defence contractors in prolonging existing wars and fomenting new ones?

[Mr Hague]

The hon. Gentleman raises a wider issue. I think he can be very confident that the decisions of the United States—and, indeed, of its allies, including the United Kingdom—have been thoroughly consistent throughout the last few years with what I have described: bringing our combat role to an end, transferring responsibility to Afghans and building a peaceful future for Afghanistan. I do not think anyone could accuse President Obama of anything other than that—or of any of the things the hon. Gentleman has just described. The President’s commitment to bringing this about in Afghanistan is abundantly clear, and I do not think he has been influenced against that by any contractors.

[Christopher Pincher (Tamworth) (Con)]

I welcome my right hon. Friend’s report on the further democratic developments in Afghanistan as it moves towards its presidential elections next year, but is he at all concerned by the report in The Times that the first major political figure to announce his candidacy—Mr Daudzai, the President’s former chief of staff—has, in the past, received cash in aid from the Government of Iran?

[Mr Hague]

I do not think it would be very helpful to the Afghan electoral process for Foreign Ministers in other countries to give a running commentary on each of the candidates as they emerge. My hon. Friend has made his point, but I do not think I will take it any further. In view of your injunction that I should be less informative in my answers, Mr. Speaker, I shall take this opportunity to set an example.

[Thomas Docherty (Dunfermline and West Fife) (Lab)]

I am sure the whole House agrees there should be no drop in the quality of medical care available to personnel after 2014, given that some will be staying behind. Can the Foreign Secretary update the House on the progress of talks with the United States about the need to ensure that the air bridge and the medical support continue to be of the present high standard?

[Mr Hague]

That is an important issue, which the Ministry of Defence continues to pursue. Our facility will be located next to a major United States facility. That will mean that we have access to the best possible medical care, which is the MOD’s intention.

[Philip Davies (Shipley) (Con)]

May I press the Foreign Secretary on a point made by my hon. Friend the Member for Gillingham and Rainham (Rehman Chishti) and touched on by my hon. Friend the Member for Tamworth (Christopher Pincher)? How dependent are the nature and extent of the Government’s involvement in Afghanistan on the outcomes of the elections in Pakistan and Afghanistan this year and next?

[Mr Hague]

I can assure my hon. Friend that they are not dependent on that. It will be important for us to work with the Governments of Pakistan and Afghanistan, whoever is elected this year and next year, because we have vital strategic interests and it is vitally in our national interests for us to continue to do so; and it is important for whoever stands for election in those countries to know that we are prepared to do so. The imperative to support—in a new and different way, after 2014—the building of peace and prosperity as well as security in Afghanistan will continue, and it is not dependent on those two elections.

[Dan Jarvis (Barnsley Central) (Lab)]

As the Foreign Secretary will know, the original ministerial decision to shift United Kingdom military effort from northern Afghanistan down to Helmand in the south came at a time when the UK was already dedicating a significant effort to operations in Iraq. I am not saying that that decision was right or wrong, but I do think that a mechanism is needed to enable the Government to review such decisions and learn from them. Does the Foreign Secretary agree, and if so, what does he think is the best mechanism for the purpose, in the context of Afghanistan?

[Mr Hague]

The hon. Gentleman has raised a very interesting issue. The decision to which he refers was made back in 2006, under the last Administration, so I cannot go into too much detail about the making of it. However, it is important for us to learn lessons after any conflict, and we have learnt enormous lessons in Afghanistan as we have gone along, including about such matters as military equipment and tactics. It will be for the House, and for all of us, to take stock when our combat role comes to an end, so I will not commit the Government to some new process of examination or inquiry at this point.

[Andrew Stephenson (Pendle) (Con)]

I welcome my right hon. Friend’s statement. We must never forget the ultimate sacrifice made by so many of our soldiers, including Lance Corporal Jordan Bancroft and Lance Corporal Michael Foley from Pendle, in achieving a sustainable settlement in Afghanistan.

I also welcome the Prime Minister’s recent trilateral meeting with his Afghan and Pakistani counterparts. Can my right hon. Friend say more about the continuing dialogue with Pakistan? Are there plans for any more trilateral meetings to take place before the Pakistani elections?

[Mr Hague]

Pakistan is going through a period of caretaker government before the elections. We will of course maintain contact with the caretaker Government, and I will continue to pursue with the caretaker Foreign Minister of Pakistan the trilateral process that I have pursued with the outgoing Foreign Minister, Hina Rabbani Khar, over the past year. I have spoken to the Afghan Foreign Minister in the last 10 days to make sure of Afghanistan’s continuing commitment to the trilateral process. The election in Pakistan will not interrupt that process.

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

It is 10 years to the day since the illegal invasion of Iraq, yet we have no statement and no debate in this House, even though the Scottish Parliament could debate it. Is that because the Foreign Secretary has sent a memo to senior Cabinet members telling them not to discuss the war—not to mention the war? Did he get away with it?

[Mr Hague]

It is easy to obey your request, Mr Speaker, by giving a short answer to this question because it is not relevant to the subject we are discussing. This statement is about Afghanistan, and we do not forget our responsibilities to our forces there just because there are controversies about other conflicts in the past.

[Oliver Colvile (Plymouth, Sutton and Devonport) (Con)]

I thank my right hon. Friend for his precise report, and I welcome the idea that we are going to be very supportive of governance in Afghanistan. The key to that is ensuring that an independent judicial system and a corruption-free police force are in place, so is he happy with the progress being made on that? Does he think that when we eventually come out of Afghanistan next year, that will be able to continue?

[Mr Hague]

It would be going too far to say that I am happy with all the progress made, because a lot more needs to be done to tackle corruption in Afghanistan. At the Tokyo conference last July, the Afghan Government entered into 164 specific different commitments about fighting corruption, and it is very important that they implement all of those. They have started implementing them, and we have seen some prosecutions following the Kabul bank scandal, but more work needs to be done on that as well. My hon. Friend draws attention to a very important subject, on which a beginning has been made—but it is only a beginning.

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

Our objectives in Afghanistan have always been noble, but surely there are lessons to learn from how we have pursued them at various times during the conflict. That applies not only to specific decisions, as my hon. Friend the Member for Barnsley Central (Dan Jarvis) mentioned, but to how we have deployed and rotated our forces, which initially led to a frequent change of tactics. As we approach 2014, surely the Government are doing some work to assess how our country has fought and managed this conflict.

[Mr Hague]

A great deal has been learnt under both Governments who have been involved in this as matters have progressed in Afghanistan. We have learnt about military tactics, training and equipment, all of which have been improved as time has gone on. Secondly, at this moment our focus is, of course, on the priorities I have set out: on making sure that our forces come home safely, and that the rest of the help we are giving Afghanistan is properly and effectively supplied. Thirdly, there must be a time for reflection in the round on all these matters, but I have no new announcement to make about that today.

[Mr Philip Hollobone (Kettering) (Con)]

Since 1945, Her Majesty’s Government have had more experience than any other on earth of withdrawing armed forces from theatre, and since the 1840s we have disengaged from Afghanistan several times. Sadly, the countries we have left behind have not always had the most stable of new beginnings. Since we have left Iraq, Iran’s influence over that country has grown exponentially. What is to stop the pernicious influence of Iran taking over in Afghanistan?

[Mr Hague]

My hon. Friend is right to ask that question. It underlines the importance of building up the Afghans’ capability to look after their own security and to develop their own economy—that is the only sure answer to the excessive interference by, or influence of, any other power in the region. It also shows the importance of supporting an Afghan-led peace process with the active co-operation of Pakistan. That is the best hope of bringing about a political settlement and a general peace in Afghanistan that would also then minimise outside interference in Afghan affairs. So those are two central planks of what the Government are trying to do.

[Nicola Blackwood (Oxford West and Abingdon) (Con)]

Yesterday, I met two female Afghan MPs. One had narrowly avoided being killed by a suicide bomber, and the other had been evacuated from her constituency by the UN and ISAF after having the temerity to celebrate international women’s day. Does the Foreign Secretary accept that not all Afghan women are victims, that those are exactly the kind of women we need to work with to ensure that the gains in women’s rights are not lost post-2014, and that an important way to do that is to implement the EU guidelines on human rights defenders in Afghanistan?

[Mr Hague]

My hon. Friend is absolutely right. The Afghan Government made a series of public commitments at the Tokyo conference in July to uphold the human rights of all Afghan citizens. That includes women, of course, and the promotion and protection of their rights as enshrined in the Afghan constitution. It is vital not only that human rights are upheld, but that human rights defenders are defended and protected, and that the Afghan Government fully implement their commitments on the law on the elimination of violence against women and the convention on the elimination of all forms of discrimination against women. We will try to hold them to all those things.

Ways and Means

Thursday 21st March 2013 Commons Chamber

Budget Resolutions and Economic Situation

Thursday 21st March 2013 Commons Chamber

amendment of the Law

Debate resumed (Order, 20 March).

Question again proposed,

That, —

(1) It is expedient to amend the law with respect to the National Debt and the public revenue and to make further provision in connection with finance.

(2) This Resolution does not extend to the making of any amendment with respect to value added tax so as to provide—

(a) for zero-rating or exempting a supply, acquisition or importation;

(b) for refunding an amount of tax;

(c) for any relief, other than a relief that—

(i) so far as it is applicable to goods, applies to goods of every description, and

(ii) so far as it is applicable to services, applies to services of every description.

12:00

[Ed Balls (Morley and Outwood) (Lab/Co-op)]

It is the morning after—the cold light of day—and the full reality of this Chancellor of the Exchequer’s fourth Budget is starting to sink in. What a huge disappointment it was; what another wasted opportunity. On growth, on borrowing and on living standards, this Chancellor’s plan has completely failed.

Families, pensioners and businesses are paying the price, but what did we get yesterday? A change of direction? Action to kick-start our flatlining economy? Real help now for families on middle and low incomes? Any recognition from the Chancellor that things have not worked out as he planned? No. All we got was more of the same failing policies. Tweeting, tinkering, but no change, of course. The Chancellor confirmed that he will still go ahead in two weeks’ time with a tax cut for millionaires. We had more of the same failing policies and a long hard road to nowhere from a downgraded Chancellor who looks out of touch and increasingly out of his depth. Surely Britain deserves better than that. What do we have to look forward to this morning?

[Mr Alan Reid (Argyll and Bute) (LD)]

What my constituents on the islands can look forward to next month is fuel duty at 18p a litre less than it would have been if the right hon. Gentleman’s Government had still been in power. Is he not delighted that this Government have reversed his party’s policy and reduced fuel duty by 18p a litre for my island constituents?

[Ed Balls]

Unfortunately, the hon. Gentleman fought the last election by saying that his constituents should vote Liberal Democrat to stop the Tory VAT bombshell. VAT has gone up, petrol is up as a result and his constituents will make their choice in two years’ time.

What do we have to look forward to this morning? Another painful, contorted and pathos-bathed Budget debate speech from the Business Secretary. I look across at him sitting on the Front Bench and cannot bear to read out once again all those pre-election quotes. You know the ones I mean, Mr Deputy Speaker—[Hon. Members: “Go on!”] No, I just cannot bear it. They were the ones in which he warned that the Chancellor’s austerity plan, his VAT rise and his rapid spending cuts would choke off the recovery and make the deficit worse. The Business Secretary knew that this plan would fail and he now knows that he is deeply implicated in its catastrophic economic failure, yet he still does not have the courage to stand up and speak out about it. Long, contorted and fudged essays in the New Statesman just will not do. No wonder he was completely ignored in yesterday’s Budget. It is a personal tragedy as well as a national tragedy, but we will hear from the Business Secretary shortly.

[Mr Tobias Ellwood (Bournemouth East) (Con)]

The right hon. Gentleman talks about economic failure. I have the UK annual debt figures going back a few years. When the right hon. Gentleman was in office, the UK debt was £347 billion. Before the crisis struck, it rose to £624 billion. After the crisis it ratcheted up another £200 billion. With this track record, why should the nation trust Labour with Britain’s finances ever again?

[Ed Balls]

This is the Conservative Member who stated just two months ago that

“the past 2 and a half years have set Britain on the right track.”

The economy flatlined, borrowing stalled and the national debt is rising year by year by year on his Chancellor’s watch. The right track? I can scarcely think what the wrong track would be.

This morning we heard the Deputy Prime Minister on “Call Clegg” attacking the Leader of the Opposition for repeating the same attacks in this year’s Budget response as he used last year. I went back to my opening speech of a year ago, the one following the Chancellor’s third Budget, the omnishambles Budget. We all remember that one, don’t we? This is what I said a year ago:

“The British economy is stagnating, unemployment is rising…the Government’s deficit reduction plans have gone wildly off track, middle and lower-income families and pensioners are facing rising…prices, rising energy bills and falling living standards—and what did the Chancellor do in his Budget yesterday? Did he admit that his economic plan has failed? Did he act to kick-start the stalled recovery?...No.”—[Official Report, 22 March 2012; Vol. 542, c. 957.]

That was a year ago, and the tragedy is that 12 months on the position is even worse. In the words of the great Yogi Berra, it really is déjà vu all over again. It is a groundhog day Budget from a failing and out-of-touch Chancellor.

Twelve months on, living standards are still falling. The Office for Budget Responsibility says that real wages adjusted for inflation will be a full 2.4% lower in 2015 than in 2010—worse off under the Tories. It is groundhog day too because 12 months on, the economy is still flatlining. As recently as the autumn statement, the Chancellor was expecting growth of 1.2% this year, but the OBR has now halved that forecast to just 0.6%—not the right track; the wrong track. At the time of the spending review in autumn 2010 the Chancellor was expecting growth by now of 5.3%. So far it has been just 0.7%, and the stagnation and flatlining continue.

[Penny Mordaunt (Portsmouth North) (Con)]

I would be interested in the right hon. Gentleman’s explanation of why the OBR is forecasting 600,000 more jobs in 2013 than there were a year ago.

[Ed Balls]

Perhaps the hon. Lady should also study the book. The interesting thing is that the OBR is also forecasting that unemployment will rise, not fall. More jobs, unemployment rising—maybe there are more people in the country. Does she know what the OBR forecasts net migration to be in the next few years? Tens of thousands? No. Net migration of 140,000 every year. That is what is going on.

It is groundhog day too because, as a result of the present stagnation, the Chancellor’s fiscal plans are even more wildly out of control than they were a year ago. No wonder his fiscal credibility is in tatters. The Chancellor used to claim that the national debt would start to fall in 2015 from a peak of 69.7% of GDP. He now expects it to rise in 2015, to rise in 2016, to rise in 2017 and to hit a staggering not 69.7%, but 85.6% of GDP. And the reason the national debt is rising is that, as the OBR said yesterday, the Chancellor’s deficit reduction plan has stalled. The deficit is now expected to be the same next year as it is this year and as it was last year. It is not a deficit reduction plan anymore. That is why the Chancellor is now set to borrow—[Interruption.] The Chancellor should listen to this. He is now set to borrow £245 billion more than he planned, vastly more than the borrowing he inherited from the Labour Government.

[Richard Fuller (Bedford) (Con)]

While the vast army of PAs behind the shadow Chancellor search for a bullet point on Bedford, let me say that his criticisms are not falling very strongly, in part because his hands are dipped in red—the red ink of years of borrowing and debt. Does he not think that the arguments would be stronger if he moved to one side and gave his seat to the fresh-faced young man sitting next to him, the shadow Secretary of State for Business, Innovation and Skills?

[Ed Balls]

The voters of Bedford might be disappointed to find out the truth: compared with a year ago, the Chancellor will borrow £29 billion more than he planned this year, £59 billion more next year, £73 billion more the year after and £77 billion more the year after that. Mr Deputy Speaker, if you want to know who the borrowing Chancellor is, it is him. Do you know what he managed to do yesterday in his Budget documentation? He fiddled around and managed to say that borrowing this year is lower than it was last year by £0.1 billion. We know why: as the OBR confirms, the Chancellor and the Chief Secretary to the Treasury, when one would think they would be working on a plan for jobs and growth or reform of the banking system, have been scrabbling around and hacking away at spending in this year in a desperate attempt to try to get the borrowing down.

The detail is set out on page 13 of the OBR document. It shows that, compared even with the autumn statement, tax revenues are down this year by £5 billion but that since December the Chancellor has found a further so-called underspend of £3.4 billion, which he says is not like normal underspends. What does the OBR tell us about that so-called underspend. It states:

“It is very rare for the government to under-spend the departmental plans it has set out less than a year ago by such a wide margin...Our overall forecast of under-spending has a number of elements: money that the Treasury has agreed to allow departments to move into future years;…money that departments thought they would spend this year, but which they do not now expect to spend either this year or in the future; and payments (for example to some international institutions) that were due to be made late in the current financial year, but which are being delayed into 2013-14.”

The cheque is in the post, but it will not arrive until after 1 April in order to massage the figures. Who does the OBR say has been hardest hit? The answer is the national health service, which has been cut by over £2 billion this year. At the same time the NHS is losing more than 5,000 nurses, the Treasury scrabbles around to try to save the Chancellor’s face.

[Richard Graham (Gloucester) (Con)]

Yesterday I brought the CEO of a significant medium-sized manufacturer in Gloucester to listen to the Budget statement and the Opposition’s response. He commented afterwards:

“I thought the Government’s commitment to helping business was exactly what is needed for growth and jobs, and I continue to be dismayed that the Opposition remains so theatrical, playing for headlines only, which cannot help any of us.”

Is not it time the shadow Chancellor gave us less theatre and more substance on what he would do to help businesses and growth?

[Ed Balls]

Falling living standards for families in the hon. Gentleman’s constituency, rising child poverty and families in work seeing their tax credits cut—that is not theatre; that is the real world. As for the national insurance cut for small businesses, that is point 5 of Labour’s five-point plan for jobs and growth. That is the reality.

[David Wright (Telford) (Lab)]

Talking about theatre and the movement of money between financial years, is it not interesting that hospitals in Shropshire have been cancelling operations? One of the chief nurses says that is because of funding cuts in the NHS. I wonder whether it is because of the Chancellor’s fiddle.

[Ed Balls]

The OBR document is very interesting. It sets out the unusual underspend Department by Department. I do not think that we have yet heard the full truth about what has been going on in the Treasury: the pressure applied in one year to cut spending or to move it to the next year just to fiddle the borrowing figures. I think that we will discover the truth in the coming weeks. For a Government who attack businesses and make late payments to small business, they are the late payment Government.

Has the Chancellor learned nothing over the past 12 months? He used to say that he was sticking to his plan in order to secure the recovery, but then we had the double-dip recession. He used to say that he was sticking to his plan to get the deficit down, but his spending cuts and tax rises have choked off the recovery. As the OBR revealed yesterday, the deficit was basically unchanged last year and will remain unchanged this year and next. Then all he could say was that he had to stick to his plan in order to keep his treasured triple A credit rating, but he has even lost that. The only reason he will not now change course is to avoid his own political humiliation, and that is no reason to stick to a failing plan.

[George Freeman (Mid Norfolk) (Con)]

The right hon. Gentleman alleges that the Government have increased the deficit. I have checked the figures from the Institute for Fiscal Studies and the OBR. Will he confirm that when the Government came to power the deficit was 11.2% of GDP and that it is now 7.4%? Is that a rise?

[Ed Balls]

The Government inherited a deficit reduction plan from the previous Government, but the Chancellor is wildly off track from our plan, which he used to call irresponsible. He is borrowing pretty much a quarter of a trillion pounds more. He said that he would get the deficit down, but the deficit reduction plan has stalled.

I have urged the Chancellor to change course, as in recent months have the International Monetary Fund, The Economist, the Mayor of London, the Business Secretary and the Home Secretary. They have all cast doubt on his plan. But yesterday we got more of the same. How did he describe the Budget? He described it as a “steady-as-she-goes Budget.” Steady as she goes? What kind of ship does he think he is on: the Titanic; the Mary Celeste?

There were some welcome measures. We have consistently called for a tax break for small firms taking on extra workers. The Government are now set to introduce a similar scheme, three years after the shadow Business Secretary and I urged them to. That is a welcome step forward. The Chancellor has finally joined Twitter, five years after I did. Maybe he will find out that his plan is going to fail five years after I worked it out, although by then he will be on the Opposition side of the House.

Yesterday there was no proper plan to kick-start our economy, no bank bonus tax to fund a youth jobs guarantee, no real action to get lending going to small firms, no proper investment in affordable homes and no return of the 10p starting rate to help millions of people, paid for by a mansions tax. Despite the welcome small change of 1p off a pint of beer—buy 320 pints and get one free, which might even be too much for the Foreign Secretary—and even after the increase in the personal allowance, an important point for the Liberal Democrats, families will still be worse off next year compared with this year because of the Chancellor’s tax and benefit changes.

[Paul Flynn (Newport West) (Lab)]

With all the voodoo economics and fiddles that have now been exposed, is not the Treasury exposed as the most disreputable massage parlour in Britain?

[Ed Balls]

I think it is a little unfair to tease this Chancellor about what goes on late at night in massage parlours. Perhaps he will correct me and tell me that it was not a massage parlour. I will take an intervention if he would like to clarify it; I cannot remember that chapter in the biography.

According to House of Commons Library figures, a one-earner family—[Interruption.] The Chancellor should listen to the reality of his plans and their impact on hard-working families in our country. According to the Library, a one-earner family on £20,000 a year with two children will be £381 a year worse off in 2013 compared with 2010, even with the personal allowance, because that is outweighed by the hit to tax credits for a working family. This is without taking into account the rise in VAT. By 2015, that family on £20,000 will be £600 a year worse off.

It is not just a case of being worse off under the Tories, but worse off under the Liberal Democrats too. In 16 days’ time, as the Chancellor, with the support of the Business Secretary, rams through the granny tax, the strivers tax and the bedroom tax, he is pressing ahead with a £3 billion tax cut for the very richest people in our country. In two weeks’ time, 13,000 millionaires will get an average tax cut of £100,000 each. Millions are paying more while millionaires get a tax cut.

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

The shadow Chancellor is on record as saying that his solution is that we should be borrowing more now. How much more would he borrow on top of what the Chancellor is already borrowing?

[Ed Balls]

I will quote the Business Secretary. Asked on the “Today” programme, “Won’t that mean more borrowing?”, he replied, “But we are borrowing more.” The Government are borrowing more—it is all here in the OBR document. If they had listened to our plan two years ago, the borrowing would be coming down, and it is not.

[Several hon. Members]

rose—

[Ed Balls]

I will take some more interventions if Members want. Let us have the hon. Member for Bournemouth East (Mr Ellwood) again.

[Mr Ellwood]

I am grateful to the right hon. Gentleman. He spoke about a deficit reduction plan. What year was he referring to? Was it 2001-02, when the deficit was £0.8 billion, or was it any one of the years leading up to the last year that Labour was in government, when it was a staggering £158 billion? Under the previous Government, the deficit increased in every single year after 2001. Will he tell me in which year his deficit was supposed to kick in?

[Ed Balls]

I do not want to have to give the hon. Gentleman an economics lesson, although given that he thinks we are on the right track, perhaps he needs one. The Chancellor’s fiscal rule is to balance the current structural budget, excluding investment—[Interruption.] Don’t be so silly. [Interruption.]

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. Can we calm down? Shouting from sedentary positions does not help the debate.

[Ed Balls]

The economy has flatlined and the national debt is rising year on year, and the hon. Gentleman does not want to know the truth.

Not only is the Chancellor pressing ahead with a tax cut for millionaires; it now seems that his mortgage scheme announced yesterday will help people, no matter how high their income, to buy a subsidised second home worth up to £600,000. From what I have seen so far, the Government are basically saying, “If you’ve got a spare room in a social home you’ll pay the bedroom tax, but if you want a spare home and you can afford it, we’ll help you to buy one.” Are the Government really going to allow millionaires, who will get a tax cut averaging £100,000 in two weeks’ time, to get a taxpayer guarantee if they use that money as a deposit on a house, a second home, or even a buy-to-let house? That is not just tax cuts for millionaires; it is subsidised mortgages for millionaires—or should I say a spare homes subsidy? I will take an intervention if the Chancellor wants to clear up the absolute confusion and chaos over this policy. Surely people struggling to get a mortgage—those who want to get their first home—should be the priority for help, not the small number who can potentially afford to buy a second home or a buy-to-let home. We will solve the housing crisis and help first-time buyers only if we finally build the new affordable homes that we said should be built but which he ignored in this Budget.

This is more of the same from a Chancellor who does not even understand the Budget he has announced, as we saw a year ago. I ask him again—is the taxpayer subsidy available for second homes to people with incomes over £100,000 or for buy-to-let properties? Yes or no? If he does not clear it up, the confusion and chaos will continue. Does he want clarify it? Pasties, caravans, churches, skips—and now subsidised second homes for millionaires. It is not “Who Wants To Be A Millionaire?”; it is “Who Wants To Help A Millionaire?” It is not “phone a friend”; it is “cut taxes for your friends.” As for “ask the audience”, he must be hoping that he does not have to ask the electorate any time soon—certainly not after the past 12 months.

What a 12 months it has been for this Chancellor! The omnishambles Budget, the double-dip recession, booed at the Paralympics, forced to upgrade on the train, downgraded by Moody’s, his fascinating biography—and now his colleagues are even speculating that he might have to be replaced by the Foreign Secretary, the Defence Secretary, or even the right hon. Member for Wokingham (Mr Redwood). A year ago they feted him as the next leader of the Tory party; now, according to the Tories, they are touting him as our next man in Brussels. It used to be Calamity Clegg they were sending off to the Commission; now it is Calamity George. Well, we do know he likes a bit of “Whip crack-away, whip crack-away, whip crack-away.” [Interruption.] Are you suggesting that I do not sing it, Mr Deputy Speaker?

A few weeks ago, the Chancellor reportedly told his colleagues at a Cabinet meeting that if they did not make a decision that day they would have to do so after 2015, sitting round the shadow Cabinet table. That is going to be the one forecast that he actually gets right.

[Mr Nick Gibb (Bognor Regis and Littlehampton) (Con)]

This is all very amusing, but not very serious. Is the right hon. Gentleman aware that in his own constituency over the past 12 months unemployment has fallen by 2.5% and youth unemployment has fallen by 12.5%? Why is he complaining about higher borrowing and at the same time advocating higher borrowing? Is it not right that the Chancellor is letting the automatic stabilisers kick in?

[Ed Balls]

The problem with what the Chancellor is doing this year—cutting in-year spending—is that it is the opposite of the automatic stabilisers. He is cutting spending and the OBR says that it is having a direct impact on economic growth. I sympathise with everybody who loses their job, including the hon. Member for Bognor Regis and Littlehampton (Mr Gibb). In my constituency unemployment has come down, but working families are worse off because of cuts to tax credits, the bedroom tax and cuts to child care. The £700 million-a-year tax break for new child care is no compensation for the £7 billion a year cut in support for families.

[Andrea Leadsom (South Northamptonshire) (Con)]

Is the right hon. Gentleman aware that inequality in income has dropped significantly since May 2010?

[Ed Balls]

I think the hon. Lady may find that that is before the millionaires’ tax cut kicks in in 14 days’ time.

The hon. Member for Bognor Regis and Littlehampton asked whether I am being serious. I am being deadly serious about the failure of this Government’s economic plan. They are failing on growth and on borrowing, and living standards are falling as families and businesses pay the price. I warned the Chancellor two and a half years ago that his plan could not work and that, given that a global hurricane was brewing, it was the wrong time to rip out the foundations of our own house. I told him that monetary policy in a situation akin to that of Japan in the 1990s or of the world in the 1930s could not do the trick to restore growth. I warned him that attempting to have the biggest tax rises and fastest spending cuts in our post-war history, and probably beyond, would backfire and choke off recovery rather than support it.

The Under-Secretary of State for Skills, the hon. Member for West Suffolk (Matthew Hancock) is the Chancellor’s former adviser and he is now a member of the Business Secretary’s ministerial team. He wrote an article in The Times in the autumn of 2010 in which he said—this is the Chancellor’s former adviser—that faster deficit reduction would lead to stronger growth. He said, as the Chancellor has also argued, that this was an example of expansionary fiscal contraction, but fiscal contraction has not been expansionary—it choked off the recovery. If the Chancellor was relying on advisers like the hon. Gentleman, it is no wonder that he got into such trouble.

[Bob Blackman (Harrow East) (Con)]

The shadow Chancellor has made great fun of tax changes and other issues relating to growth. Does he welcome the Government measure that means that next month 36,270 working people in his own constituency will get a tax cut?

[Ed Balls]

The hon. Gentleman needs to look at the figures and understand the impact on working families in his constituency. The problem with his Chancellor is that he gives with one hand and takes a lot more with the other. A one-earner family on £20,000 and with two children are worse off, even with the personal allowance, by £380 a year because of the cuts to tax credits. Working families are losing out. The Chancellor tried to divide the country into strivers versus shirkers, but we do not hear that any more because it turned out that his shirkers were the working people of this country.

The real tragedy for this Chancellor is that he is set to join a long line of past Chancellors. Philip Snowden, Norman Lamont and now George Osborne—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. Do not refer to Members by name.

[Ed Balls]

I apologise, Mr Deputy Speaker.

Philip Snowden, Lord Lamont and now Chancellor Osborne—[Interruption.] It was not the Lamont name that I got wrong, was it, Mr Deputy Speaker? Philip Snowden, Lord Lamont and now this Chancellor have said, “I will stick to the plan.” Those past Chancellors ignored all the warnings from those who said that the plan would not work. They boasted, “If the medicine’s not hurting, it’s not working,” and ploughed on and on as things got worse and worse, and their careers ended in disaster as their failed policy finally consumed them.

Is that not the truth? This Chancellor is an historian who does not know his history and he does not know his economics, either. He is completely out of his depth—business, the country, his Back Benchers and Cabinet colleagues and the Business Secretary all know it and, in his heart of hearts, I think the Chancellor knows it, too. He was the wrong man for the job at this vital time. He is running out of excuses, he has run out of answers and he is running out of road.

We needed a Budget for growth, jobs and fairness, but we got more of the same. There is no plan for growth, just tax cuts for the rich while everyone else pays the price. This is more of the same failing plan from a downgraded Chancellor—not steady as she goes, but sinking like a stone.

[Several hon. Members]

rose—

[Mr Deputy Speaker]

Order. Thirty-three Members want to take part in this debate and a time limit will be announced following the Business Secretary’s response to the shadow Chancellor, but six to seven minutes would not be too far out.

12:29

[The Secretary of State for Business, Innovation and Skills (Vince Cable)]

I am delighted to speak in support of the Budget and thank the shadow Chancellor for 35 minutes of pantomime. More worryingly for me, I occasionally read in the newspapers that we agree with each other; I am not sure whether he regards that as a bigger slander than I do. I have been trying to find out what it is that I am supposed to agree with and to understand what actually is his plan B. A quick search revealed seven different variants of plan B. In fact, that is almost certainly an understatement, because the shadow Chancellor has had more positions on the economy than there are positions in the “Kama Sutra”.

Let me run through some of the variations that we have heard from the shadow Chancellor over the past couple of years. He started with the big stimulus to the economy that was going to come from the bankers’ bonus tax, which would have imposed a £2 billion tax on a tax base—a bonus pool—of £1.6 billion. He had not realised that, since his time in charge of the City, the bonus pool had shrunk from £14 billion.

The shadow Chancellor then moved on to the five-point plan, which was mostly pretty sensible. It included apprenticeships, which we are already doing on a much bigger scale. He also wanted, I think, £200 million for the regional growth fund. Well, we have given it billions, not hundreds of millions. He then moved on to the reallocation of the money from the 4G auction sale, but it had already been allocated—I have already spent quite a lot of it.

We have now moved on to trying to understand what plan B actually means today. As far as I can fit it together, it consists of several elements, including a big stimulus from a value added tax cut, stopping Government spending cuts and, somehow out of the alchemy, reducing borrowing. I have tried to work out how this plan was created and am struck by its similarity to the economic strategy being developed by Nigel Farage, although I may be doing the UK Independence party a disservice.

The shadow Chancellor and I have a serious interest in economics. Before we discuss how to deal with this crisis, we have to try to understand how it originated. I think that most serious economists, whether they are in the Keynesian tradition or not, would acknowledge that this is not a cyclical recession. It is what is now called a balance sheet recession, and in order to understand how that happened we need to understand why the balance sheet got so big in the first place and why private sector deleveraging is now happening on such a massive and damaging scale.

This is an uncomfortable set of questions for the shadow Chancellor because, among other things, he has to explain the following. Why was it that in the 50 quarters of growth without inflation, nobody noticed the massive asset bubble in residential and commercial property, which has since burst? He has to explain why households in the UK, which have become heavily over-leveraged, managed in that period to acquire the highest level of personal debt in relation to income of any country in the developed world. He has to explain why a medium-sized bank in Scotland was encouraged and actively supported by his Government in trying to become the biggest bank in the world on the basis of dodgy acquisitions and gambling in its casino operations. He also has to explain why, when his former boss commissioned an excellent study on the banking system in 2000, which explained why there was a cartel operating that was squeezing the life out of small business, his Government did absolutely nothing about it.

We have a major economic crisis caused by balance sheet deleveraging, arising out of a major financial crisis. One would have thought that those on the left would want to talk about a crisis of financial capitalism, but they do not want to talk about it at all. In fact, the shadow Chancellor has a striking resemblance to the lead character in “Fawlty Towers”. Colleagues may remember the episode in which he goes around with great indignation, wanting to have an animated conversation about Germany, but nobody wants to talk about the war. The shadow Chancellor wants to talk about the economic crisis, but not the financial collapse that he presided over.

[Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

The right hon. Gentleman has talked about an asset bubble. What is the Chancellor’s mortgage scheme, other than the hope of an asset bubble to get him out of trouble? What growth or capacity would that add to the economy? The problems of this economy will not be answered by yet another asset bubble. What are the Government trying to do? All that their scheme will do is create another asset bubble.

[Vince Cable]

There are two elements to the Chancellor’s housing package. The first is the development of the FirstBuy scheme, which will provide £3.5 billion for shared ownership. That has been widely welcomed because it will increase the demand for housing and get the housing market going. The other, more ambitious scheme is a form of insurance for mortgages, which has been very successfully applied in Canada, for example, where it prevented a collapse of the market of the kind that occurred here and introduced greater stability. The Chancellor is now consulting on how that scheme should be designed, which is absolutely right.

[Helen Goodman (Bishop Auckland) (Lab)]

The Secretary of State needs to be a champion of the mansion tax, which would be a very sensible thing to do at the moment. Why is he supporting this scheme, which will support the purchase of houses up to the value of £600,000?

[Vince Cable]

I remain a champion of the mansion tax and will continue to champion it with my colleagues on the Liberal Democrat Benches. The Chancellor is going to consult on how this major reform to the housing market will be implemented. We recognise that there are many complex products in the mortgage market. For example, many parents support their children’s housing acquisitions. Those kinds of transactions have to be properly analysed before the scheme is launched.

[Mr David Hanson (Delyn) (Lab)]

I will be going back to my constituency tonight and would like to give the Budget a fair wind if I could. Will the Secretary of State therefore confirm that the scheme will not apply to second homes or to people who can afford to provide such a subsidy themselves?

[Vince Cable]

As I said a few moments ago, there are two schemes. The first, which is the development of a scheme that is already operating, most emphatically does not apply to second homes. The major mortgage guarantee scheme is complex and the Chancellor will consult on how to draw the boundaries around eligible mortgages.

[Ed Balls]

Will the right hon. Gentleman give way?

[Vince Cable]

Let me just finish this point.

[Ed Balls]

Will he give way?

[Vince Cable]

I will in a moment. Let me just deal with the question of the millionaires who benefit. I remember the 13 years that I spent on the Opposition Benches, asking about taxes. Let us remember the situation. We had a 40p top tax rate, we had an 18% capital gains tax, which was widely used for tax avoidance in the private equity industry and elsewhere, and non-dom tax reliefs were completely uncapped. When we challenged that situation, we were told repeatedly by this shadow Chancellor and others, “No, you can’t do that. You’ll frighten away all the bankers who are generating wealth in the City of London.”

Of course we need a more equitable tax system. That is why the Liberal Democrats continue to argue for a mansion tax. But we have a higher rate of income tax at the top than prevailed in any year of the Labour Government.

[Ed Balls]

The Business Secretary is a member of the Cabinet and a student of these matters, and he cares a lot about how the economy works. Can he tell us, because he will have been part of the discussions, whether the new mortgage scheme applies to second homes and buy-to-let. Yes or no? He is the Business Secretary; can he answer the question?

[Vince Cable]

The scheme has not yet been designed in detail. It was typical of the Labour party that it frequently launched into half-baked schemes without thinking about the detail. This is a major change and it will be planned carefully.

[Ed Balls]

To be absolutely clear, in two weeks’ time millionaires are getting an income tax cut and the new scheme that was introduced yesterday could allow them to use that tax cut to get a taxpayer subsidy for a second home or a buy-to-let, but the Business Secretary cannot tell us—yes or no—whether that will be the case. Is that not an absolute shambles? Is it not set to be totally unfair? It is a spare home subsidy.

[Vince Cable]

The right hon. Gentleman does not know, and I do not yet know, what the final outcome of this massive scheme will be. To be lectured with righteous indignation by the people who created a massive property bubble that destroyed this country’s economy and wiped out enormous gains in people’s living standards is the most gross hypocrisy.

Let me turn to some of the other issues that the shadow Chancellor raised.

[Guy Opperman (Hexham) (Con)]

The shadow Chancellor took us on an interesting history tour of former Chancellors. Does the Business Secretary recall who it was who advocated light-touch banking regulation, sold our gold and uttered the famous phrase, “No more boom and bust”?

[Vince Cable]

Yes, I think we do. That bears repetition and the hon. Gentleman has done it very well.

[Mr Reid]

Was my right hon. Friend as disappointed as I was that the hon. Member for Na h-Eileanan an Iar (Mr MacNeil) intervened and did not thank the Government for the 18p cut in fuel duty that this Government have given his constituents, thanks to campaigns by myself and other Government Members?

[Vince Cable]

My colleague is absolutely right. He reminds us of two things that the Government have done. One is the freezing of petrol duty. The other is the allowance for remote communities, which he ably represents, as does the hon. Member for Na h-Eileanan an Iar (Mr MacNeil).

[Mr MacNeil]

Does the Secretary of State agree that the rural fuel derogation should be increased? A 5p cut is not enough; we really need a 10p cut. I am sure that the hon. Member for Argyll and Bute (Mr Reid) would agree with me.

[Vince Cable]

I am sure that we would have free petrol in a perfect world.

Let me deal with some of the points of economic substance that have been raised. The first was about job creation. It is true that in the last set of figures there was a very small increase in unemployment. However, that happened against the context of the last three months, in which 130,000 new jobs were created, vacancies rose and redundancies fell. In this Parliament, we have created 1.25 million new private sector jobs. It is difficult to understand why, if the economy is performing as badly as the shadow Chancellor claims, a large number of new private sector companies are creating jobs in that way. There are regions of the country, such as the west midlands, that in the boom periods saw a decline in private sector employment. That is now being comprehensively reversed.

The question put by my hon. Friend the Member for Portsmouth North (Penny Mordaunt) is apposite: why does the Labour party think that 600,000 jobs are being predicted by the OBR in the coming year? We got the ludicrous answer that it has something to do with immigration, but immigration is about the supply of labour, not the demand. Where is the demand coming from, other than a favourable business environment that encourages small companies to establish and grow jobs?

[Mr Russell Brown (Dumfries and Galloway) (Lab)]

We have listened long and hard to the Government about the number of private sector jobs that have been created—it went from 1 million, to 1.2 million, fell back to 1 million for some reason, and yesterday we heard an announcement of 1.25 million new jobs. Will the Secretary of State put in the Library a complete breakdown of those jobs that states where they are located—not just percentage-wise but numbers-wise—which sectors they are in, and the hours that people are working, so that we know exactly what is happening?

[Vince Cable]

I understand that some of those details were placed in the Library yesterday, and the hon. Gentleman is free to consult them. I hope he is not trying to deny that the phenomenon is taking place.

[Julie Hilling (Bolton West) (Lab)]

It is not clear how many unpaid, workfare jobs are counted among the jobs created. Clearly, they are not jobs created if people are working for nothing. How many of the jobs are like that?

[Vince Cable]

These are proper jobs, as defined by the Office for National Statistics. I honestly do not know why Opposition Members are trying to deny a genuine piece of good news that affects their constituents.

[Sheila Gilmore (Edinburgh East) (Lab)]

I thought that perhaps the Secretary of State would like to hear the answer to the question, which is actually in the report by the Office for Budget Responsibility. Of jobs described as jobs created over the past year, 14% are unpaid work experience or work placements.

[Vince Cable]

I do not understand why the Opposition should be hostile to work experience. All our evidence suggests that people who enjoy work experience go on to stable employment. It is an extraordinary state of denial when we have a successful process of job creation that the Opposition do not want to acknowledge exists.

[Ed Balls]

To clear up the Business Secretary’s confusion a few moments ago—I am not sure whether he or the Chancellor have seen this document, but it might be helpful to them—the Treasury has published a document, “Help to Buy: mortgage guarantee”, which makes it clear that the scheme does not apply to buy-to-let properties. A person cannot take out a mortgage for a buy-to-let property; it must be residential. As far as we can see from the document, however, the scheme absolutely does allow second homes. It is a spare homes subsidy. I do not know whether the Business Secretary has seen the document, but perhaps he would like to comment.

[Vince Cable]

I am glad the right hon. Gentleman felt able to withdraw his earlier allegation that this was about buy-to-let mortgages.

[Ed Balls]

For absolute clarity, I asked the Chancellor and the Business Secretary whether the scheme applied to buy-to-let properties, and whether it would allow second homes. Neither of them knew. The Business Secretary said that it had not been decided, but in fact the document has been published and states that the scheme does not apply to buy-to-let properties, but it does allow second homes. The accusation stands. Is that true? It is not in the document; are they going to amend it?

[The Parliamentary Under-Secretary of State for Skills (Matthew Hancock)]

Is it in the document or not?

[Ed Balls]

It is not in the document—[Interruption.]

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. Please make the intervention briefly.

[Ed Balls]

The document is very clear. Buy-to-let is ruled out but second homes are allowed. That is a fact.

[Vince Cable]

I think the shadow Chancellor is digging himself into a certain amount of trouble. He refers to a document as fact, but it is actually a consultation document. Rather more sensibly, the shadow Business Secretary yesterday applauded the new housing initiatives. We will proceed with the consultation, and if the shadow Chancellor has any technical criticisms of the tenure arrangements, he can make them in the consultation process and we will listen constructively.

[Mr Chuka Umunna (Streatham) (Lab)]

With the greatest respect to the Business Secretary, he mentioned what I said yesterday, but I said that not knowing that people who want second homes can take advantage of the scheme. He did not know that either.

[Vince Cable]

The Opposition Front Bench is getting a little silly. Let us leave it to the consultation and see what comes out. I am sure that those imaginary horrors will not be realised.

The second criticism from the Opposition was about the level of borrowing. I was not clear whether the shadow Chancellor regards high levels of borrowing as a good or bad thing—a rather basic question. Is the Labour party in favour of more borrowing, or less? The Institute for Fiscal Studies made a thorough comparison between what is likely to happen under the Government’s fiscal plans and what would have happened under the so-called Darling plan. It was a bit perfunctory, but it gave us a framework and concluded that in 2016-17 the level of borrowing under the Labour trajectory would have been £76 billion, but £24 billion under the coalition’s policy. That is after the revisions that have taken place.

As someone brought up in the Keynesian tradition, I think it rather creditable that the Chancellor has responded to a slow-down in the economy by allowing counter-cyclical stabilisers to apply. I am amazed that those on the Opposition Front Bench find that a source of criticism, when it is good, common-sense, practical economics.

[Penny Mordaunt]

The shadow Chancellor’s speech not only did a grave disservice to the Chancellor, but to Philip Snowden. I declare an interest as my late mother was Jennifer Snowden so I am related to the first Labour Chancellor of the Exchequer. As a consequence I have his biography which states:

“He was raised in an atmosphere which regarded borrowing as an evil and free trade as an essential ingredient of prosperity.”

Does the Business Secretary think that I should loan my copy to Opposition Members?

[Vince Cable]

We seem to have forgotten, but I think Philip Snowden was the first Labour Chancellor—[Interruption.] Indeed, there have been many others.

[Mr Brooks Newmark (Braintree) (Con)]

My right hon. Friend mentioned a study by the Institute for Fiscal Studies, but the IFS also noted that under the shadow Chancellor’s plan B, the extra cost of borrowing would be another £200 billion. That surely cannot be good for UK plc.

[Vince Cable]

The hon. Gentleman has obviously found another version of plan B that I did not discover in my search, but I am sure he is right.

Let us consider what has caused this slow-down, which the shadow Chancellor blames on Government policy. The OBR was clear and explicit and stated that the downward revision in our forecast for 2012 is largely accounted for by a reduction in the contribution of net trade. We are operating in a difficult international context—particularly in the eurozone, which accounts for half our exports—and that largely explains the slow-down that has occurred, and the consequential impact on Government debt and borrowing.

We are giving overriding priority to developing British trade in those markets that have been neglected for many years. Over the past two years, led by the Prime Minister, I and other Ministers have gone back time and again to people in the big emerging economies to promote exports and inward investment. That is why our exports to Brazil and India have increased by more than half, and by approximately 100% to China and 130% to Russia. That diversification of our export base is fundamental to getting us out of this crisis. That is what we are doing, and we are succeeding.

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

I welcome the Secretary of State’s comments, but they appear pretty poor words for companies such as Alcan in Northumberland that is going to shut —the Budget did not come soon enough to provide tax breaks for energy-intensive industries. Furthermore, the steel industry in England and Scotland has been losing out to foreign, imported steel in bridge contracts, as my hon. Friend the Member for Scunthorpe (Nic Dakin) mentioned today in business questions.

[Vince Cable]

That is a serious point and I am sympathetic to it. My colleagues and I have spent a lot of time talking to the EEF, the CBI and other employers groups about the higher costs of energy and how we compensate for it. A compensation package has been through consultation and is being implemented—the cash will be disbursed soon—for the higher cost of the carbon price floor and the EU emissions trading scheme. I fully understand the hon. Gentleman’s concern—he is absolutely right—and we are addressing it.

[Tom Blenkinsop]

Further to that point, places such as Wilton, which has the largest chemical industry in the country—

[Helen Goodman]

It is the largest in Europe.

[Tom Blenkinsop]

As my hon. Friend reminds me, it is the largest in Europe. Wilton has lost out on the carbon capture and storage programme, which would have added 20 or 30 years’ longevity to the capital on site. The north-east is pushing more than any other region in providing exports for the country, and yet the Secretary of State is not providing the financial support for the infrastructure that was provided by the Labour Government.

[Vince Cable]

A CCS competition is taking place. As the Chancellor pointed out in his Budget, there is a recognition of the problems of energy-intensive industries in the north-east, Scunthorpe and south Wales. They will be given an extra year of support as a result of yesterday’s announcement.

[Richard Fuller]

I commend my right hon. Friend’s comments on exports—I have seen for myself UK exports to the Nigerian market. Does he agree that getting traditionally reluctant small and medium-sized business to export is key? Does he also agree that the employment allowance will enable some of our small businesses to take on those additional employees to attack those new markets?

[Vince Cable]

The hon. Gentleman is right on both counts. I was recently in Nigeria supporting that effort. If we are to have momentum, it must come through small and medium-sized companies. Frankly, the export effort in many emerging markets was neglected for most of the past decade—the relationships are not there and must be built up. He is also right that the employment allowance, which will help 400,000 micro-companies, is a big step forward and a big incentive to them to take on that extra member of staff.

In my concluding section, I shall address some of the big strategic choices made in the Budget. We can argue about temporary changes, but it is important that the country has a sense of direction. First, the industrial strategy gives a sense of direction; secondly, the changes in money and banking policy are fundamental after the crisis; and thirdly, the tax agenda creates a greater level of fairness.

On the industrial strategy, I was teased earlier about the “compelling vision” for the British economy, but we clearly need a vision of the economy that goes beyond one Parliament and Government, and that stretches decades ahead. That is why we have made the commitment to long-term planning and working in partnership with business in those sectors of the economy that need such a framework. We have produced agreements with the aerospace industry, and will do so with the automotive and biological sciences industries, and with the supply chains in renewable and non-renewable energy, which were desperately hollowed out in the years when manufacturing was neglected under the previous Government. We are trying to rebuild those supply chains.

A Back-Bench colleague made the point that we have an extra 70,000 jobs in manufacturing after 1 million were lost in the decade of the Labour Government. Of course, the industrial strategy is not just about manufacturing; it is about key service sectors such as education and higher education, and professional and financial services, which are equally important in driving exports.

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

In the right hon. Gentleman’s three years as Secretary of State for Business, Innovation and Skills, he has mastered being an apologist for the Conservative-led Government. May I politely remind him that he was elected in 2010 as a Liberal Democrat on the Liberal Democrat manifesto, in which, on page 15, he says:

“If spending is cut too soon, it would undermine the much-needed recovery”?

He was right then, but does he still believe he was right?

[Vince Cable]

I recommend that the hon. Gentleman look at the OBR’s figures to see what has happened to Government consumption in the past three years. In 2010, it grew by 0.5%; in 2011, it grew by 2.6%; and last year, it grew by 0.6%. It is true that aspects of Government spending have been cut in a way that has been damaging. The Chancellor has acknowledged, as I have, that capital spending cuts were a mistake. That was the one bit of fiscal consolidation that the Labour Government launched, and it has had damaging consequences, which is why we are now reversing it.

[Helen Goodman]

That is not how things look from the perspective of the north-east. The Government destroyed regional development agencies. Of the capital spending the Government have introduced, only 0.5% has gone to the north-east. Why?

[Vince Cable]

Job creation in the north-east is growing more rapidly than it is in many other parts of the country. It is precisely because the north-east has a higher share of exports in its regional gross domestic product than any other region that it is benefiting from the shift that is now taking place to manufacturing.

[Mr Umunna]

The Secretary of State says that the Government have made a mistake with their capital spending cuts and that they are reversing them— presumably, he refers to the extra £3 billion. However, why are he and his colleagues reversing the mistake only from 2015, when the economy needs the support now?

[Vince Cable]

I answered the hon. Gentleman’s point in Business, Innovation and Skills questions. Some of the increases in capital spending have already taken place. There was a significant increase in the capital outlay on universities, which my colleague the Minister for Universities and Science is seeing through at the moment in the establishment of R and D centres. After the fiasco of further education college building under the previous Government, the current Government are, in a systematic way, restoring the infrastructure of the FE sector.

[George Freeman]

This week, AstraZeneca announced a global restructuring, in which it committed its advanced manufacturing facility to Macclesfield in Cheshire, and moved its global R and D to Cambridge, with £300 million investment and 2,000 employees. The Government have moved quickly to set up a taskforce to help with the changeover of the old site to an incubator. AstraZeneca has congratulated the Government on their life sciences strategy. May I congratulate the Secretary of State and Lord Heseltine, whose birthday is today, on the leadership that the Conservative and Liberal coalition is giving on a modern industrial policy for new businesses?

[Vince Cable]

I accept the hon. Gentleman’s congratulations. Life sciences are a key area. It is a difficult sector, because the business model of pharmaceutical companies is changing—they are taking much of their R and D to spin-off companies rather than having it at their headquarters. That has been painful, but my colleague the Chancellor of the Exchequer intervened to help to make the process in his constituency less painful than it otherwise would have been. However, the decision of that large company to have its headquarters and R and D centre in the UK in East Anglia is a vote of confidence in Britain.

I want to make one more point on the industrial strategy. Apart from supporting successful sectors, we must reinforce those elements of the economy that drive long-term growth—meaning, basically, innovation and skills. That is why I and the Under-Secretary of State for Skills who is responsible for apprenticeships are driving enormous growth in apprenticeships, particularly in key areas such as advanced manufacturing skills. It is also why we must invest significantly in innovation. We have therefore established the chain of catapults, and we have the excellent proposal that my colleague the Chancellor made yesterday for the small business research initiative for small business innovation.

[Jack Dromey (Birmingham, Erdington) (Lab)]

The Secretary of State is right that it was a mistake to cut investment in affordable house building. The £4 billion cut in 2010 brought about a collapse in affordable house building. Housing starts were down 11% last year, 70,000 more construction workers are on the dole, and there has been an 8% contraction in construction. If capital investment is key to getting house building and the economy moving, why did the Government not accept the proposal of my right hon. Friend the shadow Chancellor of the Exchequer for investment to build 100,000 affordable homes, which would have added 1% to GDP, put 100,000 construction workers back to work, and got the economy moving?

[Vince Cable]

Why did the Labour party not do that when it was in government? Why was its first proposal for stabilising the budget to cut capital spending, including on affordable housing? If the hon. Gentleman had read the Budget, he would have discovered that, in addition to the housing policies that will affect private mortgages, it included a significant increase in support for affordable housing in the social sector.

The second long-term change relates to money and banking. One of the big features of the post-crisis economies has been the way in which Governments have had to pursue fiscal consolidation—because of the inheritance they received, and ours was worse than most—alongside supportive monetary policy. I made my maiden speech in 1997 in support of the then Chancellor when he made the Bank of England operationally independent. That was an important and good reform. But we have realised over the years that the world has changed. Inflation took no account of the massive asset bubbles that grew up, and the regime was not prepared for the collapse of the financial system and the difficulties we have had rectifying it. That is why it is right that, following on from the very successful, improvised monetary policies that we have experienced, the Chancellor is now consulting on a changed regime, which will be more flexible and take account of the level of unemployment, the level of nominal GDP and other variables that are crucial to long-term growth.

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

In the past, the Secretary of State has rightly criticised the banks and bankers for their contribution to the serious financial difficulties we are in. Can he therefore clarify whether he agrees with the Chancellor that bankers’ bonuses should be capped?

[Vince Cable]

There already are regulations that affect bankers’ bonuses, which we introduced long before the European Parliament and which firmly cap the amount of bonuses that can be paid out in cash, as opposed to stock, which is not redeemable in the short run. That reform has already been made in order to stabilise the banking system.

I agree that the banking crisis did enormous damage. As someone who has probably spent more time thinking and writing about it than most people in the House, I acknowledge that I have underestimated the damage that was done by the collapse of the banking system, especially the crippled, semi-state owned banks—to such an extent that even if we now ordered those banks to lend more, they would be institutionally incapable of doing so. What we have realised is that there are two problems. The first is the problem that has arisen from the banking collapse itself and the de-leveraging that followed it. The other is the fact that over a decade ago the bankers stripped out their capacity for local relationship banking. Effectively, they looted their banks and denuded them of the capacity to engage in sensible business lending. Of course, that was anticipated in the Cruickshank report, which the Labour Government ignored, but it has done serious damage that makes it difficult to revive conventional business lending. We are trying a series of initiatives to do that.

On Friday, a new tranche of money will be made available for non-bank lending. Today, we had the advanced manufacturing supply chain initiative, which is helping to fund our supply chains. I put in the Library this morning a written ministerial reply on the business bank, which gives a time profile for how that new institution will support challenger banks and new forms of wholesale financing in the banking sector. The Chancellor’s speech yesterday included a positive initiative on equity capital and helping to relieve some of the burdens on companies going to the alternative investment market on the equity side.

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

The Secretary of State is right about the loss of relationship banking: we need to put that right. However, will he acknowledge that businesses can fund themselves in two ways? One is to go to the bank and the other is to raise share capital. What the Chancellor did yesterday on AIM shares and ISDX shares—getting rid of stamp duty—is incredibly useful, but does the Secretary of State agree that business owners need education in how to seek out share capital to grow their businesses? That is key.

[Vince Cable]

My hon. Friend is right. There are a series of bottlenecks in raising risk capital. At the top end, the problem is accessing equity markets, and at the bottom end the problem is in raising angel finance, which is something else that we are trying to support. As it happens, the business bank will have a role not just in lending, but in developing equity markets for small-scale companies.

[Andrea Leadsom]

I was delighted that recently the Financial Secretary announced a consultation on a new independent payments regulator. Does my right hon. Friend agree that if we are to solve the problem of the lack of bank lending to SMEs, we need a raft of new challenger banks? The best way to achieve that would be full account number portability, which would encourage new entrants into the market.

[Vince Cable]

My hon. Friend is right, and the details of the Treasury’s proposals on that point are emerging quickly. For the first time in a lifetime, we are now getting serious challenger banks in the UK, such as Aldermore, Metro, Shawbrook and others, which are an important addition. I hope that the Co-op, the Nationwide and other mutuals that are trying to get into this market will also contribute.

[Sheila Gilmore]

Is not the real problem the collapse in demand in the economy, partly caused by the stripping out of the public sector, why people are not borrowing, why banks are not lending and why companies are sitting on big assets that they are not spending?

[Vince Cable]

There is a demand in the economy. When the Government come forward with proposals to stimulate demand, as they did in the housing sector, the Opposition jump up and criticise them.

[Jim Sheridan]

If press reports are to be believed, a banker is about to receive a £17.5 million bonus. If that is correct, what has the cap been set at?

[Vince Cable]

I deprecate that and I am surprised that the new chief executive of Barclays, who seemed to have turned over a new leaf, has allowed that to happen on his watch. But of course it is a private bank. It is subject to regulation and the high-paid executives will be properly taxed at a higher rate than ever happened under the Labour Government.

While we achieve long-term change, develop an industrial strategy and change the monetary and credit landscape, people have to have a sense of fairness, which is why some of the basic changes, including taxation reforms, are being made. I reminded the shadow Chancellor a few minutes ago of my 13 years in opposition, pointing to the tax regime that applied under the Labour Government, with lower income tax, lower capital gains tax and more generous treatment of non-dom investors than is occurring under this Government. The Opposition complain about a millionaires’ tax break, but they should remember that in office they created a tax haven for billionaires. That is the legacy that we have had to deal with, and we are dealing with it at the top end of the income and wealth scale, as well as at the bottom with our ambitious proposals to lift low earners out of tax. In 2006, when I was shadow Chancellor, I remember explaining these proposals for the first time, and they were ridiculed by Labour as impractical, unaffordable and a fantasy land. In government, we have now delivered them, and some 2.5 million low-paid workers, many of them women, will pay no income tax when these changes are introduced. That is a major change in the direction of providing incentives and fairness, and I am proud to be associated with that and the other reforms that we are putting through in this Budget.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. I remind the House that we will have a seven-minute limit on Back-Bench speeches.

13:18

[David Wright (Telford) (Lab)]

It is a pleasure to follow the Business Secretary. He is of course right that there is demand in the economy: it is demand for change. It is significant that last year we had the omnishambles Budget and this year we have had a Budget from a Chancellor imprisoned by his own rhetoric and his own record. What we needed this year was a bold Budget to break us free from the Chancellor’s record of nearly three years of a flatlining economy. We heard a lot about fuel yesterday, and slogans about driving the economy forward. In 2010, the Chancellor said that the economy would grow by more than 2% every year up to 2015, a steady drive on the road to recovery. Well, he has failed. He has not got the UK economy into gear. This debate is about growth. He has failed on growth, and the triple A rating fell off the roof rack on the way.

Budgets tend to unravel as the details are revealed, and we have seen that this afternoon. It is less than a day since the Chancellor sat down, and we have already seen cracks appearing in the second homes subsidy and the Budget as a whole, and I have no doubt that will continue in the coming days. He could have kept it simple. The fact is that for most people the standard of living is under severe pressure. Energy and other everyday household bills are rising, wages are stagnant, real wages have fallen since the Government came to power, and those on the lowest incomes and on benefits are seeing their incomes falling. That is bad for them, obviously, but it also sucks demand out of the economy and creates a crisis of confidence.

The priority of this Budget should have been a dash for growth to instil confidence in the UK economy. We have already heard the Business Secretary admit this afternoon that there was a split in the Government on this strategy; a split that still has not been resolved. The Chancellor has never admitted that he got his economic strategy wrong in the way that the Business Secretary did this afternoon. The problem is that the Chancellor is lashed to the mast of austerity. To break free would be a significant admission of his own failure, so the only cry we hear from the Chancellor is “O Canada!” He is hoping that the new Governor of the Bank of England will adopt a pro-growth strategy to dig him out of this hole with a new monetary approach, because the Chancellor cannot come to this Chamber and admit that he got it wrong.

We should dwell for a few moments on the geographical perspective to the health of the UK economy. Within the M25 ring, the London economy is pretty successful. It is patchy in areas, but it is a major engine for our economy. Outside of the M25, the situation is particularly patchy. As a whole the economy is flatlining, but there are significant regional and sub-regional problems that the Budget did not address at all. Basically, the Government have binned their regional economic development strategy—a comprehensive approach to renewing our towns and cities and ensuring growth. Centre for Cities produced its “Cities Outlook 2013” report recently. It said:

“The 64 cities that Outlook assesses account for 53 per cent of businesses, 58 per cent of jobs and 60 per cent of UK economic output. As such, policy that can help to stimulate urban growth by making the most of cities’ distinctive strengths and weaknesses will help stimulate growth of the national economy.”

Telford is one of those 64 cities, and we need help. Unemployment in Telford is stubbornly high at 7%, and a large proportion of the unemployed are aged between 16 and 24. Median rates of gross weekly pay are lower than elsewhere in the west midlands and England. The Budget did nothing at all to help young people. I did not hear the Chancellor talk about the problems faced by young people; it certainly was not a major element of his Budget.

We are not sitting back and doing nothing in Telford. We are trying to make a difference. The Labour council is leading a major drive on apprenticeships, and Telford College of Arts and Technology is working hard to offer training and development in local companies. We are delivering new schools across the borough through the Building Schools for the Future programme—the last great legacy of the previous Labour Government—and providing new learning environments. We are regenerating estates such as Brookside, and are making a significant investment, in partnership with the private sector, in the town centre as part of the Southwater scheme.

What we need now is a Government who are as keen as our Labour council in Telford and Wrekin to make a difference. We need a city deal for Telford. Twenty cities have been asked to bid in the second round of “city deal”, in addition to the major cities that have already secured it. We need the flexibility to work with Government to bring in investment. In Telford, Homes and Communities Agency land has been sitting idle since the new town corporation was wound down, and it is ready for development. We could be developing a profit-sharing deal with the Government for those land sites, working together to shift them off the Government ledger, getting investment for housing and infrastructure into our town, and profit-sharing with the Treasury. That would be good for the local community, good for the Treasury and would get the economy moving. I call on the Business Secretary to think about that. I hope he is willing to meet representatives, along with the Secretary of State for Communities and Local Government.

We need a flexible approach to the regional strategy. The Government have totally destroyed their regional approach to economic development. They need to think again about the existence and structure of regional development agencies. I spoke to the business community in Telford after the Budget via a phone-in conference. They told me that they are extremely worried that the local enterprise partnerships are not dynamic or effective enough, and do not knit together different elements across the region.

Telford needs to be driving for growth. We have the capacity to do that, and the Government need to help us. I see nothing in yesterday’s Budget that will help us, and I hope they change course. They could have done a lot things, but a major measure would have been to cut VAT. VAT is sucking demand out of the economy, and they could have moved on that yesterday.

13:25

[Mr Tobias Ellwood (Bournemouth East) (Con)]

It is a pleasure to participate in this important debate.

Labour has had its moment to spell out what it would do. We heard a lot of noise yesterday, and we have heard a lot today. What we thought was Keynesian economics was actually Hayek’s economic policy, because Labour is saying “Let’s do absolutely nothing.” It is welcome news that in the coalition’s fourth Budget, following the biggest financial crisis in our history, the deficit has been reduced by one third, employment is at record levels and private sector jobs are finally replacing those in the public sector by a ratio of 6:1. It is a difficult climate out there.

[David Rutley (Macclesfield) (Con)]

Does my hon. Friend think that one reason why Opposition Members are so gloomy is that they have failed to notice that the International Monetary Fund growth forecast for France and Germany for this year and next is lower than that for the UK?

[Mr Ellwood]

My hon. Friend makes the point I was about to come on to. We are suffering from international gloom. Along with other major economies around the world, such as France, Germany, Japan and the United States, we are faring better, despite the problems of high oil and commodity prices and the frustratingly slow resolution of the eurozone crisis. That is thanks to the Government’s strategy of monetary and fiscal responsibility, along with supply-side reform.

In layman’s terms, monetary policies reflect the price the Government pay to borrow money and the total supply of money itself. It is thanks to our low interest rates that the cost of borrowing for individuals, banks and the Government is low. That helps to keep inflation low and provides the stability that investors need for confidence in the markets. On fiscal policy—how much money goes into the pot through taxes, and what comes out to influence economic activity—this Government are smaller than the previous Government. They have cut waste and are costing the taxpayer less, which is very positive. Indeed, the public sector borrowing requirement is down by a third from its post-war peak, only three years ago, of 11.2% of GDP.

There are many incentives in the Budget to help influence economic activity. I will mention just three main measures: the introduction of the £10,000 personal allowance, which essentially is a £700 tax cut for 24 million people; the new £2,000 employment allowance; and a cut in corporation tax to just 20%, which makes us one of the most competitive economies in the G20. They are all signs that Britain is open again for business.

There is not enough time to go through the other key aspects of the Budget that were mentioned in yesterday’s debate. The Help to Buy scheme, the new mortgage guarantee scheme, the cancellation of the 3p rise in fuel duty and the introduction of tax-free child care are all very welcome. I particularly welcome the £3 billion capital spending commitment and the £1.6 billion of sector-targeted funding, some of which I hope will come to my constituency of Bournemouth East, and to Dorset, which is developing an international reputation in aerospace industries and the digital economy. Indeed, it is nicknamed the silicon beach of south England.

The 0.7% GDP target for overseas development assistance spending is an historic achievement and sends an important message to the rest of the world about our lead role in the international community. Unsurprisingly, given the waste and mismanagement under the last Government, some are sceptical about how the money is being spent, but it is clear how ODA funds can be spent. It matters not who signs the cheques; what matters is what the project does, although traditionally the Department for International Development has signed them. On the modern battlefield, however, it is no longer just about defeating the enemy, but about giving the people who have been liberated the skills to look after themselves. Clearly, war fighting does not qualify for ODA funding—that would be wrong—but peacekeeping and nation-building tasks do.

[Bob Stewart (Beckenham) (Con)]

In 1992-93, when I was sent to Bosnia in a peacekeeping role to deliver humanitarian aid, the cost of my deployment was met by the Ministry of Defence. I felt, and still feel, that the Overseas Development Administration, as DFID was then known, should have paid some of the costs of our operations in the Balkans.

[Mr Ellwood]

My hon. and gallant Friend’s thinking is the same as the Secretary of State for International Development’s and the Prime Minister’s. Those stabilisation skill sets—post-conflict and nation-building skills—should be funded by DFID but executed by the MOD, because although the budget sits with DFID, it is clear that the MOD is doing incredible work in this post-conflict world. We could have saved £24 billion in Afghanistan and £8 billion in Iraq had we moved from war-fighting to peacekeeping far quicker and avoided the delay that followed completion of the fighting. I urge the Chancellor to consider that matter carefully.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

Does the hon. Gentleman think that the Secretary of State for International Development should come here to explain the under-spend, on page 70 of the Red Book, of £500 million in the DFID budget and tell us which projects, programmes, international subscriptions and other things—perhaps relating to peacekeeping—have not been paid this year, but have been stopped in order to sort out the borrowing figures?

[Mr Ellwood]

Before I reply to that, Mr Deputy Speaker, may I point out that the clock did not stop? I hope you will give me some injury time.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

The hon. Gentleman will get no injury time, because he has given way twice before.

[Mr Ellwood]

I stand corrected. I understood that I got an extra minute for the first two interventions and that after that, if someone intervened, the clock stopped.

It is disappointing that we have not heard any answers from Labour. It has offered nothing constructive; in fact, it is in a state of denial. Its strategy seems to be to employ a little inaccuracy and a spot of amnesia, and to avoid a ton of explanation. It is now apparent that under Labour, government was too big, too costly and too inefficient. Labour allowed banks to lend money to people who could not afford it, using financial instruments they did not understand. When the history books are written, it will become apparent just how much damage the former Labour Chancellor and Prime Minister did. He will probably go down as one of the most disastrous Chancellors in history.

The former Chancellor not only doubled national debt, but killed off British competitiveness and introduced the “something for nothing” culture that this Government are now undoing. Labour squandered their 13 years in office, and it is now left to this Government not only to solve the economic mess and make Britain more competitive again, but to simplify the tax system, curb immigration, modernise the benefits system and restore respectability to our pensions system. Labour has proven the adage that occasionally applies in this Chamber: the democratic right to be heard here does not include the right to be taken seriously.

In conclusion, this is a constructive and progressive Budget that will provide a further stimulus to the economy and help hard-hit families and individuals seeking to get on. From my days as a young officer, my philosophy in life has been not to complain about the weather, but to march with determination out of the rain. That analogy holds today, as this Conservative-led Government lead Britain out of the economic storm, while Labour, which created the mess, offers no helpful solutions whatsoever, other than to repeat past mistakes such as encouraging the spending of money we do not have. We will not stop reminding the public of the last Government’s mismanagement of the economy. Whatever speculation there might be about opinion polls, small parties or even possible Lib-Lab pacts, the bottom line is clear: either a Miliband or a Cameron will occupy No. 10. I know whom I would prefer to lead the country, and it is not the former adviser to one of the worst Chancellors in history.

[Several hon. Members]

rose—

[Mr Deputy Speaker]

I remind hon. Members that they get two hits with two minutes, but no extra time for interventions after that. Hon. Members should also be aware that every intervention could knock someone off the bottom of the list. If someone is desperate to intervene, therefore, they should understand if they do not get called in the end.

13:35

[Pamela Nash (Airdrie and Shotts) (Lab)]

It is a pleasure to follow the hon. Member for Bournemouth East (Mr Ellwood). Interestingly, he used the analogy of walking out of the bad weather. The Chancellor used exactly the same analogy on Radio 4 this morning, but he blamed the economic weather for everything that was going wrong with the Government’s economic policy.

I am grateful for the opportunity to put forward my constituents’ deep concerns about the Budget. A Budget should speak to the entire country, but when the Chancellor delivered his statement yesterday, he spoke not for one nation, but for individuals, such as the millionaires who will benefit from his top-rate tax cut in just a few days. Today, I shall focus on the impact that the Budget will have on my constituents and the effects that his economic policies have had in Airdrie and Shotts.

The unemployed claimant rate in my constituency stands at 8.4%. That is not only higher than rates in the rest of Scotland and the UK, but much higher than when Labour left office. The same applies to the employment count across Scotland. Today, there are 145,000 jobseeker’s allowance claimants in Scotland—the same as the population of Dundee. This dole queue of people would reach from Edinburgh to Glasgow. The claimant count in my constituency is now three times what it is in the Chancellor’s constituency. In 2007, two people were going for every vacancy, but now 12 people are chasing every job.

Long-term unemployment is also an issue in my constituency. According to the stats, the number of people who have been unemployed for more than a year is up by 52% and the number of young people who have been unemployed for 12 months has risen by 116% in the past year alone. That is not acceptable. Youth unemployment in Scotland is one third higher now than it was in May 2010, with 38,000 young people claiming jobseeker’s allowance in Scotland—more than the entire population of Airdrie. How can it be acceptable that such a large number of young people are blocked from achieving their dreams and aspirations after two years of austerity measures?

The Chancellor called this Budget the aspiration Budget, but not one word of it spoke to young people. These are not faceless statistics; I am speaking about my constituents and people I have grown up with and known my whole life. Just a few days ago, a constituent I went to school with contacted me. He wanted to tell me how much the Government’s policies were affecting him. He served his country in the Army, before returning home and working as a security guard on a construction site. Like many of those in the industry, however, he now finds himself unemployed.

Not only does my constituent have to worry about finding a job in an economy facing the increasing likelihood of a triple-dip recession, but he will now be hit by the bedroom tax. He rents a modest two-bedroom home to allow his child to visit him at the weekends, but owing to his current situation he is now dependent on housing benefit and has the choice either of not having his child stay overnight in their own bedroom or being forced to move away from the area in which, like me, he has lived his whole life. How many Government Members truly understand the problems he is facing? When they talk about tough choices, I doubt that any of them ever have to make the decisions that he has to make, choosing between seeing his child and paying the rent.

The case of my constituent is not an isolated one. The National Housing Federation has said that 2,000 people in my constituency are losing out from the bedroom tax. My local authority of North Lanarkshire council has 5,500 tenants who will be affected by it, but at the last count it had just 26 one-bedroom properties available to rent. With those figures, where are those 5,500 people supposed to go? There is nowhere for them to go; they simply face a painful benefit cut. This is an attack on our most vulnerable and on many who are struggling with bills every month and with under-employment, and it is resulting in millions of pounds being taken out of my local economy.

If the Government really want to solve the problem, one of the things they should do is build more houses. That would go a lot further to support growth than the bedroom tax or the mortgage guarantee that was announced yesterday, which is already falling apart at the seams. In Scotland, housing makes up 40% of the construction sector. Every £1 spent on housing generates £3 in the wider economy. It is a no-brainer. Every new home creates two jobs in the construction sector and four in the supply chain. When construction makes up a third of the businesses in my constituency and around one in 10 jobs, hon. Members can see why I was hoping that capital spending in Scotland would be a bit higher than was announced yesterday. The Scottish Government could also do a bit more with the money they already have. Some 40,000 construction jobs have vanished in Scotland since the Scottish National party came to power, and in December more than 14,000 construction workers were still on the dole.

There are things the Government could be doing. For example, my local council—Labour-run North Lanarkshire—is working to help to create private sector jobs through its youth investment programme, which helps small businesses by paying 50% of the cost of employing a young person for the first year. It also has programmes helping older workers to return to work. I hope that the Government might go away and look at that example—I am happy to provide more information on it—to see how simple, practical support is making a difference to help small and medium-sized businesses and create employment just where it is needed.

To conclude, yesterday’s Budget offered none of the helpful measures that I and my constituents were hoping for. We need a change of course to bring growth back into our economy. If this Chancellor will not change course, the next Labour Government will.

13:42

[Mr Nick Gibb (Bognor Regis and Littlehampton) (Con)]

It is a pleasure to follow the hon. Member for Airdrie and Shotts (Pamela Nash), but I should point out to her that unemployment in her constituency has fallen by 3.8% over the last 12 months and youth unemployment by 9.3%.

I welcome this Budget, in particular the cut in corporation tax to 20% from April 2015; the rise in the personal allowance to £10,000; the cancellation of the planned fuel duty rise; the new measures to counter tax avoidance, particularly the information-sharing agreements that have been reached with the Isle of Man, Guernsey and Jersey; and the abolition of stamp duty on share transactions on small company growth markets, which will help to reverse the bias in the tax system towards debt financing and improve the tax position of equity financing. I also welcome the new remit for the Monetary Policy Committee, which means it can issue guidance about future interest rate expectations. Monetary policy is key to reviving growth, and the fact that the monthly 12-month growth rate of M4—the broad money supply—has been negative since October 2010 demonstrates the need for continued low interest rates.

Above all, I welcome the Government’s continued commitment to fiscal consolidation and restraint in public spending—policies that in my view have been remarkably successful over the last three years in reducing the budget deficit from a staggering £159 billion in 2009-10, or some 11.2% of GDP, to £121 billion in 2011-12, or some 7.9% of GDP. There have been two guiding principles to the Government’s fiscal policy—the fiscal mandate—which says that the structural deficit shall be eliminated within the five-year forecasting horizon. As table B.6 on page 105 of the Red Book makes clear, the cyclically adjusted surplus on current account—that is, the structural deficit—will move into a surplus of 0.1% of GDP by 2016-17, a year ahead of the five-year time horizon. The supplementary target—that the Government’s total accumulated debt should be starting to fall as a percentage of national income by 2015-16—will be met by 2017-18, with a fall from 85.6% of GDP in 2016 to 84.8% in 2017-18. That is two years later than the target; nevertheless, it is forecast to be achieved. The fact that the Chancellor has not tightened the fiscal position further in order to meet the target by 2015-16 is evidence that the Government’s economic policy is far more nuanced than critics suggest.

My right hon. Friend the Business Secretary, in his article in the New Statesman cited a paper by Carmen Reinhart and Kenneth Rogoff that made the important point that

“financial crises are typically followed by slow and difficult recovery.”

Given that Britain had the biggest banking sector relative to GDP of any major country, it is inevitable that Britain’s recovery was going to be slow and difficult. The key is that it is heading in the right direction, which is also the view of most informed commentators, such as the OECD. As it said in its 2013 economic survey of the UK, which was published last month,

“The fiscal stance remains appropriate”.

It went on:

“the Government’s decision in the December 2012 Autumn Statement to continue with its existing consolidation plans and not to override the automatic stabilisers in order to meet the supplementary debt target is appropriate.”

In other words, the fact that accumulated debt will not start falling as a percentage of GDP until 2017-18 instead of 2015-16 is not only acceptable; it is also a beneficial fiscal stimulus—the automatic stabiliser. As the Institute for Fiscal Studies says in its “Green Budget”,

“since meeting the target would do little to ensure the sustainability of the UK’s public finances, the fact that it looks set to be missed should not, on its own, cause significant concern about fiscal sustainability.”

As my right hon. Friend put it in his article, the Government have been

“sufficiently pragmatic to allow the fiscal consolidation to drift from four years to seven.”

When I listen to the shadow Chancellor arguing that we should spend and borrow more to stimulate demand in the economy, I would argue that because the Government have done that, but through the automatic stabiliser, they maintain the confidence of the capital markets, whereas his approach would not. As a consequence, there are 1.25 million new private sector jobs, while unemployment has fallen over the last 12 months by 4% and youth unemployment by 13%. Indeed, in the shadow Chancellor’s own constituency, unemployment has fallen by 2.5% and youth unemployment by 12.5% over the last year.

To those who argue for stronger spending cuts to fund further tax cuts, I would argue that the fall in public sector employment of 300,000 between 2010 and 2013 represents a sizeable reduction in the state sector, with the IFS forecasting that the figure will fall by 900,000 in total by 2017-18. I would also argue that the cuts in corporation tax are precisely the supply-side tax cuts we need to stimulate the business sector, while the rise in the personal allowance is likely to be the most effective tax reduction measure to boost demand.

If there had been more time, I would have said more about exports and the damage and the threat that the eurozone crises have already caused and may continue to cause to the economy’s growth prospects; about the importance to Conservatives of continuing to maintain strong spending on the NHS, particularly with a growing elderly population and ever more developments in medical science; and more about domestic demand in the economy, which the figures show is strong. In short, I believe it is vital that the Government continue on this rocky road to recovery and do not allow themselves to be pushed off course by siren voices claiming that there are short cuts, which of course there are not.

13:49

[Dan Jarvis (Barnsley Central) (Lab)]

I am grateful for the opportunity to contribute to this important debate at this important time. The Chancellor told us yesterday that his priority was to promote an “aspiration nation” with a Budget for those who want to work hard and get on. I hope he will understand if we are sceptical about his ability to deliver, given that in each of his last three Budgets he set out his key priority and test for the Budget, and in each of those three Budgets, he has failed to deliver.

In 2010, the Chancellor’s priority was tackling the deficit. That Budget was, he said, the Budget to deal with our country’s debts. But what has happened to our country’s debts? Today, national debt as a percentage of gross domestic product is not forecast to start falling until 2017-18, and borrowing is forecast to be £245 billion more than planned at the time of the spending review, to pay for the mounting costs of this Government’s economic failure.

In 2011, the Chancellor’s priority was promoting growth. That was the Budget that the Chancellor named the “Budget for growth”. Since 2010, however, the UK economy has grown by just 0.7%, compared with the 5.3% forecast at the time. Last year, the UK endured a double-dip recession and the economy shrank by 0.3% in the final quarter. Only three other G20 countries have grown more slowly than the UK in that time, and the Office for Budget Responsibility’s growth forecast has halved from 1.2% to 0.6% since the autumn statement.

In 2012, the Chancellor placed an emphasis on rewarding those who work. I concede that he has made some progress towards that goal. For the wealthiest in today’s society, there is a huge reward for work—in fact, a £100,000 reward. Unfortunately, it is those who are struggling on low and middle incomes who are suffering, including many people in constituencies such as mine.

Barnsley is a town with a proud history and it should have a bright future, but each week, I see what the Chancellor failed to address yesterday: a lack of opportunity, a lack of growth in our economy and a lack of vision from a Government who are more interested in running the country than in changing it. According to the latest figures for my constituency, the number of people claiming jobseeker’s allowance is at its highest since May 2010, at 7.8%. The figure for young people claiming JSA is 13.7%.

[Duncan Hames (Chippenham) (LD)]

Unemployment is an important matter, and it is important that our constituents should have jobs. Is the hon. Gentleman trying to tell us through those statistics that unemployment in his constituency was higher under the last Labour Government than it is today?

[Dan Jarvis]

I was simply stating a matter of fact: unemployment in my constituency is higher now than it was in May 2010. The number of young people claiming jobseeker’s allowance is now 13.7%, which is higher than it was in 2010. Those people in my constituency want to work, to provide for their families and to earn a living. They want to get on the housing ladder, to save for their old age and to contribute to our town, but the jobs are simply not available.

Yesterday, we heard the Chancellor set out his latest scheme to provide growth: a new infrastructure plan. During the course of this Parliament, we have already heard about the Government’s national infrastructure plan—in 2010, 2011 and 2012. Despite the promises, however, infrastructure spending in the public and private sectors has fallen, year on year, according to the Office for National Statistics. Frankly, my response to this latest announcement is, “We’ll believe it when we see it.”

A lack of growth has a multitude of effects, and they are being felt most acutely by our low and middle income families. Utility bills are rising, the price of food is rising and fuel costs are rising, all at the same time as wages are stagnating. A typical low income family will see their net income fall by 15% by 2020, while the wealthiest households will see their living standards grow.

Fairness has been the one consistent priority for the Chancellor in every Budget since 2010, yet fairness is the area in which he is failing to deliver the most. This Government’s favoured slogan, “We’re all in this together”, simply does not ring true as inequality deepens and the Chancellor’s policies target those who have the least to give. It cannot be right that millions of ordinary families are being forced to pay more for this Government’s economic failure, through cuts to tax credits, child benefit and maternity pay and through the bedroom tax, while at the same time, the most well off in society are set to receive an average £100,000 tax cut.

The Budget, and the Chancellor’s record, have failed to secure economic recovery, and that is certainly not fair. We have had three Budgets and three failures. On every economic test that the Chancellor has set himself, he has fallen short. On deficit reduction, on growth, on rewarding those who work and on fairness, he has failed those who need the Government the most. Despite numerous opportunities and calls to change course from the Opposition and from Members within his own party and even from members of the Cabinet, the Government continue on a reckless course that is serving only to prolong the economic crisis, and it is people in my constituency of Barnsley Central who, sadly, will pay the price of this failure.

13:56

[Andrew Griffiths (Burton) (Con)]

I recognise that time is short so I will do my level best to keep my comments as brief as possible. I speak as the Member of Parliament for Burton, the home of British brewing, and as the chairman of the all-party parliamentary beer group. It is therefore incumbent on me to put on record my thanks, and those of the brewing industry, for the Chancellor’s momentous decision yesterday to scrap the beer duty escalator and cut beer duty by 1p. We cannot underestimate the importance of the decision for brewers, for publicans and for beer drinkers across the country.

In his speech today, the shadow Chancellor dismissed the 1p cut in a bit of a flippant way, but I think that the 1,745 people who are employed in brewing and pubs in his constituency will be hugely grateful to the Chancellor, who has shown himself to be on the side of the publicans and beer drinkers of this country. The previous Chancellor of the Exchequer appeared on posters in pubs up and down the country stating that he was “barred from this pub”, because his Government had chosen to introduce the beer duty escalator, which has resulted in beer duty rising by an incredible 42% since 2008. That has contributed to the closure of many of our communities’ pubs in that period.

I am therefore delighted to support a coalition Government who have done more for brewers and pubs than any other Government for a generation. I went to the House of Commons Library yesterday and spoke to the Treasury expert. I asked him when a Chancellor had last cut the duty on beer. He replied, “Mr Griffiths, this might take some time, as it was so long ago. I shall have to go away and research it.” He came back with the answer: Derick Heathcoat-Amory was the last Chancellor to cut the duty on beer, in 1959. Someone who was just old enough to enjoy a pint of great British beer at that reduced price in 1959 would now be 72 years old.

It is important to applaud the campaign that has led to these changes. As the chairman of the all-party parliamentary beer group, I want to thank colleagues from all across the House who have supported it. Members on both sides have worked incredibly hard on behalf of their brewers, publicans and beer lovers. We all recognise the importance of the community pub and the role it plays in the heart of our constituencies. This measure provides us with a real opportunity to support those pubs.

[David Rutley]

I join many others in paying tribute to the great work my hon. Friend has taken forward. I received one tweet yesterday from the Wharf in Macclesfield saying this was

“a good Budget for pubs, the brewing trade and all industry”.

Has my hon. Friend received similar plaudits from people across the country?

[Andrew Griffiths]

I thank my hon. Friend for the support he has given to pubs and breweries as part of this campaign. I agree: I have been overwhelmed by the number of publicans, brewers and members of the Campaign for Real Ale and beer lovers who have welcomed this announcement. He quotes one brewer and I will quote another—Belinda Sutton from Elgood & Sons in Wisbech in Cambridgeshire who said:

“The result could be the saving of our brewery, as this was just what we needed to…stimulate trade in our pubs and hopefully increase production.”

That is so important: every brewery and every pub in our constituency are important employers, so it is fantastic that we can give them this boost. I am absolutely sure that when this cut is introduced on Sunday, beer drinkers across the country will be raising a glass to the Chancellor and toasting his health.

I am hugely sorry that the Economic Secretary is not in his place on the Front Bench, as we owe him a huge debt of gratitude. Within days of him becoming a Minister—I think it was his first ministerial duty—he spoke in a Backbench Business Committee debate to which many Members contributed. He said then that he was listening. He is a listening Minister who has listened on behalf of pubs and brewers across the land.

I would also like to pay tribute to CAMRA and its thousands of supporters who took part in this campaign and who participated in the mass lobby organised by Emily Ryan and Jonathan Mail to explain to Members of Parliament just how important their community pubs and great British beer are to them. I commend, too, the work of the Beer and Pub Association, which works tirelessly to build a bright future for pubs and breweries across the country.

I end my comments there. Let me just say that this is a great Budget for brewers, a great Budget for beer and a great Budget for beer drinkers in Britain.

14:02

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

I want to raise an issue that is close to my heart—the Scotch whisky industry—not just because it is an excellent tipple when taken responsibly and because I am chair of the all-party group on Scotch whisky, but, more importantly, because that industry provides hundreds, if not thousands, of jobs in this country.

The Chancellor suggested yesterday that he was cutting beer duty to help boost pubs, yet as 40% of pub sales come from spirits and wine, his duty increases on Scotch whisky and other drinks mean that when it comes to pubs, he has given with one hand and taken back with the other.

[Andrew Griffiths]

Will the hon. Gentleman give way?

[Jim Sheridan]

No, I do not have time.

Like the Chancellor, I wish to see British businesses succeed to help to secure British jobs. The Chancellor talked about the opportunity for UK business that a successful free trade agreement would bring. He talked about backing businesses that are a global success. For the Government and the European Commission, improved market access and reduced discrimination are priorities for the Indian free trade agreement talks. In a spectacular lack of joined-up government, in one speech the Chancellor has attacked Scotch whisky—the one industry that is currently investing for international growth to India and elsewhere—by increasing discrimination against it here at home.

[Andrew Griffiths]

Will the hon. Gentleman give way?

[Jim Sheridan]

No.

What sort of signal does that send to overseas markets? British ambassadors around the world who are trying to help Scotch gain fairer trading conditions will be shaking their heads at the example set by our own Chancellor here in this country. This industry accounts for 25% of UK food and drink exports, generating some £134 a second for the UK balance of trade, yet the Chancellor’s only action is to penalise it in its home market. The UK is the third largest market for Scotch whisky in the world, and some companies depend on the UK market for success.

[Andrew Griffiths]

rose—

[Jim Sheridan]

As I have said, this industry employs people in areas where few alternative jobs exist. The Chancellor threatens jobs in such areas, as the Chief Secretary presumably told him. [Interruption.]

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. Mr Griffiths, you have already spoken. The Member does not want to give way and we do not need a running commentary from the Back Benches.

[Jim Sheridan]

Thank you, Mr Deputy Speaker. I have been heckled by better.

Perhaps the Chancellor will explain to pensioners enjoying a dram why they should have to pay 48% more duty for the alcohol they enjoy than their neighbours who prefer a beer. Only three countries in the EU penalise Scotch whisky more than the UK does. It is time to halt the duty escalator for all and to start backing, not penalising, our successful industries.

Let me deal briefly with pensions. Like many of my colleagues here, I have a large number of pensioners in my constituency, and I am concerned that this Budget will do nothing to reduce pensioner poverty, currently standing at 1.7 million people nationally. There are no proposals to help pensioners who are struggling with rising living costs.

Moving on to growth, in a written answer I received on 17 January, the Economic Secretary told me:

“The OBR forecast that real household disposable income will grow in each year from 2013 to 2017.”—[Official Report, 17 January 2013; Vol. 556, c. 866W.]

In December 2010, the Chancellor was equally confident, telling CNBC:

“Britain is on the mend. We got pretty steady and sustainable economic growth forecasts, pretty sustainable increases in employment, a steady decline in the deficit.”

Well, how wrong could this Government be? Real wages are set to fall by 2.4% over this Parliament. The OBR has also halved the growth forecast for this year and downgraded it for next year, too. I ask the Chancellor to see some sense and stop relying on the private sector to provide the boost to the economy that is needed. Millions will be squeezed by another year of capping public sector pay, while the private sector has simply not managed to perform as well as was needed at a time when growth has stalled.

A sensible Budget would have seen an intervention to legislate for a living wage, rather than giving the tax break to millionaires that is coming up in a few days’ time. That would not only be fair on working people, but could help inject the economy with consumer spending power. The most ironic part of this plan is that the Chancellor has not even succeeded in reducing the deficit—the golden goal that we have been suffering these tax cuts in order to achieve. Borrowing is now forecast to be £245 billion more than was planned at the time of the spending review. We will not have balanced books, but we will have low-income families paying the price, while millionaires continue to count their money.

I concur with the views of the TUC, which welcomes the British business bank but is calling for more resources to support businesses on a larger scale and for the bank to be able to raise funds in the capital markets as comparable banks do.

I and, I am sure, my constituents do not see this as an aspirational Budget, but as a desperation Budget.

14:09

[David Rutley (Macclesfield) (Con)]

I am sorry to disappoint the House, but I will not be speaking about beer—[Hon. Members: “Oh!] I said I was sorry. I will not be speaking about spirits either, but I will—

[George Freeman]

Lift our spirits!

[David Rutley]

I will indeed lift our spirits. Given the co-operation of my hon. Friend, I will also say a little about life sciences. Let me begin, however, by joining other Government Members in welcoming a Budget which has delivered a positive response that recognises the needs of hard-working people, and which, as others have pointed out, has clearly demonstrated that the doors of British business are firmly open.

It is sometimes wondered whether “To intervene, or not to intervene” is the question when it comes to industrial policy. I believe that in normal free, competitive markets intervention should be minimal, but that, given the burden of regulation that was imposed on the British economy for 13 years by the Labour Government, the question needs to change from whether there should be intervention to how that intervention can take place effectively. For me, the answer to that question is simple: we need to flatten the barriers to growth, which is exactly what Government Members are determined to do.

We need only consider the recent experience of our northern neighbours to see how that can be achieved. Sweden has enjoyed tremendous success since the mid-1990s with an ethos of deregulation across the economy. Estonia had 2,000 enterprises in 1992; by the end of 1994, the figure had ballooned to 70,000. By 2003, an economic basket case with inflation of 1,000% in 1992 had spawned the invention of Skype. There are clear lessons to be learnt from those northern neighbours, the most fundamental being that if industrial policy is to work, there needs to be a broadly “horizontal” approach. That does not mean being laid back, but it does mean having a more laissez-faire confidence in the ability of businesses to identify and satisfy customer demand—as they are best placed to do—and providing the right foundation for enterprise to flourish across the board, rather than backing policies in the sense of picking winners. That is the course the Government have charted, and I am delighted they are sticking to it.

We have an industrial policy with a foundation that encourages enterprise across the board and, in key sectors, focuses on the removal of the roadblocks that prevent growth, rather than the line-by-line, multi-targeting Brownite plan for daily tactical interventions that we have seen in so many parts of the public sector. We want that foundation to consist of low taxes, a high skills base and deregulated, competitive markets, and those are being put in place.

The Government are making good progress. Before the Budget, we were on track to have the lowest corporation tax in the G7; now, as a result of the Budget, we are on track to have the lowest corporation tax in the G20—20%—by 2015. The new £2,000 employment allowance will help to spur growth and build on the Government’s successful record of creating jobs in the private sector: the private sector, not the public sector. In an enterprising constituency such as Macclesfield, where an unusually high proportion of the population are self-employed, reforms like those can tip the balance for sole traders, encouraging them to incorporate themselves in businesses that can grow, and for the self-employed, encouraging them to become regular employers.

Those are positive steps, and the Red Book goes further. It provides an important update on the progress the Government are making with their industrial policy, and demonstrates that they are breaking down barriers in certain sectors of industry and in certain local areas. I welcome the creation of the single local growth fund, which will be devolved to local level through local growth deals.

Some industrial sectors will always have greater prospects for growth than others. The Government’s industrial strategy, announced last autumn, identified 11 broad sectors that the Government want to support, including advanced manufacturing, creative industries and life sciences. That approach is bearing fruit in the case of life sciences. The Government’s “One Year On” review shows that deregulation is helping to reduce the time taken to set up clinical trials from 600 days to a 70-day benchmark. Those are important steps which need to be mirrored in many other sectors.

This week we were given challenging news in AstraZeneca’s restructuring strategy statement. The good news is that, according to its plans, the Macclesfield manufacturing site will be secure, retaining 1,800 jobs which will be safeguarded for years to come. However, AstraZeneca also announced changes in the research and development plant at Alderley Park. The fact that 700 jobs have been safeguarded there is important, but the R and D facilities will move to Cambridge, which has created uncertainty for the employees. I am working with AstraZeneca to ensure that there are plans to provide them with proper careers advice and the support that they need.

The next priority—a vital priority for Alderley Park, for the sub-region, for the north-west and for the UK economy—is to ensure that the site has a vibrant future. The way in which to do that, and the way in which we are committed to doing it, is to provide a bio-science park where other businesses can go to work. We are working with the Government, and I am delighted to say that we have set up a taskforce. Evidence from other sites where the experience has been similar suggests that there will be spin-out operations.

We need to harness that energy, and ensure that we secure money from the regional growth fund on an emergency basis so that we can support this vital part of the UK’s life sciences sector. I am committed to doing that and to working with the Government, and I will knock on every door to make sure we receive the support that is required.

This Budget has been a huge success for British business, and I am sure that it will lead to further successes if we break down barriers, not just in life sciences but in many other sectors.

14:16

[Susan Elan Jones (Clwyd South) (Lab)]

I am grateful to you, Mr Deputy Speaker, for allowing me to speak in this important Budget debate. I shall make a relatively short speech, because I know that many other Members wish to speak. I make no apology for focusing on my constituency, and on the people who elected me to be their representative in Parliament.

I do not think there is a single issue in my area that people care about more than jobs, and I entirely agree with them. My constituents know that without work, there can be no community and no prosperity. Much concern has rightly been expressed about the fact that growth in our economy now stands at less than a seventh of the amount that the Chancellor anticipated in his 2010 spending review: 0.7%, rather than the 5.3% that was forecast at that time. However, I believe that we are right to be even more concerned about the fact that yesterday the Chancellor, rather alarmingly, had to admit that the growth forecast for this year had been cut in half, to just 0.6%. The forecast by the Office for Budget Responsibility that borrowing will hit £114 billion this year, instead of the already immense £108 billion that was previously forecast, should fill us all with concern, as should the fact that yesterday’s UK unemployment figures were up by 7,000 to 2.52 million.

It troubles me, in human terms, that according to the very latest unemployment figures, one person in every 20 in the economically active population aged between 16 and 64—1,770 people—in my constituency is unemployed. I believe that that figure would be even higher were it not for the serious efforts of the Welsh Government’s Jobs Growth Wales fund, which has provided 4,000 jobs for young people throughout Wales.

On the day on which a new Archbishop of Canterbury is to be enthroned, I think that we can do worse than reflect on the words of one of his great predecessors. Archbishop William Temple wrote:

“The worst evil of unemployment is in its creating in the unemployed a sense that they have fallen out of the common life. However much their physical needs may be supplied the gravest part of the trouble remains; They are not wanted!”

Those are the words of someone who lived through the great depression of the 1930s, and who realised that without the politics of one nation, our country could never have stood against fascism. They are, I believe wise and prophetic words for us today. That is why I believe that discussions about unemployment affect us all, and why unemployment can never be seen as a price worth paying. It is why I am deeply disappointed that the Chancellor did not take the step yesterday that my party would have taken by guaranteeing a job for every young person out of work for a year or more and for every adult unemployed for more than two years—funded by a fair tax on bank bonuses and changes to pensions tax relief for the very richest. That would be a far better investment than the subsidy for second homes. For Labour Members, it is the flesh and blood of one nation politics and would have been the best and fairest option.

Real action on national insurance to help small businesses take on more staff would have been the fairest option too. Any Government Members awake at this point may say, “Did you not hear what the Chancellor said yesterday?” Of course I did, and I like the idea of the national insurance cuts for employers so much that I am delighted to be a member of the party that proposed them. It is just that, in the interests of fairness, growth and getting our economy going again, I have to ask: if it matters so much to him, why will he not do it now? Why does he think that excellent local small businesses such as the Community café in Rhosymedre should not be supported this year, yet millionaires will get their tax cut from next month? Why will he not commit to a British investment bank? The hon. Member for Burton (Andrew Griffiths) spoke eloquently about the Campaign for Real Ale and real ale pubs. Unlike him, I have last year’s CAMRA pub of the year in my constituency. One of its biggest problems in setting up was that bank managers persistently refused it loans. It is exactly the sort of programme that our British investment bank would support. The Government’s thinking on this one just does not make sense.

[Guto Bebb (Aberconwy) (Con)]

In view of the need to support small businesses with finance, how can the hon. Lady justify in the current economic scenario Finance Wales, which is funded by the Welsh Government, giving out loans at 8% or 9% above base?

[Susan Elan Jones]

I am sure that we could carry on this conversation ad infinitum. I am sure that the hon. Gentleman could tell me how he can justify all the cuts in revenue spending that are coming to the Welsh Government, but we will carry that one on some other day. I am sure that he could also tell me about the excellent impact there will be on his local economy when the holiday homes subsidy is in place, but, again, we will carry that on later.

I believe that investment, growth and employment are not just terms in economic textbooks; they are at the heart of what makes communities and countries work. I am talking about communities in my constituency and, more widely, across the nations and regions of the United Kingdom. If our Government and our Chancellor cannot understand that, it is high time for them to be replaced by a genuinely one nation Government who do understand.

14:22

[John Howell (Henley) (Con)]

One is tempted to start with the unemployment figure in one’s constituency—it is down by 25% since April 2010—but I wish to speak about housing. It is appropriate to raise that issue today because our reforms are as much about the supply of housing as about the demand for it and about the importance of that sector and of the construction sector as a whole.

The Localism Act 2011 turned us into a nation of planners. Neighbourhood plans are steaming ahead, and the reform of the planning system has ended one of the biggest blocks to development and taken away a large amount of red tape. I understand that the proportion of planning applications approved is at a 10-year high. As for local plans, 70% of councils now have something on paper. However, there is still much more to do to turn this nation of planners into a nation of builders. I was interested to read paragraph 1.115 in the Red Book, which said that yet more reforms to the planning system were proposed. We are to have reduced planning guidance, which will come forward in line with Lord Taylor’s recommendations, and

“pro-growth planning policies and delivery arrangements”

for local areas as part of local growth deals.

The importance of the supply side can be seen in a number of areas. The first such area is affordable housing, which is an important element for this Government and always has been. We have recently issued a prospectus to support affordable homes delivered through the guarantee programme, so I was pleased that an additional £225 million had been put into the Budget to support a further 15,000 affordable homes, which will be built by 2015.

[Sheila Gilmore]

Will the hon. Gentleman give way?

[John Howell]

No, I am not giving way. Those 15,000 homes will be new build homes. As for the build-to-rent sector, the Budget provides £1 billion to support the development of more homes—that is an awful lot of homes to be built. We also need certainty on social rents, which is left to the spending round in the Budget book. On the right to buy, a great Conservative measure, we are increasing the London cap to £100,000 and reducing the qualifying period to three years. Overall, this Budget introduces billions of pounds of financial support to tackle both the long-term housing market problems—the problems with the sector—and the problems faced by people wanting to get on to the housing ladder.

The Chancellor mentioned two schemes in that latter regard, the first of which is the “help to buy: equity loan” scheme. It applies to new builds only, and someone will need a minimum 5% deposit to qualify. The scheme will expand the existing FirstBuy scheme and is available to everyone; the Government will lend up to 20% of the value of the property through an equity loan. That provides extremely important assistance to first-time buyers and to those wanting to acquire a new build as part of their development. The second scheme is the mortgage guarantee scheme, under the same arrangement, where the intention is clearly not to provide a subsidy for second homes—the intention is to have a consultation to ensure that it precisely does not give subsidies to second homes.

All these measures illustrate the main point: the Government have understood that the link between the supply of mortgages and the supply of houses is an intimate one, and that these things cannot be tackled separately. They need to be looked at in the round and together.

We hope that by tackling the problem of access to mortgages we will help to stimulate the economy. That is certainly what the Federation of Small Businesses has suggested. It has said:

“The Help to Buy scheme is a bold move from the Chancellor to boost the industry and to get people onto the housing ladder.”

It continued:

“In addition the measure to build 15,000 new homes will give the sector a welcome boost.”

The Home Builders Federation has said:

“Building the homes the country desperately needs can be a key driver of economic activity. Government must be praised for its attempts to stimulate activity”.

I agree absolutely with that. A very bold attempt is being made to stimulate activity, both on the development of housing and on access to that housing.

14:28

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

This Budget comes at an unprecedented moment in our economic history, when families and businesses are looking to the Government for a change of direction and bold action to kick-start our flatlining economy. It is a time for urgency, as after three years of this Chancellor the economy is still 3% smaller than it was five years ago. However, all we got was more of the same. Unemployment in Feltham and Heston has risen by nearly l0% in the past six months; the number of young people out of work is at its highest level since March last year. During the Budget debate last year, I spoke of how there were six people chasing every job in Feltham and Heston. A year later, I am deeply concerned and saddened that I am saying the same thing again. There has been no change from this Government. This is the third successive year of less than 1% growth and the Budget is a gamble, not a plan.

Some measures are welcome. Local businesses will welcome the fuel duty freeze as well as measures to help them take on extra workers, for which Labour has been calling for some time. This is a jam tomorrow Budget, however, not one that takes action now. As John Longworth, director general of the British Chambers of Commerce commented yesterday, many of the Chancellor’s measures might come too late. Britain needs urgency, scale and delivery today. In the last quarter, net lending to businesses fell by £4.5 billion, and in the past two years, under this Chancellor, it has fallen by £28.1 billion. The reality behind those figures is that thousands of entrepreneurs and small businesses—our country’s wealth creators—are unable to access the finance they need to grow and to take on new employees. The Budget shows no signs of changing that. As the female entrepreneur Laura Tenison said on “Newsnight” last night, “I am trying to create jobs, but the Government isn’t helping.”

One nation Labour is the party for small business and enterprise. We had a regional development agenda and a legacy of which we could be proud which was dismantled by this Government and replaced with confusion. The Chancellor said yesterday that the Budget confronts our problems head on. The problem is that his judgment is the problem. A Treasury team of five men and no women has produced a Budget that did not even mention women and business. Research shows that if we had the same levels of female entrepreneurship as the US, £42 billion would be added to the economy. With more than 1 million women out of work across the UK, the Budget missed an opportunity to support female entrepreneurship. I should not have held my breath. The Government’s previous three Budgets have shown policies that have hit women the hardest. Women are paying three times as much to bring the deficit down—decisions that were made by a Cabinet with three times more men than women.

Hundreds of families in Hounslow have recently called on the Government to help mums, not millionaires. The Chancellor has ignored those calls and will go ahead with a £180 tax on new mums on the same day as millionaires will get a £100,000 tax cut. The House of Commons Library has also shown that low-paid new mums are set to lose £1,300 by the end of the first year of a child’s life, through the cuts to pregnancy support and tax credits and real-term cuts to maternity pay.

The record on housing is no better. Affordable home statistics in London have fallen off a cliff. Figures published by the Greater London authority show that 425 affordable homes were started in the first six months of the current financial year, compared with 4,659 in the previous year and more than 18,000 in 2010-11.

[Sheila Gilmore]

Does my hon. Friend agree—this is the point that I would have made to the hon. Member for Henley (John Howell), by the way—that it is a misnomer to call such homes affordable when the rents will be up to 80% of market rent? The subsidy on each of the 15,000 houses that were referred to will be £15,000, which is why the rents have to be so high. The houses will not be affordable and, what is more, they will put up the housing benefit bill.

[Seema Malhotra]

My hon. Friend makes her point extremely well. The £225 million proposed in the Budget to support “affordable” homes building is a fraction of the £4 billion that Labour would have invested.

The Government proposed change but this is more of the same. The policies of this Government have failed on jobs, on growth, on the deficit and in the lives of ordinary people. The Budget will do nothing for the 13,000 on the waiting list for a home in my constituency.

[Andrew Griffiths]

Will the hon. Lady give way?

[Seema Malhotra]

I am sorry, but I will not.

The Budget will do nothing for the 74-year-old woman waiting a week for a blood transfusion because of staffing cuts in the local hospital. The Budget will do nothing for the family I met recently who live in one room: two teenage brothers sharing a bed; a mother and father who put mattresses down on the floor; the father who goes to work at 4 in the morning until 2 in the afternoon; the mother goes to work at 11 am and comes back at 11 pm. They are not shirkers, they are hard workers and they will not be helped by the Budget.

The legacy of the past three years in my constituency is rising unemployment, Sure Start centres under threat, longer waiting times in local hospitals and police numbers being cut. Families are suffering for the decisions that the Government have made and are wondering where they will live as the bedroom tax kicks in and makes their homes unaffordable. It is not too late for the Chancellor to change his mind, change course and get a plan for jobs and growth that will deliver for Britain’s families and businesses.

14:35

[George Freeman (Mid Norfolk) (Con)]

I congratulate the Chancellor and his Treasury team on the work they have done on the historic and disgraceful debt legacy that this generation, this Parliament and this Government are having to deal with. The lack of any apology from Labour in the nearly three years in which I have had the honour to be a Member of this place is deeply shaming—[Interruption.] For the record, the Opposition’s barracking of my point serves simply to highlight their lack of ability to deal with the truth, difficult though it may be.

We are still trying to deal with a legacy of debt that we and future generations inherited from the Labour party—a legacy that hangs over the economy and this country. The Budget has been warmly and widely welcomed by all serious commentators: the International Monetary Fund, the OECD, the Bank of England, the CBI, the Institute of Directors and the British Chambers of Commerce. I urge the Chancellor to stay the course and not to be lured by the siren voices of Opposition Front Benchers calling for more borrowing, or of those calling for borrowing-funded tax cuts.

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

Will the hon. Gentleman give way?

[George Freeman]

I will develop my argument a little further, if I may, as time is limited.

We need a credible programme for deficit reduction, a fair burden of taxation and a long-term vision for the British economy, and that is what the Budget delivered. Simon Walker of the Institute of Directors said yesterday:

“We applaud this Budget. The Chancellor has stuck to his guns and held his nerve—which is exactly what we wanted to see. Deficit reduction is not an optional policy, it is an absolute necessity, and he is right to reject the siren calls to abandon it.”

Plan A is right for three central reasons. First, it tackles the appalling structural debt legacy that we were bequeathed by the Opposition. Secondly, it does so in a way that is fair in allocating the burden of taxation that must be paid. Thirdly, it is bold in setting out the platform at the base of an industrial policy for a sustainable economic recovery in which future generations—particularly the current young generation, who will have to deal with the debt crisis—can have confidence.

Let me remind the House, particularly Opposition Front Benchers, of the nature of the debt legacy we inherited. We started with the worst debt to GDP ratio of any country in the western world, worse than that of Greece and other economies that have been put into special measures by the IMF. The annual deficit when we started was running at 11% of GDP and is now 7%—that, for the benefit of Opposition Front Benchers, is a reduction.

In the situation we inherited, the interest on our debts was set to rise, if we had not acted, to £76 billion a year. We were spending £1 on interest for every £4 the Government were spending on public services. The national debt was just short of £1 trillion—roughly £15,000 for every man, woman and child in this country. As 1 trillion is a big number and people are baffled by big numbers, let me try to break it down. If it took 11 days to pay off £1 million, how long would it take to pay off £1 billion? Thirty-two years—[Interruption.] Opposition Members might think that it is funny, but I can assure them I do not, my constituents do not and the young people who will have to claw their way out of the crisis do not. If it takes 11 days to pay off £1 million and 32 years to pay off £1 billion, it takes 32,000 years to pay off £1 trillion at the same rate.

The truth is that we inherited not just an annual deficit but a structural deficit. For the benefit of Opposition Members who are not aware of the difference, the structural deficit is that bit of the Budget which, even when the economy is growing, continues to haemorrhage money. The biggest drivers of our structural deficit are pensions, benefits and the NHS. The IFS pre-Budget briefing yesterday, which was made available to all parties, makes it clear that the structural deficit continues to put a black hole at the heart of our public finances. The IFS forecasts that between 2011 and 2018 we will be spending an extra £5 billion on pensions, £20 billion on benefits and £15 billion on the NHS. That is after the sensible and pragmatic reforms we have introduced. It is a legacy the Opposition should be ashamed of.

Plan A sets out three key ways of dealing with that—tackling the deficit, a fair burden of tax and a sustainable long-term platform for growth. We have cut the deficit by 30%, from 11% of GDP to 7%, although the shadow Chancellor seemed unable this morning to accept that that is indeed a reduction. The IFS has made it clear that under the Labour party’s plan B we would incur £201 billion more debt by 2016-17. Who on earth could think that borrowing another £200 billion, given that legacy, is the answer?

On the second part of plan A, the fairness of the burden of taxation, the Opposition have been scaremongering about it and need to understand it. First, the Chancellor has decided, rightly, to pay off 80% of the debt through public spending reductions and 20% through taxation. The burden of taxation is powerfully shifted towards those with the broadest shoulders. I remind the House that 1% of taxpayers in this country pay 25% of all tax, and 50% of our income tax is paid by the top 20%. We have taken 2 million people out of tax altogether. The £130 billion funding to help new homeowners is the largest package of support—far larger than anything the Opposition were asking for. The £6 billion relief on fuel duty is a massive support for hard-working families, and coming from a rural constituency I particularly welcome its effect on the rural economy. The beer duty measure, too, is a substantial one for rural communities where pubs are at the very heart of rural life; substantial help is also being provided with child care.

This is a Budget to help the working poor. Taken alongside the universal credit and the welfare reforms, it will have a substantial impact on those who are striving to get on. In the remaining seconds, I want to pay tribute to the Government’s work in laying the foundations for a sustainable economic recovery. We cannot borrow our way out of this crisis. We will have to trade our way out.

[Richard Fuller]

I would be interested to hear what my hon. Friend thinks should be the foundations of that strategy.

[George Freeman]

I thank my hon. Friend for that intervention. I believe that this country has every reason to be optimistic about our ability to trade our way out of the present crisis. Around the world the emerging nations are growing at a phenomenal rate—7% to 8% for the BRIC nations and the 11+ nations following them. They have extraordinary needs, and in the next 30 years they will go through a revolution in medicine, food, energy, professional services, IT and leisure that we took nearly 200 years to go through. In all the areas where we have a strong and mature offering, these countries will drive phenomenal demand in the years ahead.

I applaud the work the Government have done to lay the foundations in science and research funding, skills and the industrial strategy, on which we heard from colleagues earlier. In my own sector—life sciences, food, medicine and energy, three of the largest markets in the world—today, Astra Zeneca has made a major commitment to this country, investing £300 million in Cambridge and making us its global head of research and development. With this vision, people can be confident that we are tackling the debt crisis in a way that is fair and that will allow their children to be optimistic for a better future.

14:45

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

People in my constituency must have hoped that the Budget could provide some light at the end of the tunnel created by austerity and cuts, but they will have been disappointed. Thousands of them are being hit this year by the coalition Government’s fiscal and welfare reform measures, to be implemented after 1 April. After so many Government U-turns there could have been action in the Budget to soften the blow of these changes. The Chancellor could have done that, instead of the tax cut for millionaires he is going ahead with.

Manchester and Salford are cities hardest hit by the bedroom tax. More than 2,600 families in my constituency will be hit by that policy, and many will have to pay between £500 and £900 extra to continue to rent their homes. If they cannot pay, they are expected to move, but the catch is that there are very few smaller properties available for those trying to move. City West housing trust told me that some 460 families have asked to downsize. However, it expects to have re-housed only 43 families by April, and 260 more in 2013-14. The trust believes that some 80 households might find a mutual exchange. So, the total number of households that can be helped to move is less than 400, leaving more than 2,000 to find between £500 and £900 extra in rent. It is estimated that the bedroom tax will cost our local economy £1.9 million in my constituency and almost twice that in Salford, because tenants will have so much less to spend.

This year, pensioners in my constituency lost more than £80 because the personal allowance was frozen, and people who turn 65 this year will lose much more—£320—owing to the change in age-related allowances. Parents in my constituency have lost out on child benefit. Constituents who lost this previously universal benefit felt deep resentment at that. A survey carried out by the Child Poverty Action Group found that child benefit is overwhelmingly spent on clothes, books, education and food—so that is a further loss to our local economy. The hon. Member for Mid Norfolk (George Freeman) spoke about serious commentators. The Child Poverty Action Group did not welcome yesterday’s Budget, for obvious reasons.

Unemployment rose yesterday in my constituency— 3,477 people are now unemployed, an increase on the previous month’s figure. As a result of the Government’s failure on growth and jobs, borrowing is set to be billions higher. To pay for this failure, the Chancellor is taking billions from working-age benefits and tax credits by uprating them, as we know, by only 1% over the next three years, a real-terms cut.

[Sheila Gilmore]

One thing that has not been discussed much is that, on top of that 1% cut, the Government appear to want to cap the type of expenditure that has always been demand-led. That will presumably require further cuts to benefits; otherwise, it will not happen.

[Barbara Keeley]

It is frightening both in extent and in scale. In Worsley and Eccles South, 7,500 people are in work and receiving tax credits. They are the ones who will lose out over the next three years. Most of the savings the Government are making are not from out-of-work benefits, as we have discussed in previous debates, but from tax credits, maternity allowance, maternity pay, sick pay and housing benefit, all of which are claimed by working people—the strivers whom David Cameron promised to stand up for and who are now being hit by Government cuts.

As my right hon. Friend the shadow Chancellor said earlier, the 1% benefits uprating, along with all the other changes that keep being trumpeted, such as the tax allowances, will mean that a one-earner family on £20,000 with two children will lose £380 a year. A family on that level of income is also likely to be hit further by the bedroom tax and the cut to council tax benefit. Indeed, 20,000 households in Salford will be affected by the 10% cut to council tax benefits that the Government are leaving it to the city council to implement.

On new announcements, it is disappointing for families with children that the Government are pledging to help with child care costs in a scheme due to start in autumn 2015. Families on middle and low incomes have already lost up to £1,500 through earlier Government cuts to child care support. They need help now, not in two and a half years’ time.

[Seema Malhotra]

Does my hon. Friend agree that that is yet another example of delaying giving people the resources and support they need, which in turn will delay the recovery and people’s ability to go back to work?

[Barbara Keeley]

I very much agree, particularly in the case of child care support. Families with a couple of children will now have to wait two and a half years before they can get help with child care, which is very expensive. That delay is bad enough, but, worse still, the proposed child care scheme will give a tax break to families earning up to £300,000 a year but offer no help to families on tax credits, whose incomes are already squeezed. Once again, the coalition Government are giving more help to higher earners and less to those on low and modest incomes, the people with the greatest need of child care support.

The Government propose to set the cap for social care at £72,000. Although we welcome the fact that a cap is finally being set, having waited more than a year for the announcement, we must remember that the Dilnot commission recommended a cap of £35,000. Setting the cap at that level would have offered the best protection to people on lower and middle incomes. It is very disappointing, to say the least, that the Government have ignored the advice of the experts whom they put together in the commission, and set the cap at a much higher level while also—this point tends to be ignored—making people pay accommodation costs of £12,000 a year, the very top end of what Dilnot recommended. People who need care when they are elderly, frail or ill will continue to face the shock of large care bills. Examples I have seen of the cap being set at such a high level show that the reality is that often, people will have to pay for their care for four or five years before getting any state help. Many fewer people will be helped by the Government’s proposals.

The final hit on my constituency, which I was disturbed to hear about, is the damage that will be caused to the value of homes as a result of exploration for shale gas. The Government have already caused confusion and uncertainty through their drastic overhaul of the planning system, yet the Red Book states:

“As the shale gas industry develops the Government will ensure an effective planning system is in place”.

That does not inspire confidence, because exploration for shale gas is going ahead in my constituency and, worryingly, it appears we do not have an effective planning system in place to deal with that. Drilling and fracking operations have been known to bring down house prices in an area by as much as 20%. People of course do not want to live in areas where fracking is planned, particularly after the disturbing events that took place when exploration first went ahead in other parts of the north-west. Exploration for shale gas could have a long-lasting adverse impact on the quality of life of people in my constituency. I am strongly opposed to it.

Mr Deputy Speaker, you know the geography of my constituency, so you will know that it is ringed by motorways; I am sure they are very useful in getting you home in the evening. A final aspect of the damage that the Budget will do to my constituency is that it goes ahead with an ill-advised widening of the M60 motorway, which will bring absolute chaos to 800 households in my constituency. When the motorway was built through my constituency, it was called the Stretford bypass. Now, the plan is to widen it by using the hard shoulders. “Hard shoulder running” will bring the M60—and you, Mr Deputy Speaker, if you are motoring—right next to the homes, windows and gardens of my constituents. Those 800 homes will be blighted by that ill-advised scheme, which I will continue to oppose to the best of my ability.

The Budget is a huge disappointment and will be seen as such in my constituency, because it is a massive missed opportunity and is damaging in so many different ways.

14:49

[Guto Bebb (Aberconwy) (Con)]

It is a pleasure to follow the hon. Member for Worsley and Eccles South (Barbara Keeley), but I think that her speech was representative of those we have heard from Labour Members today: there was no effort to explain the context; not a single acknowledgement of the problems the Labour party left this Government; no mention of the fact that there is a crisis in the eurozone; no mention of the fact that the IMF has indicated that UK levels of growth will be higher than those of Germany and France; and no mention of the fact that we are facing an international energy crisis—there was no mention of reality. That is the truth about what we have heard from the Labour party. Labour Members seem to be living in their own fantasy world in which money grows on trees or can be created from nowhere. The truth, as my constituents, the people of Wales and the people of Britain know, is that money does not grow on trees; we have to pay our way in the world.

The worst thing I heard today from Labour Members is their complaint that there is no demand in the economy, apparently because of the welfare cuts being implemented by the Government. Those cuts are being implemented to deal with the mess the previous Administration left behind. There is no acknowledgement that the so-called growth period under the previous Government was basically built on unsustainable Government and personal debt. There is a lack of demand in the British economy because the British public have realised that they have to live within their means, and this Government realise that they must deal with the mess left behind by the previous Administration and that we must live within our means—[Interruption.] The hon. Member for Hartlepool (Mr Wright) might laugh, but the people of this country are not laughing at the mess the previous Administration left behind. That is the context of this Budget and, in that context, I think that the Government have made a substantial and significant move in the right direction.

We need confidence that businesses will create jobs. Labour Members continually talk about Governments creating jobs. Governments do not create long-term sustainable employment. The private sector does that; businesses do that, working with Government. This Government are making sure that people can invest in the United Kingdom with confidence and know that if they make a profit in this country they will do so with the right to a more competitive tax advantage than in any other part of the world. The competitive levels of the UK economy in comparison with the situation under the previous Government show that we are definitely moving in the right direction in creating the circumstances for business investment.

[Michael Ellis (Northampton North) (Con)]

Does my hon. Friend acknowledge, as the Opposition clearly do not, that the OBR is forecasting 600,000 more jobs in the coming year than had previously been anticipated?

[Guto Bebb]

Indeed, and I welcome every single one of those jobs.

The worst thing about the argument that we are having is that every time Labour Members appear in the media in Wales, they complain, “Yes, jobs have been created, but they’re not our type of jobs—they’re not proper jobs.” They insult people who are going out to work and trying to earn a living in supermarkets and hotels by claiming that they are not taking the right type of jobs. People in my constituency know that a job is an opportunity to help themselves. This Government are making sure that people in low-paid jobs are keeping the money they earn because their tax rates are going down. Labour Members bribed people with their own money; this Government are allowing people to keep their money in order to look after themselves, encouraging self-sufficiency and responsibility rather than the expectation that the state will look after them. We are moving in a direction that I am proud of, because we will have a country in which people are confident that if they invest, they will be able to keep more of their money without being taxed and in which people will be able to earn money without being penalised for doing so.

In my constituency and in many other parts of Wales, we are very dependent on the small business community, which was never understood by Labour Members; indeed, they do not understand it now. I will give an example of how bad Labour is at understanding business. Labour’s Minister for Finance in Wales says that she does not believe in capitalism and prefers Marxism. If she were a trade unionist or a Labour activist, I would understand that, but she is the Minister responsible for economic development in Wales and does not believe in capitalism. She should give up her job and get somebody better to do it who will ensure that Wales can benefit from the policies of this Government.

Every single one of the small businesses in my constituency will benefit from a reduction in employer’s national insurance contributions. Labour increased national insurance contributions for people employing staff; we are reducing them significantly. Some 35,000 businesses in Wales will benefit, 20,000 of which will pay no employer’s national insurance contributions. My hon. Friend the Member for Burton (Andrew Griffiths) talked about small breweries and the fact that the beer duty escalator has been stopped, which is a good thing for the industry. In my constituency I have four small breweries that will benefit not only from the changes to the beer duty escalator, which was brought in by Labour, but from the reduction in employer’s national insurance contributions, allowing them to invest and to develop more opportunities for work in the area.

There is a 13% differential between the rate at which Labour would be taxing petrol and what this Government are doing. In a rural constituency such as mine, that is crucial—13p per litre makes a huge difference. Labour Members might not understand this because they do not understand rural areas, but in my part of the world there is an understanding that the changes to fuel duty and excise duties are crucial for a rural area that depends on self-employment and the small businesses that do understand the needs of the community and the need to invest in order to improve.

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

What does the hon. Gentleman think would be the effect on rural and, indeed, urban communities in his constituency of a housing measure that will apparently subsidise people to buy second homes up to a value of £600,000?

[Guto Bebb]

We await clarity on that issue. However, I am absolutely terrified about the fact that the administration of that measure will be partly devolved to Wales, where the situation is astonishing. The NewBuy scheme was introduced by this Government in April 2012, but it has yet to be introduced in Wales. The Welsh Labour Government will introduce it in June 2013. In other words, 15 months after the money was made available, the Labour Government in Cardiff are still not helping people in my constituency who want support to buy new houses.

I am concerned that the Labour Government in Cardiff are not delivering. Their decisions on every single policy are made for political reasons to undermine the work of this coalition Government, and nowhere is that more the case than with how the Welsh Government refuse to co-operate with the Work programme. Many programmes in Wales are funded by money from the European social fund and they provide support to those who need it to get back into employment, but the Welsh Labour Government refuse to allow those individuals to access the Work programme and the ESF business support programmes at the same time. The Labour party’s commitment to employment growth in Wales is zero, while its commitment to wrecking the work of this coalition Government is 100% and total. The people of Wales realise the betrayal of their communities by the Labour party.

The fact of the matter is that, on every single issue, this Budget is making an effort, in very difficult circumstances, to help those people who want to help themselves. As a Member who represents an area that is very dependent on self-employment, I welcome the key decision to introduce the flat pension rate. For far too long, the option of self-employment was penalised by the pensions system. The move to a flat system whereby people will benefit by about £144 a week from a guaranteed state pension is crucial. The decision to become self-employed is a difficult one to make, especially so in Wales, where it is also difficult to then provide for a pension, because the position of the public sector is so different. I warmly welcome the fact that this Government are tackling the need for a fairer pension system. Every single person in my constituency—employed or self-employed—will realise that if they put money aside for their own pension, they will be supported by a Government who are committed to supporting people to do the right thing.

Finally, one of my concerns about the current economic situation relates to financing for small businesses. This is not a criticism of the Government. Time and again I meet representatives from banks who claim that they have money available but that there is a lack of demand for funding. We have heard the same complaints from the Labour party. The key thing is that MPs can do a lot of work on this matter. During the Easter recess I will hold two surgeries to tell businesses how to get themselves fit for the lending available. Circumstances have changed. The time when money was thrown at businesses has gone, but businesses that go to the banks with appropriate business plans and ideas for development and growth should and could access money at much cheaper rates than the Welsh Assembly-funded Finance Wales scheme. MPs can stand up in this Chamber and complain as much as they want, but the key thing is that we—I know that my Government colleagues do this—work with businesses to help them access that funding, rather than complain all the time in the way that the Labour party does.

15:03

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

It is a pleasure to follow the hon. Member for Aberconwy (Guto Bebb), whose analysis was wrong on so many levels. That is probably why he was rejected by Plaid Cymru, which, frankly, takes some doing.

It is worth remembering that in his June 2010 Budget, the Chancellor of the Exchequer stood at the Dispatch Box and announced that the growth rate for 2013 would be 2.9%. In his autumn statement, just a few months ago in December 2012, he stood at the same Dispatch Box and announced that the rate would be 1.2%. Yesterday, humiliatingly for the Chancellor, he had to announce to the country that the Office for Budget Responsibility’s own statistics show that the projected growth rate for this year is a miserly 0.6%. It does not get any better, because the 2010 Budget’s projected growth for 2014 was 2.5%, which was downgraded by the autumn statement to 2%, and yesterday the Chancellor said that it would be 1.8%, which is, frankly, optimistic. It is worth remembering that in 2010, actual growth was 1.8%. This is a real humiliation for the Chancellor, because he has had to admit that for the last three years his growth strategy has been a no growth strategy, because there has not been any growth in our economy.

Of course, the Business Secretary admitted to that last year, when he wrote to the Prime Minister and said that his Government lacked a “compelling vision” for growth. He was absolutely right. I was pleased to hear him finally acknowledge from the Dispatch Box today that the Chancellor and the coalition Government got it wrong in 2010 when they cut the investment that this country so desperately needed. I do not recall any apology from the Business Secretary or the Chancellor before today. I might have missed it because I am not an avid reader of the Evening Standard, but I do not think that it was pre-briefed that they have got it wrong for the past three years. It is three years too late for many of our constituents. The Government snuffed out the recovery that was beginning in 2010.

I will refer briefly to some of the local initiatives and challenges in my Denton and Reddish constituency. In the short time I have left, I will then recognise the positive ideas in Lord Heseltine’s “No Stone Unturned” strategy. To be fair to Lord Heseltine, unlike most Members on the Government Benches, he understands what is needed to drive up growth in the English regions. A number of his initiatives should be taken on board.

[Nic Dakin (Scunthorpe) (Lab)]

My hon. Friend is stating things very clearly. Does he believe that this Government will allow Lord Heseltine’s proactive approach to regenerate the regions?

[Andrew Gwynne]

I very much doubt it; we can but hope. There are some good ideas that build on the many regional initiatives that the last Labour Government left in place in May 2010. The strategy almost reinvents the wheel, but I do not care who reinvents the wheel; the fact is that the wheel should never have been smashed up in the first place.

My Denton and Reddish constituency has been badly affected by unemployment. The figures that were released yesterday showed an increase in those claiming jobseeker’s allowance over the past 12 months. There are now 2,642 unemployed claimants in my constituency, which is 6% of the economically active population. The longer-term picture is far worse. The number of those claiming jobseeker’s allowance over the past 12 months has now gone up 32%. The figure has gone up 44% for young people and, staggeringly, for people over 25 claiming jobseeker’s allowance, the figure has gone up 70% in the past year.

[Barbara Keeley]

Is my hon. Friend as concerned as I am to learn from the OBR forecasts that unemployment has not peaked? It will peak later this year or early next year, so the figures that he and I have quoted will get worse.

[Andrew Gwynne]

My hon. Friend is absolutely right. She may have read the Manchester Evening News research, which showed that Tameside, which is part of my constituency, is the worst place in the north-west of England for young people to access job opportunities. There are real issues here that need to be resolved by Government.

Some good local initiatives are being pushed through by my two local authorities. One is Tameside, a Labour local authority, and the other is Stockport, a Liberal Democrat authority. They are doing their best in very tight circumstances, not least because every man, woman and child in Tameside is losing the equivalent of £163 in central Government grant to the local authority and Stockport is losing £94 per head of population.

We are seeing initiatives such as the introduction of town teams in Denton—I am proud that my office is represented on the Denton town team—and a pooled apprenticeship scheme in Tameside, which enables firms to reduce the risk in taking on apprentices. That initiative has been ably led by the leader of Tameside council, Councillor Kieran Quinn, who set out an ambition to have every young person in work or training by 2020. Tameside council has done a deal with New Charter Housing, the local registered social landlord, to ensure that one affordable house is built per week for the next three years. Stockport has the Stockport Boost initiative, its town centre is a Portas pilot, and there are huge opportunities along the M60 corridor with its close proximity to the airport city enterprise zone and the Grand Central redevelopment. That initiative is being pushed forward by the Greater Manchester combined authority and the Association of Greater Manchester Authorities—a Labour-led, city region initiative.

Lord Heseltine talks about combined authorities and giving more responsibility to local enterprise partnerships, and that is where Greater Manchester takes a lead. He also mentions local leadership, which is a thorny issue. I personally support the idea of a Greater Manchester-wide mayor, and although I realise that others in the city region are not convinced, I at least welcome the debate started by Lord Heseltine in his report.

My final point—which I have already touched on—is about housing, which continues to be a big problem in my constituency. The new homes bonus announced by the Government in 2010 was supposed to unleash growth and help build at least 400,000 additional homes, but it has failed to deliver.

[Mark Lazarowicz]

Will my hon. Friend give way?

[Andrew Gwynne]

I will not as I do not have time. Housing starts fell by 11% last year to below 100,000—fewer than half the number required to meet housing need. The Government’s £10 billion guarantee scheme has yet to deliver a single penny of support for house building. There were a number of small things to be welcomed in the Budget, but there were no answers on growth or for communities such as Denton and Reddish. After three years of failure, it is time for a different approach.

15:12

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

Following the speech by the hon. Member for Denton and Reddish (Andrew Gwynne) I feel I should point out that the Government do welcome Lord Heseltine’s report, which is why they have adopted the vast majority of his recommendations. I was also pleased to hear the hon. Gentleman mention the success of town teams and the Portas pilots, although he failed to mention that those initiatives were introduced by this Government.

I am sure, Mr Deputy Speaker, as a bit of context for this debate, that you will be familiar with the novel by Chris Mullin, a former Member of this House, called “A Very British Coup”—many Members will have read it; I think it was almost a manifesto for certain Opposition Members at one point. It tells the story of a left-wing Labour Government who run out of money and go cap in hand to the International Monetary Fund, but they cannot accept the terms that the IMF offers, so instead they go cap in hand to the Russians.

That scenario has, thankfully, been avoided here, but it is the meat and drink of a member of the eurozone and a European country, albeit a small country: Cyprus. It has lost control of its debts and spending and is in the awful position—as countries are when they get to this point—where the cuts it is being asked to make at this late stage are much worse than those it might have made earlier, at the right time. Countries find that they cannot go on borrowing for ever because one day the people lending the money will not lend it any more, or only at a rate so punitive that it cannot be accepted. That warning is live. It is affecting a member of the eurozone and may soon affect other countries. The Labour party ignore that peril, but the Chancellor of the Exchequer is steering this country away from it.

Throughout this debate Opposition Members, just as the shadow Chancellor and Leader of the Opposition did yesterday, have pointed out how much the country is borrowing and said that we are borrowing more than was forecast—a perfectly legitimate point. They are, however, much more reluctant to be drawn on whether they would borrow even more. The shadow Chancellor seems to be very happy when he is touring the news studios and sitting on the sofas to be a bit more frank and open about this, but he was asked about it twice in the debate and refused to answer both times. Last week, he was asked by Gavin Esler on “Newsnight” whether his plans would mean that the Labour party would borrow more, and his answer was, “Of course it would.” He is right. His plans do not come out of thin air. He must borrow the money to put in place the stimulus he wants. The reason he is not forthcoming is that he knows that that is not what the country wants. He knows that people are genuinely concerned about the high level of debt we have and about the costs we will put on future generations if we do not get on top of it now. He knows that people are looking at countries such as Cyprus and thinking, “That could happen here if we do not get a grip of our debts.”

[Barbara Keeley]

The hon. Gentleman does not hear what I hear from the shadow Chancellor. I heard him say, first, that we want a cut to VAT to stimulate the economy—the economy has been badly affected by the VAT increase—and, secondly, that we would use the proceeds from the 4G spectrum auction to build 100,000 houses, which would also stimulate the economy and the construction sector. My right hon. Friend the shadow Chancellor does answer those questions; the hon. Gentleman should listen to him.

[Damian Collins]

I hear the shadow Chancellor tell us how he will spend the same money a number of times. A VAT holiday could not be paid for, and would be only a temporary measure—the rate would go back up again. It would be an artificial stimulus, and the country cannot afford any more of those. Why will Labour Members not have the courage of their convictions and say, “Yes, of course borrowing would go up. That is the truth of the matter.” That is what the shadow Chancellor said on “Newsnight”. When they challenge the Chancellor, it is like a sumo wrestler giving unsolicited advice on dieting. Their prescription is worse. They want to borrow more than we have borrowed. People need to understand that. I do not understand why Labour Members will not be up front about it.

What can we do to get our economy going? Labour Members do not like to talk about the growth in jobs, because the recovery of the private sector economy and its response to the measures put in place by the Chancellor of the Exchequer in his series of Budgets is an inconvenient fact.

I was recently at the London launch of the campaign to market the east Kent regional growth fund. Doug Richard, the entrepreneur and former dragon on “Dragons’ Den”, was there to support the event. He is a great supporter of start-up businesses, particularly in the tech and digital sectors. He said that now is a great time not only to start a business—that is why we have a record number of private sector businesses in this country—but to go to the market to look for finance to set up a business. He highlighted, as have many entrepreneurs—particularly in the tech, creative and digital sectors, which are so important to the future growth of our economy—that initiatives such as the seed enterprise investment scheme, which the Chancellor mentioned in his Budget, provide great incentives to bring private sector money into start-up business, and to encourage individual investors to support the growth in those businesses.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

I accept what the hon. Gentleman says about those schemes, but the main funnel for credit provision to small businesses is the funding for lending scheme. That scheme is not working as effectively as we would want. Is he disappointed that there were no initiatives in the Budget to improve funding for lending to address the small business problem?

[Damian Collins]

We should look at the series of schemes and initiatives that have been put in place and accept that it sometimes takes time from the moment of their creation for the money to come through. Funding is now coming through for the regional growth fund for east Kent. A high-end engineering business in my constituency, HV Wooding, which supplies parts for the CERN hadron collider and grand prix engines, has received a grant of more than £1 million from the regional growth fund, which could create up to 50 sustainable, high-skilled engineering jobs at its factory in Hythe. Those are exactly the type of businesses we want to support. Money is also coming through the seed enterprise investment scheme to support creative businesses, and digital businesses in particular.

People can see the benefits that those schemes are creating in the economy. That is one reason why we see job creation in the economy and new business start-ups performing strongly. The measures put in place in the past four Budgets are starting to bear fruit, which we should appreciate and accept.

The help to buy scheme, launched by the Chancellor yesterday, is a bold and imaginative measure that could help to stimulate the housing market and construction sector. I have been in many debates in the past year in which people have said that the problem with the construction industry and the housing market is that builders are reluctant to commit to starting projects because they do not think that they will be able to sell the properties. The scheme put in place by the Chancellor will give them the confidence to start building, and will give people the confidence to start buying. That can have a dramatic impact on our housing sector.

As in the measure to support small and start-up businesses, the Chancellor is working with the grain of the aspirations of the British people to give them the opportunity to start a business or buy their own home, with the backing of the Government to do so. The hon. Member for Worsley and Eccles South (Barbara Keeley) said that the cap on the cost of residential care—the implementation of the Dilnot measures—was still quite high, but at least it is there now, and we are saying for the first time that people who work and save all their lives, who set up a business or buy their own home, will not have all that taken away late in life. There will be a cap on their contributions so that they do not pay through the nose for something that other people get for free. That is part of supporting the aspirations of the British people, and I welcome the Budget.

15:21

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

This is a Government whose central argument rests on the spurious claim that the economic crisis was national and all Labour’s fault up until 2010, and magically internationalised only after they came to power. With every passing day, the extent of that basic deception and the false conclusions drawn from it are exposed. We were told the pain would be worth it because the Chancellor would have the debt and the deficit under control by 2015. Now it will be 2017-18 and, according to PricewaterhouseCoopers, the current debt overshoot is likely to be £8 billion higher than predicted just three months ago.

This was the tomorrow budget for a tomorrow that never comes—almost anything of any value is put off until 2015 or beyond. With a Chancellor whose forecasts have proved worthless so far, just what kind of certainty does that provide? The Government’s claim is that the deficit is down by a third but the OBR’s figures show that it is down by less than a quarter, and there is no prospect of further cuts in the deficit in the next two years.

[Richard Fuller]

Does the hon. Gentleman think that the answer is to borrow more money?

[Steve McCabe]

The answer can be to borrow some money for investment, but not to squander it on rising unemployment and wasteful expenditure, which is what the Chancellor is doing. All the pain will simply be to stand still. The OBR has also pointed out that the public debt in 2015, rather than being the £37 billion the Chancellor originally promised, will actually be a staggering £108.4 billion. Just when are this lot going to learn that they have lost all right to lecture anybody about debt?

I welcome the cut in the duty on beer, although the VAT rise added 5p to a pint of beer, and the likely benefit of the measure will be offset by the loss of jobs and sales in the whisky industry, so it is not quite the achievement that some people might think. I am also pleased that the Chancellor has offered some certainty by scrapping, rather than postponing for the umpteenth time, the planned rise in petrol. The £3 billion lift in capital spending is welcome, but we need it now, not in 2015. His own fiscal rules allow him to borrow to invest: why does he not do so?

We can all welcome the cut in national insurance for small employers as probably the one genuinely growth-stimulating measure in the Budget. Perhaps that is not surprising, as it was our idea.

The Chancellor has once again promised a cut in corporation tax in 2015. Just like the now-forgotten triple A rating, stimulating inward investment by cuts to corporation tax is a Government mantra. It is not working, however. Foreign direct investment inflows to the UK fell between 2010 and 2011, and are now about a third of what they were before the crash. Meanwhile our total investment rate is 15% of GDP—the lowest in the G7—and our current account deficit is now at its highest since the 1980s. We are stifling opportunities for investment.

Legitimate foreign students are worth approximately £8 billion a year to the British economy, and that is being lost in pursuit of the Home Secretary’s immigration target. Simultaneously, she is letting in 30,000 people a year on temporary student visas that require no entry qualifications, no evidence of income and no guarantee of qualification. As usual, it is the wrong target at the wrong time. Similarly, the lack of Chinese tourists means that the very people we need to attract and to encourage to trade with us are now four times more likely to take their spending to France.

As usual, this was a Budget of missed opportunities. Where is the plan for a properly capitalised British investment bank of the kind operated by every other G7 country? There is nothing in the Budget about a target to decarbonise by 2030, but that is exactly the message that would provide certainty for the renewables supply chain and create jobs. Only one in 10 wind farm components are directly sourced in the UK. Why is it that the Chancellor is unable to see what everybody else can see?

The Chancellor called this a budget for an aspiration nation; it sounds more like alienation to me. He is presiding over what Professor Arnold Blumberg calls a zombie economy where rising inflation and no growth eats away at savings, strangles enterprise and innovation, and deprives small businesses of the capital and opportunities they need to grow. We have yet to see who the real beneficiaries of the abolition of stamp duty on share trading will be, but we know who it will not be. This is an alienation budget because the vast majority of our people are into their third year of pay cuts and falling livings standards, and the only ones doing okay are the millionaires in line for a tax cut. There is alienation as it emerges that the mortgage assistance scheme is actually a second home subsidy at the very time when the bedroom tax threatens to throw others out on to the street.

I invite the Chancellor to try listening to real people, like I do. Of those I surveyed in Selly Oak, 50% said that creating jobs and the conditions for jobs should be his top priority, 39% were worried about the rise in domestic gas and electricity prices, and 29% cannot make ends meet and will be forced into debt by his policies. The people of Selly Oak are a good barometer and they know what needs to be done. When will this Chancellor start to listen to real people and do the things that the country desperately needs?

15:28

[Bob Blackman (Harrow East) (Con)]

It is a pleasure to follow the hon. Member for Birmingham, Selly Oak (Steve McCabe), who grudgingly accepted that there are good things in the Budget as well as things to condemn. A Budget is a snapshot in time that builds on previous Budgets. Good things have come out of previous Budgets and there are great things in this Budget.

One performance measure of an economy is the level of unemployment. In my constituency, in April 2005, the level of unemployment was 1,402. By the time the Labour Government left office in April 2010, it was 1,901. That is an increase of 36%, but then we all know that Labour Governments always leave office with higher unemployment than when they arrive. Now, however, unemployment is down to 1,632—a fall of 14% in three years—showing that despite the recession and the difficulties, the Government have got it right on encouraging and promoting employment.

Next month, 4,035 of my constituents will be taken out of tax completely by the Government’s increases in the personal allowance. More importantly, 40,101 working people in my constituency will get a tax reduction, which means they will have more money in their bank accounts to spend as they choose. One of the great measures is the new employment allowance, from which 145,000 businesses across London will gain. They will be able to employ people without having to pay national insurance contributions. Furthermore, 75,000 of those businesses will pay nothing at all for the people they recruit, which has got to be great news. Combined with the abolition of the fuel and beer duty escalators, that means that the Government have got it right on taxation.

I want to dedicate most of my speech to the treatment of Equitable Life policyholders. For 13 years, when Labour ran the country, it refused to do anything about the 1 million people who suffered as a result of this scandal. I am proud to belong to a party and a Government who have taken steps to assist the victims. In 2010, the coalition Government honoured our election pledges to compensate the victims of that fiasco. The claimants asserted that £5.2 billion-worth of compensation would be needed, if full compensation was to be paid. Clearly, given the economic position, we could not afford that, so £1.5 billion was set aside to ensure that the victims received due recompense.

The victims split into three groups. The first group comprised the 37,000 with-profit annuity policyholders, who have received full compensation for the losses that resulted from the scandal for which the then Government, the regulator and Equitable Life were responsible. The nearly 900,000 people who took out pension plans have also been compensated, but at a much lower level, because they had the alternative of transferring their pension plans elsewhere. Unfortunately, however, owing to how the scheme was implemented, the people who were most vulnerable and most desperately in need of assistance—those whose money was trapped in their pension plans because they took them out before 1 September 1992—received no compensation at all.

[Mr Love]

I congratulate the hon. Gentleman on his campaign. Will he be campaigning for further compensation for those who have not received anything thus far?

[Bob Blackman]

I shall come to that when I conclude my remarks.

Some 10,000 of the most vulnerable people received no compensation at all. The all-party group on justice for Equitable Life policyholders put forward clear evidence that they suffered as much as the people being compensated. We pointed out that they could not have known before 1 September 1992 that this scandal was going on, and that they had suffered and lost money like all the others. It has taken a long time and a lot of persuasion, and my hon. Friend the Economic Secretary to the Treasury listened with great patience, weighed the evidence and proposed to the Chancellor that the pre-1992 trapped annuitants receive compensation. I am delighted to congratulate the Chancellor and his team on listening to the evidence, weighing it up and saying, “Yes, we got it slightly wrong.” All the people I have mentioned will now get £5,000 in compensation automatically, as an ex gratia payment without taxation, while those on pension credit will get an additional £5,000. It is not the full compensation that we would like to see, but it is a recognition of the fact that every policyholder suffered as a result of the scandal and will be repaid.

Let me turn to the intervention by the hon. Member for Edmonton (Mr Love). The campaign continues. The policyholders have not received the full compensation that they are due or the compensation that has been promised—it is still being paid. My clarion call to my colleagues on the Front Bench is this. Let us ensure that they receive the money—particularly the trapped annuitants —as fast as possible, because since we started the campaign in 2010, 1,000 of the trapped annuitants have sadly died, and they are dying each day. We want to see people compensated and receiving their money as fast as possible, so that they can enjoy their retirement in a reasonable way. I say thank you to my colleagues on the Front Bench, but with this word of warning: we will carry on campaigning and ensuring that the compensation is paid as it should be.

Finally, I want to refer to housing. Currently, banks and financial institutions are demanding a 25% deposit before they will allow people to get a loan for a mortgage. In my constituency, prices start at £300,000 for a two-bedroom flat. A detached house can be up to £1 million or more. A reasonable three-bedroom property is of the order of £500,000. Imagine trying to find £125,000 as a deposit to buy a family home. It is almost impossible and beyond the reach of ordinary working people. I therefore welcome what the Government are doing to support them. We want to get the housing market moving, with new properties being built and existing properties passed on, so that the starter homes can be used by new people.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. To accommodate the remaining speakers we are moving to a five-minute limit.

15:37

[Mark Durkan (Foyle) (SDLP)]

I am delighted to follow the hon. Member for Harrow East (Bob Blackman). I acknowledge the effective advocacy that he has provided for Equitable Life annuitants. I commend him and the Chancellor and his ministerial colleagues for addressing that outstanding injustice. The issue now is to deliver not just the solution that has been designed, but the outcome that people deserve.

There are some things in the Budget that it would be churlish of me not to acknowledge from a Northern Ireland perspective. Our exclusion from the carbon price floor is hugely important, given that Northern Ireland is part of a single electricity market in Ireland. The effect of the price floor would have been to skew investment in our generating capacity in a way that would have penalised business and consumers. I am therefore glad that Ministers woke up to the problems that many of us have been raising in the Chamber for so long, ever since the measure was announced.

We already know that there is some confusion about aspects of the Budget, such as Help to Buy, the mortgage support scheme. The shadow Chancellor has rightly raised some issues and questions about the scheme, but let us be clear: whether or not it will support people with buy-to-let mortgages, there is to be no income cap whatever on the people qualifying for it. At a time when people here are all about the “aspiration nation”, there are a lot of people out there who just feel exasperation that a scheme such as this should come along with no income cap. Meanwhile, they have suffered the loss of child benefit, on which there is an income cap, starting at £50,000, with payments ending completely at £60,000. Those people are exasperated too when they hear, “Oh yes, child care benefits are coming”—in two and a half years’ time. Government Members used to criticise the former Chancellor and Prime Minister when he produced Budgets and made announcements about things that would be introduced in two or three years’ time but sold them as though they were happening at the time. They rightly criticised him for that, yet they are cheering on their own Chancellor for doing exactly the same thing, while people are suffering the loss of support for caring for their children.

The Chancellor talked a lot yesterday about investing in new energy sources, but we needed to hear about investing in energy efficiency. He talked about new house building schemes to help the construction sector, but the sector is screaming out for support for repairs, maintenance and retrofitting to support energy efficiency in our existing housing stock. Many people want to stay where they are and to improve the energy efficiency of their homes, and they should be supported in that, not least through proper, targeted VAT relief and reductions.

Similar VAT reductions should be targeted at the tourism sector. That is happening in quite a number of EU member states. It is allowed, it is effective and it traps the multipliers here at home. I do not agree with the proposals for a blanket reduction in VAT for a particular period, as it could suck in all sorts of imports and send other money out of the country. We should target VAT reductions where they will produce real benefit in home sectors, and such targeting on the construction and tourism sectors would help.

[Mark Lazarowicz]

I agree with my hon. Friend’s point about targeting help, particularly on building maintenance and repair and on tourism. Does he agree that one benefit of such targeting is that it would take effect very quickly and would be likely to help small business and small traders? Many of the housing measures announced yesterday were welcome, but they will mainly benefit the bigger builders. The VAT cuts that my hon. Friend is suggesting would provide a quick way of boosting the economy and helping many of the people who need help now.

[Mark Durkan]

I fully accept my hon. Friend’s point. The multipliers would get into gear far faster under that sort of measure than under some of the other measures that have been proposed, welcome though they are in their own context.

Certain aspects of the Budget served notice of more pain to come. The Chancellor spoke yesterday about changes that he will be making through annually managed expenditure. That sounds like a dry, technical change, but it will have a significant impact in relation to the controls that are being placed on welfare spending. We have already had the Welfare Reform Act 2012, which changed many of the rules, structures and qualifying criteria for benefits. It was designed in such a way as to allow for wide regulatory powers to place further changes and squeezes on benefits without the need for further primary legislation.

It is clear that, by moving to change the rules relating to annually managed expenditure, the Chancellor is trying to put in place more fixed envelopes for welfare spending. That will have particular implications for the way in which social security spend is managed in Northern Ireland, because the money comes to Northern Ireland not as part of the departmental expenditure limit—the DEL—but as annually managed expenditure. If that is now to be subject to some fixed-envelope procedure and capped in advance, it will put serious stress on the Northern Ireland Assembly. The Assembly is in the bizarre position of having to pass karaoke legislation that has to be exactly the same as that passed here, but it is notionally responsible for the administrative discretion on delivery. That will be a fundamental challenge for us in Northern Ireland, and we all need to wake up to that fact.

We need to be as alert to that challenge as the Executive have been on the case for corporation tax. I can see where the Chancellor is going with that, but his rate of travel in regard to corporation tax UK-wide means that, by the time any concession is delivered to Northern Ireland, the marginal benefits it will give us will be a lot less.

[Damian Collins]

The hon. Gentleman is talking about business. Will he welcome the introduction of the employment allowance, and the benefit that it will bring to small businesses in Northern Ireland?

[Mark Durkan]

Yes, I welcome that. Labour has advocated it as well; it is a good, sensible measure that I know many firms will take up.

Similarly, I welcome the increase in the personal allowance, although it will perhaps not benefit as many people in my constituency as in the constituencies of some Government Members who have mentioned the measure. That is because my constituency has very high unemployment and high rates of economic inactivity. The problem in my constituency is the lack of work, not the lack of a work ethic. I will support any measures in the Budget or anywhere else that will ensure that more people can find work, embrace and express their aspirations and ambitions and make a contribution to their community and society.

The Chancellor is introducing fiscal apps and things in regional and city economies here in Britain that I would like to see our Executive and Assembly emulate at home in Northern Ireland. I would like to see the devolution discretion used a lot more to give us more creative capacity. When I see some of the measures in the Budget, I recognise that there is some constructive engagement to get the economy going again, but we need to get our share of it.

15:44

[Richard Fuller (Bedford) (Con)]

It is always a pleasure to follow the hon. Member for Foyle (Mark Durkan), who represents a very different part of the United Kingdom from the one I represent. It is always informative to listen to his contributions, and I always learn something from them.

There are some very good points in the Budget for the people of Bedford and Kempston. The cuts in national insurance rates—Labour’s job tax—are a welcome change, meaning that the people of Bedford are more likely to have a job. When they travel to work in their cars, they can look at the petrol pump and see that fuel duty has been frozen. When they arrive at work, they will know that at the end of the day, thanks to the increase in the personal allowance, they will keep more of the money they have earned. When they get home in the evening and go out to the pub with their mates, they can raise a pint to the Chancellor and say, “Thank you very much for scrapping that other iniquity of our tax system left by the last Labour Government—the beer duty escalator.” Those are all very welcome measures. On fuel duty, it is particularly important for everyone to realise that when they fill up their tank and look up at the price per litre, 13p of that is Labour’s price on fuel, which applies every time we fill up our cars.

Let me draw your attention, Mr Deputy Speaker, and that of Members to page 12 of the Red Book, which features an interesting chart—I see Members avidly reaching for it—showing the growth of debt in this country from the mid-1990s until 2010. It shows that the last Labour Government left this country as the most indebted nation on earth. They grew our debt—this does not include Government debt, which has to be added on top—from two times to five times the size of the economy. That is a massive debt that must be paid for by our children and grandchildren. I wonder whether the Economic Secretary would consider adding the Government debt to this chart and requiring to be displayed on a poster in every single school, so that our children know what they are going to have to pay back owing to the policies pursued by the last Labour Government. Their policies were an abject failure of economic management.

In the private sector, when companies have poorly performing management, we fire them and bring in other people. In the Labour party, they promote them.

[Mr Iain Wright (Hartlepool) (Lab)]

He’s pointing at me!

[Richard Fuller]

The Leader of the Opposition and the shadow Chancellor were promoted, yet their fingers are all over this increase in debt. I must say that the hon. Member for Hartlepool (Mr Wright) has it right. Those two are acting as bed blockers for more talented people on the Opposition Front Bench. Let us hope there will be a change in that regard some day.

Let me say more broadly, if I may—I sometimes get a little controversial—that the debates I have heard in this place since becoming a Member of Parliament have reinforced my view that the political class has let down the people of this country, regardless of political party. The debt is not just the fault of the last Labour Government but of the country as a whole, which had got itself into terrible levels of debt.

There are two ways of looking at the problem. The Government are borrowing £1 billion every three days, the interest on which amounts to £15 million. So, every three days, £15 million has to be taken out of the budget for our schools and our hospitals. That is a very considerable burden that places pressure on the Government, and I say to the Economic Secretary that I am not sure the Government have done enough to bring public expenditure under control. We have to go further. We need to look at the Heseltine review of the way the Government spend their money—not as an end-point, but as a starting-point for a much more radical reform of how we provide our cherished public services, so that we can deliver on the promise of providing more for less money.

In my remaining time, let me mention the Help to Buy mortgage guarantee scheme. I have read the scheme outline and there are some interesting charts in it, but an important chart is missing—that for the loan-to-value ratio over time.

[Andrew Griffiths]

Does my hon. Friend share the joy of many first-time buyers in my constituency at the fact that this will give them a real chance to get on the housing ladder?

[Richard Fuller]

I appreciate my hon. Friend’s intervention, but I am not sure that I can share his joy. The impetus behind this Treasury document is the notion that enhancing loan-to-value ratios of 95% is somehow a good policy, and I need some more reassurance about that.

Let us compare the average house bought in 1997 at the average loan-to-value ratio of 80% with the average house bought in 2007—after all that price inflation—at a 95% loan-to-value ratio. Over the 20 or 25 years of their mortgage, the people who bought the average house in 2007 will have to spend £234,000 more than those who bought the average house in 1997. Increasing loan-to-value ratios depresses people’s ability to spend money on other things, because they are spending more on their mortgages. I want some more reassurance from the Treasury that this scheme will not have unintended consequences for their ability to spend money appropriately in relation to their incomes.

[Mark Lazarowicz]

Is not another possible unintended consequence of the measure the setting off of regionally based house price spirals, exacerbating some of the regional differences that other measures in the Budget are intended to address?

[Richard Fuller]

The hon. Gentleman makes a fair point, but I do not see that that would be a problem in this instance. In fact, the scheme might counteract the problem. However, it is clear that the issue needs to be sorted out as what is currently an outline becomes a fully developed scheme.

Let me end by making a fundamental point. Every politician in the House must recognise that our debt burden presents us all with a challenge to do more with less. The answer is not to continue kicking the can down the road. We must face up to our responsibilities, and we owe it to the generations to come to do that quickly, while interest rates are low, rather than waiting to see what—as was pointed out by my hon. Friend the Member for Folkestone and Hythe (Damian Collins)—may happen if they suddenly start to spike, and we find ourselves in a much more difficult position in trying to bring Government spending back under control.

15:52

[Gavin Shuker (Luton South) (Lab/Co-op)]

I am extremely grateful not only to have been called to speak, but to follow the hon. Member for Bedford (Richard Fuller), because I intend to use his speech as a launchpad for my own. I have a great deal of sympathy with much of what he said. In particular, I agree with him that the rising level of private sector debt in the economy is worrying—much more worrying than the rising level of public sector debt during the earlier period to which he referred.

However, the most important question for the House to answer is this. Given that members of all parties know there is a massive problem in our economy—the mountain of debt that is at this moment being added to our existing national debt—why do Ministers refuse to face up to it?

Where would we have been, had the OBR’s initial assessment been correct? By this point in the present Parliament, our economy would have grown by 5% or 6%, there would have been a solid and recognisable recovery, and further scope for a reduction in public spending as the deficit went down. Instead, we have seen growth of between 0% and 1%, and we know that, in this first quarter of 2013, we are a margin of error away from a triple-dip recession—let alone the double-dip recession that has already happened. There is clearly a lack of confidence, not just consumer confidence but confidence among businesses and elsewhere, preventing investment and the securing of the growth we need.

The result of all this—the result of the halving of growth in the most recent Budget assessment, and of the Chancellor’s having not only to downgrade his own assessments of growth but to upgrade the amount he will have to borrow every time he comes to the Dispatch Box—is quite simple. We are adding an incredible amount of debt to the economy, and the Government are giving no clear indication of what they are going to do. The pain experienced by my constituents, and by many of our constituents throughout the country, can be tempered only by a sense that we are getting somewhere in sorting out the problem that has been created.

However, the sad assessment is that we have wasted three years in getting there. The debt has continued to rise. When Government Members say, “We are paying down Britain’s debts”, either they are being ignorant of the facts or something more sinister is going on. No debt has been paid down by this Government. In their five years, this Government will have borrowed more than was borrowed during the 13 years of the previous Labour Government, and that was true even before yesterday’s horror-show figures. We know that at the end of this Parliament the deficit will still be in the tens of billions of pounds; I believe the figure will be £70 billion in the final year of this Parliament. We know that last year, this year and next year the deficit remains, in essence, unchanged, at about £120 billion.

Many of us choose not to talk about this next issue. Many Government Members would say privately that they are deeply concerned about the Government’s economic strategy, but they will not talk about it in this Chamber. The shocking thing is the effect that is having on the general public’s perception of what is going on in the real economy. All the polling shows us that only about one in 10 people understands that the debt is going up, rather than going down or remaining the same. The public believe, by and large, that these cuts are productive. They confuse—possibly because the Government themselves have confused—the debt and the deficit, but, believe it or not, this Government will borrow more in their period in office than the previous Labour Government did in 13 years. We need to call them out on that as clearly as we can.

For a plan to work, it needs to be credible. What do I mean by that? First, a proper plan is needed. This Government said that they had one—Labour had one going into the last election. Secondly, the belief is needed that the Government will see it through. This Government say they will see it through, even though they are clearly not keeping to the plan. We believe that the best way to make a credible case for seeing it through would be an Act of Parliament stating that the deficit will be halved in four years. The third test of a credible plan is: does it work? I ask in the simplest way I can: on what measure is the Chancellor’s economic plan working? The answer is none whatsoever, and that presents real challenges to our constituents and to our country.

15:57

[Justin Tomlinson (North Swindon) (Con)]

Given the time constraints, this will, obviously, be a bit of a whistle-stop tour. However, I will set out some of my Budget highlights and, with each one, something on my wish list to try to be constructive for the Government. First, I very much welcome the £10,000 personal allowance. As we know, that is a tax cut for 24 million people and 2.7 million people will be completely taken out of paying income tax. This is genuinely a reward for people doing the right thing.

Some excellent work by the TaxPayers Alliance has highlighted a chronic lack of understanding of the impact of changes to taxation in people’s own payslips. In this week’s The Spectator, I set out a request that when changes to pay-as-you-earn made by any future Government, of any colour, kick in, they should be explained on the employee’s payslip. In that way, we can get greater engagement. I know through my work on the all-party group on financial education for young people that because we now have so many direct debits and standing orders, people are disfranchised from their own bank accounts. Therefore, setting out the information I suggest will help.

I welcome the various measures to support business, such as the 20p rate of corporation tax and the £2,000 employment allowance. It will make a huge difference in the south-west, as 85,000 employers will gain and 40,000 will be taken out of paying national insurance altogether. Some 1.25 million private sector jobs have been created and a quarter of a million new businesses have started since we came to power. My constituency has seen the fastest increase in the number of start-up businesses in the south-west. It is also crucial that we continue to support businesses looking to export to emerging economies such as Brazil, India and China, so that we are not so exposed to the turbulence in the European Union.

I also want more to be done to help promote young entrepreneurs. We all support that principle, but young people face a challenge, as I find when I talk to business students. I was the only one of the 350 who studied business on my university course who ended up running their own business and employing people. When I ask business students whether they would like to run a business, all the hands go up and they are extremely enthusiastic; they have been enthused by “The Apprentice” and “Dragons’ Den”. When I then ask how many will do it, all the hands go back down, because they simply do not know how. When people choose to go to university or take on an apprenticeship—the number of which has increased massively—a clear, defined career path is laid out for them. If they tick the box, get the grades and pass the application process, that is what they will do. We need to do a lot more in that regard.

A couple of weeks ago, I set up a scheme with Swindon college to support a local charity, the Prospect hospice. Those who took part were each given £10 to raise money by trading in the Blunsdon market, a tough trading environment, and between them they raised more than £711. One team was so successful that the market has asked them to come back in the summer holidays to give it a go. Our town centre is looking to use the high street money provided through the Mary Portas scheme to set up pop-up shops, and has also made an offer to that team of very successful girls. Those who are interested might like to hear that they ran a 1950s tea shop-style café, dressed in 1950s clothes and played 1950s music; they understood customer service. My request is that we do more to set out clear career paths in business.

I welcome the good news on fuel duty. People have mentioned the 13p price difference—it is 59p if we use gallons, and sounds even more impressive. Whenever I use cutting-edge social media such as Facebook to conduct a “Fantasy Chancellor” poll and ask about the one thing people would do, fuel duty is always the most popular issue. I ask for no return to the 12 hikes in 13 years we saw under the previous Government. They regarded motorists as an easy hit, but the cost has a tangible effect on people.

The excellent news on beer duty is a credit to my hon. Friends the Members for Burton (Andrew Griffiths), for Nuneaton (Mr Jones) and for Leeds North West (Greg Mulholland). I am a proud member of the save the pub group and the all-party group on beer. I had a text from the wonderful Arkell’s brewery in my constituency, which very much welcomed the move. It is important to the sector.

[Andrew Griffiths]

I thank my hon. Friend for his sterling support for the campaign to scrap the beer duty escalator. Earlier, he mentioned the work of the TaxPayers Alliance. Will he join me in congratulating the TPA on its “Mash Beer Tax” campaign, and The Sun newspaper on its fabulous campaign to scrap the beer duty escalator?

[Justin Tomlinson]

Absolutely. I also commend the constructive and proactive way they lobbied politicians on both sides of the House, so that they realised what a benefit such a move would be to the local economy, as well as for those who enjoy the odd pint in their local pub. It is cause for rejoicing.

I have two further requests. A considerable number of pubs are starting to provide food as a mainstream part of their offer. More needs to be done to encourage hospitality and catering students to consider becoming landlords, as a lot of breweries are struggling to find younger landlords. Secondly, I urge the Minister to consider the excellent work of my hon. Friend the Member for Burton and to commission him to look more widely than the beer duty: to consider why we are losing pubs and what more we can do in that regard, just as we commissioned Mary Portas to carry out the high street review.

[Guto Bebb]

Is my hon. Friend aware that the increase in the personal allowance can be crucial for businesses such as public houses, which are often run by a husband and wife working in partnership? Our changes mean that such partnerships can make a profit of £20,000 without paying a penny in tax.

[Justin Tomlinson]

Absolutely. The industry can react quickly and provide flexible employment opportunities, and it is a major contributor to local economies across the country.

The Help to Buy scheme will provide £3.5 billion to help those wanting to get on to or move up the property ladder. I know that more details need to be considered, but we should think not only of the people who will benefit directly but of the huge numbers of people in the house building industry. Over the past 20 years, Swindon has been pretty much the fastest growing town, and a huge number of local residents are connected to that industry. They will welcome any measure to help restore confidence in the housing market.

We come up with these fantastic schemes, and I was challenged on local radio last night about whether this scheme would catch on. As entertaining as we all think we are, our wonderful debates in the Chamber often pass the public by. As the scheme comes into force in 2014, it would be nice to promote it in the annual council tax bill. The councils have already paid for the postage, so let us put a little information flyer in with the bill so that people can see what opportunities there are and whether they apply to them.

Finally, I want to talk about business rates, on which I would have liked a little more to have been done. Our high streets are struggling and business rates are becoming a bigger burden, with landlords lowering rents and so on. I was fortunate enough to become a member of the Public Accounts Committee, but one of my biggest disappointments is that that happened 24 hours after Starbucks and Amazon had their hearing. Amazon kindly came to meet me yesterday and it is fair to say that we rowed. Its actions over tax and transferring money to Luxembourg are disgraceful. The company is not operating on an even playing field. We have to investigate some form of internet consumer tax for such organisations, but with every single penny ring-fenced to subsidise the business rates of the traditional high street. If the high street struggles any more, Amazon will also struggle because the high street is the shop window. I have spoken to a number of independent retailers who provide the customer service—and consumers then simply pick up the phone and order from Amazon. Let us create a fair playing field for all retailers.

16:04

[Mr Russell Brown (Dumfries and Galloway) (Lab)]

I will try to be as quick as I can because I know that others want to make a contribution to this debate.

I will not get into the knockabout. If we are all honest with one another, every Government who come in after a period out of office inherit problems that they have to tackle. I am not running away from the fact that because of what the previous Government did to support banks, this Government were landed with a bigger problem than any of us would have wanted.

The debate this afternoon has been interesting. The hon. Member for North Swindon (Justin Tomlinson), my hon. Friend the Member for Luton South (Gavin Shuker) and the hon. Member for Aberconwy (Guto Bebb) all mentioned one word, which is vital to everything we do within the economy, and that word is confidence. Without confidence, we are going nowhere, and growth runs hand-in-hand with confidence.

I took the opportunity last night to speak to about a dozen people in my constituency. I had given them a commitment. Some were small business owners and they pointed out that some of the commitments that the Government gave yesterday were about what lies in the future, not about how they were going to get from where we are in 2013 to 2015. My constituency is in an area that depends very much on small and medium-sized enterprises for running the local economy, and there is little confidence out there in my locality.

On the concept of the private sector providing jobs, only this week I have heard announcements of the loss of 36 jobs in two private sector companies, one in the food industry and one in engineering. It is a different picture in different parts of the country.

Youth unemployment rose to 9.8% in my constituency yesterday—1,080 young people. For the fourth month running, unemployment overall rose and stands at more than 3,500. I want to say something about those young unemployed people. The issue is about more than just a job. One of my colleagues on the Opposition Benches—I will not mention names—shared some information with me. He had asked some questions about mental health problems and the astonishing figure came back to show that 32.9% of 16 to 25-year-olds have a mental health problem. That may be just depression or stress, but the figure is 32.9%. When we look at those figures region-wide and overlay them on to the youth unemployment figures, the result is frightening. The figures merge together. It is more than people just being out of work. Long-term ill health can begin to set in.

I say to the Government and the Treasury team dealing with the Budget that we do not want a re-run of what we experienced in this country in the 1980s and early 1990s, when we ended up with long-term second and third generation unemployed, a situation that my party tried to tackle. It is not good for individuals, families or communities and, above all else, it is not good for the country.

The Budget contained measures for small and medium-sized enterprises, which I would love to have seen happening sooner. I have concerns about what is being proposed in respect of house building. Is the confidence there for private sector house building? I would much prefer to see more money invested in public sector housing.

Finally, I shall mention something that is dear to the hearts of my constituents in a rural area—road fuel prices. Although he is not here, I want to mention the hon. Member for Argyll and Bute (Mr Reid). He does himself no credit, nor does anyone else, by saying that had a Labour Government been in office, road fuel would have cost 13p or 18p a litre extra. The price at the pumps today is a false price, with crude oil priced at $93. When we had the same price at the pumps previously, crude oil was $140 per barrel, so we have a false price. The weak pound is ratcheting the price up, and with a weak pound and no increase in exports, there is a problem lying in the undergrowth. That problem could well be inflation, and I would like to hear the Minister say something about that when he winds up.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. The wind-ups will start no later than 4.40 pm.

16:09

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

It is good to follow the hon. Member for Dumfries and Galloway (Mr Brown), and I agree with him that it is all about confidence. I believe that the Budget will help to produce confidence in this country, especially in my constituency, where many people are not on the highest wages. Taking people out of tax right up to nearly £10,000 is absolutely the right way to go. The previous Government spent far too much time on a complex tax system, but it is much better to take people out of tax altogether so that they know that they can earn up to a certain amount—nearly £10,000 in this case—before having to pay any tax.

It is also right to reduce national insurance contributions, particularly for small and medium-sized businesses, because they will generate the most jobs. The reduction makes it less expensive to employ people, and that is what the Budget is about. Our economy must be, and will be, more competitive, because we are in a very competitive world and we need to compete. I think that the Budget will bring that about.

I echo what many Members, particularly my hon. Friend the Member for Harrow East (Bob Blackman), have said about Equitable Life and all the people who will now be compensated for policies prior to 1992, which have not previously been compensated. Many of those people are elderly and frail, so I urge the Government to get the money to them as quickly as possible. They were hard-working people who put money away for their retirement and basically were robbed in one way or another. I really thank the Chancellor and the Government for agreeing to those payments, but they need to be made quickly.

On infrastructure, there is a wonderful road, the A30 and the A303, running east from Honiton, and it needs to be dualled—there is no doubt about it. We want to dual that road until we get into Wiltshire, where we might encounter problems with a few stones. I will not say which stones, but I think that Members probably know what they are—Stonehenge. There are all sorts of problems around there, but let us not worry about that. Let us move from Honiton up through Devon and Somerset and into Wiltshire, and let us get that road built. We need a second arterial route into the west country, because tourism is so important to us, and it is linked to agriculture and many of our other industries.

That brings me to fuel and fuel duty. My constituency is only 10 miles wide, but it is 42 miles long and covers over 400 square miles. It starts up in Exmoor and meets the sea at Seaton. My constituents live mainly in villages and hamlets. If they wait for a bus, it might never come. If it does come, it probably is not going where they want to go. I am being slightly facetious, but the point is that bus services in many rural areas do not stack up economically, however much subsidy we throw at them, so fuel and cars are not a luxury; they are an essential. Therefore, every time we raise fuel duty, we tax people’s means of getting to work. That is why I congratulate the Chancellor on freezing fuel duty. It is now 13p less than it was when Labour was in power. I am also delighted about the 1p reduction in beer duty, although I remind the Chancellor that the west country and Devon are, of course, full of cider producers, so I ask him please not to forget them.

I think that the support for home buyers, particularly first-time buyers, is a wonderful idea, because many people in my constituency are on low wages, but house prices are upwards of £220,000, so they really need help with deposits. If this Conservative-led Government are about anything, they must be about getting more people to own their own homes and look after themselves, and this support is one way of helping them to do that. I am absolutely delighted to see it happening. We inherited a huge amount of debt and we are doing our very best to reduce it. I look forward to the Budget having a very positive effect in my constituency and across the country.

16:14

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

We are told that a number of announcements in the Budget will encourage investment in infrastructure and growth. I hope that these policies do have that effect, because that would be welcome. They are being announced again because the policies announced in the other Budgets since the election have, as yet, signally failed to bring about such growth. There is plenty of evidence about how slowly they are benefiting infra- structure and investment. The recent National Audit Office report on the national infrastructure plan pointed out that although developers notified the Government of 99 infrastructure projects under the plan, by December 2012 only three had been determined, six were expecting a decision within three months, and the remaining 90 were not even at a decision stage.

An example of announcements about infrastructure taking a long time to have an effect is the Caledonian sleeper service from London to Scotland, on which I have been involved in campaigning. It was announced in 2011 and announced again in 2012. The money for it will probably start flowing through into carriages and stations from late 2014 onwards, until perhaps 2017 or 2018. It is obviously a very good investment, but it will not have an effect on boosting the economy in 2013. It did not have that effect in 2012 or 2011, and it will not do so until 2015 onwards. What can be said of that project is certainly true of many of the other investment projects that the Government have been trying to encourage and bring about.

The Government know that they have to do more to get results in terms of boosting the economy. That is why at least some in the Government appear to want to set off a new housing boom before 2015. Of course, we all want to see the encouragement of affordable, or relatively affordable, housing for first-time buyers and people who cannot get on to the housing ladder, and we certainly want to see the desperately needed boost for the construction industry that would come from such measures. However, it is a different thing to promote a scheme that would apparently help anyone of any income to buy a house costing up to £600,000 in any part of the country. That would inevitably run a high risk of setting off an unsustainable house price boom, which, as we have learned from previous experience, is precisely the kind of thing that many parts of the country do not need. It also creates a great danger of exacerbating some of the regional economic differences that the measures in the Budget are supposedly trying to address.

When the Secretary of State was asked about this measure, he told us, in his usual emollient way, that the details are being discussed and that more consideration is going on. Most of us in the Chamber could already hear the gears crunching as the Government prepared another U-turn, or, alternatively, the Secretary of State personally distanced himself from Government policy. This policy is being spun in the media, no doubt by someone in the Treasury. It is not so much about helping people who need housing as trying to get a housing boom in 2015, and it is the wrong approach. The Government say that they are going to introduce a policy that would help people on whatever income, in whatever part of the country, to buy houses costing up to £600,000. That would particularly benefit people with high earnings in areas that already get a great deal of benefit from economic activity.

I hope that the Minister will soon clarify the scope of this policy. We all want support for first-time buyers and people who need housing, but we certainly do not want an unrestrained re-stimulation of the unsustainable housing booms that we have seen in the past.

16:19

[Guy Opperman (Hexham) (Con)]

The good constituents of Hexham will welcome action on fuel duty, support for the victims of Equitable Life, action on increased infrastructure, tax-free child care, decreases in corporation tax, support for business and the raising of the personal allowance up to £10,000 by 2014, which will take millions more low-paid people out of tax altogether.

The action on fuel duty is the most important thing to the people of Hexham and Northumberland. There is a stark contrast between a Labour Government who raised fuel duty 10 times in 13 years and this Government who have managed, even in these difficult times, either to keep it flat or to reduce it. I listened to the speech by the hon. Member for Dumfries and Galloway (Mr Brown), with whom I have debated fuel duty on many occasions, and it was as if I lived on a different planet, certainly not the one on which the previous Prime Minister increased fuel taxes. The reality is that the hon. Gentleman and I have the same sorts of constituents and this Government are looking after them with regard to what is the most important issue to them, namely fuel. The previous Government kept raising fuel prices. They were woeful.

[Mr Russell Brown]

All I will say, as I have told the hon. Gentleman before, is that the previous Government—this is a fact—froze or abandoned potential increases on 13 occasions over nine years.

[Guy Opperman]

There may have been plenty of times when the previous Government chose not to raise prices, but they did increase them on 10 occasions, and those with long memories in Northumberland and in Scotland remember that. [Interruption.] Opposition Members may chunter, but that is the bottom line.

The full acceptance of the Heseltine report was particularly welcomed in the north-east. It was specifically called for by the north-east chamber of commerce and has been welcomed by business. Exports from the north-east are up, jobs have improved dramatically since May 2010, and the number of apprentices has doubled. There has been a dramatic improvement. The Corus plant was shut by the previous Government—it was the titanic industrial issue in the build up to the 2010 election—but reopened by this coalition Government.

This Budget comes at a time of self-examination in the north-east. The January declaration and Lord Adonis’s review of the north-east, which I am contributing to and support wholeheartedly, are making a real difference to understanding how the region can improve itself. That is an example of proper self-examination from a detached standpoint.

Bank lending is another important issue. I welcome the Business Secretary’s statement on developments on the business bank and the fact that the Opposition have finally begun to realise that local community banking is a good idea. Sadly, when I invited the shadow Minister, the hon. Member for Hartlepool (Mr Wright), to support my campaign for local community banks in a debate on manufacturing on 24 November 2011, he declined to do so, and the point was raised with him again on the same day the following year. The proof of the pudding lies in the fact that, during an April 2012 debate on the Financial Services Bill, the Labour party voted against clauses in favour of greater competition for local banks, greater ease of entry and greater ability to open a local bank. Why would Labour Members vote against greater competition and a local community bank that makes money for the community, with profits going back to the community? It is illogical in the extreme.

I welcome the fact that the Labour party has finally come on board and accepted that local community banking is a good thing. It has taken a while and I hope that Labour Members will back up what they are saying in public with votes in support of greater competition for local people. It is vital that our campaign for local community banks continues. The work done by the Financial Services Authority is to its credit. It has made it much easier to set up a community bank.

[Neil Parish]

I agree with my hon. Friend about bank lending. Does he agree that getting greater competition locally is essential so that businesses can get better rates of interest and better deals with banks?

[Guy Opperman]

That is entirely the case. As we all know, 75% of bank lending in this country comes from the big banks and few smaller community banks are supported. The decline in local lending is definitely affecting SMEs.

There were four challenges to the creation of new local banks. First, there was a lack of legislation to facilitate such changes. We passed that legislation in the Financial Services Act 2012. The second challenge was the length and complexity of the authorisation process. That has been reduced through our work with the FSA, so it is now much easier to set up a smaller bank, whether it is a bank established by an industrialist to back a local community or an infrastructure bank like Cambridge & Counties bank or Hampshire Trust.

Thirdly, the level of capital that new banks were required to hold used to be very high. They were effectively judged exactly as Barclays would be judged. That has also changed. The FSA has made it very clear, as I have demonstrated in this House by reading out letters to me from the FSA, that it requires lower amounts of capital on an ongoing basis from smaller entrants to the market. Finally, the scale and complexity of the infrastructure was proving to be a burden. That is also being addressed.

The future must surely be local community banks, run by somebody from the local community, investing in that local community. A gradual disaster took place under successive Governments over the past 25 to 30 years, whereby local community banks were divorced from the ability to make decisions locally. Community banks could make a decent amount of profit and return it, when a certain percentage is reached, to the community.

I am delighted to say that on 7 June, the FSA, the Prudential Regulation Authority, the Financial Secretary to the Treasury and various other people will be coming to Newcastle for a debate on how we will take regional banking forward in this country. I urge all interested parties to come.

16:27

[Nic Dakin (Scunthorpe) (Lab)]

It is a pleasure to follow the hon. Member for Hexham (Guy Opperman), who was hyperactive and animated in his contribution. On balance, I feel that he protesteth too much about most things on this particular occasion.

The Chancellor can certainly talk the talk. The question the country is asking is whether he can walk the walk. In his Mais lecture on 24 February 2010, the then shadow Chancellor argued that there were a series of benchmarks for the policies of the next Parliament

“against which you will be able to judge whether a Conservative Government is delivering on this new economic model.”

He also said:

“I have set out the benchmarks against which we can be held accountable”;

that

“we will maintain Britain’s AAA credit rating”;

and:

“We have to deal with our debts”.

We can mark the Chancellor against his own benchmarks. He has lost the UK’s triple A credit rating because he has failed to deliver growth and to reduce the deficit. The lack of growth has resulted in more, not less, borrowing. It is up £254 billion. Today’s Financial Times has a graph that demonstrates that the deficit is getting wider and that debt is going up. The headline says, “Things are worse and Plan A is off course.” It is now forecast that national debt as a percentage of GDP will not start falling until 2017-18.

In a sense, the Chancellor has supervised his own deficit expansion programme. Nice work by the Chancellor! But it was all too predictable. At least one learned commentator gave a warning in 2010—the Business Secretary who spoke from the Dispatch Box earlier. He said:

“Slashing spending now could push the economy back into recession and inflict further structural damage on the UK that will make it harder to sustain our credit rating.”

He said of the then shadow Chancellor:

“He…fails to appreciate that what the markets are looking for is a credible plan to reduce the deficit, not a willingness to slash regardless of economic conditions. In the current climate, it is essential that decisions about the speed and timing of tackling the deficit are based on the state of the economy, not political dogma.”

There we have it: decisions made from millionaires’ row and in yesterday’s Budget are affecting ordinary, hard-working people in my Scunthorpe constituency, and they are not making a difference for the better.

People are suffering from the removal of the education maintenance allowance, tuition fees, the rise in VAT, short-term working, tax credits being taken away, rising energy bills, fuel bills still going up despite the welcome move in the Budget, and the bedroom tax; and they are £381 a year worse off than they were in 2010. This Budget prefers a bedroom tax to a mansion tax, and it prefers giving a second home subsidy to those who can take advantage of it to building homes for those who need them. This is a Budget for millionaires, not hard-working people. It is a Budget of desperation and exasperation rather than aspiration, and another omnishambles.

[Barbara Keeley]

On a point of order, Mr Deputy Speaker. There has been lot of confusion over the last few hours about the Government’s new mortgage guarantee scheme, and while we have the opportunity I would like to ask those on the Treasury Bench to clarify whether second home owners are eligible for the scheme. Can the scheme, which can be used for new builds and other types of housing, be used in that way?

[Mr Deputy Speaker (Mr Nigel Evans)]

That is not a point of order for the Chair. As the hon. Lady knows, we still have another half hour of this debate and two full days on the financial statement. No doubt I will be in the Chair at times during those two days, and I know that her point will be raised, and that the Government will respond, probably in a way similar to the responses we have heard during this debate. I am absolutely certain that it will be part of the debate.

16:32

[Sheila Gilmore (Edinburgh East) (Lab)]

Last Thursday when I was going home on the train I read in the Evening Standard an article pointing out that our debates on this Budget, the previous Budget and the ones before that are not just a reprise of each other, but a reprise of the 1930s. The argument that the way to cure the country’s economic problems is to cut, cut, cut, took place in the 1930s and was proved wrong, yet here we are again. If MPs from that time were in the Chamber today as ghosts, they would think that they were still alive and taking part in the debate.

That has not all happened by accident, and the Government are following an ideological path. They told us that the public sector is a drag on the economy and that if we did not cut it back the private sector would never spring into growth. In fact, the public sector is a huge customer of the private sector, both institutionally, from the construction works it undertakes right down to the stationery it buys, and individually, because a public sector worker is a private sector consumer. Individual workers contribute to their local economies by buying and furnishing their homes, buying new bikes and cars and spending on all sorts of other consumer durables. Cutting all that directly affects the private sector, which is exactly what we have seen for the past three years.

[Andrew Gwynne]

Is it not an absolute truth that in 2010 all the economic indicators, including consumer confidence, were heading in the right direction, yet almost immediately at the point that the Government turned off the taps and brought in their austerity Budget, consumer confidence plummeted?

[Sheila Gilmore]

As a result of the stimulus provided by the previous Government, all those measurements were turning in the right direction at that time—[Interruption.] Perhaps the Minister who is laughing ought to look, as I did last weekend, at the OBR report on the June 2010 pre-Budget report. He might not be laughing quite so hard then. The Government fail to analyse the problem correctly, so it is not surprising that they do not arrive at the right decision.

On jobs, it is not surprising that the Chancellor did not want to dwell on unemployment and this week’s increase. All we hear about is the increased number in employment. For once, I will not dwell on the statistics—others have done so, and I mentioned them in an intervention, but I want to highlight what the jobs situation means in the real world.

Last Saturday, I was out knocking on doors in my constituency. Within half an hour, I had met two people who were good examples of what the jobs situation means for them. One man had a 15-hour a week job in a local supermarket. No doubt these flexible short-term jobs are quite useful for the employer in meeting peak demand, and, of course, a person working 15 hours for the minimum wage will be below the national insurance threshold, which is another advantage for the employer. He had asked for more hours because he will be hit by the bedroom tax, but he was told that extra hours were not available.

Even if the hours were available, whom would they be taken from? My constituent might be given more hours, but unless there is a need for extra hours to be done in that job, another employee will get fewer hours, or another person would not get a job. Counting low-hour part-time jobs—we should remember that some so-called full-time jobs involve low hours—and saying, “Aren’t they wonderful?” is to forget that we are talking about real people. What effect does that have on them? The man is working and wants to work. More work in future would be good for his well-being, but he remains in poverty, like so many others.

[Barbara Keeley]

My hon. Friend makes some excellent points. Does she agree that, although people want those jobs, taking them often means they are denied the chance of further training and other opportunities? They would rather stick in the jobs they have than take the risk of going for those opportunities.

[Sheila Gilmore]

I know from work by single parent organisations that that is a problem for single parents who want to re-skill so that they can get jobs that will help them to bring up their children.

In the situation I have described, the individual stays poor, and the economy stagnates. That is the reality of the so-called jobs miracle. It is time the Government got real about what is happening.

On the housing measures, if the Government want to help the housing crisis and stimulate the economy, the best way would be through direct investment, which could be done very quickly. There are lots of sites with planning permission that could be used to build affordable homes. To say that 15,000 additional so-called affordable homes will be built as a result of the Budget is so far away from helping the problem that I do not know where to begin. As I said in an intervention, those are not really affordable homes—homes at 80% of market value are not affordable to most people. If they become affordable for people on low incomes, the housing benefit bill will be ratcheted up, when the Government have told us for so long that they are trying to reduce it. One part of the Government is ensuring that many of my constituents suffer a substantial cut in their income from the bedroom tax to cut the housing benefit bill, but another part is busily putting the housing benefit bill up. The policy does not make sense. Last year, we were told that 100,000 people will benefit from the Help to Buy scheme. The reality is that only 1,5000 have benefited. It is not enough to talk about all those plans and say how wonderful they will be when none of them results in anything.

Frankly, an athlete who became slower after their trainer told them they had only to diet to get faster would sack the trainer. That is what we need to do.

16:39

[Mr Iain Wright (Hartlepool) (Lab)]

I thank all hon. Members who have contributed today. By my reckoning, we have heard valuable and insightful speeches from 30 hon. Members—although, with the exception of the Business Secretary, no Liberal Democrats. All those hon. Members brought to the debate their feelings about, and analysis of, the impact that the measures in the Budget will have on families and businesses in their constituencies and across the country. We have heard about massage parlours, whip cracks and the Kama Sutra—but I shall move on.

At the start of the debate, we heard a tour de force from the shadow Chancellor, who exposed the complete confusion about the new Help to Buy scheme, suggesting that we now have a second omnishambles Budget. We are expecting a U-turn very shortly. It seems that the scheme will not help hard-pressed families get a foot on the property ladder: it is actually a bung, a spare-home subsidy for millionaires. That is not what the housing market needs, and it is certainly not what the economy needs.

We have heard that public sector net borrowing has been, with acute financial management, revised down next year by £0.1 billion. I thought that would have entailed the Treasury going round Whitehall telling Departments not to order photocopying paper this month, but it is a lot more serious than that. As my hon. Friend the Member for Denton and Reddish (Andrew Gwynne) said, we are seeing £2.2 billion moving away from the NHS. Valuable, important and often life-saving operations may not happen as a direct result of the Government’s attempts at financial management. That is an absolute disgrace.

[Neil Parish]

Will the hon. Gentleman give way?

[Mr Wright]

I am afraid that I do not have time.

I would support a comprehensive, intelligent and active industrial strategy, based on rigorous analysis and for our competitive advantage. I commend the Government on Monday’s announcement on the aerospace strategy, which is welcome, but there was precious little in the Chancellor’s statement yesterday to back up such an approach.

I was particularly concerned to read in table 2.4 of the Red Book that both resource and capital departmental expenditure limits—DEL—for the green investment bank will be cut to zero in 2014-15. Given that the CBI and others have rightly identified the low carbon sector as a potential growth area in which the UK can be a leading global player if we have the right long-term vision and targeted investment to provide certainty, the figures in the Red Book do not fill me with confidence and I would be grateful if the Minister could outline the Government’s longer term plans and investment for the green investment bank.

Similarly, I was disappointed that no mention was given in the Budget to science. The Chancellor made great play of the need for Britain to compete in the global race. I agree with him. If we are to avoid slipping behind in the international competitiveness race, we must prioritise science and technological innovation, because if we do not, our future industrial capacity will be undermined. Will the Minister outline why science was not mentioned in the Budget?

Several hon. Members, including my hon. Friend the Member for Denton and Reddish and the hon. Member for North Swindon (Justin Tomlinson), mentioned business rates and retail, and they were right to do so, because the Budget certainly did not. David McCorquodale, head of retail at KPMG, said:

“The decision to go ahead regardless and increase business rates will squeeze embattled retailers further and will not deliver the respite the retail sector needs to recover.

Retailers are now left facing a 2.6% hike to their business rates bill, a move which will add £175 million to their overheads. Amongst a backdrop of flatlining sales and continued austerity, this is not a welcome move by the Government.”

Can I ask the Minister why the Government did not help the embattled retail sector?

In today’s debate, many hon. Members, starting with the shadow Chancellor, reminded the House of what the Chancellor had promised in the run-up to the general election and in his first Budget. He set himself several key targets and tests by which his economic record, competency, judgment and capability should be judged. First, the Conservative party’s manifesto stated that the first objective would be to

“safeguard Britain’s credit rating with a credible plan to eliminate the bulk of the structural deficit over a Parliament.”

In early 2010, he backed that up by saying that

“our first Benchmark for Britain is to...cut the deficit more quickly to safeguard Britain’s credit rating.”

We all know how successful the Chancellor’s performance has been on that score. Curiously enough, there is no mention of the credit rating in the Red Book; nor was it mentioned in the Chancellor’s speech yesterday. Funnily enough, I did not hear many Government Back Benchers mention how important the credit rating is either, although my hon. Friends the Members for Birmingham, Selly Oak (Steve McCabe) and for Scunthorpe (Nic Dakin) certainly did mention it.

At the start of this Parliament, the Chancellor said that the current structural deficit would be eliminated by the end of 2014-15. Yesterday’s Red Book, however, shows that the Chancellor’s target to balance the books by the end of this Parliament will be missed by three whole years. Public sector net borrowing at the end of this Parliament is now forecast to be approximately £96 billion—five times larger than the Chancellor expected it to be in 2010. Every year, he comes to this House and has to admit that borrowing is rising, and that the time scale to cut the deficit is growing ever longer.

The Office for Budget Responsibility has said that deficit reduction has stalled. Net borrowing is higher in each year as a result of weaker economic outlook. My hon. Friend the Member for Barnsley Central (Dan Jarvis) reminded us that the Government are forecast to borrow £245 billion more than they originally planned, and my hon. Friend the Member for Luton South (Gavin Shuker) said that borrowing in the five years of this Government is higher than it was in the 13 years of the previous Labour Government. The dramatic deterioration in sentiment, even since Christmas, is striking. According to Red Book figures, the Government now expect to borrow £55.7 billion more in the next five years than they thought they would have to even three months ago.

The Chancellor assured us that, as a result of his policies, net debt would be falling as a proportion of national income by 2015. That was one of his fiscal targets. Judge me, he said, by my ability to get debt as a share of GDP down. However, the Red Book reveals the true failure of the Chancellor’s approach: net debt as a proportion of national income is not falling but rising in every single year of the rest of this Parliament and beyond, from 75.9% of national income this year, to 79.2% in 2013-14, to 82.6% in 2014-15, to 85.1% in 2015 and peaking at 85.6% in 2016-17. As the OBR states:

“As borrowing now falls more gradually, debt rises more quickly as a share of GDP.”

We are now paying more in debt interest—£51 billion a year, which is more than we spend on the defence of this country—than the £44 billion when this Government came to office. The TaxPayers Alliance, which I do not think is a friend of the Labour party, said today:

“By 2017-18, even on the OBR’s optimistic forecasts, the Coalition Government will have more than doubled the official national debt it inherited.”

The Chancellor is refusing, in the face of all the evidence, to change direction in economic policy, as my hon. Friend the Member for Barnsley Central said. On every single test of economic policy that the Chancellor has set himself and asked to be judged on, he has failed, and because of those failures families in Britain are struggling. Life is worse now and living standards are lower for ordinary families than they were three years ago, and they will be worse in 2015. The Chancellor is pursuing this course for reasons of political vanity and ideological arrogance, rather than from economic necessity. His incompetence and lack of judgment have meant that he has boxed himself in. There is nowhere for him to go with any dignity and he refuses, for reasons of pride rather than economics, to change course. As Andrew Smith, chief economist at KPMG in the UK said in response to the Budget yesterday:

“It is now clear that ambitious deficit reduction is stunting growth. Hemmed in by what is left of ‘Plan A’, today’s measures amount to little more than rearranging the deckchairs…hopes that exports and private business investment will come to the rescue depend crucially on strengthening overseas markets—something over which neither the Chancellor nor the Bank of England have any control.”

The Chancellor is fast running out of excuses. He has blamed the lack of growth in the economy on the snow, on the rain and on the sun. I am sure that the recent eruption of Mount Etna must also somehow be causing a drag on the British economy. He has blamed lack of growth on the diamond jubilee, the Olympics, the number of bank holidays and, as far as I am aware, on the fact that Girls Aloud have reformed and split up, and the Rovers Return has burned down. The excuses have got to stop. The Chancellor needs to look in the mirror.

Despite the difficult European situation, the flatlining economy is down to the Chancellor. A deficit reduction programme without a strategy for growth is no deficit reduction programme at all. Growth forecasts have halved, living standards are falling for millions of people, borrowing is soaring and control of the public finances have been kicked well into the next Parliament. The hon. Member for Bedford (Richard Fuller), for whom I have a lot of respect, has said that we should not kick the can down the road, but with this Budget that is precisely what the Chancellor is doing. He and the Government need to acknowledge their failings and change course, or, better still, make way for a team that will help fulfil the British promise, not hinder it.

16:50

[The Economic Secretary to the Treasury (Sajid Javid)]

I am grateful for the opportunity to respond to this debate. We have heard from my right hon. Friend the Secretary of State for Business, Innovation and Skills, from 30 Back Benchers—if I counted correctly—and from one comedian, also known as the shadow Chancellor. His speech was full of jokes and invective, but there was not a single idea about how to deal with the problems in the economy—the very problems that he and his friends helped to create. He might be taking heart from the Italian election, in which a comedian did rather well. He might think the same will work with the British people, but it will not.

It is worth taking a step back and reminding ourselves of the context. The Government inherited the largest deficit in peacetime history. The Government were borrowing one in every £4 they were spending. We have now cut the deficit by a third, but the shadow Chancellor’s plans would take that off track. It is worth recalling his own record on borrowing. As my hon. Friends the Members for Bournemouth East (Mr Ellwood), for Mid Norfolk (George Freeman) and for Bedford (Richard Fuller) reminded us, the previous Government were running a deficit from 2001 onwards—long before the financial crisis. The IMF said that at the height of the debt-fuelled boom, we were running a structural deficit of 5% of GDP. Only Greece and Ireland were in a worse position.

The shadow Chancellor still does not accept that he spent too much and borrowed too much. He cannot even admit that under Labour’s plans, according to the IFS, the debt would be £200 billion higher. He really believes that we can borrow less by borrowing more. This country will never forget that, true to form, Labour brought our country to the brink of bankruptcy by the end of its term. After 13 years, we were left with the largest deficit since the second world war, the deepest recession of any industrialised country and the largest banking bail-out this country had ever seen—a bail-out that was the direct result of the previous Government’s reckless decisions on financial regulation. I was hoping to hear an apology from Opposition Members for all the disaster they created, but there was not a single one.

[Barbara Keeley]

Does the Minister not think it is time to stop living in the past? Will he give an answer to the point of order I raised about the new Help to Buy scheme? Can it be used for second mortgages? The information about it states that a borrower could be remortgaging an existing property with a new lending institution. It is a very confusing scheme.

[Sajid Javid]

I shall come to the Help to Buy scheme in a moment. I was hoping the hon. Lady would offer an apology, but no such luck.

As my right hon. Friend the Business Secretary stated, yesterday’s Budget had economic growth at its heart. The economy is still feeling the impact of Labour’s disastrous policies, but we continue to find practical ways to turn the economy around and to restore growth. Through the private sector, we have created 1.25 million new jobs since we came into power—more new jobs in three years than were created under the last 10 years of Labour. Under this Government, private sector employment has been growing more quickly in the north-east, the north-west and Yorkshire than across the country as a whole. There are more people in employment today than at any other time in our history. We did not hear a single Opposition Member mention that fact.

We might think that Labour Members would have welcomed that development, but they did not. Instead, we heard cheap political talk. They asked about employment, which of course we all want to fall, but they avoided the facts.

On their behalf, I have looked at the change in youth unemployment in the constituencies represented by virtually every Opposition Member who spoke today and mentioned unemployment. Let us look at the facts. This is what happened to youth unemployment during the last term of the Labour Government in those constituencies. In Paisley and Renfrewshire North it was up 150%; in Clwyd South up 103%; in Feltham and Heston up 77%; in Worsley and Eccles South up 124%; in Luton South up 45%; in Birmingham, Selly Oak up 96%; in Edinburgh North and Leith up 60%; in Scunthorpe up 135%; in Edinburgh East up 87%; and in Denton and Reddish up a record 148%. In each of those constituencies, youth unemployment rocketed during the last term of the Labour Government and in every one of them it is down under this Government.

Let me turn to the employment allowance, which a number of hon. Members mentioned. We are proud to be introducing the £2,000 employer national insurance contributions allowance, which will benefit 1.5 million companies throughout the country and take almost a third—450,000 of the smallest businesses—out of NICs altogether. Cutting this payroll tax will be a boost for employment, but our tax changes do not stop there. We are overseeing a system of competitive tax rates that will be strictly enforced—a system that encourages companies to invest and employ here. That is why we are reducing the main corporation tax rate by April 2015 by an additional 1% to 20%, making it the lowest in the G7 and the joint lowest in the G20.

Let me turn briefly to Lord Heseltine and his report, “No Stone Unturned”. As hon. Members are aware, this week the Government published their full response to the report. I am sure that hon. Members have seen the impact Lord Heseltine made on the docklands and in Merseyside. We all know that he is a man with a vision for cities. I am sure that Members will join me in wishing Lord Heseltine, who turns 80 today, a very happy birthday. To help to celebrate, the Government have accepted, in full or in part, 81 of the 89 recommendations he made in his excellent report.

While I have time, I want to turn to aspiration. We know that businesses, buildings and companies start with the vision of individuals. Yesterday’s Budget was for an aspiration nation. It is a Budget that will support people who want to work hard and get on, by preventing higher costs of child care and disincentives to work, creating a simpler system for retirement and giving people a real opportunity to buy their homes, through the help to buy scheme, the extension of the right to buy scheme and our further investment in affordable homes.

Lastly, I want to turn to the cost of living. This Budget also recognises the pressures on the cost of living, as my hon. Friends the Members for North Swindon (Justin Tomlinson), for Harrow East (Bob Blackman), for Henley (John Howell), for Tiverton and Honiton (Neil Parish) and for Hexham (Guy Opperman) all outlined. We have cancelled September’s planned fuel duty rise. Fuel duty will no longer be 10p a litre lower than the previous Government had intended; it will be 13p a litre lower from April this year. We have also cancelled Labour’s hated beer duty escalator and gone one step further by taking a penny off beer duty. I thank my hon. Friends the Members for Burton (Andrew Griffiths) and for North Swindon for raising the issue and campaigning on it so hard.

We have also achieved our commitment to take the personal allowance to £10,000 by April 2014, a year ahead of schedule, which will be a further tax cut for 24 million people up and down the country. Together, these tax allowance changes have taken 2.7 million people out of taxation altogether. Someone working full time on the minimum wage would see their tax bill more than halve because of the measures this Government have taken. As we heard from my right hon. Friend the Chancellor yesterday, every individual who was benefiting from the 10p tax rate under the previous Government is now on a zero per cent tax rate.

Yesterday’s Budget put faith in hard-working people. It was a Budget that told businesses that they are welcome to set up here and encouraged to employ people here. It was a Budget that told individuals up and down the country that if they want to work hard, they will be rewarded in our aspiration nation. I commend these Budget resolutions to the House.

Ordered, That the debate be now adjourned.—(Greg Hands.)

Debate to be resumed tomorrow.

Wind Farm (Wingate, County Durham)

Thursday 21st March 2013 Commons Chamber

16:59

[Phil Wilson (Sedgefield) (Lab)]

I present this petition on behalf of 156 residents who are opposed to the proposed Wingate Grange wind farm in my constituency.

The petition states:

The Petition of residents of the UK,

Declares that the Petitioners strongly object to the proposed planning application for the erection of 5 wind turbines of a maximum height of 115 metres and the associated infrastructure which will include a crane, hard standing, a substation and control building, transformers, underground cabling, access tracks and a meteorological mast; further that they object to the proposed location for the turbines of Wingate Grange Farm situated to the west of Wingate, south-east of Wheatley Hill, north of Deaf Hill and on the southern side of the A181.

The Petitioners therefore request that the House of Commons urges the Government to take the necessary steps to prevent the erection of the wind turbines.

And the Petitioners remain, etc.

[P001166]

Atos Healthcare

Thursday 21st March 2013 Commons Chamber

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

17:01

[Mr Michael Meacher (Oldham West and Royton) (Lab)]

I should say immediately that I have been informed that the Minister of State, Department for Work and Pensions, the hon. Member for Fareham (Mr Hoban), to whom this debate is directed, has unfortunately been held up at Glasgow airport because his plane has developed engine trouble. Obviously I am sorry about that, both for him and for me, but I suspect that the speech to be delivered by his last-minute stand-in, the Under-Secretary of State for Work and Pensions, the hon. Member for Wirral West (Esther McVey), will not diverge too dramatically from the one he would have delivered.

I am grateful for the opportunity to raise this matter in an Adjournment debate, although I very much regret that it has been necessary to do so at all. It is unprecedented in all my 40 years’ parliamentary experience for a Minister to refuse point blank to receive a delegation, on a matter of acute public interest and importance, of representatives of a major section of the population who have, in their view, been targeted extremely unjustly by Government policy.

On 31 January, I wrote to the Secretary of State asking whether a delegation could meet him in his office to discuss the reforms that urgently need to be made to the work capability assessments for disabled people. I reminded him in my letter of the debate in the House on Atos, which I initiated on 17 January. In my view, it was one of the best debates I have experienced in the House for a long time. It was free from rancour and partisanship, but it was critical, detailed, passionate and well focused on the need for reform. Nearly 30 Members spoke and, although Members on both sides of the House acknowledged that there had been some improvements, they were without exception deeply critical of the fact that the fundamental structures remained deeply flawed. That, they said, was causing profound upset, distress, indignation, anger and a real sense of helplessness, and was, in many cases, making sick people even sicker as a result of anxiety and fear.

Although many Members targeted Atos Healthcare, the French company to which the assessments have been outsourced, it was notable that not a single Member from any part of the House defended the position of the Department for Work and Pensions on the descriptors, the regulations and the guidance that had been handed down by the Government to that firm. It was for those reasons that I sought the meeting with the delegation, and it never occurred to me that it would not be readily and promptly granted by the Minister of State, the hon. Member for Fareham. Not having had a reply to my letter throughout the whole of February, however, I tabled a parliamentary question asking when the Minister was going to reply.

Within 24 hours, after waiting more than five weeks, I did receive a reply from the Minister of State. It emerged when I spoke to the Secretary of State earlier this week that he had never seen my letter. The Minister of State’s letter, which I have with me, bluntly stated that his diary did not permit him the opportunity to see this delegation, which I take to be “civil service-ese” for a flat no. Frankly, I was taken aback, so I sought out the Minister in the Lobby and, as soon as he saw me, he said: “I’m not seeing you”. When I protested, he repeated “I’m not seeing you” three times. When I insisted that this was unprecedented and totally unacceptable, he finally said, “I’m not seeing Spartacus”—and repeated that three times.

That provides the basis for my seeking this Adjournment debate today. Spartacus is a group—initially hundreds but now thousands—of sick and disabled people whose lives have been dramatically affected by the welfare changes and who have come together as a loose collective, call it what we will, to share their own narrative with a wider public. Crucially, this work, which I have read through in detail, is evidence-based, used the DWP’s own figures and reports whenever possible, and has never been challenged on accuracy either by the DWP or the wider public. Spartacus always aims to provide a calm, credible and plausible response to the Government’s proposals, highlighting where it feels the proposals will have a damaging effect on sick and disabled people and promulgating that to the wider public.

The movement crystallised initially around the so-called Spartacus or “Responsible Reform” report, which set out an evidence-based analysis showing that the DWP had misled the public by claiming broad support for the abolition of the disability living allowance and its replacement with the new benefit of personal independence payments when there was, in fact, almost no public support at all. On the launch day, literally hundreds of thousands took part and the report trended at No. 1 or 2 on Twitter all day. Since then, the report has been widely used and quoted by the Work and Pensions Committee and the Joint Committee on Human Rights, and in several parliamentary exchanges in this Chamber. I think that says enough about the auspices and credibility of this group.

In addition, the Spartacus group has produced, as I said, a detailed and lengthy review of the work capability assessment procedure based on the lived experience— set out at great length—of 70 or more claimants, with additional comments from MPs, the courts, professional bodies and medical professionals, along with the findings of several freedom of information requests.

In the light of all that, I find it inconceivable that a Minister would refuse to meet a representative or representatives from a group who have a very powerful case to make—one that is strongly supported by hundreds of thousands of sick and disabled people—and whose records show, I repeat, that they have always argued their case with evidence-based rigour and well documented analysis. It is not as if Ministers have not yet met members of Spartacus. In the last year or two, they have done so repeatedly. Kaliya Franklin, for example, one of the people I named for the delegation, met the Secretary of State at the Conservative party conference last year, and I understand that it was a productive and courteous meeting, as I would have expected it to be. Kaliya also met the Under-Secretary last year and I believe that the discussions on disability and work were fruitful.

Sue Marsh, another leading member of the Spartacus group whom I included in the delegation, discussed employment and support allowance and work capability assessments with the former Minister of State, the right hon. Member for Epsom and Ewell (Chris Grayling), for 45 minutes before they appeared on “Newsnight” together on 12 January. Both those disability activists had engaged in debate with the former Under-Secretary of State, the right hon. Member for Basingstoke (Maria Miller), numerous times on Radio 5 Live, Radio 4 and BBC TV. I simply cannot understand how the current Minister of State can conceivably, on the basis of any defensible argument, refuse this delegation.

Spartacus set out to engage with politicians. That is what it wanted to do: to create a movement with a credible voice that would be scrupulous in aiming for reasonable change, setting out reasonable demands that it believed were achievable. Yes, it does focus on the most damaging aspects of welfare reform and explain why they are harmful, as it might be expected to do, but it also offers alternatives which it believes will work and which are costed whenever possible. For the Minister to deny the engagement that Spartacus itself wants strikes me as bizarre and perverse.

Spartacus tells me that over the next few weeks it will produce a clear set of demands regarding ESA. Key to that will be the implementation of all—I stress the word “all”—the Harrington reforms now. Three years is long enough, and Harrington himself said in his year 3 review that progress had been too slow.

Of course, in trials in which all the changes are implemented, the rate of assessments falls from the current rate of between eight and 11 a day to perhaps four or five, but, crucially, this has led to nearly 100% accurate decisions. On the basis of that extremely important conclusion, I hope that Ministers will reconsider and agree to meet the delegation.

[John McDonnell (Hayes and Harlington) (Lab)]

The Spartacus report was put together following a great deal of academic advice from my local university, Brunel. The whole purpose was to engage constructively with the Government to improve the system, and to consider basic reforms. Those people thought they would enter into a consistent dialogue with the Government. The absence of a ministerial dialogue undermines the whole exercise.

[Mr Meacher]

My hon. Friend is right. That is the whole point. The purpose is not to abuse the Government, but to engage in a rational, thoughtful dialogue in which each side listens to the other.

I realise that I could omit Spartacus from my request, but I am not prepared to do so because I do not believe that Ministers should have the right to pick and choose who is to be included in delegations they receive. It is not as if Spartacus members were rude or offensive, or did not have a powerful case to make. I would understand the Minister’s refusal in those circumstances, but they are, in fact, rational, plausible and eager to engage, and they have an extremely compelling message to which Ministers ought to listen.

I hope very much that the Minister concerned, who has displayed highly uncharacteristic defiance and intransigence, will change his mind, but if he does not, I will certainly not leave the matter where it rests at present. I will renew my request to the Secretary of State in a letter that I will personally deliver into his hands, so that this time the matter is brought to his attention.

Let me end by saying that I think it is tragic that we are having to waste time this afternoon discussing the composition of a delegation rather than dealing with the real issue, which is that hundreds of thousands of sick and disabled people have been subjected to real hardship, suffering and fear because they have been so bitterly mistreated under these regulations. They should be listened to directly, and that is the request to which Ministers should now respond.

17:15

[The Parliamentary Under-Secretary of State for Work and Pensions (Esther McVey)]

The first point to make is that the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Fareham (Mr Hoban), who has responsibility for employment, apologises wholeheartedly for not being here today. As the right hon. Member for Oldham West and Royton (Mr Meacher) said at the start of the debate, the Minister had been on his way back from Glasgow, where he had been meeting Work programme providers in Scotland, when his plane had to turn back because of engine problems. That is why he could not be here, and he apologises for that. He very much wanted to answer this debate, and I know that the Department, at his request, asked whether it could be rescheduled so that he could answer it himself. He was told that that was not possible. The only person who could withdraw today’s debate was the right hon. Member for Oldham West and Royton, but he did not do so. I understand that had he done so, he would not necessarily have had it rescheduled, so I am here to speak on behalf of my ministerial colleague.

The Minister of State engages widely and continuously with a range of people on the work capability assessment. In the past few months alone, he has met people from a range of charities, including the National Autistic Society, Mencap, Mind, the Mental Health Foundation, the Scottish Association for Mental Health, Citizens Advice, Scope and many others. As I said, he was in Scotland earlier today meeting people from the Work programme. He has also met people from a range of medical organisations, including the Royal College of Psychiatrists and the British Medical Association, and the president of the Royal College of Radiologists.

All Ministers regularly correspond with fellow MPs about the work capability assessment and we have recently written to all MPs on this matter. I can confirm that the Minister of State has had extensive correspondence with the hon. Member for Rutherglen and Hamilton West (Tom Greatrex), one of the attendees at the proposed meeting. The Minister of State has responded to almost 100 parliamentary questions from the hon. Gentleman, many on the work capability assessment or Atos, over the past six months alone. We are grateful for the hon. Gentleman’s interest and that of others, and we are keen to maintain a constructive dialogue about how we might further improve the WCA. Many meetings with stakeholder organisations or individuals can be challenging; the WCA elicits strong views and is not always fully understood. On occasion mistakes have been made, but we are always open to constructive stakeholder engagement. Since taking on his role, the Minister of State has engaged with organisations that have been critical of the Department and has done so even if they have intervened in judicial reviews against the Department—he has still had those meetings.

[Mr Meacher]

I have listened to all that the Minister says and I accept it, but the key point in this debate is: why is the Minister of State not prepared to see Spartacus? Spartacus is, by any standards, a leading organisation of sick and disabled people which is supported by thousands. Why is he prepared to see all the other organisations but not Spartacus?

[Esther McVey]

I will address that point later in this debate. What is key, and what the Minister of State felt was key, is a constructive dialogue. He has consistently said several things about the WCA since taking up his role. It has to be made clear—one would not necessarily take this from today’s debate—that he inherited the WCA from the previous Labour Government. We would not necessarily know that from listening to this debate. We have been committed to improving it. We want changes to happen, wherever possible, in collaboration with the people who know most about it and who are affected by it. The Minister of State made those points in the debate on 17 January, but it is worth reiterating them today. They are the core principles that drive much of the Department’s work on the WCA and will remain so. Since taking office we have made the WCA more sensitive and less mechanistic, successfully implementing a number of challenging reforms to it.

The independent reviews of the WCA are obviously one of our key drivers for positive change. Professor Harrington has had extensive interaction with a wide variety of stakeholders, including individuals, lobby organisations, MPs across all parties, and the staff in the Department for Work and Pensions and Atos who are affected by the changes resulting from his work. Professor Harrington listened to all of the concerns raised and made recommendations based on the evidence provided. His interpretation was that mental health conditions are difficult to assess and he recommended the positioning of mental function champions within Atos. We have listened and a network of champions is now in place to provide advice and support to other health care professionals. He also recommended that we put decision makers back at the heart of the system and ensure they are empowered to make independent and considered decisions, which we have done.

Professor Harrington spotted a gap in our relationships with clinical experts—

[John McDonnell]

rose—

[Esther McVey]

I will give way once I have finished this point, so that I can get the point across.

Professor Harrington spotted a gap in our relationships with clinical experts and concluded we were not consulting them enough on the guidance and training materials used by Atos health care professionals. We have responded by putting a process in place to engage clinical expertise. That is still in its early days but we are determined to make it work. I could go on, but I will give way to the hon. Gentleman.

[John McDonnell]

Will the Minister not just answer the question? Why not this group? What is wrong with this group? Why does the Minister of State discriminate specifically against this group?

[Esther McVey]

I appreciate that the hon. Gentleman is keen to get his point on the record and, as I said, I was coming to that. The key reason I was mentioning constructive dialogue was that I was setting the question in the context of all the people the Minister of State has met, regularly meets and will continue to meet. We are determined to carry on that engagement.

As the point has been raised and as I believe that both the right hon. Member for Oldham West and Royton and the hon. Member for Hayes and Harlington (John McDonnell) voted for the work capability assessment and were in the party whose Government created the work capability assessment, let me say that it is this Government who are picking up the pieces, holding reviews and making it a far more workable benefit. That point has not been raised at all today.

The right hon. Gentleman talked about the letter and the correspondence. The letter was replied to within the 20 working days set out by Cabinet Office protocol. That is what I have been told today. It is clear that constructive—

[Mr Meacher]

I realise that the Under-Secretary has been brought in at the last minute, but that is not correct. My letter was dated 31 January and the letter from the Minister of State is dated 5 March, but I am not bothered about the technicalities of keeping to civil service rules about replies to letters. I want to know why Spartacus has been excluded when all the other organisations she has mentioned are being included. She keeps talking about constructive engagement, so why not engage with probably the most effective organisation of all?

[Esther McVey]

I will get to that. I have just had it confirmed that the letter was received on 5 February and the reply was set out on the date I mentioned.

[John McDonnell]

Just answer the question, for goodness’ sake.

[Esther McVey]

Actually, I was mentioning the constructive dialogue and what was important in the context of why my hon. Friend the Minister of State felt unable to meet that group. I understand that his diary was under immense pressure, but he had rescheduled things and was going to have a meeting, but he did not necessarily feel that the dialogue would be constructive because of the words used by Spartacus in this regard:

“The WCA is a statement of political desperation. The process is reminiscent of the medical tribunals that returned shell shocked and badly wounded soldiers to duty in the first world war or the ‘KV-machine’, the medical commission the Nazis used in the second world war to play down wounds so that soldiers could be reclassified ‘fit for the Eastern front’.”

Because of that wording, my hon. Friend felt that there would not be a constructive dialogue. What he was seeking from the many other people whom he had met was not just criticism—one has to take criticism on the chin—but a constructive dialogue to establish what those groups thought could be done better and how we could adjust the assessment. None of that had ever been forthcoming, for which reason—

[Mr Meacher]

rose—

[Esther McVey]

Please allow me to finish the sentence—for which reason he had not thus far had the meeting. However, if there were to be constructive dialogue and positive outcomes from the meeting, I am sure my hon. Friend would meet the group, but given the tone of the remarks that I quoted, he did not think that that would be the best way forward.

[Mr Meacher]

We have finally got to the explanation. I could have been given this a lot earlier. The Spartacus report is about 100 pages long—perhaps slightly under 100 pages. The quote that the hon. Lady has given was one sentence in it. I agree that it is strong language; it is the language of exasperation, hurt and anger, but the idea that the Minister should refuse to see a delegation simply because of the use of such language is absurd. Politicians are a bit tougher than that. If he disagrees with it, he can speak his own mind to members of the delegation directly. They have engaged constructively and they expect the Minister to respond.

[Esther McVey]

I hoped the right hon. Gentleman would reject and condemn such language so that the group can start on a clearer, more open way forward and have a discussion in a positive light with, as I said, constructive dialogue. That would be a positive place to start.

Those comments are at odds with what Professor Harrington himself has stated. He has said that, although there is more to do, the work capability assessment is the right concept and the Department can be proud of what it has achieved so far in improving the assessment. Our response to the latest independent review made it clear that we agree with his views and that we are committed to continue to improve the assessment.

[John McDonnell]

Will the Minister give way?

[Esther McVey]

All of us can see that that is a positive statement on which to move forward.

[John McDonnell]

Will the Minister give way on that point?

[Esther McVey]

I will not give way on that point. We have implemented those recommendations. [Interruption.] We took on a very poorly designed assessment from the Labour Government and we have done significant work to get it right.

Furthermore, although the Spartacus report on the work capability assessment—the so-called people’s review—reflects what are clearly strongly held views, it is a collection of anecdotal accounts. It fails to recognise the improvements made to the WCA since 2010—[Interruption.]

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. Mr McDonnell, I know you are frustrated but you must not behave in this manner. Please allow the Minister to finish her remarks.

[John McDonnell]

On a point of order, Mr Deputy Speaker. I apologise to you for intervening in that way, but you can understand the frustration. I have never heard that sort of feeble excuse for a Minister not willing to meet people with disabilities. I think it is outrageous. I apologise for the interruption.

[Mr Deputy Speaker]

I think the House accepts your apology and hopes that the Minister will be allowed to finish her remarks in silence.

[Esther McVey]

I think that we all suffer frustration; I do because I inherited something that was clearly unworkable and that we have had to spend more than two years trying to get right. We will continue trying to get it right. That is what we are doing and I ask the hon. Member for Hayes and Harlington to concentrate on that.

Finally, we have also invited the right hon. Member for Oldham West and Royton to have a constructive talk with Atos to look at what we could do. I believe that he declined an invitation to discuss the changes that would improve the position. He dismissed the Atos invitation as something that would not achieve anything and he condemned the work capability assessment and Atos. I believe that we all have something to learn from this and that we must all work together constructively.

[Mr Meacher]

I refused that offer because the descriptors, the regulations and the guidance had been passed down to Atos Healthcare, as the agents of the Government, from the Department for Work and Pensions. It is the Department that is responsible, not Atos Healthcare.

[Esther McVey]

Then I would say that there is much for us all to learn, whether that means the right hon. Gentleman agreeing to meet Atos or the Department agreeing to meet Spartacus, but I conclude that the approach must be constructive, because I believe, as we all do, that we want to get this right for the most vulnerable people in society.

Question put and agreed to.

17:30

House adjourned.