House of Commons
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Oral Answers to Questions
(14 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Tony Lloyd (Manchester Central) (Lab)
1. What assessment he has made of the effect on economic growth of the programme of expenditure reductions announced on 24 May 2010.
The Chancellor of the Exchequer (Mr George Osborne)
The Treasury’s assessment is that the effect will be positive. The in-year reductions in spending are part of the Government’s efforts to bring down the budget deficit, the level of which threatens the recovery. This weekend the G20 stated:
“Those countries with serious fiscal challenges need to accelerate the pace of consolidation. We welcome the recent announcements by some countries”—
including Britain—
“to reduce their deficits in 2010”.
Tony Lloyd
I welcome the Chancellor to his place, but will he have the candour to admit that his strategy is very risky, because it risks putting this country back into a double-dip recession? In any case there will be losers, so will he say who they will be?
Mr Osborne
Let us be clear about who the losers would be if we did not deal with this record budget deficit. The whole country would lose out, because there would be higher interest rates, more businesses would go bust and international investor confidence would be lost. The hon. Gentleman needs to examine what is happening in the rest of the world, and realise that because Britain has the largest budget deficit of any advanced economy, we have to get on and deal with it.
Michael Fallon (Sevenoaks) (Con)
I welcome the Chancellor to his position. Will he give an absolute assurance that the coming Budget, and future Budgets, will always be presented first to Parliament, and that they will not have to be pre-notified to, or approved by, Brussels?
Mr Osborne
My hon. Friend has my absolute assurance that I would not sign up to that. Indeed, I have made that position clear to ECOFIN, and my hon. Friend the Financial Secretary to the Treasury, who is taking my place at today’s ECOFIN meeting, has also done so. It is absolutely certain that future Budgets will be presented first to the House of Commons.
Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)
I, too, welcome the Chancellor to his first Treasury questions. I know that he prefers the safety of the Treasury courtyard, but I am sure that the House will be on its best behaviour with him this afternoon. Since the 1970s, almost no country has cut its deficit significantly without increasing inequality. Will he make it a central goal of his deficit reduction plan to ensure that inequality does not rise?
Mr Osborne
I thank the right hon. Gentleman for his welcome. He is Labour’s “man of letters”, and it is good to see him still on the Front Bench. The point that I make to him is that Labour had 13 years in government, and inequality increased during its time in office. What we will do is deal with the very large budget deficit bequeathed to us by him and his colleagues in a way that is fair and reasonable, and protects people across the country.
Mr Andrew Tyrie (Chichester) (Con)
It is clear that in the past few days a new system of public expenditure control has been put in place. What will the Chancellor do to ensure that Parliament is fully informed about the new system? Will he publish a full explanation of exactly how it works?
Mr Osborne
I think that we have the two candidates for the chairmanship of the Treasury Committee here today. [Interruption.] I do have a vote, but I am not going to exercise it on that matter. The point that I should make to my hon. Friend—I shall speak about this a bit more in our debate on the Queen’s Speech later—is that we are publishing today details of the framework that we will adopt in conducting the spending review. I will say more about that at the time of the Budget—and I will, of course, answer questions about it in detail before the Treasury Committee, whoever is in the chair. Parliament will also have a number of opportunities to discuss it, and when the spending review is finally produced in the autumn it will, of course, be presented to this House. I want all Members of this House, from all parts of it, to engage in the big national challenge of resolving how we get this country to live within its means.
John Robertson (Glasgow North West) (Lab)
2. If he will assess the merits of increasing the level of financial assistance to pensioners through the tax system.
The Economic Secretary to the Treasury (Justine Greening)
This Government are committed to supporting pensioners to ensure that they can live with the respect and dignity they deserve. We have already said that we will restore the earnings link, protect key pensioner benefits and ensure that the retirement age can rise if pensioners want to continue working in order to support themselves. We think that, despite the fiscal deficit left to us by the former Government, that is the fairest way to proceed.
John Robertson
I thank the hon. Lady, and welcome her to her position—but I am somewhat disappointed in her answer, because she has not identified exactly how she will support our elderly people at a time when cuts will be made all over the country and will affect everyone, including pensioners. What priority will she give to pensioners? What kind of increased payments will be made to cover some of the cuts, which will hit pensioners harder than anyone else?
Justine Greening
The hon. Gentleman seems to have missed the fact that this Government are having to tidy up a huge financial mess left to us by the previous one. We have made it clear that, despite that mess, we want, first, to protect key pensioner benefits—the benefits that Labour Members claimed we would take away—such as free bus passes, free prescriptions, free eye tests and the winter fuel allowance. That is a range of benefits that the Labour party said we would remove, but we are going to keep them. I can assure him on that, so he can go back to the pensioners in his constituency and explain why he was telling them mistruths during the last election.
Neil Carmichael (Stroud) (Con)
3. What steps his Department is taking to reduce the level of the budget deficit.
Nadhim Zahawi (Stratford-on-Avon) (Con)
6. What recent representations he has received on the level of the budget deficit.
Karen Lumley (Redditch) (Con)
12. What steps his Department is taking to reduce the level of the budget deficit.
Mr Kwasi Kwarteng (Spelthorne) (Con)
13. What steps his Department is taking to reduce the level of the budget deficit.
Chris Skidmore (Kingswood) (Con)
14. What steps his Department is taking to reduce the level of the budget deficit.
The Chancellor of the Exchequer (Mr George Osborne)
In the past month, we have created an independent Office for Budget Responsibility to bring credibility to the Government’s forecasts, undertaken and completed in-year budget reductions of £6.2 billion and, today, laid before the House the process for the spending review that will take place this summer. In two weeks’ time, the Budget will set out a credible plan to accelerate the reduction of the budget deficit so that investors are reassured, interest rates can be kept lower for longer, and the recovery can be put on a stable footing.
Neil Carmichael
I note those excellent plans. Will the Chancellor of the Exchequer tell the House how many conversations he has had with colleague Ministers of Finance, and how much support and encouragement he has had from them to deal with our deficit?
Mr Osborne
I attended the G20 in South Korea this weekend. The G20 communiqué calls on countries with significant fiscal challenges—we have the highest budget deficit in the G20, so that includes us—to accelerate the reduction in the structural deficit. It has also been part of the European Union discussions that I have taken part in, that countries with significant budget deficits need to get on and reduce them. I am afraid that the Labour party, as it continues to oppose what we are doing, finds itself outside the international mainstream.
Nadhim Zahawi
Has my right hon. Friend the Chancellor read yesterday’s International Monetary Fund report, which warns that the current crisis management was no alternative to fundamental economic restructuring? Does he agree that the previous Government either naively or deliberately chose to mislead the nation?
Mr Osborne
My hon. Friend is absolutely right. I have, of course, seen the IMF report, and the lesson we learned is that you have to fix the roof when the sun is shining. That is what the previous Government completely failed to do. They had 13 years to fix the national finances, and now it is up to us to clear up the mess that they left behind.
Karen Lumley
Has the Chancellor received any apologies from the previous Government for the mismanagement of the economy over the past 13 years?
Mr Osborne
No, but we did receive a letter from the former Chief Secretary to the Treasury, the right hon. Member for Birmingham, Hodge Hill (Mr Byrne), apologising for the fact that there was no money left. We will discuss this issue in the debate on the Queen’s Speech. I note that the Labour party has tabled a motion, which it is asking us all to vote for, noting
“the need for a clear plan to bring down the deficit”.
I look forward to hearing that clear plan in the shadow Chancellor’s speech.
Mr Kwarteng
Has the Chancellor received any more correspondence from the former Chief Secretary?
Mr Osborne
No, sadly I have not, but I discovered that he had a large bust of Oliver Cromwell sitting behind his desk, and that when the Irish peace negotiations were being conducted they had to be held in another room.
Chris Skidmore
In my constituency, the number of people claiming jobseeker’s allowance has increased by 147% in the past five years. Does the Chancellor agree that unemployed people in Kingswood would be best served by decisive action to tackle Labour’s legacy of debt now?
Mr Osborne
I agree absolutely with my hon. Friend. Of course, we inherited rising unemployment from the previous Labour Government and it is a fact that all Labour Governments have left office with unemployment rising—[Hon. Members: “It’s falling.”] Opposition Members say that, but they are not looking at the unemployment figures, which show that unemployment is rising, that we have the highest youth unemployment in Europe, and that a record number of children are growing up in workless households. That is what we have inherited from the Government who had 13 years to sort out these problems. We will sort this out, and give people real life chances.
Natascha Engel (North East Derbyshire) (Lab)
I welcome the right hon. Gentleman to his new position. Has he calculated what his announcement of a £125 million reduction in the police grant means, in terms of fewer police officers and fewer special constables in Derbyshire?
Mr Osborne
All public services have to find efficiencies, and that is true of the police service, as it is of every other service. I have to say to the hon. Lady, and all Opposition Members, that if they are going to play a serious part in the discussion about how to reduce Britain’s record budget deficit, they need to come up with their own proposals instead of attacking every proposal put forward by the Government.
Mr David Anderson (Blaydon) (Lab)
When the most recent Chief Secretary to the Treasury, the right hon. Member for Yeovil (Mr Laws), made his debut two weeks ago—which became, of course, his swansong—my hon. Friend the Member for Manchester Central (Tony Lloyd) asked him whether he could give any idea how many jobs would be lost as a result of the deficit reduction package. His answer was that it is not right to pluck figures out of the air. Can we have some more concrete evidence from the Chancellor?
Mr Osborne
Our plan is to increase employment in this country by putting the public finances on a sound footing. It is about time the Labour party understood that it left behind the largest budget deficit in the EU and the G20. All over the world, people are looking at sovereign credit risks. This Government are determined to do something about the problem before people start looking at Britain.
Mark Durkan (Foyle) (SDLP)
The Chancellor could take the opportunity today to spell out to us how he and his coalition colleagues hope to popularise their cuts agenda. We seem to be being told that the public will be consulted on which spending should continue and which cuts might be made. How will that “axe factor” approach to government play out?
Mr Osborne
I congratulate the hon. Gentleman on the pun—but this is a very serious national challenge, which whoever won the election was going to have to face. The 11% budget deficit will not disappear. A very large part of it is structural, and so will not automatically reduce as growth returns to the economy. We want to make sure that all political parties, including his, and the brightest and best brains across Whitehall and the public sector, as well as voluntary groups, think-tanks, trade unions and members of the public, are all engaged in the debate and discussion about how, collectively, we deal with the problem. After all, it is our collective national debt.
Mr Alistair Darling (Edinburgh South West) (Lab)
First, may I welcome the Chancellor and his team to the Front Bench? I hope that he will join me in sending our good wishes to my right hon. Friend the Member for East Ham (Mr Timms), who remains a member of the Opposition Treasury team and who I am glad to say was in very good heart when I saw him a couple of weeks ago. He is looking forward to returning to the House at an early opportunity.
Unemployment is high today, but it is half what it was in the 1980s. Repossessions in the past couple of years are half what they were in the 1990s. Our economy is growing and our borrowing is coming down. Does the Chancellor accept that all of that is because we, in common with other countries—yes, as part of an international consensus—were prepared to take action to save our economy as we went into recession? Every one of those measures was opposed by him when he was shadow Chancellor.
Mr Osborne
It sounds as if we are rerunning the general election campaign. First, may I pay tribute to the work that the right hon. Gentleman did over three years, I think it was, as Chancellor of the Exchequer? He did the job in very difficult times, with the best of motives. Although we did not always agree with each other, as he has just made clear, he was always very courteous to me. I also thank him for the fact that I inherit from him a far more functional and less chaotic Treasury than the one that he inherited from his predecessor.
I make the point to the shadow Chancellor that the situation that we inherited from his Government—I do not say that he is solely to blame for this—is an extremely critical one. We have a very large budget deficit at a time when, as I have said, countries around the world are having to look at sovereign credit risks. We are having to deal with that, and with rising unemployment and growing inequality in our country. Regional disparities are growing as well, and we have to deal with those problems.
The right hon. Gentleman talks about the international consensus. He surely must have noted how, in the month since the general election, the EU, G20, the IMF, the OECD, and of course our own Governor of the Bank of England, have all warned us about the consequences of not dealing early with our budget deficit, and not accelerating the reduction in the budget deficit that he proposed in his March Budget.
Mr Darling
I agree that there are many issues that need to be resolved, in this country and others. No doubt we will return to them when the debate on the Gracious Speech resumes.
I want to ask a specific question about the Office for Budget Responsibility that the Chancellor is about to set up. When that body makes its recommendations, will he undertake that it will publish all the underlying assumptions that lead to them? Will he ensure that its deliberations, rather like those of the Monetary Policy Committee, are open and available for all to see?
Mr Osborne
I should have joined the right hon. Gentleman in wishing the right hon. Member for East Ham (Mr Timms) a speedy recovery. I understand that he has now sworn in, which is fantastic for everyone here concerned. The fact that he was assaulted in his constituency surgery doing his job as a constituency MP makes the incident all the more chilling, and we all wish him very well.
Let me deal specifically with the right hon. Gentleman’s question. We have set up the Office for Budget Responsibility on a non-statutory basis because we need to pass legislation to make it statutory. The model that we have followed is the approach taken by the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) when he set up the Monetary Policy Committee. Sir Alan Budd will be available to answer questions from the Treasury Committee on exactly the kind of points that the right hon. Gentleman raises—such as the underlying assumptions. It is ultimately up to him how he publishes his information, and I do not want to prejudge that, but the purpose of the exercise is for people to have confidence in official figures and growth forecasts, and confidence means transparency. I am sure that the spirit of what the right hon. Gentleman says will be taken on board by Sir Alan.
Richard Harrington (Watford) (Con)
4. If he will estimate Government expenditure on external consultants in (a) 1997 and (b) the last year for which figures are available.
The Chief Secretary to the Treasury (Danny Alexander)
Information on 1997 central Government expenditure on external consultancy is not held centrally, but records for 2007-08—the first year for which figures are available—show that spending on external consultants was £773 million in central Departments. In 2008-09 that rose to £1.1 billion for central Departments, or £1.57 billion when the whole of central Government is taken into account. Future expenditure will fall significantly as a result of the freeze on consultancy spending recently announced by the Government.
Richard Harrington
I thank my right hon. Friend the Chief Secretary for that answer, and welcome him into the job. He should note that the figures show gross profligacy and a waste of taxpayers’ money that affects everybody in the House, all my constituents in Watford, and everybody in this country. I should very much like the Chief Secretary to assure us that that disgraceful waste of money will not happen again.
Danny Alexander
My hon. Friend is right about waste and inefficiency, and consultancy is not the only example. I can give him two or three more. The Department for Business, Innovation and Skills spent £12,000 on branded golf balls over three years. The Ministry of Defence spent £232,000 on eight paintings in a single year. The Department for Communities and Local Government has spent £6,000 on deluxe espresso coffee machines for nine new, but empty, regional fire control rooms. He can rest assured that the actions that we take will ensure that that kind of waste and inefficiency will never happen again.
Mr Speaker
Order. I know that the Chief Secretary will want to stick to the narrow subject of external consultants.
Mr Tom Watson (West Bromwich East) (Lab)
Is Andy Coulson a consultant? How much are you paying him?
Danny Alexander
He works at No. 10 Downing street—[Interruption]—and I will give the hon. Gentleman a full response if he wants one.
Peter Bottomley (Worthing West) (Con)
5. What steps his Department is taking to increase economic growth.
The Exchequer Secretary to the Treasury (Mr David Gauke)
The Government are taking action to support enterprise and create a fair, competitive and efficient tax system to deliver the private sector-led recovery that will be the foundation of future growth. Fundamental to this strategy will be tackling the budget deficit and providing a stable macro-economic environment that will underpin private sector investment and growth. Further details of the action that the Government will take to secure future growth will be included in the emergency Budget on 22 June.
Peter Bottomley
We agree that investment, enterprise and modest tax rates will help the economy grow out of the inherited mess. In addition to the academic work of Arthur Laffer and Sir James Mirrlees, will my hon. Friend hold in mind the situation of an elderly lone mother who may have put money aside to buy a house, and after decades may wish to sell it, without too high a capital gains tax bill?
Mr Gauke
Obviously, this Government will want to encourage hard work and enterprise, just as the Government in which my hon. Friend served with much distinction in the 1980s did. As for specific tax measures, I am sure that my hon. Friend will understand that with only a fortnight until the Budget, I do not intend to make any specific comments. None the less, I am grateful for his remarks.
Mr Gareth Thomas (Harrow West) (Lab/Co-op)
I congratulate the hon. Gentleman on his elevation to his post. I also take the opportunity to thank the Chancellor of the Exchequer for taking time out during the general election to come and support my re-election in Harrow West. The Opposition recognise that the new politics is not designed to help Labour Members, but I am grateful for the little bit of Tory love that came my way.
Can the hon. Gentleman tell the House who in the Government will have the final say on whether and which regional development agencies will survive? Will it be the Business Secretary—once a supporter of RDAs—or will it be the Chancellor? No one expects it to be the Chief Secretary. Is not the real truth that RDAs such as One NorthEast are playing, and could continue to play, a key role in helping to deliver new jobs in new industries crucial to Britain’s economic future, such as renewable energy and advanced engineering?
Mr Gauke
I thank the hon. Gentleman for his kind words. I should congratulate him on being re-elected on this occasion, but I also note that my hon. Friend the Member for Harrow East (Bob Blackman) is here, which is a bit of a triumph for us. On the hon. Gentleman’s specific points, the decision will be made collectively. The Government will work in a cohesive manner in making those decisions.
Margot James (Stourbridge) (Con)
When I was in business, it was the oldest trick in the book for managers to come in with hopelessly optimistic growth estimates. Does the Minister think that that was endemic in the last Administration, and has he greater confidence, now that we have the impending Office for Budget Responsibility, that it will not be the case with our Administration so that, for the first time in many years, we will have realistic growth estimates?
Derek Twigg (Halton) (Lab)
Transport infrastructure is of course important for economic growth, and as the hon. Gentleman’s right hon. Friend the Chancellor will know, as a Cheshire MP, there is a very important project, the Mersey Gateway project, which is crucial to the economic regeneration of Cheshire and Merseyside. Will that be excluded from the proposed cuts that his Government are making?
Dr Julian Lewis (New Forest East) (Con)
7. What steps his Department is taking in respect of payment of compensation to Equitable Life policyholders.
John Howell (Henley) (Con)
9. What steps his Department is taking in respect of payment of compensation to Equitable Life policyholders.
Neil Parish (Tiverton and Honiton) (Con)
15. What steps his Department is taking in respect of payment of compensation to Equitable Life policyholders.
The Exchequer Secretary to the Treasury (Mr David Gauke)
The coalition Government have pledged to make fair and transparent payment to Equitable Life policyholders, through an independently designed payment scheme, for their relative loss as a result of regulatory failure. The Queen’s Speech announced the Government’s intention to introduce a Bill in the first Session of Parliament to enable payments to be made to Equitable Life policyholders. On the same day, the Government also announced that an independent commission would be established to design the payment scheme. These steps are a strong sign of the Government’s commitment to deliver on their pledge.
Dr Lewis
More than 60 of my constituents in New Forest East, and indeed even one of my own relatives, will be delighted to know that the Government intend to implement the recommendations of the ombudsman. Can he tell me when this is going to happen—and can he guarantee that the Independent Parliamentary Standards Authority will not be put in charge of making the payments?
Mr Gauke
I thank my hon. Friend for his question. The intention is that Sir John Chadwick’s report will reach its conclusion in mid-July; at the same time the independent commission will be established. We are making progress in this area—in contrast, I am afraid, to the dither and delay of our predecessors.
John Howell
I am grateful to my hon. Friend for his previous answer, but he will be aware that many of us have had to put in place our own means of keeping constituents who have got caught up in Equitable informed of what is happening, so poor has been the Government communication programme. So will he say a little more about his plans to keep that group of people informed as the payment scheme goes through?
Mr Gauke
I suspect that one of the reasons why the previous Government were so poor in communicating progress was that there was very little progress to communicate. As I mentioned earlier, we are keen to ensure that there will be progress, that we have the independent commission in July, and that we will have the conclusions of Sir John Chadwick’s report; we intend to make progress there. I hope that we will have more information to give my hon. Friend in mid-July. This is a matter that has caused enormous anxiety for many people, and it is right that we keep people up to date with exactly what progress we are making.
Neil Parish
I would like to follow up those questions on Equitable Life. Over 1 million policyholders were affected by the fact that the previous Government did not accept the ombudsman’s proposal that they be compensated. I am particularly worried that many people have died during the whole process; the previous Government was rather cynical in that respect. May I be assured that, through this process, we will ensure that people are compensated quickly? That needs to be done.
Mr Gauke
We are keen for the independent commission to design the scheme, but one of the points that we have made clear is that the dependants of deceased policyholders should be included in the scheme to address that point. Clearly, however, my hon. Friend highlights the need to move quickly, after 10 years of inadequate progress.
Michael Connarty (Linlithgow and East Falkirk) (Lab)
On the question of Equitable Life, there can be few constituencies that do not contain people who are waiting for payment or people who have died while waiting for payment. Is it not shocking that one of the main perpetrators of the Equitable Life fraud—for that is what it was—will, after last weekend, be able to take up a senior position in a financial institution? Can the Government re-examine what happened in that process, so that these people are not allowed to have senior financial positions in future?
Mr Lindsay Hoyle (Chorley) (Lab)
First, would the Minister care to share with the House the date that the cheques will arrive through the doors of those who are still waiting for payment? That is the key. My second question is, as people have, tragically, died while the process has gone on and on, will there be compensation for the families that have missed out as well?
Mr Speaker
Order. To ask a second question was very cheeky on the part of an experienced Member, but I know that the Minister will not be tempted to follow suit.
Mr Gauke
I fully understand the hon. Gentleman’s concern about delays. He knows as well as I do where a lot of the blame for that lies. I made the point earlier that dependants of deceased policyholders should be included in the scheme. As for a specific date, the only thing I can say is that we are clearly making much more progress than the previous Government did.
Dr William McCrea (South Antrim) (DUP)
Bearing in mind the fact that many of the policyholders are getting older—[Interruption]—surely it is vital that we get money into their hands as quickly as possible.
Mr Gauke
I do not want to be pedantic, but all of them are getting older. The hon. Gentleman rightly says that there is a need to move quickly. I think that we all feel that. I am pleased that the Government have already announced in the Queen’s Speech that there will be a Bill on this subject. We have already announced a date for the establishment of the scheme. We are making progress. That is a very welcome change from what we have seen in the previous 10 years.
Ann McKechin (Glasgow North) (Lab)
8. What recent discussions he has had with the Secretary of State for Work and Pensions on the future of Government targets to eradicate child poverty; and if he will make a statement.
The Economic Secretary to the Treasury (Justine Greening)
The coalition Government have announced that they want to see an end to child poverty in the UK by 2020. We now have 1.9 million children living in workless households in the UK. The OECD says that we have the highest proportion of children living in workless households of any OECD country—nearly 18%. That is one of the reasons why my right hon. Friends the Chancellor and the Secretary of State for Work and Pensions have been discussing that matter. One of the early outcomes of those discussions, as I am sure Members will be aware, is the announcement of the review by the right hon. Member for Birkenhead (Mr Field) of child poverty and life chances. We think that that will be an informative way of engaging people in the debate, and of coming up with some policy options, which we can then feed into our consideration of child poverty.
Ann McKechin
The hon. Lady will be aware that disabled children are much more likely to live in poverty and have much reduced life chances. Given that, and given her Government’s decision to abolish the child trust fund, can she tell me how many disability organisations they consulted prior to that decision, and what assessment they have made of the impact that that decision will have on thousands of disabled children throughout the country?
Justine Greening
We are providing support for disabled children and their families. In fact, regarding the child trust fund, part of the package was the funding of 8,000 extra week-long breaks for the parents of disabled children—breaks that we know are well valued.
Mr Julian Brazier (Canterbury) (Con)
Does my hon. Friend agree that the main reason for the scale of child poverty in this country is that we have inherited a benefit system that punishes thrift, work and traditional families? If the right hon. Member for Birkenhead (Mr Field) does indeed think the unthinkable, will we, unlike the previous Government, support him?
Justine Greening
Unlike the previous Government, we all recognise that child poverty is about much more than just money. If we are to be successful in improving children’s life chances, wherever they start their lives in this country, we need to look at a little bit more than the child tax credit; we need to look far more broadly. We need to look at issues around health and education. That is one of the matters that we will consider over the coming months. It is vital to realise that if we do not tackle the root causes of child poverty, we are very unlikely to tackle the symptoms. Of course, the ultimate way of tackling child poverty is sorting out our economy and getting people back into jobs, so that children are not in workless households in the first place.
Mr David Hanson (Delyn) (Lab)
Under the previous Conservative Government, child poverty doubled; thanks to the efforts of the Labour Government, with the minimum wage, working families tax credit and child benefit rises, 500,000 children were taken out of poverty. Today, will the Minister, whom I welcome to her new position, not just commit to tackling the targets that the Labour Government set, but support the means—the minimum wage, working families tax credit, and child benefit?
Justine Greening
The previous Government managed to raise a number of children who were just below the poverty line just above it, without tackling the fundamental causes of why they were in that position in the first place. What is particularly depressing is that it is as if nothing has been learned from the experiment of the past 13 years. Clearly, we need to look more broadly, rather than just at giving households in poverty money. We need to help them to get back into work. It has to be wrong that in this country, the marginal tax rates for those in low-income families who are going back to work can be in the 90th percentile range. We would never dream of taxing people who are rich that much, but we tax people who are poor at those rates.
Charlie Elphicke (Dover) (Con)
10. What recent assessment he has made of the level of growth in the UK economy compared with those of other OECD countries.
The Chief Secretary to the Treasury (Danny Alexander)
The independent Office for Budget Responsibility will publish forecasts for growth in the UK ahead of the emergency Budget.
Charlie Elphicke
There is too much deprivation in Dover and Deal. We need more jobs and money locally. What action will the Government take to increase the trend growth rate of this nation, so that the people of Dover and Deal get more jobs and money, and Britain does better?
Danny Alexander
The best thing that we can do to increase growth and create jobs in this country is tackle the enormous budget deficit that we inherited from the previous Government. By taking firm action to reduce the deficit, we can restore confidence in the economy and help the private sector to create jobs. That is what we need to do.
Angela Smith (Penistone and Stocksbridge) (Lab)
The £80 million loan to Sheffield Forgemasters was an investment designed to encourage the growth of the advanced manufacturing sector of the economy, not just across south Yorkshire but across the UK as a whole. Will the Government bear in mind that investment, and the long-term context, when they make a decision on the future of that loan?
Danny Alexander
I am grateful to the hon. Lady for making that point, and I have certainly heard what she said. Obviously, we are reassessing carefully projects approved by the previous Government between 1 January and the election, and we will make an announcement in the near future.
Mr Mark Williams (Ceredigion) (LD)
11. What his policy is on the mechanism for the provision of funding from the Exchequer to the devolved Administrations; and if he will make a statement.
The Chief Secretary to the Treasury (Danny Alexander)
The Government recognise the concerns expressed by the Holtham commission about the system of devolution funding, but as we made clear in the coalition programme for government, the first priority has to be reducing the deficit.
Mr Williams
I thank my right hon. Friend for that answer, and for the acknowledgement in the coalition agreement of the work of the Holtham commission. Its message was that there was historical underfunding of Wales to the tune of £300 million a year; that was backed up by Lord Barnett himself and a Lords Committee. Does my right hon. Friend accept the report’s conclusion that Wales has, historically, been underfunded? We acknowledge that cuts will be borne right across the UK, and across all its regions and nations, but will he use this opportunity to confirm the Government’s commitment to fair funding across the country?
Danny Alexander
In the coalition agreement, we say that we recognise the concerns raised by the Holtham commission, but the priority must be to reduce the deficit. We also said that once the forthcoming referendum has taken place, there will be a Calman commission-like process. The Calman commission looked at greater financial accountability for the Scottish Parliament, and a similar process for Wales might help to address some of my hon. Friend’s concerns.
Anas Sarwar (Glasgow Central) (Lab)
Will the Chief Secretary please tell us why his party campaigned throughout the election against immediate spending cuts, but is now, in return for jobs in the Cabinet, willing to risk tens of thousands of jobs across the country?
Danny Alexander
The hon. Gentleman just needs to look around the world to see that the argument for rapid fiscal consolidation is becoming stronger by the day. He should look at the G20 and the independent assessments. Clearly, making the sort of decisions that we are making now—the £6 billion exercise and the decisions that will no doubt be announced in the Budget—is absolutely essential to create a responsible basis for the public finances and return the country to the right economic track.
Mr Adrian Sanders (Torbay) (LD)
16. What steps his Department is taking to reduce the level of tax avoidance.
The Exchequer Secretary to the Treasury (Mr David Gauke)
Tackling tax avoidance is essential, and we will make every effort to do so. We are committed to preventing avoidance through deterrence, and by ensuring that we have a robust legislative framework. We detect avoidance early using the disclosure of tax avoidance schemes rules and other information. We tackle avoidance quickly where we find it by strengthening legislation or through the operational work of Her Majesty’s Revenue and Customs.
Mr Sanders
Recent research has shown that up to £120 billion a year is lost to tax avoidance. Will the Minister ensure that he looks at the way in which HMRC works, and does better so that people will not have to pay higher taxes and receive poorer services as a consequence?
Mr Gauke
I am grateful to the hon. Gentleman for his question. We would disagree with the number, as the tax gap estimate produced by HMRC is £40 billion. None the less, that is a significant sum, and it is absolutely right that people pay the tax that is due, and HMRC will continue to pursue matters to reduce tax avoidance.
Kate Green (Stretford and Urmston) (Lab)
Is not the general view correct, and the estimated tax gap of £40 billion a significant underestimate? Will the Minister explain how cuts to HMRC staffing and capacity are to be aligned with attempts to close the tax gap?
Simon Kirby (Brighton, Kemptown) (Con)
17. What his policy is on taxation of the bingo industry; and if he will make a statement.
The Economic Secretary to the Treasury (Justine Greening)
We keep all taxes under review. It would not be appropriate to discuss taxation in relation to bingo before the Budget in a couple of weeks, but we are keen to have a dialogue with the industry.
Simon Kirby
Does the Minister agree that sometimes it is possible to increase revenue by reducing taxes?
Justine Greening
I think that my hon. Friend is probably referring to the well-known Laffer curve. I am sure that he is aware, too, that the tax on bingo participation clubs was reduced in the last Budget from 22% to 20%. As I said, I look forward to talking to the industry over the coming months.
Kelvin Hopkins (Luton North) (Lab)
Is it not the case that bingo is taxed more severely than other more dangerous forms of gambling, and that the Government would do well if they at least brought them into line?
Justine Greening
I know that that argument has been made by the industry, and I am aware of its campaign on fair taxation. We want fair taxation. One of the Government’s key priorities is tackling the budget deficit, and ultimately the best way for us to support not just bingo clubs but other companies in Britain employing staff is to get the economy back on its feet, creating jobs so that people have money in their pocket to spend, including in bingo clubs.
Mr Peter Bone (Wellingborough) (Con)
18. What recent representations he has received on the level of the budget deficit.
The Economic Secretary to the Treasury (Justine Greening)
We have received a number of representations on the budget deficit, not least from many other European countries, which are now taking steps, as we are, to reduce their deficit—a point that still seems lost on the Opposition.
Mr Bone
I am grateful to my hon. Friend for answering my question and for her arrival at the Dispatch Box, which is very welcome on our side of the House. Will she take a representation from me on reducing the Budget deficit? Can the emphasis be put on cutting public expenditure, rather than increasing taxes? Does she have any idea of the proportion that will be raised by tax increases and by public expenditure cuts?
Justine Greening
We have said that we want to see the bulk of the deficit reduced by restraining public spending. I know that a number of other countries have taken proportions of roughly 80%:20% on restraining public spending and increasing taxes. We are particularly keen to cut out as much of the waste as possible. As we work our way through the previous Government’s horrific spending plans—not that they had any projections into the future—we will do our best to make sure that we do not just bring down our public spending, but use this opportunity to ensure that it delivers better public services for the public whom it is there to serve.
Mr Clive Betts (Sheffield South East) (Lab)
In The Sun the Deputy Prime Minister wrote about the enticing prospect of progressive cuts. Can the hon. Lady explain what a progressive cut would look like?
Justine Greening
The hon. Gentleman might be better off directing that comment to the Deputy Prime Minister. I did not see it in the paper. We are conscious of the need to make sure that we can protect front-line services that people depend on. We have already debated pensions this morning, for example, and we are doing our best to protect money that supports the most vulnerable in our society.
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)
T1. If he will make a statement on his departmental responsibilities.
The Chancellor of the Exchequer (Mr George Osborne)
The core purpose of the Treasury is to ensure the stability of the economy, promote growth and employment, reform the banking system and manage the public finances so that Britain lives within her means.
Mark Lazarowicz
Whether the amount lost by tax avoidance or tax evasion is £100 billion or £40 billion a year, it is a lot of money which could go a long way to tackling the deficit. Will the Chancellor tell his ministerial colleagues sitting next to him to give a higher priority to tackling tax evasion and tax avoidance so as to make sure that those who are most able to pay the costs of the deficit do so, rather than those who are least able to pay?
Mr Philip Hollobone (Kettering) (Con)
T6. At a time of low investment returns, which mean that many people in the private sector are struggling to fund a pension for their retirement, what steps will be taken to tackle the ballooning public sector pension bill?
Mr Osborne
The Government will establish an independent commission to look at public sector pension provision. We will make an announcement on that in due course.
Mr Graham Allen (Nottingham North) (Lab)
T3. Has the Chancellor yet had a chance to have a one-to-one with the Secretary of State for Work and Pensions to discuss the thing that would most affect the structural nature of the deficit: early intervention with our babies, children and young people to ensure that we do not accumulate massive costs of failure that need to be met much later? If he has not done that, will he undertake to do so, please?
Mr Osborne
I have had several conversations with my right hon. Friend the Secretary of State for Work and Pensions on this issue and on the broader issues of welfare reform. I broadly agree with the point that the hon. Gentleman makes—he made it forcefully in the last Parliament—that support for children in the early years can yield real results later on. We will bear that in mind as we conduct our spending review.
Tom Brake (Carshalton and Wallington) (LD)
T2. While the Chancellor is reviewing the projects agreed by the previous Government since 1 January, may I commend to him the Better Healthcare Closer to Home programme and the plans that it has for St Helier hospital? May it draw it to his attention that the plans were very enthusiastically endorsed by the new Secretary of State for Health when he visited my constituency just a couple of days before the general election?
The Chief Secretary to the Treasury (Danny Alexander)
I am grateful to my hon. Friend for his question and pay tribute to his assiduous campaigning on the issue over many years. He will know that we are carefully reassessing the projects agreed by the previous Government between 1 January and the election, and we will make an announcement shortly. He will also know that it is right that we are making sure that each and every one of the many projects that were announced is affordable and represents value for money.
Kerry McCarthy (Bristol East) (Lab)
T5. I was disappointed to see no mention of the credit union movement in the coalition agreement. Although I admit that I have not yet got my head around what the big society is, I hope that there is a role in there for the credit union movement. When can we expect the Legislative Reform (Industrial And Provident Societies and Credit Unions) Order 2010 to be laid before the House?
The Economic Secretary to the Treasury (Justine Greening)
We do support credit unions. In fact, one of the first things that the new Secretary of State for Wales did on her appointment was to visit her local credit union in Wales. We have said that we want vibrant, sustainable credit unions. We are looking at the legislative reform order to which the hon. Lady referred and I hope that we can come back with some further dates in the next few weeks. As she can imagine, the focus right now has been on the emergency Budget, but I am aware of the order and officials are talking to me about the time lines for it.
Mr Mark Williams (Ceredigion) (LD)
T4. There was great relief in the tourism sector when the furnished holiday lettings rules were scrapped just before the election in the wash-up. What will the Government do to ensure that the rules are EU compliant, but do not disadvantage tourist operatives in the way that it was feared that the old rules would do?
The Exchequer Secretary to the Treasury (Mr David Gauke)
My hon. Friend raises a very good point, and what was proposed on the furnished holiday lettings rule would have caused great difficulties. There is an issue with the EU law, but I can assure him that we are working hard on the matter and we hope to be able to say more in the next few weeks.
Alun Michael (Cardiff South and Penarth) (Lab/Co-op)
T8. The Chancellor will be aware of the public and cross-party support given to the proposal to turn British Waterways into a sort of national trust for the waterways of the UK. That was given official endorsement in the last Budget. Can the Chancellor confirm his intention to pursue this proposal, and perhaps give an idea of the time scale within which it might be brought about?
Mr Osborne
If the right hon. Gentleman will allow me, I will look into the details of the proposal to which he refers and write to him.
Mr Peter Bone (Wellingborough) (Con)
T7. In 2008-09, our contribution to the EU was £2.5 billion. This year it will be £6.4 billion. Why does every budget have to be cut except the EU’s, which can increase by 150%? Is it not a case not of ring-fencing, but of gold-plating?
Mr Osborne
I am sure that my hon. Friend will be glad to know that in my first ECOFIN I proposed to the Council that we freeze the EU budget, and there was support from other countries around the table. [Interruption.] If the hon. Member for Rhondda (Chris Bryant) is supporting an increase in the EU budget, he should tell the House.
Ian Austin (Dudley North) (Lab)
I welcome the Chancellor and his team to their new posts. As part of the consultation on cuts that is being announced today, would he be prepared to visit Dudley, so that we can discuss the importance of maintaining investment in education and training as our No.1 priority, so that we can bring to the area the new industries and jobs on which our future prosperity will depend? While he is there, I can take him to Priory road, and he can see the devastating impact that his decision to cut spending on housing is having on that community.
Mr Osborne
I am always very happy to visit Dudley. I have done so many times in the last three or four months—which was half successful.
We have found additional money to support social housing. We discovered that the housing commitments made by the Labour Government just before the general election were completely unfunded. We have found money to fund additional social housing, which during the past 13 years the previous Government almost completely failed to do.
Bob Russell (Colchester) (LD)
T9. Further to excellent question of the hon. Member for Bristol East (Kerry McCarthy), can the Minister who was briefed to answer the excellent Question 25, in my name, now give a more substantive answer? What will the Government do to support credit unions such as the excellent one in Colchester?
Justine Greening
The best thing that we can do to support credit unions is make sure that they are on a sustainable footing. When I talk to Conservative Members, many of them say that they want to see their credit unions merge. We need to ensure that credit unions can offer a broader range of products to local people, and we need to look at how credit unions operate. Interestingly, although complaints to the financial services ombudsman are broadly increasing, when it comes to credit unions they are falling. The most recently released statistics show that just one in 66,000 complaints related to a credit union. The hon. Gentleman is right to ask how we can support credit unions. The Prime Minister has been supportive of them and we look forward to seeing what more we can do to support them over the coming months.
Mr Dennis Skinner (Bolsover) (Lab)
If everybody has to share the burden of cutting the budget deficit, will the Chancellor start at the very top, and call upon the royal family to tell them that under no circumstances will they get a single penny of the £7 million increase that they are demanding in the civil list?
Mr Osborne
We will be making an announcement on the civil list in due course, but if the hon. Gentleman is looking for cost savings, perhaps early retirement is something that he could consider. [Interruption.]
Mr James Clappison (Hertsmere) (Con)
Does not part of the contribution to the EU budget result from the surrender of the UK rebate in 2005 by the previous Government, which will cost taxpayers in this country up to £9 billion over six years and was given in return for nothing? Should we not add that to the Chief Secretary’s list of waste by the previous Government?
Mr Osborne
My hon. Friend is absolutely right. The former Prime Minister Tony Blair gave away the UK’s budget rebate in return for absolutely nothing. We were promised at the time that it would give us leverage over CAP reform, which never arrived, and I am afraid that that is just one of the many decisions that the previous Government got wrong.
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
Growth throughout the UK economy has often been geographically uneven. Has the Chancellor considered what help a rural fuel derogation might bring to the highlands and, in particular, the islands of Scotland; and can I volunteer my own constituency, Na h-Eileanan an Iar, for any pilot project?
Danny Alexander
The Government are well aware of the benefits that a rural fuel derogation might bring to remote parts of the economy. We are examining that issue, which is contained in the coalition agreement, and we note the hon. Gentleman’s interests from his own constituency.
Robert Halfon (Harlow) (Con)
Under the previous Government, unemployment in Harlow was the highest in west Essex. Do the Government agree that a low-tax, low-debt economy is the best way to bring jobs back to Harlow?
Mr Osborne
May I say how particularly pleased I am to see my hon. Friend in the House? His victory was one that I found particularly satisfying on election night.
My hon. Friend is absolutely right that the ambition of a low-debt, low-tax economy is one to which people who care about the long-term economic future of this country should aspire. The key challenge, of course, is getting there, and that means dealing with the 11% budget deficit.
Geraint Davies (Swansea West) (Lab/Co-op)
The right hon. Gentleman will know that the budget deficit at the time of the Budget was £22 billion less than was predicted four months earlier in the pre-Budget report, showing that the major engine for reducing the deficit is economic growth. Will he give an undertaking that the cuts that he intends to make will not cut the capacity for economic growth in Britain, thereby increasing the deficit?
Mr Osborne
May I congratulate the hon. Gentleman on his return to the House, as we both served on the Public Accounts Committee when I first arrived in the House? I make this point: he makes an original observation that somehow the British budget deficit is low, when, actually, of course, it is an 11% budget deficit and we are borrowing £156 billion—[Interruption.]
Mr Speaker
Order. Can I just remind right hon. and hon. Members of the basic principle of “Erskine May”: good temper and moderation in parliamentary exchanges at all times?
Mr Osborne
Mr Speaker, you are absolutely right.
I make this point to the hon. Member for Swansea West (Geraint Davies). The serious observation that he makes about investment in productive economic assets is one that is reflected in the document that the Treasury produced this afternoon.
Roger Williams (Brecon and Radnorshire) (LD)
A Select Committee in the other place found that reform of the Barnett formula could lead to a reduction in the budget deficit. In terms of the imperative of achieving that, will not the Treasury team look once again at that Select Committee report?
Danny Alexander
I am happy to look at the report, but as I said in answer to earlier questions, we made it clear in the coalition programme for government that, although we recognise those concerns, the priority must be to address the budget deficit, and that is what we are going to do.
Fiona Mactaggart (Slough) (Lab)
Will unemployment and inequality increase or decrease in the coming year?
Mr Osborne
The ambition, of course, is to try to get unemployment falling, but it is rising at the moment. That is the situation that we inherited—as is inequality, which we inherited too.
Matthew Hancock (West Suffolk) (Con)
Is the Chancellor aware of the recent Institute for Fiscal Studies report which showed that, going into the recession, the budget deficit in the UK was already one of the highest in the developed world?
Mr Osborne
I am absolutely aware of that report, because my hon. Friend drew it to my attention about three months ago, for which I thank him.
Huw Irranca-Davies (Ogmore) (Lab)
Everybody is assuming that the budget cuts are based on the Canadian model, which itself was based on 3% growth and not least on strong growth in the American economy. I want to ask the Chancellor something in all seriousness. If there is not equivalent strong growth globally and within the eurozone, will that not mean that we get all the pain and none of the gain?
Mr Osborne
There does seem to be collective amnesia on the Labour Benches. They were in government for 13 years, they ran up the largest budget deficit in the European Union and they handed over office to us after an election in the middle of a eurozone crisis. The threat to the British economy is what will happen if we do not deal with this budget deficit. Let me say to the hon. Gentleman and all Labour Members that until they have their own proposals to deal with the problem that they have bequeathed the new Government, they are not going to be taken seriously.
Alec Shelbrooke (Elmet and Rothwell) (Con)
I ask my right hon. Friend the Chancellor to outline to the House exactly what not tackling the deficit would mean for my constituents in Elmet and Rothwell and for their mortgages.
Mr Osborne
Unfortunately, my hon. Friend would have to tell his constituents that interest rates would start to rise and international investor confidence would be lost. Today, one of the credit rating agencies has published a report that makes the observation that the UK’s deficit reduction plan is particularly weak. That is the situation that we have inherited, and we are going to put it right.
Chris Leslie (Nottingham East) (Lab/Co-op)
Will the Chief Secretary to the Treasury rule out the means-testing of child benefit?
Danny Alexander
A range of announcements will be made in the Budget across a whole range of issues, but as the Chancellor has said repeatedly, one of the key tests of measures is fairness, to ensure that we do not repeat the mistakes of the previous Government in allowing inequality to widen and in missing child poverty targets.
Gordon Birtwistle (Burnley) (LD)
Does my right hon. Friend intend to continue using the very expensive PFI funding for future capital investment in the NHS? The most expensive to date has been in Wythenshawe hospital, where the NHS will pay back 16 times the original capital value. More prudent borrowing in the past would have delivered the investment without adding to the deficit.
Mr Osborne
The hon. Gentleman makes a very good observation about the hidden costs of PFI liabilities. After the Office for Budget Responsibility creates an independent set of national economic forecasts, it will go on to look at PFI liabilities. The deficit and national debt that we have been talking about are, of course, only half the story; there is the hidden iceberg of the PFI liabilities that the Labour party ran up over 13 years as well.
Blockade of Gaza
Sandra Osborne (Ayr, Carrick and Cumnock) (Lab)
I wish to present the petition of residents of Ayr, Carrick and Cumnock constituency and others.
The petition states:
the petitioners are appalled by the loss of life associated with Israel’s attack on the flotilla of ships carrying humanitarian aid to Gaza, an attack which took place in international waters; further declares that Israel’s blockade has destroyed the economy of Gaza, deepened poverty, inflicted widespread suffering and imposed collective punishment on the people of Gaza.
The petition was collected on Saturday. People in my constituency are very concerned about this issue, and I hope that the Government take note of their concerns.
Following is the full text of the petition:
[The Petition of residents of Ayr, Carrick and Cumnock constituency and others,
Declares that the petitioners are appalled by the loss of life associated with Israel’s attack on the flotilla of ships carrying humanitarian aid to Gaza, an attack which took place in international waters; further declares that Israel’s blockade has destroyed the economy of Gaza, deepened poverty, inflicted widespread suffering and imposed collective punishment on the people of Gaza.
The Petitioners therefore request that the House of Commons calls on Israel to end its blockade and supports international efforts to secure a lasting settlement with a secure and independent state of Palestine alongside a secure and independent Israel.
And your Petitioners, as in duty bound, will ever pray.]
[P000834]
Point of Order
Mr Alistair Darling (Edinburgh South West) (Lab)
On a point of order, Mr Speaker. Yesterday, the Prime Minister said that the coming spending review was going to change our whole way of life and that today the Chancellor and Chief Secretary would publish a framework for this year’s spending review. I am not seeking to reopen your decision in relation to my request for an urgent question, and I would normally have expected a statement in the House from the Chancellor in relation to what I took to be an important document. I understand that his argument is that he will be able to speak in the Queen’s Speech debate; the problem is that because of the order of speakers, he speaks after me. In fairness to him, he did offer to let me have a copy of the document at 2 o’clock, but sadly it did not get to me until I was just walking into the Chamber.
Given what you said on your re-election, Mr Speaker, I really think that it would be far better, especially on matters as important as this, if the Chancellor, as well as other Ministers, were prepared to come to the House and defend the decisions that they are taking. As it is, I have had a quick look through the document, and there does not seem to be very much substance in it at all, which may be why the Chancellor decided not to give a statement. But the principle is an important one.
Mr Speaker
I am grateful to the right hon. Gentleman for his point of order. If I were uncharitable, I would think that he was in some sense seeking to continue an earlier debate—but I am not, so I assume that he is not. My judgment is that the matter in question, which is extremely important, can be debated very fully today. However, I trust that any major announcement to be made in due course, on this or any other matter, will be made first in the House.
Speaker’s Statement
Mr Speaker
The House will know that the election of Deputy Speakers took place today, and the ballot was closed at noon. The counting is finished, and I have the results.
Before I announce the results, I would like to take this opportunity to thank, on behalf of the whole House, the two temporary Deputy Speakers who have helped to chair the House during the Queen’s Speech debate. The hon. Member for York Central (Hugh Bayley) has brought to the House his experience of chairing Public Bill Committees, and he has done so with great care and good sense. Sir Alan Haselhurst was a newcomer to the Chair 13 years ago, when Betty Boothroyd was Speaker. He has served as Chairman of Ways and Means with distinction through three Parliaments, guiding the House in the Chamber and helping its work behind the scenes. I particularly thank him for all his wise counsel to me during my first year as Speaker. I know that the House will benefit from his judgment and commitment in other ways in this Parliament.
This also gives me the opportunity to pay tribute in the House to Sir Michael Lord and Sylvia Heal, who retired from the House at the general election having served the House so well as Deputy Speakers from 1997 and 2000 respectively. The standard set by these three Deputy Speakers in their combined service in the Chair of some 36 years will be an inspiration to their successors elected today.
I will now announce the result of the ballot held today for the election of Deputy Speakers. Mr Lindsay Hoyle was elected Chairman of Ways and Means. Mr Nigel Evans was elected First Deputy Chairman of Ways and Means. Dawn Primarolo was elected Second Deputy Chairman of Ways and Means. They will take up their posts tomorrow. I congratulate those elected, and I look forward to working with them.
The results of the count, under the single transferable vote system, will be made available as soon as possible in the Vote Office and published on the intranet.
Debate on the Address
Economic Affairs and Work and Pensions
(14 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Speaker
I inform the House that I have selected the amendment in the name of the Leader of the Opposition. Standing Order No. 33 provides that on the last day of the debate on the motion for an Address to Her Majesty, the House may also vote on a second amendment selected by the Speaker. I have selected the amendment in the name of Angus Robertson for that purpose. The vote on that amendment will take place at the end of the debate after the amendment in the name of the Leader of the Opposition has been disposed of.
Mr Alistair Darling (Edinburgh South West) (Lab)
I beg to move an amendment, at the end of the Question to add:
“endorse the successful steps taken by the previous administration to return the economy to growth, to keep people in their jobs and homes, and to support businesses; note the need for a clear plan to bring down the deficit; respectfully believe that securing the recovery and robust future growth should be central to that plan; further believe that such a plan must be fair and protect front line public services; therefore oppose your Government’s measures to cut the support provided by the Future Jobs Fund for tens of thousands of young people out of work, to damage growth in the regions by scaling back regional development agencies, and to cast uncertainty over support for key low carbon sectors like the nuclear supply chain and lower carbon vehicles; further note that a rebalanced British economy must be built as the UK emerges from the recession; and therefore urge your Government to reconsider the removal of investment allowances which support manufacturing businesses seeking to grow.”
I congratulate all those Members who have made their maiden speeches over the past few days, and commend the speeches that we will hear from new Members during the debate this afternoon.
Before I turn to what I suspect will be the main focus of the debate—the economy—I want to mention a number of Bills in the Gracious Speech on which the Chancellor might want to respond in the course of his speech, which will follow mine. The Government want to bring before the House several measures on which the Opposition can offer complete support or, I hope, can be constructive in their support. The first is the terrorist asset-freezing Bill. That piece of legislation is necessary as a result of a recent decision by the Supreme Court and we will certainly support the Government in getting it on the statute book as soon as possible. I am grateful for the co-operation I received when I was Chancellor from the then shadow Chancellor and his Liberal counterpart.
I appreciate what the Chancellor said a few moments ago about the Office for Budget Responsibility currently operating on an extra-statutory basis, but I hope that the principles on which it will operate—with as much openness and transparency as possible and with us being able to look at the deliberations of the budget responsibility committee and understand its reasoning before it reaches a recommendation—will be part of its practice now and will be in the legislation when it comes before the House. I welcome the fact that Sir Alan Budd, who has been appointed acting chairman of that office, has made it clear that he is willing to speak to all hon. Members. That is important, as the office will work only if it is seen to be non-partisan.
On Equitable Life, all of us know that the process has been long and drawn out. I think the Government may have already found that the process is not straightforward and that the ombudsman’s ruling was not as clear-cut as some people thought. We therefore commissioned Sir John Chadwick to investigate the matter, and I am glad to say that he will report in July. I had thought he was going to report at the end of May, which is what he had told us, but it may be that he has had further discussions with the Treasury. [Interruption.] The Chancellor is saying from a sedentary position that it was at his request. That is fine, but I wonder whether he will make provision for whatever Sir John recommends in his June Budget, or whether the fact that Sir John is reporting in July means we will have to wait for a further Budget to see what provision is being made.
On the financial services regulation Bill, we had many exchanges across the Floor of the House in the last Parliament on this matter, but I simply say to the Chancellor that it would be helpful if he could perhaps tell the House exactly what the coalition agreement is in relation to who has responsibility for regulation. We have read conflicting reports in the newspapers about whether the Financial Services Authority is to be brought within the responsibility of the Bank of England and whether it is the Governor or Lord Turner who is to be responsible for the regulation of the financial services industry. Other reports say that no decision has been made and the decision has been parked. It is important that we have some certainty about that, because the very nature of such things means it is inevitable that some problem may arise quickly. It is therefore important to know who is in charge, as we do not want the FSA and its staff to be concentrating more on their future than on what is happening in the financial services industry.
Keith Vaz (Leicester East) (Lab)
On the point about banking regulation, the shadow Chancellor will remember the closure of the Bank of Credit and Commerce International and the Bingham report. That report was commissioned by the previous Government and its conclusions mentioned an independent regulator. It is important that we look carefully at the issue of regulation and that we do not hand back to the Bank of England all the powers for regulation. In his conclusions, Lord Bingham recommended that that should not happen.
Mr Darling
My right hon. Friend will know that I have always had reservations about transferring responsibility for regulation to the Bank of England, as I am not sure that it is the best body to deal with it. Certainly, for much of the past 10 years, it has had a good and distinguished record on monetary policy, but I am not so sure whether it should have widespread responsibility for regulation.
My right hon. Friend is also right to draw attention to the Bingham report. The Chancellor will no doubt recall, or I am sure his officials will remind him, that Lord Bingham produced two reports—one was published and one was not. I strongly advise him to read the second, unpublished report, because it sheds considerable light on some of the problems that arose. Perhaps after such a length of time, it might be possible to reconsider whether that report should be published, because I think many of the people concerned would not be so badly affected.
Mr Darling
I think it was providing a response to a parliamentary question from my right hon. Friend that obliged me to read the report. I remember spending two days reading it and giving my decision. However, I do not have the benefit of the advice I received, which I now need to remind me why I refused his request at that time. All I can say is that I refused his request for entirely the right reasons but, 10 years later and in the spirit of freedom of information, I am not saying that it definitely should be looked at, but the present Chancellor or whoever is dealing with the issue should look at the matter and perhaps 10 years further on someone else looking at that report might reach a different conclusion. I reiterate, whatever decision I reached was right for the reasons I gave at the time.
May I also tell the Chancellor that it would be helpful if he took the opportunity to spell out the Government’s policy on the banks in which the Government have shareholdings—Northern Rock, Lloyds, the Royal Bank of Scotland—because that is a matter of interest, especially now that RBS is talking about disposing of its Williams & Glyn’s branches and others? I believe it is the view of both main political parties that there ought to be more competition in the system, so a clear statement on Government policy on how we do that would be helpful. We do not want to end up selling a tranche of banks to another big UK operator, because that would mean that we would not get the competition we want.
I was interested to re-read last Friday the Business, Innovations and Skills Secretary’s criticism of the banks’ failure to lend, but it is not entirely clear to me what the new Government are doing to increase bank lending. It would be useful to hear from the Chancellor, or at least one of his colleagues, in the fairly near future on that.
However, the main focus of today’s debate is, inevitably, the economy, as it was in Treasury questions for the past hour or so. Yesterday, predictably, the Prime Minister, as the Chancellor did today, sought to lay the blame for everything the new Government plan to do on the previous Government. There is nothing new in that: new Governments frequently blame their predecessors and it is the easiest thing in the world to do. It is equally unsurprising that the Prime Minister and the Chancellor should go around the country and other parts of the world and say, “The situation is much, much worse than we thought. It’s all terrible and we will have to do terrible things.” By a stroke of good fortune, they have the Liberal Democrats to front up some of the difficult decisions they must take.
Nadhim Zahawi (Stratford-on-Avon) (Con)
Did not the shadow Chief Secretary to the Treasury, the right hon. Member for Birmingham, Hodge Hill (Mr Byrne), rather than the new Government, reveal the desperate state in which the shadow Chancellor left the country’s finances?
Mr Darling
Forgive me if I have misunderstood the hon. Gentleman, but throughout the three years when I was Chancellor, I do not think that I ever, on any occasion, concealed from anyone the difficulties that we and other economies would face as a result of the deepest global downturn in the past century. There can be no doubt about that.
However, I should tell the hon. Gentleman and his colleagues that by 2008, it was clear that this country, and every other major developed country in the world, faced the catastrophic consequences of the failure of the banking system. Had we not taken action to stabilise the banking system—many of those decisions were opposed by the Conservatives—and to ensure that we supported our economy when private sector investment dried up and died away, we would have had a situation in which recession tipped into depression. That is why we took the action that we did. We were right to do so, and the Conservatives were wrong to oppose us. Our economy is now growing, and as I said earlier, unemployment is half that in the downturn of the 1990s, and borrowing is coming down, because of the action we took in 2008 and 2009. We took that action along with most developed countries.
Dr Coffey
Will the shadow Chancellor explain why, if he was so open about the state of the economy, he would not hold a comprehensive spending review, and why he would not publicise the impending debt payments of £70 billion that the people of this country must pay for his profligacy?
Mr Darling
First, I said on many occasions that the right thing to do was to hold a spending review this year, before the end of the current review period ran out. There is still a lot of uncertainty, as I shall explain later, and the hon. Lady would do well to remember that at present, while we are coming out of recovery, our growth is modest. I hope we will see recovery secured, but what is happening in continental Europe and other parts of the world shows that we are not out of the woods yet and there is still a lot of uncertainty around. On the hon. Lady’s main point, however—which I dare say her colleagues will make too—our borrowing and debt levels rose for exactly the same reason as they are rising in America, Japan, Italy, France, Germany and just about every other country in the world: because we went through the deepest global recession in modern times. The hon. Lady might also want to remember that until well into 2008 the Conservatives, far from condemning our spending, were supporting our spending plans. They are therefore in no position to say now that they were opposing all this in times past. That is simply not right.
Mr Darling
I will give way to my hon. Friend the Member for Huddersfield (Mr Sheerman), and then I shall make some progress.
Mr Sheerman
Will the shadow Chancellor join me in recommending Sam Brittan’s article in the Financial Times last week entitled “Now is the time to ask: ‘What crisis?’”? He is a Conservative and he supports the coalition Government, but he says that it does nobody any good to exaggerate the state of the British economy, which he believes is much stronger than that of most of our competitors.
Mr Darling
I think it is necessary for anyone charged with responsibility for the British economy to take a measured approach. If things are difficult, they have a duty to speak out, even when that causes them some problems, as I found out myself a couple of years ago. I think it is better that we do that, than not. Equally, however, it does no good to go running around saying the situation is absolutely terrible and dire, because sooner or later we may find that the markets call our bluff; we may find that one day they say, “Whatever you do, it isn’t enough.” I believe that that approach is as irresponsible as saying nothing about a difficult situation.
We must discuss these matters in a reasoned and rational manner, because while it is important that we identify the things that need to be put right, equally we must not give an impression counter to the fact that, fundamentally we have an economy that is coming through this period, that we can get through it and ensure that we have growth, which is absolutely critical in the future. Running around scaremongering and raising all sorts of fears could have the perverse effects of turning market sentiment against us, which we do not need, and of dampening consumer and investor confidence, which is simply not necessary.
Charlie Elphicke
The shadow Chancellor says that Government Members are scaremongering by pointing out that the Budget deficit is 13%. We are not scaremongering; we are scared, as the position is extremely serious. The recession was so deep in the first place because the right hon. Gentleman’s colleague, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown)—who has not been seen of late—ran things so badly that the money ran out, which meant that we were more exposed before the recession. The shadow Chancellor should therefore be apologising to the House for the mess that his right hon. Friend and the previous Government have left behind.
Mr Darling
No, I do not agree with that. I think the hon. Gentleman will find that an awful lot of things that went wrong in 2007 were a result of what went wrong in the banking system, not just here but in other parts of the world as well.
Rachel Reeves (Leeds West) (Lab)
Does the shadow Chancellor agree with this statement by the Governor of the Bank of England:
“I don’t think you can compare the UK with Greece. There are big differences”?
I suggest that not the least of the differences between our countries is that our debt-to-GDP ratio is about half that of Greece.
Mr Darling
The Governor was making a very fair point, as he does on many occasions. It is interesting that even in the past couple of days Government members—the Prime Minister yesterday, and one or two of his ministerial colleagues—are rowing back from direct comparisons with Greece because that may have been very convenient to them in opposition, but it might not be such a good idea now that they hold office.
Our economy is experiencing growth at present, and that is because of the action we took over the past couple of years. I do not intend, as the Chancellor said, to fight the last general election again or to go through everything that happened over the last two or three years—that is, perhaps, for another occasion—but I do say this about the action we took. The fiscal stimulus we put in place—the VAT reduction; the decision to bring forward capital spending; the measures we took to protect people’s jobs and ensure that if people were out of work for a short period we could get them back into work as quickly as possible; the time to pay scheme, which is still helping hundreds of thousands of businesses throughout the country; the car scrappage scheme; and the action we took internationally—have all come together to make sure we came through this recession. Interestingly, although the predominant position of the financial services industry in this country meant that it took us longer to come through into recovery than it took some other countries, Britain has had two quarters of growth whereas other countries, particularly those in continental Europe, have seen their growth slip back and, in some cases, they have slipped into recession. What that tells me is that had the previous Government not taken the action that they did over the past couple of years we would not now be in a position to say, “Yes, our economy is growing.” Equally, our action has meant that although our borrowing is still very high and needs to come down, it is coming down faster than many people believed, even a few months ago.
Andrew Bridgen (North West Leicestershire) (Con)
I wish to assure the shadow Chancellor that Conservative Members appreciate that the previous Government had to borrow money during the recession. What baffles us is why they borrowed money during the boom.
Mr Darling
I am grateful to the hon. Gentleman for accepting what is obvious: the fact that during a recession Governments do have to borrow in order to support their economies. However, I should remind him that during the earlier part of the previous decade the Conservative party supported our spending programmes, saying that they would stick to our spending levels. The Prime Minister, when he was Leader of the Opposition, said that as recently as 2008. The hon. Gentleman was not here during the previous Parliament, but I can assure him that I do not recall any Conservative standing up to say, “Don’t build a new school in my constituency. Don’t build more housing. Don’t open a new hospital.” Conservative Members were not saying that at all; they wanted more spending in just about every area. So the idea that the Conservative party was behaving in a way that would have meant that there was no borrowing and that the Conservatives would have behaved any differently is absolute nonsense. The hon. Gentleman just has to accept that.
Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)
Does my right hon. Friend agree that some of the measures that have now contributed to the deficit were being demanded by manufacturing industry in order to sustain the corporate manufacturing base needed for us to grow out of recession, the car scrappage scheme being one case in point?
Mr Darling
I agree with my hon. Friend. The new Government will find that for every industrialist or manufacturer who says that public spending needs to be cut, in areas that benefit from such spending people take a rather different view. The car scrappage scheme is an example of that, and it made a huge difference to the car industry and the motor vehicle industry in general. As the hon. Member for North West Leicestershire (Andrew Bridgen) said, the action that we took did involve more borrowing and it does result in increasing debt. However, the point is that the cost of failing to act would have been far greater.
The Chancellor was talking about the international consensus. I know something about that, and I can tell hon. Members that over the past three years it was very much in favour of our continuing to support our economies; of course, as we come through to recovery we have to get the borrowing down. Nobody disputes that, and at least two of the parties that fought the previous election were absolutely clear about it—it was never clear what the third party was in favour of, and its position remains something of a mystery even today.
Stewart Hosie (Dundee East) (SNP)
The shadow Chancellor rightly says that there was an international consensus, and I supported many of the actions that he took. However, in this financial year, when recovery is not secure, why did he leave the economy without a fiscal stimulus? Ours is one of only two countries in the G20 without a fiscal stimulus, and I still believe it was absolutely necessary for us in order to secure recovery and prevent our slipping back into recession.
Mr Darling
What economists call the “automatic stabilisers” are still operating and are still supporting the economy. I have always been clear about this, and I believe that the deficit has to be reduced. One of the reasons why I wanted to halve it within a four-year period was that I wanted to get it down in a way that did not damage the economic or, indeed, the social fabric of the country while that was being done. Obviously I do not know what the new Government are going to come up with, but I suspect that they will not go too far before they start seeing that when they want to reduce expenditure quickly that sometimes has severely damaging consequences. We shall wait to see what happens, but I believe that that is a substantial risk.
Mr Darling
Before I leave this point I should say something further because a number of hon. Members mentioned our spending in the earlier part of our Government. It is not just about what we did during the recession; it is about the fact that over the relevant 10-year period, there was an unprecedented decade of growth such as this country had not seen before, as well as low interest rates, low inflation and falling unemployment. Gross domestic product per capita grew faster in this country than in any other G7 country even after one takes into account the effects of the financial crisis. The economic environment was one that this country had not had for many years. Of course, we had to deal with the effects of the banking crisis and the downturn that followed, which had a very severe effect on our public finances as well as other public finances.
Mr David Blunkett (Sheffield, Brightside and Hillsborough) (Lab)
My right hon. Friend did a phenomenal job as Chancellor of the Exchequer. The measures that he has just outlined and the success were considerable, but is it not also true that back in 2002 his Government, and my Government, finally paid off the second world war and post-war debt that was run up with the Americans in 1947? The final bonds were paid off not by the Conservatives in the 1950s, 1960s or 1980s, but by the Labour Government in 2002. [Interruption.] That is absolutely true.
Mr Darling
My right hon. Friend is right. No doubt there will be another occasion to revisit the lend-lease arrangements that the then Government entered into in the 1940s, although I commend to the House Lord Robert Skidelsky’s excellent third volume on Keynes, which deals with this matter quite extensively. Some people thought that we got a pretty bad deal in 1943, but there you are.
Mr Darling
I shall give way to the hon. Gentleman who I think used to advise the Chancellor at one point.
Matthew Hancock
The shadow Chancellor has mentioned the banking crisis several times. With hindsight, does he regret the system of banking regulation that was introduced in 1997, and recognise that it failed?
Mr Darling
No, I do not think that was the main problem. The system of regulation that we introduced in 1998 brought together about eight or nine different regulators—self-regulators, as the Conservative party used to be very keen on self-regulation. The problem in relation to the Financial Services Authority, the American regulators and most other regulators was that they simply did not understand the systemic risks that arose in the previous decade or the consequences of the failure of one bank for another. The system in this country was not the problem, but there was undoubtedly a failure on the part of regulators right across the world, including in our country. The FSA’s inquiry into what went wrong in Northern Rock demonstrated that the FSA had spotted problems in Northern Rock in February 2007 but had not taken action. I shall say this in the nicest possible way to the hon. Gentleman: he might want to have a word with one or two of the people who were running Northern Rock—members of his party—who might have had a better look at what they were supposed to have been doing when they were running that bank.
Mr Darling
I shall give way to the hon. Lady. It might be a mistake, but I will.
Claire Perry
I thank the shadow Chancellor for giving way. May I say that as a bystander, rather than a participant, in the last Parliament, I was always struck by his excellent manners? As a mother of three children, I am very hot on manners. In particular, when my children make a mess that I have to clear up, I encourage them to say sorry. Would the shadow Chancellor like to apologise to the Government and the people of Britain for the mess he has left for this Government to clean up?
Mr Darling
I am glad that I gave way to the hon. Lady for at least the first part of her intervention. I do not agree with her on the second part, but I should like to address that point now. It is true that our borrowing has risen very substantially—
Mr Darling
I shall not give way. I want to make some progress, because I know that many hon. Members want to make their maiden speeches, and I do not want to be blamed for not allowing them to do so. I might give way before I finish, but not just now.
As I was saying, borrowing has clearly increased, but that has to be put into perspective. Our deficit for this year is broadly similar to that of the US. All other major countries have had the same problem.
We went into the recession with the second-lowest level of debt of any of the G7 countries, but IMF projections for this year show that our debt is lower than that of France, Germany, Italy and Japan. Yes, we have to get our borrowing down and make sure that we start to bear down on debt, and I agree with everyone who says that it is far better to spend money on things other than debt interest. However, it is worth making the point—because it is one that the present Government never do make—that this problem does not affect our country alone. It has affected all countries, and certainly all the developed countries.
It is not a surprise that borrowing and debt went up, because our tax revenues fell dramatically in 2007 and 2008. Our spending on unemployment and social security went up because tax credits were there to help people who lost their jobs. Yes, that was increased expenditure but, if we had cut then, the risk was that we would turn a recession into a depression. That was a cost that I was certainly not willing to contemplate.
We made an active choice to allow borrowing to rise to support the economy. As I said, that policy was supported by the then Conservative Opposition right up until 2008. It was not as though they were saying anything different immediately before that, but I fundamentally disagree with the analysis that the Chancellor made when he was shadow Chancellor. He said:
“Even a modest dose of Keynesian spending”
was
“a cruise missile aimed at the heart of a recovery.”
He said that in 2008, when the banking system and the world economies were close to collapse. That seems to me to be complete nonsense. Of course we will have our arguments about how and at what rate we reduce our deficit, but I simply do not accept the argument that by implication he seems to be advancing—that somehow the previous Government should have been cutting spending just as we were going into a recession. I know of no other Government who were doing that.
Ian Lucas (Wrexham) (Lab)
The construction sector is one of the most important barometers of the national economy, and I was privileged to serve as construction Minister. If that spending by Government had not taken place in the last two years, would we not have had a massive increase in the level of unemployment in the construction industry? That would have opened up the horrific prospect of having 3.5 million people unemployed—a level that we reached twice under the Conservative party.
Mr Darling
That is indeed right, and many people in the construction industry say that an already difficult situation would have become much worse if we had not done what we did in 2008-09. Not many Conservatives or Liberals—we must include the two together—now stand up and say, “Actually, in retrospect, we shouldn’t have been supporting the construction industry.” I rather get the impression that they are telling local industries in their constituencies something entirely different.
Mr Darling
I will give way, for the last time, to the hon. Lady, whom I last met in a BBC studio. I got the distinct impression that she did not like Scottish accents, so I cannot resist.
Margot James
Will the shadow Chancellor clarify his party’s position on our proposed spending reductions? Before the general election, it was my distinct impression that the Labour party was planning public expenditure cuts of up to 25% across some Departments. In my constituency of Stourbridge, we were extremely concerned when the results of a freedom of information request on the NHS in the west midlands revealed plans for significant cuts to doctors, nurses and beds in our area. By anyone’s definition, they must be front-line services.
Mr Darling
I agree with that. If the hon. Lady is worried about spending cuts, she is going to have an interesting time over the next few months. I look forward to the exchanges that she has at future Question Times.
As I draw to a close—
Mr Darling
No, I am not going to give way. I want to draw attention to one of the biggest problems that I see in the future. I know that Governments in countries right across the world have to get their borrowing down and reduce their deficits. However, I am particularly worried that, if we do not have some countervailing pressure to support growth and measures to get growth in our economy, we run the risk of having many years of it merely bumping along the bottom, sometimes growing and sometimes not. That will inevitably mean that we will have higher unemployment and that aspirations and sentiment will be affected.
I see that especially in the EU at the present time. The EUROSTAT figures published last Friday went almost unreported in this country, but what is worrying is that we see that Germany’s growth in the first quarter of this year was 0.2%. We see France’s at 0.1%. We see Greece not surprisingly, back in recession. We know that Spain has unemployment of more than 20%. I am glad that the Chancellor enjoys going to ECOFIN so much, and long may he enjoy that. I am fascinated that the Conservatives now find so much succour in Europe. All I can say to him is that I worry that rather too many finance Ministries, yes want to get their deficit down, but are not concentrating on the structural reforms that are necessary within the EU or on measures to achieve growth in the future. That is a real threat.
It worries me that the present Administration here in the United Kingdom also fall into that camp. It is interesting that in the past six months the Prime Minister has made only one speech on growth. It flickered into life in November just before the CBI conference last year. We do not hear what measures the Government intend to put in place to get the rebalancing of the economy that we want to see—measures to encourage private sector investment to come back. It is not coming back yet in sufficient volume to take the place of the public sector investment that the Chancellor wants to take away. We have to have a clear, strategic look at this to make sure that we can get growth in this country as well as in the EU, which after all is our major export market.
Mr Darling
I knew that if I mentioned Europe this would happen, as sure as night follows day.
Mr Cash
I do not want to disappoint the shadow Chancellor, but I am much more interested in the reasons why, when he was Chancellor—despite the tissue of self-justification that we have just heard—he was never prepared to refer to the true level of debt. He said that no Conservative raised it, but a number of us raised the true level of debt from 2008 onwards. Does he deny that the true level, according to the Office for National Statistics, is £3.1 trillion and not the amount that he has been describing over the past few months?
Mr Darling
When comparing the judgments that we make about what is necessary fiscally, I do not think that bringing on to the main balance sheet PFI, Network Rail and everything else particularly helps. However, if that is the course of action that he has managed to persuade the Chancellor to take, we will look with great interest at the Budget in a couple of weeks. I just do not think that it is a particularly accurate or informative way of looking at the accounts. I have said that before to the hon. Gentleman.
Robert Halfon
Before the last election, in an interview with the BBC, the right hon. Gentleman said that he believed that the cuts needed to be more savage than anything Mrs. Thatcher had done. Does he still hold to that view?
Mr Darling
I think that the word “savage” was used by the Deputy Prime Minister, of whom the hon. Gentleman now finds himself a great admirer. It was not a word that I used.
It is important in the task that confronts the whole country and the Government that we do not get ourselves into a situation of almost competitive austerity, in which Governments and countries become blind to the need to secure growth. There is a substantial risk, as I have said for a long time, that if the Government take action prematurely without considering its consequences as a whole, they will choke off the recovery. We have to get borrowing down, but we also have to get growth and recovery firmly established.
Geraint Davies (Swansea West) (Lab/Co-op)
Will my right hon. Friend give way?
Mr Darling
No, I will not. If we are to maintain jobs and ensure that borrowing does indeed come down, we need to have growth. Policies to achieve that are notable by their absence both in this country and the rest of continental Europe. It is no use Government Members citing what happened in Canada and Sweden. Yes, Canada reduced its structural deficit, but it did so at a time when its next door neighbour, which happened to be the biggest economy in the world, was growing strongly. So the Canadians benefited from a strong US economy. Equally, when Sweden was going through its retrenchment, Europe was starting to grow again. So the comparisons are not entirely appropriate.
We must realise that we need to put in place policies that ensure growth, get our borrowing down and, critically, equip this country to compete in the markets that are going to be opened for it and take advantage of the opportunities that will be here.
As I said during the election campaign and have said since, I believe that the Conservative party remains a risk to the recovery. I believe too that no matter how they dress it up, and how they seek to blame other people, even if they use the Liberal Democrats to cover their true intentions, what they are about is ensuring that they cut exactly the same expenditure as they have always wanted to, and they are using this as an excuse for doing so.
I believe that action does need to be taken, but crucially I believe that we need to ensure that we secure the recovery, and I hope that this Government have got the sense to see that now, before it is too late.
The Chancellor of the Exchequer (Mr George Osborne)
I enjoyed what sounded very much to me like a valedictory speech by the shadow Chancellor, going through all the decisions he took and explaining to the House why they were all right. Of course, I paid tribute to him in Treasury questions for the work he did during that period, which was clearly a very stressful one, but it was pretty extraordinary that he did not once accept that he had made a single mistake during those three years—that for all his good manners, he did not once apologise for the fact that he has bequeathed to the incoming Government the worst inheritance that any British Government have faced since the second world war.
Mr Osborne
If my hon. Friend will allow me, I would like to make some progress first.
I guess that the shadow Chancellor is entitled not to apologise. I would only say this to the people who are standing for the leadership of the Labour party. As far as I can tell from their contest at the moment, they seem to think that they just did not speak enough about immigration and Europe in the campaign. Let me tell him: I have done that campaign and I did not get the medal. Perhaps the leadership contenders will at some point turn their attention to the very serious economic problems that this country faces, and tell us what they would do—what they would cut. The amendment that we are being asked to vote for tonight—tabled by the Leader of the Opposition and the shadow Chancellor—states that we need
“a clear plan to bring down the deficit”.
I agree with that; I would happily vote with the shadow Chancellor if he could perhaps tell me exactly what his clear plan to bring down the deficit is because, as far as I could tell, he opposed every single decision that we have taken to try to reduce the deficit.
Mr Ivan Lewis (Bury South) (Lab)
In The Sunday Times, the Prime Minister said that the cuts would be unprecedented in their severity and would change Britain. In The Observer, the Deputy Prime Minister said that the cuts would not at all be as serious as in the 1980s and ’90s, and would be progressive in nature. Can the Chancellor tell us—which is it?
Mr Osborne
It was the shadow Chancellor who said—and we were reminded of this—that the cuts would be deeper than anything that Margaret Thatcher had undertaken, and that was the proposal from the Labour party when it was in government. It is unfortunately an economic fact that the budget deficit that this country faces is higher than at any point in our peacetime history, and whoever forms the Government of this country has to deal with that budget deficit and cannot ignore it. Indeed, there is a rather striking fact about the Labour Government’s proposals, which they left in their Budget book—the shadow Chancellor has a copy in front of him. There are £50 billion of cuts built into the Labour Budget produced in March, and not one single pound of those cuts has yet been identified by the Labour party.
David Tredinnick
Many congratulations to my right hon. Friend on taking up his position. Was not one of the greatest weaknesses of the last Government, which the former Chancellor avoided mentioning, the fact that the number of people in non-taxpaying employment rocketed up and the number of those working in productive jobs that produce taxes drifted down?
Mr Osborne
My hon. Friend is right. There was a profound imbalance in the economy. We heard the shadow Chancellor saying, “What are the Government going to do about the unbalanced economy?” He seems to forget that he has been running the economy for the last three years. His Government have actually been in charge for the last 13 years. If there is an unbalanced economy, the people responsible are sitting on the Opposition Benches.
Mr Osborne
I want to make progress, as I know that a lot of people want to make their maiden speeches; I was talked out of my maiden speech on the day I wanted to give it by over-long Front-Bench speeches. However, I want to give way to the hon. Member for Dudley North (Ian Austin), because I want to know where his Friend the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) is.
Ian Austin (Dudley North) (Lab)
This morning, we all read the Prime Minister’s comments telling us that the cuts would affect every family in the land, and that no one would be exempt from the deep pain that those cuts would cause. Given that we are all in this together, can the Chancellor tell me which public services he and his family rely on, and which they will miss the most?
Mr Osborne
If that is the quality of the intervention by the Labour party as the country faces a very serious economic challenge, it confirms my view that, at the moment, it is not a serious player on the national political stage.
Mr Osborne
I want to make a little progress because a lot of Members on both sides of the House want to make their maiden speeches. I will give way in a little while, perhaps, to Members who stood up.
Of course, the economic situation is the backdrop to the Queen’s Speech. Our country is borrowing £156 billion a year. Our national debt has doubled and is set to double again. Those Opposition Members who think that this is some abstract problem should pay heed to the warning noises from the European continent. Countries that cannot live within their means face high interest rates, greater economic shocks and larger debt interest bills.
Let us consider this one fact, raised by my hon. Friend the Member for Suffolk Coastal (Dr Coffey), which the previous Chancellor refused to publish. The only reason she can deploy that fact in the Chamber is that this Government published it. It is that, on the spending plans that we inherited from the previous Government, British taxpayers are going to pay £70 billion a year in debt interest by the end of this Parliament. That is higher than the education budget, it is higher than the defence budget, and it is far higher than the policing budget. That figure was kept secret from the British people, but we will publish it because people need to know where their money is going.
Mr Sheerman
A lot of brickbats will be thrown across the Chamber today. Surely all hon. Members, on both sides of the House, as people who care about the long-term future of our economy, agree that cuts are necessary, but is it sensible to cut widely and deeply before private investment has recovered?
Mr Osborne
At least the hon. Gentleman acknowledges—it is the first time, either in this debate or in Treasury questions, that we have heard this from those on the Opposition Benches—that cuts have to come. [Hon. Members: “The shadow Chancellor said that.”] I am sorry, but we have just listened to a speech by the shadow Chancellor in which he explained why we should not be trying to accelerate the reduction in our structural deficit, despite the advice of the Governor of the Bank of England, the European Commission, the OECD, the G20, virtually every international investor in the UK economy and virtually every business organisation that represents businesses in this economy. The hon. Gentleman acknowledges at least that there have to be cuts. The offer that I make to him—he may take this up; I am not sure that his colleagues will—is to engage in a proper conversation in the Chamber over the next three or four months about the decisions that will obviously have an important impact on the way the Government function over many years to come.
Mr Osborne
I will give way on one more occasion and then make some progress.
Huw Irranca-Davies
I want to extend to the right hon. Gentleman the courtesy of asking the question that I asked previously, because he did not do me or my constituents the courtesy of answering it. If his judgment is wrong and the cuts are either too soon or too deep so that there is not sufficient economic growth to deal with the cuts that will be imposed, will that not mean that my constituents will suffer all the pain of the cuts and have none of the gain of the growth?
Mr Osborne
If the hon. Gentleman is not prepared to trust my judgment, let me read out what the Governor of the Bank of England has said:
“The most important thing now is for the new government to deal with the challenge of the fiscal deficit. It is the single most pressing problem facing the United Kingdom; it will take a full parliament to deal with, and it is very important that measures are taken straight away to demonstrate the seriousness and the credibility of the commitment to dealing with that deficit.”
That is the judgment of the Bank of England Governor—appointed, by the way, by the shadow Chancellor—and the judgment that we have taken in order to protect the prosperity and the livelihoods of the people whom the hon. Gentleman represents, and the people represented by everyone else in the House of Commons.
Mr Osborne
I will make a little progress, and will give way later on in my speech, if Members will allow.
Of course, the backdrop is that our economy has become deeply unbalanced. There is deep imbalance between different parts of the country: the wealth gap between regions widened over the past 13 years. There is imbalance between different sections of society: the gap between the rich and the poor widened in our country over the past 13 years. There is imbalance between different parts of our economy: the public sector boomed to take almost half our national income, while the private sector struggled with the deepest recession that we had seen since the war. This Queen’s Speech, with its landmark reforms of welfare and education, begins the task of righting those wrongs. Later in this debate, we will hear from my right hon. Friend the Secretary of State for Work and Pensions, who has done more than anyone to highlight the trap of low aspiration, poor education and welfare dependency that our fellow citizens do not deserve and our country cannot afford any more.
Mr David Winnick (Walsall North) (Lab)
However dismissive the Chancellor may be, those of us who have been here since 1979 and who saw what the last Tory Government did saw only too clearly that the burden of the cuts that were made then fell on those least able to bear it, and the rich and prosperous did very well indeed. That is why we are so sensitive about the people whom we represent, and why we are so suspicious of what the Chancellor is saying, no matter what sort of qualifications he makes. I am afraid that it is our people—the people who sent us here to sit on the Labour Benches—who will suffer the worst of the burdens.
Mr Osborne
The similarity is this: in 1979, a new Conservative Government also had to deal with a terrible economic inheritance from the Labour party. If the hon. Gentleman is so affronted by what Margaret Thatcher did during her premiership, perhaps he could explain why, every time there is a new Labour Prime Minister, virtually the first person they invite round for tea is Margaret Thatcher.
Mr Osborne
I will make a little progress.
The Queen’s Speech contains five Treasury-sponsored Bills, and I should say something about each of them. There is the national insurance contributions Bill to stop the jobs tax that Labour would have imposed. Like every post-war Labour Government, the previous Government left office with unemployment rising, and their answer was to increase the cost of employing low-paid people. I have not yet heard from the shadow Chancellor, or anyone else, whether that is still the official Opposition’s policy. Our reforms to national insurance will not just stop the most damaging part of the jobs tax but will, by raising employer thresholds, reduce the cost of employing people on lower incomes. The Budget will also contain further measures to stimulate private sector employment and to proclaim to the world that Britain is open for business.
There is the financial services regulation Bill to fix the previous Government’s system of banking regulation. To respond to the question asked by the shadow Chancellor, next week I will set out in more detail the content of that Bill and how we propose to take the matter forward. I find it somewhat baffling to be told by him that he is unsure who is in charge of banking regulation at the moment. That was the question posed by the Treasury Committee in the last Parliament—a question about the system of regulation that his predecessor as Chancellor, the right hon. Member for Kirkcaldy and Cowdenbeath, created in 1997. That system meant that no one was in charge of looking at the growing levels of debt and the systemic risks building up in our banking system.
I believe that it is still the Opposition’s policy to oppose our decision to introduce a bank levy; they claim that they want every country in the world to have agreed to such a levy before Britain goes ahead with it. Our decision is to proceed with it, because the banks should pay some contribution to clearing up the mess that they helped to create.
We are working urgently on a problem that the shadow Chancellor correctly raised, but to which, of course, he found little solution when he was Chancellor: the problem of getting credit to small and medium-sized businesses that still face a credit crunch out there in the country.
I welcome the shadow Chancellor’s support for the terrorist asset freezing Bill, which, of course, has bipartisan support. Then there is the Bill that should have been introduced by the previous Government years ago—the Equitable Life payments scheme Bill to help those who lost everything and were given nothing by the Labour Government.
Chris Bryant (Rhondda) (Lab)
I warmly welcome the fact that the Chancellor has introduced that Bill, which is an important piece of legislation, and I hope that compensation arrives for those who lost an awful lot of money. However, may I urge him to learn one thing from the miners compensation scheme, which ended up putting an awful lot of money into lawyers’ pockets—unscrupulous lawyers in many cases? Will he make sure that it is a simple, transparent scheme that does not require us to pour taxpayers’ money into lawyers’ pockets?
Mr Osborne
The hon. Gentleman makes a good point. What happened with the miners compensation scheme was a tragedy, and we will certainly seek to learn the lessons of what went wrong. He is more than welcome to correspond with us—I am going to volunteer, if he wants, a meeting with one of my colleagues to discuss the issue—because we are determined to introduce the legislation and help those people who lost everything. We hope that that will command support on both sides of the House.
Finally, we will introduce a Bill to give the independent Office for Budget Responsibility statutory authority and to bring transparency and honesty to our nation’s finances. I cannot work out whether the shadow Chancellor now supports that proposal, which he opposed in government, but it is a revolutionary step in budget making, removing forever the historic power that Chancellors have had to make the official forecasts. It is based, however, on a very simple idea—perhaps completely alien to the thinking of the previous Government—that in future, we fit the Budget to fit the figures, instead of fixing the figures to fit the Budget.
With the help of Sir Alan Budd, we have established the Office for Budget Responsibility on a non-statutory basis. Today I am publishing in a written ministerial statement the terms of reference that I have agreed with Sir Alan. With his consent, I can confirm in the House for the first time that the office will produce its independent assessment of the growth forecast and other forecasts next week, on Monday 14 June. The Budget will be presented just over a week later, well within 50 days of the election, as we promised.
Geraint Davies
On the figures, the Chancellor will remember that in February last year the unemployment rate was 2.5 million. Independent forecasters and economists were predicting that unemployment would now be between 3.5 million and 4 million. Does he accept that we do not have those levels of unemployment because of the fiscal stimulus from the previous Government? Furthermore, he will know that the cost of an extra 1 million unemployed is £6 billion, which would wipe out the savings that have just been announced. Will he therefore be extremely careful not to make cuts that will undermine the economic capacity for growth in future?
Mr Osborne
Unemployment is rising. We have the highest youth unemployment in Europe. We have the highest proportion of children growing up in workless households of any country on the European continent—that is not a record of which I would be particularly proud if I were a Labour MP. We are going to introduce a comprehensive work programme, and reform welfare to create genuine incentives to make work pay. One of the issues that came up time and again in the general election—for me at least, and perhaps for other Members—was the frustration felt by working people on low incomes who go out to work every single day and find that their next-door neighbour has been sitting on out-of-work benefits for years. That is going to be part of the reform that we introduce in our welfare Bill.
I was discussing the Budget, which needs to address the immediate debt situation that the country faces. However, it will also begin the long-term task of moving an economy based on debt—too much consumer debt, too much banking debt, too much Government debt—to an economy in which we save, invest and export in future. If anyone needs to be reminded why the immediate debt situation we have inherited is so serious, I suggest that they read the report on the UK produced by one of the world’s three credit-rating agencies today, which warns of
“a rise in public debt... faster than any other AAA rated sovereign”
country, and points to
“the largest cyclically-adjusted budget deficit in Europe”.
The rating agency says that the previous Government’s plans to reduce the deficit are “distinctly weak” and lack “credibility”. It says that we are the only European economy set to run a budget deficit above 3% in five years’ time. That is all at a time when, as it points out, the fiscal crisis in Greece and other eurozone countries has caused a major shift in investors’ attitude to sovereign risk.
Mr Andrew Love (Edmonton) (Lab/Co-op)
I thank the right hon. Gentleman for giving way. He spoke earlier about judgment. Is he not concerned about the outbreak of competitive austerity across Europe? Does he not think that that may well lead to European economies all bumping along the bottom because we cannot get international trade up and running again to sort out the difficulties of our economy?
Mr Osborne
But the reason why European economies, particularly those in southern Europe and in the eurozone, are having to take the measures that they are taking is that there are concerns about sovereign credit worthiness. Of course they must deal with their situation, but, in the month that I have done the job, I am very aware when I sit down at ECOFIN or at the G20 that I represent the country with the largest budget deficit at either of those gatherings. That is the situation that we inherited—[Interruption.] For two years we had to listen to all the lectures about how the European Union, the G20 and the OECD disagreed with what we are saying. Now they agree with what we are saying. The G20 communiqué signed in South Korea stated:
“Those countries with serious fiscal challenges need to accelerate the pace of consolidation”.
That is the situation bequeathed by the previous Government to Britain.
Mr Ivan Lewis
I thank the Chancellor for giving way. I have some simple questions. Were we right to save Northern Rock? Were we right to recapitalise the banks? Were we right to go for fiscal stimulus? Can the Chancellor be frank with the House about the decisions that my right hon. Friend the shadow Chancellor made?
Mr Osborne
Talk about refighting the last war. We spent the entire general election talking about those decisions. The answer is that the British people agreed with us and not with the shadow Chancellor.
Mr Osborne
Let me make some progress.
It is striking that the Opposition do not have a single positive idea to propose about how we sort out our nation’s economic problems. They are still talking about decisions taken a year previously or in 2008. I am happy to debate them; I debated them on television with the shadow Chancellor during the general election; I debated them in the House on many occasions, but what I am now interested in is sorting out the country’s economic problems and getting Britain working again.
Mr Osborne
I have given way a great deal, and there are Members on both sides of the House who want to make their maiden speeches.
Let me say this to Labour Members: their response in this debate and in Treasury questions is pretty striking. The credibility of our country is put at risk by their borrowing decisions, and they do nothing. Higher debts threaten higher interest rates, and they do nothing. Every single measure that we have taken they oppose. They sign up to every pressure group complaint. They agree with every trade union protest in order to gobble up votes in their leadership contest. They now find themselves in the ridiculous position whereby the reductions in spending for this year are applauded by the G20 but opposed by the shadow Chancellor who used to attend it, and our clear commitment to accelerate the reduction in the deficit is supported by the US Treasury Secretary but opposed by the shadow Chief Secretary. Let them lurch off leftwards into the comfort zone of opposition, while the rest of us work together in the national interest to fix the problems that they left behind. Let me explain how we propose to do that.
Alongside other measures to support the recovery, the Budget on 22 June will set out the overall mandate for bringing the deficit under control, against which the Office for Budget Responsibility will judge the Government’s fiscal policy in future. It will set the overall envelope for spending, but it will not allocate spending between Departments. That is what the spending review will do this autumn.
Today I am placing in the Library of both Houses the document that explains how the review will work. The shadow Chancellor complained that he received the document only as he was coming into the Chamber. That was about an hour before I used to receive any document from him in the debates in this place.
Given the scale of the spending reductions required, the review needs to be quite different from any that this country has seen in recent years. For the past 13 years, spending reviews have not exactly been collegiate affairs—more of a one-way process. The Treasury told Departments what they were getting and precisely what they would do with the money—no room for innovation, no acknowledgement that some of the best ideas for doing things differently might come from the front line and not from the centre. The result of this top-down, centre-knows-best approach was falling public sector productivity and that large budget deficit—less for more. We cannot afford to continue in that direction.
As has been said in the Chamber today, we need to look at Canada and its experiences in the 1990s, when it too faced a massive budget deficit. It brought together the best people from inside and outside government to carry out a fundamental reassessment of the role of the state. They asked probing questions about every part of Government spending. They engaged the public in the choices that had to be made, and they took the whole country with them. That is what we will seek to do. We are committed to carrying out Britain’s unavoidable deficit reduction plan in a way that strengthens and unites the country.
The spending review will be guided by the principles of freedom, fairness and responsibility. It will deliver on the Government’s commitment that health spending will increase in real terms in each year of this Parliament, and we will honour the promise that we as a British people made to the developing world on overseas aid. It will limit as far as possible the impact of reductions in spending on the most vulnerable in society and on those regions heavily dependent on the public sector. It will protect as far as is possible the spending that generates high economic returns so that we build the economy of the future while cleaning up the mess of the past.
Mr Nigel Dodds (Belfast North) (DUP)
The Chancellor mentions those areas heavily dependent on the public sector and the impact on different regions of the United Kingdom. I welcome that commitment, but in order for it to be real, as opposed to simply rhetoric—he talks about the Finance Ministers quadrilateral meetings discussing the spending review—will there be a robust resolution mechanism, so that it is not just the Treasury that decides what happens with regard to the devolved Administrations, which, after all, have their own independent administrations, budgets and economic settlements?
Mr Osborne
The devolved Administrations have to be part of the wider spending review. With the best will in the world, we cannot let the three devolved Administrations simply determine what they will spend, particularly when most of them do not have significant tax-raising powers, but I give the hon. Gentleman the commitment that we will engage in an open and frank way and that we will listen to the concerns from Northern Ireland. I am well aware that one of the big challenges in Northern Ireland is how we can stimulate the private sector in Ulster, and we want to work with him on that. As I am sure he knows, the Secretary of State for Northern Ireland has some ideas in that area. We will engage not just with the Administration in Northern Ireland but with the Scottish Government and the Welsh Assembly and its Administration. For us, this is genuinely about trying to bind as many people as possible into a collective discussion which I hope other Opposition parties will be part of, even if the main Opposition party does not want to be.
Let me explain to the House how the review will work. First, we will build on the in-year savings that we have already made in order to drive for efficiency and value for money. We are creating a new efficiency and reform group at the heart of Government, which brings together a variety of bodies that are separate across Departments in order to try to bring to one place expertise on renegotiating contracts, maximising collective buying power and the like. We will ask for administrative spending in central Whitehall and quangos to be reduced by at least a third. Each Secretary of State will appoint a Minister with specific responsibilities in their Department over the next three months for driving that value-for-money agenda across their Department, and we will place a new obligation on public servants to manage taxpayers’ money more wisely by strengthening the role of the departmental finance director.
Mr Tom Watson (West Bromwich East) (Lab)
I strongly support the Chancellor in his drive to have more transparent budgeting, in particular the obligation on Departments to announce every item of expenditure over £25,000. Will he be legislating to make that a statutory obligation? Will he explain the slight incongruity between the obligation on local government to publish items of expenditure over £500 and civil servants getting away with a little bit more at £25,000? Does he think that merits him reducing that bar?
Mr Osborne
We chose £25,000 because, quite frankly, the US model suggested that that was an appropriate sum. I am very willing to consider moving to a lower level of disclosure in central Government, once we get the system up and running and working, but I did not want to make the sum so small that it stopped the thing working in the first place. Local councils have much smaller budgets, of course, relative to central Government, and that is why we chose a lower threshold. However, the £25,000 threshold is perhaps just the first step. The big IT challenge is to make the system work, but in the United States they have done so, and they call it “Googling your tax dollars”. Barack Obama, when he was a senator, helped to sponsor the Bill that introduced it, and we are absolutely committed to introducing such a measure here in the United Kingdom.
Secondly, the spending review will challenge Departments, local government and others to consider fundamental changes to the way they provide public services. As part of that process, every part of government and every spending programme will have to answer a series of probing questions. Is the activity essential to meet Government priorities? Do the Government need to fund that activity? Does the activity provide substantial economic value? Can the activity be targeted on those most in need? How can the activity be provided at a lower cost? How can the activity be provided more effectively? Can the activity be provided by a non-state provider or by citizens, wholly or in partnership? Can non-state providers be paid to carry out the activity according to the results that they achieve? And can local bodies, as opposed to central Government, provide the activity? The answers to those questions will inform a fundamental reassessment of the way in which government works.
Dr John Pugh (Southport) (LD)
Where will the Public Accounts Committee and, indeed, other Select Committees play a part in the process? How will they play their part?
Mr Osborne
The Public Accounts Committee will, I hope, be very involved in the process, and I want to involve the expertise not only of its current membership, but of my hon. Friend the Member for Gainsborough (Mr Leigh), who chaired the Committee with such distinction during the previous Parliament. I served on the Public Accounts Committee when I first entered the House, and it is perhaps our most effective parliamentary tool for dealing with some of the big issues of public expenditure and value for money. One has only to read its reports on, for example, the big Ministry of Defence procurement contracts over recent years to realise that it has identified a very serious problem and, with the National Audit Office, brings a considerable expertise to solving those problems.
Chris Leslie (Nottingham East) (Lab/Co-op)
Will the right hon. Gentleman give way?
Chris Leslie
At Treasury questions some time ago, I was concerned about items of expenditure that might have met the tests that the Chancellor has set out in the spending review. On some of those tests, will the Chancellor now go where the Chief Secretary to the Treasury could not and say whether he has any plans to means-test child benefit? Many people are quite worried about that.
Mr Osborne
I welcome the hon. Gentleman back to the House, but I shall not be drawn down the path whereby new, eager and young—or no longer so young—Members jump up with every cherished item of Government expenditure and pose such questions. The hon. Gentleman will have to wait for the spending review and Budget for a discussion of the whole Government programme, but he should not assume anything from that answer.
The next thing that we will do is bring together, from within the Government and outside, the best people in their fields. We want the best civil servants helping us in that collective effort, not defending their Whitehall Departments. We want the inspirational head teachers, the chief inspectors in the police service and the nurses with new ideas to have their opportunity to put their ideas to us. The remit will be to innovate, to challenge entrenched ways of doing things and to identify the best ideas from throughout the world; and, in order to ensure that the resulting reform programme is achieved, we will establish robust mechanisms to ensure accountability to the public.
Thirdly, the spending review will cover the large, cross-cutting areas of Government spending. We will set out our plans to reform the welfare system and restrain the cost of public sector pay and pensions, and for capital spending we will undertake a fundamental review of spending plans to identify the areas of spending that will achieve the greatest economic returns. Opposition Members should know that we have inherited a capital budget that is set to halve.
Mr Douglas Carswell (Clacton) (Con)
My right hon. Friend has been quoted talking about having a Star Chamber to oversee public spending. For years, have we not had an elite clique of Treasury officials doing precisely that? Somehow, no Executive quite manage to rein in the executive as planned. Why not in addition try a radical solution and give the newly liberated Select Committees powers to curb departmental spending? As well as fixing our finances, that might give Parliament some purpose.
Mr Osborne
I am probably going to regret this, but I am quite attracted to the idea that my hon. Friend has proposed, not just in the Chamber today but to me privately; I think he has also written about it. The key thing that he proposes is that Select Committees should be able to recommend reductions, rather than increases, in Government Department budgets. I would certainly welcome that if we were ever to proceed in that direction.
I honestly mean it when I say to my hon. Friend that I am attracted to his idea. I will come back to him and see whether we can take it forward. Obviously, it would be the collective decision of the Government, rather than mine alone. My hon. Friend is right to say that we are trying to get away from it simply being the Treasury that conducts the spending review, imposing its decisions on everyone else.
I believe that when Tony Blair was Prime Minister, he and the right hon. Member for Kirkcaldy and Cowdenbeath would simply agree a total. Every Secretary of State would then receive the number in an envelope, before it was announced to the press about 20 minutes later. We are going to have a more collegiate approach and we are genuinely seeking to engage as many people as possible—the brightest civil servants across all the Government Departments and the best people from the devolved Administrations, pressure groups, independent think-tanks and front-line public services. There will be a Cabinet committee to chair and oversee the process and its membership will be restricted to those Cabinet Ministers with very small budgets of their own. Other Cabinet Ministers will be eligible to be members of the committee once they have settled their departmental allocations. That will create an incentive structure within the Cabinet.
Finally, over the summer we are going to conduct a wide public engagement exercise so that the whole country has a chance to get involved. We have already begun to implement the most radical transparency agenda that the country has ever seen. The hon. Member for West Bromwich East (Mr Watson) and I were talking earlier about the £25,000 disclosure limit for central Government expenditure. The previous Chancellor refused my freedom of information request to publish the Treasury’s combined online information system, or COINS, database of public spending. But the current Chancellor of the Exchequer has accepted that request and the raw data in the COINS database are now available online.
Mr Osborne
I will give way on this point, if the hon. Gentleman likes, but just let me say this. We have published the database as quickly as we have been able to. By August, we will be able to publish a more user-friendly version of the data; the current version is quite difficult to operate. We need a couple of months to get the computer software to enable people to search the database.
Mr Bailey
In his list of those who would be consulted on the budget cuts, the Chancellor omitted to mention manufacturing industry. Will he undertake to talk to representatives of manufacturing industry about his proposals on investment allowances, as portrayed in the run-up to the general election?
Mr Osborne
My team and I are in regular discussions with manufacturing industry, representatives of which were vocal supporters of our proposals during the general election to avoid the jobs tax.
Let me conclude by saying that all parts of government and society—and all parts of this Parliament, if they want to take the opportunity—will have a chance to make their voices heard. This is the great national challenge of our generation. After years of waste, debt and irresponsibility, we have to get Britain to live within its means. It is time to rethink how the Government spend our money. We did not choose the terrible economic situation that we inherited; the Labour party chose that for us. But we can work to put it right—deal with our debts, set our country on a brighter economic course and show that we are all in this together. I commend the Gracious Speech to the House.
Mr Deputy Speaker (Sir Alan Haselhurst)
Order. I must at this point remind the House that Mr Speaker has placed a seven-minute limit on Back-Bench speeches, which operates from now on. Obviously, anyone who can speak within that limit and spare us an extra minute will earn the gratitude of nervous hon. Members who are waiting to make their maiden speeches.
Mr David Blunkett (Sheffield, Brightside and Hillsborough) (Lab)
I shall endeavour to adhere to what you have requested, Mr Deputy Speaker.
I am standing to defend the record of my Government, not to traduce it. I am proud of those 13 years—proud of the new schools, the jobs that did not previously exist, the environment that has been improved, the houses that have been completely refurbished, and the complete transformation of Sheffield, Brightside and Hillsborough. I say that because I am little worried about people who are now looking over their shoulder, some of whom are competing for the leadership of my party, and who are in a 1930s denial situation whereby they have to pretend that they had nothing to do with the decisions that were taken. I did, and I am proud of the decisions that we made, some of which were about investing in communities that had been neglected for years.
When I hear Conservative Members saying, as has the Chancellor of the Exchequer in the media and this afternoon in this House, that we are all in this together, it makes me want to be sick, because those Members across the aisle know, and we know, that we are not all in this together. It will be the people we on the Labour Benches represent, and some Liberal Democrats represent, who face the greatest difficulty, because they cannot buy their way out of deteriorating public services, and they do not have the alternatives that those with resources, including capital assets, have.
That is why the decision to do away with the child trust fund is one of the most heinous things in this £6 billion package of cuts. It takes away the future assets of young people who would be able to stand on their own feet, and it reduces the propensity to save, which the Secretary of State for Work and Pensions has extolled over the past fortnight. He is right to do so. In the next breath, however, his Government are cutting at a time when the subsidy from the public purse for tax relief on individual savings accounts is twice as much as the amount that it would cost to maintain the child trust fund, which has a 100% take-up, involving 5 million children, compared with a 30% take-up for ISAs among the adult population.
In the end, we have to ask ourselves three questions. First, who got us into this mess? Was it politicians and politics, or was it the international financiers and bankers, and international capital, that created the situation that the Chancellor of the Exchequer wants to place on the shoulders of the outgoing Government? Of course, it was not the Labour Government’s doing but a result of the problems that we have had to deal with over the past three years in terms of saving ourselves from the banks and avoiding the collapse of our economy.
That brings me to my second point. If we should be doing more, more quickly—cutting faster and more deeply—is it because we need to mirror what is taking place in the rest of Europe and the world, as the Chancellor of the Exchequer has enunciated? If that is true, how is it that all these other countries that we should be emulating came to be in the mire in the first place? I presume that it is the Labour Government in Britain who have brought Spain, Italy, Greece and the Republic of Ireland to their knees. That is why public sector workers are having their pay cut; that is why the Chancellor in Germany is cutting £65 billion; and that is why, across the world, we are seeing this retrenchment: it is all down to my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown) and my right hon. Friend the shadow Chancellor. Everybody in this country who has a brain knows that that is nonsense.
Thirdly, if we are not careful, we will exacerbate an existing problem. Of course we know that there are going to be public expenditure reductions. We do not need to be told that—we had agreed it before the general election—but we wanted growth, an increased tax yield and a reduction in outgoings on benefits and unemployment to help us to bridge that gap. If we are not careful, then Sir Alan Budd, with the difficult job that he has been given in the Office for Budget Responsibility, will predict lower growth to the point where the Chancellor then tells us that because lower growth is projected, we will need to cut services and investment still further to take account of that. If we do that, we reduce the likelihood of growth and of tax yield and redemption without having to cut the essential services of the people we represent. Fourthly, we need to think imaginatively about how we can combine services nationally and locally, so that we do not have to make draconian cuts. We can genuinely reduce the cost of providing the same services.
Under the current shadow Chief Secretary to the Treasury, the Cabinet Office produced an excellent document that I recommend to the new Government. That document showed what is being done around the world and I wish we had given it greater publicity and made more of it at the time. We can use what is now called the Total Place initiative and engage local people. However, we cannot do that if massive draconian decisions to cut centrally are made and local government and local people are blamed for the cuts being made and the pain being inflicted. I shall give one example: aggregate external funding for local government. In the Prime Minister’s Oxfordshire constituency, there is 1.7% of unrestricted expenditure, but that figure is 18.5% in my city. We know perfectly well that the cuts will fall on those who are least able to bear them, and that is why we should oppose them.
Lorely Burt (Solihull) (LD)
It is a strange feeling to be standing here today—not only am I on this side of the Chamber, but I am speaking on Government proposals that incorporate the vast majority of policies that we, the Liberal Democrat business, innovation and skills team, produced as part of our general election manifesto. I know that many of those policies were in the Conservative manifesto as well, but it would be churlish to quibble about who thought of them first.
Both the Conservatives and the Liberal Democrats see themselves as being the party of business, so it is unsurprising that many of our policies chime together. I want to speak briefly about my hopes for the implementation of some of those policies, but first I want to mention two policies that did not make it into the agreement. Access to capital has been a great problem for business for some time, and with the banks taking a more cautious—ultra-cautious some might say—approach to lending, we thought up a couple of creative ideas to use equity as opposed to capital as a mechanism to fund growth. For start-ups, we devised a policy of local enterprise funds, which would be a tax-efficient way for local companies or individuals to plough capital back into their area in return for equity. They could also have offered added value by offering advice if appropriate.
In order for established companies to fund growth, we looked at the idea of having regional stock exchanges, which would be based on the same principles as national ones, but would be localised and geared up for smaller companies. They could use the regional stock exchanges to get cash for equity without the long-winded and exacting due diligence that would otherwise preclude them from entering the big boys’ national stock exchange league. I hope that the new coalition will still consider those ideas at some point.
There are great things in the agreement that, if properly implemented, will make a huge difference to the ability of business to do what it wants and needs to do, which is get on with the job. On regulation, I am greatly looking forward to seeing a system of one-in one-out, sunset clauses and an enforcement regime that seeks to help business meet regulatory requirements in a speedy and efficient way. I am glad to see that the Government will create a Star Chamber to bring those policies into being. Having been a member of the Select Committee on Regulatory Reform for three years, I know how easy it is for civil servants to focus on the smaller issues, and for the regulators and the regulated to cosy up in mutual congratulation. The star chamber must work on the plank, not the mote, in the regulatory eye.
Other welcome policies are simple but very important to those they affect, such as IR35, which has been an issue for micro-businesses for a long time. We will not let business avoid tax, but we will make the system simpler and more straightforward, and take away the anxiety of someone not knowing whether they are covered by the rules or not. We welcome the automatic rate relief for small businesses, as it will bring relief to the very businesses that will benefit most: those least conversant with the system.
One coalition Government policy—our plan for local enterprise partnerships—has been met with dismay by the regional development agencies, but RDAs that have done a good job can continue to work for enterprise in their regions. However, the policy will mean that we will have a form of organisation that is more accountable to the region that it serves and more flexible to its needs. Obviously, there are cuts in the proposals, but business knows what it means to cope with changing, more difficult circumstances and has been dealing with those since the beginning of the recession. RDAs must now deliver service to business more efficiently than ever before.
Lorely Burt
The hon. Gentleman is entirely mistaken. In fact, the policies of the two parties were almost identical. They were so similar, I wondered whether someone had been talking to someone else. We are at one on that.
Procurement is a big issue affecting the ability of businesses to survive and grow, and it was great to hear in the debate on the Humble Address the aspiration to contract 25% of Government procurement to small business. That will take some enforcing, and we must first get the bodies that spend our taxpayers’ money to take account of the size of companies from which they procure. While they are doing that, would it not be great to get them to have a look at whether the people from whom they are procuring look like the people they supply? Are we utilising the rich diversity of supply that we could utilise, including businesses owned by women and ethnic minorities?
I come from the west midlands, which is possibly the UK region that has been hardest hit by the recession. However, we in the west midlands do something special, and we do it well: we make things. We are very clever at making highly technical, high value-added products, many of which we export to the world. Although our car industry has suffered badly, not only do we produce two of the most iconic marques in the world—Jaguar and Land Rover—but they are thriving, both in the export and home markets.
I shall conclude on this point: for far too long, financial services—I understand that they are important—have held the Government in thrall. If I have anything to do with it, that will no longer happen. Despite the fact that manufacturing has been allowed to wither, the UK is still the sixth largest manufacturing country in the world. The time has come to talk manufacturing up, create a climate in which it can thrive, allow it access to finance, which is the lifeblood of business, and create a fair regulatory playing field. Then, we should get off the pitch, and let team Great Britain compete on the world stage.
Frank Dobson (Holborn and St Pancras) (Lab)
At the recent general election, the Tories gleefully asserted that under the Labour Government, inequality had increased. That was true, and it was a major embarrassment to Labour candidates and supporters, but in fact, the gap widened despite the Government’s introduction of the national minimum wage and tax credits, and their targeting of health, education and pre-school resources on the most deprived areas and families. The gap widened not because the Labour Government ignored the plight of the worst-off, but because the best-off kept paying themselves more and more.
The Prime Minister has said that his Government’s proposals will change our way of life, but they are very unlikely to reduce inequality. His Tory-Lib Dem Government are positively drooling at the prospect of slashing public services, when we all know that the living standards of the poorest in society are, as they always will be, the most dependent on public funds and public services. Cutting pay and pensions and slashing public services will not narrow the inequality gap, but widen it.
As we all know, increasing the share of national wealth going to the worst-off is not of itself sufficient to narrow the inequality gap. We must at the same time reduce the share going to the wealthy. The principal target for such a reduction must be the bloated finance sector, which has been taking an ever greater share of the nation’s wealth while devoting a great deal of talented effort on tax avoidance to benefit the people who work in it. Indeed, in the recent banking crisis, far from being a wealth creator, the financial sector proved to be a wealth destroyer. Its record was deplorable. Today, KPMG has given us the benefit of its wisdom on how to improve efficiency in the public sector. I do not know why we give any credence to KPMG, however; after all, it was the auditor of HBOS and Bradford & Bingley and it did not spot that anything was going wrong when those outfits were going bust, even though that was its primary task.
Banks are supposed to act as a conduit between savers and borrowers, providing capital for individuals and firms who want to produce useful goods and services for the rest of us. Over the years, that function has increasingly taken a back seat to speculation that is referred to, in deferential terms, as “the market”. These markets, both national and international, often have nothing to do with supply and demand, however. Fluctuations in the price of oil are a good example. In July 2008, the price of Brent crude reached $146 a barrel; by December that year, just five months later, the price had fallen to $36 a barrel, almost exactly a quarter of its top price. That was not the product of changes in supply and demand; it was the product of speculation.
The price of rice shot up from about $280 a tonne to $1,015 a tonne in April 2008. Apologists for “the market” denied that that was the product of speculation. They said it was because the Chinese were eating more rice. If so, the Chinese must have started eating something else since then, because the price of rice has halved to $500 a tonne today. Such speculation always hurts the worst-off and lines the pockets of the people who are already rich. The G20 should be taking concerted action to tackle such speculation, because while it does not do so everybody else in the world will be vulnerable.
Of course, the main sources of wealth for the finance industry are the costs it imposes on the rest of us for its services—its handling charges and transaction costs, or what would be referred to in any decent above-board casino as the “croupier’s rake-off”. All large financial transactions involve a host of advisers, consultants, lawyers, fund managers and the like, all pocketing a percentage. Let us consider the recent abortive effort by the Prudential to buy part of AIG at an original estimated value of £25 billion. If the scheme had gone through, the transaction costs had been expected to total about £1 billion, or about 4% of the value. Although the proposal has fallen through, it has still cost the Pru approaching £500 million, including a lot of fees for expensive City advice—presumably bad advice.
The current proposal to sell off the channel tunnel rail link and St Pancras station illustrates how the finance industry failed in its self-proclaimed task of providing private capital yet is now creaming off some of the value. No City institutions were prepared to invest in the channel tunnel link, so the taxpayer had to step in and take the risk. Now that it is operating successfully however, the private sector is sniffing a profit, and it is to be sold off. Citigroup and UBS are involved. They did not design the link, transform St Pancras or manage the building project, and they certainly did not take any of the risk, but they are now advising on the sale and will pocket substantial fees for that advice. One can only hope, on behalf of taxpayers whose assets are being sold off, that those two firms will do a better job than they did in the banking crash, when Citigroup lost $55 billion and UBS lost $44 billion. We need to ensure that the drain of finance and of talented graduates into the City is stopped, so that the money can be devoted, and those people can devote their lives, to doing something a lot more useful and promoting British industry. That is what we all want to see.
Mr James Clappison (Hertsmere) (Con)
This is my first opportunity to make a contribution in this Parliament, and it is a pleasure, as always, to follow the right hon. Member for Holborn and St Pancras (Frank Dobson), although I will not go down the same route as him. I wish to say a little about the work and pensions side of this debate, but before I do so may I deal with a subject that is somewhat associated with it: the proposal in the Gracious Speech for a limit on economic migration from outside the European Union? I warmly welcome that sensible proposal. Strangely, it was part of the Opposition amendment to yesterday’s motion, although it was not mentioned in the speech of any Opposition Member, including the Front Benchers. One can only speculate as to the internal problems in the Opposition on that matter.
Although I welcome the proposal, I note that the coalition agreement says that it is to be subject to consultation on the “mechanism” by which the limit is achieved. I urge my hon. colleagues to bear in mind that an important consultation has just taken place; call me old-fashioned, Mr Deputy Speaker, but I think that the most important consultation takes place when the voter goes into the voting booth and puts his or her cross on the ballot paper. Therefore, I respectfully invite my right hon. and hon. Friends to take account of the considerable concern expressed about immigration during the campaign.
It is right to engage in some consultation about implementation and, doubtless, the Government will have a queue of employers come before them. When I served on the Select Committee on Home Affairs we examined this very question. We heard from restaurant owners, farmers and people involved in the IT industry, and they seemed to be under the impression that the resident working population of this country was incapable of working on a farm, in a restaurant or in the IT industry. I suggest to my hon. Friends that when they hear such submissions from employers they gently point those employers towards the unemployment statistics, particularly those relating to young people in this country.
Those statistics show one of the most baleful inheritances from the previous Government. Given the speeches that we have heard today, Labour Members seem totally oblivious of the plight that they have left so many young people facing. We have heard a lot about child trust funds, but we have not heard so much about the lack of opportunities for young people who are about to enter their working lives and find themselves facing the prospect of the dole queue. After 13 years of a Labour Government, almost 1 million young people are out of work and there is a structural problem of youth unemployment. I say that because the level of youth unemployment was rising long before the recession took hold. All that has occurred under a Government who had promised at their outset to reduce unemployment among young people by 250,000.
A further 1.5 million older workers are out of work, and standing behind them, although not of course recorded in the formal unemployment statistics, are the many millions of people of working age who languish on out-of-work benefits. We cannot expect some of them to work because of the nature of their condition, but many of them are capable of work and indeed want to work but under the current system they are not receiving the help that they need, be it medical help, encouragement or training, to enable them to work.
In many cases—this is an important part of the problem—such people also lack the incentives to work. We talk a lot about providing incentives for better-off people to work—I am all in favour of that, because I support enterprise and hard work, seeing it as the way forward, unlike some Labour Members, whose view is to rely on the state for everything. However, we must consider also providing incentives for poorer people on benefits to get into and remain in work. All too often, the poorer person on out-of-work benefits, who may not have many skills and may have a patchy previous employment record, can find only low-paid employment. Under the current system, a large part of their money—their housing benefit and council tax benefit—is withdrawn from them the moment they start work. The moment a poor person who has been on out-of-work benefits gets into work they, in effect, face a marginal tax rate of 80% or 90%. They then find that out of the meagre proceeds left for them they have to pay the normal costs involved in getting to work, being prepared for work, dressing for work and so on. In addition, they have the fear of not being able to rely on the benefits system in the future for housing and all their other needs.
Mrs Anne McGuire (Stirling) (Lab)
Will the hon. Gentleman recognise that the previous Government implemented a proposal that meant that people could move into work from receiving benefits and still retain for two years their right to move back to receiving benefits? He is misrepresenting the current situation.
Mr Clappison
I am not misrepresenting it in any way. Labour Members were prepared to have a system in which 80% or 90% of income was withdrawn from people who went into work, through the withdrawal of council tax and housing benefit, and not very much has been done about that. I recognise that some Labour Members were aware of the problem, including the right hon. Member for Birkenhead (Mr Field) and some who have now left the House such as James Purnell and John Hutton. They were aware of the problem, but I suspect that they were blocked when they wanted to do something about it. The result is that 2 million people now say that they want to work but are on out-of-work benefits and are not included in the formal unemployment statistics, which amount to 2.5 million.
Labour Members have presided over a welfare system that is incredibly effective at trapping people on benefits once they get on to them, and it is a challenge for my hon. and right hon. Friends to devise a better system that will get people off welfare and into work. They are having to undertake radical action on this front at a very unpropitious time, when we are facing, as we all know, the appalling deficit that has been inherited. I urge them to turn their hands to this task, because it is too important to fail or to put in the drawer marked “too difficult to undertake”. It has to be undertaken, particularly for the sake of the younger people who are languishing on out-of-work benefits and are formally recorded as unemployed. This is a challenge for the future for my right hon. and hon. Friends; it is a challenge that has been neglected by the Labour party and so left for us to take up. It will contribute to solving the problem of the deficit, but we have to take the bold action that has not been taken for far too long—for 13 years of wasted opportunities, which have led to wasted lives and people who have been left, after a Labour Government, languishing on unemployment and out-of-work benefits.
Kate Green (Stretford and Urmston) (Lab)
I am hugely proud to be giving my maiden speech this afternoon as the new Member for Stretford and Urmston. I think that mine is the first maiden speech today. My constituency is, of course, very special. I am deeply privileged to represent it and I hope to serve my constituents well.
My first act in Parliament must be to pay tribute to my predecessors, starting with the right hon. Beverley Hughes. Hon. Members will be aware of Bev’s tremendous contribution to public life as a Minister, and I especially want to acknowledge her contribution as children’s Minister and her achievement in bringing forward the implementation of the Sure Start programme. Bev was immensely respected locally as a first-rate constituency MP, and I think that mattered more to her than anything she achieved as a Minister, despite her many successes in that role. I am delighted, as I know all hon. Members will be, that she is to remain in Parliament as a Member of the House of Lords.
I should also pay tribute to my hon. Friend the Member for Manchester Central (Tony Lloyd). He first entered the House as the Member for Stretford in 1983, and he retains the great respect and affection of my constituents to this day.
My constituency is special for many reasons. It typifies what is best about our country, such as hard-working, neighbourly people who are determined to do their best for their families and their community—people who are down-to-earth but who have ambitions, hopes and dreams. Old Trafford is world-famous well beyond the constituency boundary as home to both Lancashire county cricket club and Manchester United football club, whose stadium will be known to many hon. Members as the aptly named “theatre of dreams”. To us locally, Old Trafford is just as exceptional for its success as a vibrant, friendly, welcoming and supportive multicultural community. I believe that it is a real showcase for the strengths that we gain from different cultures and communities living, working and enjoying life together, celebrating their distinct identities, values and cultures but in doing so creating an exciting, caring and diverse neighbourhood where people live in harmony and peace.
The local neighbourhoods of Flixton, Urmston, Stretford, Partington, Ashton on Mersey and Carrington are also well settled, stable and tight-knit. They too foster dreams and aspirations and share pride in local success. Just the other day, Urmston resident Danielle Hope was chosen as the BBC’s new Dorothy, to the delight of local people who had cheered her on.
The constituency has a proud tradition of public service. It was to what is now Trafford general hospital in Davyhulme in the heart of the constituency that Nye Bevan came in 1948 to announce the birth of the NHS. That bold and unapologetic commitment to our public services remains important in the constituency to this day.
We are pleased too that the Imperial War museum has its northern base in the constituency—a reminder, as our troops show great courage today in seeking to bring peace in some of the most troubled parts of the world—of the proud tradition of military service.
Importantly too, the constituency has a proud working tradition as the home of Trafford Park, once the largest industrial estate in Europe and still home to many local and global businesses, and the Trafford Centre, with its many retail jobs. My constituents are proud of the contribution that we make to the UK and the regional economy, and they know the value and the dignity of work.
In the thousands of conversations that I have had with local people, they have repeated the importance of young people gaining the skills that they need, and getting into good jobs, as they start out in life. I was proud to be able to answer that, thanks to Labour’s investment in employment and skills, unemployment in this recession has up to now been lower than in the past two recessions, and that our future jobs fund would guarantee every young person training for a job.
Some hon. Members are perhaps a little younger than I am, and they may not have experienced growing up with the fear that there would be no work. My grandfathers knew that fear. My generation began our adult lives at the beginning of the 1980s facing the same fear. I am deeply concerned to prevent young people from facing the same fear today. A robust economy, a thriving business sector and an enabling welfare state are certainly part of the answer, but if work is to be a secure route out of poverty, we must both protect jobs and pay attention to dismantling the barriers that prevent people from taking up paid work.
My challenge to the Government, as they take forward their welfare reforms, is that they must guarantee that there will be adequate support. If they want to ensure that work pays, my challenge is that they must lead the way in the public sector, where a quarter of low-paid workers are employed, by adopting the living wage.
I ask the Government now to invest in the future. Good jobs, investment in our young people, a sustainable recovery and fairness in the economy are what my constituents want. I am determined that I will always speak out for them, and I hope that they will hold me to that.
Sajid Javid (Bromsgrove) (Con)
Thank you, Mr Deputy Speaker, for giving me this opportunity to make my maiden speech. I speak with a particular sense of humility after so many hon. Members have given such admirable maiden speeches, including that just made by the hon. Member for Stretford and Urmston (Kate Green).
I have some worthy predecessors. My immediate predecessor was Miss Julie Kirkbride. She was first elected in 1997, and she was a fine constituency MP. I will never forget the spontaneous tributes that people paid to her, when I knocked on their doors during the campaign, for all the work that she had done on their behalf. I should also like to express my gratitude to her two most recent predecessors, Mr Roy Thomason and Sir Hal Miller, who both helped me in my campaign with great advice.
Bromsgrove is a beautiful, traditional beacon of middle England. I know that many hon. Members have described their constituencies as beautiful, but Bromsgrove truly has breathtaking countryside. It is an old market town which was originally a bit of an industrial hub for the west midlands industrial complex. It still has a very active, traditional court-leet, with lovely traditions.
In the east of the constituency we have many beautiful picture-postcard villages, including the glamorously named suburb of Hollywood.
Over the centuries, we have had many heroes from Bromsgrove. I should like to pay tribute on this occasion to two of the most recent—both teenagers, both soldiers in the 2nd Battalion, the Mercian Regiment. The first, Private Robert Laws, was aged 18 when he lost his life fighting for our country in Helmand province last year. He had passed his training only six months previously. The second, Private Alex Kennedy, also aged 18, earlier this year became the youngest soldier since the second world war to receive the military cross. He fought hard to save the life of his commanding officer during a fierce battle with the Taliban. We must never forget the sacrifices that our soldiers—those who have served and those who are currently serving for us—make on our behalf.
A notable person from Bromsgrove was A. E. Housman, whose stirring prose reflected the rural beauty of the heart of England. In Bromsgrove we have a wonderful heritage in the English countryside, and that is why I want to make sure that it is the people who are most affected by planning decisions who make those decisions. That is why I welcome the recent announcements of my right hon. Friend the Secretary of State for Communities and Local Government on that issue. They have been most welcomed by my constituents.
Perhaps at this point I should say something about my own background, as hon. Members may be able to tell from my appearance and my name that I can hardly be of traditional Worcestershire stock. My parents were both born in British India. Although my father was just six years old in 1947, he remembers full well the tragedy that occurred upon the partition of India—12 million people were displaced and almost a million lost their lives. If we need an example of how political failure can lead to great human tragedy, surely that is one of the most heart-wrenching, and an example of how politics can really make a difference. That is what I say to people who ask me why I gave up a lucrative career in finance to enter this House.
To the dismay of the right hon. Member for Holborn and St Pancras (Frank Dobson), I have to tell him that for 19 years I have been an investment banker. In my case, this is one brain that was sucked up by the City and has now come to serve the people in this Parliament. I worked in London, Singapore and New York. I readily admit that being seen as an investment banker was not the most useful thing on the campaign trail, but it helped prepare me for a profession not well liked by the general public. Let us hope that all of us, on both sides of the House, can work together over the coming years to help restore the nation’s respect for our great Parliament.
In view of my background in finance, I am particularly pleased to give my maiden speech during this debate on economic affairs. There are many global economic uncertainties at the moment, and they have potentially grave consequences for our economy. First, the euro is only just beginning to have problems. It was always a political contrivance that had virtually nothing to do with economics. Secondly, the world’s largest emerging market economies, which have buttressed global demand since the onset of the credit crisis, are about to go through a period of monetary tightening, and we can no longer rely on them for global growth.
Thirdly, industrialised nations, including our own, that have issued vast amounts of sovereign debt over the past three years in particular can no longer go on that way. We have to make sure that when we look at these issues, we never forget the traditional disciplines that have stood Britain in good stead—sound public finances, low and simple taxation, and light and flexible regulation. It is when we forget these disciplines that we put our future prosperity at risk.
Thank you, Mr Deputy Speaker, for giving me this opportunity, and thank you to the people of Bromsgrove for allowing me to serve them in this Chamber.
Nick Smith (Blaenau Gwent) (Lab)
Thank you, Mr Deputy Speaker, for letting me speak in the House for the first time. I would like to say well done to the previous speakers, my hon. Friend the Member for Stretford and Urmston (Kate Green) and the hon. Member for Bromsgrove (Sajid Javid). Both made excellent contributions.
Today I want to talk about three things: some of my predecessors from Blaenau Gwent, my constituency in south Wales; what a visionary place it is; and why the constituency needs a fair deal from the Government, to provide the economic growth that our people deserve.
It is often said that we stand on the shoulders of giants. If you are the MP for Blaenau Gwent, that is definitely the case. It was one of my predecessors, Nye Bevan, the former Labour MP for Ebbw Vale, who set up our national health service. Michael Foot also represented the constituency. Just before he died, I told Michael that I would do my very best to win the constituency back for Labour at the general election. I am proud to have fulfilled that promise. I will do my best to continue the Welsh Labour tradition of Nye and Michael, to serve in my own way with communities for whom they did so much. I also pay tribute to my immediate predecessor in this place, Dai Davies. Mr Davies is a strong trade unionist and a long-standing advocate for modern, high-quality apprenticeships.
I am honoured to be the MP for a wonderful valleys constituency such as Blaenau Gwent. We are Welsh radicals who put our values into action. I was born in Cardiff, and my family are long-standing valleys people who worked in coal and steel. Tredegar, the valleys town where I grew up and went to school, is the cradle of the national health service. The Tredegar Medical Aid Society was Nye’s model for the health service. In 1948 he said:
“All I am doing is extending to the entire population of Britain the benefits we had in Tredegar for a generation or more.”
His politics were based on the vision of local men and women—a combination of radical debate and a determination to run things themselves, and provide better services for local people.
Blaenau Gwent also played a vital role in the development of British democracy. It was from the villages and towns of north Gwent that the Chartists marched on Newport in 1831.
Blaenau Gwent is a proud constituency. While not rich in money terms, we have a very rich environment and culture. Our choirs and town bands have won national awards down the years; in a few weeks, the acclaimed blues festival takes place in beautiful Abertillery park; and now, in the digital age, film making has taken off too. Indeed, a recently produced local film called “A Little Bit of Tom Jones” won best picture at the BAFTA Cymru awards. I recommend it. This July, we will celebrate this creative contribution when the Welsh National Eisteddfod comes to Ebbw Vale.
Over the past 13 years the Labour Government did an excellent job rebuilding the local economy and infrastructure in Blaenau Gwent. Transport links have been improved, with the new train line from Cardiff to Ebbw Vale. The foundations of a new, splendid valleys learning campus are in hand, and our brand new hospital, named after Nye Bevan, is about to open.
But no one coming to the constituency can ignore our industrial legacy. There is still much, much to do. Too many of my constituents are unemployed. In Blaenau Gwent, unemployment stands at 11.8%. In Witney, the Prime Minister’s constituency, it is 1.9%. Also, life is too short for many. Average male life expectancy in the constituency is just 75.3 years. In Witney, men live nearly five years longer—an average of 79.4 years. In the Queen’s Speech there were fine words about fairness and reducing health inequalities. My constituents will be measuring the new Government closely on these policies.
Unfortunately, I believe this Government have got off to a very bad start. The cuts announced for the future jobs fund and child trust funds are not welcome. I deplore the cuts that slash the numbers of young people able to go to university. As I know from personal experience, one of the best routes out of poverty is a good education.
I am a former director of policy for the Royal College of Speech & Language Therapists and campaigns manager for the National Society for the Prevention of Cruelty to Children. I will use my campaigning skills to stand up for families whose children suffer from communications disability. Our Speaker and the shadow Secretary of State for Education, my right hon. Friend the Member for Morley and Outwood (Ed Balls), showed great leadership on that topic in the previous Parliament. I would like to help take forward that important work.
In his maiden speech in 1929, Nye Bevan warned of
“collusion between the Tories and the Liberals”.—[Official Report, 16 July 1929; Vol. 230, c. 338.]
Nothing changes, does it? He called for Labour to have its eyes on the needs of people. Our needs are for more jobs, and a reduction in poverty and health inequalities. There are huge issues of inequality in my constituency. The chronic diseases of the legacy industries of coal and steel must still be overcome; heart disease and lung cancer in particular must be reduced. Public health should be at the centre of our investment and policy changes. Unpopular though it may be with some, I support the campaign for minimum pricing for units of alcohol. Although health is now an issue for the Welsh Assembly, as a local MP I will concentrate on that.
Employment must be another priority. The confidence and aspirations of young people must be supported. The new learning campus in our valleys must be delivered, so that good, well-paid employment is their future. We are a constituency that helped build this country. The railways and factories were made with our steel, and fired with our coal. Now though, we must invest in tomorrow's jobs. Alongside manufacturing, we should nurture green jobs as well as jobs based in science and the digital economy. We must get over the country’s massive digital divide. We must have fast internet access in Blaenau Gwent.
To boost the economy of Blaenau Gwent, our generation must build on the vision of my predecessors, learn from the socialist history of Blaenau Gwent and invest in industrial, education and transport infrastructure to boost our economic regeneration. I will pour my energy into that work. I will do it with a smile on my face, as working well with people usually gets the results needed. I will pursue our jobs, health and anti-poverty agendas with tenacity, too. My constituents deserve nothing less. I thank the House for listening to me today.
Nicky Morgan (Loughborough) (Con)
Thank you, Mr Deputy Speaker, for allowing me to make my maiden speech during this debate, which is addressing a critical part of the new Government’s future programme. I congratulate the previous speakers, particularly those who have made their maiden speech and set the bar very high for the rest of us.
It is an honour to speak as the first female Member of Parliament for the Loughborough constituency. I pay tribute to my two immediate predecessors. One, my right hon. Friend the Member for Charnwood (Mr Dorrell), is still a Member of the House. Unsurprisingly, I have been researching previous maiden speeches and it would appear that he made his maiden speech during the Budget debate following the 1979 election. Little did he think that one of his successors, 31 years later, would be speaking as the Conservatives were preparing another emergency Budget after a change of Government.
My immediate predecessor, Andy Reed, worked tirelessly for his constituents following his election in 1997. He was respected as a man of principle and resigned as a Parliamentary Private Secretary over the Iraq war. He was a committed Christian and—I hope that he will not mind my saying this—a well-known sports fanatic. Several Members on the Government Benches have already asked me whether I am going to take his place on the parliamentary rugby team. For the record, the answer is no. I hope that I will be able to serve the people in the Loughborough constituency as well as he did.
Loughborough is a wonderful mix. It sits, as my two immediate predecessors said in their maiden speeches, between Nottingham, Derby and Leicester, and that has clearly not changed. Loughborough is a town of about 50,000 people but it expands by 12,000 or so during term times thanks to our world-famous university, which is back on the map, as the football to be used at the forthcoming World cup was designed there.
Just across the M1 is the town of Shepshed, which, as I have discovered since the beginning of my candidacy six years ago, feels ignored by every tier of government. I hope that I will be able to put that right during my time as its Member of Parliament.
Finally, a number of smaller villages make up the constituency, including Hathern, Sileby, Quorn, Barrow upon Soar, Mountsorrel Castle, and some picturesque Wolds villages. The fact that I have villages in my constituency raises interesting rural issues that I hope to be able to take further forward in the House.
We have a sizeable ethnic community, and it has been my pleasure, in my six years as a candidate in the constituency, to meet and learn more about them, and to visit the Shree Ram Krishna centre, the gurdwara, the Geeta Bhawan and our two mosques.
At one time, Loughborough was renowned for its textiles and hosiery manufacturing. Now, we are known for pharmaceuticals, research and engineering, and for manufacturing bells—Taylor’s is one of the last remaining bell foundries in the country. The bells have been exported worldwide, and even hang in St Paul’s cathedral here in London.
I want to touch on the importance of supporting the manufacturing sector, as other Members have done. Much has already been said—and, I am sure, will continue to be said—about spending cuts and tax rises, but more needs to be said about supporting private sector businesses, which are the backbone of our economy. We rely on our private sector businesses to provide employment, to train apprentices, to give people skills and, of course, to supply exports.
In March in Loughborough, just before the election campaign started, we received the devastating news that AstraZeneca is to close its Charnwood site, with the loss of at least 1,200 jobs locally. I hope that I will have the opportunity in future debates to raise a number of issues relating to the closure. I am proud to be part of the taskforce, of which my predecessor Andy Reed was a vital part, that is working to fill the site and plug the gap. I hope that we will end up not with a black hole in the middle of Charnwood, but with a site that new businesses and many other industries can use, so that we can still have a full manufacturing sector in the town.
We need to support strong manufacturing businesses, particularly with regard to research and development. Although manufacturing accounts for only about 20% of our economy, it accounts for about 75% of research and development in this country. The services sector is important, but manufacturers take on apprentices and give people new skills in a way that the services sector does not necessarily do. We need both. I am delighted to see that, in the coalition agreement, the Government mentioned the need for a more balanced economy; in fact, that was mentioned earlier today, too.
With a background as a solicitor advising companies large and small on raising finance both in the City of London and outside, I hope that I will be able to use my time in the House to ensure that we have a truly business-friendly environment in Britain. That would be good for my constituents, for Loughborough, for the east midlands, for Leicestershire and for the country. I hope that we can replace the jobs that have been lost, and can ensure a burgeoning manufacturing sector by the time that this Government leave office.
Mr Michael Meacher (Oldham West and Royton) (Lab)
We have heard some wonderful speeches; there have been four very good maiden speeches today from my hon. Friends the Members for Stretford and Urmston (Kate Green) and for Blaenau Gwent (Nick Smith), and from the hon. Members for Bromsgrove (Sajid Javid), and for Loughborough (Nicky Morgan). I congratulate them, and I am sure that we were all impressed by the rich quality, the powerful confidence, and the wit and humour of all their contributions. I am sure that we will hear a great deal more from all of them.
More than once in his speech, the Chancellor threw down a challenge on how the deficit issue should be handled, and in seven short minutes I want to try to take up that challenge. The Prime Minister, in a speech yesterday, said that the whole way of life of Britain’s entire population would be drastically disrupted by the most severe spending cuts for a generation, but the Government have also made it clear that they want to have a debate on how the matter should be handled. I welcome that, because I do not believe that the issue of spending cuts—or the alternatives—has yet been systematically explored.
Nobody doubts that a budget deficit of £156 billion is far too high, and of course it has to be reduced, but that still leaves open three fundamental questions: the timing, who should pay and, most importantly, the mechanisms for reducing the deficit. On timing, as has been repeatedly said, and as was said again today, making drastic cuts this year, when the economic recovery is so extremely fragile, is surely taking far too great a risk of precipitating a second collapse—a double-dip recession. Nothing that the Chancellor said today gives me much confidence that that will be avoided. That was exactly the experience of Japan in the 1990s, and of the US in the 1930s. We should learn from historical experience, not repeat it.
As for the question of who should pay, it is monstrous for any Government to shift the burden of the financial crash away from the perpetrators—the banks—on to its victims: public services and public sector jobs, perhaps 100,000, or even, as the papers have said, 300,000. It is outrageous that the banks whose greed and recklessness caused the crash—I do not think that anyone doubts that—should be let off virtually scot-free. They are not subject to a levy to pay back all the bail-out moneys, nor have they been made to restore bank lending to small businesses and homeowners to pre-2007 levels, which was the ostensible reason for the bail-outs in the first place.
The really big question is why so much emphasis has been put exclusively on public spending cuts, when there are alternative ways of cutting the deficit, which would be much fairer, as well as economically more productive. Those alternative mechanisms are economic growth and taxation. The Government’s latest growth forecast for the next year is a modest 2%, although it is expected to rise slightly in future. However, even Sir Alan Budd, the new head of the Office for Budget Responsibility, has said that he expects growth in the next year to be at least 2%. On that basis, as Britain’s gross domestic product is about £1.5 trillion, a minimum 2 per cent. growth over the next four years would increase the country’s income by about £120 billion. If, as usual, Government tax revenues take 40 per cent. of that, the Government will have available an extra £50 billion over that period, without any cuts or increases in taxation.
If the goal now, as for the previous Government, is to halve the deficit within four years, that means that there is still a gap of about £28 billion. I believe that this debate, which the Government want to encourage, should focus far more closely on how that remaining gap could be met by a mix of taxes on the banks and on the hyper-rich—a group that accounts for less than 1% of the population, and whose wealth has risen staggeringly over the past decade. While the average real incomes of the rest of the population in this country have remained flat over the past half decade, the wealth of the super-rich—and I am talking about just 1,000 multi-millionaires, who are listed in The Sunday Times rich list, issued only a few weeks ago—has almost quadrupled since 1997. In money terms, which is what matters, their wealth has apparently grown by an eye-watering £337 billion. In the last year alone, when the rest of the country has had to pull in its belt pretty tightly, their wealth grew by a cool £77 billion—a 30% increase in a single year.
Against that background, the banks, many of which are turning in record profits, and, above all, that rich elite, to whom the director general of the CBI referred as an alien class apart, because of their excessive executive pay, should certainly be expected to make a contribution proportionate to their increase in resources in the nation’s time of need, particularly as many of them were directly involved in causing the crash in the first place. The Chancellor no, less, is on record as saying at a recent party conference:
“We are all in this together.”
If that is true, and the rich are not a race apart, exempt from the privations of the rest of the population, I certainly think that they can contribute at least £7 billion a year over the next four years—a minuscule fraction of their recent increase in wealth.
I welcome this debate, but there are alternatives, which the Government need to take seriously. The question that I want to ask is: are the Government seriously listening?
Andrew Bingham (High Peak) (Con)
Thank you, Mr Deputy Speaker, for allowing me the opportunity to deliver my maiden speech in the House. May I compliment preceding speakers from across the country who have given their own maiden speeches today? The right hon. Member for Oldham West and Royton (Mr Meacher) did not make his maiden speech, but I compliment him on a speech he made in the House some time ago on post offices, and on speaking against the then Government.
I begin my speech by acknowledging and paying tribute to my predecessor, Tom Levitt, who was MP for High Peak for 13 years from 1997. In my seven years as a candidate in High Peak, he always treated me with the courtesy befitting a Member of the House. A steadfastly loyal Member of Parliament, and an assiduous attender of debates, he took the decision late last year not to stand for re-election—an action to which he referred in his maiden speech 13 years ago as “the chicken run”.
I am especially proud to represent High Peak, not just for its beauty and its many attractions, but as someone born and bred in the area. As we move towards the summer recess, I would like to recommend High Peak to fellow Members as a wonderful place to take their summer holidays. It is a large constituency covering over 200 square miles and containing some of the most beautiful countryside in Britain. I have listened to many maiden speeches over the past few days: everyone proclaims that the represent the most beautiful seat in Britain, but they are all welcome to challenge for second place.
In Buxton, we have numerous architectural delights, including the crescent, the Devonshire dome and the renowned Buxton opera house, which is a fabulous example of a Matcham theatre—one of the finest in the country—and the venue for the Buxton festival, which is an opera and literary festival to rival anything Glyndebourne has to offer, and one graced only last year by my right hon. Friend the Prime Minister. Buxton is also the home of the world famous water, which is oft seen being consumed at major sporting events across the world, and more recently by President Obama. If he continues to consume Buxton water and benefit from all its life-giving properties, he may well live up to his election slogan, “Yes we can.”
In the north of High Peak, the town of Glossop has a different character from Buxton, but it is its equal in every way. With its industrial architecture, it shows a different face of High Peak, and one that tourists all too easily miss. The neighbouring village of Tintwistle gave us Vivienne Westwood. It has distinct problems with traffic—something to which I shall return before I conclude. Glossop has the proud distinction of being the smallest town to have a team in the highest level of English football. At the time, Glossop North End—last year’s Wembley finalists in the FA vase championship—was owned by Mr Samuel Hill-Wood, a former member of the House and predecessor of mine, who eventually left the town to concentrate his efforts at Arsenal, where his family still retain a considerable interest.
I would add at this stage, for those Members who are fans of “The League of Gentlemen”, that that television programme is filmed in Hadfield in my constituency, so therefore I assume I am by default the member of Parliament for Royston Vasey. The Hope valley covers a large area, arguably the most beautiful area of all, against very strong competition, all of it contained in the Peak District national park, which is the oldest national park in the country, and reputedly the second most visited in the world after mount Fuji.
The caves of Castleton, which are the source of Blue John stone—unique to those caves and mined since Roman times—and the southern end of the Pennine way in Edale are particular delights. It is an area in which the farming community plays a crucial part in making High Peak what it is. They have suffered much in recent years, and they are a group whom I hope to stand up for in the House. I could go through High Peak village by village, as they all have their own attractions, but the tradition is to be brief—I am conscious of that, and there are lots of other nervous people trembling in the wings—so I will just mention that my home village of Chapel-en-le-Frith is the birthplace of Ferodo brake linings, and that New Mills is the home of Swizzels Matlow, which makes the famous loveheart sweets. Containing messages such as “Want you”, “Need you”, and “Be mine”, they are very much the flavour of the new coalition.
It would not be right to mention High Peak without reference to its famous limestone, which is quarried in great quantities in the south of the constituency, providing jobs and economic benefit for the whole community. Indeed, my right hon. Friend the Secretary of State for Work and Pensions remarked on the vastness of the quarries on his visit to the constituency several years ago.
As we move into the stormy waters ahead caused by the deficit left by the Labour party, I commend to the House the actions of the local High Peak borough council which, when it entered a strategic alliance with the neighbouring Staffordshire Moorlands district council, has driven out over £1 million of saving, yet managed to maintain and improve front-line services for its residents. The strategic alliance continues to make strides forward under the leadership of Councillor Tony Ashton, together with his team of Conservative councillors and supported by the excellent and determined staff of that council. This small borough council has shown the way to us all. The savings are there to be made, and we should heed its example.
As the coalition embarks on this Parliament, and as I embark on my first but I hope not last term as the Member for High Peak, we are aware of the tough times ahead. I am and always will remain aware of the problems facing my constituents. In Glossop and Tintwistle, the Tintwistle bypass is an issue that has meandered on for many years. It was promised by my predecessor 13 years ago but has still to be built. It is a difficult issue. There are difficult environmental consequences to be considered but something needs to be done to alleviate the traffic problems suffocating Glossop. Tintwistle shudders and resounds to the thundering of wagons as they cross the Pennines. I know that money is tight and will be for some time, but if money becomes available a workable solution may be achieved.
Both Buxton and Glossop have health service issues. In Glossop, where the Tameside and Glossop primary care trust prevails, my residents are reliant on Tameside hospital, the subject of much debate locally. In Buxton and the remainder of the constituency, Derbyshire County PCT is responsible for provision. I will meet the PCT to discuss provision for hospitals in Buxton and care outside the hospital in the central area.
I shall deal quickly with another issue—pensions. I have made many efforts over several years to help the members of the Turner and Newall pension scheme and I will continue to make those efforts, as it is still in assessment for the Pension Protection Fund. I have met the PPF and will meet the independent trustee, and I hope to get the best result for my residents.
In summary, the High Peak is a beautiful place to live, and I hope that I can make the residents of the High Peak as proud of me as their MP as I am of them and the constituency.
Jim Shannon (Strangford) (DUP)
Thank you, Mr. Speaker, for calling me to make my maiden speech. I thank hon. Members for their speeches beforehand—including the hon. Member for High Peak (Andrew Bingham). We look forward to visiting High Peak as a holiday destination. If we go to all the places that hon. Members have spoken about in the House, we will not have to go abroad this year to get the sun. I thank the right hon. Member for Oldham West and Royton (Mr Meacher) for his comments on the social politics. There are many bread and butter issues there to interest us. I thank the hon. Member for Loughborough (Nicky Morgan). We have something in common. I am a Leicester City football supporter and have been for umpteen years. I do not know whether that is a good or a bad thing, but it shows how loyal I am anyway.
One of the things that I wished to speak about in the Chamber was my Ulster Scots. I did get permission to do this, so I hope hon. Members will bear with me.
Thaur is monies a guid thang at A cud sae aboot tha fowk o mi Baille-Wick bot yince an firmaist A coont it a muckle oaner tae spake oot oan thair ahauf in tha Hoose O Commons. Tha Strengfird fowk ir tha satt o tha grun, an in thenkin thaim fer thair support A wud promis thaim at A’ll wrocht an dae fer thaim aa at A caun.
For those who did not understand me, and there may be some here who did not, I will translate that for them. There are many good things that I could say about the people of my constituency, and first of all is that it is a great honour to speak on their behalf in the House of Commons. The Strangford people are the salt of the earth and in thanking them for their support, I also assure them that I shall work and do for them the best I can.
A hard-working MP is nothing new to the people of Strangford. My predecessor, Iris Robinson, was known for years as a conscientious worker. John Taylor was the MP for many years before that, and I had my first meeting with him and his wife Mary in the House of Commons some 20-odd years ago. Before that we had Jim Kilfedder, who represented the area of Strangford within North Down. We have been blessed over the years to have a number of good MPs. I can remember placing my X for the first time ever next to Jim Kilfedder’s name many years ago.
Those former MPs all had one thing in common—a love for Strangford and its people. I represent a new constituency of Strangford as the boundaries have changed. Whether it be from Portaferry to Carrowdoor, from Comber to Crossgar, Ballynahinch to Ballywalter, Newtonards to Grey Abbey, I would urge any of those in the Chamber to see the unparalleled beauties of my constituency and I defy them not to fall in love with it, as I have.
Today’s debate focuses on the economy and on work and pensions, and I wish to outline a number of opportunities to build the economy of Strangford and the whole of the United Kingdom in areas such as tourism, manufacturing and agriculture. Since 2008, unemployment in Northern Ireland has risen by 18,000 and too many able-bodied people are out of work. I urge the Government to do something about that. The solution requires a cross-sectoral and cross-Government approach.
Tourism offers a first clear opportunity. It is my belief that Northern Ireland will be able to carve out a niche in the global scene in tourism. The Lonely Planet tour guide praised Northern Ireland as
“abuzz with life: the cities are pulsating . . . and the people”—
the people are very important—
“the lifeblood that courses through the country, are in good spirits”.
Ulster, and Strangford in particular, has the unique combination of a beautiful landscape and coastline, a land steeped in history and a welcoming and diverse people who cannot help but draw others to our shores. Yet it seems that the only people who are fully aware of all that Strangford has to offer are those who are blessed enough to have been born there or passed through it. This is a loss not only to the people of my constituency, but to the people of the United Kingdom. I am in the business of changing that impression.
If Strangford was marketed to its full potential it could deliver significant benefit to local and visitor alike. For the cyclist, the walker and the nature lover, there is abundant bird and wildlife along the coast and lough shores. Short-break visitors can shop, be pampered and enjoy our excellent restaurants and entertainment. Strangford is the perfect base for those who wish to explore towns, the countryside, the coast or all of them together.
One sector which clearly demonstrates this is country sports. The game fair at Ballywalter attracts a record number of people, and this is an area in which Strangford has the potential to excel. For example, five American shooters came to the constituency on a five-day trip to Northern Ireland. They spent some £50,000 in the local economy—high-value tourism. I understand that country sports in Northern Ireland employ some 3,000 people. Again, there is opportunity. When I was elected, the people of my constituency were glad to have me in the House of Commons to work for them. It is also rumoured that the pheasants and the ducks of Strangford were looking forward to at least two free days a week when I would not be about. That is probably good news as well.
Northern Ireland’s private sector is underdeveloped but at its core is the manufacturing sector. It contributes around 25% of the gross value added to the Northern Ireland economy. Therefore, the Government’s recent commitments to bolster regional economies and manufacturing are of deep interest. However, the lack of detail is concerning, especially in comparison with their clearer plans to cut public expenditure. I want to put my concern about that on record.
The urban and rural mix of my constituency also means that the farming and agri-food sectors are a key component, possibly more so than in other parts of the United Kingdom. I am well aware of the push that there has been to encourage local Northern Ireland businesses to compete on the global stage. We have various international exporters in the constituency. I want to plug the humble Comber potato and the Portavogie prawn, because they are world leaders. Many people enjoy them as delicacies.
The family farm is important to us in the constituency. There are those who have diversified into the ice cream business or adapted unused barns and land for quad bikes and crazy golf, all of which are advertised in our local paper, the Newtownards Chronicle. Commercial fishing is also important, a once proud industry. Fishing boat numbers have been halved, due to EU regulation and scientific information. The common fisheries policy needs to be right for the people of my area. It needs to restore confidence and give people viability and jobs. I hope the Government will work towards that.
In conclusion, Winston Churchill is one of my heroes and always has been. He had a good grasp of the English language, and he was a good historian and also a good soldier. He said:
“This is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.”
I stand in this place humbled and honoured at the fact that the voters of Strangford have elevated me from the Northern Ireland Assembly to the House of Commons. The Assembly was my beginning, but my election to the House is certainly not the end of the matter. That quote from Winston Churchill reminds me of another of his. I have made it to the end of my maiden speech with no heckling from Irish Nationalists or anyone else, something that I am exceedingly grateful for. I hope this will be the first of many speeches in the House.
Guto Bebb (Aberconwy) (Con)
Thank you, Mr. Deputy Speaker, for calling me to make my maiden speech. After sitting in the House for seven hours yesterday, I can say that there is only one thing more nerve-wracking than being called upon to make a maiden speech—sitting on the Bench for seven hours and not being called to make a maiden speech.
Before I pay tribute to my constituency, Aberconwy, I must say that I am proud to stand here as the first elected Member for the constituency, which is a new construct for this Parliament. My right hon. Friend the Leader of the House came up to Aberconwy during the election campaign to offer me support. I am sure that hon. Members from both sides of the House have had the experience of a senior politician coming to support them. We were walking along the promenade in Llandudno, which is the most beautiful promenade in Wales, and probably in Britain, and my right hon. Friend asked me about the arithmetic in the constituency. When I informed him that Aberconwy had 44,000 electors, he immediately said, “Oh well, your seat will be abolished, won’t it?” That was before I had won the election. If that is how prominent politicians are supposed to help candidates, then I am not sure that was the case in that instance. He left me dumbfounded and went off on the cable car that takes people up from the promenade to the Great Orme, a visit that I would recommend to anyone.
Aberconwy is built upon two constituencies—the Conwy constituency and the former Meirionnydd Nant Conwy constituency. I want to take this opportunity to pay tribute to my two predecessors in those constituencies. Mrs Betty Williams was the Member for Conwy and she served the constituency with distinction for 13 years. Even though I stood against her in 2005 and disagreed with her time after time, on every doorstep in Conwy I was told that if I was as good a constituency MP as Mrs Williams, I would do well. I will aspire to ensure that I do serve the area as well as Mrs Betty Williams did.
More importantly, Mrs Betty Williams has recently published her memoirs in Welsh, and, being a first language Welsh speaker, I have had the pleasure of reading them. What shines through is the fact that she embarked upon a political career for the right reasons. She was a quarryman’s daughter, and she served local communities on district and county councils and stood for Parliament on four occasions before she won. Throughout, her commitment was for the right reasons. She wanted to serve her people and she wanted to make sure that her Labour party views were expressed in the House. For that, I respect her very much indeed, and I hope that I will be able to do as good a job on behalf of my constituents as she did.
The Meirionnydd Nant Conwy part of the constituency was extremely well served by the now hon. Member for Dwyfor Meirionnydd (Mr Llwyd). Despite the fact that we have had our disagreements—viewers of Welsh language television can attest to that—I would also like to pay tribute to him. When I canvassed in the Conwy valley, people said that Elfyn Llwyd was always approachable and always served his people very well, and, again, I would hope to do the same. I follow in the footsteps of two hard-working Members and I am aware of the responsibility and privilege that I have in serving.
Aberconwy is a diverse constituency. It is dependent on tourism, with Llandudno, which I have mentioned, the queen of Welsh resorts, in the centre of the constituency, and locations such as Conwy with the castle of Edward I, Llanfairfechan and Betws-y-Coed in the Snowdonia national park. There is no doubt that tourism is an important industry within the constituency. Agriculture, on the other hand, has seen a decline during the past 10 years. The agriculture industry, which is centred on the market town of Llanrwst in my constituency, is in need of support. While I am in the House, I will try to support the tourism industry and ensure that it is not seen as a Cinderella industry. In our part of Wales it is crucial to creating employment and retaining young people in the area. In the same way, we need to develop the food sector and the food industries by working with farmers and the agriculture sector. I would like to see the development of real opportunities for businesses to be created in the food sector in my constituency.
The other thing that I need to say about Aberconwy is that it is an historic constituency. I have already mentioned the castle in Conwy that was built by Edward I, but in many ways the history of Wales is apparent in Aberconwy by the fact that we have Conwy castle on the coast, but we also have the castle in Dolwyddelan, which was built by the Welsh princes. Those two castles are a snapshot of the history of Wales. One thing that causes me immense regret is that the history of the building of Conwy castle is well known to most people in the House, but the history of the Welsh princes and the castle at Dolwyddelan is not as well known. Our education system should deal with that, because it is important to know our history—British history and Welsh history.
The Welsh language is a living, breathing language in Aberconwy. Around 40% of my constituents are first language Welsh speakers, and the Welsh language still survives basically because of the work of two people who are associated with my constituency. The first is Bishop William Morgan, who was commissioned by Queen Elizabeth I to translate the Bible into Welsh in 1588. He created a work of literature, which is much better than the recent Welsh Bible translation. I suspect that the fact that I prefer the old version shows that I am a natural conservative in many ways.
The other individual associated with my constituency is Wyn Roberts, now Lord Roberts, who served the Conwy constituency for 27 years. In his time in this House he played a huge part in ensuring that the Welsh language had the opportunity to survive into the 21st century. Wyn Roberts was in many ways responsible for ensuring that we have the fourth television channel in Wales, S4C. He was responsible for the Education Act 1986, which ensured that the Welsh language had a proper place in our education system, and, just as crucially, he was responsible for the Welsh Language Act 1993. He is a hard act to follow.
Thank you very much, Mr Deputy Speaker, for this opportunity to give my maiden speech.
Rushanara Ali (Bethnal Green and Bow) (Lab)
Thank you, Mr Deputy Speaker, for giving me the opportunity to make my maiden speech in this important debate, particularly as employment was one of the central themes of my campaign.
It is an amazing privilege to be standing here as the Labour MP for Bethnal Green and Bow, a place described as the heart and soul of this great country, of which I am incredibly proud to be a citizen. I feel just as proud to be one of the first three Muslim women MPs ever to be elected to this Parliament, and the first person of British-Bengali heritage to be elected to this House.
I thank the people of Bethnal Green and Bow for giving me the honour of representing them. At a time of great national scepticism about this institution, I can assure the House that for millions of people in Bangladesh, where I was born, this Parliament has always been a beacon of democracy and self-determination. The power of this House to inspire and to do good is undimmed.
It is customary to pay tribute to one’s predecessor—in my case, the inimitable George Galloway. Where do I begin? Perhaps I should begin with his long service in this House, and his rather shorter stay in the other house. His great oratory was admired by many, even when they passionately disagreed with him. While the people of Bethnal Green and Bow chose unity over division, and while my politics could not be more different from Mr Galloway’s, we have one thing in common, which I know that the House passionately shares—a deep commitment to a lasting settlement in the middle east. For me, that is impossible without ending the blockade of Gaza and a viable independent Palestinian state alongside a secure Israel.
I would also like to pay tribute to my Labour predecessors. Oona King was a hard-working, dedicated MP for almost a decade, who fought for people who suffered enormously from the appalling housing conditions in the east end of London. She fought relentlessly to tackle poverty and inequality, both in this country and in developing countries.
We remember the late Lord Shore of Stepney who worked tirelessly for the people of my constituency. He has a special place in the hearts of Bengalis, especially among my parents’ generation, for the way in which he led Members on both sides of this House to speak up for the fight for democracy in the war of independence in 1971 in Bangladesh. I am only sorry that he is not here today to see someone born in the country he supported, brought up and educated in the constituency he represented, elected to this Parliament.
My passion for Bethnal Green and Bow is about the place, the people and our political heritage. I would urge hon. Members to go east and visit places such as the Whitechapel gallery, Columbia Road flower market, and Spitalfields market near Brick lane. Brick lane has iconic status in this country, both for its vibrancy and cultural activity and for its extraordinary history: for being the place that provided a home for many waves of migrants, including the Huguenots, Jews, Irish, Pakistanis, Bengalis, Somalis and many others, manifested poignantly in the Brick lane Jamme Masjid, which was built by the Huguenots for Christian worshippers, later became a synagogue and is now a mosque, reflecting the different contributions of so many to our great country.
In other parts of my constituency I come across people who remind me of the courage and determination of so many in the east end. I think of the elderly lady who survived the blitz but overnight lost her family, and the many other stories of sacrifice and loss, such as the Bethnal Green tube disaster, when 173 people lost their lives seeking shelter from air raids in 1943.
We owe it to those east enders never to forget that freedoms are never easily won. For me, it is an honour to stand here, as a successor, I hope, to the great social reformers of the past, who took ideas born in the east end, developed them and changed this country for the better. It is no exaggeration to say that the east end inspired men and women to make history and fight for social justice. I think of the trade union movement, the suffragettes and the welfare state.
My constituency sits between the glittering towers of the City of London and Canary Wharf and is a stone’s throw away from the Olympic village. The Olympics have the potential to deliver huge opportunity and a sea change in attitudes towards our country, our pride and our sporting ability, yet many in my constituency remain unconvinced that they will benefit. I hope that the job opportunities and the legacy that we wish to create will benefit them, and I am acutely aware that it is an extraordinary opportunity for an historically poor part of London.
I want to speak on behalf of those who face the rough few years ahead. Already, unemployment is incredibly high in my part of London. The east end has been in that situation too many times before, and for us wasted talent is never a price worth paying. In the recessions of the ’80s and ’90s I saw families, friends and neighbours lose their homes, jobs and livelihoods overnight. That was the time when the Liberals controlled the council and the Conservatives ran the country. Any community that does not provide useful work for its people risks falling apart.
It is not that people in the east end lack resourcefulness; on the contrary, it is impossible to walk the streets without seeing the energy, dynamism and drive that take whatever resources are available and turn them into success. But when programmes such as the future jobs fund are shut down, the Government send a message to thousands of people, saying, “You’re on your own. We wash our hands of you.” That is why I shall fight to create jobs in the east end and work hard and tirelessly to serve the people of this great constituency.
Mr Robin Walker (Worcester) (Con)
I am very grateful for this opportunity to address the House for the first time. Today’s debate and the excellent speeches of so many hon. Members have done nothing to reduce the awe with which I approach this task, and I commend the hon. Member for Bethnal Green and Bow (Rushanara Ali) for her passionate speech and associate myself with her views on the blockade of Gaza and the importance of creating employment. I share in the salute of my hon. Friend the Member for Bromsgrove (Sajid Javid) to the brave soldiers of the Mercian Regiment, who have laid down their lives for our country.
My first thanks are due to the electors of Worcester, who have sent me to this Chamber, and I am conscious that I shall be forever in their debt. I intend to repay that debt by working tirelessly on their behalf and being Worcester’s man in Westminster. I must thank also my predecessor, the former Member for Worcester, Michael Foster, who for 13 years was a fierce advocate for his party, a tireless campaigner for animal rights and a distinguished supporter of his Government. As a Whip, a Parliamentary Private Secretary and a Minister, he did much to further the interests of peace in Northern Ireland and international development, and for that he deserves the approbation of this House.
It would be remiss of me not to mention some other former Members for Worcester. My hon. Friend the Member for Mid Worcestershire (Peter Luff), who is now an Under-Secretary at the Ministry of Defence, served the city well until boundary changes took him from us. He is a friend and a mentor, the first MP for whom I ever had the privilege to vote, and now one who has the dubious privilege, shared by my right hon. Friend the Member for Charnwood (Mr Dorrell), of having voted for me. I know that every Member will join me in wishing my hon. Friend the Member for Mid Worcestershire success in providing the best possible equipment to our gallant armed forces over the years to come.
Before my hon. Friend’s time there was, of course, another Member for Worcester with whom I am very familiar, but as my hon. Friend spoke so eloquently on his behalf in his maiden speech, I shall say only that, as many thousands of constituents have reminded me on their doorsteps, he is a hard act to follow. I owe that Member, my father, my lifelong knowledge of, and deep love for, my constituency and its history, not to mention my support for the once and future premiership rugby team, the Worcester Warriors, and my support—shared with the Governor of the Bank of England—for the cricket team, which has the most beautiful ground in the country.
The task of representing Worcester, made so enjoyable by those factors, is made all the more daunting by the fact that the city has been represented in Parliament since the 13th century. Empires have risen and fallen and royal houses have come and gone in the time that MPs have spoken for Worcester, but I do not intend to go on for that long. The city, of course, played its own major part in the civil war. The first shots of that war were fired beyond the boundaries of my constituency, near Powick bridge, and its last slaughter took place at the Sidbury gate, now in the heart of modern Worcester, as Cromwell finally crushed the King’s army and took the faithful city. That war started after an arrogant Government had overspent and oppressed the people of the country with unfair taxes.
At the end of the battle of Worcester, the parson of the parliamentary army addressed the troops and said to them:
“Say you have been at Worcester, where England’s sorrows began, and where happily they are ended.”
I hope that, given the alleged role of Worcester woman in bringing Labour to power over the past 13 years, the same might be said again today.
The civil war was one of the historic events that gave us the evolved constitution that we have today. Respect for that constitution is one of the things that inspires me in politics, and, despite much tinkering over the past 13 years, there is still much to be defended: the unique position of the Crown; the privileges and stature of this mother of Parliaments in holding the Government to account; the powerful ties that bind Members to their constituencies; and a system of election that is simple, effective and allows for the removal of failed Governments. All those are worth fighting for with the same passion with which our ancestors fought on the battlefields of Worcester.
As I am passionate on that subject, so also I am passionate about opportunity. My party has always been the party of opportunity. In the Gracious Speech and in this debate, we have set out plans to support opportunity for British businesses, for young people, and for those on welfare to escape the traps of unemployment and dependency. Opportunity in business, and that unleashed by the national insurance reforms that we propose, will benefit Worcester Bosch and Yamazaki Mazak, innovative manufacturing companies that, between them, employ thousands of people in my constituency.
The coalition Government have set out exciting plans to support green technology, and I support those initiatives. I believe that they will benefit companies in Worcester, but I am concerned that there has so far been no mention in Government statements of the renewable heat incentive. Given that homes are responsible for 21% of the carbon emissions generated in this country, and that 73% of energy in the home is used for heating or hot water, supporting renewables for heating should be given as high a priority as support for the renewable generation of electricity.
Worcester has a range and diversity of businesses, great and small, that reflects the range of topics covered in the Gracious Speech. The breadth of our economy ranges from engineers to health care companies, industry associations, recyclers and housing associations. I have visited firms, such as Craegmoor Healthcare, Skills for Security, the Remarkable recycling company and Sanctuary Housing, which are all headquartered in Worcester and, as an MP, I want to ensure that Worcester remains a place to which businesses want to come, maximising the opportunities for my constituents.
To maximise opportunity, we need the best education to be available to all, and that is why I welcome the exciting reforms proposed by the Secretary of State for Education. We have already seen how academies can turn around the fortunes of failing schools and, in Worcester, the Tudor Grange academy is a shining example of that trend, so I welcome the decision to open up the opportunity of freer education to more schools in the area.
Supporting opportunity means careful nurturing of further and higher education. I shall support both, and I am very proud that Worcester boasts the country’s fastest-growing university. The university of Worcester, which I congratulate on its recent Ofsted report, was rated “outstanding” for its training of teachers at primary and secondary level, and the principal of Worcester college of technology was recently elected president of the Association of Colleges.
For opportunity to thrive everywhere we need fair funding in education. Today the average pupil in Worcestershire receives £370 less than the national average and a staggering £762 less than children in the neighbouring authorities of Birmingham, despite the fact that some parts of my constituency are among the 10% most deprived areas in the country. I have high hopes for the coalition Government’s pupil premium policy in addressing that issue.
The last Walker to speak for Worcester began his maiden speech by saying,
“I hope that if, in the course of my remarks…I make what are considered to be constructive criticisms of the Government’s economic policy, this will not be considered indicative of a person representing a constituency noted throughout the world for its production of sauce.”—[Official Report, 20 April 1961; Vol. 638, c. 1433.]
I shall be equally ready to make constructive criticisms and to place my constituency at the forefront of my parliamentary career. In the interests of Worcester, I commend the Gracious Speech.
The Leader of the House of Commons (Sir George Young)
On a point of order, Mr Deputy Speaker. At half-past 6, you will leave the Chair for the last time. May I endorse what Mr Speaker said earlier and, on behalf of the whole House, thank you for your impartial, firm but courteous service over 13 years?
Mr Deputy Speaker (Sir Alan Haselhurst)
Order. [Laughter.] I am not sure that that was not grossly out of order.
Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)
Further to that point of order, Mr Deputy Speaker. I add congratulations and warm support from this side of the House. We are grateful to you for your many years of kind consideration for all Members of the House, Back Benchers and Front Benchers, and for your fairness over the years.
Martin Horwood (Cheltenham) (LD)
Further to that point of order, Mr Deputy Speaker. May I add congratulations from the Liberal Democrat Benches on your service to this House? Perhaps your early education in my constituency contributed to your excellent and impartial service to the House.
Mr Deputy Speaker
I am extremely grateful for those very kind words and the way in which they were supported. It has been an exciting and privileged 13 years, certainly in my memory, and I hope that I can continue to serve the House in other ways.
Stewart Hosie (Dundee East) (SNP)
I hope that the clock has not yet started, Mr Deputy Speaker; as the last person whom you will call to speak in your current role, I want to pay tribute to you. You have always been extraordinarily kind and generous to those on my party’s Benches.
Mr Temporary Deputy Speaker, it is a pleasure to follow two totally different maiden speeches, one from the hon. Member for Worcester (Mr Walker) and the other from the hon. Member for Bethnal Green and Bow (Rushanara Ali). They are different people from different constituencies and different backgrounds, but they have a shared determination to see an end to the blockade of Gaza. Many in the House share that determination, and I hope that we will see proper progress in the middle east during this Parliament.
Today’s debate is fundamentally about the economy and I am delighted to take part in the debate on the Gracious Speech today. I should like to comment on much of what the Chancellor said. His description of the economy left to the new coalition Government is well known and the numbers that back it up are equally well known. The deficit was forecast last year to be £173 billion, but this year it is forecast to be £156 billion—still 11%-plus of gross domestic product. UK national debt is sitting at £1.2 trillion on the treaty calculation and is forecast to rise to £1.6 trillion, approaching 90% of GDP by 2014-15.
We know the last Labour Government’s response to this recession—to make real-terms cuts of £500 million for this year to the Scottish budget, before recovery was secured. Against everything that they professed in public, they began cutting the budgets early and weakening the ability of the Scottish Government and others to secure the recovery.
Mrs McGuire
Will the hon. Gentleman confirm that the current Administration’s budget in Scotland is double what Donald Dewar’s was when he became First Minister of the Scottish Parliament in 1999?
Stewart Hosie
I am delighted to confirm to the right hon. Lady that she seems again to fail to understand what real-terms increases and real-terms inflationary costs mean over the period of the Scottish Parliament. There have been real-terms cuts to the Scottish budget this year.
The Chancellor also confirmed that tackling the deficit and debt was the most urgent issue facing this Government, and they have started with £6 billion of in-year cuts. I am delighted that the Scottish Government have taken the opportunity to defer those cuts this year to avoid in-year cuts, which are extraordinarily damaging as they require budgets to be ripped up and jobs to be shed. What have worried me, however, are the comments and criticisms from Labour’s Scottish Parliament finance spokesman, who criticised the decision to postpone the cuts. Clearly, Labour will condemn the Tory Government here while its finance spokesman in the Scottish Parliament seems to want the Tory cuts this year in Scotland. That is wholly wrong.
The new coalition Government said in their programme that they would
“significantly accelerate the reduction of the structural deficit”
in this Parliament and that the main burden of deficit reduction will be borne by reduced spending rather than increased taxes. I question the logic of that whole approach. The previous Government promised cuts that were deeper and tougher than Margaret Thatcher’s. They promised to take £57 billion out of the economy in a single year—2013-14. They also promised £20 billion or so of tax rises and £40 billion or so of cuts. The accelerated attack on the structural deficit and the smaller contribution made by tax increases clearly indicate further public sector cuts—cuts well in excess of the £40 billion that the Labour Government planned to take out by the time we reached 2013-14.
Labour’s plans for taking £57 billion out of the economy represented approximately 3% of GDP, but this Government’s plans are likely to go very much further. I was concerned that reducing consumption in the economy in a single year to the tune of 3% of GDP would tip the economy back into recession, but I am more concerned that stripping yet more consumption out of the economy and doing it more quickly—before we have properly secured the recovery—would be even more damaging than Labour’s plans.
Remember that at the time of the last Budget, it was only Government consumption, up 2% on the year, that kept the economy afloat. Household consumption was down by 1.9%, business investment was down by 24% and gross fixed capital formation was down by 14%. Even now, following the statement today, we know that household consumption is down by only 0.5% on the year, but business investment is still down by 11% and gross fixed capital formation is down by half that, at 5.7%. This is not the time to cut Government consumption, given that it was up by 3% over the last 12 months and kept the economy afloat.
I do not want anyone to misunderstand me. I was a critic of the deficit and the debt before the recession. I am arguing about how we tackle it now and I believe that we should not go down the route of the Canadian model, which involved 20% cuts in public services over three years. We should look again at the New Zealand model, which gave the flexibility to tackle the deficit and the debt over the medium term. That way we could at least benefit from the huge £50 billion-plus medium-term savings from scrapping Trident and its replacement. I am delighted that Mr Speaker has allowed our amendment covering that matter to be put to a vote later today.
There were, of course, a number of other matters economic in the Gracious Speech—the financial services regulation Bill and the plan to introduce a bank levy, for example. Although it is self-evident that there must be depositor protection and that we must protect against systemic risk from bank failure, not least through the application of proper capital ratios, that is what pillar 1 of the Basel II accord was meant to do. Given that the banking crisis commenced in summer 2007 and that Basel II is not meant to be fully implemented until October-November 2012, I would have thought that it would have made more sense for the incoming Government to push for the early international implementation of Basel II rather than unilaterally implementing a domestic banking levy now. The consequences of such a levy are not at all clear.
The coalition’s programme also said that they would reform the regulatory system and give the Bank of England control over macro-prudential regulation. But that would leave the Financial Services Authority fundamentally in place, and I remember many criticisms from Conservative and Liberal Democrat Front Benchers about the FSA. Surely the Government will continue to recognise that failure of supervision by the FSA was as important as the weakness of the underlying regulation.
There were many other matters economic in the Queen’s Speech and the programme for government, and we will come back to them. I have one final question, and it is about the decision to scrap the child trust fund. Between 2004 and 2008, savings ratios were half those when Labour came to power in 1997. Why are this Government planning to scrap a savings scheme with a 71% voluntary take-up rate?
Mark Pawsey (Rugby) (Con)
It gives me great pleasure to follow the hon. Member for Dundee East (Stewart Hosie) and to be able to speak for the first time in this Chamber as the Member for the new seat of Rugby. I often have to explain to people that I represent a town, rather than a sport. As an enthusiastic former player, it seems appropriate to have joined today the all-party rugby union group. Rugby is unique as the only place to have given its name to an international sport. It already receives many overseas visitors, particularly from rugby-playing countries, who make their way to the close at Rugby school, where William Webb Ellis picked up the ball and ran. Much work has already taken place in the town to capitalise on our association with the game, and I look forward to a new visitor attraction in time for the 2015 world cup.
The seat of Rugby includes villages to the north and west of the town, including Binley Woods, where I grew up and attended primary school. It has since become famous as the location of Hyacinth Bucket’s bungalow in the sitcom “One Foot in the Grave”. The constituency also includes the village of Bulkington, which was familiar to the author George Eliot, who referred to it as Raveloe in her book, “Silas Marner”.
I should like to pay tribute to my hon. Friend the immediate past Member for Rugby, who is at my side and has been returned as the Member for Kenilworth and Southam (Jeremy Wright). Having made a very big impact here in his first term, he has now taken the sensible option of a safe seat.
Previous Members include Andy King and, before that, someone well known to me, since that person is my father—James Pawsey, who was first elected for Rugby in 1979. I know that it is not unusual for a son or a daughter to follow their father here, and there are many examples in the current intake. I join my hon. Friend the Member for Worcester (Mr Walker), who spoke just before me, as a son following a father into the same seat. My father still has an excellent reputation in Rugby as a hard-working constituency MP. Throughout the time that I was seeking to be elected, many potential constituents spoke to me about how much he has done for the people of Rugby. I have heard many similar tributes from people here since I arrived—colleagues and staff who remember his contributions, particularly in the field of education. Like my hon. Friend, I feel that I have a very tough act to follow.
I am a product of Rugby’s grammar school, which was founded by a locally born grocer, Lawrence Sheriff, who, when he established Rugby school, set aside a sum of money for the education of boys from the town. From an intake of 90 boys at that school in 1968, two of us sit here today; my former school friend and now my hon. Friend the Member for Warrington South (David Mowat), was also elected in May.
Rugby changed significantly in the 19th century with the coming of the railways, and our station is familiar to many; it is on the west coast line, with a journey time to London Euston of just 50 minutes. In Rugby, we welcome the Government’s commitment to new high-speed rail lines but are anxious to ensure that fast services will remain on the original network once the new lines are in use. Indeed, Rugby’s transport links are the most important feature of our town. Rugby is at the heart of the UK’s motorway network. That makes Rugby an attractive location for business in general, and for freight and logistics businesses in particular. Despite the current pressure on the public finances, we believe that it is vital to continue true investment in our network in order to continue to improve it.
Rugby has also had an impact in the field of communications through the Rugby radio site, the masts of which have for many years been visible from the M1. Almost all those masts have now been removed in preparation for a massive housing development, which will be the most important issue facing the town over the next 20 years.
Rugby has experienced major growth before. In the early 1900s, heavy engineering came into our town and Rugby became a major industrial centre. We have a history of producing gas and steam turbines at a company known as British Thomson-Houston, which went on to become GEC and AEI—now amalgamated to form Alstom, a leader in power generation. Rugby is also home to Converteam, a worldwide specialist in power conversion that is building electric engines for the new Queen Elizabeth class of aircraft carriers. Rugby had a pioneering role in other forms of propulsion. In 1937, Frank Whittle built the world’s first prototype jet engine in Rugby. I have a personal connection with Whittle’s work, because I established a small business in Rugby in a rented unit adjacent to where Whittle carried out his work.
I have spent 25 years starting, running, managing and building up a business, and I have a good understanding of the challenges that businesses face. We need to recognise more effectively those who create wealth and jobs. Small business is ready to make its contribution, but it needs a work force with the skills and the attitude to roll up their sleeves and play their part. Too often, regrettably, there is insufficient incentive for jobseekers to do that, and I welcome the changes in our welfare system that will put incentives to work firmly back in place. I make no apology for putting the case for manufacturing and for business, particularly small business, and I look forward to doing so in the House over the coming years, in addition to representing all the electors of Rugby, with whom I believe I have a special bond.
Rachel Reeves (Leeds West) (Lab)
I would like to thank you, Mr Deputy Speaker, for giving me this opportunity to make my maiden speech. It is a pleasure to follow the hon. Member for Rugby (Mark Pawsey) and other new Members of this House, who have done their constituencies proud today.
It is a huge privilege to have been elected as the Member of Parliament for Leeds West and to succeed John Battle, who represented us here for 23 years. John’s work for Leeds West touched the lives of so many people: fighting for, and getting, compensation for the victims of asbestos poisoning in Armley; supporting the Kirkstall festival in the grounds of our beautiful 12th-century abbey; and working with West Leeds debt forum and Bramley Credit Union to drive loan sharks out of our community. It is those, and John’s many other achievements—I have mentioned only a handful—that are his legacy.
At a constituency surgery recently, a lady took my hand and said that as long as I was half as good as John Battle, she would be happy. I later received a letter from a constituent who asked that I only be a quarter as good. I hope to exceed both their expectations, but I know that in John Battle I have a fantastic role model and a very tough act to follow. I will fight tirelessly for my constituents to be the champion for local people that John was before me.
Most of all, I will fight for jobs, growth and prosperity—the subject of our debate today. Leeds has a proud economic heritage. Leeds West was built on engineering and on textiles. From my home in Hawksworth Wood, people used to be able to hear the hum of the Kirkstall Forge Engineering plant at work. The forge, originally set up by the monks of Kirkstall abbey, continued in operation until 2002. The industrial revolution transformed Leeds, as well. The Leeds-Liverpool canal brought to our city wool spun at the mills that still stand tall in Kirkstall, Armley, Bramley and Rodley. Of course, Leeds was the birthplace of Montague Burton and of Marks and Spencer—a proud industrial, and retail, heritage. The economy was transformed once again under the previous Labour Government. The city centre is now packed with new businesses, shops, museums and galleries.
More than all that, however, under Labour every single person—most of all, every young person—has been given opportunities to recognise and fulfil their potential. It was my own experience of education under the Conservative Governments of the 1980s and 1990s that motivated me to get involved in politics. When I was at school, there were never enough textbooks to go round. There was no money for new school buildings, so our sixth form was a prefab hut in the playground and our library was turned into a classroom. It is therefore with immense pride that I tell the House that my old secondary school is now a specialist college with two new, modern buildings.
Such investment has been seen up and down the country, in all our constituencies. In Leeds West, every single primary school has been rebuilt or refurbished since 1997. In September last year, the new Leeds West academy and Swallow Hill community college opened their doors—proud achievements, transforming lives and communities.
In his maiden speech in 1987, John Battle spoke of his visit to the Bramley jobcentre. Back then, there were just six jobs on offer in the window, with wages ranging from £2 to £2.28 an hour. No parents can bring up a family on £2—not in 1987 and not on today’s equivalent—and no one should be made to work all hours of the day and night and yet remain in poverty. It was that belief and sense of justice and fairness that brought the national minimum wage—one of Labour’s proudest achievements—to the statute book.
Throughout the recession, Labour has not abandoned its commitment to social justice. The future jobs fund helped more than 8,000 young people in Yorkshire to get back to work during these challenging economic times and, under Labour, a generation of young people were not condemned to the scrapheap as happened in the recessions of the 1980s and 1990s. However, the economic recovery is fragile and cannot be taken for granted. We need the passion, enterprise and determination that built the Leeds economy of the past to build the economy of the future. For that to happen, the people of Leeds will look to the Government to be on their side and build a future for Leeds based on high skills, new technologies and new industries, with better transport links—including high-speed rail—and a banking sector that supports industry and small businesses, rather than just being out to make a quick profit. The new Government are right to make the budget deficit a priority, but that must not be at the expense of the recovery that Labour has secured.
I started my career as an economist at the Bank of England and focused on Japan at a time when its economy had been in and out of recession for a decade. Today, debt in Japan is 190% of gross domestic product, which is 2.5 times the level in the UK. Japan’s debt is so high precisely because its Government did not take swift action to ensure that its economy emerged from recession with strong growth. I urge this Government to learn those lessons from history, because the very worst thing for Leeds West and for Britain would be another recession caused by hasty and unfair spending cuts. I fear that the Government are making those mistakes and putting the recovery at risk. The Chancellor of the Exchequer is reducing industrial support for businesses and universities, watering down the regional development agencies and abolishing the support that Labour introduced to get young people back to work. If the Government really are serious about ensuring the recovery, they must put in place policies for jobs and growth.
We know that the causes of this crisis are global, but the pathways out must be local and regional, so I will fight for Leeds West with determination, and I will do so in a responsible way. It would not be responsible or sensible to oppose every spending cut or tax increase. I will encourage this Government when they get it right and acknowledge that, but when they get it wrong and put the economic future of my constituents and the country at risk, I will hold them to account. John Battle showed us that politics can make a difference and that the right values and policies can transform people’s lives. Today more than ever, we need the ambition for justice, equality and fairness that drove John. It is a real honour to serve as the Member of Parliament for Leeds West and, in doing my duty to my constituents, I will act with the hopes, dreams and aspirations of Leeds West as my guide.
Gavin Williamson (South Staffordshire) (Con)
It is a great honour to be called and to follow so many fantastic maiden speeches: when the bar is set so high, it is often easier to duck under it. It is a great honour to serve South Staffordshire. It is traditional for hon. Members to pay tribute to their predecessors, and that is easier for some than it is for others.
It is easy for me to pay tribute not only to my predecessors for previous constituencies, such as Cannock and Brierley Hill—for example, Sir Fergus Montgomery and Jennie Lee, who were great parliamentarians—but to my immediate predecessor, Sir Patrick Cormack, a great parliamentarian whom we all greatly admire. Sir Patrick believed in and fought passionately for his constituency and constituents, but he also believed passionately in this House—in its traditions and its importance in our national life. He also believed in the importance of a strong House of Commons in holding the Government to account and ensuring good government. Those principles were close to Sir Patrick’s heart and will be close to mine.
Over the weeks following my selection, Sir Patrick and I became good and close friends. We enjoyed spending a great amount of time campaigning together, and although our styles were sometimes a little different, that made it all the more enjoyable. I remember campaigning in the former mining village of Great Wyrley, where many constituents rushed up to Sir Patrick to wish him well in his retirement and thank him for the work he had done for them. They shook his hand and said, “Mr McCormack, Mr McCormack.” After about the 10th person had done so, I said to Sir Patrick, “Don’t you ever correct them?” He said, “Dear boy, after 40 years, it hardly seems worth bothering, don’t you think?” It is an honour to step into Sir Patrick’s very large shoes, but I hope that, over the years, I will gain some of his panache and style, which graced this Chamber, and that I will be an asset not only to the people of South Staffordshire but to this House.
South Staffordshire is one of those constituencies about which so many people say, “Where is it? Which town is in it?” People probably travel through it many times when they go up the M6 or up the west coast main line. It is a beautiful constituency that does not have a single major town, but is built up around many small, and some large, villages scattered across the South Staffordshire countryside. Many of those villages were born out of the industrial revolution and coal mining traditions, and have settled in some of the most beautiful, pretty and gentle English countryside that one can imagine.
The people are straight talkers, which, as a Yorkshireman, is comforting to know. As a straight talker myself, it is nice to have it blunt from others. South Staffordshire is a beautiful constituency that is criss-crossed by many canals and beautiful fields. However, it has its problems and issues. In South Staffordshire, compared with the national average, twice as many people work in manufacturing. That is important to me, because I have worked in manufacturing since I left university. I think it is fair to say that I am one of the few potters who sit in the House today. It is that experience of manufacturing that I hope to bring to the House, because far too often Governments of all colours have believed that we can build a strong, stable and vibrant economy on the twin pillars of financial services and coffee-shop economics. I have a great deal of respect for anyone who works in coffee shops and I even grudgingly admit that we might need bankers, but we cannot have a vibrant British economy without a strong and vibrant manufacturing sector.
Far too often, young people who go into manufacturing or engineering are seen as taking a second-class career, whereas we reward and sing the praises of people who go into accountancy, the law or public relations. We do not sing enough the praises of our designers, engineers and manufacturers. We need to change that ethos and have a similar one to that of Germany or Japan. We will have a truly vibrant economy only when we recreate the Victorian spirit of ingenuity and inventiveness that made Britain such a vibrant country, as I am sure it will be again.
I truly welcome the Prime Minister’s comments about the importance of manufacturing and I hope that the Treasury team listen well to his comments and do not spend all their time listening to bankers. They should also listen to manufacturers, because we often have a lot more common sense than bankers. I hope I can play my part in representing South Staffordshire and the people of a beautiful and lovely constituency, and that I can ensure their voices are heard loud and clear in this Chamber.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
Diolch, Mr Deputy Speaker. I congratulate the hon. Member for South Staffordshire (Gavin Williamson) on his excellent maiden speech, and I am delighted to have the opportunity to make mine in this debate. The way in which we respond to the longest-lasting recession since records began, and the support structures we put in place to deal with the human cost of the recession, will be the overriding domestic issues of this Parliament. I will close my contribution today by talking about an issue that is of huge importance to me—fuel poverty—but first I should like to use this opportunity to talk about my home constituency, which I now have the ultimate honour of representing as Member of Parliament.
Carmarthen East and Dinefwr consists of four valleys. Two rural valleys—the Teifi and Tywi to the north—are based on two majestic rivers that provide among the best salmon and sewin fishing in the British isles. Agriculture provides the backbone of the economy, and I am committed to fighting to preserve the traditional Welsh family farm and the traditional Welsh rural way of life.
There are also two post-industrial valleys—the Amman and Gwendraeth. As a son of the Amman valley, I can claim without any prejudice that the anthracite coalfield there contains the best coal in the world. The industrial half of my home communities—a producing economy—has suffered at the hands of a UK macro-economic policy obsessed with financial services and the negligence of manufacturing.
My constituency is probably most famous for its production of Welsh sporting icons. Some of the greats of Welsh rugby come from the area—Carwyn James and Barry John—and current Welsh and British Lions greats Dwayne Peel, Stephen Jones and Shane Williams are sons of Carmarthenshire. Carmarthen East and Dinefwr is also famous for its many castles, some of conquest, some of defiance. The three Deheubarth castles—Dryslwyn, Dinefwr and the imposing Carreg Cennen—are symbols of Welsh resistance, and of our determination as a people to preserve our identity and defend our freedom.
The north of my constituency was the home of a real life Robin Hood. Twm Sion Cati earned his fame by robbing from the rich to give to the poor. I consider myself a redistributive politician very much in the same vein. His arch-enemy was the sheriff of Carmarthen, a post I once held—although I must admit it was somewhat confusing for a Welsh nationalist such as me to hold that office. I look forward to campaigning for a tax on international currency transactions in honour of Twm.
Carmarthenshire is the home of great Welsh political radical minds. Llandybie born DJ Davies formed the Independent Labour party in Ammanford before the first world war, but then became a founding member of Plaid Cymru in the 1920s. He began working in the mines at the age of 14, served in the US navy, and was a formidable boxer. He lived in Denmark, and became convinced that the advancement of the Welsh working class could be secured only in a free Wales. Heavily influenced by the syndicalist movement, he wrote the masterpiece “The Economics of Welsh Self-Government” in 1931, which formed the basis of the decentralist socialist vision that guides my party to this very day. His vision of a mutual approach to economic development is one that I believe areas such as Carmarthenshire must embrace if we are to meet the challenges we face.
Jim Griffiths was a son of Betws. A Labour politician, he was the co-architect of the modern welfare state with Aneurin Bevan, and helped to deliver the first measure of Welsh devolution with the creation of a Minister for Wales. That political victory for the first time enshrined Wales as a political nation, and set in motion the chain of events that led to the creation of our own Government and legislature.
Carmarthenshire was also the constituency of the greatest Welshman of our time, Gwynfor Evans. His historic victory in 1966 marked the election of the first Plaid Cymru MP. Gwynfor’s legacy has been to inspire generations to the cause of our country.
I should like to say a few words about the man I replace, Adam Price. After less than a decade in front-line politics, he has already established himself as one of the greatest figures in the history of the nationalist movement, and one of the most significant political figures of our time in Wales. When he returns from his studies in the USA, his destiny is clear: to serve our people in our own Parliament in Cardiff, and to lead our people to our political freedom.
Adam will be remembered for unearthing the Mittal scandal and for leading the opposition in this House to the invasion of Iraq. He was a local champion in fighting for compensation for miners suffering from terrible respiratory diseases and securing a pension compensation fund for steelworkers who had seen their life savings disappear. Wales can ill afford to lose politicians of the stature of Adam, and I hope he returns ready to continue his work on behalf of our people and our communities.
In the time that is left, I should like to talk briefly about an issue that is very close to my heart: fuel poverty. In a modern country, it is a disgrace that more than a quarter of all Welsh households live in fuel poverty. It is one of the greatest failures of government that people in Wales and throughout the UK must continue to make daily choices between heating and eating. In the last year alone, average heating bills have increased by 33%, leaving people on fixed incomes terribly exposed, and energy prices in Wales are higher than anywhere else in the UK.
We need action at international, UK, Welsh and local government level if we are serious about eradicating the blight of fuel poverty from our communities. First, international oil prices must be stabilised to avoid price fluctuations. That could mean a long-term agreement between oil producer and consumer countries, as advocated by the French Government, and—arguably—the use of a more stable trading currency. The UK Government need to raise incomes and ensure that available benefits and tax credits are claimed by those who are entitled to them. That package should include the extension of winter fuel payments to all vulnerable groups. Secondly, energy-efficiency measures should be targeted primarily at the fuel-poor, and, thirdly, we need greater regulation of the energy market, and in particular a mandatory social tariff for the fuel-poor so that they are removed from a competitive market that simply does not work.
The Welsh Government must ensure that Wales gets its fair share of the UK Government’s energy efficiency schemes and create a package of support and advice for people living in fuel poverty. They must also promote off-grid, decentralised local energy systems, backed up with smart metering, so that communities can develop their own solutions to the twin challenges of global warming and energy poverty. I would also like a statutory duty on Welsh local authorities, which could include the retrofitting of vulnerable homes with the latest air-to-heat technology.
I have little doubt that the social justice agenda and the growth of Welsh political democracy and sovereignty are intertwined. During my time here in this place, I look forward to working with those across the political divide who believe in building a modern, just and prosperous Wales. Diolch yn fawr.
Stephen Gilbert (St Austell and Newquay) (LD)
Thank you, Mr. Deputy Speaker, for allowing me to speak here today for the first time. I am delighted to follow the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards), and I share his determination to secure a Robin Hood tax on international financial transactions. As it happens, I had the pleasure of knowing his predecessor from my time studying in Aberystwyth, and I am sure he will be a worthy successor.
St Austell and Newquay is a new seat that stretches from coast to coast across the heart of Cornwall; it is a unique constituency. It includes many places that hon. Members will have visited. St Austell and Newquay are Cornwall’s largest towns, but they are sharply contrasting, and the villages at the heart of my constituency could not be more different from those along the coast. It is a diverse seat: rural, urban, coastal, industrial and agricultural. I was born and bred in the constituency and I am proud to call it home.
Yesterday, my right hon. Friend the Deputy Prime Minister announced a boundary review. It seems that as well as being the first Member of Parliament for St Austell and Newquay, I may also be the last. In the context of today’s debate—I say this tongue in cheek to the Conservative Whips—perhaps it is only the sizes of our constituencies that will be increased by the Government rather than cut. However long I am in this place, it will be the privilege of my life to represent the people with whom I went to school and grew up, and with whom I live and work.
Members will be familiar with the picture postcard image of Cornwall, but they may be less aware of what lies behind that. We have by far the highest water bills in the country, yet some of the very lowest incomes. We do not have enough jobs, and those we have tend to be low- paid and seasonal. Thousands of people cannot afford a place to live in the communities in which they grew up. Indeed, I may be the only Member who was still living with his parents when he was elected.
Those are the challenges that face the people whom I represent, and my predecessors—Matthew Taylor, Colin Breed and my hon. Friend the Member for North Cornwall (Dan Rogerson)—made a huge effort to tackle them. Matthew Taylor’s review of affordable housing is the best route map out of the housing crisis that we face in rural areas; my hon. Friend’s work to secure the Walker review on water charges has led to a real-terms cut in water bills in Cornwall; and Colin Breed helped to develop the tax policy that will be implemented by this Government and will lift millions out of poverty. All three of my predecessors have shown a record of action in the best tradition of the first Liberal MP for Truro and St Austell, David Penhaligon. If anyone in this place doubts the impact we can have, they should knock on doors in my constituency and hear people talk about Mr Penhaligon almost 25 years after his untimely passing.
I do not mind admitting that that is a lot to live up to—as with other hon. Members, the bar in my seat is very high—but I welcome the opportunity to continue to tackle the problems we face in Cornwall from the Government side of the House and with the principles that underpin the Government’s agenda: freedom, fairness and responsibility. People who are trapped in poverty cannot be free. The need to work day in, day out just to make ends meet erodes the freedom to have a quality of life to which we should all be able to aspire.
I therefore welcome the Government’s commitment to raising the threshold at which people pay tax to £10,000 over the course of this Parliament. That will take many thousands of my constituents out of tax entirely and give hard-earned money back to everybody else. It will increase the freedom of those I represent, and by spreading the tax burden more evenly across our society, it will be fairer. I also welcome the re-establishment of the link between pensions and national average earnings. That is the fair thing to do and it is a step towards ending the pensioner poverty that blights Cornish communities.
The first step towards people being able to lead a responsible life is for them to have a place of their own in which to live, so I welcome the moves the Government will be making to bring empty homes back into use. There are 8,000 empty homes across Cornwall, and 1,400 in St Austell and Newquay alone. These homes should not be standing empty while so many people are in housing need.
I welcome the scrapping of the absurd regional spatial strategy, which would have led to so much of Cornwall’s countryside being concreted over with little gain for those in real housing need. Other measures, such as the promotion of shared ownership and community trusts, will do much to ease the housing crisis in Cornwall. I would like this Government to go further, however, by allowing local authorities to set a limit on the number of second homes in a community. Local needs should come first. Following recent announcements, councils now urgently require clarity about the criteria they will use to determine future housing provision.
I was the first person in my family to go to university. In fact, I enjoyed it so much I went twice. Statistically, I should not be here. My grandfather was a clay worker, my parents are separated and my secondary school was in the state sector. I am a gay man from an average working-class Cornish family. Access to education changed my life chances, and I have come to this place to extend to others the social mobility and opportunities that have so benefited me. If we are to tackle the poverty that bedevils parts of Cornwall, we have to give people the chance to make the very best of themselves. We cannot have a fair society if people do not have the chance to make the most of their talents, and it will not be a free society if people cannot use their abilities to achieve their dreams.
The community I grew up in and now represent understands the values this Government are promoting; indeed, they are summed up in Cornwall’s motto “One and all”. However, the people who sent me here will be keen to make sure that the burden of addressing the problems facing Britain, which were caused by the Labour party, falls on those most capable of carrying it.
This debate has highlighted some of the difficult choices we face. We in Cornwall have been let down by successive Governments, and in playing my part in making those difficult choices I will never forget that we need a fairer funding deal for Cornwall. I hope that now my party sits on the Government Benches, the issues I have touched upon this afternoon, and that my predecessors have campaigned on for decades, can finally be addressed, not “drekley”, as we say in Cornwall, but today.
Mrs Anne McGuire (Stirling) (Lab)
It is a pleasure to follow the hon. Member for St Austell and Newquay (Stephen Gilbert). My family has spent many holidays in his constituency, and I think VisitBritain could do worse than collect together all the maiden speeches of the past few days and use them to promote some of the most wonderful parts of our country—indeed, there are bits of our country I would not have recognised at all from the descriptions. I congratulate all Members who have delivered their maiden speeches. I was going to say that my contribution would be an older maiden speech, but one of those adjectives would not quite be appropriate. I shall now launch forward while leaving Members to work out the meaning of that remark.
First, I want to welcome the comments of the new Secretary of State for Work and Pensions about the principles that will underpin his approach to welfare reform. He said in a recent article:
“Tattooed across my heart is that I didn’t come here in any shape or form simply as a cheeseparer.”
That is a robust comment to make, certainly for a Conservative Secretary of State for Work and Pensions—and, frankly, it would not be at odds with many of the comments of previous Labour Secretaries of State.
I am also delighted that the new Secretary of State had his road-to-Damascus moment on the road to Easterhouse in Glasgow. I know the area well as I grew up there and my father represented it as a councillor during some of the worst periods of the Thatcher era, when a large community that was essentially made up of aspirational working-class people found itself in an economic desert. It was a period in which intergenerational unemployment and the poverty that the Secretary of State saw took root, and the aspirations of individuals and communities alike were crushed by the lack of jobs. There are similar examples to that in my constituency, where the mining industry was destroyed. Frankly, these communities started on the road to recovery only as a result of the massive investment in economic renewal by Labour Governments in both Westminster and Holyrood.
The absence of any detail in the Secretary of State’s programme so far—apart from the loss of the future jobs fund, which has already been dealt with by others—means that I could refer only to the coalition programme for government to see if any further light could be shed on the new approach. We should have some sort of cross-House consensus on how we move forward on welfare reform. Indeed, one of the new Ministers has strongly promoted a consensual approach, and I will be interested to learn whether he sees that consensus being continued now that he sits on the Government Benches.
The coalition wants to have a single work programme, and I think there is some room for rationalisation, subject to the demands, which have changed over a matter of years. I am not yet convinced, however, that a single work programme is necessarily the way forward. We have also heard much from the coalition about “decentralisation” of decisions and “individualisation” of provision. How will a leviathan single work programme respond to the specific needs of individual unemployed people? How will such a programme respond to someone who has a fluctuating mental health condition or a physical disability, or who is a carer or a recently unemployed bank worker? Some may require minimum support for a short time between jobs, but others will require a significant amount of longer-term help. There is no detail of how the initial assessment for support will be made. I assume that the programme will be cash-limited in spite of the Secretary of State’s ambitions, so how will the initial financial decisions about who needs more support and who needs less be made? Will Jobcentre Plus continue to have a significant role to play in this, or will people have to refer themselves to some other local or national organisation? If someone is disabled and needs additional help, will they have to compete with others on the programme?
Where does the access to work programme, which daily supports thousands of disabled workers in employment, fit into the new uniform approach? I know that the coalition has said it will reform access to work and I welcome that, but will the coalition Government commit themselves to doubling the access to work programme as the previous Government did, or will this just be rolled into a single approach that is not ring-fenced and that becomes a victim of cuts? On realigning contracts, will that be 100% output-based? In short, how is the whole thing going to work?
Perhaps the Secretary of State can provide answers to questions on his own sanctions policy. What will the level of sanctions be? Who will enforce them? What will happen to children if benefits are taken away from their parents? Where are the safeguards? Will people be forced to take any job, or will there be flexibility within the programme? Will the unemployed people in my constituency be taken off benefit if there are no jobs, or no valid opportunities?
May I briefly comment on the “work doesn’t pay” issue, which the Secretary of State repeatedly mentions? I understand and appreciate his sentiments. The coalition document says that it supports the national minimum wage, but I have to ask this question: in terms of the “work doesn’t pay” issue, is the Secretary of State proposing to increase individuals’ incomes through a mixture of benefits, credits and earnings or, as many of my hon. Friends and constituents fear, to go back to the old tried and tested Tory solution of salami-slicing benefits?
The two Ministers currently sitting on the Government Front Bench—the Exchequer Secretary and the Minister of State, Department for Work and Pensions, the hon. Member for Thornbury and Yate (Steve Webb)—can smile knowingly to each other if they want to. However, given the history of welfare reform, which causes a shudder through many communities, certainly in Scotland but also in many other parts of the country, these are serious questions and the coalition must answer them before its welfare reform programme will have any credibility among Opposition Members.
Alun Cairns (Vale of Glamorgan) (Con)
It is a privilege to have the opportunity to make my maiden speech in the debate in response to the Gracious Speech, and it is a pleasure to follow the right hon. Member for Stirling (Mrs McGuire). I congratulate the Ministers on their appointments and look forward to supporting them in tackling their challenges between now and the next general election.
I wish to pay tribute to my immediate predecessor as MP for the Vale of Glamorgan, John Smith. His campaigning efforts, which were primarily on tackling deep vein thrombosis and latterly in favour of the defence technical college proposed for St Athan, were recognised by those on both sides of the House. I strongly support his approach on both issues, and he is very much respected in the constituency. I also recognise the contribution of the previous Conservative Member for the constituency, Walter Sweeney, who will be remembered for, among many things, having the smallest majority in the House of Commons following the 1992 general election—it was a majority of 19. Thankfully, I am not in that position, but I do not take any vote for granted and I aim to keep my majority somewhat larger than that.
I also take pleasure in referring to the late Sir Raymond Gower, whom many senior hon. Members will recall with great fondness. He served the Vale of Glamorgan’s constituents from 1951 until his untimely death in 1989. His reputation for responding to and serving constituents is still recalled affectionately in the constituency, and his prolific letter writing to and on behalf of constituents came long before modern technology made such communication relatively straightforward. His efforts were extraordinary. I hope to be able to follow the principles of Sir Raymond’s approach to constituency work with passion and conviction, and to stand up, here in the Chamber, for equality of opportunity irrespective of background. It is ironic that Sir Raymond Gower’s maiden speech was about devolution to Wales and his call for greater “home rule”, as it was referred to then, because a commitment to such a referendum has been made by this Government.
It really is a privilege to represent the Vale of Glamorgan, my home constituency. It contains rich farmland, three main towns, numerous villages and hamlets, and a magical coastline. It has a fantastic history and I am confident that, with the Government’s support, it has a great future. It contains areas of prosperity and pockets of deprivation. I am confident that the policies announced in the Gracious Speech will go a long way to help overcome the deprivation, to meet the need for regeneration and to help to protect the fantastic environment.
The constituency’s three prime towns are Cowbridge, Llantwit Major and Barry. The Romans built a small fort in Cowbridge in the 1st century. In 1254, Sir Richard de Clare, the Lord of Glamorgan, granted the town its first charter and in 1886 Cowbridge was the last recipient of a royal charter given by Queen Victoria. David Lloyd George and Iolo Morganwg have strong links to the town, which was the birthplace of Sir Leoline Jenkins, who was the principal of Jesus college, Oxford. He endowed the town’s grammar school and formed its long-standing association with Jesus college.
Llantwit Major came to prominence with the foundation of a monastery, which was established by St Illtud in the late 5th century. It became a seat of learning and religion, attracting royalty and St David himself. It is the nearest town to St Athan, with its significant RAF base which is the proposed site of the £13 billion defence technical college—I strongly support that policy.
Barry, too, has a great history. The name derives from St Baruc, who was drowned in the Bristol channel and buried on Barry island. The rapid expansion of the town dates back to 1884, when a group of colliery owners built a railway line and a dock, but interestingly the original Barry Dock and Railway Bill was defeated in Parliament in 1883. By 1913, Barry had become the largest coal-exporting port in the world, and the railway line also brought millions of tourists to Barry island to enjoy one of Wales’s most spectacular beaches.
Latterly, the town has become well known because of an Essex boy and a Barry girl —Gavin and Stacey. Even a former right hon. Member of this House, John Prescott, has appeared in an episode with Nessa, Smithy and the other characters. Stacey and Uncle Bryn live on the steepest road in my constituency, and the Essex home in the programme is actually located in Dinas Powys, in my constituency. I apologise in advance, Mr Deputy Speaker, should I ever ask, “What’s occurring?” or should I thank you by saying, “Tidy”. The new interest in the town, combined with the regeneration efforts of the local authority, mean that Barry has an exciting future ahead of it.
Although the Vale of Glamorgan’s gross domestic product is at or slightly above the UK average, there are great differences between its communities. The overall headline masks the deprivation, which has its roots in the change from the former industries, and because the GDP of other parts of Wales is lower, areas of deprivation in my constituency are left wanting. I want to fight for equality of opportunity. I was contacted last week by a constituent who had been made unemployed and did not qualify for training support to enhance his prospects because he lived in the Vale of Glamorgan. Had he lived in the neighbouring authority area, he would have been eligible for projects that receive European aid.
I wish to conclude my remarks by returning to the issue of the proposed defence technical college, which is the largest private finance initiative scheme. I recognise that the strategic defence review needs to take place and that the Government also face financial challenges, but this project would use money that is already committed and is already being spent by the Ministry of Defence, and it would spend it more efficiently and effectively. We owe this to our armed forces; it is important to Wales and the Welsh economy, but it is most important for our brave men and women who serve in our armed forces, because it will give them the world-class training that they most desperately need and deserve.
Shabana Mahmood (Birmingham, Ladywood) (Lab)
I am grateful to you, Mr Deputy Speaker, for giving me the opportunity to make my first contribution in the House, especially as today’s debate has particular resonance for me and my constituency. I shall talk about that shortly, but before doing so I must congratulate all hon. Members who have made their maiden speeches today, because they were all excellent and are a hard act to follow. In particular, I am delighted to follow the maiden speech made by my hon. Friend the Member for Bethnal Green and Bow (Rushanara Ali) who, like me, is one of the first Muslim women to be elected to this House. As we are joined in that achievement by my hon. Friend the Member for Bolton South East (Yasmin Qureshi), I can only remark that Muslim women in the Commons are rather like buses: there are none for ages and then three come along at once.
My predecessor, Clare Short, was very well known for being unafraid to speak her mind. When making her maiden speech in 1983, Clare said:
“I intend to follow tradition and speak about my constituency. However, it is impossible for me to follow the tradition of not being controversial”. —[Official Report, 29 June 1983; Vol. 44, c. 623.]
That was a sign of things to come, but it was also indicative of her honesty. Clare had a distinguished career as a Labour MP but following differences over the Iraq war she ultimately resigned the Labour Whip in October 2006, choosing to sit as an independent MP. She was not the first Labour MP from Birmingham, Ladywood to have disagreed with the Labour party over policy, because our predecessor, Victor Yates, who held the seat from 1945 to 1969, had the Whip withdrawn from him twice. That meant that he, too, sat as an independent in this House for a period of time. This is not a Ladywood tradition that I hope to continue, but I will strive to emulate the passion and fearlessness of my predecessors in standing up for the people of my constituency. In every part of Ladywood, Clare is remembered with pride, warmth and gratitude for her hard work, and that is the best and most fitting tribute that I can give to this most outspoken of MPs.
I am a Brummie born and bred, so the fact that I now represent a constituency that is the heart of Birmingham is a source of great honour and it is a privilege. My constituency consists of four extremely diverse and different wards: Aston, Ladywood, Nechells, and Soho. Between them, they are home to the Grade I-listed Aston hall, the historic Jewellery quarter, the Star City entertainment complex and the Grade II-listed Soho house, home of the manufacturer Matthew Boulton. I am also lucky to have both Aston Villa and Birmingham City football clubs in my constituency, but as both are in the premier league I will have to learn new skills of football diplomacy when the two sides play each other.
Birmingham, Ladywood is one of the most multicultural areas in the country. More than 50% of our population is non-white and we have a proud multicultural tradition. I have been privileged to meet many people from all race and faith backgrounds during my time as a candidate and now as a Member of Parliament. Each such meeting has reiterated to me that while the people of my constituency might have come from different places, the destination they seek is the same—a place of greater opportunity and the same chance as everyone else to succeed.
That brings me to why it is so important to me to begin my parliamentary career by speaking in this debate and focusing on the labour market. My constituency has the devastating and unwanted distinction of having the highest rate of unemployment in the country. Our figures for unemployment have been too high for many decades. In researching my maiden speech, I noted with dismay that unemployment was a theme in the maiden speeches of many of my recent predecessors. My constituency is particularly blighted by long-term intergenerational worklessness, which is the legacy of previous recessions which devastated my constituency so much that it has never really recovered. I was pleased, therefore, when the Labour Government announced in December 2007 that £1.5 billion would be provided through the working neighbourhoods fund specifically to tackle the problem of long-term worklessness, and allocated more than £100 million of that money to Birmingham.
I wish that action had been taken earlier in our term in office. However, I have real concerns about the effectiveness of the working neighbourhoods fund in Birmingham, where the partnership tasked with delivering the fund is controlled by Birmingham city council, which has been run by the Conservatives and Liberal Democrats in coalition since 2004. To date, the fund has not been adequately used for the express purpose for which it was created by the Labour Government—to help to reduce unemployment in Birmingham’s most deprived communities such as my own. Two facts are evidence of that. First, mid-way through the three-year programme, of the £30 million that had been spent, only £2.5 million had actually been spent on projects to tackle worklessness. Secondly, and just as controversially, £14 million of working neighbourhoods fund money was diverted to help to bail out the Tory-Lib Dem council’s budget overspend on social services. I believe that cash for jobs should be spent on jobs, and I hope that what is left of that money is spent in the way intended by the Labour Government—to support the long-term unemployed in areas such as mine in getting the skills and confidence that they need in order to get and retain a job so that they can transform their lives.
I wish to make a related point on youth unemployment. In 1983, Clare Short warned that school leavers in Ladywood in the 1980s faced unemployment not only in ever greater numbers, but for ever greater periods of time. In 2010, I find myself warning that the children of that generation might be in the same boat, because of the new Government’s plans to cut the future jobs fund. That fund created 200,000 jobs and arose from our guarantee of a job, or training or a work placement, for anyone who was under 25 and out of work for six months. I am disappointed that the new Government are getting rid of the fund. Once again, a Conservative Government—this time helped by the Liberal Democrats—are walking away from the young unemployed in our country. I implore them to change course. When we damage our young people, we damage us all, because they are our future. If the Government walk away from them and break their hearts and spirits, they truly will create a broken Britain.
I conclude on a personal note and with a pledge to the people of Birmingham, Ladywood. My grandfather came to this country from Pakistan in the 1960s. He worked long hours on a low wage and made sacrifices so that his family could access greater opportunity. He died when I was six years old and did not live to enjoy the fruits of his labour. He could not have known that his decisions and his hard work would one day lead to his granddaughter being elected to this House. I pay tribute to him and to the successes of the Labour party and the Labour Government, who created the opportunities that made my family’s journey and that of so many ordinary hard-working families possible. I believe that opportunity and the chance to fulfil one’s aspirations is the birthright of every one of our citizens, and I pledge to the people of Birmingham, Ladywood that I will devote myself to eradicating the misery, hopelessness and sheer waste of long-term unemployment so that my constituents can have what they deserve—the same chance to succeed in life as everyone else. For however long I am their Member of Parliament, I will never settle for anything less. I thank the House for listening.
Damian Hinds (East Hampshire) (Con)
Thank you for allowing me to catch your eye, Mr Deputy Speaker. It is an enormous privilege to address the House for the first time. The trepidation that I had already has been greatly enhanced by having to follow so many of my hon. Friends and Opposition Members.
I begin by expressing my appreciation for my predecessor, the right hon. Michael Mates. On his election in 1974, as MP for the then Petersfield constituency, he was about the age that I am now, but he had already served Queen and country for 20 years in the Army. He went on to serve in the House for a further 36 years. His well deserved reputation as a champion of the people of East Hampshire and his service as a Minister of the Crown and as a Select Committee Chairman cast a very long shadow, in the penumbra of which I stand rather hesitantly today. If ever, in this House, I can be half as good as he was, I shall be not half bad.
I very much hope to emulate Michael Mates’s long and close relationship with the people of East Hampshire, and there are many people whom I have the privilege to represent now who have been transported into my constituency, courtesy of the Boundary Commission, having taken no decision of their own to do so. They have been served well by my right hon. Friend the Member for North East Hampshire (Mr Arbuthnot). The House will be familiar with his exemplary service and so I shall not affront his modesty now. Suffice it to say that I aim to ensure that the residents of Bordon, Liphook, Grayshott, Selborne, Headley and Headley Down will not be found gazing wistfully across the constituency boundary. I shall do my best to serve them as well as they have rightly come to expect.
The constituency of East Hampshire is England at its very best, with its varied and enchanting landscape, historic market towns and many beautiful villages. One such village is Chawton, where Jane Austen found such inspiration and created most memorable characters and images that show our country at its most cherished. But that tranquillity has at times been rather violently disrupted. Should I ever require a reminder of the need to remain in harmony with my constituents, it is there in the bullet holes in the door of St Lawrence’s church, close to our family home in Alton, for that was the site of the civil war battle of Alton. On that occasion, it took 5,000 parliamentarians to match up to the local men.
Today, East Hampshire is, I am pleased to say, once again a harmonious place, but challenges still exist. We need houses that local people can afford, but we need to resist the sort of overdevelopment that can spoil the character of an area. It is vital to provide jobs locally and to keep the micro-economies of our towns and villages vibrant for our local heart and soul. Looking forward, the opening of the Hindhead tunnel, the various options for the future of Bordon and the advent of the South Downs national park all present both new opportunities and new challenges.
In my constituency, particularly in Bordon, we are proud to be home to so many who serve in our armed forces. They are a constant credit to our nation and our commitment to them in this House must measure up to their commitment to serve our country. I welcome the Government’s pledge to renew the military covenant and I look forward to seeing that as a priority in the business of the House.
After the defence of our country and our security, perhaps the biggest battle we face is ensuring that we further define and bolster Britain’s place in the new world economy. As the new powerhouses of China, India, Russia and Brazil loom ever larger, we must rise to the challenge they set. Fundamental to that must be ensuring the very best education for every child to enable them all, regardless of background, to fulfil their potential. That is a theme that many hon. Members have touched on already. Striving for excellence is not just about bringing all up to scratch or setting the bar at an acceptable standard. It must be about encouraging all to stretch themselves, from wherever they start, to be all that they can. That should be true both for schools and for the students in their care. In education, as in industry, when people feel ownership, empowerment and responsibility, they are much more likely to go the extra mile and make a success of their venture—hence the great attraction of the academy model, even for schools that are already very successful.
Those same principles need not mean going it alone, as they can extend beyond the school gate, with schools working in partnership with others. In my constituency, the 44 schools and colleges already work co-operatively, choosing to pool resources in the pursuit of shared goals. The potential advantages of that kind of approach are manifold. It can enable smaller village schools, which we value very highly in my area, to derive scale benefits that they otherwise would not have. It can provide new stretch opportunities for particularly gifted and talented youngsters, and also a forum for governors to share best practice.
My right hon. Friend the Secretary of State for Work and Pensions has outlined bold plans to help tackle the problem of people being trapped in the welfare system, but I am sure that he would agree that even better than cure is when we can go for prevention. The oft-quoted number of NEETS—people not in education, employment or training—is such a bland statistic, but it masks so much wasted potential. It is often said, too, that one can spot the people likely to end up adding to that statistic from a very early age. That is too often remarked on, but too rarely acted on.
We must have ambition for all our young people, and the pupil premium that my right hon. Friend the Secretary of State for Education is putting forward will be a big part of that. I hope too that more areas will follow the model of the East Hampshire Partnership, for which a key focus is identifying the people who may be at risk of falling into that group, and working together across the age groups for their benefit.
Mr Deputy Speaker, thank you for allowing me the chance to speak.
Ms Margaret Ritchie (South Down) (SDLP)
Thank you for calling me, Mr Deputy Speaker. I greatly appreciate the opportunity to make my maiden speech in a debate about economic affairs, and in particular about the services and assistance that we provide for our most disadvantaged and vulnerable citizens. It is an honour for me to follow the hon. Members for East Hampshire (Damian Hinds) and for Birmingham, Ladywood (Shabana Mahmood).
The subject of today’s debate is one close to my heart, not least because until very recently it was part of my responsibilities as the Minister for Social Development in the devolved Administration in Northern Ireland. In addition, concern for the disadvantaged and the vulnerable has always been top of my political agenda and that of my party. The Social Democratic and Labour party is here to serve.
No one better personifies dedicated public service and a lifelong desire to improve the lives of fellow citizens than my predecessor Eddie McGrady. He has been an exemplary contributor to making Northern Ireland a better place for all its people, across a career spanning 50 years of steadfast public service. Unlike others, his leadership style has not been bellicose or loud. Instead, he is a member of that elite group of statesmen and politicians who make progress for everyone through their wisdom, dedication, patience and hard work. For me personally, he has been a role model and a true friend. I am proud of what he has done for the constituency of South Down. The evidence of his endeavours is there for all to see throughout that beautiful constituency.
I said that South Down was beautiful, and it is. Located in the south-eastern corner of Northern Ireland, it boasts at its heart the magnificent Mountains of Mourne, which play host to Northern Ireland’s highest mountain peaks and cradle the crystal-clear waters of Silent Valley that sustain our capital city of Belfast. South Down also has an extensive and charming coastline, stretching from Carlingford lough at the Irish border to the south, through the bustling harbour towns of Warrenpoint and Kilkeel and on to Newcastle where, famously.
“the Mountains of Mourne sweep down to the sea.”
The coastline curves northwards beyond that again, to the historic town of Downpatrick—the place that I call home.
Although there is some vibrant manufacturing industry and commerce in the area, the main industries in South Down are agriculture, fisheries and, increasingly, tourism. Regrettably, South Down also has its own pockets of deprivation. It is a very good example of a place where, if the kind of welfare-to-work initiatives envisaged by the Government are to have any success, there needs to be an accompanying concentration on job creation. For the House can rest assured that there are very few people I know, especially in South Down, who do not want to work.
As a former Northern Ireland Minister, I told the previous Government that a policy of pressing people into work when there are few jobs to go to could not prosper, and I repeat that message to the new Administration. I share the Government’s desire to help more people enjoy the dignity and self-sufficiency that comes from gainful employment but, in Northern Ireland, a policy of hounding people away from benefits when there are few new opportunities for employment will cause only hardship and resentment.
But let us be positive: I believe that we in Northern Ireland have it within us, now that all the pointless violence has ended, to make our economy take off for the first time in generations. We are attracted to the possibility of devolving tax-varying powers to the Stormont Executive—powers that will allow us, for the first time, to compete as equals in the quest for foreign direct investment. I very much welcome the indications from the Government that they will help us harmonise corporation tax on the island of Ireland.
We can do more for ourselves in many other areas, too. Northern Ireland has potentially a very rich renewable energy resource. It can be at the centre of our plans to develop the green economy. We also have huge potential in our agriculture and food industries to drive for higher added value. We have a well-educated and trained work force, and a world-class broadband infrastructure that can be the platform for the growth of our tradable sectors. We must get all of this moving if we are to be credible in offering work to everyone.
I also think Northern Ireland can harvest a major expansion of its tourism industry. We offer a well-priced and absorbing tourism product that is enhanced by high-quality hospitality and a genuinely friendly and welcoming people. The potential for tourism development is, I believe, at its most enticing in my own constituency of South Down.
In the Downpatrick area, we hold the authentic heritage of our national saint, Patrick, and that is something very special. The whole world celebrates his anniversary on 17 March, yet that same world has limited understanding of his story. It is a powerful and compelling story of bringing Christianity to Ireland and allowing it to blossom in a land of saints and scholars at a time when it was threatened with extinction in Britain and the rest of Europe.
Patrick transcends all our historic quarrels in these islands and in particular within the two traditions in Northern Ireland. He is a unifying figure and his message is one of reconciliation. He was a Roman Briton, and as such was our greatest ever import. He is, and can be even more, our greatest ever export. In special parts of South Down, we hold the sites where Patrick first landed in Ireland and where he built his first church, the healing wells where he bathed, the place where he breathed his last, and the grave where he now rests.
I am confident about the future and the ability that we have to improve the economy and the living standards of our people. I will work positively here to achieve those objectives, but each week I know that I will be returning to a special place. I invite all Members here to visit South Down, and Downpatrick in particular, where they can walk in the footsteps of Patrick.
Elizabeth Truss (South West Norfolk) (Con)
Thank you for calling me, Mr Deputy Speaker, and may I congratulate the hon. Member for South Down (Ms Ritchie) on her passionate advocacy of the economic development of her constituency? I also congratulate my hon. Friend the Member for East Hampshire (Damian Hinds) on his advocacy of the importance of education programmes.
I am very grateful to be called in today’s economy debate, as I believe that addressing the deficit and powering economic growth are the two most important things that this Government can do. I believe that South West Norfolk, and Norfolk as a whole, have a lot to offer in helping us to achieve those objectives.
The people of South West Norfolk are not afraid of hard work. Indeed, we are a forward-looking and self-reliant county. We are part of the east of England, which is one of the three regions in the country that puts more in the tax pot than it takes out of it. To carry on being a net contributor, however, we need to make sure that we have the necessary infrastructure and skills in our county, and that is what I am going to talk about today.
My predecessor, Christopher Fraser, worked hard on those issues—to secure further funding for the A11 and to protect Swaffham community hospital. He spoke out frequently on the issue of flood defences, which are important for members of our community, some of whom can use their road for only 200-odd days in the year because at other times it is closed due to flooding.
South West Norfolk is famous for some strong characters. Thomas Paine was born in Thetford—a man who started off revolutions on two continents. Boudicca was reputed to have had her base in Thetford as well. She led an uprising against the Romans. Sadly, when she left the county of Norfolk and moved on she was strategically outmanoeuvred at the battle of Watling street. That is not a fault that afflicted one of my other predecessors Gillian Shephard, now Baroness Shephard, who successfully steered many reforms through this House as a Minister for Agriculture and as Secretary of State for Education and Employment.
Agriculture is a huge part of the economy in South West Norfolk. We have the world’s biggest sugar factory in Wissington; we also have some amazing arable production and pig production, and we are still enjoying the bounty of the asparagus crop. I have just been enjoying asparagus in the Tea Room and I hope that it was Norfolk asparagus. If it was not, I will certainly be working to make sure that it is in future. Agriculture faces problems, not least the Rural Payments Agency, which I want to work to reform, particularly the mapping exercise, which has caused many farmers in South West Norfolk utter consternation.
We have two other key market towns in South West Norfolk—Swaffham and Downham Market. I do not know whether hon. Members have heard of the pedlar of Swaffham. He came to London to look for treasure, but he found out that the treasure was in Swaffham all along. I can tell the House that there is much more treasure to be unearthed in Swaffham—its tourism industry and its energy industry. Downham Market is another fine town that used to boast orchards. It is still a centre for agriculture, and now has a number of commuters living in the constituency, who travel to Cambridge, Kings Lynn and London. I shall be wanting to make their lives easier by seeking improvements to that train line.
The constituency stretches from the fens to the brecks and right down to the Suffolk border. In all those areas various business are tucked away. We have innovative businesses producing fuel from cooking oil, high-tech lasers and airport scanning equipment. It is amazing the things one finds. All those businesses tell me the same thing. They are frustrated with dealing with too many Government agencies, a plethora of initiatives, and too much red tape. They also want action on the creaking infrastructure in Norfolk and say that we need more specialist skills. That is why, together with my Norfolk colleagues, I shall be fighting for dualling of the A11 from the fiveways roundabout to Thetford.
I notice that my right hon. Friend the Chancellor mentioned earlier that he wanted to put money where there was a high-level economic return. I can tell the Minister that there is a benefit-cost ratio of 19 for this project, so it is of high value. It will unlock more growth in Norfolk. We also want to see a successful conclusion to the train franchise agreements, and of course broadband rolled out across the county.
The other thing that I will be pushing for is an overhaul of our qualifications system. Like everywhere else in the country, the economy of South West Norfolk has changed. With increased automation, we now have more highly skilled jobs. A typical farm now employs an eighth of the employees that it did 40 years ago, but those employees are in highly technically skilled and business management roles. We need to ensure that we educate people for those jobs. That is why I want to look to our great universities to lead on academic qualifications. I have previously called for maths and science to move from geek to chic. Never has this been more important, and I will be pressing for that.
I also want to see employers lead in on-the-job skills, because people get a passion for work and a sense of craftsmanship from watching someone who cares about it doing the job. I will be fighting for that to make sure that those people, not bureaucrats, are in charge of setting our qualifications.
Thank you so much for giving me the opportunity to make my maiden speech today. I am truly grateful. I know that we have the right policies and that the will is there among those on our Front Bench. We can make not just Norfolk a powerhouse but the whole of Britain a powerhouse for the future of our economy.
Alex Cunningham (Stockton North) (Lab)
Thank you, Mr Deputy Speaker, for calling me to make my maiden speech. I congratulate other hon. Members on their maiden speeches. I have learned a lot; I have enjoyed them much, but I particularly look forward to a supply of that asparagus.
After 30 years living in my constituency, I am proud to be an adopted Teessider, and even more proud to represent the people of Billingham, Norton, much of Stockton and the surrounding villages. My Stockton North constituency has a long history as an industrial hothouse, with engineering, chemical manufacture and shipbuilding. Work with metal for building ships and some of the world’s most famous bridges has always been at the centre of our community. Even just two weeks ago, we saw the world’s largest marine pipe-laying machine loaded on board a ship and exported to the far east. Built in my constituency by IHC Engineering, it will subsequently be deployed in the Gulf of Mexico and off the Brazilian coast, laying pipe lines for, among others, BP, Exxon-Mobil and Shell.
The metal work also has its links with the Houses of Parliament. Every time I hear Big Ben strike, it reminds me of home. The original bell was cast in Calf Fallow lane, just 400 yards from my back fence. The history books say that the people of London cheered the bell through the streets, but sadly it never took its place in the Clock Tower, as it cracked under testing. I hope, Mr Deputy Speaker, that the same does not happen to me.
We have seen many changes in our local economy. Substantial investment by the regional development agency One NorthEast has helped business and industry in Stockton not just to play to its strengths but to diversify into all manner of things from financial services to 21st-century digital businesses. Investment in education and training has also brought big dividends, and I only hope that the investment continues, and that the new Government’s plans to change the RDA do not render it useless.
My constituency is famous for many other things. Stockton is home to one end of the world’s first railway line. The town boasts the widest high street in England. John Walker invented the friction match in his high street shop, and the town is home to one of Europe’s premier arts festivals, the Stockton international riverside festival. We are also celebrating the 700th anniversary of our market charter this year.
Billingham developed from a small village to a large town during the ICI era on Teesside. It also boasts a festival of its own—the international folklore festival, now in its 46th year. The people of Billingham are also famous for taking on the might of the nuclear industry in the shape of Nirex, which wanted to dump hundreds of thousands of tonnes of medium-level radioactive waste under their homes in a disused anhydrite mine. Their campaign “Billingham against the nuclear dump” was successfully led by my predecessor Frank Cook, then a new MP himself. It was the biggest constituency campaign he was involved in during his 27 years as the Member of Parliament for Stockton North. Many hon. Members will remember Frank Cook as a Deputy Speaker in Westminster Hall, and for his work with NATO. I will remember him as a dedicated champion of genuine asylum seekers, helping to protect many of them from torture or death, which they would have ultimately suffered if they had returned to their home country.
Education is my particular interest, and I am extremely proud of the success of many schools in my constituency. They have delivered outstanding success for our children and young people. Much has been achieved, but much remains to be done. As Stockton borough council lead member for children and young people, I was privileged to oversee the work to develop the Building Schools for the Future programme across the borough. Opposition Members share my anxiety that the biggest single investment in education ever is now subject to review and could be cut. I remain hopeful, however, that the new Government will soon end the speculation over BSF and help us transform teaching and learning in the kind of facilities of which we can all be proud.
A co-ordinated approach to delivering integrated services for our children and young people is essential as we go forward. The safeguarding of our children must be central to that work, yet there has been little mention of it from the new Government, except for a statement promising a review and a cut in bureaucracy. We have seen the high-profile cases of recent years, and they illustrate the need for safeguarding of our children to remain one of the highest priorities for national and local government alike. While every failure is a disaster for a child or a young person, we must not lose sight of the daily work of our local authorities and social workers, often working against the odds to deliver success in the most difficult of circumstances.
Much of our talk these days is about reducing spending, but I hope the Secretary of State for Education and the Chancellor will deliver real resources in developing education in our schools on budgeting. It is a critical area in which support is needed for young people and many families, to help them manage their income and not fall into the hands of loan sharks, both legal and illegal. There are people in my constituency who pay for their television £1 at a time through a slot meter, and end up paying for their television several times over. There are others who, believing that there is nowhere else to go, take out loans with extreme interest rates, and often struggle just to meet the interest payments. I will work here to put an end to that “legal loan shark” practice, which devastates so many lives, and help people find affordable credit through credit unions or other means.
Higher education is also important to my constituency, and Stockton boasts of being a university town. Durham university on the south bank of the River Tees falls in the Stockton South constituency. I know, however, that the university harbours an ambition to expand student numbers and move across our new Infinity bridge and on to the north shore and into Stockton North. I hope that ambition is realised.
I firmly believe that a healthy community can be a learning and economically vibrant community that can achieve great things in developing an exciting future. In recent times, we have seen improvements in the health of some of our neediest communities across the country, and in my own constituency. I hope we will see that improvement continue, with our planned new hospital given the go-ahead. I also hope that the new Government will recognise the huge benefits that continued investment in integrated education, social care and other services for children and young people can bring. Many children and adults in my constituency still face the toughest of circumstances, and could suffer most under the cuts proposed by the Government. I hope I can serve them well by highlighting the issues affecting their lives, and persuading all who will listen that people like them need us in their corner.
Nick Boles (Grantham and Stamford) (Con)
Thank you for calling me, Mr. Deputy Speaker, and for giving me the opportunity to address this House for the first time. I start by congratulating hon. Members who have just concluded their maiden speeches. I hope that, after six hours here, they enjoyed the experience, and I hope the House will forgive me if the microphones pick up the mild rumbling of my stomach at this late hour in the evening.
I should like to thank my predecessor, Quentin Davies, for his long record of service. He worked hard for the people of south-west Lincolnshire, and played a crucial role in securing the future of Grantham hospital when it was under threat. It is therefore with a heavy heart that I report to the House the shocking truth about Mr Davies’s recent ordeal. Three years ago he was kidnapped by a brutal and unscrupulous gang. As a political prisoner, he was spared no indignity. He was even forced to sign a statement hailing the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) as
“a leader, who is entirely straightforward, who has a towering record, and a clear vision for the future of our country”.
Last week, Mr Davies suffered the final humiliation—exile to the House of Lords. We can only imagine his anguish as he protested his belief in a fully elected second Chamber and his scorn for titles and other baubles. I hope that the House will join me in sending our condolences to the newly ennobled Lord as he starts his life sentence on the red leather Benches.
I feel immensely lucky to be representing south-west Lincolnshire in Parliament. Nowhere in the country is there a town more lovely than Stamford, but living in a place of ancient beauty creates its own challenges. Stamford’s residents have to work out how to preserve their town for future generations, while finding a way to live and work and have fun in the 21st century. I would not presume to tell them how to strike that balance—but I can think of no place better equipped to run its own affairs without interference from regional commissars in Nottingham and planning gauleiters in Bristol.
North-east of Stamford is Bourne, a small town that boasts two great secondary schools, Robert Manning technology college and Bourne grammar. Together, they demonstrate that selective education, where it is well established and accepted by parents, can provide children of all abilities with superb teaching. I am delighted that my right hon. Friend the Secretary of State for Education has also invited outstanding selective schools to become academies.
At the northern tip of the constituency is Grantham. The first thing one sees on approaching the town is the magnificent spire of St. Wulfram’s, but it is not church architecture that has made Grantham world famous. It is not even Sir Isaac Newton, who grew up nearby in Woolsthorpe manor and discovered gravity while snoozing in its orchard. Grantham achieved global celebrity because of Margaret Thatcher. Thirty years ago, she smashed through the glass ceiling in this House, and gave us all a master class in true grit. I pay tribute to her today.
Traditionally, Grantham was an engineering town. I believe it can be so again if we learn from the mistakes of the past. In 1905, Richard Hornsby and Sons of Grantham invented the revolutionary caterpillar track. By 1914, Hornsbys had only sold one caterpillar vehicle, so they transferred the patent to the Holt Manufacturing Company of California for $8,000. Thanks in part to this patent, Holt became Caterpillar Inc. and went on to dominate the global market in construction and mining equipment. What haunts me about that story is that none of us is surprised by it. We have ground-breaking research, brilliant design, even watertight patents, yet the conversion of that technological potential into orders and jobs often passes us by. If we are to restore our economic fortunes, we must change that. I spent the best part of 10 years running a small business, making paintbrushes and rollers. I will not pretend that I made a huge success of it, but it did help me understand the challenges facing modern manufacturing. I am determined to help others who make a living by making things.
Thank you for your patience, Mr. Deputy Speaker. I would like to conclude with a few words to Labour Members. We disagree about much and will have fierce battles in the years to come, but I will never forget what they, and their recently departed colleagues, did for gay women and gay men such as me. I would not be standing here today if they had not passed legislation to extend full equality and respect to everyone in Britain—and thereby entrench a change in culture and attitudes that my own party has now embraced. This was the Labour party at its best: brave, principled and humane. I thank and salute it, and hope that some day in this place I will have the chance to do something as good.
Naomi Long (Belfast East) (Alliance)
Thank you for calling me, Mr. Deputy Speaker. I am honoured to address the House for the first time, on behalf of my constituency of Belfast East, where I have lived all my life. I want to thank the hon. Member for Grantham and Stamford (Nick Boles) for his speech, particularly his words about the importance of equality and respect, and I congratulate all those Members who made their maiden speeches today. I only wish that they had set the bar slightly lower for those of us who have to follow.
In preparing for today I read the maiden speech that my predecessor, Peter Robinson, delivered here in 1979, when the troubles in Northern Ireland were at their height—a fact that was reflected in his remarks to the House on that occasion. While our political perspectives are distinctively different, I want to pay tribute to him for his 31 years of dedicated service to the constituency as Member of Parliament, and particularly for his contribution in recent years, as First Minister, to making Northern Ireland an immeasurably more stable and peaceful place than the one to which he referred in his maiden speech. I wish him well as he continues in that important role.
It is a convention to introduce one’s constituency to the House in a maiden speech, but perhaps I could also briefly introduce my party, as the first Alliance party member to be elected to the House. Alliance was formed in 1970 by people from across the traditional religious and political divide who were committed to healing the deep-seated sectarian divisions in our community. They recognised that there was much more that united the people of Northern Ireland than divided them; that any change to the constitutional position of Northern Ireland required the consent of those who live there; and that power sharing would ultimately form the basis of any political agreement.
Unfortunately, it was an idea ahead of its time and the past 40 years have been marked by failed attempts to realise those aspirations. However, now, with a functioning Assembly, based on those same principles and endorsed by the overwhelming majority of people, the quality of the original idea has been proven. Importantly, however, those people also offered a vision of a better future for all the people of Northern Ireland. In doing so, they gave hope to people such as me, growing up in circumstances where both vision and hope were in short supply.
The work of tackling prejudice in all its forms is still critical if we are not only to maintain progress but to create an open, welcoming and diverse community in which diversity is respected and celebrated, and in which we can fully realise our potential, both economically and socially. I thank my constituents for endorsing that commitment to a shared future when they elected me. I look forward to serving them in this new role and will endeavour to live up to the trust that they have placed in me.
Stretching from the River Lagan, through the terraced streets of the inner city of Belfast East, outwards to the suburbs and the beautiful Castlereagh hills beyond, my constituency is home to Parliament Buildings and so has provided the backdrop for many dramatic moments in political life in Northern Ireland. It is also a constituency with a rich cultural, sporting and industrial heritage and, as a result, there are many famous names associated with it, such as C.S. Lewis, Van Morrison and George Best, to name only a few.
Perhaps the most famous name of all associated with Belfast East is not that of a person but that of a ship, the Titanic, the ill-fated White Star liner that was at the time the largest and most luxurious ship ever built, and is surely now the most renowned. She was constructed at a time when Harland and Wolff was the largest shipyard in the world. Gustav Wolff was a partner not only in Harland and Wolff but in the east Belfast-based Belfast Rope Works, one of the largest rope works in the world. Among his other enterprises, Gustav Wolff also found time to serve as a Member of Parliament for East Belfast, so I have quite a lot to live up to.
That industrial heritage marked out the east of the city for many years, but with the decline in shipbuilding and manufacturing it also cast a huge shadow over my constituency. Our experiences in that respect were not dissimilar to those of many industrial cities. However, our difficulties were compounded by the ongoing violence and political instability, which hampered the economic rebalancing that was required. Thankfully, with the changed political fortunes of Northern Ireland, there are huge opportunities for regeneration and growth and the site of that shipyard remains a significant economic driver. Once fully occupied by the shipbuilding industry, it is now the largest waterfront redevelopment site in Europe: Titanic Quarter. When completed, it will transform the 185-acre site into a new mixed-use maritime quarter, with the potential to create upwards of 25,000 new jobs over the next 15 years. The Titanic signature project, set to open ahead of the centenary of the Titanic in 2012, will allow east Belfast to showcase and celebrate its linkage with Titanic to the growing number of tourists visiting the area. That anniversary offers my constituents something more significant than merely an opportunity to reflect on past glory—it offers inspiration and opportunity for a future generation.
What made the constituency a world-class centre of industry, innovation and imagination was not its factories, its rope works or its shipyard, but its people. Their creativity, resourcefulness and hard work remain our most important resource today and are the key to unlocking the potential of the constituency, particularly for those young people growing up in disadvantaged communities.
Today's debate about economic issues and challenges is a fitting context in which to introduce my constituency to the House, as it was once an economic powerhouse, which I believe it has the potential to be again. The challenge that faces us is how we realise that potential in the current economic difficulties. A very sizeable proportion of my constituents are employed in the public sector and severe cuts to public expenditure will have a disproportionate effect there. That is of concern not only to those directly employed in the public sector but to the many others whose small businesses depend on it to stay afloat.
The Government have indicated that they do not want to divide the country or to target the most vulnerable with the cuts that are ahead. However, to a degree the country is already divided economically, with regions such as Northern Ireland lagging behind others, despite our best efforts. To avoid widening that gap, we must be sensitive to regional differences, and to the particular challenges faced by Northern Ireland as we emerge from years of conflict. To do otherwise would risk the best opportunity for growth that we have had for a generation. If the proposed cuts are too deep and too swift, and are not balanced by job creation, there is a serious risk of simply moving many of my constituents out of productive public sector employment into the welfare system, which will do nothing to protect public services for the vulnerable, to generate growth in the private sector or to raise aspirations, dignity and confidence.
In closing, I fully recognise the enormity of the challenges ahead. I believe that my constituency has the potential to play a significant role in the economic recovery not just of Northern Ireland, but of the UK as a whole. I simply ask that the Government, as they formulate their plans, exercise caution and wisdom, so that we in Belfast East have the necessary support, space and opportunity to play that role to the full.
Steve Baker (Wycombe) (Con)
Thank you, Mr Deputy Speaker, for the opportunity to give my maiden speech. Some Members may know that I am a skydiver. I am happy to tell the House that this is far more terrifying than two miles of air and a hardstop.
I congratulate those hon. Members who have spoken before me. I was particularly encouraged by the words of the hon. Member for Belfast East (Naomi Long). When I served in the Royal Air Force, Belfast was a name perhaps to strike terror into our hearts, but I am very encouraged that today, with the Alliance party, the hon. Lady is healing divisions and has a positive story to tell.
I also congratulate my hon. Friend the Member for Grantham and Stamford (Nick Boles) on a very charming speech, and I am sure that he suits his constituency very well. Having lived there for a number of years, I know that it is a charming place and I congratulate him on his win.
It is a great honour to enter this House and I am grateful to the people of the historic constituency of Wycombe for sending me here. I very much look forward to serving them. Throughout my campaign, I was strictly forbidden to quote Disraeli, as he fought the constituency at least three times I think, and lost. Today, as we are in coalition, it is my great pleasure to use this perhaps well known quote from a campaign speech in High Wycombe:
“I am a Conservative to preserve all that is good in our constitution, a Radical to remove all that is bad. I seek to preserve property and to respect order, and I equally decry the appeal to the passions of the many or the prejudices of the few.”
In representing Wycombe, I well understand Disraeli's sentiments and his reasons for writing “Sybil or The Two Nations”.
Wycombe is a constituency of astonishing diversity and contrast and yet unity in adversity. From the wealth and beauty of the Hambleden valley, through the tougher areas of the town—some Conservative Members do represent constituencies with pockets of severe deprivation—to the affluence of Tylers Green and Hazlemere, from the stoic Buckinghamshire traditionalists of old Wycombe to our large ethnic communities, Wycombe is a microcosm of contemporary Britain. I am proud to represent an area that defies expectations and encapsulates contemporary Britain.
The most consistent theme of my candidacy was, above all, the tribute to my predecessor, and I feel I can scarcely do him justice. Paul Goodman enjoyed the respect and admiration of all sections of the community, his parliamentary colleagues on both sides of the House and his party. He set out aspiring to Sir Ray Whitney's qualities of shrewdness, courtesy, unselfishness and kindness. I know that Paul surpassed his own aims and that this House will miss him. Paul’s top priority was Wycombe hospital, and I have to say for the benefit of the Bucks Free Press that it will be my top campaigning priority. I mean that sincerely; no other issue compares to it, in terms of its ability to create anxiety and concern.
As a trustee of a charity for economic education, I would like to give what is perhaps an alternative perspective on the cause of the banking crisis; I hope that Members will indulge me. I should like to put to them a proposition that is uncontroversial: around the world, the system of money is a product of the state. Our monetary system is characterised by private banking, with a fractional reserve controlled by a central bank, which determines monetary policy and has a monopoly on the issue of legal tender. A Monetary Policy Committee sets interest rates.
The banks have the legal privilege of treating depositors’ money as their own. In the words of Irving Fisher,
“our national circulating medium is now at the mercy of loan transactions of banks”.
In the other place, in the Banking Bill debate of 5 February 2009, the Earl of Caithness explained eloquently the base of 19th-century judicial decisions—and yes, our system of money has evolved since then—that enabled that situation to take place. He called it
“the fault which has led to every major banking and currency crisis during the past 200 years, including this one.”—[Official Report, House of Lords, 5 February 2009; Vol. 707, c. 774.]
The Bank Charter Act 1844 ended the practice of banks over-issuing notes, but it left them virtually unmolested in their ability to issue deposit currency to be drawn by cheque. That loophole haunts us today. Unlike the situation in respect of any other commodity, in the case of money, price controls do not drive the product off the market. Artificially lowered interest rates increase the demand for credit, and decrease the supply of savings, but the legal privilege granted to banks means that they can meet demand by extending credit that is unbacked by real savings. There is a good argument to say that that causes the boom-and-bust cycle, the misdirection of resources in the capital structure of production, and over-consumption by consumers. That is the biggest problem that we face today.
We could talk about the moral hazard of having a state-backed lender of last resort and state deposit guarantees, and of the socialisation of the cost of failure; I only wish that I had time to touch on the accounting rules on derivatives. Perhaps that is for another day. My political hero, Richard Cobden, spoke on the subject. He held
“all idea of regulating the currency to be an absurdity”,
but I see that time is short; I shall have to save the rest of the quote for another day.
Today, money is a product of the state. The Bank of England controls the price, quantity and quality of money. Perhaps if we were talking about any other commodity, there would be far less confusion over and questioning of the cause of the crisis. If money is a product of the state, we should ask ourselves, “Is this a good idea?”
In the coalition, we have a Government ideally suited to be conservative to preserve what is good, but radical to change all that is bad. If we are to have a once-in-a-generation, fundamental review of the role of government, let us also examine government’s role in the system of money and bank credit.
Ian Murray (Edinburgh South) (Lab)
Congratulations on your tenure in your post, Mr. Deputy Speaker. I also congratulate the hon. Member for Wycombe (Steve Baker) on his lesson; I am sure that those in the financial services across the world will read Hansard with interest tomorrow. I particularly congratulate the hon. Member for Grantham and Stamford (Nick Boles). The equality issues that he raised at the end of his speech are ones on which the House is stronger when it works together, and I will welcome the opportunity to take those matters forward with him.
It is an honour and a privilege to stand in this great Chamber of democracy and represent the people of Edinburgh South. My constituents have placed tremendous faith in me, and I will certainly be putting their views, hopes and aspirations forcefully.
Edinburgh South is a diverse constituency stretching from the old mining villages of Gilmerton to the leafy suburbs of Morningside and beyond. Some literary geniuses that hon. Members may recognise live in the constituency—Ian Rankin, Alexander McCall Smith and, of course, J.K. Rowling lived but a stone’s throw from each other in the heart of the constituency. Those literary geniuses are complemented by a large student population, people in academia, public service workers and people in the professions.
The southern part of what is called the Athens of the north was represented in this House for over 100 years by the Conservatives. The area has had many distinguished Conservative Members of Parliament, including Sir William Darling, the great-uncle of the shadow Chancellor. The seat was last held for the Conservatives by the right hon. former Member for Devizes, the Earl of Ancram, who, in 1979, defeated a certain Gordon Brown.
The Earl of Ancram lost Edinburgh South to my predecessor, Nigel Griffiths, and I am delighted to be given this opportunity to pay tribute to him. Nigel was without doubt one of the most hard-working constituency MPs in this House. His dedication to serving his constituents was second to none, and his mantra that everyone knew someone he had helped is certainly true. He leaves behind a long legacy of how a Member of this House should serve, and a couple of other things, too. If anyone has had the unenviable pleasure of campaigning with Nigel and his infamous megaphone, they will know legendary megaphone phrases such as, “Don’t leave it to the folks next door,” and “We are knocking on your door now,” the latter said just as his finger reached the bell. Those are aspects of campaigning that I hope Nigel will continue to employ for many years to come. Nigel was also well known for championing the cause of the disabled and the most vulnerable, and I know he will continue to do that outside this House.
Edinburgh was one of the major centres of the enlightenment, led by world-famous institutions based in south Edinburgh. One of them was the university of Edinburgh, a research-led university with an international reputation. It has long held a principal place in science and engineering research, which is based in King’s Buildings. It has world experts in biological science, chemistry, engineering, geosciences, informatics, mathematics and physics. The university of Edinburgh and the other fine academic institutions in Edinburgh hold much of the intellectual property for what could be a modern enlightenment in science, innovation and green technology, and that must be wholeheartedly supported by Government. The Chancellor’s announcement that he will cut 10,000 university places as part of his £6 billion of so-called efficiencies will do nothing to help our universities to flourish and our economy to grow. There will be a significant knock-on effect for universities in my constituency.
The royal observatory in Edinburgh South houses the UK’s national centre for the production of state-of-the- art astronomical technology. I recently visited it to see the people there making lenses for the most technologically advanced telescopes in the world. They are training them now on the Liberal Democrats to see if they can find anything left of the principles that they stood on in the election.
Edinburgh South also boasts the new Royal Infirmary of Edinburgh, a state-of-the-art teaching hospital built by Labour, and now the centrepiece of plans for the largest biomedical park in Europe. For 150 years, the Royal hospital for sick children has been caring for children in Edinburgh and beyond.
This week is Erskine week. Erskine has provided nursing and medical care for former members of our armed forces for over 100 years, rebuilding shattered lives, restoring dignity and providing first-class care to ex-servicemen and women, both young and old. The Erskine facilities in my constituency are well worth a visit.
I am fortunate to have been elected Member of Parliament for a constituency that boasts some of the best state schools in the country, with the most dedicated and dynamic head teachers and staff. Added to that, there is a plethora of faith and charity groups, which contribute so much to our community.
My constituents are well informed by the wonderful Edinburgh Evening News, a bastion of all that is truth in the Edinburgh journalistic community since 1873. I know that because one of their journalists wrote this paragraph for me.
Many of my constituents work in financial services—banking has been part of Edinburgh’s economic life for over 300 years. The devastation to the Edinburgh economy if our banks were left to collapse, as championed by the Chancellor of the Exchequer, would be incalculable. Time after time, issue after issue on the economy, the Tories called it wrong, and put my constituents at risk. The intervention by the Labour Government, led by my right hon. Friend the Member for Edinburgh South West (Mr Darling), laid the foundations for a worldwide economic turnaround that saved many thousands of jobs for people in my constituency while protecting their savings. The Conservatives have been in government only a matter of days, but we have seen a massive £6.2 billion cut—what they describe as efficiency savings.
Ultimately, this is not a real Tory-Lib Dem coalition; this is a personal relationship between the Prime Minister and his deputy. The coalition is held together by the unnatural empathy and their deep, deep comfort in each other’s personalities, politics and background: two peas from the same pod. In the 1980s, Margaret Thatcher claimed that the Liberal Prime Minster William Gladstone would have felt very much at home with the dominant ideology of the Conservative party. I am convinced that the Deputy Prime Minister would fit in very well, too.
I would like to conclude by paying tribute to my mother, who taught me the values that I hold dear. I was born and brought up on the Wester Hailes council estate in Edinburgh. When my father died suddenly at the age of 39 from a brain haemorrhage, my mother was left with my 13-year-old brother and me, aged just nine. She was written off by the Conservative Government of the day. My mother and many others like her who lived around us were left to fend for themselves, through no fault of their own, when they needed their Government most. I saw first-hand communities ripped apart to the resonance of cheap political soundbites. The first few weeks of this Conservative Government show that they have not changed, and I will fight tooth and nail to ensure that the communities I represent in Edinburgh South do not suffer the excesses of Tory ideology again. I owe that to them, and I certainly owe it to my mother.
Mike Crockart (Edinburgh West) (LD)
Thank you, Mr Deputy Speaker, for giving me the opportunity to make my maiden speech. I want to pay tribute to the hon. Member for Wycombe (Steve Baker) for his considerable knowledge of the banking industry. I cannot wait to hear more about that in future debates. It is slightly difficult for me to follow the hon. Member for Edinburgh South (Ian Murray)—we are starting to become slightly Edinburgh-centric, with the hon. Member for Edinburgh East (Sheila Gilmore) hopefully still to make a contribution this evening—because I can no longer mention the Edinburgh Evening News. The journalist mentioned by the hon. Member for Edinburgh South wrote the same paragraph for me.
My predecessor, John Barrett, is taking a well-deserved rest after more than quarter of a century of public service, having represented the many people of Edinburgh West on community councils, city councils and, latterly, as its MP for nine years. He was a local business man and entrepreneur. In that spirit, he sold this job to me as being the best in the world. It has certainly been the most exciting in the first four weeks—even more exciting than my first few weeks as a green probationer in Lothian and Borders police.
In his time, John met many interesting people, including the Queen and Dolly Parton. I will let the House into a secret—it was the photograph of Dolly Parton that hung on the wall in the office. The seat has a well-established Liberal history, and I join a select but growing group, including my hon. Friends the Members for Orkney and Shetland (Mr Carmichael) and for Caithness, Sutherland and Easter Ross (John Thurso) by being a third—or perhaps even more—generation Liberal MP. We are joined, too, by my hon. Friend the Member for St Austell and Newquay (Stephen Gilbert). That Lib Dem legacy is established through the quality of service given to our constituents, in my case in Edinburgh West, and an absolute commitment to them.
I have deliberately chosen this debate on economic affairs in which to make my first contribution. My constituency is immensely diverse, taking in areas of great affluence as well as areas of great poverty. Historic villages such as Corstorphine, Davidsons Mains and Cramond are now subsumed in the Edinburgh sprawl, as well as modern housing estates such as Muirhouse. Residential Barnton as well as rural Ratho and Kirkliston. The constituency is a key player in the powerhouse that is the Edinburgh economy, boasting within its boundaries some of Scotland’s most iconic and important brands and businesses, which have brought prosperity to Edinburgh and, indeed, to Scotland. Some of them, however, have been at the centre of the catastrophic events of the past two years and that has resulted in many thousands of people losing their jobs in Scotland.
There are many, many community groups in Edinburgh West, from those conducting community litter picks in South Queensferry or on Cramond beach to those fighting to protect the integrity and boundaries of Corstorphine hill. The Carrickvale community centre provides services to older and young constituents, and the Gylemuir Community Association does a similar job. Thousands of people are actively improving their communities all over Edinburgh West.
I am in the middle of the summer gala season—for the benefit of the English in the Chamber, I should explain that is a fête. On Saturday, along with thousands of others, accompanied, surprisingly for Scotland, by the sun, I attend the Corstophine fair—the largest community-run event in Edinburgh, and perhaps in Scotland. In it was a programme bursting with entertainment, kids’ activities and community displays, as well as the usual stalls to give people a chance to meet those behind the many community groups across the constituency. At the end of that, I officiated at the tug-of-war event, where two teams battled it out for victory. There was much name calling, shouting and huge efforts in blood, sweat and ultimately tears before both teams claimed a moral victory, at the very least. It reminded me a great deal of the past four weeks on this side of the House.
Edinburgh West is also a centre for many varied Scottish, British and internationally renowned companies. I have already found that across the business sector too, there is unity and solidarity in the adversity that we face, and I am immensely lucky that in these difficult times, Edinburgh West has a shared aim and a sense of team spirit. So as we rightly place more emphasis on industries such as biotechnology and the engineering of exciting new marine energy solutions, we should not forget two other priority industry sectors in Scotland, which have contributed significantly to the success of the Scottish and UK economies in the past decade. I refer to tourism and the financial services, two sectors in which my constituency has flourished.
Edinburgh airport, the gateway from mainland Europe not only for Edinburgh but for Scotland more generally, has 320 flights a day and 20,000 passengers, and those numbers are climbing. It is opening up new routes all the time—for example, to Marrakesh and many others announced in February. This is to be commended, as the more direct routes we have, the less wasteful travel we have through the London hubs of Heathrow and Gatwick. Add to this the potential for a much-needed high speed rail link with London, and we will see a continuing healthy picture for Scottish tourism and business, boosted by the year-round reputation of Edinburgh as a festival city.
I must not forget Edinburgh zoo when talking about tourism. In his maiden speech my predecessor joked about representing more penguins than any other Member in the House, and I am proud to say that that is still the case, but I can now add to that list of animals and say that I am the only MP in the UK to represent koalas. Should present plans come to fruition, I hope to be standing here in five years’ time as the only person representing pandas.
The financial services sector is a major sector in Edinburgh West, employing many people, but I shall move on as time is defeating me. Understandably, many of those working in the financial services sector and banking in particular fear the banking reform that must surely come. They should be reassured that the aim of that reform is to make their jobs more secure, not less. I will work closely with my right hon. Friend the Secretary of State for Business, Innovation and Skills to ensure that that happens.
I conclude by quoting my Conservative opponent during the recent contest, who said—
Mr Deputy Speaker
Order. That was a fine maiden speech, but we must move on to the next maiden speech. I am pleased to call Chi Onwurah.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
Thank you, Mr Deputy Speaker, for giving me the honour to follow so many excellent maiden speeches.
I would like to start by paying tribute to my predecessor. To be able to say on the doorsteps of Newcastle upon Tyne Central that I was the new Jim Cousins was a huge asset. Perhaps one in five constituents knew him personally, and had a tale to tell about how he had helped them. As a constituency MP, he could not be bettered. He was also a champion of Newcastle and the north-east, and his long service on the Treasury Committee was of great benefit to his country and his city. His role in saving Northern Rock will be long remembered.
In the boundary review, Newcastle Central gained the wards of Elswick and Benwell and Scotswood from the old Tyne Bridge constituency. I want to thank David Clelland for his dedication to his constituents in those historic areas of my city.
The Romans chose Newcastle as the lowest bridging point of the Tyne, and later built Hadrian’s wall, which runs through the constituency. In the centuries that followed, we guarded England from the attacks of Scottish raiders. How times change! But as a port, we were ever open for trade. Newcastle played a huge part in the major industries—wool, salt, shipbuilding, coal and engineering. We were at the leading edge of the first industrial revolution.
If history is merely the story of great men, I need mention only some of Newcastle’s favoured sons to prove our place: Earl Grey, who has found such favour on the Government Benches; Armstrong, the great industrialist and founder of Newcastle university; and my own hero and fellow engineer, Stephenson, who built the railways.
But I believe that it is the contribution of those whose names are not recorded that it is most important to remember. It was the unnamed, ordinary men and women of Newcastle who built the ships that enabled this small island to wield global influence. My own grandfather worked in the shipyards of the Tyne. The men and women of Newcastle built the trade union and Labour movements, to which we owe so many of our working and voting rights. They built the co-operative and the Fairtrade movements, which combined the best of international idealism and local realism. Closer to home, they fought to protect the unique environment that is the heart, or rather the lung, of Newcastle.
Newcastle’s town moor is justly famous—a vast expanse of open moorland, kept in common and grazed by herds of cows. In London, cows in the centre of the city are considered installation art. In Newcastle, our councillors debate the future of our city within spitting distance of cowpats, an arrangement that I recommend to the House as ensuring a grass-roots sense of perspective.
With this history and community, it is no wonder that I felt a huge sense of privilege growing up in Newcastle. Yes, we were a one-parent family on a poor working-class estate, North Kenton, but good local schools, great public services, great housing and the health service meant that I could fulfil my ambition of becoming an engineer. But just as I was deciding to enter engineering, the country was deciding to leave it behind. We were going to become a service economy. I believe in a strong service sector, but time has shown that an exclusive focus on services left our country weaker. Certainly, I had to spend much of my career abroad. Still, I saw first hand the devastation brought about by the loss of the great northern industries of mining, shipbuilding and steel—whole communities robbed of a purpose. Let us be clear, that loss was not just a north-east loss; it was the country’s loss. Although we remain the sixth largest manufacturing economy in the world, building and making things is no longer a part of our culture. That has to change.
I know that I should not touch upon controversial subjects, which is why I am so glad that what I am going to say is entirely uncontroversial. During the election, all parties were in agreement that the economy needs to be rebalanced in favour of manufacturing. Newcastle, with our great universities, specialising in medicine, design and engineering, our industrial heritage and strategic assets, has an essential role to play. We can help the UK to meet two of the great challenges that face us—securing sustainable energy resources and supporting an ageing population. These sectors need to be part of the new economy. We need to build up our science and manufacturing base and foster the spirit of innovation that led George Stephenson to invent the steam engine and make his fortune.
I know from my own experience that building a business takes vision, courage, blood, sweat and tears. But manufacturing is particularly difficult. It needs long-term investment. I recently visited BAE Systems and Metalspinners, two engineering firms in my constituency. I saw 60-tonne pressing and cutting machines that cost millions of pounds and are expected to last for decades. We must continue to help these companies invest. They need a strong public sector. They need apprenticeships, good transport links, a strong regional development agency and tax allowances for manufacturing and innovation.
We are a small country and it is no longer our ships that set the boundaries of the world. But even as a small country, we can set the direction of the new industrial revolution if we equip ourselves to grasp those opportunities, and I will fight to make sure that the Government do just that. My career in Parliament will be dedicated to ensuring that Newcastle upon Tyne Central is an economically and culturally vibrant contributor to the UK and the world.
Joseph Johnson (Orpington) (Con)
Thank you, Mr Deputy Speaker, for calling me this evening. The six hours that I have been waiting have truly passed in a flash, such has been the quality of previous maiden speakers, including just now the hon. Member for Newcastle upon Tyne Central (Chi Onwurah). I should particularly like to associate myself with the remarks made by my hon. Friend the Member for Grantham and Stamford (Nick Boles), who is sadly no longer in the Chamber, about the equalities agenda and gay rights.
At the outset, I should make a declaration, as we do a lot of that at the start of Parliaments. Anyone hoping that I will enliven proceedings in the manner of one of my elder brothers, the former Member for Henley, is likely to be disappointed. Private Eye, in the issue on newsstands at the moment, has helped me to set expectations appropriately low. It quotes an unnamed Oxford contemporary, in the first of a series that it is doing on new Members, and that friendly Oxford contemporary of mine says:
“He could not be more different to Boris. It’s as though the humour gene by-passed Jo altogether and he inherited only the ambition gene.”
It is an absolutely fair comment, but I do not really apologise for the humour-ectomy, nor, indeed, for any hint of ambition that the House might detect, because these are serious times and politicians need to be ambitious when the country is in such a mess. History will not forgive us if we flannel around in the House over the next five years and fail to pick the economy up off the floor, where it is at present.
Orpington, the constituency that I am fortunate enough now to represent, has not troubled the House with a maiden speech for 40 years. I am tempted to give Members a double helping, but time will not allow it. That lengthy interlude has arisen because my distinguished predecessor, John Horam, began his parliamentary career not in the idyllic glades of northern Kent, but in the gritty Gateshead West area of Newcastle.
John Horam has the distinction, as many Members will know, of being the only Member to have served in all three parties. He was originally of course a Labour MP in Gateshead, but, disillusioned with Labour’s leftward drift, he dallied with the Social Democratic party in the early ’80s before eventually donning Conservative colours and becoming the MP for Orpington in 1992. By the time he came to give his maiden speech that year, he was of course no maiden, but as a liberal Conservative long before the genre became fashionable, he was at least ahead of his time.
That John’s political journey—his odyssey, in some ways—culminated in Orpington of all places is entirely appropriate. After all, it was in Downe, one of the constituency’s most picturesque villages, that the father of evolutionary biology propounded the earth-shaking theory of natural selection—the most important scientific breakthrough of the past 150 years. It is no surprise to me at all that the people of Orpington inspired Charles Darwin to come up with the concept of the survival of the fittest: meet them and one sees the very best that evolution has done with homo sapiens over the millennia.
Orpington is famous for much more than the man who debunked creationism. I shall not dwell too long on the “Buff Orpington” chicken, admired by poultry breeders for its gentle contours, colourful plumage and succulent breast meat; suffice it to say that they are easy layers, go broody very often and make great mothers. Would it be too much to expect the local Tesco superstore to stock it and support the breeders of that fine bird? I shall keep the House informed of my progress, but my office called Tesco this morning, and it does not currently stock that chicken.
If Orpington’s contribution to science is beyond question, its place in the footnotes, if perhaps not the chapter headings, of British political history is no less assured. In 1954, for example, the constituency almost snuffed out the career of a young Mrs Thatcher. Having fought unwinnable seats in neighbouring Dartford, she sought the nomination for Orpington. In The Croft Tearoom in St Mary Cray, one of the more hard-on-its-luck areas of the constituency, can be found a fine photograph of the young Mrs Thatcher buying her daily milk from a horse and cart in an attempt to impress her local credentials on selectors. She was unsuccessful. Bitterly disappointed at how leading local Tories reckoned her candidacy incompatible with her role as a mother of twins, she wrote to central office to say that she was abandoning all thought of Parliament for many years. Needless to say, British politics would have been very different had she not relented.
I shall not dwell on counterfactuals, but one thing is certain: Orpington would not have gone on to become the totemic seat for the Liberals that it did in 1962 had Mrs Thatcher become our MP. The man who defeated her for the nomination resigned unexpectedly, triggering a famous by-election. A good Balliol man by the name of Eric Lubbock, representing the Liberals, scored an historic victory by overturning a very substantial Conservative majority and chalking up a Liberal gain in an area far away from his party’s traditional heartlands in the west country and the Celtic fringe. The birth of Orpington man sparked a revival that marked the end of the Macmillan era and made Orpington a permanent fixture in Liberal folklore.
I come back to the present and the subject of this debate. The scale of the Conservative victory on 6 May, with its 60% share of the vote, was a resounding endorsement of the Conservative party’s economic programme. The priority now is to achieve an accelerated reduction of the £156 billion deficit and it is one that I wholeheartedly support, as I support the creative and compassionate ways that I know the Government will use to go about that difficult task. The £6 billion of cuts already announced is barely a start in the process. I look forward to the emergency Budget on 22 June and the public consultations on the role of the state, which will follow.
As one who recently spent four years working in one of the fastest growing parts of Asia, with a ringside seat on the emerging economy that is India, I am fully aware of the challenges that globalisation presents to the British economy. I would like to use the time that I have in Parliament to help this country and Orpington constituency meet those challenges.
Toby Perkins (Chesterfield) (Lab)
I congratulate hon. Members who have made their maiden speeches, particularly the hon. Member for Orpington (Joseph Johnson), who should not be so self-deprecating. If it is in fact true that he has no sense of humour, someone has written him a great speech.
It is a great privilege to be only the fifth person to represent the Chesterfield constituency in Parliament in the past 80 years. The most recent of my predecessors was Paul Holmes, and I should like to start my maiden speech by reflecting on some of the strengths that he brought to the House in the nine years during which he served it. He was a diligent constituency Member of Parliament and a determined fighter for council housing, particularly through his membership of the Defend Council Housing group. As a former secondary school teacher, he was also an outspoken advocate of comprehensive schools and the teaching profession. As MP for an area that suffered a great deal from firms that went into liquidation with failed pension schemes, he consistently added his voice to those calling for a fair deal for those pensioners.
As a guide to the history of Chesterfield and as a commentary on the times, I also want to reflect on the maiden speeches of some of my other predecessors. Sir George Benson was a stalwart member of the Government who is still remembered fondly by some of Chesterfield’s most experienced citizens. His first major address to the House was in 1931, when he controversially called for the end of flogging with the cat o’ nine tails. I am pleased to inform the House that on the basis of an informal survey that I conducted during the recent election campaign, Sir George’s stance against corporal punishment still enjoys some support.
In Eric Varley, a local miner’s son who rose to the Cabinet and was posthumously given the freedom of the borough of Chesterfield, my constituency had a famous son who is fondly remembered across the borough. There is also, of course, Tony Benn, one of the greatest political figures of the 20th century, a man who bestrode the politics of his time as few can. I am mindful of those who have trodden this path before me in Chesterfield’s name.
Chesterfield has made its mark in other ways than through political history. Despite the comments of my hon. Friend the Member for Newcastle upon Tyne Central (Chi Onwurah), George Stephenson was actually from Chesterfield. Thanks to the vision of Bill Flanagan, the council leader for 27 years, an innovation centre now stands on the Stephenson family’s former estate; new firms grow in new industries, overlooked by the grandfather of innovation.
Football fans will know of the town as the home of goalkeepers, with legends such as Gordon Banks, the England World cup-winning goalkeeper, before him Samuel Hardy, the England goalkeeper for 14 years at the end of the 19th century, and Bob Wilson, who served Arsenal, Scotland and sports broadcasting with tremendous distinction, all learning their trade in the town. Chesterfield football club, the Spireites, is a useful metaphor for the town, having had its moments in the hearts of the nation, as it did in 1997—a great year—when, as a third division club, it was cruelly denied a place in the FA cup final by a combination of the Old Trafford crossbar and a short-sighted football referee. Now, after a quiet period, the club gets ready to welcome the new season at the sparkling new B2net stadium—a brand new home on the north entrance to the town, and a symbol of the regeneration of Chesterfield.
The campaign that brought me here to represent the people of Chesterfield focused most strongly on jobs. With Junction 29A, or Skinner’s Junction, a huge site open for business as a result of the tireless work of my hon. Friend the Member for Bolsover (Mr Skinner), working with Labour party councillors who have fought for the area for so long, such as John Williams, Walter Burrows and John Burrows, Chesterfield and north Derbyshire finally get the investment in jobs that we needed—indeed the biggest investment in the area since the pits were sunk.
As Chesterfield rebuilds its economic prosperity, tourism also plays an increasingly important part, our world-famous crooked spire being just the highlight. While it is true that the number of people drawing the dole is less than a quarter of those who did so at its peak in the ’80s, thanks to the Labour Government’s steps to save jobs during the recession, the need for skilled work for those who do not go to university, or for graduate and apprenticeship opportunities, is still keenly felt.
The Secretary of State for Work and Pensions has stated that his purpose is to improve the quality of life for the worst-off in society so that they can play a part and, one hopes, pay tax themselves one day. No one on the Labour Benches would oppose that aspiration; indeed, it was that aspiration that led Labour, in the face of Conservative opposition, to introduce the national minimum wage and the tax credits system. The starting point in reducing benefit dependency is not an increase in the rhetoric against the unemployed, but an increase in work opportunities. It is therefore depressing that the coalition should choose the future jobs fund as one of the first examples of waste to be cut.
The Secretary of State is right to say that benefit recipients should be free to try to work their way off sickness-related benefits while retaining some security, as previewed by the previous Labour Government in the pathways to work pilot. No one could object to his intention to make benefits simpler and fairer, but surely one of the key reasons benefits are complicated is that so are the circumstances of people’s lives. The current system at least attempted to reflect logically the complexities of ordinary people’s lives, and the Secretary of State has not yet demonstrated how he can simplify the system without increasing unfairness; until he does, I will remain a sceptic. From my perspective, however, I will provide any support that I can to help him to convince his own party of the need to invest more in jobs, not in cutting them, and to understand that benefit recipients are more often the victims than the architects of their circumstances. Alongside a call for personal responsibility must come governmental responsibility to put job creation before the benefit cuts and to ensure that the most needy are not the victims of the simplification of benefit payments.
Chesterfield has a great deal going for it; under Labour, it improved so much. I came into politics to fight for the next generation of working opportunities for Chesterfield and Staveley—to fight inequality and to protect the public services that our people rely on. As I stand here in this magnificent place, bearing a dual responsibility, sent here to represent the people of Chesterfield and the Labour party, there is not a prouder man alive.
David Rutley (Macclesfield) (Con)
Thank you, Mr Deputy Speaker, for inviting me to address the House this evening. We have already heard contributions of real quality from my hon. Friend the Member for Orpington (Joseph Johnson) and the hon. Member for Chesterfield (Toby Perkins). I hope that I can fulfil the same degree of quality in the words that I say.
Being elected to represent the wonderful constituency of Macclesfield is the greatest honour of my career. I will seek tirelessly to serve the people of Macclesfield and to honour the trust that they have put in me. Sir Nicholas Winterton is like few other predecessors—he could hardly be described as shy, even when he was retiring. He served as a hard-working constituency MP in Macclesfield for more than 39 years and, being elected in my 40s, I can assure the House and Macclesfield residents that that is a record I will not break.
At the start of the campaign, I canvassed one very short street in which three people told me about the way in which Nick Winterton helped them with real problems in their lives. That is the sort of constituency MP he was. In the House, he was a strong, independent parliamentarian, who gave long and legendary service. He was respected on both sides of the House and by many others who work here. Whether I am in Macclesfield or in the House, people constantly say to me, “You’ve got a hard act to follow and big shoes to fill.” Well, I wear size 11 shoes, so I am off to a reasonable start, but I have a lot to learn. I wish Sir Nicholas and Lady Winterton a long and fulfilling retirement.
Macclesfield is famous for silk. At one point, it was the world’s biggest producer of finished silk, with more than 100 mills and dye houses in the constituency. The fine silk tie that I am wearing was woven in Macclesfield and I am proud to wear it. Today, revitalising Macclesfield town centre is a real priority. Local residents and traders will be consulted on how that should be done in the months ahead, but further development must celebrate the town’s rich heritage and ideally be linked to the creation of a national silk centre in Macclesfield, where it belongs.
Macclesfield hospital is also an important priority in the community. Many people have fought to keep the accident and emergency and children’s services at the hospital, and I will continue to fight to ensure that they stay there. Macclesfield is also home of the mighty Macclesfield Town football club and Macclesfield rugby club, and I am proud to say that we were crowned champions of the national league 2 this season. Our communities are served well by the active Macclesfield Express, Canalside Community Radio and Silk FM. We enjoy great rail links; some people might describe them as first class, but I am very happy to travel standard, like many hon. Members.
The history of Poynton, in the north of the constituency, is rooted in coal. Many residents work in Manchester and continue to enjoy the sense of community that Poynton offers. Traffic congestion is a real challenge, and one that I will tackle as a major priority. In the far north-east, the vibrant village of Disley lies at the edge of the hills next to the magnificent Lyme park. Bollington, once known for cotton, nestles below the wonderful White Nancy and is known locally as “Happy Valley.” With its strong community spirit, it is easy to see why. Nearby Prestbury, sometimes famous for footballers, boasts one of the oldest parish churches in the country and has a magnificent conservation area.
As a keen walker and rock climber, I love spending time in the upland villages of the hill tribes of Kettleshulme, Rainow, Wildboarclough and Wincle. I also enjoy all that the Peak district has to offer in the east of the constituency. To the west, we move out to the fertile farmland of the Cheshire plain and the unique rural communities of Langley, Sutton, Gawsworth, Marton and Lower Withington. I will work to protect that beautiful countryside and support our farmers and those rural communities, which were overlooked for far too long by the previous Government.
The most impressive thing about the great part of Cheshire that I represent is the warm, generous, hard-working and enterprising people who work and live there. We have well-known residents who have achieved their aims in the world of commerce and industry, and famous footballers. We also have other heroes, who are mostly unsung and work selflessly in the community: our doctors, nurses and policemen and the volunteers who work actively in our churches, in the local talking newspaper, in the MAST—the medical and surgical trust—hospital appeal, at East Cheshire hospice, for the Gateway Project in Poynton and for the Friends of Bollington Recreation Ground, to name but a few. Those people genuinely inspire me and do so much for our area.
Let me turn to the debate in hand. Since the war, Macclesfield has turned from its focus on silk to pharmaceuticals, with ICI and now AstraZeneca. AstraZeneca demonstrates that we can still innovate, develop and make things in this country and, in turn, the pharmaceutical industry shows that we can compete in global markets. However, too many local businesses have announced job losses in recent years, and the latest announcement—of 250 job losses—came today from the Cheshire building society.
We have to get this economy working again, which means that we must focus on reducing the deficit. When I had the honour of being a special adviser in the Treasury, working with “canny Ken” as the Chancellor, I learnt a lesson: we cannot spend what we do not have. That lesson has not been lost on the Government side of the House.
Having worked in the real world of commerce and industry for more than 20 years in companies such as Asda and PepsiCo, it is clear to me that growth is not determined by state diktat, but based on the decisions of thousands of brave businesses. Growth is developed only in a truly competitive private sector. That is what we need to create jobs, provide valued public services and support those in genuine need. That task will always motivate me as long as I serve the people of Macclesfield in this House.
Heidi Alexander (Lewisham East) (Lab)
I am very grateful for the chance to speak in this debate, and I congratulate the many hon. Members who have made their maiden speeches. The knowledge and passion with which everyone has spoken is testament to the talent and commitment that exists in this House.
I feel incredibly privileged to be here, and I thank the people of Lewisham East for giving me this opportunity. I also thank Bridget Prentice, my predecessor. Her decision to step down at the last election came as a surprise to me, as it did to many. Anyone who knows Bridget will say that she is straight-talking, good-humoured but not-to-be-messed-with Glaswegian. As the Member of Parliament for Lewisham East since 1992, she was a fearsome advocate for our corner of south-east London. There is also huge respect for her here, as there is in the constituency, as a former Minister. She has been an enormous support to me over the past few months, and I thank her for her advice, encouragement and friendship.
When I was growing up, I never thought I would be a Member of Parliament. Yes, I thought I might be a PE teacher, or even a town planner, but not an MP. A trip down to the polling station every four or five years with my mum and dad was the limit of my political experience as a child, but I was brought up with a very strong sense of right and wrong, and a belief that with hard work and determination, I could do whatever I wanted. I am pleased that my mum and dad are here today and I thank them for all they have done for me. Given that they have sat here for seven hours, I should probably also thank them for their stamina.
I was very lucky to have a good comprehensive education, and even luckier to be a student when full grants allowed people from families such as mine to go to college without racking up enormous debts. I was lucky to have people close to me who wanted me to do well, and to complete a degree that nurtured my interest in the world around me and gave me the confidence to get on in life. It was the recognition of my own fortunate position and a desire to see the world a better place that led me into politics, to ensure that others had the opportunities that I had and to reduce the inequalities that still exist in our society. My brother often tells me to get off my high horse, but I have always wanted a job in which I can make a difference, so I guess it is no surprise that I should find myself here.
I am very proud to represent Lewisham East, which has been my home for the past eight years, and to represent a party that has brought about huge improvements in the lives of ordinary people, but I also know that my party has a significant challenge of renewal and revitalisation ahead of it. We need to listen to what voters across the country are telling us, which is precisely what I plan to do in Lewisham East.
Like many others, my constituency is one of great contrasts, from the leafy streets of Blackheath and Lee Green, through multicultural Catford, and to the homes of Downham and Grove Park. Bisected by overland railway lines, my constituency has a history of welcoming people from different parts of the UK and, indeed, the world. In her book “The Wouldbegoods”, E. Nesbit described Lewisham as a place where
“nothing happens unless you make it happen”.
More than 100 years later, I can assure the House that the residents of Lewisham East make an awful lot happen.
Although we have areas of significant deprivation, we are not deprived of ambition or community spirit. I have been fortunate over the past few years to work with many of the groups that make our corner of London special, such as the tenants’ leaders who set up Phoenix Community Housing, the Friends and Users of Staplehurst Road Shops, and the volunteers at the Rushey Green Time Bank. I could go on. I love living in Lewisham, but I also know that a lot needs to change. During the election, I met mums and dads who were concerned about violent crime and gang culture, commuters fed up with being stuck in someone’s armpit on overcrowded trains, and people who were concerned about jobs and housing and were worried about the changes they have seen in their community, but most of all I met people who were anxious about the economy, and I shall now turn to that subject.
My predecessor spoke in her maiden speech in 1992 about the scourge of youth unemployment. She called for quality training schemes and job guarantees for young people who were affected by the recession of the early 1990s. Sadly, 18 years down the line I am in a similar position as a result of the new Government’s determination to slash public spending. Axing the future jobs fund beggars belief. In Lewisham, this scheme has already created 133 jobs, with another 42 positions lined up. These are real people benefiting from real jobs, with real money going into their pockets, real experience of the workplace and real references being secured to help them get their next job. Civil servants in Westminster may tell Ministers that the scheme is not working, but I am not sure that my constituents would say the same.
Ensuring that the next generation have the right skills to access the jobs of the future is critical. Ensuring that the next generation want the jobs of the future, and believe they can get them, is equally important. It never ceases to amaze me that while Canary Wharf is only a 15-minute DLR ride from my constituency, for some kids growing up in Lewisham East it might as well be another world. How we bridge that gap is a big challenge. Excellent schools can expand the horizons of our youngsters, but I cannot help but think that mentoring schemes, such as those run by Urban Synergy in my constituency, may also have some of the answers. By providing accessible role models and giving an insight into different careers, they fire the imagination of the next generation.
If London is to improve its economic competitiveness, the underlying challenge is to tackle the huge inequalities between the haves and the have-nots. Investment in housing and social housing is very important. I look forward to hearing from the new Front-Bench team about its plans for the decent homes programme, and I hope I will soon be in a position to reassure my constituents that much-needed investment in Lewisham homes will be forthcoming.
For as long as I am the Member of Parliament for Lewisham East, I will campaign hard to secure the resources that my part of London deserves. I will fight to reduce the gap between rich and poor and I will work tirelessly to give a voice to those who are least often heard. A friend of mine recently told her three-year-old that my job was to keep everyone in south-east London happy. That is one of the most challenging job descriptions I have ever heard, but I have told her I will do my best.
Kwasi Kwarteng (Spelthorne) (Con)
It is a great honour to be called to deliver my maiden speech. First of all, I want to give hearty thanks to David Wilshire who, amidst difficulties and press distortions, managed to keep up his work as a fine constituency MP. Very often, people would open the door to me and say, “Ah, so you’re the new David Wilshire,” and I would reply, “Well, sort of, but I want to continue his traditions of service and commitment to the constituency.”
People always ask me, “Where is Spelthorne?” A friend of mine said he did not realise it was a constituency; instead he thought someone called David Spelthorne was the MP for Wilshire. It is, however, a well-known constituency, and Spelthorne is a very old name, too. It comes from an old English word of which we have a remnant in the word “spelling”. It means speaking, and the “thorne” part of the word “Spelthorne’” referred to a thorn tree on Ashford common where people used to gather and speak. That is where the name comes from, and it also appears in the Domesday Book as the southern hundred of the old county of Middlesex.
Middlesex had a long and illustrious history, which my predecessor was very keen to stress—much to the annoyance of my Surrey colleagues. Middlesex did have an existence, however, and it had a reputation in this House, because in the old days it had proper elections. Charles James Fox was elected, and thousands of people were involved, whereas in nearby rotten boroughs there might be only half a dozen people. Famously, John Wilkes was elected in Middlesex, and was a distinguished Member of this House. He was described as the “ugliest man in England” but, like many politicians, he was not afraid of boasting and celebrating his own talents and he said that he had such charm that he could “talk away his face” in “half an hour”. Hon. Members can imagine my surprise at the fact that we were given only seven minutes to speak in the House today.
In the limited time available to me, I wish to make some points about the subject of today’s debate. Spelthorne is a seat in the south-east that relies almost exclusively on infrastructure and economic expansion, and in that context self-starting business men are very important. A gentleman from Shepperton, in my constituency, who has been in the breakage business for 30 years said to me, “Kwasi, it is very difficult. I am getting strangled by red tape and bureaucracy.” A Government quango, whose name I shall not mention, had been bombarding him with forms that he had to fill in, so he had been spending all his time filling in forms and none of his time attending to the business. My thought was that it was precisely those small business people who will drive us out of recession and into recovery.
I have to say—even though this is a maiden speech, I will be controversial—that to hear Labour Members in many of these debates is to be in never-never land; they have not once accepted any blame for what happened and they seem to think that we can just sail on as before. In many of their eloquent speeches it appears that they have forgotten that wealth creation is the most important element in getting us out of this recession. I heard the right hon. Member for Oldham West and Royton (Mr Meacher), who I believe has been in the House for 40 years, say that he was going to tax those in The Sunday Times rich list. Of course, one of the results of their being rich is that they can leave the country in about half an hour, so if he were to go down that route, a lot of them would leave and he would not bring in any more money to the Exchequer.
One of the right hon. Gentleman’s remarks reminded me of the story of the man who, when leaving a gentlemen’s club—it might have been the Carlton Club—in 1970 gave the footman sixpence. The footman looked at him and said, “That is only sixpence,” to which he replied, “Ah, it is sixpence to you, but it is a pound to me.” That was because income tax was at 95% or 97%. We cannot go down the road that the right hon. Gentleman suggests, and the Conservatives have stressed again and again that the only way to get out of this difficulty is to try to let business grow.
I was surprised to hear the hon. Member for Edinburgh South (Ian Murray) refer to the Scottish enlightenment. He will recall that one of its most prominent figures was Adam Smith, rather than the previous Prime Minister, who did not take an enlightened Scottish approach. Adam Smith made it very clear in “The Wealth of Nations”, a book that many hon. Members will know, how societies grow rich and how they can become very poor. I am sorry to say that the past 13 years have been an exercise that Adam Smith and the university of Edinburgh would probably have awarded a flat D grade for performance—although perhaps he would have awarded a B grade for effort, who knows?
I am pleased at this juncture to refer to the compelling speech made by the hon. Member for Newcastle upon Tyne Central (Chi Onwurah), in which she mentioned George Stephenson. There was some controversy as to whether he came from Newcastle upon Tyne Central or from Chesterfield, but I shall not comment on that as that is a matter for Labour Members. What she did say was that he made a fortune through industry, enterprise and innovation, and those are exactly the kind of things that this coalition Government will look to promote in the months and years ahead.
To sum up, I should say that the truest words said in this debate were uttered by someone making a maiden speech, my hon. Friend the Member for Loughborough (Nicky Morgan), who said that the private sector is the “backbone of our economy”. In my few weeks in the House, I have not heard any truer words uttered in it. That is something that we have to be absolutely focused on, in terms of getting out of the recession. I hate to say this, but I find it staggering that Labour Members have not had the good grace to come to the House to apologise and to show some recognition of the very real problems that we face and the solutions that we need to get out of this situation. I thank the House for giving me such a good and warm reception for my maiden speech.
Sheila Gilmore (Edinburgh East) (Lab)
Thank you, Mr Deputy Speaker, for calling me to make what I understand will be the final maiden speech of the day. I congratulate all those who have gone before me. There have been some excellent speeches and some fascinating stories. I am pleased to welcome so many women to the House, alongside myself, because it is extremely important to have them here. New Members learn a lot when they come to this place, such as learning to sit for several hours to make their maiden speech. Another slightly bizarre tradition is that of jumping up and down, which I have decided must be to keep us fit in what would otherwise be a very sedentary day.
My predecessor, Gavin Strang, was the MP for Edinburgh East for 40 years. I know that many Members will join me in paying tribute to his service to the House, his constituents and the country. He served in government under Harold Wilson, Jim Callaghan and Tony Blair, and it is not just the length of his service that stands out. He is a man of principle and conviction, so much so that in his maiden speech in 1970 he eschewed the tradition of paying tribute to his predecessor and his constituency and launched into an attack on the Government of the day about selling weapons to apartheid-era South Africa. Gavin did not mellow with age. In recent years, he spoke against the Iraq war and the replacement of Trident. He won the respect of his colleagues and constituents by resisting the temptation to become a knee-jerk rebel, and that made his arguments all the stronger. I fear that it will be difficult for me to achieve Gavin’s length of service in this place, unless there are some advances in medicine, in relation to ageing, in the next 40 years, but I aspire to emulate his principled approach.
Edinburgh is a beautiful city, and I have the honour and privilege of representing many of its gems. Right at the heart of the constituency is Holyrood park with our very own volcano, Arthur’s Seat, but I assure any Transport Ministers present that it is safely extinct. On the coast lies Portobello beach, which featured recently in The Guardian supplement Travel as one of Europe’s best urban beaches. I should also mention Easter Road, the home of Hibernian football club, one of Edinburgh’s two Scottish premier league teams, but perhaps I should declare an interest as my husband is a season ticket holder. Other sporting venues include Scotland’s only swimming pool capable of hosting diving competitions, which is currently being refurbished for use in the 2014 Commonwealth games in Scotland.
In Edinburgh’s historic centre lies the royal mile, which has an abbey and a palace at its foot and Edinburgh castle at its head. Less well known is my constituency’s second castle, Craigmillar, which is reckoned much the superior by most children because they can run about and have so much fun in it. Edinburgh East also plays host to many Edinburgh festival venues. Places such as the Pleasance courtyard may be known to many here, as it seems to become an outpost of London for the month of August.
Appropriately for someone who is a lawyer, my patch includes all three levels of Edinburgh’s law courts, as well as Edinburgh university, which is one of the oldest universities not just in Scotland but in the UK. Neither is the constituency short of politicians as it houses both the city council buildings and the Scottish Parliament. Carrying out our 1997 manifesto commitment to establish a Scottish Parliament is something of which Labour can be proud.
East Edinburgh is not just a place of history and tourist attractions, but is home to many people who work hard in minimum wage jobs, or who have retired on little more than the basic state pension. In previous economic recessions, with the decline in the area’s traditional industries such as brewing and brick making, too many people became unemployed and sidelined on to incapacity benefit.
I supported the previous Government’s attempts to prevent people from being condemned to such low-income existences and to help them advance out of them. However, as I was knocking on doors in the last year, I became aware of the gulf that can exist between the theory of a policy initiative and its implementation. When it comes down to real people, things are rarely straightforward. One woman in her 50s, suffering from cancer and still receiving treatment, had been declared fit for work. She was far from being a long-term claimant—as she said herself, she had worked all her life and it felt like a slap in the face to be treated in that way.
We also have to be aware that there are people whose conditions fluctuate. They can be very well one day but hardly able to get out of bed the next. That is the story of one of my constituents: she had ME—myalgic encephalomyelitis—but she too was declared fit for work.
The introduction of the new employment and support allowance was expected to lead to around 50% of applicants being deemed unfit for work. In practice, only 32% have been so assessed and thus in need of support. Either there has been a great improvement in health, or there is something very wrong with the assessment process. The fact that so many appeals succeed suggests that there is something wrong. I regret to say that all that was happening on my party’s watch. In my campaign, I said that this would be one of the issues I would take up, regardless of who formed the Government. I believe that it is one of the primary roles of an elected Member to monitor where policy is not quite working out as we might hope.
It is worrying to have heard that the new Secretary of State for Work and Pensions wishes to accelerate the roll-out of the employment and support allowance, despite one of its architects admitting that the pilot has severe problems. I hope that the right hon. Gentleman will temper his zeal with mercy.
My politics was formed and forged by my father, and I am particularly proud to represent the area in which he was born and brought up. In conclusion, I want to thank all the voters of Edinburgh East for giving me the opportunity to represent them in this place.
Nadhim Zahawi (Stratford-on-Avon) (Con)
Thank you for calling me, Mr. Deputy Speaker. I should like congratulate all those who have made their maiden speeches, especially my good Friends the hon. Members for Rugby (Mark Pawsey), for Bromsgrove (Sajid Javid) and for Spelthorne (Kwasi Kwarteng).
Mr Deputy Speaker, I would love to be able to tell the House that generations of Zahawis have lived and worked in Stratford for hundreds of years, but I suspect you just might spot that I would be stretching the truth a little. What I can tell the House is that I have had the most incredibly warm welcome from all the thousands of people I met through the campaign, and that Stratfordians are truly special people—a rightly proud people. It was humbling for me to achieve 51% of the vote in an eight-horse race, and I will never forget who put me in this place.
My predecessor was a first-class Member of Parliament and I am not surprised that he has been elevated to the other place. I did not know him well, as I have spent the past 11 years concentrating on building up a business rather than around the candidates department, but I very quickly learned that there is an enormous amount of affection and huge respect for him among the people of my constituency. Coupled with that achievement is his hard work for his country and his party. He held the posts of shadow Health, Defence and Foreign Secretaries, and he was also deputy chairman of the party twice. I am thrilled that he has chosen to be known as the Lord Maples of Stratford-upon-Avon.
My constituency covers some 465 square miles. It contains some of England’s most attractive market towns and some 120 stunning villages, ranging from Long Compton in the south to Earlswood in the north. Stratford town itself awaits the re-opening of the Royal Shakespeare Company theatre in November; under the great leadership of Vicky Hayward, it is undergoing a £112 million makeover that will deliver a whole new experience for those coming to see the works of the great bard. My wife Lana and I were honoured to be part of the procession for his 446th birthday celebrations in April, when we walked from his birthplace in Henley street to his place of rest at Holy Trinity church.
My constituency is not without its problems, some very local and others inflicted on it by the policies of the previous Government. The town of Stratford is suffering from overdevelopment, and the top-down targets set by central Government have clearly done a lot of damage. All our towns have problems with antisocial behaviour and thuggery, which stem from a combination of the 24-hour drinking laws and a police force who are hampered by bureaucracy. The farmers are suffering too, with too much red tape, the single farm payments being delayed for months, and the problem with badgers, which I highlighted in the House last week. I will continue my predecessor’s campaign for better flood defences and to save our fire stations in Alcester, Bidford and Studley.
The biggest problem in Stratford-on-Avon is the economy. We have too many closed shops and too many burdens on business. We need to help small and medium-sized businesses to do better and get back on their feet. They, as my right hon. Friend the Chancellor has identified, are the future and the solution to our economic woes. I am very pleased to have seen my right hon. Friend make the Government’s first ministerial visit to China and play such a central role at the G20 in South Korea. I am pleased to see in the Gracious Speech special emphasis on balancing the books, getting rid of the tax on jobs and giving a one-year national insurance holiday to start-ups. I strongly believe that that will be a catalyst to kick-start the enterprise economy.
I now utter my only word of caution. I am someone with first-hand experience of a start-up. We must be careful what we do on capital gains tax. Of course I understand the need to raise some taxes and to help to create a fairer tax system. It must be right to relieve the lowest earners of the tax burden. I would go as far as labelling it a moral tax cut. However, it is important to remember the job creators, those who back them and those who join them and work for them. It would be counter-productive to penalise people who invest in start-ups—in itself a high-risk thing—by increasing CGT on their investment. It would also be wrong to penalise employees who join a risky start-up from possibly a safer occupation and, of course, to penalise entrepreneurs themselves.
In the Gracious Speech there was a strong focus on freedom, fairness and responsibility. It would be unfair and wrong to penalise people who have acted and saved responsibly with a further tax at a time when we are introducing incentives to act responsibly in marriage and partnership. Penalising responsible investment would send a contradictory and unhealthy message to the country.
No maiden speech from the Member for Stratford-on-Avon would be complete without a quote from our country’s greatest poet and playwright. I thought long and hard about which of his works would be most appropriate, and I settled on the Scottish play, that great tale of human ambition, conspiracy and tragedy. It is from the witches scene in act I, which must surely be read as a warning to the three largest parties in this House:
“When shall we three meet again
In thunder, lightning, or in rain?
When the hurly-burly’s done,
When the battle’s lost and won.
That will be ere the set of sun.”
Our country faces a dark economic storm, and the people will be watching us and how we behave in this House. Let us not be tempted by self-interest or party interest but let us instead put our country first.
Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)
I begin by paying tribute to the hon. Members who have made their maiden speeches this evening and have given us thoughtful, elegant and eloquent speeches. We have toured the nation—the hills, the valleys, the coasts and the cities. They have been wise speeches. Given the number of people who have paid tribute to their local newspapers as well as to their constituents, remind me to mention the Pontefract and Castleford Express rather more often.
My hon. Friend the Member for Stretford and Urmston (Kate Green) began the maiden speeches and was typically modest in not mentioning the impact of the work that she did on child poverty before she was elected. The hon. Member for Bromsgrove (Sajid Javid) gave us an eloquent speech, in which he confessed to having been a banker in a previous life—a brave thing to do. My hon. Friend the Member for Blaenau Gwent (Nick Smith) told us about Nye Bevan’s warning of collusion between Liberal Democrats and Tories—a rare example of a Nye Bevan understatement, I fear.
The hon. Member for Loughborough (Nicky Morgan) talked about her commitment to new jobs in her constituency. The hon. Member for High Peak (Andrew Bingham) laid claim to having one of the most beautiful constituencies in the country; I suspect he may be right. The hon. Member for Strangford (Jim Shannon) invited us all to go quad biking in his constituency, and the hon. Member for Aberconwy (Guto Bebb) also talked about tourism in his constituency and paid a lovely tribute to Betty Williams, which we would all support. The hon. Member for Grantham and Stamford (Nick Boles) paid a gracious tribute to the changes on lesbian and gay equalities that have taken place in the last few Parliaments. The hon. Member for South Down (Ms Ritchie) talked about the importance of investment in jobs in Northern Ireland—so too did the hon. Member for Belfast East (Naomi Long)—and the importance of economic development as part of the peace process.
The hon. Member for South Staffordshire (Gavin Williamson) talked about support for manufacturing. The hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) raised the subject of energy efficiency and my hon. Friend the Member for Leeds West (Rachel Reeves) drew on her experience and talent as a Bank of England economist to warn powerfully of the risks of a contractionary Japanese experience. The hon. Member for St Austell and Newquay (Stephen Gilbert) talked about social housing. My hon. Friend the Member for Bethnal Green and Bow (Rushanara Ali) paid tribute to the visionaries and social campaigners rooted in London’s east end and showed she would be a strong MP in the same tradition.
The hon. Members for Worcester (Mr Walker) and for Rugby (Mark Pawsey) both paid respectful tributes to their fathers, who were both their predecessors, although I must say I thought that Hyacinth Bucket was in “Keeping up Appearances”, not “One Foot in the Grave”. But we also had scenes from “Gavin and Stacey” from the hon. Member for Vale of Glamorgan (Alun Cairns), who spoke about the importance of the economy to his constituency. The hon. Member for Wycombe (Steve Baker) told us he was a skydiver and began to dissect global capitalism.
I missed the speech by the hon. Member for East Hampshire (Damian Hinds), but my mum and dad live in his constituency, so I hope he will look after them well. My hon. Friend the Member for Birmingham, Ladywood (Shabana Mahmood) shared her concern about long-term unemployment in Birmingham. I cannot quite read my handwriting, but I think it must say that the hon. Member for South West Norfolk (Elizabeth Truss) talked about farming—seeing as it is Norfolk. My hon. Friend the Member for Stockton North (Alex Cunningham) talked about the importance of engineering, seeing as it is Stockton North.
We spent quite a lot of time in Edinburgh today. In the course of the day we heard from my hon. Friend the Member for Edinburgh South (Ian Murray), who gave us a funny and witty speech just as we were starting to get tired for the evening; my hon. Friend the Member for Edinburgh East (Sheila Gilmore), who talked about the festival in her constituency; and the hon. Member for Edinburgh West (Mike Crockart), who talked about the zoo in his constituency—very appropriate, now that he has joined us in this place.
My hon. Friend the Member for Newcastle upon Tyne Central (Chi Onwurah) talked about defending England against the Scots, and the hon. Member for Orpington (Joseph Johnson) managed to amuse us while pretending not to be amusing at all—in which I detect an echo of his brother, perhaps, after all.
The hon. Member for Macclesfield (David Rutley) talked about the importance of local communities. The hon. Member for Stratford-on-Avon (Nadhim Zahawi) gave us a Shakespearean tour, and I think signed up to being the first of the rebels among the new Members on his side. The hon. Member for Spelthorne (Kwasi Kwarteng) told us a lovely story about his constituency’s Domesday roots and my hon. Friends the Members for Chesterfield (Toby Perkins) and for Lewisham East (Heidi Alexander) both talked about the importance of not axing the future jobs fund. I was going to pay tribute to the parents of my hon. Friend the Member for Lewisham East, who sat through the entire debate but decided to leave before the closing speeches began—perhaps wisely.
I congratulate the Secretary of State for Work and Pensions, the right hon. Member for Chingford and Woodford Green (Mr Duncan Smith), on his appointment. I know it is an appointment that he will relish, because he has a genuine interest in issues concerning poverty and families suffering from deprivation. I welcome too his Front-Bench colleagues, although I think they will be having an interesting time.
The Secretary of State said in his speech last week that he wanted clear and evidence-based policies, but he has in charge of employment statistics the Minister of State, the hon. Member for Epsom and Ewell (Chris Grayling), the man who said that crime was going up when in fact it was going down and was roundly rebuked by the UK Statistics Authority, the police and even the London Mayor for his lack of factual accuracy; so we look forward to those economic statistics debates.
The Secretary of State has also said that he wants to cut poverty, but as part of his team he has the Minister of State, Department for Work and Pensions, the hon. Member for Thornbury and Yate (Steve Webb), whom I very much respect. He told the House last year that
“the idea that the Conservative party is the answer to child poverty is amazing.”—[Official Report, 9 December 2009; Vol. 502, c. 457.]
He also said:
“To hear Conservative Front Benchers suggest that they even care about this subject…is frankly unbelievable.”—[Official Report, 20 July 2009; Vol. 496, c. 625.]
He has also stated:
“The reason unemployment has risen so rapidly in the UK is not because people have suddenly become workshy, but because the jobs are not there.
These Tory plans for benefit reform will not do anything to change that.”
We thought that the hon. Gentleman might have a few tensions with the Treasury about his plans, but it seems that the real fractious relationships are within his own team. If the Prime Minister and the Deputy Prime Minister are the happy couple in the rose garden, it seems that the Secretary of State has finally been granted his wish of being put in charge of dealing with dysfunctional families who are at risk of breakdown.
The Secretary of State has high ambitions. We will support him where we can. We will, of course, support measures to restore the pensions link with earnings. We will not support ripping up the rest of the Turner consensus, putting future pensions for low and middle-income earners at risk. We will support the Secretary of State where he brings forward genuine proposals that help to reduce poverty and disadvantage, but we will not support plans to water down the child poverty target and we would be extremely concerned by proposals to freeze all benefits below inflation.
The Secretary of State did some serious work on policy options at the Centre for Social Justice—on benefit reform and on measures to help to ensure that people are better off in work. We will look very sympathetically at those and we are interested in the proposals that he made when he was in opposition, but his case would be considerably stronger if he accepted that hundreds of thousands of families throughout the country are thousands of pounds a year better off as a result of the minimum wage and the tax credits that he and his party strongly opposed.
I hope, too, that the Government will continue the implementation of the reforms to sickness benefits and to lone parent benefits that we introduced and were starting to roll out. Those reforms and the investment in support to help the unemployed have already cut the number of people on inactive benefits by more than 350,000 since 1997. The combination of extra investment and support alongside benefit reforms and stronger requirements to take up that help have made a big difference. It is unfortunate that both the Conservatives and the Liberal Democrats voted against some of our stronger requirements on benefit claimants in the previous Parliament.
I hope that the Secretary of State will recognise the good work that Jobcentre Plus did to respond to the recession. As a result of the extra investment and the hard work of those staff, the claimant count peaked at 5% in this recession, compared with 10% in the 1990s recession and in the 1980s recession. That was possible only because of the extra investment in jobs alongside the tougher conditions on benefits. That is why it is so shocking that his first priority is to cut the future jobs fund. That is up to 80,000 youth jobs gone when the Chancellor himself has said that youth unemployment is still too high. I have to ask Government Front Benchers: did they talk to a single young person on the future jobs fund before cutting those jobs? Did they talk to a single voluntary sector provider before they cut the funding used to get people into work? Before the election, they told a very different story. The Prime Minister visited Merseystride, a social enterprise helping the long-term unemployed, during the election. He said to them that the future jobs fund was “a good scheme”. I hope that he will remember that visit. Then he said:
“And good schemes we will keep”.
What did the then shadow Work and Pensions Secretary, who is not in her place, say at that time? She said:
“The Conservative position on the Future Jobs Fund…has been misrepresented by certain groups in the media. We have no plans to change existing Future Jobs Fund commitments”.
As for the Minister of State, Department for Work and Pensions, the hon. Member for Thornbury and Yate, he said on behalf of the Liberal Democrats:
“We have no plans to change or reduce existing government commitments to the Future Jobs Fund. We believe that more help is needed for young people not less.”
So there we have it—a breaking of Tory and Liberal election promises. There has been no evidence, and no consultation with the voluntary sector. So much for the big society; this is, in fact, just a big sham. There has been no consultation with young people, and no listening to the thousands of young people who are getting their first chance because of the future jobs fund. These are cuts in help for young people. The Government just don’t get it: if they cut help and support for jobs for young people right now, it will cost all of us more for decades to come. Once again, they will be making the mistakes of the ’80s and ’90s, when they abandoned young people to long-term unemployment. That is not getting people off welfare into work; it is leaving them abandoned on welfare for decades, and we will not support it.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
It has been a really interesting debate, and I thank the right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper) for her kind comments welcoming me back to the Dispatch Box. Her husband is probably away doing whatever one does when one is standing to be Leader of the Opposition. Let me say this to her so that she can quietly say it to him: it is not all that it is cracked up to be. She might whisper that in his ear and hope that he does not get the nominations.
We have had an excellent debate; the right hon. Lady is correct about that. As for all those who made maiden speeches, the degree to which they consider it a real honour to have been elected is a great reminder to all of us who have, over time, become a bit more cynical about the speeches that we make in this place. Almost every one of those speeches reminded me—and, I know, pretty much everyone else in the House—of that fact.
My hon. Friend the Member for Bromsgrove (Sajid Javid) confessed to being a banker, as the right hon. Member for Normanton, Pontefract and Castleford said. That is a pretty brave thing to do in this House at the moment. He paid a moving tribute to the two soldiers from his constituency who died. My hon. Friend the Member for Loughborough (Nicky Morgan) said that she was happy to be here, and I am happy about that, too, but she replaced a good friend of mine from the other side of the House, Andy Reed, with whom I used to play football. I am rather sorry to see him go—he was a very good MP—but not that sorry, and I am pleased to see my hon. Friend here.
The right hon. Member for Normanton, Pontefract and Castleford is right to say that the hon. Member for Stretford and Urmston (Kate Green) comes to this House with a strong record on the subjects that we are considering. I look forward to hearing her speak informatively, and to her bringing her great knowledge to debates. Most of us will consider her a real asset to this House.
The hon. Member for Blaenau Gwent (Nick Smith) said that he stood on the shoulders of giants, and I must say that they do not come any bigger than the two to whom he referred—Nye Bevan and Michael Foot, probably two of the greatest orators to have sat in this place—so he has huge shoes to fill. He spoke about benefit dependency, a huge issue, and one to which I shall refer in a second; it is at a ridiculous level.
My hon. Friend the Member for High Peak (Andrew Bingham) challenged anyone in this House to match his constituency for natural beauty. I can with Chingford. We do not have a lot of countryside, but we have a lot of people who work very hard—and who pretty well tell their MP that MPs do not.
The hon. Member for Strangford (Jim Shannon) talked about high unemployment in Northern Ireland; it is, of course, staggeringly high there—higher than in most other places. We know that there is a historical issue there, but there is also much more that we have to do about it. I hope that he will play a full part in that when the time comes.
My hon. Friend the Member for Aberconwy (Guto Bebb), who spoke very well, talked about his constituency. He said that my right hon. Friend the Leader of the House told him, when he arrived here, not to get too used to this place because his constituency would soon be abolished. That threat has been given to all of us throughout the years; it is either our constituency or we who should be abolished. One way or another, one can fit oneself around that. In my case, it was more me than the constituency that was to be abolished.
The hon. Member for Bethnal Green and Bow (Rushanara Ali) spoke about her direct predecessor, George Galloway, who stirs emotions on both sides of the House—not necessarily very constructive ones among Labour Members. Her predecessor but one, Oona King, was highly respected on both sides of the House. If she was in another party, I would wish her the best of luck with any chance that she has to be Mayor, but in the meantime, she will be a great adornment to the campaign.
May I tell my hon. Friend the Member for Worcester (Mr Walker), who mentioned his father, that those are a big pair of shoes to fill? I knew the father of my hon. Friend the Member for Rugby (Mark Pawsey) incredibly well. Jim Pawsey was well regarded by Conservative Members and well liked, so my hon. Friend will have a big act to follow, as his father was always direct in telling people what he thought, regardless of whether it cost him a job: it did. The hon. Member for Labour—rather, the hon. Member for Leeds West (Rachel Reeves); I apologise, I did not quite hear some of the speeches, and I did not write all these notes. However, I gather that she made an extremely good speech, and spoke about her predecessor, John Battle, who was well liked in the House. She also quoted the Japanese advice to lead, and not to reduce borrowing quickly. I am an eighth Japanese, and the Japanese are not always right about everything.
My hon. Friend the Member for South Staffordshire (Gavin Williamson) praised his predecessor, Patrick Cormack—[Interruption.] Yes. Many of us remember him fondly. The one thing that we do remember about him is his incredible ability to speak about this place in 17th-century terminology as “Parliament assembled”. He will be much missed, and I hope that my hon. Friend fills his shoes very well indeed. The hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards), who is a member of Plaid Cymru, spoke about fuel poverty—something to which we shall definitely return—and benefit complexity. I welcome him to the House if he shows interest in those subjects.
The hon. Member for St Austell and Newquay (Stephen Gilbert) spoke about being got rid of as a result of a boundary review affecting his constituency. Again, I suggest that he fight that if he can: he may be here longer than he thinks. My hon. Friend the Member for Vale of Glamorgan (Alun Cairns) spoke very well, and referred to “Gavin and Stacey”. I am not quite sure what the connection is, except that Gavin came from Essex—near Chingford—and Stacey came from Wales, which shows that on this side of the House, we can unite the party yet again. It is a fairly tenuous link, I grant.
The hon. Member for Birmingham, Ladywood (Shabana Mahmood) has very big shoes to fill. Clare Short ended her parliamentary career in some measure of dispute with her party, but I can hardly think of anyone who has left the House, whether in government or opposition who was more well respected—[Interruption.] Well, she spoke passionately, but people did not always agree with her. However, if someone’s fault is that they are passionate in the House, it is a fault with which everyone will agree.
My hon. Friend the Member for East Hampshire (Damian Hinds) spoke well about his support for preventing poverty. The hon. Member for South Down (Ms Ritchie) was keen on the poverty agenda, and spoke about living in the same house as St Patrick. Any attempt to be deified in the House will end in tears. My hon. Friend the Member for South West Norfolk (Elizabeth Truss) spoke about the importance of skills, in another very good speech. The hon. Member for Stockton North (Alex Cunningham) spoke about credit unions and loan sharks. I am with him on that: we need to do a lot more to try to break the stranglehold of doorstep lenders and, more particularly, of the very bad elements among loan sharks. I am very strong on seeing what we can do about credit unions.
May I tell my hon. Friend the Member for Grantham and Stamford (Nick Boles) that his seat is a Conservative gain, although it was Conservative before? His predecessor remains a friend of mine. It was always difficult to know quite where Quentin was going to be standing at any one time.
Mr Duncan Smith
That is exactly right.
The hon. Member for Belfast East (Naomi Long) said that she was dedicated to bridging the political divide and the regions, as a member of the Alliance party. She should come across to this side of the House: we are the living embodiment of an alliance, so perhaps she could join us. My hon. Friend the Member for Wycombe (Steve Baker) made a very good speech, and I remember his predecessor, Paul Goodman, very well. The hon. Member for Edinburgh South (Ian Murray) made an excellent speech and spoke about astronomical manufacturing. I am not quite sure what that means, but it sounded good at the time.
The hon. Member for Edinburgh West (Mike Crockart) spoke about the pivotal role of community groups. I agree with him. The hon. Member for Newcastle upon Tyne Central (Chi Onwurah) paid tribute to the grass roots and sense of respect of the people of Newcastle. She made an extremely witty speech. If she carries on like that in the House, she will rise fast and dominate her own side. I commend her.
My hon. Friend the Member for Orpington (Joseph Johnson), who made a very good speech, said that he did not have the humour gene of his brother, but he proved that not to be true. He has the hair, too, of which I am rather jealous. He will go far in the House, provided he follows his brother’s trait of never sticking to any particular line for any length of time but ending up being elected to highest office while he is at it, which is a pretty good record of success.
The hon. Member for Lewisham East (Heidi Alexander) made a very good speech. My hon. Friend the Member for Spelthorne (Kwasi Kwarteng) spoke about business being strangled by red tape. The hon. Member for Edinburgh East (Sheila Gilmore) made an excellent speech. My hon. Friend the Member for Stratford-on-Avon (Nadhim Zahawi) made a very good speech in which he spoke in Shakespearean terms about the gathering clouds and the dark lowering economy. I was getting so worried at one stage that I thought I would not get to the Dispatch Box to speak at all. Never mind, here we are.
I shall touch quickly on speeches not made by new Members. The right hon. Member for Sheffield, Brightside and Hillsborough (Mr Blunkett), whom I know and like enormously, blamed bankers, the world economy, the leadership candidates in his own party, and everyone except the previous Government, for the shambles that we are now in. He should think again. It was the Government of whom he was a member who reduced the country to the state that it is in.
Mr Duncan Smith
We do not have a great deal of time. I will give way, but I shall finish shortly.
Mr Blunkett
I am grateful and I shall be brief. Perhaps the right hon. Gentleman, whom I wish well, would describe to all of us why the rest of Europe has been devastated by the Labour Government.
Mr Duncan Smith
I can answer many questions, but I cannot say what the last Labour Government did as they toured Europe destroying all those economies, so I am afraid I cannot help the right hon. Gentleman. All I know is that we have spent huge sums, much of it not carefully adjusted to see whether it was working, including the future jobs fund, about which I was asked earlier. The issue is not that it was not creating jobs, but that the jobs that were being created were more than likely to be temporary, they were nowhere near the number originally projected, and the cost of the programme was running out of control.
Everyone wants to create jobs and stop the wage scar for the young unemployed, but I must tell the right hon. Member for Normanton, Pontefract and Castleford that we face a nightmare in which we have to look at the spending to make sure that whatever we spend delivers real life change. We will be doing that with welfare reform to try to make it much easier for people to get back to work, and to make sure that the money they earn is real money and means that going to work pays. We will reform pensions. The right hon. Lady and her party managed to lower the level of life chances for far too many people in this country, and it is the coalition Government who now set out to help the young, the unemployed and the impoverished in Britain once and for all.
Question put, That the amendment be made.
Business without Debate
Mr Speaker
As there is an amendment not supported by the Member in charge, I will follow the practice of my predecessors and treat that as an objection to the motion.
petition
Sandra Osborne (Ayr, Carrick and Cumnock) (Lab)
I wish to present the petition of residents of Ayr, Carrick and Cumnock constituency and others.
The petition states:
the petitioners are appalled by the loss of life associated with Israel’s attack on the flotilla of ships carrying humanitarian aid to Gaza, an attack which took place in international waters; further declares that Israel’s blockade has destroyed the economy of Gaza, deepened poverty, inflicted widespread suffering and imposed collective punishment on the people of Gaza.
The petition was collected on Saturday. People in my constituency are very concerned about this issue, and I hope that the Government take note of their concerns.
Following is the full text of the petition:
[The Petition of residents of Ayr, Carrick and Cumnock constituency and others,
Declares that the petitioners are appalled by the loss of life associated with Israel’s attack on the flotilla of ships carrying humanitarian aid to Gaza, an attack which took place in international waters; further declares that Israel’s blockade has destroyed the economy of Gaza, deepened poverty, inflicted widespread suffering and imposed collective punishment on the people of Gaza.
The Petitioners therefore request that the House of Commons calls on Israel to end its blockade and supports international efforts to secure a lasting settlement with a secure and independent state of Palestine alongside a secure and independent Israel.
And your Petitioners, as in duty bound, will ever pray.]
[P000834]
Housing policy
Andrew George (St Ives) (LD)
I am particularly pleased to have secured this evening’s Adjournment debate, as it is on a very important aspect of Government policy that I now know needs to be developed. There were a number of welcome statements in the coalition agreement about the abolition of regional spatial strategies, shared equity accommodation, and the removal of garden grabbing from the planning system.
In my part of the world, the most important issue facing local communities is the lack of affordable housing for local people. It has bedevilled the area for decades but, if anything, the situation has become significantly worse in the last decade. We know that the planning system is fuelled primarily by greed rather than need: in those circumstances, it is difficult to design a system that enables need to be met, and I am particularly pleased to see that the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Hazel Grove (Andrew Stunell), is here to respond to this important debate.
In the short time available to me, I intend to develop a number of issues, and I have a number of questions about what will happen with the supply side. The Government are to abolish the regional spatial strategies and the housing targets that go with them, so what role will development control play in meeting affordable housing need after that abolition?
With regard to planning policy statement 3, I believe that there will be an increasing number of questions about the integrity of exception sites and about maintaining that integrity, especially in rural areas. In addition, I know that my hon. Friend the Minister will be keen to respond to what I believe is widespread concern about how some elected members of planning committees are finding themselves at risk of predetermination in the consideration process.
Other supply-side questions have to do with the management and regulation of the private rented sector, its relationship with the housing benefits system, and whether there should be formal regulation of landlords and letting agents. On the demand side, I particularly want to probe the Government’s approach to the control of second homes—something that has a significant impact on communities in my constituency and many other areas around the country. I also want to discuss the Government’s attitude to property taxation, given the earlier announcement of the extension of capital gains tax and the impact that that is likely to have on the private rented sector in particular.
On the abolition of regional spatial strategies, the Secretary of State for Communities and Local Government has embellished the previous coalition agreement statement with his own statement. On 3 June, he said that
“the new Government has announced it will abolish Labour’s unelected Regional Assemblies, top-down building targets and unwanted Regional Spatial Strategies.”
In my part of the world, the housing stock has more than doubled in the last 40 years. In fact, the area is one of the fastest growing places in the UK, yet the housing needs of local people have got dramatically worse over that period. The previous Government’s approach of adding another 70,000 houses in a place like Cornwall, which is what they proposed in the regional spatial strategy over 16 years—as if somehow, by magic, that would address the housing needs of local communities—is disproved by the way the market has operated in the past 40 years. We need a much more sophisticated approach if we are to address the deep-seated, endemic and serious housing problems in such a place as Cornwall. Simply turning it into a developers’ paradise is not the answer.
The Secretary of State went on in his letter:
“In contrast to Labour’s regime of targets, we will be seeking to introduce new incentives to reward councils which build more homes and support local business growth.”
The question really is how the Government intend to do that. If fewer private market houses are to be heaped in where it is not helpful in places like Cornwall, which I would welcome, does that mean that the Government will introduce a system driven more by need than demand? If that is the case, would the outcome be that in places like Cornwall a higher proportion of any new development would be affordable housing to meet local housing need than was originally the case in the previous Government’s regional spatial strategy?
On the wider implications of development control in meeting the need for affordable housing, sometimes the best way of meeting local housing need is to have strict control on housing development, although that sounds counter-intuitive, especially in rural areas such as Cornwall. Then one can apply the exceptions approach not only in rural areas but perhaps in others. Often the value of the land is determined by the planning process and what that land can be used for. That determines ultimately whether we can achieve the ultimate goal of developing affordable housing.
The role of the intermediate market is developed in the coalition agreement. Shared ownership accommodation is encouraged, which is something that I warmly welcome. That is encouraging. The coalition agreement says that we will
“promote shared ownership schemes and help social tenants … own or part-own their own home”,
but how will we do that? There is a serious lack of mortgage finance to develop a meaningful intermediate market. In places like Cornwall it is vital that we create a new rung on the housing ladder for people at the very bottom who cannot make the enormous jump on to the first rung of the private market.
Dan Rogerson (North Cornwall) (LD)
I am grateful to my hon. Friend for giving way and congratulate him on obtaining this debate so early in the new Parliament. In talking about definitions and the Government’s policy, does he agree that “affordable” housing can sometimes be used by developers to provide housing for sale that is still very much unaffordable to local people? It is discounted when compared to the full market price, but really socially rented accommodation would do the most to bite into that need in our communities.
Andrew George
My hon. Friend is right to suggest that we need a lot more social rented accommodation, but much of the pressure on that accommodation is from people who might otherwise get on to the intermediate rung of the housing ladder. I am keen that we should develop that. The problem is the lack of mortgage finance. Only three lenders are currently lending, and in order to get schemes to go ahead it is necessary to have all three lenders on a site. With that, of course, comes significant pressure for relaxation of the section 106 agreements, which often go alongside such developments.
Before I was elected I was a rural housing enabler before such things were properly invented. I was involved in many of the kind of developments that have taken place since the early 1990s as a result of what was then PPG3 and is now PPS3. We found exception sites. What I found then, and has been found since that time, is that it is easier to find exception sites where the development value is significantly less than £10,000 a plot. People were finding it a great deal cheaper than that in the early 1990s. Such sites could be taken forward in an environment in which the integrity of the planning system was maintained. Otherwise, the hope value on all those sites will be lost.
Rural exception sites—also known as departure sites—are sites beyond or close to defined settlements. Exception sites are acceptable for the provision of 100% affordable housing but not for the provision of open market housing. Often such schemes consist of fewer than 20 houses—more often than not, far fewer. It is very important indeed, , as PPS3 states, that:
“Rural exception sites should only be used for affordable housing in perpetuity.”
The problem is that there is pressure from some local authorities to weaken, or lessen, the pressure on that. I therefore urge my hon. Friend the Minister to ensure that the integrity of the exceptions approach in PPS3 is retained. That has been supported—I spoke to Matthew Taylor before he produced his report last year—by the Taylor review, the Affordable Rural Housing Commission, the rural housing trusts and all the housing charities that work in this field. It is vital that such sites provide affordable housing in perpetuity 100%. There is a risk that we might lose that.
I mentioned predetermination; I shall be interested to hear what the Minister says on that. There is concern among many elected members; they feel unable to campaign on the issue before they are elected, in case, once they have expressed a view about the way in which their local community might or should develop, it would restrict what they might be permitted to do on a planning committee. A statement on that would therefore be particularly helpful.
I mentioned housing benefit. In areas such as mine, where a large proportion of the local community live on the very margins of economic survival, because of the very high private rents those people often depend on the housing benefit system whether they are in or out of work. The problem is that the system as it operates at the moment still results in the withdrawal of housing benefit at the rate of about 85p in the pound earned for people in that situation. If that is the case, clearly there are a lot of people, particularly in areas such as mine, who are going in and out of work who suffer from that mechanism and a housing benefit system that does not take fully into account the difficulties of living at that level. As a result, a lot of people living in my part of the world, and many other places, are living in awful accommodation, which certainly does not meet national standards, and are often paying very high rents indeed.
In my area there are some excellent private landlords and the private rented sector is run extremely well, but of course there are some who do not run it as well as perhaps they should. For example, one family that I was seeking to help earlier this year during the very cold winter, who were living in a one-bedroom flat up some stairs and had a one-year-old baby boy—the mother had epilepsy—found themselves in and out of both accommodation and the working environment and were unable to maintain the housing benefit at rental levels. They found themselves under a great deal of pressure from their letting agent at the time. I will quote from a letter that the letting agent, Antony Richards Property Services, sent to my constituents, a Mr Shaun Burden and Ms Rosemary Jarmain, who were living in Morrab road at the time. They have since been housed by the council in accommodation in Newlyn.
The letting agent wrote:
“In the absence of any rent forthcoming and your apparent refusal to help yourselves by providing the information…we are left with no alternative but to seek to enforce the possession notice served last year…the Council will deem you as intentionally homeless and are highly unlikely to offer you accommodation. You will then be homeless.
The choice is yours.
I am told the streets are cold at night.”
Such treatment of local families in a desperate situation is not acceptable.
Adverts for Homechoice in Cornwall have shown that this week, of the 42 properties available, 14 are one-bed, 21 are two-bed, six are three-bed and one is four-bed. In Cornwall, there is a serious shortage of family accommodation—three and four-bed accommodation.
Andrew George
Because of time, I need to press on. I am terribly sorry.
I mentioned the issue of second home ownership and the need to control second home ownership in areas such as mine. I know that my hon. Friend the Minister is aware of the background in constituencies such as mine. For example, recent surveys of estate agents have shown that last year alone four times as many properties were sold to second home buyers as to first time buyers. In some communities a significant number—sometimes 20%, 30% or 40%—of the properties in local communities are owned by second home owners. Those circumstances make it difficult for people to have any chance of being able to afford a home of their own.
The previous Government looked at the issue following the Taylor review and other representations that I and others made. The then Government said that they were not prepared to look at our proposal to introduce a new use classes order to allow local authorities to restrict the number of second homes permitted to be converted from permanent residency to non-permanent residency in many of the communities where local people do not get a chance.
The previous Government said that they were not prepared to go forward because they thought that that would be difficult to enforce, but with council tax records, business tax records, the electoral register, capital gains tax information and local knowledge, I believe that it is possible to enforce that and to define properly what second homes are.
I mentioned the issue of capital gains tax. I hope that the Government will think carefully, before the Budget on 22 June, about the implementation of the changes in capital gains tax. I welcome the broad announcement, but I hope that there will not be an unintended impact on other business investments, including private letting properties, which are important to our communities. I hope that there will be roll-over relief, annual exemptions and other measures to ensure that the private letting sector is not hit detrimentally. I hope that the Minister is listening and I look forward to his reply.
The Parliamentary Under-Secretary of State for Communities and Local Government (Andrew Stunell)
I am delighted to have the opportunity to respond to my hon. Friend the Member for St Ives (Andrew George) and to discuss an important issue that he has pursued in the House for a long time, on the Opposition Benches and on the Government Benches, with great vigour. I thank him for his support for the coalition Government’s action and plans in this area, which I hope on the whole he will find acceptable.
The Government believe that enabling people to have a home of their own is a high priority. The problem that we face is that the current system does not deliver that, and my hon. Friend has outlined some of the impacts of the current circumstances on his constituents. He may want to look at the speech that my hon. Friend the Minister for Housing made at the Royal Institution of Chartered Surveyors this morning, which covers some of the points. Perhaps I will not duplicate all of them here.
My hon. Friend the Member for St Ives made a wide-ranging contribution on an important topic. Mine will not be quite as wide-ranging. I am not the Chancellor of the Exchequer, so I will not be commenting on capital gains tax. There may be some other things that my hon. Friend will find are missing, too, but on the issue of the disqualification of councillors from taking part in planning decisions and other decisions at their council because they have an opinion about it—so-called pre-determination—I hope that I can give him some comfort. It is absolutely the case that it is wrong for local representatives to be barred from taking part in decisions, even if they have a clear predisposed view. The fact is that despite the advice that is often handed out to them, it is not wrong for councillors to be predisposed towards a particular view, or to express and publicly voice it. They may even have been elected on a particular issue, and it would of course then be deeply frustrating for them to receive apparently professional advice that disqualifies them from taking part. The Government certainly understand the concern that the issue causes to councillors, and if necessary, we will legislate to ensure that councillors are not prevented from speaking up on issues on which they have campaigned. I hope that that is useful news for my hon. Friend and his councillors.
On housing supply, my hon. Friend seemed to suggest that the changes that we were making were intended to produce fewer homes. That is not the case at all. We want homes in the right places, and our view is quite clear: we have not built enough homes. Indeed, this year, house building is at its lowest level since 1946 or, if one discounts the war, since 1923. There is a huge gap between supply and demand, and it is the Government’s policy to address that. The long-term demand for housing is strong, even if, as he rightly says, it is at the moment a little hard to make that market work properly.
Andrew Stunell
Yes, but I have very little time, and I have to be fair to my hon. Friend the Member for St Ives.
Mr Spencer
Just a small point: obviously, the housing ladder has a bottom and a top. In Sherwood, there are many single people living in five-bedroom houses who want to stay in the village in which they live, but who, unfortunately, cannot find elderly accommodation locally. Building the right property in the right place is a big advantage and a big assistance to people who want to come out of a large property and who would free up spaces on the ladder so that people could move up.
Andrew Stunell
My hon. Friend makes a good point, and I am sure that he will pursue it in debates in future.
We need to recognise that the under-supply of housing has consequences. It impacts on the affordability of homes. I will not rehearse the arguments, but the fact is that first-time buyers are pretty much out of the market at the moment unless they have the support of parents or friends, or there are outside circumstances; the average age of a first-time buyer is now 37, and that is obviously not acceptable. We have a problem with housing market stability, too. A volatile housing market can quickly translate into instability in financial markets and the wider economy.
Andrew George
I entirely accept what my hon. Friend says in respect of the national picture and the national figures. I understand that the coalition agreement talks in national terms about such patterns, but as I understand it, the Secretary of State for Communities and Local Government and the coalition agreement are giving local authorities the power and ability to interpret the national standing and to ensure that local need is met in the way that the local authority deems best. The local authority is surely in the best position to know how local need might be met.
Andrew Stunell
It is certainly in a better position to do so than the devisers of regional spatial strategies; I think that we can agree on that. We need to increase supply.
My hon. Friend has brought me neatly on to the abolition of regional spatial strategies, a phrase that has to be said carefully and articulated clearly. Regional spatial strategies have gone. The Secretary of State has written to planning authorities telling them that it is now a material consideration for them to take account of his letter saying that regional spatial strategies are to be disposed of. The legal decision must await legislation, but clearly we are there already. It is not just a question of telling local authorities, “You’re on your own”; there will be clear incentives for local authorities that permit the development of housing, and a reward system that will give them the opportunity to develop infrastructure and services to match the investment that they are allowing.
My hon. Friend had plenty to say about second home ownership. I have had the privilege of listening to him speak on the subject in debates for a number of years. He asked for some specific things. I cannot deal with capital gains tax—that is definitely well above my pay grade—but he also asked whether we could use the planning use class of second homes. The Government do not believe that there is a way forward on that. I would be interested—I do not suppose that I have the choice—to receive further representations from him and from others who think differently, but there are serious difficulties over how that can be done, not least because, for the first time, we are bringing the ownership of an asset into consideration of whether it was a material planning use or not. [Interruption.] I can see that my hon. Friend wants to engage in debate, and I look forward to doing so over the coming months.
My hon. Friend will have received a parliamentary response from the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Bromley and Chislehurst (Robert Neill), probably this afternoon, to say that we have no immediate plans to change the discount on council tax for second homes. However, my hon. Friend the Member for St Ives has raised some interesting issues, and some of us have great sympathy with them.
My hon. Friend asked about rural exception sites, and there seems to be a bit of a flurry: perhaps PPS3 and rural exception sites might, in some mysterious way, be at risk. I want to assure him that there is nothing in the coalition agreement or in the Conservative Green Paper on open source planning—I did not think that I would be likely to be standing at the Dispatch Box defending it—that would to change rural exception sites. The Government believe, as he does, that they are important and very material, so I hope that he accepts our assurance.
My hon. Friend rightly drew attention to the need to put in the missing rung in the ladder through the development of the intermediate market. Again, I refer him to the words of my hon. Friend the Minister at the Royal Institution of Chartered Surveyors this morning. We are committed to supporting that intermediate sector and making sure that it flourishes. We want to promote shared ownership and help social tenants and others to own or part-own their home. Shared ownership is a way of helping lower-income households purchase a share in a home, perhaps for as little as 25%, which is what the current HomeBuy offer says.
Andrew Stunell
I am keeping an extremely close watch on the time, Mr Speaker, as I am sure you are, but I will give way to my hon. Friend the Member for St Ives.
Andrew George
I am grateful to my hon. Friend, and I apologise for catching him at the close of his speech. The Government own two banks, but mortgage finance is the big stumbling block in developing this sector. Is there anything more that he and the Government can do to enable the sector to move forward?
Andrew Stunell
Again, I do not think that that can be dealt with at my level, but the whole Government are committed to putting the British economy back on its feet and to restoring the health of the financial and business sector. That is going to be the fastest way to get the financial market working properly. I know that my hon. Friend, like me, is committed to dealing with that.
Finally, may I deal with the private rented sector? The House will have been appalled to hear of the case that my hon. Friend drew to our attention and of the callous words of the letting agent as they affected his constituent. We must recognise that the private rented sector is significant: 13% of households are in the private rented sector, and some tenants in that sector face problems of overcrowding, poor-quality accommodation and difficulties with the letting agents themselves. I certainly have a great deal of sympathy for anyone who suffers as a result of poor practice by a letting or managing agent.
We advise anyone contemplating renting or letting a property through an agent to use one who is a member of the Royal Institution of Chartered Surveyors scheme, the Association of Residential Letting Agents or the national approved letting scheme. About half the agents are members of those organisations. I look forward to working with my hon. Friend over the coming months and years to make sure that what he wants, what I want and what the Government want—
Written Ministerial Statements
(14 years, 6 months ago)
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Office for Budget Responsibility
(14 years, 6 months ago)
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The Chancellor of the Exchequer (Mr George Osborne)
Sir Alan Budd and I have agreed the terms of reference for the interim Office for Budget Responsibility.
Copies of the document are available in the Vote Office and have been deposited in the Libraries of both Houses.
Media and Technology
(14 years, 6 months ago)
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The Secretary of State for Culture, Olympics, Media and Sport (Mr Jeremy Hunt)
The coalition’s programme for Government set out the Government’s belief that a vibrant media sector is crucial for our well-being and quality of life. The Government’s intention is to create the conditions that will allow enterprise to flourish in a way that avoids over-regulation or over-subsidy. I am therefore today announcing:
Rapid roll-out of superfast broadband: we need to put the digital infrastructure in place that will allow this country to increase growth rapidly in the digital economy as we come out of recession. The Government propose to take this forward in two areas: (i) backing the commitment to make a service level of 2Mbps available to those parts of the country still without a basic level of access; (ii) announcing three rural market testing projects that will bring superfast broadband to rural areas.
Access to infrastructure: to support the Government’s commitments to the roll-out of superfast broadband by ensuring that BT and other infrastructure providers allow the use of their assets to deliver such broadband, we will: (i) back Ofcom’s proposals for opening up access to BT’s ducts and telegraph poles to promote further investment; (ii) in line with the Queen’s Speech, offer clarity that if legislation is necessary then the Government are ready to bring it to the House; and (iii) to encourage further debate on the issue, the Department for Culture, Media and Sport will publish a paper setting out our latest thinking on this in July, coinciding with an industry day to be organised by Broadband Delivery UK.
Local media: as part of the Government’s wider commitment to localisation, we aim to provide the right incentives and conditions for sustainable commercial growth in local TV and online services. The Government therefore proposes: (i) that it will not go ahead with the previous Administration’s Independently Funded News Consortia (IFNC) pilots; we recognise the high degree of innovation and level of partnerships which emerged through the pilot procurement process; however, we do not agree that subsidising regional news is the right approach; (ii) instead, funding identified for the IFNC pilots will be used to support our plans for the roll-out of superfast broadband around the country; (iii) that we will accept Ofcom’s recommendations on reforming local cross-media ownership rules meaning they will be significantly relaxed. I will bring forward secondary legislation to the House to enact these changes as soon as possible; (iv) to support local television, we will be conducting a full assessment of the regulatory and commercial context for local TV with strong independent input in order to identify the interventions which can best secure sustainable local television in this country. Based on those findings, I will publish a full local media action plan in the autumn.
A full copy of my speech will also be deposited in the Libraries of both Houses.
Sea Fish Industry Authority
(14 years, 6 months ago)
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The Secretary of State for Environment, Food and Rural Affairs (Mrs Caroline Spelman)
The Sea Fish Industry Authority (Seafish), is a UK-wide, levy-funded non-departmental public body established by the Fisheries Act 1981. It has a statutory duty to promote the efficiency of the sea fish industry as a whole. It is jointly sponsored by the four fisheries administrations in the UK.
On 18 March, the Court of Appeal ruled that the Fisheries Act 1981 does not permit Seafish to raise a levy on imported sea fish and sea fish products, only that which is first landed in the UK. The result was to significantly reduce its levy income.
The Court of Appeal handed down an order on 20 April requiring Seafish to repay to the claimants six years of unlawfully collected levy plus interest and costs. The Court of Appeal agreed to stay the execution of the payments pending determination of an appeal to the Supreme Court.
On 18 May, Defra, with the support of Seafish, petitioned the Supreme Court for leave to appeal against the judgment.
The reduction in Seafish’s income has led Seafish to scale back their activities and to ask the sponsoring administrations for financial support. With the agreement of HM Treasury, Ministers have agreed to make a short-term, commercial loan of £200,000 available to Seafish to enable Seafish to continue to operate within its reduced income.
Officials are continuing to work with Seafish to explore the longer-term options and further statements will be made as appropriate.
Prime Ministerial Appointments
(14 years, 6 months ago)
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The Prime Minister (Mr David Cameron)
The right hon. Lord Patten of Barnes will lead Government arrangements for the papal visit as my personal representative. Pope Benedict XVI will be visiting the UK as both Head of State and the leader of a major denomination. Lord Patten will, on my behalf, oversee and manage Government preparations for the visit alongside the arrangements being made by the Catholic bishop conferences. Lord Patten will oversee the coordination of all elements for which the Government are responsible.
The right hon. Member for Birkenhead (Frank Field) will lead a review on poverty and life chances. This will examine the case for reforms to poverty measures and look at what the Government can do to improve the lives of the least advantaged people in our society and will report to the Government by the end of the year.
Motorcycle Test
(14 years, 6 months ago)
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The Parliamentary Under-Secretary of State for Transport (Mike Penning)
I am announcing today a review of motorcycle tests in Great Britain. The new two-part motorcycle test that was introduced in April 2009 has clearly led to some concern among motorcycle groups, particularly about the safety of the off-road module 1 part of the test and about the difficulty of accessing the limited number of off-road test centres. The new test was introduced in order to meet the requirements of the second EU directive on driving licences. While most elements in the module 1 test are required by the directive, there may be scope for us to make some changes to the way in which the test is carried out.
We will be working with the motorcycle community and road safety groups to look again at the current form of the motorcycle test. This review will look at the manoeuvres carried out in both modules 1 (off-road) and 2 (on-road) and whether these manoeuvres could safely be conducted in the on-road test.
The review will also look at other related motorcycle testing and training issues, including the options for training and testing for progressive access under the third driving licence directive and how any changes relate to wider proposals to improve motorcycle training and testing.
We are inviting views from members of the public, motorcycle riders, trainers, road safety groups and others on what aspects of the motorcycle test they want us to look at, including how and where they think motorcycle testing might best and most safely be carried out. Views should be submitted to the Department for Transport (RUSD4consultation@dft.gsi.gov.uk) by 31 July. We aim to conclude the review by the autumn.
House of Lords
European Union: Debts
Lord Pearson of Rannoch
To ask Her Majesty’s Government whether Article 122.2 of the Treaty on the Functioning of the European Union has been or could be used to require the United Kingdom to underwrite £9.6 billion of other European Union member states’ debts.
Lord De Mauley
My Lords, EU finance Ministers agreed on 9 May that up to €60 billion of emergency finance can be provided to any member state in accordance with Article 122.2. Only where there are defaults on loan repayments would there be a cost to the EU budget. Member states would be liable for a share. Based on the United Kingdom’s contribution to the 2010 EU budget, the UK’s share would be approximately 13.6 per cent, or up to a maximum of around €8 billion. Euro-area finance Ministers have also agreed a €440 billion package of assistance to be provided through a special purpose vehicle. The United Kingdom has chosen not to participate in this, and there is therefore no question of any liability arising to the United Kingdom.
Lord Pearson of Rannoch
My Lords, I thank the Minister for that Answer, and I welcome him to his new position. However, I have to point out that this article can only be used legally to help with natural disasters, such as earthquakes and so on. Is he aware that the Eurocrats are also violating Article 125, which prohibits financial bailouts of any kind? If so, can he tell us what the sum of all this illegality is going to cost us? Secondly, since this year we have to send a further £9.7 billion in net cash to Brussels, and since the TaxPayers’ Alliance puts the cost of our overall membership at £120 billion a year, has the time not come to review that membership, starting perhaps with an independent cost-benefit analysis?
Lord De Mauley
My Lords, there were several questions in there. I shall first answer the noble Lord’s question about Article 125—the so-called bailout clause—which states:
“The Union shall not be liable for or assume the commitments of … governments … A Member State shall not be liable for or assume the commitments of … governments … of another Member State”.
That does not rule out member states lending each other money. The noble Lord refers to a figure of £9.6 billion. The Government do not recognise that figure. If he can give us a basis for it, we will look into it.
Lord Waddington
My Lords, I wonder whether my noble friend can help me on this point. If we had been foolish enough to join the euro, what would have been our contribution to the Greek bailout simply as a result of being a member of the eurozone?
Lord De Mauley
My Lords, a package of assistance was agreed in early May for Greece, consisting of €110 billion over three years and comprising an IMF standby arrangement of €30 billion and an intergovernmental package of bilateral loans from euro-area member states of €80 billion. This is, of course, subject to strict conditions. I think noble Lords would agree that it is not for me to speculate on what might have been.
Lord Soley
Will the Minister confirm that neither party of the coalition would support any support for the euro?
Lord De Mauley
My Lords, so far as I am aware, despite the best efforts of noble Lords opposite, there is a quite remarkable degree of agreement between the two parties of the coalition.
Lord Newby
My Lords, does the Minister agree that it is in the UK’s national interest, as well as that of Greece, that collective action has been taken by the EU to prevent the complete collapse of the Greek economy?
Lord De Mauley
My Lords, I quite agree with my noble friend. We must be alive to the risks that the current uncertainty poses because of financial-sector linkages well beyond the euro area. The UK’s support for the €60 billion euro element of the package represents a sensible position that strikes a balance between UK support and the need for the euro area to take the lead in resolving these problems.
Lord Eatwell
My Lords, as the noble Lord is undoubtedly aware, the exposure of British financial institutions to the heavily indebted southern states of the eurozone is estimated at more than £100 billion. In those circumstances, if the European authorities asked for British financial participation in an activity that would strengthen the security of British banks, would the Government participate? Yes or no?
Lord De Mauley
My Lords, I am not in a position to answer a hypothetical question today.
Lord Low of Dalston
My Lords, does the noble Lord agree that any scrutiny by the EU of the UK budget would be unwarranted interference in our domestic affairs?
Lord Stoddart of Swindon
Is the noble Lord aware that people simply will not understand why Britain has to make a contribution to the bailout of a member of the eurozone when the United Kingdom is not a member of that zone? What would our potential liability in a total bailout have been had we been members of the euro?
Lord De Mauley
My Lords, the €60 billion euro element of the total €500 billion package is available in the existing EU budget, without a change in legislation, for any member state to drawn on. It is not confined to the euro area. While we declined to participate in the €440 billion element, we cannot and should not simply walk away. A strong and stable euro is in the United Kingdom’s national interest. More than 40 per cent of our exports are to the euro area, and I am sure the noble Lord would agree that it would be unwise to jeopardise that.
Lord Hannay of Chiswick
Does the noble Lord find it a little odd that all this questioning ignores the fact that, as a member of the International Monetary Fund and a substantial subscriber to its resources, we provide relief for any number of countries, both in and outside the euro area, and we should do so? That is the purpose of these institutions.
Lord Higgins
My Lords, given the strain that the weak members of the European monetary union are putting on the system, would it not be wise to consider possible contingency plans which could be used if one of them wished to withdraw?
Lord De Mauley
My Lords, these are early days. Several countries have announced new packages of fiscal recovery measures in recent weeks. I am sure that my noble friend will agree that it would be inappropriate for me to comment on individual member states or to speculate on what might or might not happen.
House of Lords Reform: Committee Membership
(14 years, 6 months ago)
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Lord Lucas
To ask Her Majesty’s Government what will be the membership of the committee to be established to bring forward proposals for a wholly or mainly elected upper chamber.
The Minister of State, Ministry of Justice (Lord McNally)
My Lords, my right honourable friend the Deputy Prime Minister announced yesterday that he will chair a committee composed of Members of all three major political parties in both Houses. It will be charged with producing a draft Bill by no later than the end of this year. The draft Bill will then be subject to pre-legislative scrutiny of a Joint Committee of both Houses. Those serving on the committee will be Mr Mark Harper MP, the noble Lord, Lord Strathclyde, the noble Baroness, Lady Royall, Sir George Young, Mr David Heath, Miss Rosie Winterton, Mr Jack Straw and me, under the chairmanship of Nick Clegg.
Lord Lucas
My Lords, the best part of that Answer was the inclusion of the noble Lord himself in the list of members. Does he agree that it is important that the committee should have a deep understanding of the way that the House of Lords operates within the constitution in order to avoid some of the mistakes made by the previous Government when contemplating constitutional reform? Will he assure us that, unlike previous attempts at reforming the Lords, this one will be conducted openly and with full access for Members of this House to the committee to put their views and ideas?
Lord McNally
I thank my noble friend for his comments. I think that Fabio Capello could not get a better blend of youth and experience than this committee. How the committee will do its work will depend on what it announces after its first meeting. But I agree with him. I hope that Members of both Houses and organisations outside will feel free to feed in their ideas and opinions. But it is a working group to draft legislation. It will not just go around in ever-decreasing circles, which has been the experience of the past 10 years.
The Archbishop of Canterbury
My Lords, given the historic role of this Chamber as representing the interests of non-partisan civil society, will the Minister give us some assurance that the proposals before us do not represent an increase in underlining the partisan character of this House? I speak of course with some interest from these Benches and with the Cross Benches in mind.
Lord McNally
I understand the interest that has been expressed. I can say only that the committee will take such considerations into its deliberations. Its conclusions will be reflected in the final draft Bill which will be presented for scrutiny by a Joint Committee of both Houses.
Lord Strathclyde
My Lords, I know that many Peers wish to speak. Perhaps we could have the Convenor next and then someone from the Labour Party.
Baroness D'Souza
My Lords, does the noble Lord, Lord McNally, agree that two fundamental issues must, or should, underline the deliberations of the cross-party committee? The first is the need to identify the clear and necessary functions of the House of Lords. The second is that any proposals put forward should necessarily enable this House to do its job more effectively.
Lord McNally
My Lords, when we first meet I will draw those statements to the attention of the chairman, because they give a succinct work-in-progress for us.
Baroness Jay of Paddington
My Lords, given that the coalition has clearly set out the policy that it wants to see in terms of the Bill to be presented to both Houses of Parliament, what is the agenda, the remit, for this committee?
Lord McNally
The remit for the committee, taking into account what the Convener of the Cross Benches has just said, is to prepare a Bill. One of the great weaknesses of all our discussions over the past 10 years has been that no one has had a bone to chew on. We are going to produce a Bill.
Lord Forsyth of Drumlean
My Lords, would it not be more useful for the Deputy Prime Minister to set up a committee to look at the performance of the other place, given the amount of legislation that has come to this House to be reviewed and revised without having been debated or even considered in the House of Commons?
Lord McNally
My noble friend has always been skilled at getting an audience on his side and his point may well have merit. But the fact is that the three major political parties which fought the last election all had in their manifestos reform of this place. We are going ahead with those commitments as perhaps the other party should have done at some stage when it had the majority to do so.
Lord Strathclyde
My Lords, let us hear from the noble Lord, Lord Grenfell, and then from the noble Lord, Lord Tyler.
Lord Grenfell
I am most indebted to the Leader of the House. It is almost as difficult to get into an Oral Question these days as getting into Fort Knox used to be. In light of the composition of this very cosy committee, if I may characterise it as that, the exclusion from which of all Back Benchers I find discouraging—to put it ridiculously mildly—can the noble Lord assure us that we will be given plenty of time for pre-legislative scrutiny because I expect that that exercise will be ferocious, and it should be so?
Lord McNally
I could not agree more with the noble Lord, but the point is that this committee is about drawing up a Bill. It is not a debating society and therefore it is absolutely appropriate that those on the committee should represent the official policy of their parties. As I have said before, some of the speeches from the Labour Back Benches should really be made at Labour Party conferences to change Labour Party policy.
Lord McNally
In the mean time, Labour Party representatives will be on this committee furthering what they presented to the British people at the last general election.
Lord Tyler
My Lords, does my noble friend recall that after the White Paper of 2008, the previous Government promised to bring forward for pre-legislative scrutiny precisely the Bill to which he is now referring, but never did so? In order to meet the concerns expressed on all sides of the House, I suggest that the sooner we get a draft Bill for pre-legislative scrutiny before a Joint Committee, as set out by my noble friend, the better. To accelerate that process, I would draw my noble friend’s attention—modestly—to the fact that the Second Chamber of Parliament Bill was introduced in the other House five years ago by Mr Kenneth Clarke, Mr Robin Cook, Mr Tony Wright, Sir George Young and myself.
Lord McNally
The building blocks for this Bill are all around us. The work has been done in many committees; I have served on three over the past 10 years. But this committee is going to do a real job of work that will allow the proper work of Parliament on its proposals.
Schools: Modern Languages
(14 years, 6 months ago)
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Baroness Coussins
To ask Her Majesty’s Government what proposals they have for the teaching of modern languages in primary schools.
Baroness Coussins
My Lords, I beg leave to ask the Question standing in my name on the Order Paper, and I declare an interest as chair of the All-Party Parliamentary Group on Modern Languages.
The Parliamentary Under-Secretary of State for Schools (Lord Hill of Oareford)
My Lords, we are considering our priorities for the national curriculum, including what subjects it should cover. We will be announcing our plans in due course.
Baroness Coussins
I thank the Minister for that reply, but as languages at key stage 2 are no longer to become statutory, will sufficient funding still be available for teacher training in this area? Research shows that learning foreign languages improves children’s written and spoken English, and languages are a significant part of the “vast divide” between state and independent schools, which only yesterday the Government said they want to close.
Lord Hill of Oareford
I start by paying tribute to the work of the noble Baroness as chair of the All-Party Parliamentary Group on Modern Languages. I know that she has kept the flame for modern languages burning and I agree with her wholeheartedly about that. I am a great fan of modern languages and, if it is not too rash a thing to say on my first outing at Oral Questions, of ancient ones as well. As the noble Baroness knows, over 90 per cent of primary schools are offering a language to some of their pupils at key stage 2—70 per cent to all pupils. I welcome also the progress made by the previous Government in attracting and training more language teachers for primary schools. I reassure the noble Baroness that the spending cuts announced for the current financial year should not affect funding for primary languages or for the training of teachers.
Baroness Sharples
My Lords, does my noble friend agree that a problem here is that English is the second language for 27 per cent of pupils coming into schools?
Lord Hill of Oareford
I agree with the noble Baroness. Obviously that increases the challenges that primary school teachers have in teaching languages. However, I have already had the privilege of seeing many good examples where schools are coping with that challenge and managing to teach modern foreign languages as well.
The Lord Bishop of Chichester
My Lords, can the Minister reassure the House that the Government are aware of the importance of languages for our international competitiveness, particularly at the moment? Can he say a little more than he said in answer to the noble Baroness, Lady Coussins, about how the Government intend to continue the recruitment, education and training of teachers, which seems particularly vulnerable at the moment?
Lord Hill of Oareford
As to helping international competitiveness and business, I agree that modern languages have an important part to play. I also have a slightly old fashioned view that education is a good in its own right; I do not wholeheartedly share the concentration there has been in recent years on education being merely a means to a job. As to the funding for recruiting more language teachers, I understand the points made by the right reverend Prelate. As I said, funding is in place for this year. We will continue to look at the issue but in the context of the difficult overall public spending decisions in the CSR.
Lord Wright of Richmond
The Minister has already drawn attention to the fact that, although 90 per cent of all primary schools teach some foreign languages, slightly fewer than 70 per cent provide such teaching for all stage 2 pupils. Is there not a risk in this difference in provision of something which everyone accepts is of benefit to all children? Should it be applied selectively in this way?
Lord Hill of Oareford
I am grateful to the noble Lord for that important point. There will be a consultation as part of the review of the overall national curriculum and how it should be delivered. I hope that as many noble Lords as possible—I do not think many will need much invitation—will contribute to that review because it is extremely important that we get this right.
Baroness McIntosh of Hudnall
My Lords, does the Minister agree that whereas teaching primary school children modern languages is obviously of great benefit to them, it has to be sustained into the secondary system as well? There is, I suspect, an increasing shortage of suitable candidates, and the issue of training teachers will be resolved only if the teaching of modern languages in secondary schools is made compulsory to a higher level than is currently the case and more people are encouraged to take them on at university.
Lord Hill of Oareford
I understand those points very clearly. In regard to the overall review of the curriculum, its content and the question of what should and should not be compulsory, we shall need to reflect on those points and come up with conclusions in due course.
Baroness Walmsley
Given the continued need for more specialist teachers and the continued budgetary constraints, will the Minister join me in welcoming the British Council scheme which funds temporary cover for teachers to go away during term time, as well as their own time, to foreign countries to increase their language skills? Will he encourage other organisations to put their money into similar schemes?
Lord Hill of Oareford
My Lords, I will be very interested to hear more about the British Council scheme; it sounds extremely good. I would like to talk to the noble Baroness about that and to see whether we could encourage other organisations into it.
Baroness Royall of Blaisdon
My Lords, following the excellent debate on the Academies Bill yesterday—and I hear what the noble Lord has said about reflecting on the teaching of languages in primary schools—I wonder whether, in the Government’s view, the Government’s primary academies should be obliged to teach every child a language. Have the Government made any assessment of the impact of schools opting out of funding provision for teaching languages in other schools in areas where it is a shared service?
Lord Hill of Oareford
The basic question about the overall content, how the curriculum should be constructed and how that applies to all schools is one that the Government are looking at, with regard to academies. There is a presumption that academies will have slightly more freedom over their curriculum than other schools. They are obviously under an obligation to provide a broad and balanced curriculum. Clearly, many academies are already providing excellent language teaching as part of those courses.
Israel and Gaza
(14 years, 6 months ago)
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Lord Campbell-Savours
To ask Her Majesty’s Government what recent discussions they have had about the situation in Israel and Gaza.
The Minister of State, Foreign and Commonwealth Office (Lord Howell of Guildford)
My Lords, the United Kingdom is in regular contact with the Israeli and Palestinian Governments and our international allies regarding the current humanitarian situation in Gaza and the wider issues relating to the peace process. As my right honourable friend the Foreign Secretary said in the other place, it is essential that there should be unfettered access to Gaza, not only to meet the humanitarian needs of the people of Gaza but to enable reconstruction of homes and livelihoods and permit trade to take place.
Lord Campbell-Savours
My Lords, in the face of threats to intervene and break the blockade by Iranian Revolutionary Guard naval units, why cannot the United Kingdom Government announce that they are prepared to challenge the blockade by providing a naval escort for a flotilla of ships carrying humanitarian aid into Gaza, aid which has been given prior clearance by the European Union in the way that Bernard Kouchner has suggested? Would that not be a far better way to proceed? The Israeli Government are far more likely to heed that kind of initiative.
Lord Howell of Guildford
I recognise the noble Lord’s strong feelings on this matter, but we simply do not think that that is the right way to proceed. We think that the right way is for the restrictions and the so-called blockade to be lifted beyond the present arrangements, by which some humanitarian supplies get in but not enough. We think that the right way forward is to put maximum pressure on Israel to do that. That is the sensible way forward for Israel’s own security and for the future prospects for the peace process.
Lord Hylton
I agree entirely with the Minister about unrestricted access to Gaza, but are there not immediate questions to be discussed with the Government of Israel concerning the ships themselves, their cargoes, now under arrest, and possibly the personal possessions of persons who have been arrested?
Lord Howell of Guildford
I cannot answer the noble Lord on the personal possessions issue. With regard to the humanitarian goods on these ships, the idea is that they should be shipped on into Gaza. However, unfortunately, it appears that the Hamas group has not been very keen on accepting all that aid at the moment. But that is the procedure that the Government of Israel are trying to adopt in the face of attempts to run the blockade or break the restrictions, which are apparently to be promoted by a number of countries, including some of the Iranian authorities.
Baroness Ramsay of Cartvale
Does the Minister agree that, while there is a great need to improve the access for aid and commercial goods into Gaza, it still requires any new regime allowing new materials into Gaza to take great care not to allow in weapons that might be used against Israel?
Lord Howell of Guildford
The noble Baroness is absolutely right. This is the dilemma. Israel does have the right to restrain the import of weapons, bombs and so on into the control of Hamas. At the same time, we all want to see the sufferings of the people of Gaza minimised and the maximum supplies of food, building materials, medical supplies and so on imported into Gaza. That is the dilemma that must be solved. The right way forward is along the lines proposed, with pressure on Israel to do that rather than creating some head-on conflict with Israel when it is the country with which we need to co-operate to achieve the two-state solution that we all want to see.
Lord Dykes
In the mean time, my Lords, will my noble friend confirm that the peace talks and the proximity talks are proceeding apace, despite the continuing weakness of the quartet mechanism, which is deeply disappointing to all observers? Will he reassure us that the sinister rumours that George Mitchell is less than even-handed between Israel and Palestinian lobbies are not true?
Lord Howell of Guildford
I can give that reassurance. I can also tell my noble friend that the Palestinian authorities have shown no inclination to withdraw from the proximity talks or from the talks that might follow them. For the moment that side of the situation holds together, despite all these unhappy developments in recent days.
Lord Anderson of Swansea
The Minister must recognise that Israel has legitimate security concerns and cannot be expected to allow unfettered access. How, then, do the Government respond to the specific proposal from Bernard Kouchner that the European Union offers to provide some form of border monitoring for material entering Gaza to ensure that it is only for humanitarian purposes?
Lord Howell of Guildford
There may well be something in that idea. Of course there is the other border on the Egyptian side, which was open temporarily and has now been closed. All these matters are to be pursued to see whether we can find that key reconciliation between the need to end the suffering of the people of Gaza and Israel’s legitimate security concerns.
The Lord Bishop of Bath and Wells
My Lords, while I recognise the appropriate need for Israel to be protected, the issue of building materials in relation to the people of Gaza is nevertheless important, given the recent campaign against Gaza involving bombing and the destruction of houses. What can Her Majesty’s Government do in the interim to encourage the Israeli Government to allow building materials to go into that country? Surely they are fundamental to the humanitarian effort.
Lord Howell of Guildford
The right reverend Prelate is right. The answer has to be that maximum pressure and encouragement must be placed on the Government of Israel to do what is actually in their own interest, which is to minimise the restrictions, to lift the blockade as far as they can consistent with their security and to continue to expand the amount of provisions already going into Gaza from Israel as well as from Egypt. That is the way forward and we should not be deflected from it.
Arrangement of Business
(14 years, 6 months ago)
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The Chancellor of the Duchy of Lancaster (Lord Strathclyde)
My Lords, it may be helpful for me to say a few words about the procedural Motion in the name of the noble Lord, Lord Howarth of Newport. The Motion proposes that the Local Government Bill should be referred to the Examiners of Petitions for Private Bills to allow them to consider whether the Bill is hybrid. The Companion to the Standing Orders explains that:
“Hybrid bills are public bills which are considered to affect specific private or local interests, in a manner different from the private or local interests of other persons or bodies of the same class, thus attracting the provisions of the Standing Orders applicable to private business”.
The Bill, like every public Bill, was considered by the Public Bill Office before introduction. It took the view that the Bill was not prima facie hybrid. A letter from the Clerk of Public Bills explaining why that view was taken has been placed in the Library of the House. The Companion makes it clear, however, that it is open to any Member who considers that a public Bill may be hybrid to move that the Bill be referred to the Examiners. As with all matters of procedure, while the Clerks can advise the House, it is ultimately for the House to decide whether the Bill should be referred to the Examiners. I should perhaps make it clear that if the Motion in the name of the noble Lord, Lord Howarth, is agreed to, the Second Reading will not take place today.
Local Government Bill [HL]
(14 years, 6 months ago)
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15:37 - Division on Lord Howarth of Newport's Motion. - Ayes: 154 / Noes: 150 - Motion agreed.
Lord Howarth of Newport
My Lords, I declare an interest as a resident of Norwich. I want to put it to the House that there is a strong prima facie case that the Local Government Bill is hybrid, and that it should therefore be referred to the Examiners to determine whether that is so. As soon as they saw it, a number of experienced colleagues said surely this Bill is hybrid.
The noble Lord the Leader of the House just told us the definition of hybrid Bills in the Companion, but perhaps it would help the House if I quoted the words again. The definition states that they are,
“public bills which are considered to affect specific private or local interests, in a manner different from the private or local interests of other persons or bodies of the same class, thus attracting the provisions of the Standing Orders applicable to private business”.
In the next paragraph, the Companion goes on to say:
“It is open to any member who considers that a public bill may be hybrid … to move that the bill be referred to the Examiners. Such a motion is usually moved immediately before second reading”.
These semi-mythological creatures, the Examiners, are the Clerks of Private Bills in both Houses.
I recognise that hybridity is not for amateurs. These are deep waters and a prudent politician does not even get into his bathing trunks, let alone plunge in. But I fear that, unlike my right honourable friend the former Prime Minister, prudence has never sufficiently been my watchword.
I regret that I was unable to give the House more notice of this Motion. The difficulty has been that the Government have advanced this Bill with extraordinary speed. We saw the Bill only on the eve of the long bank holiday weekend. That was followed by a day when the House was not sitting, so I was not able to consult the Clerk of Public and Private Bills until the following day, last Wednesday. I then had to discuss with Norwich and Exeter City Councils whether they wished to seek the advice of parliamentary agents and counsel. The lawyers then worked at top speed, with e-mails flying around all over the weekend and late at night. Counsel's formal opinion and a letter of advice from parliamentary agents were delivered yesterday, and in the light of them I tabled the Motion on the Order Paper for today. We could not have got to this point more quickly, and I have had no desire to wrong-foot the House.
In any case, while the concept of hybridity may be obscure and elusive, the issue before us now is simple. Do we consider that there are sufficient reasonable arguments that the Bill is hybrid to warrant referring it to the Examiners?
Plainly, the Government have sought to draft this Bill so that it is not hybrid. However, they are navigating tricky waters, and the House ought to satisfy itself on this point, since there are major implications for how we proceed depending on it. If the Bill were judged by the Examiners to be hybrid, after Second Reading, as I understand it, the Bill would go to a Select Committee which would receive and examine petitions and question witnesses and then report to the House before following the usual course of a Public Bill.
It seems clear to me that the Bill is hybrid on this ground most obviously, although there are others. Norwich and Exeter are treated differently from other local authorities under this legislation for the following reason. Since the Bill, significantly, does not repeal Section 1 of the Local Government and Public Involvement in Health Act 2007—the Act that permits the Secretary of State to invite a local authority to make a proposal for reorganisation into single-tier government—the Bill contemplates that authorities will in the future, after the Bill has become law, have the opportunity to make such proposals. However, the Bill specifies that Norwich and Exeter—just those two named authorities—are not to become unitary authorities. It seems plain as a pikestaff that the local interests of Norwich and Exeter are especially prejudiced for the future. In the language of the Companion, Norwich and Exeter are affected,
“in a manner different from the … local interests of other … bodies of the same class”—
other councils that may wish to propose unitary reorganisations.
However, I speak merely as a politician and not as a lawyer. Far more significant are the views of learned counsel. I will not attempt to paraphrase either the lengthy opinion of Mr Peter Oldham QC or the shorter but densely argued advice of Mr Alastair Lewis of Sharpe Pritchard, parliamentary agents. Both those documents came in after the Clerk of Public and Private Bills had given his opinion that this particular Bill was not hybrid. I will just say that Mr Oldham concludes his opinion with the words:
“In my view, there are proper and reasonable arguments that this Bill is hybrid”.
Mr Lewis says he believes that a further line of argument that he has put forward,
“represents a strong argument in favour of saying that the Bill is hybrid”.
What I am not proposing to the House in this Motion is that the House should decide here and now that the Bill is hybrid. Nor is this a debate about the rights and wrongs of the Government's policy on Norwich and Exeter—that is for Second Reading. What I am proposing is that the House should recognise that there are various views about whether this Bill is hybrid, all put forward in good faith by serious people—professionals who are competent to make such a case—and agree that all these arguments should be considered carefully and expertly by the Examiners so that they can determine whether the Bill is hybrid in accordance with the procedure that Parliament has provided.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham)
My Lords, I am not sure how many noble Lords will want to take part in this debate, but I thought that it might be helpful if I put forward the Government’s view now, so that both views are available for further consideration. I thank the noble Lord, Lord Howarth, for explaining the reasoning behind his Motion and the opinions that he has received. I assure him that this Government have their view, which I shall put forward now.
The Local Government Bill was introduced into this House on 26 May and is scheduled to have its Second Reading, as the noble Lord mentioned, once this Motion has been disposed of. The Motion refers the Bill for determination of its status and so has taken precedence over Second Reading.
As the noble Lord said, the aim of the Bill is to stop the proposed restructuring of councils in Devon, Norfolk and Suffolk, which will save the taxpayer some £40 million. I will not take up the House’s time by presenting the rationale for the Bill, as we hope to get to that later this afternoon, after the Motion has been considered.
The Motion tabled by the noble Lord asks the House to refer the Bill to the Examiners. He has expressed doubts that the Bill should be treated as a public Bill on the basis that he believes—he has cited other authorities, too—it to be hybrid. I need to say at the outset that, despite what the noble Lord has said, he has left it to this very late moment to bring the matter to the House and has given little notice for the House to be able to deal with it. I must make it clear that the Government strongly believe that, whatever the noble Lord has said, the Bill is not hybrid.
That is not only my view. The noble Lord should be aware of the letter I received from the Clerk of Public and Private Bills on 3 June, which states that the advice of the Public Bill Office was that,
“the Local Government Bill currently before the House is not prima facie hybrid”.
A copy of this letter has been placed in the Library of the House, and I drew the noble Lord’s attention to it earlier. The letter also sets out clearly the reason why the Public Bill Office does not consider the Bill to be hybrid. It may assist the House, for those who may not have had an opportunity to see it, if I quote the relevant sections of the letter. This is a subject that not all Members will be intimately familiar with, hybridity being something which we do not often consider.
The letter begins by giving a definition of hybrid Bills—which act as the noble Lord, Lord Howarth, has already described. It states:
“A hybrid bill is defined as ‘a public bill which affects a particular private interest in a manner different from the private interests of other persons or bodies of the same category or class’”.
The letter goes on to give the Public Bill Office’s reasoning as to why the Local Government Bill is not prima facie hybrid. It states:
“The concept of ‘class’ is therefore crucial to deciding whether a bill is hybrid or not. Erskine May states that: ‘A class must be defined by reference to criteria germane to the subject matter of the bill’.
The Local Government Bill is a tightly drafted one-topic Bill which relates only to proposals made, but not yet implemented, for the creation of unitary authorities under Part 1 of the Local Government and Public Involvement in Health Act 2007. It does not affect Orders made under Part 1 of the 2007 Act which have already been implemented. So for the purpose of judging hybridity, the class, defined by reference to criteria germane to the subject matter of the bill, is those councils which have made proposals—as yet un-implemented—for unitary status under Part 1 of the 2007 Act.
Section 1 of the bill contains the substantive provisions preventing the implementation of proposals under Part 1 of the 2007 Act. Subsection (1) prevents any further Orders being made under Part 1 of the 2007 Act to implement existing proposals for unitary authorities. I understand that at the moment, the only proposal which has not been the subject of an Order is that which was made by Ipswich Borough Council. Subsection (3) revokes the Orders which have already been made (but not implemented) in respect of Norwich and Exeter.
The class of bodies affected by the bill is clear, and all members of that class are treated equally, so we do not think”—
this is from the Public Bill Office—
“that any hybridity arises. The fact that Norwich and Exeter are named on the face of the Bill, in the Titles of the Orders to be revoked, while Ipswich is not, does not make any difference to our view on hybridity. All three bodies are being treated equally”.
Those are the terms of the letter that has been sent out. It gives the full basis for why the Government do not believe that hybridity is an issue.
I am slightly surprised that the advice of the Public Bill Office does not satisfy the noble Lord, Lord Howarth, that the Bill is not prima facie hybrid. I hope that, having aired his concerns—which has given me an opportunity to clarify this issue—the noble Lord will withdraw his Motion requesting that the Bill be sent to the Examiners, not least because of the considerable delay to the future of the Bill. We have a long tradition in this House of respecting the advice of the Public Bill Office. The noble Lord would need to make a very good case for the House to depart from that advice, and I do not believe that he has done so.
Lord Lloyd of Berwick
Is not the problem—I am not sure that the noble Baroness has dealt with it yet—that the advice given by the Public Bill Office was given, as I understand it, before it had seen the evidence to which the noble Lord, Lord Howarth, referred? If there is, as a result of that evidence, any real doubt—a prima facie case, or whatever you like to call it—the Bill ought to go the Examiners. That is perfectly clear.
Baroness Hanham
My Lords, my understanding is that the Public Bill Office has not changed its view as a result of that advice, and I intend to proceed on that basis. Before I sit down, I should make it clear that if the noble Lord decides to put his Motion to a vote, I will have no option but to ask the House to oppose it as, were he to succeed, it would delay the passage of the Bill and clarity for the future of the local authorities concerned, which need a decision.
Lord Elystan-Morgan
I rise to support the Motion. Even in my greatest delusions of grandeur, I do not consider myself a constitutional lawyer. However, with very great respect to the House, I believe that this matter turns on a fairly narrow point to which I shall come in a moment.
The definition of hybridity stems from a ruling of the Speaker of the House of Commons in the Session 1962-63, and very much follows the words of the Companion which have already been quoted. The issue, therefore, is whether or not certain bodies or private interests, which stand on the same ground in respect of being private or being limited as bodies, are treated in exactly the same way. What is not spelt out in Erskine May, as I understand it, is whether or not there might be justification for treating bodies of that nature, which are of the same class, differently as different considerations relate to them. As I understand it, nothing in Erskine May casts light on that fundamental issue.
Since the enactment of the Local Government and Public Involvement in Health Act 2007, 13 orders have been made creating unitary authorities in Cornwall, Durham, Northumberland, Shropshire, Wiltshire, east Cheshire, west Cheshire and the city of Chester, Bedford County, mid-Bedfordshire, south Bedfordshire, Norwich and Exeter. The first 11 of those authorities gained unitary status in 2008. By 2009, those procedures were well set and, indeed, the transitional stages had been completed. The other two bodies with which we are concerned were dealt with by this House—if I remember rightly—on 22 March and, clearly, the transitional provisions have not begun to operate. Therefore, their situations are very different. If that be the basis of distinction, there would be justification for dealing with them differently. However, as far as I know, there is no rule which says that special cases need special exemptions: either you deal with all bodies in exactly the same way or you fall foul of hybridity. As I say, 13 orders have been made since 2007 and there has been no challenge in 11 of them. The other two were challenged in this House. Is that challenge valid, or not? That is the narrow issue that this House should consider.
Baroness Hollis of Heigham
My Lords, I, too, support the Motion. I declare an interest as a resident of Norwich and as a former leader of the city council. I wish to repeat a couple of points in addition to the excellent speeches that we have heard from all around the House. This Motion is not about the merits or otherwise of the Bill. It is certainly not about the merits or otherwise of unitary status. The debate is not even about whether the Bill is hybrid, despite the speech of the Minister, who is seeking to act as judge and jury—if I may put it that way—on that issue. The House is not being asked to decide that. That is a matter for the Examiners, as the noble and learned Lord, Lord Lloyd, put it so well. What we are discussing is a procedural “reasonable doubt” issue.
The most relevant guideline comes from the Speaker’s ruling, also on a local government Bill, which was quoted by my noble friend. I repeat it, because it represents a very low hurdle indeed. The ruling stated:
“I accept the true position to be this, that if it be possible for the view to be taken that this Bill is a Hybrid Bill”—
I repeat, “if it be possible”—
“it ought to go to the examiners. There must not be a doubt about it”.—[Official Report, Commons, 10/12/62; col. 45.]
I will not explain what the hybrid issue is; the noble Lord, Lord Elystan-Morgan, has done that very well. However, given that there is such a very low hurdle, is it possible, in the words of the Speaker of the Commons, for the view to be taken that the Bill is hybrid? Such a view should clearly not be whimsical or something that I thought up in the bath. In fact, we have the view of learned counsel and of parliamentary agents, Sharpe Pritchard, which has stated that it is strongly arguable that this Bill is hybrid. Others, perfectly properly, may take a different view.
However, we are not asking the House to judge that this afternoon. That is a matter of judgment. We are asking it merely to decide whether the arguments from QCs and parliamentary agents meet the very low hurdle of the test set by the Speaker, when he said,
“if it be possible for the view to be taken that this Bill is a Hybrid Bill”,
it should go to the Examiners. Opinion from learned counsel and parliamentary agents would seem to me not to be frivolous, but a serious one that should be explored by the Examiners.
Counsel’s opinion is, therefore, unambiguous and it seems to me that the Speaker’s ruling applies unambiguously, as the noble and learned Lord, Lord Lloyd, and the noble Lord, Lord Elystan-Morgan, argued. If the House ignored that ruling—and the Clerks’ advice was given in advance of them seeing learned counsel’s opinions to the contrary—that would flout not only the clear ruling of the Speaker and the House would be, if I may say so, behaving in a very high-handed way which all of us have studiously sought to avoid, precisely because we are not elected.
Whatever our views about the Bill—and I fully accept that they will be various—I do hope that we all agree that we should be seen to be meticulous and transparent in our procedures. If not, we cut away further at our distinguished history and that will leave us more exposed in the future. Whatever noble Lords’ views about the merits of the Norwich and Exeter case, I hope that they will support this Motion, because that would show the House of Lords at its most reflective best.
Lord Richard
My Lords, perhaps I may make two or three points. First, this Motion is certainly not about the merits of the Bill. As far as the Bill is concerned, I was not in favour—and I am still not in favour—of Exeter becoming a unitary authority. On the contrary, as someone who spends a large part of his time down in Devon, it is important that Exeter should remain with the rest of Devon. However, that is not the issue. I totally agree with my noble friend Lord Elystan-Morgan when he said that it is a simple point—it is. Where are we? What is the dilemma facing the House? It is simply this: on the one hand, we have the Clerks. They have given their respected, respectful and highly considered opinion which states that the Bill is not hybrid. On the other hand, we are now in a position whereby an eminent Queen’s Counsel, who is experienced in this branch of the law, has also given a firm and unequivocal opinion that the Bill is, or could well be, hybrid. How can we resolve that? We cannot.
I am not in a position this afternoon to argue whether or not the Bill is hybrid, but I am in a position—and I hope that the rest of the House will follow me in this—to say that there is a clear argument as to whether the Bill is or is not hybrid. That being so, the procedures on how to resolve that are perfectly clear: the Bill has to go to the Examiners. The Examiners are there to assist the House in coming to a conclusion. It seems to me that we cannot come to a conclusion today, except by ignoring one or other reputable opinion by reputable people. I am not prepared to ignore one set of views in favour of another; I am not in a position to make up my mind. There is a clear issue here and, that being the case, the Bill should go to the Examiners and I shall support the Motion.
Lord Howarth of Newport
My Lords, it is appropriate that this has been a short debate. The noble Baroness, Lady Hanham, trailed her Second Reading speech but this is not a debate about the merits of the Bill. She told us that the Government strongly believe that the Bill is not hybrid. We know that they strongly believe that but others, equally strongly, take the contrary view. I perfectly respect the views of the Clerk of Public and Private Bills and I respect his role. I make no criticism whatever of the advice that he has given, which I think has been entirely proper. However, I think that it is wrong of the noble Baroness to invite the House to agree with her that the Bill is not hybrid, because that is not the issue or the role of this House.
The question is whether there are reasonable arguments for saying that the Bill is hybrid. The crucial point, made very well by the noble and learned Lord, Lord Lloyd of Berwick, was that opinion that this House should not ignore was provided to us after the Clerk had given his view. Therefore, we cannot question that there is doubt about the status of the Bill. The Speaker’s rulings have made it absolutely clear that, where there is such doubt, the Bill should be referred to the Examiners so that they can determine the matter. The noble Lord, Lord Elystan-Morgan, explained the nature of the doubt. My noble friend Lord Richard, a former Leader of the House and a QC—incidentally, not a supporter of unitary status for Exeter and Norwich—advised the House that it would be appropriate to refer the Bill. I do not think that this House can ignore the advice received from QCs or eminent parliamentary agents, and I very much hope that we will therefore refer the Bill to the Examiners.
Lord Strathclyde
My Lords, a few moments ago when I was making the procedural statement, I explained that if the Motion was carried we would not continue with Second Reading. Therefore, we will not continue with Second Reading.
However, because the business has now effectively closed down rather sooner than we had anticipated, the noble Lord, Lord Levene, who has the next business, is not in his place. Therefore, I suggest that we adjourn the House during pleasure until 4.30 pm until we can find the noble Lord.
UK: Competitiveness
Lord Levene of Portsoken
To ask Her Majesty’s Government what factors they take into account when making sure that the United Kingdom maintains its competitiveness.
Lord Levene of Portsoken
My Lords, I am very glad to introduce this short debate this afternoon, not least because it will mark the maiden speech of the noble Lord, Lord Sassoon, who is now Commercial Secretary to the Treasury. The issue of competitiveness has particular resonance for me since I served in two government posts in previous Administrations, the first in the Ministry of Defence with responsibility for defence procurement and the second working for the then Prime Minister with responsibility for a programme called “Competing for Quality”. Both posts were essentially based on the premise that competition brings with it efficiency and profitability.
For quite some time now, we have been living in an atmosphere of doom and gloom. The purpose of this debate, however, is more positive. It is to explore what policies will allow us, as a country, to export more goods and services and to attract investment—in short, to stop our morbid fascination with the financial crisis of 2008; to stop acting like carrion birds picking over what happened and who was to blame; and to start working out how we are going to make enough money to pay off our enormous debts. The time has come to stop wallowing in our condemnation of a group of greedy and unscrupulous bankers. Everybody enjoys the view from the moral high ground, but the new Government must tear their eyes away from the past and get to work fixing the economy.
The Prime Minister has said that he intends to reopen Britain for business. However, I would argue that Britain has never been closed for business. I am chairman of Lloyd's—an interest which I declare this afternoon—and in 2009, we made a record profit. Lloyd's is not the only business in the United Kingdom that has shown prudence and perseverance in facing up to the financial crisis. For example, in 2008, the insurance industry contributed £8.2 billion to the Exchequer. There are millions of men and women working up and down the country who are exporting goods and services. The starting point for this debate is to ask the Minister what his Government can do to help those exporters to operate in a competitive environment.
It is clear that the UK must grow its way out of debt, and the primary way to do this is both to sell our goods and services to the rest of the world and to encourage foreign capital into this country. The World Bank has described Britain as among the easiest places to set up and run a business. We need to decide once and for all: is this description of the UK as a place for international business to thrive and prosper a point of pride, is it something that we fear or is it even a point of shame?
I firmly believe that if we are to derive the enormous benefits of living in a globalised world, the UK must engage fully with the international economy. We cannot deal in half measures and mixed signals. For example, while immigration controls remain absolutely necessary, we should not throw the baby out with the bathwater by preventing experts from businesses outside the UK who want to set up here bringing their key staff with them or by excluding students, who are the lifeblood of a huge industry.
There are two areas to consider. The first is how we promote UK exports and offer practical assistance to help those exporters plug in to overseas markets. Here I pay particular tribute to the work of UK Trade & Investment. Lloyd’s, which is one of the leaders in this country of invisible exports, has received outstanding support from the staff of UKTI in the UK, and even more so from its staff, who are based in our embassies all over the world.
The second essential component is to ensure that we have a business environment in which people want to trade. Many factors make the UK attractive, but the most hotly contested at present are what our tax rates should be and what business regulations we should set. This is where the Government must once and for all take decisive steps to prove that they are on the side of business. When I served as lord mayor of the City of London in 1999, I was able to travel around the world saying that we had one of the most competitive tax regimes anywhere. This is no longer the case, and the totally spurious arguments that increasing direct taxation has little effect on retaining the best talent in this country, or in attracting new talent to come here, must be corrected.
Businesses today, even British businesses, do not have to trade in the UK if they are offered a better deal elsewhere. This is particularly true of financial services, which require no factories, warehouses or heavy industry, and can move easily from one jurisdiction to another. We have experienced this first hand at Lloyd’s, where only nine out of the 53 businesses that operate in the market remain domiciled in the United Kingdom. They are re-domiciling not only in the traditional tax havens but within the European Union, so it is critical that the Government take urgent steps to re-establish the UK as the most competitive location in the European Union.
The previous Government's levy on bonuses accrued a £2 billion windfall for the Treasury, but this kind of sudden taxation is playing with fire. One day there will be no bonuses, and no bankers left to tax, and you do not need a team of Treasury accountants to tell you that 50 per cent of nothing is nothing. I am becoming very concerned that the phrase “re-balancing the economy” is a sort of code for shrinking the financial services sector. That would be a mistake of huge proportions. If we want to boost manufacturing in this country, that is one thing, but we should not view a thriving world-class financial services sector as a barrier to this ambition. This is an industry that we happen to be very good at. It is an industry that has driven our economy and created hundreds of thousands of jobs. The hand wringing and recrimination that we have seen directed at the entire sector of more than a million workers in this country would not happen in other countries. Have noble Lords noticed the Germans castigating their car industry? Have any of your Lordships noticed the French castigating their wine industry? Not only does the financial services industry suffer in this way; so too does the other industry with which I was closely associated: the defence industry—another huge earner of foreign exchange and an employer of hundreds of thousands of people.
The domestic criticism of our financial services industry is being noticed overseas. One leading international banker very recently described the tax and regulatory environment in the UK as scary. In tax terms, the financial services punch above their weight. Last week, the lord mayor set out in a speech that UK financial services accounted for £61.4 billion in the tax take for the fiscal year ending in 2009. This equates to 57 per cent of the health budget, 75 per cent of the education budget and 150 per cent of the defence budget.
Today we need to move on, to be confident that we have learnt from our mistakes and to start once again building on what we are good at. I hope that the Minister and all noble Lords here today can send a clear message that we are proud that the City of London, and the whole of the UK, is a place where the world comes to trade.
The new Government find themselves at a crossroads. We can be ashamed of our success in certain sectors or we can celebrate it. We can pursue a path where we spend the next few years poring over the post-mortem of the financial crisis or we can take a pragmatic path—one that leads to jobs and money for British people. This decision needs to be taken now. The Government need to put business out of its misery rather than add to it. I hope that the Minister will be able to reassure us that this will be a feature of his department's forthcoming Budget.
Baroness Noakes
My Lords, I congratulate the noble Lord, Lord Levene, on securing this important debate so early in this new Parliament. As we would expect, his speech was masterly and one with which I am in almost complete agreement. It is a great pleasure to take part in a debate on economic matters from the relative calm of the Back Benches, but it is an even greater pleasure to take part in a debate which features the first appearance at the Dispatch Box of my noble friend Lord Sassoon.
Usually a maiden speech is followed by other speakers who are able to say what a marvellous maiden speech has been made. But my noble friend has chosen to make his in a debate in which he will speak last. However, I know that he will make a marvellous speech and therefore have no hesitation in congratulating him on that in advance and on being a marvellous Minister.
Back in 1997, the UK was a competitive place to do business. We were seventh in the World Economic Forum's competitive league table. Last year’s report, the latest, shows that we have slumped to 13th. The UK will not lift itself out of the economic mess which the previous Government created unless our competitiveness is restored. It is as simple and as complicated as that. Growth and jobs are essential to our recovery and they will not come without a big improvement in our competitiveness.
I would like to focus my remarks on two aspects of competitiveness—tax and regulation, to which the noble Lord, Lord Levene, has also referred. Again back in 1997, the World Economic Forum ranked us fourth in the world for tax and regulation. The last report shows that we had slumped to 84th and 86th for tax and regulation respectively. This shows the scale of the task facing our new Government.
The Institute of Directors recently estimated that the administrative costs alone of regulation are now nearly £80 billion a year, which is not much short of 6 per cent of GDP. I welcome the coalition's plans for a one-in, one-out rule on new regulations and sunset clauses for both regulations and regulators. These initiatives should help to stem the tide of regulation but they may not involve a significant reduction in the burden of regulation. I hope that the Government will look again at whether there should also be a downward ratchet on the burden of regulation—for example, through the use of regulatory budgets, which decline year on year.
The EU is the source of most of our new regulations and those regulations typically offer low cost-benefit ratios. The Commission has never embraced the goal of reducing the burden of regulation as opposed to the administrative costs of regulation. What can my noble friend tell the House about our Government’s determination to make a difference on EU-sourced regulation?
Turning to taxation, I welcome the fact that the Government are committed to not implementing Labour's tax on jobs. I also welcome the corporation tax reforms where simplifying reliefs and allowances will allow the headline rate of corporation tax to come down. But while reducing the headline rate of tax is a good thing, if it is achieved only by shifting around reliefs and allowances, in the short term it merely creates winners and losers, and in the long term it is not enough to make the UK a more competitive place for business. We need a commitment to much lower business taxes as well, and the Government’s aim to create the most competitive tax system in the G20 is a good first step. But we must not take our eye off the nimbler fiscal regimes of the emerging economies because they will be the ones wooing inward investment away from our shores.
We have an inordinately complicated tax system which is a drag on the UK’s competitiveness. Our party had a clear commitment to an independent office of tax simplification, building on the excellent work of my noble and learned friend Lord Howe of Aberavon. Can my noble friend say whether the Government will press on with this? Do our Liberal Democrat partners share our aims in relation to tax simplification?
A competitive tax environment has to go beyond business taxation; it must embrace personal taxation too. Top rates of taxation and national insurance of 52 per cent have no part in a competitive tax system. I hope that my noble friend will confirm that the Government understand that our personal tax system can be as important as our corporate tax system in terms of encouraging enterprise within the UK and attracting businesses from abroad. I hope he will agree that a tax system is not a fair one for the UK as a whole if it actively discourages business and enterprise.
That brings me to my last point on tax; namely, capital gains tax. My noble friend will be aware that the coalition’s adoption of the Liberal Democrat’s policy on capital gains tax has no popular support in our party or with the business community. I shall do no more today than quote from Arthur Laffer’s article in last week’s Spectator:
“Raising the capital gains tax rate does an inordinate amount of damage to an economy … Raising tax rates on the rich and especially on capital gains is about as bad an idea for the UK as I could imagine”.
I do not expect my noble friend to reveal what will be in the Budget planned for later this month, but I hope he will confirm that our Government will have the competitiveness of the UK at the very heart of that Budget.
Lord Haskel
My Lords, I, too, congratulate the noble Lord, Lord Levene, on putting down his Question and I very much welcome his tone of optimism. But we really need to know and understand what is the coalition Government’s view on competitiveness, and who better to explain it than the noble Lord, Lord Sassoon. He comes with a formidable reputation and I look forward to what he has to say. I also congratulate him on his first appearance at the Dispatch Box.
For many, competitiveness refers to our ability to trade: the exchange rate for sterling. Some would say that all we have to do is reduce the value of sterling and we would become more competitive. If only life were so simple. Yes, with the recent devaluation of sterling, our exports have increased, but in addition we need to substitute imports because they have become more expensive. To increase our exports we need more of the brains, skills, supply chain, investment and all the other things, tangible and intangible, that go into successfully supplying goods and services. It may be complex, but what do the Government think is a competitive exchange rate?
Innovation, the ability to convert science and technology into products and services has become a race between nations to translate discoveries into economic success stories before other nations do so, and our ability to do this is crucial to our competitiveness. The Labour Government put a lot of effort into helping British industry win this race, so where do the coalition Government stand? Are they going to continue this effort or cut it? And to be competitive, most countries have built up an infrastructure to bridge the gap between research, technology and commercialisation. Here, it is the task of the Technology Strategy Board to deliver our national strategy and to bridge the gap. Its innovation agenda is crucial to our competitiveness. Does the Minister agree?
Equally important is how good our financial sector is at financing the enterprise and the new technologies essential to make us more competitive. The Hauser report and the recent report from the Council for Science and Technology lists many areas of new technology where we currently have a technical leadership and a defensible technology position, giving us a very good chance of becoming competitive. Are the Government going to accept these recommendations? Will they ensure that the finance is available?
Or is there no role for government in this? Tory dogma says that too much government stifles individual initiative and so it is best to rely on market forces and individual initiative. Others say that the state is an engine of progress in competitiveness. At the same time, Ministers speak of shifting the responsibility for this kind of support downwards from national to local, but local government has been a big loser in the first round of cuts. Are Ministers looking both ways? Where does the compromise lie?
The noble Baroness, Lady Noakes, spoke about taxation. Many say that the debate about capital gains tax is central to our competitiveness. They say that taxing capital gains saps initiative. Unfortunately, well meaning tax concessions to encourage this initiative have unintended consequences, such as hedge fund managers paying tax at a lower rate than their cleaners. Of course, the real way to tackle this from a competitiveness point of view is to tax consumption and not income. Is the Minister prepared to go along this route?
The noble Baroness, Lady Noakes, and the noble Lord, Lord Levene, spoke about regulation. All new Governments tell us that the less regulated we are the more competitive we become. Of course poor and outdated regulation needs to be cut, but this is not the real threat to our competitiveness. As I said in the debate on the Queen’s Speech, the real threat to our competitiveness is the absence of competition through unregulated market failure. On this the coalition agreement is silent. By choosing to be populist and ignoring the important, the Government will not help our competitiveness.
I agree with the noble Lord, Lord Levene, that our attitude towards world trade is very important. Will we be more competitive by being independent or by advancing international co-operation? Some say that to be more competitive we should abandon many of the rules of the European single market: “Trade with Europe on our own terms”, they say. How is the coalition going to manage our partnership with Europe to strengthen our competitiveness? This is crucial because, thanks to the Labour Government’s handling of this, the European Union has become our biggest market.
There are, of course, other considerations. How far do managers have to consider environmental and social issues—the triple context, as Tomorrow’s Company puts it. Are our businesses more competitive if the attitude of business owners is one of stewardship or one of shareholder value? Which reflects the more responsible economic model the coalition agreement talks about? Which is more competitive?
These are some of the elements that affect our competitiveness, and there are many more. The point that I wish to make is that our competitiveness is not a matter of destiny or chance; we have to choose. Our competitiveness will be determined by the sum total of these choices. What are they to be?
Lord Patten
I am glad to attempt to straddle the oratorical gap left by the noble Lord, Lord Newby, who unfortunately at the last moment cannot be here, but I am sure that my coalition partner would agree fully with everything that I am about to say.
Two texts should underpin my brief intervention in this debate. First, after the mess that we have been left after 13 Labour years, we have to drag ourselves out of it altogether. That may take another very substantial period of time, which will mean cuts in public expenditure and higher taxation affecting us all. However—and here I echo the noble Lord, Lord Levene—I hope that it is not the sort of higher taxation that affects competitiveness. The second of my texts is that any changes in levels of taxation and taxation regimes that deter entrepreneurship, reduce job creation and lower tax receipts would be a bad thing for our citizens, all the more so if the competitiveness of UK business was damaged and foreign investment into our characteristically and happily open economy is discouraged.
My interest in industry in the City is long declared, along with my equally strong declaration of long-standing admiration for how the noble Lord, Lord Levene of Portsoken, has led so many great issues affecting the City of London. I make one other declaration, which may shock those of your Lordships of a rather sensitive disposition. I should come out this afternoon and reveal that a number of bankers are my close personal friends. It is really very counterproductive to excoriate across the piece everyone in any sector of our society; it is the greatest possible mistake. Indeed, living in these straitened times when the blame game has become a national sport, we had better realise that no great sector of society seems popular at the moment. The public sector, with its often unfairly so-called pen-pushers; the world of financial services, to which I have just referred; and, in particular, politicians—all of us are in “Sniper Alley” in one way or another. As we try to be more competitive economically, we should certainly try to be much less competitive in attributing blame and crawling over what has happened in the past, as the noble Lord said.
With the state that we are in, we know that something is not quite right, to put it mildly. The international league tables of competitiveness, to which my noble friend Lady Noakes has already referred, do not tell us all that much of use in the end in exactly how to pull up our economic boot-straps. They just tell us where we are by different measures. There are figures for competitiveness ranked by country, produced by the Centre for International Competitiveness. Then there is the World Competitiveness Yearbook, and the World Economic Forum. Someone remarked in my hearing how luminaries, loving to gather under spotlights like pigeons at a grain sack, not only started turning up at the World Economic Forum in Davos but migrated shortly afterwards to the literary festival at Hay-on-Wye, in a sort of moving caravan of commentariat. These types should listen with particular care to my noble friend the Commercial Secretary to the Treasury, because of his great financial expertise and the literary heritage that flows through his veins. I look forward to the speech that he is about to make to conclude our affairs today.
I hope that my noble friend will not find it too unwelcome if I ask, in the way of the times, that the excellent principle of transparency so much advanced by my right honourable friend the Prime Minister yesterday will extend to making a clear impact statement of the expected economic outcomes of any tax changes after they are announced. If we raise tax—and in particular, as my noble friend Lady Noakes, has said, the capital gains tax—too much, then jobs, profits and tax revenue will all suffer. It always has that effect, or at least history shows that it does. All our experience in the UK and the US demonstrates this. For example, over the 30 years from 1975 to 2005 when capital gains taxes were cut, revenues rose as a share of national economic output and in cash terms. However, when capital gains taxes were raised, the revenues always slumped. May it be different this time around? I do not know. History does not always repeat itself, of course. I am not an economist, just a simple Back-Bench Peer, but one who is fearful that if we go too far down the route of raising the taxes to which I have referred, then down, down, down will go profits, investments, wages and employment.
What I do know is that the new transparency much applauded by the coalition Government demands a clear and open impact assessment of any eventual proposals on taxation when they are known. I hope that if CGT changes have the effects feared by some on competitiveness or productivity—take your choice of term—then we must be clear that the changes in taxation are being produced for good economic reasons, not for political reasons that will have bad economic outcomes.
Baroness Coussins
My Lords, I was privileged to lead a debate six months ago about the contribution of modern language skills to the UK economy, and I am grateful for the opportunity to update the House in today’s debate. I declare an interest as chair of the All-Party Parliamentary Group on Modern Languages.
I refer noble Lords to Hansard of 3 December 2009 for the details of the earlier debate. I shall not repeat it today, but it boils down to the fact that the UK’s competitiveness is being damaged by the inadequacy of foreign language skills in the workforce. Professor Michael Worton concluded in his review last year of modern languages in universities that Anglophone Britons are on course to become one of the most monolingual peoples in the world, with severe consequences for our economy and for business competitiveness. Many surveys of employers have recorded frustration at the lack of language skills among both school-leavers and graduates, to the extent that they are increasingly forced to recruit abroad to capture the skills they need.
The latest report from the CBI, published three weeks ago, says that over two-thirds of employers are not satisfied with the foreign language skills of young people and over half perceive shortfalls in their international cultural awareness. The report found that at least 4 per cent of firms knew that they had missed out on opportunities because of inadequate language skills but that a further 17 per cent did not know whether they had lost business or not, so the scale of the problem could be much bigger. Indeed, other research suggests a significantly higher level of lost business. The British Chambers of Commerce has claimed that 80 per cent of English exporters were unable to conduct business in a foreign language and that 77 per cent of them believed that they had lost business as a result. Research from Cardiff University’s Business School suggests that the UK economy could be losing contracts worth up to £21 billion a year because of a lack of language skills.
French is still the most sought-after language, but Mandarin or Cantonese is now coming a close second. In addition, with new markets opening up in Latin America, the Far East and central Asia, employers are also looking for people with Spanish, Russian and Arabic. German was mentioned by 34 per cent of respondents to the CBI survey, and Polish, Japanese, Portuguese and Korean are also on the employers’ wish list.
The importance of language skills is often underestimated and even dismissed by people who believe that English is enough in the business world, but that is very short-sighted. Yes, English is vital, and yes, we benefit enormously from so many other people wanting to learn it, but 75 per cent of people on planet earth do not speak English at all, and not all tender documents appear in English.
Competitiveness in academic research is another area being undermined by lack of language skills. Much cutting-edge research on, for example, climate change or counterterrorism is by definition international and comparative. Graduates from the US, China, India and other EU countries are more likely to have a language or two in addition to their main subject, whether that is law, chemistry, economics or geography. The British Academy is concerned that that may damage the internationally recognised distinction of UK scholarship. The fact is that there are large sums available on a competitive basis from EU sources for university research groups based in three or more countries, and it will become increasingly difficult for UK universities to put forward convincing applications for such funds.
In debates about competitiveness, the importance of the STEM subjects—science, technology, engineering and maths—is always and quite rightly a top-line issue. But the Minister should remember that languages have also been designated, alongside the STEM subjects, as strategically important and vulnerable—or SIV subjects, to use the acronym. Do the Government still accept that designation for languages? Will the Minister also undertake to liaise with his colleagues in the Department for Business, Innovation and Skills and the Department for Education to press the competitiveness case? That is needed, among other things, to inform and speed up the decision on the future of the cross-sector forum on languages, which was set up following Professor Worton's review but which now seems to be in limbo. Set up under ministerial chairmanship, the forum brought together schools, universities and employers for the first time to address the nation’s language capacity and it is important that it does not lose more momentum.
It would be a hugely welcome and motivating signal if the Government were to designate a Minister with specific responsibility for languages, with a brief that included all relevant departments, not just the Department for Education but also BIS and the Treasury. Indeed, I pay tribute to the noble Lord, Lord Davies of Abersoch, who as a BIS Minister in the last Government took responsibility for the languages issue on an informal basis, because of his personal commitment to language skills and his understanding as a leading businessman in his previous life of their vital importance to business success. Will the Minister replying today confer with colleagues and see whether a formal responsibility could now be allocated, as for science? Our shortfall in languages is restraining our competitiveness at just the time that we need those skills to contribute to our economic recovery.
Lord Tugendhat
My Lords, I thank the noble Lord, Lord Levene, for introducing this debate. He is my colleague on the Economic Affairs Committee and I know how strongly he feels about the subject. I should also like to express my delight at the appointment to the Treasury team of my noble friend Lord Sassoon. He brings a great deal of varied experienced to the post and will I am sure provide exactly the same strength of reinforcement to the government Front Bench as the noble Lord, Lord Myners, did under the previous Administration.
I approach this debate from a different angle from those that other noble Lords have spoken about. For the avoidance of any misunderstanding, I should state at the outset that I am the chairman of the Imperial College Healthcare NHS Trust. I was prompted to intervene by the Prime Minister's speech yesterday on the severity of the forthcoming public expenditure cuts. I support the objective of reducing the deficit. I support, too, the aim to cut waste, re-examine the role of government and, where appropriate, to shed functions, to make the economy more competitive and, over time, to make society better. But if the Government are to carry through their deficit reduction programme without damaging the economy let alone improving its competitiveness, the Government will need to mobilise all the support, skills, resources and dedication of managers in the public sector.
To put it in military terms, Ministers are the generals who issue the orders. The managers in the public sector are the troops who will have to carry through the fighting. By that I mean that they are the ones who will have to implement the spending cuts, choose which programmes to axe, initiate the redundancy programmes, renegotiate the pension plans and carry through the closures. That is a very difficult programme. I therefore urge Ministers not to repeat the error that the Thatcher Administration fell into of associating cuts in public expenditure with the denigration of the public sector managers whose task it is to carry them out. I was chairman for some of that time of the Civil Aviation Authority, which in those days incorporated the National Air Traffic Services, since privatised by the Labour Government, and I know what damage the denigration of public sector managers did and how much harder it became to recruit good people into the public sector to do the difficult jobs that were required.
I fear that we are already hearing in the background far too many murmurs about pen-pushers and bureaucrats ripe for the slaughter, as if the cutting of public sector jobs is in itself an objective rather than a necessary cost of what is being undertaken. Of course the Government want to maintain front-line services and to free the professionals who staff them to get on with their jobs, but they must remember that doing that in a time of cuts requires skilful and careful managers—the fewer the resources, the greater the management challenge. The cost-effectiveness of those programmes and thus the competitiveness of the British economy will suffer without the skill and the support of public sector managers. The same applies to the redesign of the management structures, the taking out of layers of management, the streamlining of functions and the consequential loss of management jobs. All that will, I know, be necessary, but it should be seen for what it is—a necessary public service that will make the services themselves more robust and more effective—not as a reason to rejoice in the fate of those who pay the price with their employment.
We hear a great deal from the Government—and not only from the Government—about the importance of improving the quality of management in the private sector in the British economy and we hear a great deal about what the public sector can learn from the private sector, as it can, although there is also a reverse process. However, we need to bear in mind that, if the Government are to carry through their programme, which I support, they will need the support of managers in the public sector. I urge them to value those managers and to show understanding of and sympathy with what they will be required to do and the losses that some of them will suffer. The Government should avoid the mistake of conflating reductions in public sector expenditure with the denigration of those who have to carry them through.
Lord Myners
My Lords, I, too, congratulate the noble Lord, Lord Levene, on securing this debate on an issue of considerable national importance. He speaks with considerable experience not only in leading Lloyd’s—a market of excellence and global leadership—but in his many other successful functions in the commercial and public sectors.
I welcome the noble Lord, Lord Sassoon, to the Front Bench. Like the noble Baroness, Lady Noakes, I know that his maiden speech will be excellent. I have known the noble Lord for close on 20 years. He has an excellent reputation for the clarity of his expression; I have always known him to be somebody who answers questions in a forthright and straightforward way and never seeks to duck them. In that respect, he will be a blessed addition to the Front Bench, as we have struggled in previous debates to get any clarity at all about government policy from the noble Lord, Lord De Mauley, and the noble Lord, Lord Henley, who surprisingly has still not written to noble Lords after the Queen’s Speech debate last week. The noble Lord, Lord Sassoon, joins a long list of Swiss bankers who sit on the government Benches. He joins the noble Lords, Lord Freud, Lord Garel-Jones, Lord Brittan, Lord Waldegrave, and many others who have worked for UBS. It is good to know that our economic management is now in the hands of the gnomes of Zurich.
Competitiveness is absolutely vital to our economy. It comes from the value created that exceeds the cost of production. That is the edge that will give us economic competition. It is through being economically competitive that we get growth and it is through growth that we deliver our policy objectives sustainably in supporting education, health and other areas of national importance. The noble Lord, Lord Levene, in a speech given on 17 September last year, a few days after the anniversary of the collapse of Lehman Brothers, said:
“Competitiveness demands excellence, and continued excellence requires constant change and evolution”.
To be successful in that respect we need the right environment. Competitiveness is even more important in an era of globalisation, particularly when mobility of location is so important, as the noble Lord, Lord Levene, noted in his introductory statement.
The Government can create jobs but they cannot create the capacity sustainably to support those jobs if they are either imprudent in their fiscal policy or if the public sector begins to bear too heavily on the economy. However, as the noble Lord, Lord Tugendhat, said, there is good work done in the public sector. We must ensure that during this period, when we face the need for fiscal adjustment, we do not denigrate those who work in the public sector.
We clearly need a policy of fiscal caution. It was right to support the economy during the global recession but there now needs to be fiscal adjustment, as evidenced by the last Government in the Fiscal Responsibility Act. There is nothing progressive about a Government who consistently spend more than they can raise in taxation, and certainly nothing progressive that endows generations to come with the liabilities incurred by the current generation. There will need to be significant cuts in public expenditure, but there is considerable waste in public expenditure. I have seen that in my own experience as a government Minister. I hope that the Government will pursue with vigilance their search for waste and efficiencies without making cuts which are injurious to the provision of public service. The difference between the Government and the previous Government was on the issue of timing and when those cuts should take place.
There was flawed thinking about job creation in the past. I found it very frustrating to sit in meetings with some of my fellow Ministers talking about creating jobs in the green economy and biotechnology. The Government cannot create jobs. The Government can create an environment that is conducive to the creation of jobs, but they cannot create jobs and we mislead ourselves if we believe they can. We need to create a context for competition, incentives for capital investment, protection for intellectual property and promotion of high standards of governance. We also need high- quality business inputs in infrastructure, human capital and physical infrastructure—a subject that I am sure the noble Baroness, Lady Valentine, will speak to in a moment. We need predictable and business-sensitive administrative rules, and a technological infrastructure which promotes innovation.
The economies of the state are not the same as the economies of the business or the family. There is an important role for the Government in supporting economic activity. The noble Lord, Lord Skidelsky, made that very clear in a penetrating contribution to the Queen’s Speech debate last week. The economy is still operating at a rate in excess of 5 per cent below productive capacity. One of the questions that I would like to ask the noble Lord, Lord Sassoon, is: where are the sources of growth for the economy over the next 12 months? Mr Cable has suggested that consumer expenditure will reduce. We know that public expenditure will reduce. Over the weekend, George Osborne claimed the credit for persuading our trading partners to reduce their consumption through their own fiscal deficit programmes, so where does the noble Lord see the source of growth for the economy over the next 12 months? Where does he see the mechanisms for rebalancing the economy, to which the noble Lord, Lord De Mauley, again spoke yesterday? He spoke about the financial sector not growing as fast as other sectors. I find this difficult to reconcile with the fact that we need credit to support the economy. The noble Lord, Lord De Mauley, shakes his head but I have looked at Hansard and the noble Lord is very clear about manufacturing growing at a faster rate than other sectors. Therefore, I would like the noble Lord, Lord Sassoon, to explain to us the actions that the Government will be taking in that regard. I would also like him to tell us whether he believes that the fiscal adjustments that the Chancellor will announce on 22 June are likely to lead to an increase in unemployment. If there is to be an increase in unemployment, I would like him to confirm how much it will be. I would also welcome a comment from him on whether he agrees with the Prime Minister’s observation that monetary policy will have to tighten in the short term.
Finally, I would welcome a comment from the noble Lord, Lord Sassoon, on the banking commission, which is causing considerable uncertainty. When can we expect to have details of this commission? Will its membership be constituted in accordance with public appointment rules?
Lord Northbrook
My Lords, we are all grateful to the noble Lord, Lord Levene of Portsoken, for introducing this short debate. First, I pay tribute to the former Minister, the noble Lord, Lord Myners, and to my noble friend Lady Noakes for encouraging a high standard of debate in the previous Parliament and for their legislative achievements, such as the Banking Bill, which did great credit to this House. I also warmly welcome the noble Lord, Lord Sassoon, in his new position. Like his predecessor, he brings great financial experience to our deliberations and a good grasp of matters political from his time at the Treasury. He will be an invaluable addition to the coalition.
To encourage a sound economic background to enable UK competitiveness to flourish, the coalition needs to get UK finances back on to a more even keel, which it is already starting to do. Without this, the cost of government and business borrowing could increase rapidly as markets worry about the state of the UK economy. You only have to look at Greece to see the consequences of delaying doing anything, and the Spanish situation is of concern, too. Taking a leaf out of the Canadian book in the 1990s seems to be the latest mantra and that seems a sensible one.
The latest edition of the IMD World Competitiveness Yearbook, which ranks the competitiveness of 58 economies on the basis of more than 300 criteria, puts the UK at number 22—down one place from last year. Five of the top 10 are from the Asia Pacific region. For the first time we are seeing the creation of a self-sufficient economic block of developing countries. They have money markets and technology that did not exist 10 years ago. The biggest loser is Europe. Only three old world countries, Switzerland, Sweden and Norway, broke into the IMD’s top 10 this year. The IMD attributes the old world's relatively poor showing to high levels of government debt, a weakening infrastructure and continued inefficiencies in European labour markets. Professor Garelli of the IMD stated that,
“obviously the UK is undergoing the uncertainties of the post election period but also faces the dual challenges of the huge financial cost of the crisis as well as the deindustrialization of its economy”.
The deindustrialisation means that the UK cannot suddenly change track and become a mass manufacturer as our labour costs are too high compared with the Far East and other relevant developing countries. We need to retain and develop our focus on specialist niche, higher value-added manufacturing. Like my noble friend Lady Noakes, on this front I strongly argue, even at this difficult time, against restrictions on capital allowances for manufacturers, which would be a short-term and retrogressive step. Will the Minister make the strongest representations to the Chancellor on this point?
One of our major economic strengths is in financial services, as other speakers have said, which has been demonstrated by the success of Lloyd’s. The noble Lord, Lord Levene, mentioned that last year. This area must be nurtured even after the banking crisis of the past few years. The balance that the Government must seek to achieve here is to combine the right amount of regulation—to avoid a repeat of the sub- prime crisis—with a regime that allows bank lending to recover. Capital adequacy of banks is crucial, but this regime must be agreed internationally, whereby UK banks are not put at a disadvantage to their global competitors. This is already proving to be a slow process.
Regulation is a key factor in other areas of the economy. Overregulation means that the UK will be at a disadvantage compared to other less regulated markets. However, a balance has to be kept to ensure that safety and quality standards are adhered to without gold-plating European rules and regulations.
Another area that the Government should focus on to make sure that the UK retains its competitiveness is tax rates. The Chancellor is correct to be considering reducing corporation tax. The proposed increase in national insurance for employees should be reversed as soon as possible, because it is an extra burden for business to bear against international competition.
Capital gains tax is another area that causes me, like my noble friend Lady Noakes, concern. The proposed hike in the rate will cause concern especially to the elderly, who need to resort to capital to fund their living expenses. This could also curtail the activities of those who previously had spare capital to fund start-up enterprises. I ask the Minister to use his influence to argue for a return of taper relief and/or indexation to soften the blow of this proposed hike. I should like to point out that while I am not opposed to a higher short-term gains tax within a year to avoid income being turned into capital, the rate should decrease, whereby after three years it should be about 25 per cent. High personal tax rates can discourage enterprise. I therefore hope that the coalition will reduce the 50 per cent top rate of tax as soon as possible.
In summary, like my noble friend Lady Noakes, I believe that regulation and tax are two of the most important areas in encouraging the UK to maintain its competitive advantage.
Baroness Valentine
My Lords, I thank the noble Lord, Lord Levene, for introducing this important debate. I declare an interest and, I trust, a valuable perspective as chief executive of London First, the non-profit-making business membership organisation which champions the competitiveness of the capital.
London and the south-east account for one-third of Britain’s GDP. Productivity rates in this region are substantially higher than in the rest of the UK, and the region sports internationally competitive talent in creative industries, professional services and, yes, even banking. My speech today therefore focuses on how to nurture this valuable global talent hub at the same time as balancing the budget. Encouragingly, the Government appear to be proposing spending cuts to tax increases in the ratio of roughly 80 per cent to 20 per cent. That approach is supported by successful international examples of deficit reduction campaigns, such as that in Canada.
In seeking to cut costs without affecting outputs, the Government can usefully draw on experience in the private sector, born of the pressures of meeting customers’ demands in competitive markets. Money can be saved while focusing on key outcomes through efficiencies and cutting economically less productive programmes. Take the skills sector, for example. To increase efficiency, the alphabet soup of quangos could be rationalised, and recent research by London First suggests that significant savings could be made from skills programmes which have low market impact. However, an objective mechanism is required to remove low-value programmes across all departments. Cutting spending well is as important as the pace and scale of cuts.
Lastly, government should preserve investment in long-term productive infrastructure. Noble Lords have heard me championing the case for Crossrail many times before. Inevitably, the Department for Transport has to bear a share of spending cuts, and the business community strongly supports robust action specifically to drive down costs in the Crossrail project, but cuts to scope are a false economy. Crossrail and, indeed, the Tube provide the capital’s arteries.
On tax, the new Government should espouse three principles: fairness, competitiveness and stability. The Government have already set out a number of measures aimed at providing a fair tax framework, protecting those on the lowest incomes. Competitiveness in both business and personal taxes is also vital. We need to keep our existing talent and investment, as well as attract internationally mobile businesses and business people. If we fail, our productivity and our ability to grow in coming years will be damagingly constrained, as will tax yield.
Greater predictability in tax policy-making is equally important. Recent policy changes—for example, over non-doms or the bankers’ bonus tax—have undermined the UK’s reputation as a stable jurisdiction. I understand the previous Government’s reasons for introducing the 50 per cent top rate, but a firm indication in the emergency Budget that this is a temporary measure might prevent this having a lasting impact on the perceived risks of locating in Britain.
In closing, I shall mention three areas of policy which have no funding impact but which require sensitive application if they are not to have a negative economic impact. The first is international air links. The cancellation of runway three is not the end of the story. Heathrow is still running at 99 per cent capacity. We need this hub for international business travel to be world class, which it cannot be without addressing delays caused by this lack of resilience.
Secondly, I urge caution in revising the planning system while the property sector remains fragile. Reform may be necessary, but not as necessary as ensuring that the buildings we need get built.
The third area is the implementation of an immigration cap. People who contribute to our global talent hub, whether in business or as students, must be allowed to come and go. Poor implementation risks multinationals running their operations from elsewhere and damage to our relationship with emerging economies.
Finally, we need a new relationship between government and the business community. The lead-up to the election saw an unhappy fight between parliamentarians and bankers to be least favourite. The Government need to find a way of respecting the strengths of the financial community while fine-tuning their legislative response to the credit crisis, and the banks need to recognise the Government’s legitimate concerns while putting their own houses in order. I know that in this final area we can rely on the noble Lord, Lord Sassoon, to proceed with understanding and tact.
Lord Cotter
My Lords, I also congratulate the noble Lord, Lord Levene, on this debate, and I express apologies on behalf of my noble friend Lord Newby, who could not attend due to the retiming of the debate.
Clearly, there are many factors to be taken into account in encouraging competitiveness, top of which is to have a business-friendly Government. It is clear that right from the word go this Government are emphasising the need for the private sector to lead our recovery, and thereby the need to help and encourage business and industry. On the one hand, we are living through very difficult times when costs have to be cut and savings are needed but, on the other hand, we have to be sure that the drivers for our recovery are not discouraged.
It is encouraging that in the past few days, weeks or months we have seen a resurgence in manufacturing, which I very much applaud. Before I entered Parliament, I was the managing director of a small, 30-employee manufacturing company, so it is good to see a bit of a lift in that direction.
The low rate of sterling is of course advantageous for our exports. Also, because of the difficult circumstances in which we are living, many firms have had to cut costs over the past few years, so that in its own way will help with competitiveness.
As my noble friend Lady Noakes said earlier, we have to be very careful to ensure that bureaucracy and red tape are addressed. I know that this has been said many, many times by many, many people, but I assure her and others that we on these Benches are going to encourage the new brush and the new enthusiasm to cut back on red tape and bureaucracy. I believe that with fresh enthusiasm we can do a lot to help.
The noble Lord, Lord Levene, spoke about the future of the financial sector—something about which we are naturally all concerned. When there is much talk about rebalancing, with implied negativity towards the financial industry, of course he should be concerned. However, I would also say that the City and financial institutions need to be encouraged to invest in manufacturing, for example. So often in the past British and UK innovation, ideas and inventions, whatever they may be, have not been encouraged enough. I urge the financial sectors of all sorts to look, as we are all saying, towards production in manufacturing terms.
In the short time since the election there has rightly been a lot of emphasis on business. In that connection I refer to the debate last week in this House on the Queen’s Speech. The noble Baroness, Lady Wilcox, opened the debate with many encouraging announcements on the Government’s programme, when she reiterated the need to cut bureaucracy. She also spoke, among many other aspects of business, about the need to help businesses to start up. There were a number of points that were encouraging, among which was the emphasis that the Government will put on high-speed broadband and wider deployment. Certainly these signs are encouraging and I, along with others, look forward very much to hearing from the noble Lord, Lord Sassoon, with his wide experience and expertise. I am sure that he will make a great contribution to this debate.
Lord Young of Norwood Green
My Lords, I, too, congratulate the noble Lord, Lord Levene, on ensuring this debate. It is also a great pleasure to welcome the noble Lord, Lord Sassoon, to your Lordships’ House, and to congratulate him on his appointment to the Government. I applaud him and look forward to his maiden speech. It is quite a lot for him to do in one evening but I am sure that he will rise to the occasion.
Every Member of this House knows what a privilege it is to be here, but the noble Lord, Lord Sassoon, is particularly lucky. As many of you will know, he served in the Treasury for a number of years. From 2002 to 2006 he was managing director of finance, regulation and industry, so it was he who was responsible for the Treasury leg of the tripartite relationship that was supposed to identify and regulate the systemic risk in British banking—a relationship that we all know failed somewhat spectacularly. Now he has the chance to put things right—that is what you call luck. In 2007 and 2008 the noble Lord, who was still in the Treasury, acted as Gordon Brown’s ambassador to the City and then he left the Treasury to become David Cameron’s ambassador to the City. He is certainly fleet of foot in all directions.
Every speaker in this debate has been absolutely right in stressing that in the global economy, sustaining and enhancing the competitiveness of Britain must be central to everything we do in economic policy. To gain some insight into this coalition approach, I read two recent speeches. I cannot deal with every aspect of them, but the Prime Minister’s speech entitled “Transforming the British Economy: Coalition Strategy for Economic Growth” dealt with three elements. On international action, he seems to think that if the Indian and Chinese markets are opened up more British goods would be sold. That depends on whether we can be competitive. Simply opening up the market on its own does not guarantee that we can take advantage without being more competitive.
On the aspect of modern support, I shall just cover the point about the banks. Will the Minister tell us whether the Government’s policy is that banks should rebuild their balance sheet or should they lend more? It will be difficult for them to do both at the same time. A number of references have been made in the debate to the question of rebalancing. The point has been well and truly made that the financial services make a huge contribution to exports. Getting that rebalancing right—if that is what we are going to do—while not undermining a valuable export service will be supremely important.
A section of the speech was entitled “Liberalise”. Apparently Vince Cable is going to be given the power to say no. Since he has not been given any other powers I suppose that that is something. There was one clear policy commitment in that section, which states that,
“our ambition is to have the most competitive corporate tax system in the G20”.
It is interesting that if we examine corporation tax rates in the G20 we find that 14 out of the 20 countries already have higher corporation tax than we do, and five have lower rates. If we are to be the most competitive we need to cut it by more than 8 percentage points which, to save the Minister looking up the figure, I have worked out. The rough size of that pledge is between £10 billion and £15 billion. It would be interesting to know how we will deal with that.
I was interested that throughout this debate, there have been plenty of pleas for getting rid of taxes. On taxes on bankers’ bonuses, the noble Lord, Lord Levene, warned us that there will not be any bankers left. I find it unlikely that nature will permit that kind of vacuum. The noble Baroness, Lady Noakes, told us that we do not want a tax on jobs and that we certainly do not want any increase in capital gains tax. I will be interested to see how the Government balance that. My noble friend Lord Haskel reminded us that when hedge fund managers are paying less tax than their cleaners, we cannot have got the tax system absolutely right, especially under a Government committed to fairness.
On funding economic growth, I notice that that my previous department, BIS, will suffer cuts of about £836 million—more than any other department. What is the real substance of those cuts and what will be their impact on the competitiveness of British industry? In previous debates, we have heard comments about the previous Government’s commitment to assist Ford with £1.5 billion in building a new engine plant and guarantees given to Nissan, Vauxhall and Sheffield Forgemasters. Will the Minister confirm that the coalition still plans to give that vital support to industry?
I must concur with the point made by the noble Lord, Lord Tugendhat, about the importance of not denigrating the vital role of the public service. We are all committed to ensuring efficiency in the public sector, but how we go about that will be vital. My noble friend Lord Myners stressed that we need to ensure that the Government create the right environment to ensure the creation of jobs, and made the vital point: where will be the source of growth? The impact of growth in demand stimulated by the falling exchange rate embodies a crucial lesson: industry will invest and competitiveness will be enhanced only if there is a prospect of growing demand.
The coalition has not put forward a coherent industrial strategy. That is the reality behind the rhetoric. There is no credible strategy for skills, no credible strategy for research and development, and no credible strategy for funding investment. There is no consideration whatsoever of the impact of its age of austerity on jobs, innovation and competitiveness. The core of the coalition approach amounts to liberalisation plus corporate tax cuts.
In the interests of time and ensuring that the noble Lord, Lord Sassoon, has plenty of opportunity to answer the questions, I will leave my comments there.
The Commercial Secretary to the Treasury (Lord Sassoon)
My Lords, I rise with considerable trepidation to address this most august of Houses for the first time. First, I thank the officials of this House, who have been so helpful and supportive in easing me into your Lordships' House. Last week, I listened to the well merited tributes paid to the noble Lord, Lord Myners. I know that he will indeed be a very hard act to follow, and I am very grateful to him for his kind words this afternoon, as well as to my noble friend Lady Noakes, who so ably carried the Treasury portfolio on the opposition Front Bench. I was tempted to remain sitting and just leave the two of them to get on with it, but I will carry on.
I am also particularly grateful to the noble Lord, Lord Levene of Portsoken, because the topic of this debate resonates with so much in my background. My great-great-grandfather came to this country from Bombay in 1858 as an inward investor to build trading links with the cotton mills of Lancashire and to establish a financial base for our family in the City of London. So it is absolutely in my blood to want our financial sector to grow and prosper and that it should support the needs of the UK’s industrial base. Whether this makes me a Swiss/Indian/Iraqi banker I do not know, but I am not a pure Swiss banker.
In the first part of my career as a banker, I advised on the privatisation programmes of the UK and many other countries—privatisation programmes that were so central to the structural reforms and growing investment flows of those countries. When I moved to the Treasury in 2002 as a civil servant, I was responsible for competitiveness issues. I made it part of my business to travel regularly to the major Asian economies, the Gulf states and to other countries to listen to the concerns of inward investors, to explain UK competitiveness policy and to argue for open markets for our exporters of goods and services. I am tempted to talk about other aspects of my time in the Treasury, but I shall stick to the convention of making this a non-controversial speech and perhaps respond to the noble Lord, Lord Young of Norwood Green, on another occasion.
In my new role as the first Commercial Secretary to the Treasury, I combine in my responsibilities both financial services and wider business policy, so the UK’s competitiveness is again a central concern of mine. I am therefore delighted that we are discussing how this Government intend to maintain the UK's competitiveness. However, we are here not simply to maintain our competitiveness; we are here to improve it.
This means, first, recognising those drivers of competitiveness where the UK is a leader but where we must work ever harder to preserve our advantages. I am thinking of the UK’s flexible labour market, of our pool of highly skilled talent, of our competitive markets and of our openness to inward investment and investors. On the other hand, the UK suffers from some long-standing structural weaknesses. The challenge here will be to set a clear medium-term policy direction while cutting our cloth in line with the new economic realities. In this category I put our infrastructure and energy policies, dealing with lower skills and planning policy, and translating our science base into profitable enterprise.
In terms of immediate action, we need to look at two drivers of competitiveness that have been much talked about today: tax and regulation. High taxes damage business and hamper investment. We need lower, simpler and more predictable taxation. For this reason, the Budget will set out reforms on corporation tax. We will set out a road map for the creation of the most competitive corporate tax regime in the G20. We also need to keep a hawkish eye on regulation. We will introduce a one-in, one-out rule, and sunset clauses will be imposed both on regulations and regulators so that the need for each regulation is regularly reviewed.
I should turn to some of the specific points raised in this important debate, but I recognise that if I addressed only half of the questions put by the noble Lord, Lord Haskel, we would be here all night. Your Lordships will perhaps forgive me, therefore, if I pick out just a few major points; I shall write on some others. With a couple of weeks to go before the Budget, a number of macroeconomic points, made particularly by the noble Lord, Lord Myners, and tax points, made by, among others, my noble friends Lord Patten and Lord Northbrook, we shall just have to defer for now. However, I shall try to respond to some points, starting with the questions put by the noble Lord, Lord Levene of Portsoken, about helping exporters, which I regard as critical. As I have said, I did a certain amount of that in my previous role. I believe that we must continue to work with UKTI and ECGD to ensure that their support continues to be targeted where it can most help our UK exporters.
The noble Lord, Lord Haskel, asked a number of questions about choice, of which I shall pick up on one or two—one of my answers responds to a point made by the noble Lord, Lord Levene of Portsoken. When it comes to the state versus the private sector, we advocate neither a laissez-faire model nor state control of the market. Regulation must at all points be proportionate and targeted and must help the aims of businesses and households.
Having said that I cannot talk much this afternoon about taxation, I want to answer a question asked by my noble friend Lady Noakes about tax simplification because it is not just a matter of rates. The noble Lord, Lord Young of Norwood Green, referred to headline tax rates. They are very important, but we also need a tax system that is certain, flexible and proportionate, so I can confirm that the Government will set up an office of tax simplification to suggest reforms to the tax system.
I talked about the need for putting downward pressure on UK regulation. The question of European regulation was raised by a couple of noble Lords. Yesterday, I was talking to Professor Mario Monti, the former commissioner, who has recently written a key report on how to drive forward the single market. Although not everything in that report would be endorsed by the Government, there are some critically important things, including a welcome approach that he suggests for the European Commission to put its own house in order for better targeted and better enforced regulation.
There were one or two questions and comments about skills and questions about savings being made in expenditure, including a question asked by the noble Lord, Lord Haskel. To indicate the importance that the Government attach to skills and to dealing with cuts in expenditure in a sensible and responsible way, within the recently announced £6.2 billion savings in 2010-11, there was a plan to reinvest £200 million in improving Britain’s growth potential, £150 million in funding 50,000 new apprenticeships and £50 million in capital investment in FE colleges most in need.
The noble Baroness, Lady Coussins, drew our attention to the important question of languages. It is easy to be complacent about this. Every time I go to China, I am reminded that the Chinese leadership is increasingly speaking English, and I feel very inadequate. I take the noble Baroness’s general point to heart, and I will feed back to colleagues the specific point she raised.
Another important issue raised by a number of noble Lords was public sector cuts and public sector workers. I admire and respect the contribution of public sector workers. Of course there will be savings from lower-priority schemes within the programme of spending cuts that is coming, but key front-line services will be protected, and we respect the public sector workers who provide those and all other services.
Finally, the noble Baroness, Lady Valentine, talked about the need for a new dialogue between banks and industry. All I can say is that I have policy responsibility for both banks and industry in my new portfolio, which is probably an indication that our Chancellor exactly takes her points.
I am embarrassed that the necessity for brevity in my speech this afternoon makes my comments seem no doubt both superficial and rather trite. However, we have highlighted some key factors that affect the UK’s competitive position, and they will certainly very much help me as I work on this agenda in the months ahead.
Lord Levene of Portsoken
My Lords, I am sure that the Minister is about to sit down, but I hope that I may be permitted to congratulate him on his incisive maiden speech. He has spent much of his career advocating and critique-ing the work of the financial services industry in the City. As we heard from the noble Lord, Lord Young of Norwood Green, he has done so wearing many different hats and serving a number of different political masters with equal effectiveness and irrespective of their political affiliation. Now that he not only is a Member of your Lordships' House but bears the heavy responsibility of a Minister of the Crown, I am sure that he will fulfil those responsibilities with great distinction and that we can look forward in this House to his very perceptive insight into the future. I apologise for my interruption.
Lord Sassoon
I am very grateful to the noble Lord. That is the sort of interruption that I can take. I am particularly grateful to be thanked afterwards as well as in advance. I end simply by saying that the prize, if we get all this right and can restore the UK’s position as the most competitive economy, is very clear.