House of Commons

Monday 28th June 2010 Commons Chamber

Monday 28 June 2010

The House met at half-past Two o’clock

Prayers

Monday 28th June 2010 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Monday 28th June 2010 Commons Chamber

The Secretary of State was asked—

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

1. What recent assessment she has made of the level of problem drug use in this country compared to other EU member states.

[The Secretary of State for the Home Department (Mrs Theresa May)]

The most recent estimate of problem drug users for England is 328,767 for 2006-07. Estimates for 2008-09 will be available in October. The European Monitoring Centre for Drugs and Drug Addiction estimates show the UK with the highest rate, although there is no consistent methodology for calculating estimates across different countries, which prevents direct comparisons. Nevertheless, that level of problem drug use is unacceptable. The Government are committed to tackling it and rebalancing the treatment system so that abstinence is the clear goal.

[Sarah Newton]

I thank my right hon. Friend for her answer, but does she agree that one of the biggest problems at the moment is the availability of so-called legal highs? Does she agree that the previous Government were slow to address the issue, and can she assure the House—and especially the families in my constituency who have young people going off to university for the first time this autumn—that she will take action to protect people from such substances?

[Mrs May]

I thank my hon. Friend for that question. She has made an extremely valid point on an issue that will concern a large number of parents and others. She is right to say that the previous Government were slow to deal with the issue of legal highs, particularly mephedrone. It was only pushing from our party while in opposition that led them to do something about it, and we are committed to introducing a temporary ban on legal highs.

[Paul Flynn (Newport West) (Lab)]

The United Kingdom has the harshest drug laws in Europe and the highest number of addicts. Portugal has the least harsh policies in all of Europe and the smallest number of addicts. Why is this?

[Mrs May]

The hon. Gentleman has been a long-standing campaigner on the issue of drugs. As it happens, he and I take a different view on how we should approach the issue. What we need to be doing in this country is looking at making abstinence much more of a goal for individuals and looking seriously at ensuring that the treatment and rehabilitation provided to drug addicts mean that they do not simply go back on drugs in future.

[Kerry McCarthy (Bristol East) (Lab)]

2. What discussions she has had with the Secretary of State for Justice on the effects on police investigations of plans to give anonymity to defendants in rape trials; and if she will make a statement.

[The Parliamentary Under-Secretary of State for the Home Department (Lynne Featherstone)]

My right hon. Friend the Home Secretary has had a number of discussions on this issue with her cabinet colleague the Secretary of State for Justice. We have made it clear that we will progress our commitment on this subject with the care that it merits. Our consideration of the options will of course include a full examination of any impact on police investigations.

[Kerry McCarthy]

The Minister will know that this issue has been brought up time and again in the Chamber. We have had a confusing and mixed set of responses from the various Ministers who have answered. Could she now confirm whether it is the Government’s intention to bring forward legislation to give anonymity to rape defendants, and if so, what is the timetable for that, and on what basis have they made that decision?

[Lynne Featherstone]

There have been a number of discussions, as I just said, and the Prime Minister himself has said that the issue will be brought forward for debate in this Chamber at an appropriate point.

[Alan Johnson (Kingston upon Hull West and Hessle) (Lab)]

I would be interested at some stage to learn the Home Secretary’s views on the issue, because it is a crucial one both for the Home Department and for equalities. The Lord Chancellor told the House the other day that he had voted for anonymity in 2003. I voted against it, and that is still my view, but at some stage I would like to know the Home Secretary’s view.

As for the Minister, she will know that the Prime Minister recently told the House when he replied to a question on the issue that Baroness Stern had

“found that 8 to 10% of reported rape cases could result in false allegations.”—[Official Report, 9 June 2010; Vol. 511, c. 329.]

The Minister should know that the Stern report made no such finding and that what Baroness Stern recommended was independent research to study the frequency of false allegations of rape compared with other offences. Does the Minister agree that the Government ought to be implementing that recommendation, instead of proposing to introduce anonymity?

[Lynne Featherstone]

In the first instance, I am sure that the Home Secretary and the Secretary of State for Justice will indeed look at what sort of research is necessary, prior to bringing any debate to the House.

[Fiona Mactaggart (Slough) (Lab)]

I was slightly taken aback by the hon. Lady’s “Oh, we’re going to look at the research before we do this”, given that, up until now, it seems there has been a failure to talk to those tasked with implementing the policy. Has she or any of her colleagues spoken to the Association of Chief Police Officers lead on rape about the policy, and what has his response been?

[Lynne Featherstone]

I have not spoken to the ACPO lead on the issue, but I will refer that question to the Secretary of State for Justice, who may well have done so.

[Mr Chuka Umunna (Streatham) (Lab)]

3. How she plans to take forward the conclusions of the work of the “Together we can end violence against women and girls” strategy consultation on domestic violence.

[The Parliamentary Under-Secretary of State for the Home Department (Lynne Featherstone)]

Violence against women and girls ruins lives and destroys families, and its impact is felt down the generations. A cross-government strategy is the best way to address domestic violence and other forms of violence against women. In July, the Home Secretary will chair a meeting of Ministers across government that will be dedicated to this issue, and we look forward to discussing how we will take forward our approach in this area.

[Mr Umunna]

I am a supporter of the Cassandra learning centre, which is an organisation in my community that works on these issues. It was set up by the family of a victim whose killer was one of the first to be retried and sentenced following the revision of the rules on double jeopardy. What funding do the Government intend to make available to such third sector organisations working in this field and, importantly, will that funding be ring-fenced, given last week’s Budget?

[Lynne Featherstone]

I am aware of the hon. Gentleman’s interest in this area. The coalition Government have committed to look at how we can provide sustainable funding for, and support the development of, new rape crisis centres to provide for victims. At the moment, in the voluntary sector, this provision has been very ad hoc and serendipitous, and it is important to get it on a stable basis.

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

What plans does the Minister have for longer-term funding for voluntary sector organisations, including refuges?

[Lynne Featherstone]

I can really only refer to the rape crisis centres—both parties in the coalition agreement have committed to up to 15 rape crisis centres—and sustainable funding from the victim surcharge.

[Alan Johnson (Kingston upon Hull West and Hessle) (Lab)]

According to the British crime survey, the incidence of domestic violence has decreased by 64 % since 1997. Does the Minister agree that the British crime survey is the best measurement of long-term crime trends?

[Lynne Featherstone]

The British crime survey is a good source of information, but I will refer this matter back and the Minister will write.

[Bob Blackman (Harrow East) (Con)]

4. Whether she plans to renew the legislation which permits terrorist suspects to be detained for 28 days without charge.

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

6. Whether she plans to renew the legislation which permits terrorist suspects to be detained for 28 days without charge.

[The Secretary of State for the Home Department (Mrs Theresa May)]

The Government laid an order last Thursday to renew the existing 28-day maximum period for pre-charge detention for terrorist suspects for six months, while we conduct a review of counter-terrorism measures and programmes, including pre-charge detention. Both coalition parties are clear that the 28-day period should be a temporary measure, and one that we shall be looking to reduce over time.

[Bob Blackman]

I thank the Home Secretary for her answer. We are, of course, all committed to safeguarding Britain against terrorist activities. How many people have been detained for 28 days under these powers in the past three years?

[Mrs May]

I am sure that my hon. Friend has followed the old adage about not asking a question to which one does not know the answer. The answer is that, since 2007, no one has been detained for 28 days. Before that date, a number of people were detained for periods of between 14 and 28 days. As I made clear in my opening answer, we see the 28-day period as a temporary measure, and we are committed to reducing it over time.

[Mr Davis]

I, too, thank my right hon. Friend for her answer. Will she give the House an undertaking that the deferral of the decision on 28 days does not indicate any weakening of her determination to constrain not only the excessive length of detention without charge but the other excesses introduced by the Labour Government—namely, house arrest, internal exile, secret trials and all the other issues associated with control orders?

[Mrs May]

Of course, my right hon. Friend has a distinguished record of fighting for these civil liberties issues. I can assure him that one of the key reasons for introducing the 28-days order for six months was that it would enable us to look at the pre-charge detention period alongside a number of other issues relating to counter-terrorism legislation that we wish to consider. These include control orders, and stop-and-search procedures under section 44. We want to review the various measures and look at them in the round.

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

As one who proposed the period of 28 days, may I remind the Home Secretary that it was the alternative to 90 days or 42 days? If it were possible, despite the acute terrorist danger, for the 28 days to be reduced to 14 days, I would certainly be very happy.

[Mrs May]

I commend the hon. Gentleman on the campaign in which he, too, participated in the Chamber to ensure that his party’s Government did not introduce the 90 days or the 42 days, which we collectively opposed at the time when they were proposed. We consider 28 days to be a temporary measure. We will look at the issue in the round, in the context of other counter-terrorism measures introduced by the last Labour Government and the requirement to balance civil liberties with the need for national security.

[Caroline Flint (Don Valley) (Lab)]

We have had to take a number of measures which have not always involved easy decisions, such as the 28 days’ detention. The right hon. Lady said after she had had assumed her post that she would review control orders. Has she reached a view, and if so, when will she inform us of it? If we could charge people through the courts we would all want to do so, but it is not always possible.

[Mrs May]

In my answer to my right hon. Friend the Member for Haltemprice and Howden (Mr Davis), I cited control orders as one of the items in counter-terrorism legislation that we were currently reviewing.

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

Does my right hon. Friend recall the time when it was possible to exclude people from this country on the basis that their presence was not conducive to the public good? Is not our current dilemma about putting people under restraint for a period of days due to the fact that we are no longer able to deport people who have no legal right to be here because of legislation initiated either at home or abroad? What is the state of that legislation, and when will we be able to get rid of people who should not have been here in the first place?

[Mrs May]

My hon. Friend has raised a number of points, and I shall try to limit my answer for brevity’s sake. Let me simply say that I share his concern about the country’s inability to deport people who, in some cases, have been identified clearly as a terrorist threat to the country and a danger to national security. We are looking at the issue, but obviously we must ensure that, whatever we do, we take our national security and the protection of British citizens into account.

[Ian Paisley (North Antrim) (DUP)]

Given that terrorism is not a temporary aberration, what more permanent measures has the Home Secretary in mind for the purpose of countering terrorism across the United Kingdom? In particular, will the Government make good their pre-election commitment to ensure that automatic number plate recognition systems are available in Northern Ireland, especially in the border area, to prevent terrorists from moving across our border?

[Mrs May]

The hon. Gentleman has asked a very specific question about automatic number plate recognition. As he and other Members may know, the issue has come to the fore in a rather different context in England recently in relation to its use in Birmingham. We will be considering it as one of the various measures that we are considering in connection with CCTV.

[Mr Graham Allen (Nottingham North) (Lab)]

5. How many community protection officers there are in the city of Nottingham.

[The Minister for Police (Nick Herbert)]

I understand that there are 102 community protection officers in the city of Nottingham. Nottingham also has 30 auxiliary officers, funded through the working neighbourhood fund, who work with the community protection officers. Those officers work in close partnership with neighbourhood policing teams in the city.

[Mr Allen]

Will the Minister congratulate the city of Nottingham division of the police—and, indeed, police community support officers and community protection officers—on the massive reduction in crime in the city? Will he emphasise that that is because people trust the uniformed presence that they have seen on the streets in the last five or six years, and will he ensure that that level of uniformed protection remains in future years under this coalition Government?

[Nick Herbert]

I recognise the role that community protection officers play in Nottingham as part of the wider policing family, alongside PCSOs and police officers. The Government have had to reduce national allocations in order to reduce the budget deficit, but we have also relaxed ring-fencing to give the city council and its partners freedom to determine their priorities in order to meet local needs and provide local opportunities.

[Jo Swinson (East Dunbartonshire) (LD)]

7. What representations she has received from Scottish Water on removal of the security fences at Milngavie waterworks.

[The Parliamentary Under-Secretary of State for the Home Department (James Brokenshire)]

No representations have been received from Scottish Water, but I am aware of the hon. Lady’s interest and of discussions that have taken place between Scottish Water, the Scottish Government and the Centre for the Protection of National Infrastructure about the replacement of security fencing with less intrusive measures.

[Jo Swinson]

I thank the Minister for that answer, but these so-called security fences around Milngavie reservoir cover only a tiny part of the three-mile perimeter, and as the rest is completely open to the public they serve no practical purpose other than being an eyesore spoiling a beautiful and popular local attraction. Scottish Water has said that it is waiting on a new directive from the Home Office before it can remove these fences, so can the Minister look at this issue again and ensure that that directive is issued without delay?

[James Brokenshire]

I know that the hon. Lady has run the campaign, and I understand her interest in ensuring access to the area around the reservoir. We will discuss with the Scottish Government the application that I understand they have received from Scottish Water in relation to this issue. The continuing need for the security fences will be looked at in the light of CPNI advice and any other alternative measures that may be forthcoming.

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

8. What recent representations she has received on the amount of time spent on administrative tasks by police officers each year.

[Jackie Doyle-Price (Thurrock) (Con)]

15. What recent representations she has received on the amount of time spent on administrative tasks by police officers each year.

[The Minister for Police (Nick Herbert)]

When I have spoken to police officers, they have asked us to help to free them up to do the job they are paid to do. I am committed to returning common sense to policing, which means getting officers back out on the streets dealing with crime, not sitting behind desks filling out forms to meet Government targets.

[Damian Collins]

I thank the Minister for his answer. When I was recently on patrol with the Kent police in Folkestone in my constituency, they shared with me their concerns about the large amount of paperwork that goes to support front-line policing. Does the Minister agree that the priorities for the policing budget should be to support front-line police work in the community, not excessive bureaucracy?

[Nick Herbert]

I strongly agree with my hon. Friend. Every Labour Home Secretary promised to cut bureaucracy, but the police still spend more time on paperwork than on patrol. We are determined to make a real difference by dealing with the central targets that bedevil policing and doing all we can to protect the front line.

[Jackie Doyle-Price]

Does my right hon. Friend agree that by freeing up police officers to spend more time on patrol, we will not only aid crime prevention but make the public feel much safer?

[Nick Herbert]

I strongly agree with my hon. Friend. What the public want to see is police officers out on the beat. They do not want them to be tied up with unnecessary paperwork. That is why we are so determined to deal with the performance management framework and the targets that have prevented them from doing the job they want to do.

[Keith Vaz (Leicester East) (Lab)]

I welcome the Minister for Police to his first Home Office questions. What he has said is absolutely in agreement with the recommendation of the Select Committee on Home Affairs, which is that we should get police officers out on the beat. Will he therefore accept the other recommendation, which is that there should be full investment in new technology, giving police officers hand-held computers so they can spend more time on the beat than in police stations? Will he defend that part of the Home Office budget against any Treasury cuts?

[Nick Herbert]

I thank the right hon. Gentleman for his kind introduction. I recognise the importance of technology in assisting the process of reducing bureaucracy, such as in our commitment to scrap the stop form, which is an unnecessary and bureaucratic impediment to common-sense policing. There is a role for technology such as hand-held computers in recording stops and searches in accordance with the right hon. Gentleman’s suggestions.

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

Does the Minister agree with me, however, that there are some administrative tasks that are worth performing, such as the judging of the Best Bar None competition in my constituency, which was awarded to The Woodman pub in Carshalton?

[Nick Herbert]

If my hon. Friend were to invite me, I would be delighted to attend the pub with him so I may judge the best performance for myself.

[Mr David Hanson (Delyn) (Lab)]

I welcome the right hon. Gentleman to his position, but I might just advise him that we did actually stop the stop form in the Crime and Security Act 2010—but I will let that pass. Will the right hon. Gentleman today tell the House how much money he expects to save by tackling police bureaucracy over the next three years? Does he understand that, however much he saves, it will be nowhere near enough to compensate for the 25% cut he is planning in the Home Office budget, which will remove 35,000 police officers and 4,000 PCSOs from the beat? How does he expect that to help to fight, and reduce, crime in Britain?

[Nick Herbert]

Once again, we see absolutely no understanding from the Opposition about the fiscal position we have inherited from them. The fact is that their Government left us with an unspecified cut of £44 billion to find across Government Departments. They would not say where that money was to be found, so we have to make the savings. I believe that police forces can do it, and we are also determined to protect the front line.

[Tony Baldry (Banbury) (Con)]

9. When her Department plans to undertake its review of the terms and conditions of police officer employment.

[The Minister for Police (Nick Herbert)]

The Government have announced a review of the remuneration and conditions of service of police officers and staff. We will provide information about the review, including timing, shortly.

[Tony Baldry]

I thank my right hon. Friend for that answer. Although I welcome the Government’s decision to honour the third year of the police pay award, does my right hon. Friend agree that the time has now come to review police pay and conditions, and to ensure a more flexible work force who are not so dependent on extensive and expensive overtime?

[Nick Herbert]

My hon. Friend is right. The previous Government conceded that more than £70 million a year was being wasted on police overtime. We need to look at that and it is one of the things that the review will do. We have, however, stood by the third year of the police pay award, as my hon. Friend suggested, which indicates our good faith towards the process and the value we place on the police service.

[Mr Denis MacShane (Rotherham) (Lab)]

Could the Minister for Police, whom I welcome to his departmental responsibilities, kill two Lib-Con birds with one stone—namely, reduce the £400 million in overtime and bring public sector pay under control by saying that every hour of overtime authorised by a chief constable or a senior police officer will be deducted from their own pay?

[Nick Herbert]

The right hon. Gentleman may be offering himself as a candidate to serve on the pay review that we are proposing. Perhaps I should have a discussion with him about that. We have to strike a balance. Many chief constables believe overtime is an important management tool, but we are concerned about the extent of its use. That is exactly the kind of thing the pay review will have to look at.

[Richard Fuller (Bedford) (Con)]

10. What recent progress the UK Border Agency has made on processing the backlog of outstanding asylum cases.

[The Minister for Immigration (Damian Green)]

Under the previous Government, the chief executive of the UK Border Agency wrote to the Home Affairs Select Committee periodically to update it on this issue. However, in the interests of transparency, I am happy to update right hon. and hon. Members in the House today. Until the end of May 2010 the UK Border Agency had concluded 277,000 cases.

[Richard Fuller]

I thank the Minister for that answer. As he is aware, Yarl’s Wood family detention centre is located outside Bedford. Does he agree that the Government’s determination to end the detention of children for asylum purposes will be most welcome to people as a measure of fairness? It will be regarded as something that is long overdue and that shamefully eluded the previous Government.

[Damian Green]

I am very grateful to my hon. Friend for making that point, which I regard as important. In a spirit of non-partisanship, I think it is regarded as important on both sides of the House. When we held a Westminster Hall debate on the subject last week, I was struck by the fact that there was universal approval of the new Government’s desire to end the detention of children—although the point was made that it might have been the last time as Minister for Immigration that I ever got universal approval for anything. However, we should welcome such steps forward while we have them.

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

I sincerely welcome the hon. Gentleman to the Dispatch Box, and I wish him all the best in a very difficult job.

In the light of the Minister’s answer about the backlog, I was pleased to see recognition of the UK Border Agency’s success but will he confirm the reasons behind the answer to the hon. Member for Perth and North Perthshire (Pete Wishart), at column 143W, on 22 June, about the dropping of the language requirement for dependants of people who successfully apply for asylum? What was his rationale?

[Damian Green]

The rationale, as with all our proposals on language, is that those who wish to come to this country need to be able to play a full role in its life. If as many people as possible who live and settle in this country are able to speak English, they will lead more fulfilled lives and be able to integrate better in our communities. That would be extremely helpful.

[Mr Philip Hollobone (Kettering) (Con)]

11. How many asylum applications were made by individuals who had passed through another safe country to get to the UK in the most recent year for which figures are available.

[The Minister for Immigration (Damian Green)]

In 2009, 2,665 cases were positively identified as having travelled through another EU member state that is considered safe under schedule 3 to the Asylum and Immigration (Treatment of Claimants, etc.) Act 2004.

[Mr Hollobone]

What do we do with those people? Surely we should not be giving asylum to people who come to this country via another safe country. Yes, let us give asylum to people who are genuinely fleeing persecution, but not to tourists.

[Damian Green]

I rather agree with my hon. Friend, who will know that, under the previous Government, one of the many shambles in the immigration and asylum system was the problem of being able to remove people to safe countries. We will try to do better. The Dublin regulation, which is the system under which we do this, is working—in 2009, the UK removed 625 more cases than we accepted—but it is not working well enough. [Interruption.] If former Ministers on the Opposition Front Bench can contain themselves, I shall give the reason: we must do better at returning cases to specific EU countries. We are doing better with Italy. The next case that we really need to get to grips with is Greece, but the Government are determined to do this.

[Bridget Phillipson (Houghton and Sunderland South) (Lab)]

Is the Minister aware of the great difficulties many of my constituents face when lodging an asylum claim? They have to travel to the UK Border Agency in Croydon to lodge claims for initial screening, and the full cost of that must be met by the individual concerned. Will the Minister look again at that system and consider any review that can make it fairer, so that constituents in the north-east do not need to travel to London?

[Damian Green]

It is perhaps a shame that the hon. Lady has launched an attack on a change made by her own Government in their last 12 months in office. I can see some logic in why Ministers in the previous Government made the change that she objects to: by and large, people who claim asylum should claim it as soon as they get to this country. That is one area where there is not much difference between those who sit on the Front Benches. So I am afraid that I will have to ignore her plea to change the system to make it easy for people who may have been here for many months or, in some cases, many years to claim asylum. Asylum is meant for people who come to this country as genuine refugees.

[Karen Lumley (Redditch) (Con)]

12. What progress she has made reviewing the retention on the national DNA database of records of those who have been neither charged nor convicted of a crime.

[The Parliamentary Under-Secretary of State for the Home Department (James Brokenshire)]

The Government are committed to adopting the protections of the Scottish model for retaining the DNA profiles of those who have not been convicted of an offence. We will introduce our detailed proposals shortly.

[Karen Lumley]

Is the Minister aware that the previous Government failed to ensure that all prisoners were on the DNA database? Can he reassure the House that steps are being taken to fix that problem?

[James Brokenshire]

My hon. Friend makes a very important point. Despite their desire to retain DNA profiles indefinitely, the then Government did not focus on getting those who were convicted, possibly of serious offences, on to the database to ensure that it was effective in fighting crime. That is certainly something that we are looking at very closely in terms of the proposals that we will introduce in the House in due course.

[Mr Alan Campbell (Tynemouth) (Lab)]

I welcome the hon. Gentleman to his post. Why does he believe that the Scottish police support the current English model, rather than the Scottish model, for DNA retention? Is that because the English model is based on evidence, whereas the Scottish model is not?

[James Brokenshire]

The hon. Gentleman makes quite an interesting point. As I understand what he said, he now seems to be arguing for the indefinite retention of DNA, which has been found to be not acceptable and not proportionate. He says in some way that there is no evidence, but I remind him of the comment made in the other place by Lord Bach, who highlighted very clearly the report that Professor Fraser undertook in relation to the Scottish system in which he said that he did not uncover any evidence to suggest that the Scottish approach to retention had caused any detriment to the detection of serious crime in Scotland.

[Margot James (Stourbridge) (Con)]

13. What plans she has for the future regulation of CCTV cameras.

[Ian Lucas (Wrexham) (Lab)]

17. What proposals she has for regulation of the use of CCTV cameras by police services and local authorities.

[The Parliamentary Under-Secretary of State for the Home Department (James Brokenshire)]

In our coalition programme for government, as part of our work on safeguarding civil liberties we have stated that we will further regulate CCTV. We will introduce detailed proposals in due course.

[Margot James]

I thank my hon. Friend for his answer. Although there has been criticism that some CCTV has been used randomly and not always effectively, is he aware of the Safer Leeds project, in which CCTV has played an important role in the apprehension and prosecution of offenders? Can he give an assurance that future regulation will not deter the proper use of CCTV that my constituents in Stourbridge feel is essential in the battle against crime?

[James Brokenshire]

As the Prime Minister made clear in the House on 9 June, we support CCTV cameras. When used properly, they can be a significant asset in the prevention and detection of crime, but any such use involves a need to ensure that civil liberties are properly protected. The use of CCTV has increased in the absence of a specific regulatory framework. For reasons of proportionality and retaining public confidence, it is important that there is appropriate regulation, and it is interesting to note that the previous Administration recognised that when they appointed the interim CCTV regulator.

[Ian Lucas]

In the past 13 years, some 21,000 individuals have been arrested in Wrexham as a result of the operation of CCTV cameras. Wrexham’s CCTV system is widely appreciated. Will the hon. Gentleman confirm whether he expects a reduction in the number of CCTV cameras as a result of the regulation that he is describing, and how will that regulation be consulted on?

[James Brokenshire]

On the latter point, we will announce further details on how we intend to take CCTV forward and on how engagement will take place. As I have said, we recognise the importance of CCTV in the fight against crime. As for moving forward, the installation and use of CCTV systems is very much a matter for local decisions, so the regulation will certainly provide a framework to assist local decision making about the CCTV systems that should be put in place to protect local communities.

[Philip Davies (Shipley) (Con)]

Before my hon. Friend jumps on the liberty bandwagon far too much, may I urge some caution? CCTV cameras do not prevent anyone from going about their lawful daily business freely. Will he acknowledge that the people who were responsible for the tube bombings on 7/7 were identified only through the use of CCTV, as was the person recently arrested in Bradford for the murders of three prostitutes?

[James Brokenshire]

I thank my hon. Friend for underlining CCTV’s important role in policing and protecting our communities. Perhaps more focus could be given to its use in prosecutions and as a forensic tool. However, the use of CCTV has developed in the absence of a specific regulatory framework. We believe, for reasons of proportionality, that regulation should be taken forward, so we shall proceed with that in due course.

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

I am interested to hear the Minister talk about CCTV in such a way, as it seems that there is already a slight shift in the coalition Government’s position. We know that CCTV has given people throughout the country their neighbourhoods back and the freedom to go about their daily lives. His Government talk about reducing red tape and regulation for the police, yet they plan to regulate CCTV and perhaps create more hoops for the police, who see it as a valuable tool, so will he answer a simple question once and for all: will the plans to regulate CCTV lead to fewer CCTV cameras? He is fudging.

[James Brokenshire]

It is interesting that the hon. Lady suggests that regulation is not required, because her Government established the interim CCTV regulator, thereby accepting that regulation is required and that the matter needs to be examined carefully. It is all very well for her to talk as if this issue has suddenly arisen, but she and her Government recognised the situation when they were in government. We will ensure that proportionate and relevant regulation is brought forward that will enable CCTV systems to be established by local communities in an appropriate way—

[Mr Speaker]

Order. I would be grateful if we could make some progress.

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

16. What plans she has to tackle serious and organised crime; and if she will make a statement.

[The Minister for Police (Nick Herbert)]

Tackling serious organised crime requires effective co-operation and co-ordination across law enforcement. We will work with police forces to strengthen arrangements to deal with serious crime and other cross-boundary policing challenges.

[Elizabeth Truss]

I am pleased that Norfolk constabulary is collaborating with other police forces in the region to work against the scourge of serious and organised crime. However, I understand that, on a national level, that collaboration is not yet as strong as it is in counter-terrorism. What plans do we have to put serious and organised crime fighting on a similar footing?

[Nick Herbert]

I know of the close interest that my hon. Friend takes in these matters, having been the author of a publication that proposed better arrangements to deal with serious crime. We will not pursue the Labour party’s policy of compulsory mergers of police forces. We believe that it is necessary for police forces to collaborate better to deal with organised crime, just as better collaboration has been achieved in counter-terrorism activity, and that is the policy that we shall pursue.

[Alun Michael (Cardiff South and Penarth) (Lab/Co-op)]

Does the Minister accept that the internet is increasingly being used by those who get involved in serious and organised crime? Does he agree that a partnership approach, making use of the talents and expertise of people in business, is essential to reduce the extent of internet use for the purposes of crime?

[Nick Herbert]

I know that the Under-Secretary of State for the Home Department, my hon. Friend the Member for Old Bexley and Sidcup (James Brokenshire), is already in correspondence with the right hon. Gentleman about this matter. E-crime is a serious and growing problem, and it must make sense to tackle it on a partnership basis, with law enforcement agencies and business working together, and that is what we will do.

[Hugh Bayley (York Central) (Lab)]

18. What the percentage increase or decrease in the number of crimes reported in North Yorkshire was between (a) 1980 and 1997 and (b) 1997 and 2010.

[The Minister for Police (Nick Herbert)]

The police in North Yorkshire notified the Home Office of nearly 22,000 offences in 1980; just over 50,000 in 1997; and 48,500 in 2008-09. During this period there have been considerable changes to reporting levels and to how the police record crime, and I am advised that these figures are not comparable.

[Hugh Bayley]

Comparable figures show nationally a 38% decline in crime. Will the Minister join me in congratulating the police on reducing crime in North Yorkshire and York? Does he agree with the statisticians in his own Department and the UK Statistics Authority that the British crime survey is the best way of measuring long-term trends in crime?

[Nick Herbert]

I agree that the British crime survey plays a valuable role, but the problem is that, as the hon. Gentleman knows, it is not complete. For instance, it misses out the recording of crimes against young people. Last week, the experimental figures showed that there may be up to 2 million crimes that were previously being missed by the British crime survey. Police recorded figures also have their problems. We need measures of crime in which the public have confidence, and we will be making further announcements about that in due course.

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

Does my right hon. Friend agree that many crimes that were previously dealt with as breaches of the peace are now dealt with as antisocial behaviour? Will the Government now grasp the nettle and tackle such crimes using police forces, rather than councils, which are not open over the weekend and in the evening, when most of those crimes are committed?

[Nick Herbert]

It is important to convey the message that antisocial behaviour may be activity that is criminal and should be treated as such. The public still feel that there is too much antisocial behaviour in their neighbourhoods, and they want it to be prioritised by police forces. The best way to do that is not only by policing but through effective partnerships on the ground, using the full range of resources that can be provided by local authorities, other agencies and the police family working together.

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

19. What recent representations she has received on the amount of time spent on administrative tasks by police officers each year.

[The Minister for Police (Nick Herbert)]

With permission, Mr Speaker, I would like to group this question with Question 22.

[Mr Speaker]

Order. I have had no indication of that grouping. There is a practice now developing of this happening spontaneously. It really will not do. We shall see how it goes today. I call the Minister.

[Nick Herbert]

I apologise, Mr Speaker. I refer my hon. Friend the Member for Hastings and Rye (Amber Rudd) to the answer that I gave some moments ago.

[Amber Rudd]

I thank the Minister for his answer. Recent statistics demonstrate that police spend 14% of their time on patrol and 20% on paperwork. Will he give an example of what administrative function might be cut from their work, so that we can give them the opportunity to spend more time out on the beat?

[Nick Herbert]

The most important example is the policy we have had for a long time: scrapping the unnecessary stop form, whose introduction made it harder for police forces to interact sensibly with the public, and resulted in a great deal of unnecessary bureaucracy. However, we will not stop at that, but will look at the whole performance framework and the central targets that have bedevilled policing for too long. We will free up police officers, so that they can do the job.

[Barry Gardiner (Brent North) (Lab)]

Given that the Minister wishes to free up police officers to spend more time on the beat, and given the recent survey that predicts 35,000 fewer police officers on the beat, what assessment has he made of how many administrative tasks he will have to scrap to maintain an appropriate and effective police presence?

[Nick Herbert]

I should say to the hon. Gentleman that we do not recognise those figures. Our policy is that we want to do everything possible to enable chief constables to prioritise the front line and maintain police officers out in the neighbourhoods, where the public want to see them. To do that, we must ensure that we reduce bureaucracy.

[Mr Speaker]

Order. No blame is imputed to the hon. Member for Pudsey (Stuart Andrew). It is simply that the grouping of his question with Question 19 was not something of which I had notice, and it is not a grouping to which I would ordinarily agree, for reasons of progress down the Order Paper.

[Alun Michael (Cardiff South and Penarth) (Lab/Co-op)]

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

[The Secretary of State for the Home Department (Mrs Theresa May)]

Later this afternoon, I will make a statement to the House on the Government’s plans to consult on the introduction of an annual limit on the number of non-EU economic migrants coming to the UK, and the introduction of an interim limit.

[Alun Michael]

Does the Home Secretary acknowledge the evidence given to the Select Committee on Justice by Victim Support suggesting that what victims want, other than not to have become a victim in the first place, is not to become a victim again in future. Does she accept that consequently a key purpose for the police and all other parts of the criminal justice system must be the reduction of offending and reoffending?

[Mrs May]

I am grateful to the right hon. Gentleman for his reference to the need to reduce reoffending. I entirely agree that we need to do more to reduce reoffending, but I would point out to him that, over 13 years, his Government did very little to address that issue, which is why we have in the coalition agreement a clear commitment to look across the whole criminal justice system to examine what can be done to improve rehabilitation of offenders and hence to reduce reoffending.

[Mr Robin Walker (Worcester) (Con)]

T2. In recent meetings with Worcester’s Kashmiri and Bangladeshi communities, I have found a strong welcome for the new Government’s focus on improving community cohesion and supporting integration. Does the Home Secretary agree that the English language requirement for people coming to the UK from outside the EU to marry will support those aims and benefit those communities?

[Mrs May]

I am grateful to my hon. Friend for his question. With your permission, Mr Speaker, may I begin by offering my condolences to him on the recent death of his father, and pay tribute to the many years of distinguished service given to this country, both in the House and in another place, including as a Government Minister, by the late Lord Walker?

I agree with my hon. Friend. The English language is important in respect of people being able to live in the UK and integrate in communities here, which is why we have indeed already announced that we are tightening up the requirements for English language to be spoken. We require people who are coming into the UK to marry to speak English at a level that was not required before. It is perfectly reasonable to do so.

[Helen Jones (Warrington North) (Lab)]

T3. Before the election, Warrington Liberal Democrats said in a leaflet headed “Stop The Police Cuts”: “Just to keep force levels where they are today the police need a grant increase of at least 5%”.Does the Minister agree?

[Mrs May]

The issue that affects most people in relation to the police is seeing police not sitting in offices filling in forms, but getting out on the street, preventing crime, dealing with criminals, and giving people the safety, security and confidence that they want in their neighbourhoods. That is why we will slash bureaucracy, and get police on the streets—something that the hon. Lady’s Government failed to do in 13 years.

[Mr Philip Hollobone (Kettering) (Con)]

T4. Given that there are 11,500 foreign nationals in British jails, will the Home Secretary work with the Secretary of State for Justice and the Foreign Office to ensure that those in-sentence prisoners are deported back to their country of origin to serve out their sentences in their own lands?

[The Minister for Immigration (Damian Green)]

My hon. Friend makes an important point. The issue of foreign national prisoners bedevilled the previous Administration for years and led to the resignation of a Home Secretary. In 2008—the last year for which we have full figures—the UK Border Agency removed or deported nearly 5,400 foreign national prisoners. There is always more to be done. There are cases in which the court rules in an individual’s favour on specific human rights grounds and the Home Office disagrees with the court’s decision, but we all have to respect the court’s decision, so we are continuing to look at the administrative improvements needed to avoid administrative obstacles to the removal of foreign national prisoners at the end of their sentence, and to look at the legal problems.

[Vernon Coaker (Gedling) (Lab)]

T7. What will the Home Secretary do if one of the new directly elected police commissioners is an extremist? What will happen?

[Mrs May]

I believe that introducing that important element of democratic accountability for police forces and not getting involved in operational matters, which will remain with the operational independence of police chiefs, is important. The hon. Gentleman’s question implies something with which I disagree. It implies that he is not willing to trust the British people and the common sense of the British people to elect people who will do a good job in their area.

[Richard Fuller (Bedford) (Con)]

T5. The Home Secretary is aware of the current discussions about a potential merger of the police forces of Bedfordshire and Hertfordshire. Does she agree that such discussions are worth while at this time to achieve a fairer allocation of police resourcing and a more efficient allocation of resources where it matters—on the front line with our police?

[The Minister for Police (Nick Herbert)]

I can confirm to my hon. Friend that I am due to have a meeting with the chief constables of Bedfordshire and Hertfordshire to discuss the matter. I will also talk to locally elected representatives. It is important that if voluntary mergers of police forces go ahead, they do so with the consent of local people.

[Derek Twigg (Halton) (Lab)]

The Home Secretary will be aware of the comments made by the Culture Secretary this morning linking the Hillsborough disaster to football hooliganism. That is a disgrace. I have recently spoken to some of the families who lost loved ones at Hillsborough. They are deeply distressed by that and angry about what has happened. How can they have trust in the Government to see through the proper release of the Hillsborough files, given that that is the view held in high parts of Government? As the Home Secretary leads on the matter, will she meet urgently with members of the families and the Culture Secretary to discuss the issue?

[Mrs May]

I thank the hon. Gentleman for his question. I understand that my right hon. Friend the Secretary of State for Culture, Media and Sport has apologised for any suggestion that crowd unrest was responsible for the Hillsborough disaster. The judicial inquiry was absolutely clear on this point. The Taylor report cleared Liverpool supporters of any allegations that they were to blame for the terrible events that took place at that time, and the families of those who, sadly, lost their lives in the Hillsborough disaster have conducted a dignified campaign over the years to try to ensure that the information is released and that they can see all the details of what happened at that time. I have already met the Bishop of Liverpool to discuss the work that his panel is doing in examining these issues. I would be happy to meet representatives of the Hillsborough families.

[Chris Skidmore (Kingswood) (Con)]

T6. In my constituency, Kingswood, under the previous Government, the local police station on the high street was bulldozed to make way for flats. Many of my constituents are rightly extremely concerned about that. What steps will the Minister take to ensure a more effective local policing presence in the future?

[Nick Herbert]

I will happily meet my hon. Friend to discuss that. Local people want to see an available and visible police presence. That does not necessarily mean old buildings, but it means the police using innovative ways to ensure that they have a presence in the community—for instance, by sharing community facilities.

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

T8. A cut of 25% in police funding would be devastating for public confidence. What the Minister said before would require large reductions in the number of police officers, community support officers and civilian staff. Those reductions could come about only through large up-front payments in pension, redundancy and other costs. What assessment has the Minister made of the size of those costs, and how on earth will they be paid for?

[Mrs May]

The hon. Gentleman refers to front-line policing and to police doing the job that the public want them to do. We have answered a number of questions on that issue today, and the first thing is to ensure that our police officers are able to get out on the streets, doing the job that they want to do and people want them to do. I find it somewhat surprising that Labour Members continue to raise funding issues, when the people who are to blame for the funding situation in which we find ourselves are their Government.

[Richard Harrington (Watford) (Con)]

T9. As I am sure my right hon. Friend is aware, there are a large number of failed asylum seekers in my constituency and elsewhere in the country. Can she assure me that the situation will be reversed, and that policies will be implemented to ensure that our porous borders cease to be so?

[Damian Green]

I am grateful to my hon. Friend for making two important points. One key problem with the asylum system, affecting both the taxpayer and genuine refugees, is the appalling delays that were allowed to build up under the previous Government. That was unfair on genuine asylum seekers and unfair on the taxpayer. At the same time, as he said, our borders have been allowed to become much too porous over the past 13 years. That is why we are working on plans for a border police force, which will give much better protection to our borders than was ever provided under the previous Government.

[Several hon. Members]

rose—

[Mr Speaker]

Order. There is very little time left, so we need exceptionally short questions and short answers.

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

The Home Secretary referred earlier to the problem with some CCTV cameras in Birmingham. I understand that more than £3 million has been spent on cameras that are now covered with plastic bags. Does she intend to unmask the bureaucrat who is responsible for that fiasco?

[Mrs May]

As the hon. Gentleman will be aware, a discussion is now taking place between the local police force and local communities about automatic number plate recognition cameras in Birmingham, and that is one reason why we intend, in looking at regulation on CCTV, to include ANPR.

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

One of my constituents, who also happens to be my parliamentary researcher, was seriously hurt in an unprovoked attack after he had been out for dinner with a friend in Croydon last week. Does the Secretary of State agree that late licensing is partly responsible for the increase in violent assaults at night? Will she update the House on how plans are progressing to sort out late licensing?

[The Parliamentary Under-Secretary of State for the Home Department (James Brokenshire)]

My hon. Friend provides a powerful example of the impact of violent crime and alcohol, and certainly 47% of violent assaults are believed to be carried out by individuals under the influence of alcohol. That is why we will bring forward proposals to rebalance the Licensing Act 2003 in favour of local communities, and in particular introduce a proposal for a late-night levy to deal with the costs that are attributed to dealing with licensing problems in certain areas.

[Ian Austin (Dudley North) (Lab)]

My constituency has been targeted by the English Defence League for a series of demonstrations. Recent events have seen violence and disorder on the streets, police diverted to deal with that and property and constituents attacked. On one occasion the entire town centre was boarded up, costing businesses thousands. Could I bring a delegation of people from Dudley to meet the Home Secretary in order to discuss how we might prevent those problems in future?

[Mrs May]

Certainly I or another Minister will be very happy to meet the hon. Gentleman and a delegation in order to address those issues. He raises a very important point about the activities of the English Defence League, and we would be happy to discuss that.

[Duncan Hames (Chippenham) (LD)]

Recent visits organised by the Children of Chernobyl charity have been disrupted because of late decisions by the UK Border Agency. Will my right hon. Friend urge the agency to take a risk-based approach to its investigations and recognise the long and trouble-free record of that excellent charity?

[Damian Green]

I am obviously aware of the problems that have emerged with what are perfectly reasonable investigations. Children are being brought a long way across the world unaccompanied, so it is not unreasonable for there to be some checks, but I am aware that there have been problems this year, and I shall be happy to take up any individual case that my hon. Friend would like to raise with me.

[Jessica Morden (Newport East) (Lab)]

At a time when the Government are looking to police forces to save money, will the Minister tell the House how much it will cost to elect and fund the proposed directly elected police commissioners?

[Nick Herbert]

We will be making further announcements in due course about our policy of replacing bureaucratic accountability with direct accountability through directly elected individuals.

[Mr James Clappison (Hertsmere) (Con)]

Does my right hon. Friend recall that nearly 10 years into the life of the previous Government, it suddenly emerged by chance that foreign prisoners were not being considered for deportation when they should have been, and that there was a backlog of 400,000 asylum cases and other cases owing to incompetence? Will he ensure that there is a culture of openness, transparency and efficiency in the Home Office right from the start of this Government?

[Damian Green]

My hon. Friend makes a good point with characteristic trenchancy and passion. He is right. The situation with foreign national prisoners was a disaster, as was the asylum delay backlog. We are getting to grips with these problems. It is very important not only that we have the right number of people coming to this country but that the people of this country have confidence in the administration of the immigration system, because without that we will never have people assured that the borders of this country are as secure as they should be. That was one of the great failures of the previous Government.

[Mr Wayne David (Caerphilly) (Lab)]

What progress is being made on the implementation of the European Union’s drugs strategy?

[James Brokenshire]

We are considering the whole issue of the drugs strategy in the context of legal highs and other emerging psychoactive substances, as well as in the context of the prevalence of cocaine use, which remains very significant. That is why the Advisory Council on the Misuse of Drugs is examining the issue and will be providing further advice to Government in that regard.

G8 and G20 Summits

Monday 28th June 2010 Commons Chamber

15:31

[The Prime Minister (Mr David Cameron)]

With permission, Mr Speaker, I would like to make a statement on the G8 and G20 summits which took place in Canada.

First, I am sure the whole House will join me in paying tribute to the seven British servicemen who have lost their lives in the last week: from 40 Commando Royal Marines, Sergeant Steven Darbyshire; from 1st Battalion the Mercian Regiment, Colour Sergeant Martyn Horton, Private Douglas Halliday, and Private Alex Isaac; from the Yorkshire Regiment, Lance Corporal David Ramsden; and from the 4th Regiment Royal Artillery, Bombardier Stephen Gilbert, who died from injuries he received in an explosion earlier this month; and we also remember the soldier from 101 Engineer Regiment who died yesterday. As the country marked Armed Forces day this weekend, people did so with tremendous pride but also with great sadness. We must never forget what these men, and so many of their colleagues, have given for us, and our thoughts should be with their friends and their families.

As I have said, I am determined that our forces will not stay in Afghanistan a day longer than necessary. I led a discussion at the G8 where we made it clear that we

“fully support the transition strategy adopted”

by international partners. We are not after a perfect Afghanistan—just a stable Afghanistan able to maintain its own security and prevent al-Qaeda from returning. So the G8 sent a collective signal that we want the Afghan security forces to

“assume increasing responsibility for security within five years.”

The presence of large-scale international forces cannot be an indefinite commitment. We need to get the job done and bring our troops back home.

Let me report to the House on the main conclusions of the G8 and G20. I have placed copies of the communiqués in the Library so that people can see the details of what was agreed. The G8 is a good forum for the leading democratic economies to give proper strategic consideration to the big foreign policy and security issues. It has also played a vital role in helping the richer nations to improve the future of the poorest people in our world.

In my view, those two vital functions of this forum should continue. I want to take each in turn. On the big security issues, we discussed the middle east peace process and agreed the importance of putting pressure on both sides to engage in the proximity talks, with the aim of creating the conditions for direct talks later this year. President Obama specifically said that he would make this his priority in the coming months. While the changes Israel have proposed are welcome, they do not go far enough, and the communiqué says that the current arrangements in Gaza

“are not sustainable and must be changed.”

On Iran, UN Security Council resolution 1929 was welcomed. The communiqué states that all countries should “implement it fully.” Since the G8 includes Russia, I believe that this was significant. The UK also made the case for all members of the G8 to have positive engagement with Turkey, which could have a key role to play both in resolving the Iran issue and in encouraging progress on middle east peace. We also discussed North Korea, deploring and condemning the sinking of the Cheonan, and the vital topics of nuclear disarmament and non-proliferation.

On development, while the G8 has played an important role in increasing aid spending by the richest countries in the world, some of those countries have not met commitments that they set out. I stressed the importance of transparency and accountability, and the accountability report that has been published sets out what countries have done in meeting their commitments. While not perfect, it represents good progress in ensuring that countries cannot make promises without being held accountable for them and for failing to meet them.

Even at a time when our countries face difficult budget decisions, it is important that we maintain our commitment to helping the poorest in the world. The UK is maintaining its commitment to increase spending on aid to 0.7% of gross national income. That gives us the opportunity to exercise leadership on behalf of the poorest. At the same time, in order to take the public with us, we also need to ensure that every penny will reach those who need it most. That means transparency and accountability along the lines that we are introducing. It also means that the projects we support must be deliverable, practical and measurable, addressing the causes of poverty and not just alleviating the symptoms.

The Muskoka initiative on maternal and child health agreed at the G8 is a case in point. Today in the United Kingdom, the chances of dying in pregnancy and childbirth are 1 in 8,200. In parts of Africa they are as high as 1 in 7. That is something we can change and must change, and the resources agreed, including a big contribution from the UK, could lead to an additional 1.3 million lives being saved. As the White Ribbon Alliance for Safe Motherhood points out, if we save the mother we save the family, and if we save the family, we build a stronger society and a stronger economy.

I turn to the G20, which is now clearly the right forum for all the leading economies of the world to discuss the vital economic issues. The key goal of the G20 is to continue the recovery of the world economy and secure sustainable growth. The argument proposed by some that deficit reduction and growth are mutually exclusive is, in my view, completely wrong. The whole approach underlined by the International Monetary Fund for this G20 and the subsequent meeting in Seoul is about how the world should maximise growth through the right combination of three things: deficit reduction; tackling imbalances, particularly through actions by emerging economies; and structural reform in the advanced economies. There was broad agreement on all three, which is reflected clearly in the communiqué.

On deficit reduction, the G20 agreed that

“those countries with serious fiscal challenges need to accelerate the pace of consolidation”

and that there was a risk that

“failure to implement consolidation would undermine confidence and hamper growth.”

The advanced G20 economies committed to at least halve current deficits by 2013 and stabilise Government debt-to-GDP ratios by 2016. While we agreed that the speed and timing of deficit reduction will vary with national circumstances, the verdict of the G20 was unequivocal: for countries with large deficits, the time to act is now. Britain has one of the largest deficits in the G20, and the summit specifically welcomed the plans set out in our Budget last week.

On addressing the fundamental imbalances, China’s recent decision to move towards greater exchange rate flexibility is clearly very welcome. On financial reform, the G20 agreed a set of principles on bank levies to ensure that the financial sector makes a

“fair and substantial contribution towards paying for any burdens associated with government interventions to repair the financial system”.

That is very much in line with the plans for a bank levy that my right hon. Friend the Chancellor announced in his Budget. On ensuring that the banks in all countries can withstand future crises, we also agreed that

“the amount of capital will be significantly higher and the quality of capital significantly improved”.

The new standards should be finalised by the Seoul summit in November. The Basel accord took 10 years; this looks like it could be completed in a little over one.

Although the drawing up of clear, robust new rules is essential, it is important that they are not implemented too quickly. We do not want a further monetary squeeze or a reduction in bank lending at this stage of the recovery. The biggest stimulus we could give the world economy today is the expansion of trade. While the G20’s agreement to extend its pledge that no additional trade barriers should be put in place is welcome, continued failure to make progress on Doha is deeply disappointing. It has now been eight years in negotiation, and frankly, there can be little confidence that as things stand the round will be completed rapidly. That is a tragedy, because a completed trade round could add $170 billion to the world economy.

The UK led the working session on this issue at the G20. One potential way of making progress is to try to add to the benefits of the round, including more things in it, so that all parties can see reasons for going that final mile. This was supported by President Obama, and the director-general of the World Trade Organisation, Pascal Lamy, suggested that all trade negotiators should return to the table and consider, vitally, both what it is they really need from the round and what it is they are prepared to offer to get it moving again. This should lead to a report at the Seoul meeting in November. In my view, too many people still see this as a zero-sum game, where one country’s success in exports is somehow another country’s failure. This is nonsense: everyone can benefit from an increase in trade flows. We will play our part in breaking the logjam, and I want this country to lead the charge in making the case for growing trade flows around the world.

On climate change, while the G8 communiqué was strongly positive on limiting the rise in global temperatures to less than 2°, the G20 communiqué was more limited. This is partly because some countries do not see the G20 as the forum for discussing this issue. In discussions, it was also clear that there was widespread disappointment at the way that Copenhagen failed to deliver a legally binding global deal. We must not give up on this, and we will be playing our full part in pushing for a successful outcome at Cancun.

This long weekend of summitry was a good opportunity to build Britain’s bilateral relationships. Among others, I had useful meetings with President Obama, President Hu of China, Prime Minister Singh of India and Prime Minister Erdogan of Turkey. In building a very strong friendship with our leading European partners, I also suffered the exquisite agony of watching England lose 4-1 to Germany in the company of my good friend Chancellor Merkel and the German summit team. While I cannot recommend the experience of watching England lose football to Germany in the margins of a G20 summit, I do commend this statement to the House.

[Ms Harriet Harman (Camberwell and Peckham) (Lab)]

I join the Prime Minister in paying tribute to the service personnel who have died in Afghanistan since we last addressed the House: from 40 Commando Royal Marines, Sergeant Steven Darbyshire; from 1st Battalion the Mercian Regiment, Colour Sergeant Martyn Horton, Private Douglas Halliday and Private Alex Isaac; from the Yorkshire Regiment, Lance Corporal David Ramsden; from the 4th Regiment Royal Artillery, Bombardier Stephen Gilbert; and the soldier from 101 Engineer Regiment who died yesterday. Our thoughts are with their families as we remember them and acknowledge the deep debt of gratitude we owe them.

May I thank the Prime Minister for his statement? The G8 and G20 summits covered many issues of importance to the United Kingdom, not least the need to work internationally to sustain the UK economic recovery that began last year. The G20 declaration rightly identifies the G20’s

“achievements in addressing the global economic crisis”,

saying that the G20’s

“efforts to date have borne good results. Unprecedented and globally coordinated fiscal and monetary stimulus is playing a major role in helping to restore private demand and lending.”

Now that the Prime Minister has joined other G20 leaders in endorsing those pro-growth policies that have put the global economy back on the road to recovery, will he acknowledge the role of the former Prime Minister, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), in shaping that approach and winning support for it at the G20, thereby laying the foundations for that recovery internationally and here at home?

Is it not inconsistent for the Prime Minister to sign up to this approach abroad while continuing to denigrate that approach here at home? We welcome the G20’s commitment to

“‘growth friendly’ fiscal consolidation plans”

and the target of halving deficits by 2013. Will he confirm that this target is entirely consistent with deficit reductions that the Office for Budget Responsibility showed would have been achieved by 2013 under our plans? Will he confirm that nothing in the G20 statement provides any justification whatever for his choice to cut the deficit further and faster? Indeed, is it not the case that only last week President Obama called on world leaders to

“learn from the consequential mistakes of the past when stimulus was too quickly withdrawn and resulted in renewed economic hardships”?

The G20 calls for growth-friendly fiscal consolidation, but how is it growth friendly to cut investment allowances for manufacturing firms, to scrap the regional development agencies and to cut back on investment in high-tech, export-oriented British firms such as Sheffield Forgemasters? How is it growth friendly for his Government to take an approach that the OBR says will cost 100,000 jobs?

With President Obama and major emerging economies, including India and Brazil, warning against the risk of Budget cuts too early and too deep, is it not clear that on the question of timing and content, the summit’s conclusions on deficit reduction amount to no more than an agreement to disagree? Given the risk of deflationary policies in the eurozone and the fact that growth forecasts in the United States have been revised downwards, is not weak demand the major threat to growth? Is it not the case that Government policy should still play a part in sustaining demand? Is it not clear, given that demand in our export markets again looks fragile, that the assumption of a 40% increase in UK exports, on which last week’s Budget plans were based, looks very optimistic? To which markets does the Prime Minister expect that 40% increase in exports to go?

The Opposition welcome the G8’s commitment to support the international security assistance force’s efforts in Afghanistan. As the Prime Minister recognised in his statement, this will be a crucial year for Afghanistan, with the Kabul conference and elections in September. Because military effort must pave the way for, and go alongside, a political settlement in Afghanistan, will he update the House on preparations for the Kabul summit and Afghan elections?

Surely there is agreement on both sides of the House that we do not want our troops to stay in Afghanistan one day longer than necessary. We look forward to when the Afghan Government can guarantee their people’s stability and security, and thereby make us safer, as the Prime Minister has said previously. Will he therefore clarify his remarks on Afghanistan? He said:

“We can’t be there for another five years”.

Does the Prime Minister believe that that assists our troops in their task in Afghanistan? What effect does the Defence Secretary believe the Prime Minister’s comments will have on the morale of our troops fighting day by day on the ground in Afghanistan? Is it not the case that, as the Defence Secretary has said, setting artificial time scales is a very dangerous game to play?

May I now turn to the G8 approach to tackling global poverty? Is the Prime Minister aware of the deep frustration within the development community at what it sees as a major retreat by the G8 on its commitment to help the poorest? In particular, how can he, as one of the G8 leaders, justify the decision to drop the commitment of the 2005 Gleneagles summit to increase aid by $50 billion by 2010? That G8 commitment was hard won by the previous Labour Government. Is he aware that Save the Children called that “shameful”, and that Oxfam described the G8 statement as being

“lower than our lowest expectations”

on maternal mortality?

Writing on the eve of the summit, the Prime Minister said:

“Too often these international meetings fail to live up to the hype and promises made”,

but instead of strengthening the resolve of G8 leaders to deliver the promised action, he has allowed them to renege on their promises. Does that not reflect badly on his international leadership, for which the very poorest will pay a heavy price? Can the Prime Minister tell us how hard he tried to get the other world leaders to stick to, and deliver, the Gleneagles promises? He apparently told journalists that as

“the new kid on the block”,

he was focusing on a different aid target, namely the UN’s 2015 millennium development goals. Will the Prime Minister attend the key UN summit on the millennium development goals this September in New York? If he is not planning to do so, could he reconsider his decision in order to put the G8’s and the world’s efforts towards achieving the millennium development goals back on track?

[The Prime Minister]

I thank the right hon. and learned Lady for her response.

We are preparing for the Kabul summit by having repeated conversations and meetings with President Karzai and others. I have met him twice since becoming Prime Minister, once here in the UK and once in Afghanistan, and my right hon. Friend the Foreign Secretary will attend that important meeting.

The right hon. and learned Lady asked me to clarify the perfectly obvious statement that British troops should not be in Afghanistan in five years’ time. Let me put it to her the other way around. It was a Labour Government who took us into Helmand province in 2005. Is she really saying that 10 years later we should still be there? We want to get the job done, train up the Afghan army and police and bring our troops back home. She would be better advised to seek cross-party agreement on that than to take the position that she has chosen.

The right hon. and learned Lady then made some remarks about global poverty. Of course I deplore the fact that some G8 members have not stuck to the promises that they made at Gleneagles in 2005, but the slippage that she was trying to blame on the new Government took place between 2005 and 2010. The person to whom she wanted me to pay tribute—I would be delighted if he could be bothered to turn up to the House—was either Chancellor of the Exchequer or Prime Minister during that time.

The right hon. and learned Lady asked me to attend the UN summit on the millennium development goals in September in New York. I was intending to do so, but for reasons of paternal health—we have been talking about maternal health—I hope that I will be otherwise engaged in the UK, as we are having a baby. My right hon. Friend the Deputy Prime Minister will be at the summit and doing a very good job.

The right hon. and learned Lady’s whole premise on which she based her argument about the G20, the need to tackle deficits and get growth is completely wrong. The whole point about the G20 is that if you combine fiscal consolidation in the countries that need it with expansion and dealing with the imbalances from emerging economies, you can maximise world growth. That is what it is about. She says that there is no case for going faster in those countries with excessive deficits—on the IMF figures we have the biggest deficit of all—but the Labour party is now completely isolated on this issue. The G20’s view is that

“it is clear that consolidation will need to begin in advanced economies in 2011, and earlier for countries experiencing significant fiscal challenges at present”—

and that is the UK. So the Labour party is isolated from the G20.

Let us see how Labour is getting on with the US. Tim Geithner, the US Treasury Secretary, said about the UK Budget:

“I think they’ve got the right balance, the right objectives and I think they’re demonstrating that again you have to act so that people can see you’re committed to follow through”.

So Labour is now isolated from the Americans. What about the Europeans? José Manuel Barroso, the President of the Commission, said in Toronto that there is no more room for deficit spending. So Labour is now isolated from the Europeans.

Let me end with the IMF, because that is where we would have ended up if that lot had stayed in power. The IMF was clear:

“In this regard, credible and coherent fiscal plans should be clearly communicated as soon as possible. There is a pressing need…for fiscal consolidation in G-20 advanced economies”.

If that is not done, it could, says the IMF,

“weigh on the recovery and raise market pressure in an environment of elevated uncertainty about sovereign debt risks.”

There we have it. Whether it is the US, the EU or the IMF—and I could add in the OECD—the Labour party is now completely and utterly isolated.

As for quoting President Obama, here is one I prepared earlier. He said that

“we have been very impressed with the leadership that David Cameron has shown thus far. He has, I think, taken a series of steps on some very tough issues and…is prepared to make…decisions on behalf of…his country.”

The right hon. and learned Lady’s attempt to claim that somehow we are not completely in tune with the US, the EU, the G20 and the IMF is an attack that simply is not going to take off.

[Several hon. Members]

rose—

[Mr Speaker]

Order. Many right hon. and hon. Members are seeking to catch my eye, so brevity is required, a legendary example of which will, I know, now be provided by the hon. Member for Louth and Horncastle (Sir Peter Tapsell).

[Sir Peter Tapsell (Louth and Horncastle) (Con)]

Is part of President Obama’s message to the leading industrial countries of continental Europe not to move too rapidly or too severely in cutting back on public expenditure or the money supply lest they precipitate a slump, as occurred in the case of Credit Anstaldt, as a result of applying similar policies, led by Germany?

[The Prime Minister]

The message is clear: countries that face big fiscal challenges have to address those challenges. Let me put it the other way around: for countries like us, with an 11% budget deficit, further fiscal action—or, indeed, no action—could lead to a serious problem with our economy. Where I agree with my hon. Friend is that when we tighten fiscal policy, as we should, that should be accompanied by a loose monetary policy. That is why I made the remarks that I did about the importance of not bringing in the banking rules too quickly, and why the Bank of England’s positive response to the Budget that my right hon. Friend the Chancellor introduced is so encouraging. However, for Britain, the right measure, as the G20, the EU and the OECD say, is to deal with our deficit. If we do not, we could be in real danger.

[Mr David Blunkett (Sheffield, Brightside and Hillsborough) (Lab)]

I was going to congratulate the Prime Minister on his first foray into the G8 and G20, but he has already congratulated himself.

In his discussions with the Canadian Prime Minister, did they talk about the consequences for ordinary men and women of too rapid a deficit reduction and, in particular, the reduction in Canada in the late 1990s, when the environmental services budget in Ontario was cut by $200 million and the town of Walkerton experienced the most enormous impact, with disease and, regrettably, death from E. coli? Does the Prime Minister agree that it is not grandiose announcements but the consequences for people in their lives with which we need to be concerned?

[The Prime Minister]

I thank the right hon. Gentleman for his question and his probably justified rebuke, which was well put. However, at the risk of quoting another Prime Minister, Stephen Harper did say that the UK Budget

“highlighted the very fiscal consolidation that we’re trying to steer the G20 towards,”

so there was strong support from the Canadians for what we are doing here. As we do the difficult job of dealing with the record deficit that we inherited, we of course have to do everything that we can to protect the poorest and ensure that we stimulate regional growth, a subject that we will be talking about tomorrow. However, I keep returning to this point: not acting would be more serious for the UK economy and would lead to greater hardship for people.

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

By what criteria will it be judged that Afghanistan is sufficiently stable to allow us to withdraw our troops, and how long will it be before we are talking to the Taliban, as suggested over the weekend by General Sir David Richards?

[The Prime Minister]

Let me try to answer both those questions briefly. The way to judge progress in Afghanistan is in terms of the basic level of security, stability and governance. So in Helmand, for instance, as we see districts that are under good provincial governors, with lead Afghan control over security, that is the time when we can judge that the job is getting done, and there is some prospect of some of that happening this year. As for talking to Taliban, as the right hon. and learned Gentleman puts it, a process of reconciliation and reintegration is taking place, where Taliban who are prepared to stop fighting and accept the basic tenets of the Afghan constitution can be reintegrated back into society. That should happen. That political track, which runs alongside the training of the Afghan army and the military surge, is vital, and we need to push further and faster on it.

[Mr Geoffrey Robinson (Coventry North West) (Lab)]

May I push the Prime Minister slightly harder on the issue of Afghanistan and talking to the Taliban? It is true, as he says, that those who want to lay down their arms can be welcomed back, but there may be many who are not, but who will nevertheless be required to do so, in the event of a political situation being arrived at, which all of us in this House know is the only eventual outcome for Afghanistan. There is a limited amount that the Prime Minister can say, but it would be good if he could reassure the House that, come the right moment and in the right way, the British Government will indicate their willingness to talk?

[The Prime Minister]

I am grateful to the hon. Gentleman for the way in which he put his question. This is one of those things that it is better to get on and deal with, rather than endlessly theorising about it. There is a huge difference between that part of the insurgency that is linked to al-Qaeda and is extremist in its ideology, and what has become in some parts of Afghanistan an insurgency based on the way in which particular tribes have been dealt with or on particular local issues. There is a difference between the two, and we need to bear that in mind in this important political track that we have embarked on.

[Mr James Arbuthnot (North East Hampshire) (Con)]

My right hon. Friend was absolutely right to say that none of us wants to stay in Afghanistan a moment longer than is necessary, but does he agree that we have to get our priorities right between leaving and succeeding? If our priority is to leave, that will make it harder to succeed, whereas if our priority is to succeed, that will make it easier to leave.

[The Prime Minister]

I very much agree with my right hon. Friend on that. Transitioning provinces and districts to Afghan control should be done on the basis of the facts on the ground and the capacity that they have to do that, rather than on the basis of a timetable. Having said that, I do not see anything wrong with saying, “This is a task that has to take place over the coming years, but we should not be there, for instance, for five years.” That is a perfectly fair point to make—[Interruption.] I can hear chuntering from the Opposition. The last Government set quite a lot of interim short-term targets, and I think that is where the problems have come from.

[Angus Robertson (Moray) (SNP)]

I thank the Prime Minister for the advance copy of his statement. I associate the Scottish National party and Plaid Cymru with the condolences that he expressed at the beginning of his statement. President Obama has set a timetable for beginning the draw-down of US troops from Afghanistan, as have the Canadian hosts of the G20. If that is right for the United States and for Canada, why is it wrong for the UK?

[The Prime Minister]

There is a difference between what Canada has decided and what President Obama is undertaking. Canada has set a firm deadline for withdrawing all its troops from combat and other operations, and that date is firmly set in stone. President Obama has spoke about a review towards the end of this year and, from July 2011, he hopes to be drawing down the surge in troops that has taken place this year. That is very different from what the Canadians are discussing. We are part of that US surge. We surged our troop numbers, as the US did—albeit by less, but we still have around 10,000 in Helmand. We, too, should be looking at progress at the end of the year, and at that July 2011 date. However, I would rather give the House and the people of this country the certain knowledge that we are not going to be there in five years’ time in the role that we are now. Between now and then, however, let us try to deliver on the ground as best we can, and train up the Afghan national army and the police in order to deliver that security and bring our troops home. And let us do it, as my right hon. Friend the Member for North East Hampshire (Mr Arbuthnot) suggested, on the basis of the facts on the ground.

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

I know that the Prime Minister wants the existing strategy to be given more time to succeed, but will he accept that, if it shows little sign of progress in the next few months, or even the next year or so, there should be an alternative to recommending total withdrawal? Total withdrawal would take us back to square one, and the existing strategy would mean our continuing to take excessive casualties. There has to be, and there could be, a middle way, and I hope that he will consider that if he sees that the present strategy is not moving in the direction that he would like to see.

[The Prime Minister]

I know that my hon. Friend is working hard on the middle way option, and that he is going to do further work on it. Of course I shall look carefully at what he produces. I would say to him that the surge in troop numbers has made a difference on the ground. In the parts of Afghanistan where previously it was impossible to step outside a military base, it is now possible to walk around the towns and visit the markets. I went to a training college, the last time I was in Helmand. The previous time, I went to a wheat seed distribution centre. Both times, I was able to have some freedom of movement. So there is some progress, and I think that this is the right strategy. We should use all that we have, this year, to give it every chance of success.

[Tony Lloyd (Manchester Central) (Lab)]

The Prime Minister prayed in aid the International Monetary Fund earlier, but he did not quote the IMF boss, Dominique Strauss-Kahn, who has warned that fiscal retrenchment wrongly done would cost 60 million jobs globally. How many of those 60 million jobs will be lost among the world’s poor, and how many will be lost among the poor of this country?

[The Prime Minister]

I discussed that with the IMF over the weekend. Dominique Strauss-Kahn’s own interventions in the debate at the G20 were very strongly in favour of fiscal consolidation, particularly for the countries—such as Britain—with the largest budget deficits. I looked around that table at the G20. According to the IMF’s figures, our budget deficit, at over 11 per cent., is the biggest. The answer to the question “Do they mean us when they are talking about excessive deficits?” is “Yes, they do.”

The key point made by Dominique Strauss-Kahn and others is that this is a package. If we are to maximise world growth, which will bring more jobs and livelihoods, we need a combination of fiscal consolidation in the countries that require it and measures to deal both with the imbalances in the developing world and with the structural problems in the developed economies such as Germany’s. That is what needs to be done. Dominique Strauss-Kahn is recommending exactly the sort of action that we are taking here in this country.

[Tony Baldry (Banbury) (Con)]

In the context of international development, the publication of the accountability report is very welcome, as is the specific commitment on maternal and child health. However, does my right hon. Friend agree that a commitment by the international community to a robust and specific process will be necessary in New York in September if we are to have any hope of achieving the millennium development goals by 2015?

[The Prime Minister]

My hon. Friend is absolutely right. We need a process of continual checking up on the progress being made towards the MDGs. Now, in 2010, we are two thirds of the way towards the final point, and we should be doing better. We chose maternal and child health at the G8 because those are two of the goals that we are furthest from meeting.

I, too, welcome the document to which my hon. Friend has referred, and I encourage my colleagues to read it. While it is not perfect, it sets out pretty clearly on pages 15, 16 and 17 what countries promised to do and what they have done. That is progress. We have all sat here and heard reports of the great things achieved at G8 summits, but this document holds countries’ feet to the fire and asks, “Did you do what you promised to do? If you did not, you must think again.”

[Jeremy Corbyn (Islington North) (Lab)]

The Prime Minister is right to draw attention to the likelihood of deaths in pregnancy in sub-Saharan Africa, but does he not think that the summit was a little bit complacent about the immediate and very serious problem of food shortages throughout that area, and the consequent large migration flows as people desperately seek somewhere to live and something to eat? Is there not a real sense of urgency when one in six of the world’s population are suffering from food shortages, the largest number in history?

[The Prime Minister]

I would not say that the summit was complacent. It was my first G8 summit, and I was struck by the fact that about half the sessions were opened up to visiting leaders from the African Union, Algeria, Egypt and elsewhere in Africa, so that they could keep reminding the richest countries in the world of what they had promised to do. The G8 cannot substitute for the work of the United Nations and other food programmes—it is not an emergency organisation—but I do not think that it is complacent about these challenges. At least, for the first time, it is checking up on itself a bit more, and that can only be a good thing.

[Mark Pritchard (The Wrekin) (Con)]

Prime Minister Harper has reiterated his plans to start withdrawing Canadian troops from Afghanistan next year. What discussions has the Prime Minister had with Prime Minister Harper about retaining Canadian troops who are in non-combat roles, such as the medical teams and their air troop transport helicopter teams?

[The Prime Minister]

My hon. Friend is right to ask that question. A discussion has been held. However, I think we should put on record the fact that no one can accuse Canada of not playing an incredibly positive role in NATO. It has experienced a very large number of casualties in relation to the size of its population. It has made its decision about 2011, and we should not seek in any way to gainsay it over that. Of course we can all do what we can to encourage it to go on playing a role of some kind, perhaps medical or related to training, and obviously it will play a role in terms of development. However, I think that my hon. Friend’s point was well made.

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

I realise that watching the football with Angela Merkel cannot have been much fun for the Prime Minister, not least because—I think—he was not even born in 1966, and therefore could not console himself with the memory of that achievement.

In his statement, the Prime Minister mentioned Turkey and its important role in relation to the middle east process in Iran. Has he had any discussions with fellow European heads of state about the fact that if we go on making it difficult for Turkey to accede to the European Union, it may well turn its back on Europe, in which case we will be the losers?

[The Prime Minister]

I have had those conversations at both the G8 and the G20. It is good that there is all-party agreement in this House that we should do everything we can to encourage Turkey into the European Union, to anchor her into the west in all the ways we can. Clearly there is a disagreement—a disagreement that is not going to go away—between France and Germany on the one hand and Britain on the other about Turkey and the EU, but irrespective of those positions we should all be doing what we can to encourage Turkey to feel part of Europe and of the direction we are taking. The role she can play in terms of Iran and the middle east peace process is very important, but she will not be so inclined to play that role if Europe turns her back.

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

I am sure my right hon. Friend will agree that if we are to succeed in Afghanistan, we need unity of purpose. How concerned is he, therefore, by the resignation of General McChrystal and of key Ministers in President Karzai’s Government, and by the extended leave being taken by the UK special representative to Afghanistan?

[The Prime Minister]

On the issue of the Ministers resigning from President Karzai’s Government, he has put in place quite talented replacements. On the issue of Stanley McChrystal, he is a very talented general who we believe had delivered the right strategy. I was consulted on the issue twice by President Obama, but in the end it was about what General McChrystal had said about the US Administration in the interview in Rolling Stone magazine, so it was an issue between the US Administration and Stanley McChrystal, rather than necessarily a matter for me.

[Mr Denis MacShane (Rotherham) (Lab)]

The Prime Minister has had three international outings and he has acquitted himself very well; it would be churlish not to acknowledge that. Ahead of them, he wrote in the Financial Times on 17 June:

“It is shocking that…women still do not have equal rights in the workplace. This is not just unfair; it makes no sense—because it deprives our economies of their full potential as workers and consumers.”

Will he therefore agree, in this spirit of bipartisanship, that having the gender pay audits that have been suggested in both the public and private sectors would be a way of getting rid of that huge problem?

[The Prime Minister]

We have supported—and, indeed, before the election we put forward a case for—gender pay audits, particularly based on those companies where any unfairness is found. The right hon. Gentleman makes a good point, quoting from my FT article, which is that that is one of the structural reforms that we in the west in the developed world should be carrying out in order to increase our growth rates, and as the right hon. Gentleman is being so friendly, I shall have to take away his thoughts and think about them again.

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

Whether it be Afghanistan, the global economy or, indeed, tackling climate change, the G8 and G20 summits are becoming useful vehicles for tackling global issues, but they make decisions that are then passed on to an organisation created just after the war, the United Nations, which is woefully out of date. Were there any discussions about updating the United Nations so that it can tackle these issues much better?

[The Prime Minister]

I am grateful for my hon. Friend’s question. The UN Secretary-General was, of course, at the G20 meeting and made a number of contributions, but my hon. Friend is right that the architecture of international relations is badly out of date. We have the rise of India, we have the enormous strength of Germany and Japan, and we have the great growth of Brazil, yet none of those countries is on the Security Council. We have to recognise that it is all very well all of us—we all do this—saying that we must share global leadership with India and China, but if we are going to share global leadership we need to change these institutions. This was discussed. It is fantastically difficult because people have so many vested interests—as, indeed, do we—but I do think that it is absolutely right for countries such as India and Brazil to have the sense that they should be on the UN Security Council.

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

I praise, of course, the troops who have died and those who, sadly and unfortunately, are likely to die in the future, but is it not the case that there can be hardly a single Member who believes that a military victory in Afghanistan in any meaningful sense is likely to come about even in another nine years? Therefore, is it not all the more important to start negotiations sooner rather than later, as suggested by General Richards? I think the Prime Minister should recognise that there is growing concern in the country at large about what is happening and the number of deaths in Afghanistan.

[The Prime Minister]

The hon. Gentleman is right. We are all concerned about the number of casualties in Afghanistan. He is also right in that when we look across history at fighting insurgencies, in very few of them has there ever been a complete military victory—it is a combination of what happens militarily and in the country at large and what happens in terms of some sort of reconciliation process. That is important. We are committed to the reconciliation process and would like to see it go further and faster, but as I said, it is important to maintain a distinction between Taliban linked to al-Qaeda, who would have the terrorist training camps come back and who want world terrorism, and people involved in insurgency for any number of other reasons. Yes, of course there must be a political track and of course we should develop it, but we need to differentiate the sorts of Taliban we face.

[Andrea Leadsom (South Northamptonshire) (Con)]

Does the Prime Minister agree that our global banking system remains incredibly risky, and that bearing in mind how long it has taken to get previous Basel agreements in place, it may be necessary to take steps to protect our particular vulnerability to the banking sector before then?

[The Prime Minister]

My hon. Friend is right. We are trying to put in place a system whereby banks have to ask themselves whether they have enough capital to withstand the sort of shock they suffered in 2008 and 2009. That is what needs to take place, and it is being put in place relatively quickly, but the rules need to be drawn up and agreed, and there may then be a pause before they are actually introduced, because at the moment the great risk is shrinkage of the monetary base—a shrinkage of bank lending—at this very sensitive time in our recovery.

[Paul Flynn (Newport West) (Lab)]

How can the Prime Minister retain his optimism after 11 British deaths in 10 days? How can a stable Afghanistan be built on the crumbling foundations of an election-rigging president and his criminal family, on an Afghan army that is mercenary and drug-addicted and on a police force that is depraved and entirely corrupt? We are in the end game position, as Canada and the Netherlands have explained. At the end of the Vietnam war a question was asked that should haunt us all now: who will be the last soldier ordered into battle to die for a politician’s mistake?

[The Prime Minister]

The hon. Gentleman has long taken that view, but even though he makes that case he wildly overstates it. If we talk to British soldiers who serve with the Afghan national army they say that those soldiers are brave, they work hard and they are committed. Yes, of course we need to improve recruitment from all parts of the country, but I do not think it is fair to characterise the army as he does. There have been problems with the Afghan police force, but when we go to Afghanistan we see police trainers from European and American countries doing good work. I do not accept that all is as bleak as the hon. Gentleman puts it. We have had a number of casualties, which are heartbreaking in every individual case and it is heartbreaking that there are so many, but we have to remember what we are doing in Afghanistan. It is not creating the perfect society; it is training up the Afghans so that they can take care of their own security and we face fewer attacks from terrorist groups trained in the Afghanistan-Pakistan border area. The hon. Gentleman shakes his head, but the fact is that today the number of threats coming from that area is reduced, because of what we have done in Afghanistan and because of what the Pakistan Government are doing in Pakistan. Of course we should not be blind to people’s concerns, but we should try to take people with us on the success there has been in reducing those threats.

[Mr Brian Binley (Northampton South) (Con)]

The Prime Minister will know that business growth is vital for the Chancellor’s plans and that credit is vital to business growth. The Governor of the Bank of England warned on Friday that lending to business remained weak and there was a risk of “disruption of credit”. The G20 proposals could cause banks more serious concern in that respect, so what will the Prime Minister and the Government do to make sure that small and medium-sized enterprises receive the credit they need to ensure growth in this country over the next three years?

[The Prime Minister]

My hon. Friend makes an extremely good point, and the concern that we should have about the economy is not the fiscal tightening that needs to happen, but to ensure that the banks are lending and that monetary policy is working effectively. Of course, monetary policy is not just interest rates—the price of money—but we also have to think about the quantity of money, which is bank lending. My right hon. Friend the Chancellor in the Budget made a number of improvements to the credit lending schemes. I think that we can look to see whether there is even more that should be done, but let me repeat that the key thing that we were trying to do at the G20 was not to enforce credit rules now that would restrict lending, but to put in place the measures for the long term that will stop the catastrophe that we suffered in 2008 and 2009. That is the key. In Europe, we are stress testing the banks to ensure that they have adequate capital. Again, that is important: we need to ensure the soundness of the banking system, because that is part of the key to recovery.

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

The Prime Minister mentioned that he had four useful bipartite meetings. Did he meet Juan Manuel Santos—the President-elect of Colombia—or did he indicate that he would meet him when he goes on tour? He is a gentleman who, as Defence Minister, dressed his troops as members of the International Committee of the Red Cross, carried out the extra-judicial murders of 2,000 innocent civilians and bombed Ecuador, where there is, I believe, a murder warrant out for him. Did the Prime Minister, or will he, raise those issues on behalf of concerned people in the UK who follow them very closely?

[The Prime Minister]

I did not meet the President-elect; I did meet the current President, President Uribe, who was at the G8 session on tackling corruption and the drugs trade, where there was a presentation from him and I had a conversation with him. I will take away the points that the hon. Gentleman makes and reflect on them when I have the conversation—I am sure that I will—with the President when he is not just the President-elect but the President.

[Alec Shelbrooke (Elmet and Rothwell) (Con)]

Did the Prime Minister find time during the G20 summit to speak to the leaders of Russia and China about the ongoing diplomatic issues with Iran? May I urge him to work closely with those traditional allies of Iran to ensure that we try not to go anywhere near the military action that some hawkish nations want?

[The Prime Minister]

I had very positive meetings with President Hu of China and President Medvedev of Russia. We discussed, particularly in the Russian meeting at quite some length, the Iranian situation. It is encouraging that the Russians have voted for the sanctions resolution in the UN—resolution 1929—and it is important to show a united face to the Iranians about the unacceptability of their acquiring a nuclear weapon. The point is that nobody wants military action, by Israel or anyone else, to take place, and that is all the more reason for taking the sanctions route and trying to maximise the pressure and change the balance for Iran, to raise the costs for it of having a nuclear weapon. That is what this is all about.

[Kelvin Hopkins (Luton North) (Lab)]

Almost 80 years ago, countries across the world adopted policies of fiscal tightening and gave us the inter-war depression—the slump, with millions of people thrown out of work. We are now adopting policies of collective deflation. Is the Prime Minister not at all fearful that history might repeat itself and that we might see millions back unemployed?

[The Prime Minister]

It is quite difficult to talk about deflation when monetary policy is as loose as it is and when interest rates are as low as they are. This is where, with respect, the Labour party has not understood enough of the argument. We have to tighten fiscal policy in the UK. We are borrowing 11% of our gross domestic product. If we started borrowing more, or indeed we stood still, we could face the situation that others in Europe face—it is that serious—so where the demand should come from is by the combination of a fiscal tightening but with loose monetary policy. That is not the same thing that happened in the 1930s. The additional mistake made in the 1930s was to have trade wars, and hon. Members could hear from my statement just how hard this country is fighting to ensure that that does not happen.

[Jason McCartney (Colne Valley) (Con)]

As one of the many millions of disappointed football fans around our country today, may I thank the Prime Minister for raising the issue of goal-line technology? Does he agree that, when it comes to tackling the deficit, it is the Opposition who have taken their eyes off the ball?

[The Prime Minister]

That was an ingenious way of bringing goal-line technology into a statement on the G20, and I am amazed by your latitude, Mr Speaker—[Interruption.] There was no point blaming the referee; as I said, we were not robbed, we were beaten. However, to Chancellor Merkel’s credit, every time Germany slotted another one past us, she apologised.

[Barry Gardiner (Brent North) (Lab)]

Will the Prime Minister confirm that the only occasions in the past 25 years when England have beaten Germany at football have been under a Labour Government? When does he expect that we will be able to do that again?

[The Prime Minister]

At the rate you are going, never.

[Guy Opperman (Hexham) (Con)]

In the Prime Minister’s absence last week, he might have missed two surprising events. First, the shadow Chancellor made a speech that contained lots of criticism, but not one recommendation for reducing the deficit. Secondly, we saw a five-minute silent cameo from the former Prime Minister, although amazingly, for such a fiscal champion, it was during Environment, Food and Rural Affairs questions.

[Mr Speaker]

Order. It is always a pleasure to listen to the hon. Gentleman, but the Prime Minister is not responsible for speeches made by the shadow Chancellor, nor even for the former Prime Minister, so I think that we will leave it there.

[Derek Twigg (Halton) (Lab)]

The Prime Minister said in his statement that the G8 sent a collective signal that “we want the Afghan security forces to ‘assume increasing responsibility for security within five years’”—he did not say “full responsibility”. He said later on that he wanted to give an indication that we will be out of Afghanistan in five years. Does that mean that we will be out of Afghanistan regardless of the situation in that country in five years’ time—full stop?

[The Prime Minister]

The point is that for many years after our troops have left, we will have a strong relationship with Afghanistan that will involve diplomacy and aid, and perhaps even helping to continue to train Afghan forces. However, in answer to the question of whether we should be in Afghanistan by then in the way that we are now, with large-scale military deployment and all the rest of it, no we should not. We should by then have trained up the Afghan army and police force, and seen an improvement in governance, so that we can bring our troops back home.

[Claire Perry (Devizes) (Con)]

I read on page 3 of the G20 communiqué that fiscal consolidation plans should be credible and clearly communicated. Did the Prime Minister get the chance to read any of the weekend papers that suggested that the majority of the British people support the Budget and agree with some of the spending plans, which shows that our message is definitely getting across to all but Labour Members?

[The Prime Minister]

My hon. Friend makes the important point, which the International Monetary Fund also makes, that if we carry out fiscal consolidation and demonstrate that we have a plan and are getting on with it, that can enhance confidence. Confidence is the key to growth. If we are going to get people to spend and invest, they need to know that the Government have a plan for getting us out of the mess that we inherited, so that is key to getting our economy moving.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

When the Prime Minister was discussing the banking levy at the G20, did he explain to his colleagues why he was so lenient on the banks? Instead of taking the axe to public services, he should be asking the banks to contribute more to address the mess that they created, instead of letting them off the hook.

[The Prime Minister]

I know that the hon. Gentleman missed the previous Parliament, but he could have read about some of the things that took place. During that Parliament, we argued for the introduction of a banking levy even if others did not follow suit. The position of the Labour party, although I am sure that it is changing by the minute, was that, under the great disappeared—the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown)—we had to wait for full agreement from every single country in the world. That was not our policy. We have introduced a banking levy, and quite rightly too.

[Philip Davies (Shipley) (Con)]

May I urge caution on my right hon. Friend when it comes to Turkey’s membership of the European Union? Unless we have already left the EU by that stage—I can but hope—Turkey’s membership could lead only to the British taxpayer being asked to put his hand further in his pocket and further strain on immigration into this country.

[Chris Bryant (Rhondda) (Lab)]

Not complete agreement.

[The Prime Minister]

As the hon. Gentleman says, there is not quite complete agreement on this issue, but as I would say to the French President or German Chancellor, even if people do not agree with me that Turkey should be a member of the EU, we should be straining every sinew to think of ways of encouraging Turkey to play a full role in the affairs of our continent. It is a member of NATO, and we have a strong bilateral relationship and a trading relationship with the country. Turkey wants those relationships with us, and we should do everything that we can to enhance them.

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

Has not the Prime Minister been a little selective in his quotes from the IMF? Did it not say clearly that there is a lack of co-ordination at the G20, that there are premature consolidations, particularly in Europe, and that if there were greater co-ordination between the G20 and other economies it would add 2.5% to world growth and create 8 million jobs?

[The Prime Minister]

The hon. Gentleman is right in one regard: the upside scenario posed by the IMF adds to growth and to jobs, but that scenario includes fiscal consolidation by countries such as Britain. I do not want to bore him with quotes from the IMF, but it said:

“Fiscal deficits and debt in some advanced economies reach unacceptably high levels… Sound fiscal finances are essential to sustain recovery”.

A key point from the declaration says that those countries

“with serious fiscal challenges need to accelerate the pace of consolidation.”

That is what the IMF is saying about us. Yes, there needs to be action across the board, including by emerging markets and developing countries which have very high surpluses, not just fiscal surpluses but trade surpluses. In a way, that is what the G20 was about—trying to get people to put into the process what they need to put in. From us, that is fiscal consolidation; from the Chinese, it is dealing with their surpluses. Not everyone acted as much as we did—Germany included.

[Mr Philip Hollobone (Kettering) (Con)]

The communiqué says that the present situation in Gaza is not sustainable and must be changed. Was there any discussion at the summit about practical assistance that international organisations could offer Israel to ensure that humanitarian aid gets into Gaza but weapons smuggling is stopped?

[The Prime Minister]

My hon. Friend is right. There were discussions about what could be done, such as having international bodies at the various crossing points to try to examine what is being brought in. The change that has taken place is encouraging on one level because instead of effectively banning everything, Israel has listed those things that it will not allow in, which should lead to increased humanitarian capacity in Gaza. That has a very long way to go, and everybody knows that we are not going to sort out the problem of the middle east peace process while there is, effectively, a giant open prison in Gaza.

[Clive Efford (Eltham) (Lab)]

Were there any discussions about the possibility of one of our European neighbours falling into further recession? In that eventuality, what contingencies would be considered?

[The Prime Minister]

There are great concerns, particularly in the eurozone, about the sovereign debt and other problems that countries face. We should be constructive. As I have said before, I do not think that we should join the euro. In my view, we should never join the euro. However, the eurozone is important to us, and those countries sorting out their problems is important to us. We should not stand in their way if they want to take steps to do that. The key point for us is not putting more money in and not passing powers from London to Brussels. Inasmuch as those countries find ways of sorting out their problems, we should back them.

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

Also in the newspapers this weekend were comments by Professor Joseph Stiglitz, Nobel prize-winning economist, who predicted the global financial meltdown, that announcements in our Budget will, at best, make Britain’s recovery from a recession longer, and, at worst, put us into the double-dip recession that we said would occur. Does the Prime Minister agree that we ignore Professor Joseph Stiglitz at our peril?

[The Prime Minister]

One can find any number of economists taking any number of different views. I say that as someone who studied under them. In the end, if we look at what the IMF says, at what the OECD says, at what, as I quoted, the Americans and the European Union say and at all the advice we have had from the Bank of England and the Treasury, we see that it is important to deal with our deficit. Unless we do that, we will not get confidence, and unless we have confidence, we will not get growth.

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

Apart from the military operation in Afghanistan, what steps are being taken to win over the hearts and minds of the people of Afghanistan? Linked to that, what steps are the Government of Afghanistan taking to reform the madrassahs, the religious schools, which are often seen as a breeding ground for radicalism?

[The Prime Minister]

My hon. Friend makes a very good point about religious education. It has been more of a problem in Pakistan than in Afghanistan. In terms of improving the quality of life for Afghans, it is worth remembering why the Taliban succeeded in the first place. They succeeded because there was no law and order, and no system of justice. Effective district governance and security, being able to go about one’s daily life, are key. Of course we want to see things such as girls going to school and better observance of human rights, but we should prioritise those things that I think the Afghans themselves would prioritise, which is safety and security.

[Ian Austin (Dudley North) (Lab)]

rose—

[Mr Speaker]

I saved the hon. Gentleman up.

[Ian Austin]

The Prime Minister has cracked jokes about his bilateral last night with Chancellor Merkel, but millions of people will agree with me that last night’s performance was no laughing matter at all. Is it not time that the governance of the game was shaken up, so that we treat football as a sport, not as a business? Did the Prime Minister find time to discuss with President Sarkozy how he can follow his example and launch an inquiry so that we never have to witness that sort of performance again?

[Mr Speaker]

That was a bit wide of the summit, but not, I am sure, of the Prime Minister’s capacities.

[The Prime Minister]

There are parts of sport and politics that probably should not mix. It is no laughing matter; it was very depressing. For all of us who wanted England to do well, it was heartbreaking to watch. At least we can say, “We weren’t robbed—we were beaten.” It was not all down to the disallowed Lampard goal—we were beaten fair and square. An interesting point that was made while I was watching was how much German football institutions put into youth training and their football academy. I am sure there are things that our own game, independent of the Government, as they should be—we only want to take credit when they win—can learn from that.

Limits on Non-EU Economic Migration

Monday 28th June 2010 Commons Chamber

16:36

[The Secretary of State for the Home Department (Mrs Theresa May)]

Immigration has enriched our culture and enhanced our society. Britain can benefit from immigration, but not uncontrolled immigration. The levels of net migration seen under the previous Government—an annual figure of almost a quarter of a million at its peak in 2004—were unprecedented in recent times. It is this Government’s aim to reduce the level of net migration back down to the levels of the 1990s—tens of thousands each year, not hundreds of thousands.

Of course, it is necessary to attract the world’s very best talent to come to the UK to drive strong economic growth, but unlimited migration has placed unacceptable pressure on public services and, worse, severely damaged public confidence in our immigration system. Our over-reliance on migrant labour has done nothing to help the millions of unemployed and low-skilled British citizens who deserve the Government’s help to get back to work and improve their skills. The coalition’s programme for government confirmed the Government’s intention to introduce an annual limit on the number of non-EU economic migrants admitted into the UK to live and work. We have always said that we will consult on the implementation of that limit. It is important that the Government take full account of the views of business and other interested sectors. We want to ensure that we can properly weigh the economic considerations against the wider social and public service implications.

I am therefore launching a consultation today on the mechanisms for implementing that annual limit, including questions about the coverage of limits, as well as the mechanics of how they will work in practice. The consultation also recognises the need to attract more high net-worth individuals to the UK through the routes for investors and entrepreneurs, which will not be covered by limits, and we ask for views on how that can be achieved. At the same time, I have commissioned the independent Migration Advisory Committee to provide advice to the Government on the levels at which limits should be set for the first full year of their operation, which I intend should be from April 2011.

I am sure that all Members of the House would agree with me that the Migration Advisory Committee has an excellent track record in this area, and I want to take this opportunity to record my thanks to David Metcalf and the rest of the committee for taking on this critical piece of work. The consultations will be complete by the end of September, and I intend to make final announcements about the first full annual limit before the end of the calendar year.

It is important that today’s announcement does not lead to a surge of applications during this interim period, which would lead to an increase in net migration, undermining the purpose of the limit and putting undue strain on the UK Border Agency. I am therefore also taking a number of interim measures, and I have laid a statement of changes to the immigration rules in support of those measures. First, I am introducing an interim limit on the number of out-of-country main applicants to tier 1 (general). For 2010-11, this route will be held flat from the equivalent period for 2009-10. The tier 1 routes for investors, entrepreneurs and the post-study route are not affected. Secondly, to ensure that those who do come through this route are the brightest and best, I am raising the tier 1 (general) pass mark by five points for all new applicants.

Thirdly, I am introducing an interim limit on the number of migrants who can be offered jobs by sponsor employers through tier 2 (general). This route will be reduced in the interim period by 1,300 migrants, the equivalent of a 5% reduction across the relevant routes of tiers 1 and 2. The tier 2 routes for intra-company transfers, ministers for religion and—I am not sure whether to say this, given the comments at the end of the Prime Minister’s statement—elite sportspeople are not affected. These interim measures will take effect from 19 July.

It is vital that we restore public confidence in our immigration system. Our plans to do that extend much further than the measures I am announcing today. We support e-borders and the re-introduction of exit checks. We have said that we will create a dedicated border police force to enhance national security, improve immigration controls and crack down on the trafficking of people, weapons and drugs. We have committed to improving our asylum system to speed up the processing of applications. We have said that we will end the detention of children for immigration purposes, and the UK Border Agency has already launched a review engaging a wide range of experts and organisations on how to achieve this.

Our commitment to reduce net migration will require action, as I am sure the right hon. Member for Kingston upon Hull West and Hessle (Alan Johnson) will indicate in a moment, beyond the economic routes. It may assist him if I tell the House now that I will be reviewing other immigration routes in due course and will be bringing forward further proposals for consideration by the House. And, of course, unlike the previous Government, we are committed to applying transitional controls for all new EU member states.

The commitment to introduce limits on non-EU economic migration is a major immigration commitment of the coalition Government. Today’s announcement is a key step towards the delivery of that commitment, and I commend this statement to the House.

[Alan Johnson (Kingston upon Hull West and Hessle) (Lab)]

I thank the right hon. Lady for a copy of the statement. I am pleased that she has come to make the statement to the House. However, I had already seen the statement she has just made because it was handed to me by a journalist this morning at 11.15.

Obviously, the Home Secretary originally intended to lay a written ministerial statement today. Indeed, the title was laid last Friday. This morning I sought that written ministerial statement. I was told that the Home Office was having a press conference prior to issuing the written ministerial statement—something unknown in my time as a Minister. Therefore, I sought the written ministerial statement again. At 11.15 am a journalist who had been to the press conference handed to me a written ministerial statement that is almost precisely the statement that the right hon. Lady has just made.

I hope the Home Secretary takes the matter seriously. As I am sure you will agree, Mr. Speaker, Members of the House have a right to see written ministerial statements before they are circulated to the media.

The Home Secretary’s announcement represents nothing more than a small adjustment to the points-based system. It was spun to the media over the weekend as a profound adjustment to net migration. Migration to this country has gone up. If the Prime Minister were talking to his French and German colleagues, he would know that there were 4 million migrants in Germany, 4 million in France and about 1.5 million in this country. Since the 1990s, the last time the Conservatives were in power, there has been a huge explosion of migration around the world, as the UN has detailed.

Yes, migration has gone up since the last time the Conservatives were in power, but will the right hon. Lady confirm that net migration has fallen substantially over the past three years? Will she confirm that tier 1 migration—the most highly skilled—fell by 44% in the first quarter of this year? What is the problem with skilled migration that she seeks to resolve? Will she also confirm that the number of asylum seekers has fallen to the levels last seen in the early 1990s—a third of their peak, and the same peak everywhere else in Europe? We are 15th in Europe regarding the number of asylum seekers per head of population.

Will the Home Secretary continue to support the points-based system that we introduced, which ensures that no unskilled worker can come to this country—the door has been closed on tier 3 for the past two years—and that skilled workers under tier 2 can come to this country only if their sponsoring employer has advertised that job in Jobcentre Plus for four weeks prior? Can she confirm that she intends to continue with those measures, which we introduced?

How many skilled workers will be denied entry to the UK under that temporary cap, and what percentage of total net migration will that represent? What makes the Home Secretary think that the UK can avoid the problems the US experienced when President Bush introduced a quota on skilled migrants, with disastrous consequences and a whole series of readjustments 10 years ago? Can she give an example of the problems caused to our society by skilled migrants coming to the UK under the current flexible arrangements?

What effect does the right hon. Lady think her announcement today will have on population growth? Over the weekend I heard Government Members speculate that this morning’s announcement—this trivial adjustment —will somehow ensure that our population avoids reaching 70 million. Does she believe that? If so, how does she think that that will happen?

Given that this measure has been Conservative policy since the less progressive “Are you thinking what we’re thinking?” days of their 2005 manifesto, why have they as yet failed to come up with a figure for their pre-determined quota? Does the right hon. Lady intend to implement fully Labour’s tough measures to deal with the abuse of tier 4, the student route, which, along with spousal visas and EU migration, will be totally unaffected by the cap she has announced today?

Today’s announcement will affect fewer than one in seven migrants to this country, and those whom it will affect are the migrants our economy needs the most. If the cap is set too high, it will be meaningless; if it set too low, it will damage our economy. At best it is a gesture; at worst it is a deceit. The Home Secretary knows that a cut in her Department’s budget of one third, according to the Institute for Fiscal Studies—25%, according to her right hon. Friend the Chancellor—will have disastrous consequences for border control. Is that not the real reason for controlling immigration, rather than this artificial and unnecessary tinkering at the edges?

[Mrs May]

Let me first address the right hon. Gentleman’s point about the written ministerial statement and my coming to the House. He is absolutely right: I had intended to make a written statement, and the title was indeed placed before the House so that Members could be made aware of it. Over the weekend I spoke to the Government Chief Whip about the possibility of changing that statement into an oral statement, because at the time I felt it more important to come to the House to make an oral statement, which is precisely what I have done. The right hon. Gentleman said, “Will I take this issue seriously?” Government Members have taken Parliament seriously over the past 13 years, so I shall take no lessons from him or any of his colleagues about taking it seriously, given how they bypassed Parliament for 13 years and reduced the House’s powers to hold the Executive to account.

The right hon. Gentleman talked about migration figures, but immigration actually tripled under the Labour Government. It is our desire to get the number down from the hundreds of thousands a year that it has reached under Labour to tens of thousands a year. If he wishes to look at numbers, he should look no further than the past comments of the former Home Secretary, the right hon. Member for Sheffield, Brightside and Hillsborough (Mr Blunkett), who said that there was “no obvious upper limit” to immigration. It is this Government who are taking the issue seriously, who promised that they would do something about it and who are taking the action that is necessary.

The right hon. Member for Kingston upon Hull West and Hessle made a number of comments about technicalities and the issue of jobs being advertised for four weeks in a jobcentre. Currently, immigrants can come into the country if the resident labour market test or the shortage occupation list requirements are met. We are consulting on whether they should be combined so that a tier 2 migrant is able to come in if both tests are relevant and met. That would be a significant tightening of the current rules.

The right hon. Gentleman asked about the wider social impact, as opposed to the economic impact. He has only to go out and talk to people about the pressure in some areas on public services, hospitals and schools. Another issue that his Government failed to get to grips with over the years is the significant number of unemployed people in this country. Some of those people do not have the necessary skills to get into the jobs that are available, but the job of the Government is to ensure that they do have those skills and to give them the support they need to get into those jobs, rather than simply thinking that the answer is to pull in migrant workers from elsewhere.

The right hon. Gentleman referred to students. If, instead of commenting on the statement he thought I was going to make, he had listened to the statement that I made, he would have heard me say that we would indeed be looking at other immigration routes in due course and bringing further proposals to this House. I recognise that this is one part of the job that we are doing as regards immigration, and other measures will come forward in due course.

The right hon. Gentleman asked why we did not yet have a figure for the annual limit on immigration, despite the fact that this has been a Conservative policy for some time and was in the coalition agreement. I can tell him why not: because we have, for some time, been committed to going out there and consulting those who will be affected—businesses, public service providers and others—about what the limit should be. As I said, the Migration Advisory Committee will be advising the Government and recommending what that annual limit should be. Of course, this is in sharp contrast to the approach of the previous Government, who, in one consultation exercise after another, merely paid lip service to consultation because they had already decided what they were going to do. People then got fed up with being asked to give comments and finding that Government took no notice. We are genuinely consulting people and will be listening to the responses that we get.

[Mr Peter Lilley (Hitchin and Harpenden) (Con)]

Does my right hon. Friend agree that although individual employers may benefit by importing cheap labour, as a nation we will get richer only if our existing employees are enabled and encouraged to acquire skills themselves so that they can produce more, and enrich themselves and the country, rather than have those incentives to acquire skills undermined by the importation of cheap labour from abroad?

[Mrs May]

My right hon. Friend makes an extremely valid point. This is another area where frankly, yet again, the Labour Government failed over the course of 13 years: they failed to ensure that people in this country had the skills necessary to get the jobs that become available. This Government, through our welfare reform proposals and our work programme, will be helping people and giving them much more support to get into the workplace, whereas under the Labour Government economic inactivity in the UK rose significantly. Many migrant workers were being brought in from overseas, and limiting that number will be part of the process of ensuring that we are able to help people to get out of unemployment and into the workplace.

[Keith Vaz (Leicester East) (Lab)]

The Home Secretary’s cap, if I may call it that, is a departure from existing policy, because this is the first time we have had a definitive figure. How did she arrive at the figure of 24,100? What will we do about the 24,102nd person who applies and is turned down? Will we give them the right of appeal if they have the skills necessary to help our country? What resources does she propose to give to posts abroad, which will be overwhelmed by a stampede of applications over the next year? Will she come before my Committee as soon as possible to discuss these matters further?

[Mrs May]

I am grateful to the right hon. Gentleman for raising those points. He mentioned the possibility of a stampede at posts overseas in relation to this matter. The whole point of having the interim limit set over the next nine months or so, until the permanent annual limit comes into place, is precisely to avoid that stampede. It will not be possible for people to say that they are going to try to apply to come here before that limit comes in, because we have the interim limit, which we have set at slightly below—5% below—the numbers for the past year.

The right hon. Gentleman said that this is a change in policy. It is indeed, because under the points-based system the impetus is with the individual migrant: if they have the right number of points, they can decide whether they want to try to come into the UK. Under our system, we are saying, “We do want to welcome the brightest and the best, but we recognise that it is necessary to have a limit because we want to ensure that we are able to control immigration.” I am sure that Members across the whole House will agree that that is the view of many members of the general public who have raised this issue with them.

[Mr James Clappison (Hertsmere) (Con)]

I welcome my right hon. Friend’s sensible and proportionate measure. There have already been representations about it on the radio this lunchtime from care home owners. Will she gently remind them that there are 1 million young people unemployed in this country, who would welcome the opportunity to have training and employment in the care homes sector? Is it not a shame that some employers, and the Opposition Front Benchers, seem to put a vote of no confidence in our young people?

[Mrs May]

I am grateful to my hon. Friend for his sensible and wise point. Of course, there will be those whom businesses want to bring in from abroad, and as I have said, we will raise the number of tier 1 general points required to ensure that they genuinely bring in the brightest and best. However, there are indeed sectors of employment in which many unemployed people would be very happy to train, and to take up the job opportunities that would then be available to them. As I have said, it is a great sadness that so many young people are unemployed in this country today and have not been given such opportunities as a result of the failure of the previous Labour Government.

[Mr Frank Field (Birkenhead) (Lab)]

Does the Home Secretary accept that her statement will be widely welcomed throughout most of our constituencies, but that during the election voters expressed another worry, which was that we are growing our population through immigration? At what stage will she consider the last Labour Government’s proposal to break the link between coming here to work and gaining citizenship? If we are to prevent our population from passing 70 million, we need to control both the number of people coming in and the number who can permanently settle here.

[Mrs May]

I am grateful to the right hon. Gentleman for having raised that point. I said in my statement that what I have announced today is but one part of what we are doing about immigration into this country. We have already made a statement about tightening the English language requirements for people coming here to marry, and we will examine all immigration routes into this country across the board.

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

Does my right hon. Friend agree that we need to carry on this important consultation in a measured and considered way, given that it is controversial but very important? We need to avoid unfair discrimination, particularly as most people coming from outside the EU are not white and not Christian. That must include discrimination against people who are skilled but not academically skilled—who come here to do skilled jobs in the catering trade, for example. Finally, will she ensure that we consult on having the best possible border police force, incorporating customs, police and immigration, thereby saving money and breaking down entrenched divides that are not working in the public interest?

[Mrs May]

On the last of my hon. Friend’s points, we will bring forward in due course more detailed proposals on the policing of our borders. On his earlier points, I draw his attention to the consultation document, which has fairness as one of its objectives, including fairness in ensuring that individuals have some understanding of the system and an expectation of whether they are likely to be able to come here under our proposals. The whole point of the consultation is to discuss with businesses and others what the best system would be and how it should operate to provide business with the flexibility that it requires, within the constraint of the annual limit.

[Glenda Jackson (Hampstead and Kilburn) (Lab)]

Will these strictures apply to those usually immensely wealthy employers from the middle east who bring with them their own domestic servants, usually of nationalities not in the middle east? That practice has been deemed slavery, given the appalling treatment that is often meted out to those workers by their employers, not least having to work incredibly long hours, usually for no money. There have been allegations of physical and sexual abuse, and there is an almost invariable practice of the employer stealing the employee’s passport. Will the strictures apply to those individual employers, and will those practices be stopped?

[Mrs May]

The hon. Lady raises an important point about the treatment of individuals who are brought here on the basis of working for others. I believe that Members in all parts of the House recognise that there are problems that need to be addressed, and we will indeed do that.

[Mr Julian Brazier (Canterbury) (Con)]

My right hon. Friend has made a powerful and welcome statement, particularly in her points about skills. Does she agree that another key factor in our social problems today is a lack of adequate housing in many areas, and that in deciding on the future direction that immigration should take, the overall population factor mentioned by the right hon. Member for Birkenhead (Mr Field) is extremely important? We should consider the issue of housing in particular.

[Mrs May]

My hon. Friend makes an extremely important point. Housing is, indeed, one of those wider social issues that will be taken into account in the consultation, and I am sure that the Migration Advisory Committee will take it into account as it looks at wider social issues other than just the economic impact of immigration into this country.

[Stewart Hosie (Dundee East) (SNP)]

May I agree with the Home Secretary that immigration has enriched our culture and enhanced our society? I welcome the fact that she intends to consult business and other interested parties on the implementation of the new rules. May I ask for that to include further detailed discussions with the Scottish Government, particularly the Cabinet Secretary for Education and Lifelong Learning, and Scotland’s universities, to make sure that the difficulties that we have had under the current regime in recruiting world-class academic and research staff are not made worse, and to make sure that the reputation of those universities is not weakened?

[Mrs May]

I am grateful to the hon. Gentleman for raising that point and for reminding me that I did not make it clear in my statement that we will, of course, be consulting the devolved Administrations. Indeed, my hon. Friend the Minister for Immigration has written to the devolved Administrations in Scotland, Northern Ireland and Wales today on exactly this point.

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

I thank the Secretary of State for her statement, which I am sure will be welcomed by my constituents who have been concerned about uncontrolled immigration. She talked about migration within the European Union. Will she give some indication of the process and timetable in relation to agreeing transitional controls on migration from new EU partners?

[Mrs May]

The process is very clear and is set out in the treaty. What happened previously was that the previous Government—certainly for the first tranche of accession countries that we have seen in recent years—simply failed to put those transitional arrangements in place, whereas other EU member states such as Germany did. We are absolutely clear that, with any future new EU member state, we would put those transitional arrangements in place.

[Mr David Lammy (Tottenham) (Lab)]

A certain someone, who is often described as a towering intellect of this House, said that the right hon. Member for Witney (Mr Cameron) was planning a cap on workers, not on dependent immigrants, students or asylum seekers, so it would not work. That someone is the Business Secretary; has he changed his mind?

[Mrs May]

I assure the right hon. Gentleman that in relation to what we are proposing to do, it has always been our intention to look across the various immigration routes. I specifically mentioned, earlier, that we will look at the student route in relation to immigration, and we will do that in due course.

[Charlie Elphicke (Dover) (Con)]

In welcoming the Home Secretary’s long overdue implementation of these measures, may I ask about her plans to crack down on the trafficking of people, weapons and drugs? In Dover, on Friday morning, 17 people of Afghan origin were found in the back of a lorry, of whom many were children and all were in a pretty bad way.

[Mr Denis MacShane (Rotherham) (Lab)]

What nationality was the lorry driver?

[Charlie Elphicke]

The lorry driver was Polish. It was a refrigerated lorry and many of the people were taken to hospital. It is important to have X-ray scanning on the French side of the border, for lorry cabs to be checked on the French side and for the French to be encouraged to do more as the first country of arrival. What measures might the Home Secretary take in that regard?

[Mrs May]

I am grateful to my hon. Friend for raising this issue and for reminding us of this problem as well as the number of people involved and the way that some of those being persuaded to come here are treated. We should all take human trafficking extremely seriously in this House, as, indeed, the Conservatives do. On our interaction with the French authorities, I am pleased to say that the Minister for Immigration and I have already held meetings with the French Minister for Immigration and that we are talking to the French on a regular basis about the processes that need to be in place to ensure that we can control our borders.

[Katy Clark (North Ayrshire and Arran) (Lab)]

Will the Home Secretary confirm that any limit will have no impact on those seeking political asylum? May I also ask her to look into the case of Charles Atangana, who lives in Glasgow? He is a journalist in a trade union and is due to be deported to Cameroon tomorrow. He has previously been imprisoned there because of his activities, including writing articles that are critical of the state. Will she confirm that she, as Home Secretary, will have a compassionate approach to those seeking political asylum?

[Mrs May]

As I am sure the hon. Lady will recognise, I am unable to comment on individual cases such as the one she raises, but I assure her that the limit we set out today applies to non-EU economic migrants, not to asylum seekers.

[Dr Julian Huppert (Cambridge) (LD)]

Does the right hon. Lady accept that success in research and high-tech businesses in areas such as Cambridge is fuelled by many non-EU migrants who are sensitive both to rules and to how welcome they are made to feel? What steps will she take to ensure that it continues to be possible, or even easy, for us to attract the best and the brightest to this country to help our universities, industry and economy?

[Mrs May]

I say to my hon. Friend that it is indeed our intention to ensure that we can continue to attract the brightest and the best. That is why we are taking steps to ensure that we do so within tier 1 migrant workers. We will consult with business and others on how we can best operate the limit to ensure that that continues.

[Mr MacShane]

I welcome the Home Secretary’s statement, but I heard it on the “Today” programme this morning. She was right to criticise the previous Government for such things, but frankly, she is repeating all the same errors.

The Prime Minister met Mr Harper of Canada, Mr Singh of India and Mr Uribe of Colombia, but the Prime Minister must now tell them that their skilled people are not welcome in this country. Does the Home Secretary accept that her policy is frankly protectionist? I do not know whether she understands the bureaucratic gobbledegook that she had to read out, but no business can. Some of us in the House are still liberal on this issue, and the fig leaves in the Liberal Democrats ought to be ashamed.

[Mrs May]

I must tell the right hon. Gentleman that the technical gobbledegook of which he speaks is the rules that have been applied and how we will change the rules. Businesses understand those rules very well. The idea that the statement somehow says to every other country in the world that their skilled workers will never be able to come into the UK is completely and utterly wrong, and he should frankly be ashamed of himself for standing up and suggesting that in the House. As I said, immigration has been good for the UK, but uncontrolled immigration is not. We are ensuring that we put an annual limit on immigration. I believe that that is what people are looking to this Government to do. They are looking for us to take action on the things that we promised prior to the election, but perhaps he finds it difficult to accept that we are actually delivering on our promise.

[Bob Blackman (Harrow East) (Con)]

The new rules announced today will be warmly welcomed not least among the rather newer residents of the UK. How will the rules be applied to ensure that not only big firms but smaller, entrepreneurial firms, which are quite often run by people from immigrant families, can bring in the brightest and the best?

[Mrs May]

I suggest that my hon. Friend looks at the consultation document. We are asking businesses about a number of ways in which we can apply the limit, be that a first-come-first-served system or a pool system such as New Zealand’s, so that his points are taken into account. I am sure he will want to make his own representations on the matter.

[Ian Paisley (North Antrim) (DUP)]

I welcome the Home Secretary’s statement. I recognise that this is a difficult matter for any Government to deal with and that there are no easy answers, but will the cap be flexible in any way with regard to those fleeing religious persecution, especially Christians from Iran, Iraq and parts of Africa?

[Mrs May]

I thank the hon. Gentleman for his question, but as I said to the hon. Member for North Ayrshire and Arran (Katy Clark), who raised the issue of political asylum, the limit does not apply to asylum seekers. The statement is about economic migrants coming in from outside the EU.

[Margot James (Stourbridge) (Con)]

I put my question on behalf of the 4.5 million people who lived on out-of-work benefits during the past decade, when four out of five of the new jobs created in the boom years went to foreign nationals. That was unforgivable and we cannot let it happen again. We were elected on a clear platform significantly to reduce immigration. Can my right hon. Friend assure the House that she will stand firm in the face of lobbying that seeks to defend unacceptably high levels of immigration again in the name of skills? The skills we do not have in this country, and indeed across the rest of the EU, cannot reasonably—[Hon. Members: “Speech!”] I will give way now.

[Mrs May]

I thank my hon. Friend for her points. She was making a valid point about the many unemployed people in the UK who have not had the skills to take advantage of the work opportunities that have become available. Our welfare reform proposals will provide extra support to help people get into work, and that is important. She is also right to say that people are looking to this Government to ensure that we control immigration into this country.

[Barry Gardiner (Brent North) (Lab)]

I welcome the Home Secretary’s exemption for ministers of religion from these provisions, but will she go further and set in place a protocol, such as the protocols that we have at present with universities and other certified institutes of higher education, so that those coming in from certified religious institutions can be fast-tracked and not have to go through the present process with the Home Office? Often, monks or sadhus who take a vow of poverty are asked to show what wealth they have before being allowed to come here.

[Mrs May]

The hon. Gentleman makes an interesting point, which sounds like an early submission in the consultation process. He might like to put that forward in more detail.

[Gavin Barwell (Croydon Central) (Con)]

I thank my right hon. Friend for her statement, which is an important first step in implementing the coalition’s proposals to get our immigration system under control. She talked about restoring public confidence in our immigration system. Does she agree that, in addition to the measures that she listed in her statement, doing a better job of removing those people who do not have a right to be in this country is a key element in that regard?

[Mrs May]

I absolutely agree with my hon. Friend, and that is something on which we will also focus. The general public are right to expect that if someone is here without the right to be here, the Government take steps to ensure that they are removed.

[Mr Ian Davidson (Glasgow South West) (Lab/Co-op)]

May I welcome both the statement and the direction of travel? I also welcome the direction of travel from those on my own Front Bench. Indeed, had we been clearer about our direction of travel, we might not be sitting on these Benches today.

I am, however, disappointed on two counts. First, the Home Secretary said nothing that she did not say to Radio Scotland this morning. I was not aware that it was the practice to make announcements to Radio Scotland first thing in the morning before coming to the House—[Interruption.] I never did that. Secondly, why does the statement address only non-EU immigration? Why do the Government not seek to repatriate powers over EU immigration? Would the Government not consider saying to their European neighbours that there will be no new accession until powers over immigration have been repatriated?

[Mrs May]

Perhaps the hon. Gentleman needs to listen a little more carefully to BBC Radio Scotland in the mornings, because I did not speak on it this morning, although my hon. Friend the Minister for Immigration did. I am not aware that I sound like him—

[Chris Bryant (Rhondda) (Lab)]

In the morning you do!

[Mrs May]

Yes, perhaps when the hon. Member for Glasgow South West (Mr Davidson) has just got up. He suggests that what we are doing is a natural progression from the direction of his Front-Bench colleagues, but they were not proposing to have an annual limit. In fact, they have consistently derided the concept of an annual limit. It is this coalition Government who are taking the steps necessary.

[Jane Ellison (Battersea) (Con)]

I welcome the Home Secretary’s statement. In my short time as a Member of Parliament I have met people who are in this country as economic migrants and working for large, established employers who should be establishing training schemes, taking people on and equipping them with the relevant skills. Does she agree that those employers should put their efforts into setting up apprenticeships rather than recruiting low-skilled workers from abroad?

[Mrs May]

My hon. Friend makes a valid point about the need for employers to see what they can do to ensure that unemployed people in this country can take up job opportunities. The policies that my right hon. Friend the Secretary of State for Work and Pensions is bringing forward will ensure that we give the support necessary to help people get into the workplace.

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

In my constituency fishermen from the Philippines have been very welcome in the fish-catching sector, especially as they have kept jobs in the fish-processing sector. Will the Home Secretary listen to specific information such as that when deciding the basis for work entry?

[Mrs May]

Let me say to the hon. Gentleman that that is the whole point of a consultation exercise.

[Mr Peter Bone (Wellingborough) (Con)]

The Home Secretary spoke powerfully about human trafficking and how the coalition Government were going to deal with the problem. Is she happy that the Human Trafficking Centre in Sheffield has closed and is now part of the overall police effort, with the £1.8 million budget seeming to have disappeared?

[Mrs May]

I thank my hon. Friend for raising that issue and congratulate him on, I believe, having taken over the chairmanship of the all-party group.

[Mr Bone]

Tomorrow maybe.

[Mrs May]

I am so sorry; I am a little in advance of myself. If that does happen tomorrow, I congratulate my hon. Friend. Our honourable friend the former Member for Totnes had an excellent record during his time in this place on dealing with the issue and ensuring that it was discussed on the Floor of the House. Regardless of the result tomorrow, I am sure that my hon. Friend will continue to do that, as he has in the past. Looking at how we deal with human trafficking is an important issue, and the response of the police is an issue that I am interested in looking at both as Home Secretary and, with my other hat on, as the Minister for Women and Equalities.

[Mr Philip Hollobone (Kettering) (Con)]

Whenever we talk about net migration, we always tend to talk about the numbers coming in, forgetting the large numbers of people going out. Given that under the previous Government net migration reached record levels, it would have been even higher had hundreds of thousands of British skilled workers not got fed up with Brown’s Britain and left to go and work abroad. Will my right hon. Friend work with her colleagues across Government to ensure that Britain’s skilled workers are incentivised to stay in Britain?

[Mrs May]

I thank my hon. Friend for that point. The good news for those many workers is that this is no longer Brown’s Britain.

Points of Order

Monday 28th June 2010 Commons Chamber

17:16

[Glenda Jackson (Hampstead and Kilburn) (Lab)]

On a point of order, Mr Speaker. During Home Office questions this afternoon, my hon. Friend the Member for Streatham (Mr Umunna) and the hon. Member for Maidstone and The Weald (Mrs Grant) asked questions about domestic violence and the concerns felt by refuges across the country about a possible serious cut in their funding. In response, the Minister seemed to confuse domestic violence with previous questions to do with rape, and kept praying in aid responses with which she hoped to furnish the House from the Ministry of Justice. If the Home Office no longer has responsibility for the issue of domestic violence or the sanctuaries from it—namely the refuges—surely this House should have had a statement to that effect.

[Mr Speaker]

I am grateful to the hon. Lady for her point of order, but I have a sense that, dissatisfied with the responses that she heard earlier, she is, in a sense, seeking to continue the debate. To the best of my knowledge, responsibility for the issue of domestic violence remains where it has always been. If Ministers feel otherwise, they might wish to respond to the serious point of order that she has just raised. However, I see that the Home Secretary is in her place, so it might help the House if she would care to respond to that point of order.

[The Secretary of State for the Home Department (Mrs Theresa May)]

I am happy to confirm that the Home Office does indeed continue to have responsibility in matters relating to domestic violence, although there will be aspects of dealing with domestic violence that require the intervention and consideration of the Ministry of Justice.

[Mr Speaker]

Whether that response satisfies the hon. Member for Hampstead and Kilburn (Glenda Jackson) I cannot be sure, but it will have to do for now.

[Mr Ian Davidson (Glasgow South West) (Lab/Co-op)]

On a point of order, Mr Speaker. Would it be in order for me to apologise to the Home Secretary and the Minister for Immigration for confusing the two of them this morning? Could I also point out that, in my defence, they were on the radio and all these posh Tories sound the same, and that the Home Secretary did not, however, deal with the point that the announcement was made by the Minister for Immigration this morning before it was brought to this House?

[Mr Speaker]

In almost all circumstances it is in order to apologise, but if that is the hon. Gentleman’s idea of an apology, I am not sure that I ever want one from him.

[Chris Bryant (Rhondda) (Lab)]

On a point of order, Mr Speaker. You said last week, and five weeks ago, that you wholly deprecated the practice of Ministers announcing things to the press before they had announced them to the House. You will know that many hon. Members on both sides of the House complained about this when Labour was in government. We tried to ensure that it did not happen and, in many cases, succeeded—[Interruption.] I would say to those on the Government Benches that there is no point in sneering about this. The truth is that there is no point in fighting to get elected to this House if we might as well stay at home and listen to the announcements on the television or the radio, or read them in the newspapers.

Mr Speaker, can you confirm that we had a statement this afternoon from the Home Secretary only because an urgent question had been tabled? Can you also confirm that that happened after a written ministerial statement on the subject had been laid, and that that happened a long time after the Home Secretary had given a press conference today? We now have a Government who are systematically leaking matters to the press before they are announced in the House. That should not have happened in the past, and it should not happen in the future. Only if the House takes responsibility and takes action will we be able to stop this. Otherwise, Ministers will just laugh at the House. Will you, sir, refer this matter to the Committee on Standards and Privileges? It would be good if that Committee had already been set up, of course, but the Government have not yet done that. Will you refer the matter to that Committee, so that the House can take action?

[Mr Speaker]

The first point that I would make to the hon. Gentleman is an important one about which we need to be clear. A reference to the Standards and Privileges Committee cannot be made on the basis of a point of order raised on the Floor of the House. A written request must be made to me, explaining the rationale for the request, and a decision on that will then be reached. That is a procedural point. Secondly, I reiterate in the strongest possible terms that I utterly deprecate the practice of releasing to the media the content of ministerial statements before those statements have been made to the House. I deprecated it in the past, both from this Chair and as a Back-Bench Member, and I continue to do so. The question of whether this has taken place on a similar, greater or lesser scale in the past is neither here nor there, because two wrongs do not make a right.

Thirdly, I simply say to the hon. Gentleman that I cannot confirm what he has just asked—namely, that an oral statement followed the submission of an urgent question. I am in no position to confirm that. I listened to the Home Secretary’s explanation of the reason for changing from a written statement to an oral statement. I can confirm, however, that I am willing to look further into the particular details of this case, and to decide what, if any, action needs to be taken. We need to establish a new pattern in this Parliament, whereby this sort of thing does not happen and, if it does, action is taken. I shall look into this as a matter of urgency and revert to the hon. Gentleman and to the House. I hope that that is clear; I get the impression that it is.

Ways and Means

Monday 28th June 2010 Commons Chamber

Budget Resolutions and Economic Situation

Monday 28th June 2010 Commons Chamber

Capital Gains Tax (Rates)

Monday 28th June 2010 Commons Chamber

Debate resumed (Order, 24 June).

Question again proposed,

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

17:23

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

My right hon. Friend the Chancellor of the Exchequer has delivered our first coalition Budget, making what he legitimately described as unavoidable choices in the face of a potential eurozone economic crisis. They will involve, first, a reduction in spending to repair the record deficit left by the previous Government. I remind the House that we inherited the largest deficit in peacetime history: for every £4 we spend today, we are being forced to borrow at least £1. According to the Office for Budget Responsibility, this Budget will put us back on track to balance the structural deficit by 2015-16, with net debt falling as a share of gross domestic product by the end of the Parliament.

Secondly, the measures will include a restructuring of the tax and welfare system, underpinned by our commitment to fairness and protecting the vulnerable, even when faced with some tough choices—and there are tough choices.

[Chris Heaton-Harris (Daventry) (Con)]

Will my right hon. Friend kindly clarify the rate at which the Department for Work and Pensions can undertake work capability assessments for people on incapacity benefit?

[Mr Duncan Smith]

I was not going to deal with that at this point, but while we are on it, I can tell my hon. Friend that I know there has been speculation in the media over the past few hours and days. I can confirm that, as we said previously, we will launch the work programme in 2011, and will migrate current incapacity benefit claimants to employment support allowance over the three years. We have absolutely no intention of changing the current plan to assess 10,000 claimants per week over the period. That is our expectation. As the right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper) will know, it will involve challenges, but we will stick to it and see if we can get there. Unlike the last Government, we will provide an extra bit of help for those on employment support allowance who undergo the work capability assessment and need that support. My hon. Friend the Minister of State will table a statement tomorrow giving more details.

I am sure that the right hon. Lady—my opposite number—will back up what I have said. She has already expressed the hope that we will proceed with the changes that she introduced and with which we agreed.

[Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)]

Will the Secretary of State confirm that his timetable is the one that we proposed for the roll-out of the work capability assessment, and that it is expected to save about £1.5 billion over the next five years? Does he plan to make additional savings, and if so, where? The briefing that was in the papers today will have caused concern to people. Will the Secretary of State also tell us whether he will implement the small amendments to the work capability assessment that we announced just before the election in response to points raised by the citizens advice bureaux?

[Mr Duncan Smith]

We are continuing with the programme that the right hon. Lady left. We thought it a good programme, and I want to make it happen. She asked us to do that, and I agreed that it was right. We always said in opposition that we would do it.

As for whether we are looking for more savings, we are going to intensify the work support programme, which was not there before. I should be happy to give the right hon. Lady more detail about it, and my hon. Friend the Minister of State will make a more detailed statement. We estimate that we will be able to return more people to work, but we will keep that estimate under review. The right hon. Lady will recall that when she was Secretary of State there was a constant review of the programme to deal with the group who were flowing in. Recommendations were made, and we are paying attention to them.

[Yvette Cooper]

Does the fact that the Secretary of State thinks he will be able to help more people to return to work—although he has cut the job guarantee and billions of pounds from the support that would help them to do so—mean that he thinks that other people will not get jobs instead, or is he suggesting that the Office for Budget Responsibility will raise its forecast of the number of people in employment? Where will the jobs come from for the extra people whom he is going to return to work?

[Mr Duncan Smith]

The right hon. Lady is assuming that the economy is static, and that nothing changes in it. We believe that unemployment will fall—that is what the Office for Budget Responsibility says—and that we will therefore create more jobs.

The right hon. Lady’s programme, which we inherited, provided support for the “back to work” element in only two parts of the country. We are extending support to the whole country, and that is where we will get the extra effort. We will continue the programme. We think that we have embellished it and made it somewhat better, and I guarantee that we will keep it under permanent review.

The third thing that we are doing is setting down a strong foundation for long-term reform, which is part of the Budget proposals. Although we must correct the failings of the last Government, we are committed to delivering a better future for Britain, and we have had to make the stability of our economy a priority. I know that it is difficult for many Opposition Members to talk about this, but I also know that it is what they would be talking about if they were in government. There are always difficult choices to be made at a time when we have to draw our horns in.

We have had to prioritise the stability of our economy lest we forget the shambles with which we were left. Borrowing will be £149 billion this year, the second largest amount in Europe, and, as the Prime Minister pointed out before the Budget, it was on course to double in five years to £1.4 trillion—£22,000 for every man, woman and child. As a result of the Budget, however, the debt will fall to £116 billion next year, £89 billion the following year, and £60 billion in the year after that. It will fall to £37 billion in 2014-15, and is projected to fall to £20 billion in 2015-16, with the current structural deficit back in balance. That is the task that we have set ourselves. That was the first test of this Budget: to tackle borrowing and get the deficit down. Our approach has been reinforced by the judgments of the credit rating agencies and the business lobby when they agreed on Budget day that the plan is credible. Measures include reducing current expenditure by £30 billion a year by 2014-15, stronger medium-term growth with more business support to restore UK competitiveness, and reducing regulation and tax rates; and unemployment is forecast to fall throughout the OBR’s forecast period.

[Glenda Jackson (Hampstead and Kilburn) (Lab)]

Will the Secretary of State tell the House how many credit rating agencies made that judgment? My knowledge, which I admit is limited, is that there is one individual in Florida and another rating agency company comprising three individuals in the United States of America, and also that they consistently failed to remove the triple A rating from those companies and banks that caused the economic downturn in the first place. Why are the Government listening to people who clearly do not know what they are talking about?

[Mr Duncan Smith]

It is not just the Government who are listening to them; it seems that the rest of the world is as well. I must remind the hon. Lady that if we are not careful—[Interruption.] Whatever she says, if the credit rating agencies downgrade our rating, we would, like Spain and Greece, be paying far more to borrow the money that we are borrowing as a result of the previous Government’s position. Whether or not we agree that the credit rating agencies got it right on the banks is irrelevant, therefore. In this particular case, the question is whether or not we would end up paying more as a result of their bad rating, and that is something we were not prepared to risk. This is a Budget to get the economy back on track. It is a Budget to support the recovery and drive down the deficit, and, most importantly, to get Britain back to work.

Despite facing the tough and unavoidable choices forced on us by the fiscal position left by Labour, we are increasing the threshold for paying the basic rate of income tax, and increasing the child element of the child tax credit by £150 above indexation next year. We are making sure that the most vulnerable do not pay disproportionately.

[Bob Russell (Colchester) (LD)]

On that point, will my right hon. Friend advise me whether the current level of 3.9 million children living below the poverty line—inherited after 13 years of failure by a Labour Government—will be increased or decreased by the end of this Parliament?

[Mr Duncan Smith]

Directly in terms of this Budget, there will be no increase at all; that figure is approved by the OBR, and it is our determination to drive the figure down. Let me say to my hon. Friend that he is right: we have inherited from Labour one of the worst records of household unemployment in western Europe and, worse than that, we have the highest number of children living in workless households in the whole of western Europe. That is a shameful record of the previous Labour Government, and although Labour Members go on about it, it is we who have to deal with it, and I promise my hon. Friend that we will deal with it.

[Yvette Cooper]

Will the Secretary of State confirm that the number of children living in workless households has fallen from about 2.3 million in 1997 to 1.8 million today, and that it was, in fact, his party when in government previously that trebled the number of children in poverty?

[Mr Duncan Smith]

If the right hon. Lady wants to go on fighting past elections, she can; it will not change the results of them. The reality is that under her Government, child poverty rose—[Interruption.] It rose from 2004 onwards, and the Government threw a lot of money at it and absolutely failed. Under her Government, in the last seven or eight years child poverty has risen dramatically, and I have to point out to her that she has failed to recognise that as a result of their policies child poverty is now at serious risk of rising even further. We have to get it down.

[Several hon. Members]

rose—

[Mr Duncan Smith]

I will give way in a minute; I want to make a bit of progress first.

Universal child benefit will be frozen, but benefits will be recycled so that they are targeted at the most vulnerable through child tax credits. Thereby, the poorest will be protected. That is exactly what we will do in this Budget.

We will freeze public sector pay, but we will also increase the pay of those on the lowest incomes. I am sure the right hon. Member for Normanton, Pontefract and Castleford will welcome the fact that half the employees—the lowest paid—at her former Department will get at least £250 this year and next.

We will protect health spending, which was a priority, and honour our international aid obligations. We will reduce the deficit by raising taxes more and cutting spending less, but we will also reduce corporation tax from 28% to 24% to make the UK more competitive internationally and get people back to work. We will reverse the cynical pre-election clawback by the previous Government from this year’s uprating forecast, and we will do the decent thing and fill the gap they left. We were left with a £300 million shortfall, because the previous Government had uprated benefits when the retail prices index fell below zero but had made no provision to find that money in 2011, so benefits would have been uprated less than the uprating we shall put through next year.

Let us not forget that we chose to take hundreds of thousands of low-income individuals out of tax, improving work incentives. More than 880,000 people on the lowest incomes will be taken out of tax altogether and 23 million taxpayers will benefit. That is a Liberal choice—I say that to the hon. Friends sitting on my right—and one I wholeheartedly support.

[Emily Thornberry (Islington South and Finsbury) (Lab)]

The right hon. Gentleman talked about making sure that the most vulnerable did not pay disproportionately. Is he aware that in Islington, 2,154 families are in private accommodation on housing benefit and a third of them will be affected by the new caps on housing benefit? If and when they face eviction, what help will the Government give to stop hundreds, if not thousands, of Islington families being made homeless? If they are made homeless, what help will he give to get them somewhere to live?

[Mr Duncan Smith]

The hon. Lady is looking at things in a rather doom-laden way. The reality is that the changes to housing benefit will assist people into the right level of home. At the moment, through local housing allowance, we are paying vast sums of money to people who would not be able to get the same money if they were in employment. For example, in south-east London, which is similar to the hon. Lady’s area, people on low incomes living in private rented accommodation would still—even with the caps in place—be nowhere near the level of money that somebody on local housing allowance receives. That is not fair on those who are striving and working, but having to struggle to live in a house. Before the hon. Lady carps too much, she should recognise that we have also increased the discretionary payment, trebling it to £60 million. If there are specific difficulties there will be money for local councils to help and assist.

[Mr Andrew Tyrie (Chichester) (Con)]

May I take the Secretary of State back to child poverty? Page 34 of the Red Book makes it clear that there will be

“no measurable impact on child poverty in the next two years”

of Budget measures. Can he explain why the Government have published that assessment only for a two-year period and whether he will commit to publishing an assessment for the whole of the planning period?

[Mr Duncan Smith]

Indeed, we will. We shall launch a strategy in March next year and I promise my hon. Friend that I shall inform him about how it goes. As I pointed out, child poverty has risen by more than 100,000 since 2004, so when the Opposition lecture us about child poverty they ignore the facts. They spent a lot of money but they failed to meet even their targets.

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

Does my right hon. Friend agree that although the welfare state is obviously necessary to protect the poor and vulnerable, it has often acted as a disincentive for people to go from being out of work to work? I know that from my constituency. Will he ensure that over the next few weeks, when we consult on the future of the welfare state, all the relevant charities, agencies and local councils, which are very knowledgeable about such things, are fully involved so that the outcome is informed by the facts and not by prejudice?

[Mr Duncan Smith]

I give my hon. Friend absolute confirmation that we shall consult widely. As he knows, we are planning to reform the benefit system so that it no longer acts as a major disincentive for people to go back to work. We have had to take decisions in the Budget, but beyond that we want to bring forward changes that make work pay—significantly for those going to work for the first time, as they understand. My comments at the weekend were about the need to recognise that often people want to move 10 or 15 miles to take a job, but they worry about the cost of travel to work or losing their house. The coalition has to look at that sort of thing to see whether we can make it easier for people to make decisions and take risks without being punished every time, as with the last Government. It is worth remembering that, of all social housing tenants—it is a falling figure—only 5% change their houses during the year, whereas 35% of low-income private tenants change. That is the problem: they are static, and they are stuck in what they do.

[Mr Andy Slaughter (Hammersmith) (Lab)]

When will the right hon. Gentleman publish more details of the proposals for the cuts in housing benefit? The local authorities affected, such as mine in Hammersmith, which is a Conservative authority, really do not know what is happening, other than that 750 families, at least, will have to move out of the borough because even the substandard accommodation that he clearly wants them to move into is not available in central London. How does he expect those families who move to areas where less work is available than in central London to find jobs, as he says that he wishes they would?

[Mr Duncan Smith]

In fact, over a third of all the properties available for rent are available below the 30th percentile. The reality is that property is out there, and we know that we can do it. Of course, I did not say at any stage that these changes would be easy. They will not be easy—we recognise that—and they will not happen overnight. They will not start until next October, and most cases will be reviewed only on their anniversary, which could be anything up to a year and a half or two years away.

[Several hon. Members]

rose—

[Mr Duncan Smith]

Excuse me; I am answering the hon. Member for Hammersmith (Mr Slaughter) if hon. Members do not mind. We will publish the full details, and he can discuss them with us at any time—the door is always open, as soon as I am ready.

I felt it unfair therefore to make such a change, and I agreed that we needed to ensure that we protected the worst-off.

[Mr David Lammy (Tottenham) (Lab)]

Will the right hon. Gentleman give way?

[Mr Duncan Smith]

I will give way in a second; I think that I have been reasonably generous.

I should like to return to the choice on the uprating of benefits—something on which, I guess, Opposition Members will want to intervene. Before the Budget, there was some media speculation, much of it fed by the Opposition. In fact, I think that the right hon. Member for Normanton, Pontefract and Castleford said that she would not support a freeze of benefits and that she would definitely want to oppose that. The media speculation was that we would go to that—in fact, I believe that that would have saved some £17 billion over the lifetime of this Parliament—but I resolved not to do that. We decided that it would be unfair for the worst-off. Instead, the Chancellor and I agreed that we would continue to uprate benefits by the consumer prices index, which is forecast in the Budget to be 2.7% this year. Of course, the CPI does not include housing costs, and it seemed more reasonable. However, the right hon. Lady was reviewing that before she left office, and I am sure therefore that she will want to tell me that she agrees with the uprating, rather than remaining as we were. I would therefore like her to tell me exactly what reduction in spending she was planning as her Department’s share of the £45 billion. I will give way to her if can tell me which elements of saving she would have made in her budget. She does not want to use the CPI; what was she going to do that added up?

[Yvette Cooper]

In fact, as the right hon. Gentleman will be aware, the additional support that we have put in to help the unemployed has kept unemployment at about half the level of previous recessions and nearly 750,000 lower than it was predicted. That in itself is likely to save more than £15 billion over the next five years. We believe that the right way to do welfare reform is help people into work, not just to slash the support for the most vulnerable people in society.

[Mr Duncan Smith]

I am very sad that the right hon. Lady chose not to answer the question. When I give way to an intervention from now on, I will ask Opposition Members—this goes for all of them—the very simple question: what would they have reduced? They were in government not two months ago, and they have left us with a terrible problem.

[Chris Bryant (Rhondda) (Lab)]

Will the right hon. Gentleman give way?

[Mr Duncan Smith]

Before I give way—I will give way in due course—I want to make a bit more progress, and I want Opposition Members to tell me what they would have advised the right hon. Lady to cut from the Department’s spending. It is utterly unreal that they can sit there now in opposition as though they have been there for six years and they had nothing to do with the mess. After all, the right hon. Member for Birmingham, Hodge Hill (Mr Byrne), who is sitting on the Front Bench right now, said that there was no more money left, so where was the right hon. Lady going to get the money from?

[Chris Leslie (Nottingham East) (Lab/Co-op)]

Will the right hon. Gentleman give way?

[Mr Duncan Smith]

I will give way in a second; I think that I have been reasonable.

Our action to increase benefits in line with headline inflation measures is in marked contrast to the actions of the previous Government. I mentioned that there was no provision to find the extra £300 million that they would have reduced next year’s budget by. Let me look at some of the other measures. Today in the UK, nearly 2 million children grow up in homes where no one works. They are at risk of poorer outcomes than those of their peers in working households. That is unacceptable, so the Budget will deliver fairness for children and families while protecting the vulnerable. To help lone parents to raise themselves out of benefit dependency and into work, our measures include lowering the age at which lone parents will be expected to move into work to when their youngest child reaches five. However, it is important to remember that jobcentres have wide discretion on this, and as they assist parents, they will of course have the capacity to examine how things fit in with parents’ requirements around their children’s education. It is right and fair that lone parents should work as and when their children are in school, although more particularly in this case that will be part-time work.

When we are restricting eligibility for the Sure Start maternity grant for the first child, it is right that we provide additional support for families to buy essentials. However, it is also right that these essentials are not repeatedly bought for subsequent children but used again, which is what is done by many hard-working families on low incomes. For multiple births, the grant will come through a corresponding number of times, so people who have triplets or twins will receive different lots of that £500. Further help may be available from the social fund if there is an additional need.

[Chris Leslie]

I certainly disagree with the reduction in the maternity allowance, but can the right hon. Gentleman justify scrapping the health in pregnancy grant? The money would have been available for the grant, by the way, if the Government had been tougher on the banks with the banking levy.

[Mr Duncan Smith]

The reality is that the grant came far too late and had no effect on improving women’s health, which was its original target. It was actually paid after the child was born, so the whole grant was a nonsense from start to finish. Getting rid of it has affected nothing out there and there are far better uses for the money.

[Mr Stewart Jackson (Peterborough) (Con)]

Did my right hon. Friend read last week that the media commentator Stephen Pollard had spent his family’s health in pregnancy grant on a trip to the Fat Duck restaurant in Bray? That is an example of a lack of proper targeting of those who are most in need of such funding, and it shows why we were right to get rid of the grant.

[Mr Duncan Smith]

I thank my hon. Friend for that example. We have put £2 billion into the child tax credit because we believe that that is a far better way of helping poorer parents. The grant is rather indicative of the way in which the previous Government scattered money around in the hope that they could buy some votes in the run-up to the election although, as was demonstrated, that failed.

[Several hon. Members]

rose—

[Mr Duncan Smith]

I want to move on to housing fairness and work incentives, but I shall give way in due course. I have been pretty reasonable about that.

[Chris Bryant]

In your view.

[Mr Duncan Smith]

Perhaps not in the hon. Gentleman’s view, but he has never been reasonable in my view, so good luck to him.

The Budget tackled the ballooning cost of housing benefit. In real terms, the cost of working-age housing benefit has increased from £10.6 billion to £15.4 billion in 2010-11. If the system was left unreformed, it is projected that the housing benefit bill would reach £21 billion in 2014-15. It is out of control and what is more, housing benefit is often unfair for working families. Today, a tenant in a five-bedroom house in an expensive area such as Westminster could feasibly get more than £100,000 a year. Although that example applies to a small number of people, some 750,000 get more than £10,000 a year. Those cases are still in the minority, but they happen far too often. It is unacceptable and unaffordable that people on benefits are living in homes that our hard-working families cannot afford, so we have capped local housing allowance levels at the rate for four-bedroom properties.

[Sheila Gilmore (Edinburgh East) (Lab)]

Is the right hon. Gentleman aware that the biggest reason behind the increase in housing benefit is the lack of affordable rented housing in this country? Most of my constituents would rather live in an affordable rented house than a private rented home.

[Mr Duncan Smith]

Oh dear me; there is no stopping Labour Members sometimes. I must say to the hon. Lady: whose fault is that? The Labour Government slashed the building programme, so Labour Members have only themselves to blame. Everyone warned them about the problem for years. As far as we possibly can, we need to ensure that the houses that people occupy are of the size that they need. We should not have elderly people trapped in houses that are far too large for them and that they cannot look after. Only the most expensive areas will be affected by the cap.

[Several hon. Members]

rose—

[Mr Duncan Smith]

I will give way in a minute.

We have also introduced size restrictions to the social rented sector to make better use of existing housing stock, changed the percentile of market rents for local housing allowance rates to 30% to keep rents under control, time-limited the housing benefit award for jobseekers to reinforce back-to-work incentives and changed the current system of mortgage interest support, in which 92% of customers get more help than they need.

Of course I am listening to the concerns about the potential impact of housing benefit reform, and we will keep it under review. That is why we are tripling the discretionary housing payment to £60 million and we will provide for an additional bedroom for non-resident carers, who may need to stay overnight—something, by the way, that the other Government could have done and never did.

[Several hon. Members]

rose—

[Mr Duncan Smith]

I give way to the hon. Member for Wakefield (Mary Creagh).

[Mary Creagh (Wakefield) (Lab)]

I can tell the right hon. Gentleman that there are no fat ducks in Wakefield. What we do have is a large number of poor families who will be hit by his cut to the Sure Start grant. I can tell him that if someone has a child who is two, they cannot expect a baby to travel in the same pushchair. I can tell him that if someone has a child of six of seven, they have already given away the pushchair by the time the next baby comes along, because that is how families organise themselves. He argues that people should reuse and recycle goods for babies, but people cannot fit two babies in the same cot—is that what he is now suggesting families in this country should do?

[Mr Duncan Smith]

I must say to the hon. Lady that that is a pretty poor intervention. The grant of over £500 for every child was far more than most poor, working families would ever achieve from any other source. As I told Labour Members earlier, we have to make tough choices. This is an area where people can share. Having had children myself, I know, as will many others in the House, that people share clothing and pushchairs. They do what they can to get by. There was a ludicrous idea that every child required the same amount of money, and I am afraid that in these difficult times we have had to take a difficult decision. I say to the hon. Lady that we are not going down the road she suggests.

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

Does the right hon. Gentleman accept that the Institute for Fiscal Studies, in its report on the Budget, said that the new measures were largely regressive, and that was before housing benefit cuts were taken into account? A survey at the weekend by Tim Horton and Howard Reed said that if the housing benefit cuts and spending cuts were taken into account, the poorest 10% were likely to face a six times greater reduction in their spending power than the richest 10%. Does that make it a fair Budget, in the right hon. Gentleman’s opinion?

[Mr Duncan Smith]

The IFS talked about it being debatable whether the Budget was regressive or progressive. I say honestly to Labour Members that if they do not like these measures and if they really want to be taken seriously, they need to tell me what they would have done. Had they won the election—heaven help us—they would have been on this side of the House justifying reductions in spending, not playing games on the other side. If the hon. Gentleman wants to say that this is unfair, he should tell us what would have been a fair way of getting that £45 billion reduction.

I am committed to ensuring that disabled people and carers receive the support that they deserve. I have therefore asked the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Basingstoke (Maria Miller), who has responsibility for disabled people, to undertake a strategic review, taking a principled look at the support provided for disabled people across the piece, to ensure that the effect of all the measures is appropriate and that they work.

Over the last decade, spending on disability living allowance—this is the issue—has spiralled out of control, and the system has been vulnerable to error, abuse and, in some cases, outright fraud. In just eight years the numbers claiming DLA have risen by around 700,000. In 2010-11, spending is on track to reach just over £12.1 billion, twice the level of the 1995-96 spending in real terms. That is a significant sum, and we need to make sure, for the taxpayer, that the money is paid to those who desperately need it. That is why we need a proper medical assessment. It is not about cutting support for people who live with serious disability or health problems; it is simply about making sure that we target support at those who need it, and the system remains fair and affordable.

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

I welcome the right hon. Gentleman to his new post. He will recollect that towards the end of the last Parliament the entire House agreed to an increase in disability living allowance for blind people. Will he give the House a guarantee that he will not go back on that decision?

[Mr Duncan Smith]

We will give that guarantee. We will be laying the regulations for that this week, so there is definitely a commitment to go ahead.

[Several hon. Members]

rose—

[Mr Duncan Smith]

As the hon. Member for Rhondda (Chris Bryant) has been standing up so often, I will give way to him.

[Chris Bryant]

I am very grateful to the Secretary of State. My constituency has one of the highest levels of those on sickness benefits of various kinds. There are historical reasons for that. He asks what I would like to see. I would like to see fewer of my constituents on unemployment benefits and fewer people on sickness benefits because they were in jobs. The difficulty is how one achieves that without cruelty to those who desperately need support and want to be able to go to work. The vast majority of my constituents are not looking for handouts; they want to be able to get into work.

The right hon. Gentleman talks about people moving house. My concern is that that does not apply in constituencies such as Rhondda because we have a very high level of home ownership. For those people, unless he really is talking about just upping sticks and moving to another part of the country, what he is saying poses the very real danger of increased poverty. How will he make sure that those people have a chance in future?

[Mr Duncan Smith]

That is a very reasonable question. As I said earlier, we did not want to be here in the first place. We have inherited a major deficit, and we have to eradicate it. Whoever was to be in government—the hon. Gentleman should know this, having been a Minister—was going to face tough choices. There is no easy choice. Of course I recognise that he has a problem. We have said that we will increase the discretionary allowance. We also want to make sure that more money is spent on areas such as his that can, in turn, develop more jobs. That is a priority, and we will be making announcements about that.

These decisions are not about taking money away from people who need it; they are about making sure that those who need money get the money that they need. Nobody, after these checks, will have money taken away from them who can genuinely demonstrate that they should be receiving DLA. The key point is to make sure that those who do not need it are seeking work.

[Chris Bryant]

rose—

[Mr Duncan Smith]

I have already given way to the hon. Gentleman. If he will forgive me, I want to make some progress.

I started with a clear argument that the first coalition Government faced some unavoidable choices. I know that the Opposition, having been in government a couple of months ago—[Interruption.] The Opposition say that the choices are not unavoidable, but I would love to know what they would reduce if they were in government. What would be their choices? We have heard nothing about that except their talk about the £45 billion—not a single word about a penny piece being cut from any budget. We have to make spending cuts to repair a record deficit, reform the tax and welfare systems while protecting the vulnerable, and set the foundations for long-term, sustainable recovery.

[Mr Lammy]

The right hon. Gentleman has confirmed that he believes that there will be an exodus from central to outer London, and he has said that there is housing to accommodate those people. What is his assessment of that housing in Chingford? Can he confirm that he will be doing a race impact assessment?

[Mr Duncan Smith]

I am happy to consider a race impact assessment—that is reasonable—and if the right hon. Gentleman wants to come and talk to me, my door is open.

We believe that there is enough housing in London. Of course, I did not say that this was going to be easy. The point is that far too many people in houses in central London are paid significant sums—over £100,000 in some cases. That is unsustainable. As much as I like the right hon. Gentleman—he is a fellow Tottenham supporter—I have to say to him that he knows as well as I do that these are tough choices, but they are ones that we believe that we can manage. We have tripled the discretionary fund to allow for difficult cases, and I suspect that a significant amount of that will be used in London because the nature of London means that there will be issues. We will get through this, and I guarantee that we will keep the situation under review. My offer to the right hon. Gentleman still stands.

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

The Chancellor ended his Budget speech by saying that it

“laid the foundations for a more prosperous future. The richest paying the most and the vulnerable protected: that is our approach.”—[Official Report, 22 June 2010; Vol. 512, c. 180.]

If the actuality falls out of line with the intention, will measures be brought forward to bring it back into line?

[Mr Duncan Smith]

My hon. Friend has to recognise that one needs to see the Budget in the round, over the lifetime of this Parliament and in terms of reform. What I want to do is introduce reforms that focus benefit money—the money that we spend—hugely on the poorest in society. That must be our priority. Right now, the benefit system that we inherited is out of kilter, and has sucked in too many people on higher incomes, and has left too many people on low incomes desperately looking for work, but unable to find it. The answer to my hon. Friend’s question is that we are absolutely—and I am, too—determined to reform the system, so that the poorest benefit the most, and we make sure that they receive assistance to change their lives and become more profitable in all that they do.

[Several hon. Members]

rose—

[Mr Duncan Smith]

I am going to continue.

We have to seize the long-term prospectus for reform, and I shall introduce radical, long overdue changes to the welfare system, reforming the working-age benefit and tax credit system with measures consistent with our core principles: protecting the most vulnerable; improving incentives to work and providing the best route out of poverty; and tackling the pathways into poverty, welfare dependency, family breakdown and debt. That is crucial if we are to tackle income inequality, which is at its highest since records began in this country.

[John Howell (Henley) (Con)]

A vulnerable group that my right hon. Friend has not yet mentioned is pensioners. Will he say something about what we intend to do to protect pensioners’ incomes?

[Mr Duncan Smith]

I was going to come on to that, but I shall deal with it now.

As my hon. Friend knows, the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Thornbury and Yate (Steve Webb), fully supports all of this, and has made an announcement. [Interruption.] We are a coalition, and we are together. He has announced some radical proposals on pensions, and I am enormously proud to be the first Secretary of State for Work and Pensions to say that we have relinked pensions and earnings. Moreover, even in these difficult times, we will triple-lock that pension, so that it will rise in line with earnings or prices, whichever is highest, or by 2.5%. [Interruption.] I heard the hon. Member for Wallasey (Ms Eagle) chuntering about the consumer prices index, but earnings will rise in due course well above that, so she does not know what she is talking about. [Interruption.] Okay: she had 13 years to do that, but she did not do it. She should go and look pensioners in the eye, and tell them why the previous Government did not do so, when they had the opportunity.

The coalition is proud to make sure that we will reform the system that we have inherited. We will reduce the deficit, and we will improve the lot of the poorest in society. We will look back on this and say, “What a shameful 13 years the other side had.”

18:02

[Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)]

The Secretary of State told us in May in his first speech that he would work to improve the quality of life of the worst-off in Britain. He said that

“we are here to help the poorest and most vulnerable in our society.”

He has just spent 40 minutes defending a Budget that kicks the poorest and the most vulnerable in the teeth. How does that sit on his conscience? Was it his idea, or was it the Treasury’s, to tell a woman in her fifties, who has given up work to look after her elderly parents that, in fact, what they wanted to do was cut housing benefit and make her pay VAT—hundreds of pounds a year—and that even her carer’s allowance over the next five years would be cut in value by about £90 a year? Was it his idea, or was it the Treasury’s, to tell someone who is severely disabled—

[Mr Duncan Smith]

rose—

[Yvette Cooper]

Perhaps the right hon. Gentleman can answer this point as well if he is going to respond. Was it his idea, or was it the Treasury’s, to tell someone who is severely disabled and really cannot work, “We’re going to cut the value of support over the next five years by £300 a year”? If he could answer those points, that would be very welcome.

[Mr Duncan Smith]

I should be grateful if the right hon. Lady answered the original question. She was in government not two months ago. [Interruption.] No—the Opposition have to recognise that they have only just left government, so we have a legitimate right to ask the question. They left the deficit behind, which will lead to real problems for Britain—we have had to resolve it. If she does not like what we have done, what would she have done instead? Will she answer that question?

[Yvette Cooper]

The right hon. Gentleman has not answered the question. He has not explained why he claims to help the poorest and most vulnerable, yet is cutting the benefits of those who are poorest and most vulnerable in society. Government Members like to claim that this is inevitable. This is an ideological choice that they are making. They have chosen to cut an extra £40 billion from the economy. They have chosen to cut an extra £11 billion from the value of benefits and tax credits. They have chosen to cut an extra £17 billion a year from Government Departments, and they have chosen to increase VAT. They have chosen to cut the deficit at a pace that is not only unfair and destructive to our public services but damaging to our economy.

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

Will the right hon. Lady tell us exactly what the maximum level of housing benefit should be? Does she think it right that we are paying people more than £100,000 a year?

[Yvette Cooper]

No, I do not, which is why we introduced cuts in support for the highest rents as a result of the previous Budget, and set out a series of further reforms. I want to return to the point about housing benefit in a moment, because it is important.

[Clive Efford (Eltham) (Lab)]

On page 33 of the Red Book, paragraph 1.102 makes it quite clear that the Government intend to reduce housing benefit to people of working age if they under-occupy council housing. In his response to an intervention, the Secretary of State referred to pensioners under-occupying social housing. Does that not give the lie to what is in the Red Book, and show the real intention of housing benefit changes, which are an attack on pensioners?

[Yvette Cooper]

My hon. Friend makes an important point, and I am happy to accept an intervention from the Secretary of State if he wants to clarify the position, because he did indeed discuss pensioners who under-occupy homes across the country. It is right that we help and support people who want to move to smaller homes as they grow older, but he needs to give us an answer. If he is telling elderly people and pensioners that they are going to have to move out of the home where they have lived all their lives, and where they have brought up their children, that has severe consequences. He must clarify his position, because my hon. Friend is right.

[Simon Hughes]

The right hon. Lady’s attack appears to be that the measures introduced by the Government are ideologically driven—something that is difficult to justify with regard to my right hon. Friend the Chief Secretary to the Treasury; the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Thornbury and Yate (Steve Webb); and others, who have a record of campaigning for the poor and disadvantaged. Might not the same fallacious argument explain why, for 13 years, the Labour Government never linked pensions to earnings? Was that an ideological option? I hope it was not but if it was, the right hon. Lady cannot make the argument, because it is fallacious.

[Yvette Cooper]

The hon. Gentleman is right that there are many members of the Government who have indeed campaigned against poverty for many years, which is why their betrayal of the people whom they have stood up for is shocking. He will recall, too, that it was the Labour party that legislated and changed the law to restore the link with earnings. He should look rather carefully at the increase that, in practice, pensioners will receive over the next few years compared with the old standards. He will find that the new proposals are rather less generous than they appear at first sight.

[Chris Bryant]

Is there not also a real danger that the Government are presenting us with a straw man on housing benefit? In many of the constituencies that have the biggest problems in the land in trying to get people into work, it is not a question of people being paid more than £400 or of their living in houses that are too large, but of people living in houses that are not large enough and not looked after well enough by unscrupulous landlords. What we need to do if we want to help young people to grow up in households where there is work is to give them real opportunities to work.

[Yvette Cooper]

My hon. Friend is right that the key is helping people into jobs, yet the Budget cuts the number of people in work, increases the number of people on the dole, cuts the help for people to get back to work, as well as cutting the income of carers and the severely disabled, cuts help for kids, and hits the elderly with a VAT hike. Nothing in the Budget will get a single extra person back to work. Instead, it cuts the number of people in work.

[Kwasi Kwarteng (Spelthorne) (Con)]

To what degree does the right hon. Lady believe that the previous Labour Government were responsible for the massive budget deficit that we face?

[Yvette Cooper]

We have been through the greatest global recession for many generations. That has had an impact on economies across the world, pushed up unemployment across the world, and pushed up borrowing across the world. We think it was the right thing to do to increase borrowing in response to the recession. That is why unemployment in this recession has been about 5%, compared with 10% in the recession of the 1980s and 1990s. Helping more people back into jobs has saved us money and also helped to put borrowing in a stronger position.

Minister after Minister has tried to pretend that this is a fair and a progressive Budget. The Liberal Democrats are clinging to the fig leaf of their increase in personal allowances, despite the fact that it is more than blown away by the hike in VAT. The Prime Minister said last year about VAT that

“it’s very regressive, it hits the poorest the hardest. It does, I absolutely promise you. . . VAT is a more regressive tax than income tax or council tax.”

That, then, will be why the Government have cut council tax, cut income tax and increased VAT to pay for it. As the Institute for Fiscal Studies made clear, the Budget is regressive, no matter how many times Ministers try to pretend the opposite.

[Bob Russell]

Does the right hon. Lady agree with the study by the Fabian Society and the Webb Memorial Trust that shows that 20% of the population is living in poverty? Talking about betrayal and 13 years of Labour Government, the inequality in Britain today, on some measures, is at its highest since the early 1960s.

[Yvette Cooper]

As the hon. Gentleman knows, the level of child poverty is some 600,000 lower than it was in 1997 as a result of the action that the Labour Government took. He also knows that we deliberately made the measures of poverty by which we were judged relative measures. Of course, that makes matters harder as the economy grows, and of course there is always more to do. That is why we believed it was right to do more to help the poorest and those who were struggling—in contrast with this Budget, which does the opposite. Pensioners do not get the income tax cut, but they have to pay more in VAT. Those on the lowest incomes do not get the income tax cut, but they have to pay more in VAT.

The Ministers are like fraudsters in the fairy tale, telling gullible Liberal Democrat MPs about the beautiful progressive clothes that the emperor is wearing, if only they are clever enough and loyal enough to see them. Liberal Democrats are clinging desperately to shreds of invisible cloth, reaching deep into their Liberal and Conservative history to pretend that they can be progressive now. They are claiming that Keynes might have backed the Budget. They are calling on Beveridge for support, kidding themselves that they can call on their history and that they are following in the footsteps of great liberal Conservatives like Winston Churchill, who supported the minimum wage, but the truth is that the emperor has no clothes.

The truth is that if we look at the detail, the Budget is nastier than any brought in by Margaret Thatcher. Instead of Churchill, Keynes or the founders of the welfare state, the Liberal Democrats have signed up, with the Secretary of State for Work and Pensions and his Chancellor, to cut support for the poor. It is perhaps apt that in this week of World cup disappointments, it was a footballer who got it right. In 2002, after England were defeated in the World cup by Brazil, Gareth Southgate reflected ruefully on England’s performance and said:

“We were expecting Winston Churchill and instead got Iain Duncan Smith.”

That is the reality for the Liberal Democrats now. With all their high hopes, they have betrayed the poor and the vulnerable, whom they stood up to defend.

[The Minister of State, Department for Work and Pensions (Steve Webb)]

rose—

[Yvette Cooper]

I will give way to the hon. Gentleman because I know he has a history of supporting people on low incomes. I do not know why he is betraying it now.

[Steve Webb]

I am grateful to the right hon. Lady. Will she confirm a fact for us about the pension rise that she pencilled in for 2012? Whereas we have guaranteed a minimum of 2.5%, can she confirm that her spending plans proposed a pension rise below 2.5%?

[Yvette Cooper]

As the hon. Gentleman knows, the old uprating rules are that the pension should go up by either RPI or 2.5%. If he had stuck to those old rules, pensioners would be better off in 2012, 2013 and 2014. As he also knows, all parties supported restoring the link with earnings in the next Parliament, but his proposals cut the support for the additional pension for 6 million women and 4 million men by £100 a year, as a result of his upratings by CPI, rather than RPI.

[Steve Webb]

As a new Minister, I have had to reply to many letters complaining about what the previous Government did. One of things that people complain about is the freezing of the additional pension by the right hon. Lady’s Government in April 2010. Can she confirm that under our CPI policy, the pension would have gone up in April 2010? Can she confirm that she froze that pension for millions of people?

[Yvette Cooper]

The hon. Gentleman will struggle to defend his progressive history if he quotes selectively from the figures. He knows that the Budget sets out the additional cuts and savings that he will make from benefits, tax credits and public service pensions from the switch to CPI indexation from 2011-12, which includes, as he well knows, the additional pension and much additional support for pensioners—and which he hid from pensioners on Budget day. That will lead to cuts of £1.17 billion in 2011, £2.2 billion in 2012, and £3.9 billion in 2013.

Perhaps the hon. Gentleman should also consider this: he had his negotiations with the Conservatives about the personal allowance that they were so keen on, yet they failed to consider extending that personal allowance increase to pensioners. They left pensioners out. If he really cared about pensioners, he might have increased the personal allowance for pensioners. As a result, all the pensioners across the country do not benefit from the increase in personal allowance, but they will pay hundreds of pounds extra every year in VAT—an increase that members of his party opposed, campaigned against and shouted about in the run-up to the election. Where are their principles now? Now they are ditching all those commitments and all those principles because they are happy for pensioners to pay hundreds of pounds a year more in VAT.

[Ian Swales (Redcar) (LD)]

Can the right hon. Lady remind me, a new Member, which Government it was who gave pensioners a 75p a week increase?

[Yvette Cooper]

I do not think that was right. That is why it was right to increase the support for pensioners, to increase the winter fuel allowance and to bring in a floor, so that never again would pensioners face such an increase.

Members on the Government Benches jeer and call, but what are they going to do to the winter fuel allowance and to free bus passes? They are already briefing the newspapers that they plan to cut the winter fuel allowance and free bus passes, and that that is needed to protect the police and public services. I invite the Secretary of State to intervene and to confirm that he will make no cuts in the winter fuel allowance every year for the next five years.

[Mr Duncan Smith]

I tell the right hon. Lady that the coalition gave a commitment. We are paying the winter fuel payment.

[Yvette Cooper]

I hope that meant for this year, next year and future years. [Interruption.] The right hon. Gentleman says that he is paying the winter fuel payment in full. It is not clear, however, what he thinks the full level is. Perhaps he could make the same commitment about free bus travel. Will he stick with free bus travel and not cut it for the next five years?

[Mr Duncan Smith]

I shall tell the right hon. Lady what I am going to do. I am going to answer questions when she answers this question: what would she have reduced with a £45 billion requirement on her head to cut the deficit? Until she owns up and answers that question, she has no right to ask us any more.

[Yvette Cooper]

The right hon. Gentleman has gone £40 billion further. He has proposed an additional £40 billion of cuts that we do not think are the right thing to do. He asks what we would have done, but I am sure that he has read chapter 6 of the March Budget, which sets out £20 billion of saving cuts in some detail and a further £19 billion in tax increases. I shall tell him what else we would not do: we would not waste money on measures such as free schools and the married couple’s allowance.

Nothing in the Government’s plans will get a single extra person back to work. In fact, the opposite is true. The Budget cuts the number of jobs in the economy by 100,000 a year. It increases the number of people on the dole by up to 100,000 a year, and that is on the admission of the experts the Government appointed. At the same time, the Government are cutting 200,000 jobs and training places and the youth guarantee and job guarantee schemes. How on earth will they get more people into work if they keep cutting jobs?

[Mr David Anderson (Blaydon) (Lab)]

Does my right hon. Friend share the concerns of the Royal College of Nursing, which, in relation to a Department that allegedly is protected, suggests that at least 5,500 and, possibly, as many as 30,000 front-line nurses’ jobs will go?

[Yvette Cooper]

My hon. Friend is right that the Government’s proposals do not even include the consequences of the spending review and the proposed additional £17 billion of cuts in public services.

We think that it is better for people to be in work than on the dole, and that is why we funded the future jobs fund and additional support and jobs. They were often in the community and run by the voluntary sector, and they helped young people to obtain the skills that they needed and to stay off the dole. Yet, shockingly, the Government have cut 90,000 jobs through the future jobs fund, putting all those people—additionally—back on to the dole and pushing up unemployment bills. As a result, even on the OBR’s calculations, those measures will cost the Government £2 billion more over the next four years. They will have to pay additional benefits for the unemployed, and the financial, economic and social price of higher long-term unemployment will cost us more for years.

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

Will the right hon. Lady give way?

[Yvette Cooper]

I want to make some progress before I do.

The Secretary of State also said that he wants to make work pay. Yesterday he told Sky that there are marginal tax rates of 90p in the pound for some young people, that that was regressive and that he wanted, first, to change the system so that they are able to keep more of their own money. But, page 69 of the Red Book shows that as a result of the Budget an extra 20,000 people will lose more than 90p in the pound.

We agree that housing benefit needs reform, and we brought forward some measures in the March Budget and introduced a consultation paper last December to set out our proposals. We agree also that we have to stop some of the most excessive rents being paid, and that we should exclude some of the highest rents in every area. However, we should also consider how we provide more security and payments for people moving into work, so that work incentives are improved. There is a strong case for linking housing benefit to tax credits in the longer term, but the Government’s proposals do not set out any reforms; they set out only cuts, and destructive ones at that. Their plans cut almost £1.7 billion a year from housing benefit, and there is no analysis of how many people that measure will push into poverty or homelessness.

[Mr Slaughter]

There are clearly no poor people left in Southwark—certainly none on housing benefit, or the hon. Member for Bermondsey and Old Southwark (Simon Hughes) would not have the temerity to support the Budget. However, there are poor people in Hammersmith, Islington, Westminster and Kensington, so does my right hon. Friend agree not only that it is wrong to force thousands of families out of London, but that such measures will do nothing to get people into jobs, nothing for family break-up figures and nothing for community cohesion in London?

[Yvette Cooper]

My hon. Friend is right that those proposals will have an impact on families and on entire communities. Almost £1 billion will be taken from tenants in the private rented sector—almost 20% of their support. If tenants have on average 20% of their payments cut, how many of them does the right hon. Gentleman think will really be able to carry on paying their rent? People in Wakefield will lose £20 a week; people in Barking will lose £40 a week; and people in Broxtowe will lose £30 a week. That is before they face the cuts in tax credits and the hit from extra VAT.

[Glenda Jackson]

The Secretary of State cited a four-bedroom house in the private sector. My constituency is served by two local authorities, and in Brent the medium price for a four-bedroom house is £450 a week. In Camden the medium price is £1,020 a week. Currently, 42% of people claiming housing benefit in Brent and 18% of people doing so in Camden are in the private rented sector. That represents a sizeable number of families who will clearly lose their homes under the current Government.

[Yvette Cooper]

My hon. Friend is right to raise concerns, particularly as many people who receive housing benefit are in work. They work hard, are in low-paid jobs and cannot afford to pay their rent without the extra help that housing benefit brings. So, the Government’s measures will hit people who work hard to support their families and make ends meet. They will find the rug withdrawn from under them.

I am particularly concerned about the combined proposals for lone-parent families, and I ask the Secretary of State to look at them, because he says that lone parents with five and six-year-olds will move on to jobseeker’s allowance and have to look for work. However, his own documents, which were provided at the same time as the Budget, assume that only 10% of those lone parents will leave benefits because of the risk they might be less work ready or need more time to find a suitable job that fits with their caring responsibilities.

Many lone parents need additional support to find work that fits school hours, but as a consequence of these proposals about 90% of them will still be on jobseeker’s allowance one year later, at which point they will suddenly be hit by the right hon. Gentleman’s 10% cut in housing benefit. Lone parents with young children might work really hard to find a job that fits school hours, but suddenly an average of £500 a year will be taken from their incomes because they cannot find work and because, as a result, he wants to cut their housing benefit. That is deeply unfair on families who might work really hard to try to make ends meet. What does he expect people to do? Hundreds of thousands of people will struggle to pay their rent, and parents will have to move house, shift their kids out of school, move long distances and break up communities in order to try to find an affordable home.

[Emily Thornberry]

Given that the Secretary of State seems to think that we are exaggerating the position, does my right hon. Friend agree that it might be a good idea if he spent a morning with me visiting some of the Islington families who will be profoundly affected by those changes to housing benefit?

[Yvette Cooper]

That is a very generous invitation, which I shall pass on to the right hon. Gentleman.

Where are the figures for the analysis of the impact of those proposals on homelessness? Where are the figures for their impact on families who will not be able to pay their rent? Does the right hon. Gentleman have any idea how expensive it is to keep a family in temporary accommodation? That is the problem. That proposal is just like the proposal on unemployment. If the Government do not provide the support up front, it will cost them more later on in terms of dealing with homelessness.

As for supporting families, not even in the worst of the Thatcher years did the Government ever introduce a Budget that hit children so hard. Of the £8 billion that this Budget raises from direct tax and benefit changes, however, £3 billion directly hits children: cutting the child trust fund and the value of child benefit, and overall cuts in child tax credit. That is even before we add the cuts that families face in housing benefit, free school meals, free swimming, the future jobs fund and university places. This is a savage Budget for children. The Government claim that it will be all right because there is not a measured increase in child poverty as a result of this Budget. Of course there is not, because the Treasury model will not measure the impact of changes to VAT or housing benefit, and it will not look ahead any further than 2012-13, before many of the cuts bite.

Look at the people the Secretary of State is hitting hardest—the very youngest children of all. Gone is the baby tax credit, so some mums will now find they cannot afford to stay at home for as long as they want with their little babies. Gone is our plan for a toddler tax credit, gone is the pregnancy grant, and cut is the Sure Start maternity allowance. Has he no idea at all that supporting a family and getting the children out of poverty when the babies are born can save money from the public purse for years to come? Instead, he wants to cut support from the babes in their mothers’ arms. At least Margaret Thatcher had the grace to wait until the children were weaned before snatching their support.

[Mrs Anne McGuire (Stirling) (Lab)]

Does my right hon. Friend recognise that the Child Poverty Action Group has said that this is a disappointing Budget in terms of child poverty and that it will make it very difficult to meet the targets for the eradication of child poverty already set by the previous Labour Government?

[Yvette Cooper]

My right hon. Friend is right. When one takes account of what the Government are doing to housing benefit and VAT, the real consequence of this Budget is that it will push people, including children, into poverty. We remember how the Conservatives did this before in the ’80s: they cut jobs and cut the help for people to get into jobs, they cut the support for people who could not find jobs, they cut help for pensioners, and they cut support for families and ramped up the VAT bills for them to pay. We also remember how those cuts cost us more for generations to come. It cost more to deal with people on the dole, it cost more to help families who were made homeless, and it cost more to deal with the long-term effects on communities devastated by unemployment.

These unfair cuts are not driven by good budgeting. They will cost our economy and they will cost our public finances, too. This is an ideologically driven Budget by a party that simply wants to cut the size of the state, no matter who gets in the way. The truth is that the Conservatives have the youngest, the oldest, the poorest, the weakest and the most vulnerable in their sights. The nasty party is back—only this time they brought along their mates. Shame on them. Both parties have broken their promises; now they want to break Britain too, and we will fight them all the way.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. Considerable numbers of Members wish to take part in this debate, as I am sure you can all see. Therefore, the Speaker has imposed a limit of seven minutes during the debate.

18:32

[Mr Edward Leigh (Gainsborough) (Con)]

I welcome this Budget because I believe that it is an honest Budget. I have now sat through nearly 30 Budgets, and it is often a profoundly depressing experience, because there is great excitement during the Budget statement only for us to receive a let-down the next day when we actually start to read the Red Book. There is a lot of difficulty and pain in this Budget, but what you see is what you get. What we heard on Budget day was the essence of this Budget, which is the need to try to resolve the desperate financial crisis in which we find ourselves, with a potential debt of £20,000 on every man, woman and child, and £1 out of every £4 spent being borrowed.

I accept that there are many things in the Budget that many of us do not like. Does anybody in this Chamber like a VAT rate of 20%? We are in the desperate position of having to impose that rate on everything that we buy, apart from essentials—I am not sure why newspapers are zero-rated, considering all the rubbish that they put out, but it applies to some useful things like food—because we are faced with this financial crisis. However, contrary to what the right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper) said, the pain is shared. I agree that a VAT rise is regressive, and we did not want to do it, but we have increased personal allowances, and in doing so ensured that is not the rich who benefit.

I pay tribute to my right hon. Friend the Secretary of State. Who has done more than him to try to raise people out of the poverty and unemployment trap? Who has done more than he in setting up the Centre for Social Justice? Who has done more than he to visit all these areas and try to create a benefit and tax system that encourages people into self-reliance, self-help and self-belief, and does not trap them in sink estates without a job and without hope for the future? He has been working on this problem for more than a decade. Now, at last, he has a chance to put some of his ideas into action, and we welcome him to the Front Bench.

[Mr Anderson]

I understand the long and proud record that the Secretary of State has in this House. Does the hon. Gentleman understand, however, that some Labour Members have not just been there for 10 years, but have lived this? We lived this same experiment in the 1980s and we saw the devastating impact on the people we represent—the people who had to pay for the failure of the Government at that time, when unemployment was not a price worth paying in the areas where I and many other Labour Members come from.

[Mr Leigh]

Nobody doubts the hon. Gentleman’s commitment to relieving poverty, but does he think that the system that we have at the moment is perfect? Of course it is not. We are trying to create a fairer system in which there are real opportunities to create a society where people are given incentives to climb out of unemployment, despair and poverty. That is what this Budget is trying to do.

It is right to speak for the poor, but it is also right to speak for the many people who earn and who are creating jobs. Rightly, this will affect everybody earning more than £50,000—by the way, everybody in this Chamber will be £1,500 a year worse off—so it is not simply the case that only the poor are paying for this. Everybody, all the way up the income tax scale, is having to pay for our difficulties and helping us to climb out of this mess. Everybody in this nation is having to pay, and that is absolutely right. I also like the fact that this Budget is starting to create the conditions in which we can have a fairer tax system in which there is less churning of money and less of a deep unemployment and poverty trap. By all means let us raise personal allowances, and let us then try to move towards a flatter and fairer rate of taxation.

I will finish shortly, as each of us has very little time. First, let me make a point about much of the work that I was trying to do in the last Parliament to try to get efficiency in Government. We still have not got there. Does anybody think that we would have got into this mess if we had had a better Budget system? We need a triple lock. The Budget process that we have in this House is still not transparent enough. In the last Parliament, I tried to persuade the Liaison Committee that we should have a powerful Budget committee—a committee of this House—to which a Government Department should go when proposing to increase legislation. We should look at that and debate it in an open forum, not just have one minute per amendment, which is what we get with the Finance Bill. Does anybody think that our Budget process is, for example, as good or as powerful as the congressional one, whereby the President proposes and Congress disposes, and there are hundreds of hours of meetings?

We already have a good audit process—one of the best in the world—in the shape of the Public Accounts Committee, but we do not have the equivalent of the PAC inside Government. Frankly, the Treasury has not been strong enough in resisting waste, inefficiency and incompetence in Government spending. The Treasury has been overwhelmed, and the process is largely paper-based. We need a kind of star chamber—a PAC—so that when my right hon. Friend the Secretary of State or any other Minister come up with a proposal, they have to go before it, in private, to justify that proposal and to be hounded by senior Members saying, “Is this spending efficient? Is it properly piloted? Above all, are we reducing complexity in Government?”

Some of us think that complexity is so inherent in Government, with the civil service having this relentless itch always to try to control and regulate, that there is no way out of this, but I do not believe that. I believe that we can create a social security system which, although simpler, is fairer and provides more incentives. I believe that we can strip away whole areas of complexity. It will be a mighty task, but I believe, given all my right hon. Friend’s experience and all the work he has done, that nobody is better placed to carry out that work over the next five years.

18:39

[Malcolm Wicks (Croydon North) (Lab)]

I want to make a specific contribution about the assumptions that underlie Government policy on raising the pension age. Those assumptions relate to our increasing life expectancy, and therefore the number of years that we will spend receiving the state pension and the affordability of that. There is also a related assumption about our ability to work longer in the future.

Life expectancy is undoubtedly increasing in general, but I wish to give a social-class perspective on the matter. I sometimes think that we get so carried away with an analysis that we are all going to live into our 80s and 90s that we fail to examine how life expectancy varies between socio-economic groups. First, it is a clear fact that fewer individuals from lower social classes survive even to reach state pension age. It is estimated that almost one fifth—some 19%—of men from lower social classes who are currently 25 are likely to die before they are 65 years old, so they will never get a state pension. That contrasts with 7% of men from the highest social class. For women, the comparable figures for those dying before the age of 60 are 10% and 4%.

Secondly, the great majority of poorer people who do reach retirement age enjoy shorter pension lives, if I may call them that, than the better-off. At 65, professional men have a life expectancy of 18 years as a pensioner, while unskilled men have one of only 14 years. For women, taking the starting point as age 65, the respective contrasting figures are 22 years and 17 years. There are significant social-class differences, and the Government need to think through their implications.

What about the employment assumptions? Raising pension ages assumes that in future years, men and women will be able to work for an extra period. How reasonable is that assumption? Let us look at current employment trends. Some people, of course, continue to work past state pension age—I believe the figure is about 13%—but a far higher proportion are effectively out of the labour market before the formal state retirement age. We rather pretend that the state retirement age is 60 and 65, but the statistics show the myth behind that. The labour force survey data show that for the period of February to April this year, 24% of men aged 50 to 64 and 26% of women aged 50 to 59, in the period leading up to retirement, were classed as economically inactive. In other words, they were not in work.

When we look more specifically at those coming up to the state pension age, we see that very large numbers of them have effectively been retired long before the age of 65 for men and 60 for women. Some 43% of men aged 62, for example, are not working; by age 64, it is 53%. To take another example, 35% of women aged 58 are not working.

I am not making a particularly partisan point, but what conclusions do we need to draw? In general, it is not unreasonable to increase the age at which people become eligible for the state pension. I say that as a general proposition, but we need to be sensitive to social class. To be blunt, as many of us know from the people we meet in our constituencies, many people working in heavy industry or who have had tough lives in physically demanding jobs, such as in the mines, in steelworks, as cleaners or as care workers, cannot go on working for ever. There comes a point when they need a rest and need to retire.

Significant changes will be needed to employment practice and attitudes to work if more jobs are to be available for those in their late 50s and 60s. The statistics that I have cited show that it is currently difficult for many people of that age to get work. I suggest that we need to build on policies that are already in place to promote flexibility in state pensions. At the moment there are choices to be made at state pension age. People can take their pension at that point, as most need to and do. However, they can defer it and receive a higher pension later, or they can take the deferred element of their pension as a lump sum. We need to ask whether we can do more to promote that type of choice for those able to work, so that we bring more flexibility. The number of people deferring is relatively low. I am bound to say, as a former Pensions Minister who had some responsibility for legislating in that area, that I am disappointed at how low it is. We need to consider whether we could do more to encourage choice. Could we consider, for example, making the lump sum tax-free?

Finally, what about the people whose case I have cited, those who are already out of work in their late 50s and early 60s? We know those people from our advice surgeries and constituency offices. They are in a difficult situation. Are we really saying that someone of 60 who is not in work will have to wait another year to get their state pension? Are they simply destined to be classed as unemployed or disabled, and somehow trapped in a no-man’s land between grand assumptions about future retirement patterns and the grim reality of their lives? We need to think the matter through. I do not have the answers, but we have time to consider some of the issues.

18:46

[Andrew George (St Ives) (LD)]

I wish to approve the headline description of the emergency Budget and what it is intended to achieve, which, as my hon. Friend the Member for Bradford East (Mr Ward) has said during the Budget debate, is that the richest pay the most and the vulnerable are protected. We must test that claim as we proceed. The coalition Government face many challenges in achieving that, in circumstances in which the public finances are in a very serious state, which I do not need to describe again this evening.

I wish to give the Budget a fair wind at this stage, and of course as a Liberal Democrat I gather a degree of satisfaction from a number of measures that I and my colleagues have campaigned for, namely the increase in the tax allowance with a target of an allowance of up to £10,000, taking many thousands of people on low income out of tax altogether; the restoration of a meaningful annual increase in the basic state pension, for which pensioners have been crying out for decades; increases in the child care element of the child tax credit for the poorest; the closing of the gaping tax avoidance loophole created by the previous Government through changes to capital gains tax; the introduction of a banking levy; and the protection of lower-paid public servants. There are a number of measures that I applaud and welcome very much.

This is a coalition Government and a new arrangement altogether, with two distinct parties. Seeking consensus between those parties inevitably creates significant debate.

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

The hon. Gentleman is showing by his demeanour that he is not very enthusiastic for his coalition. He says that he has campaigned for many things in the Budget. Can he tell the House when he and the Liberal Democrats campaigned for an increase in VAT?

[Andrew George]

As far as I recall, none of the three main parties ruled out the prospect of VAT increasing. It is only when one is in government that one can see the nature and state of the finances, and therefore fully understand the impact that it is likely to have.

Having said that, as all Members will know, there is an amendment about VAT on the Order Paper in my name and those of some of my hon. Friends. It asks, I think reasonably, that an impact assessment be undertaken, taking into account a number of factors including the impact that the VAT increase would have on businesses, charities and families and households across the income range and age groups. It is vital that, in order to advance a number of the challenging measures in the Budget, the Government should reasonably be expected to bring forward more information than they are able to at this emergency stage of the Budget, so that we can debate the impact of those changes.

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

I thank my hon. Friend for giving way and I agree with the sentiments he is expressing. Does he agree that charities that are unable to reclaim VAT could be about £250 million worse off as an unintended consequence of the VAT measure?

[Andrew George]

I am very grateful to my hon. Friend for that comment. There is not just a new coalition Government, but a new Parliament, and in it we should be able to debate issues both across the Chamber and within the parties of the coalition Government. That is not unreasonable. The Chamber should enable greater transparency and discourse across and between parties. The purpose of our amendment is to probe issues that need and deserve to be probed.

[Lyn Brown (West Ham) (Lab)]

Will the hon. Gentleman give way?

[Andrew George]

I shall not give way any more, I am afraid, because of the limit on time.

The motion refers to the Red Book, which, at page 67, in relation to chart A3, describes the VAT change as potentially “progressive”. I think that the notion is based on the expectation that those who spend the least will be less affected. Of course, those who spend the least are inevitably those on lower incomes, who will, as the Red Book explains, pay less VAT in absolute terms. But not everyone agrees with that: the hon. Member for Gainsborough (Mr Leigh) has described VAT as regressive, as have Labour Front Benchers.

The Institute for Fiscal Studies is rather equivocal on this issue. It says that when contrasted with income, VAT does look more regressive as it hits those with high expenditures the hardest. It also says that those with the lowest incomes tend to have the highest expenditures relative to their incomes, so there is an issue that needs to be investigated a great deal more. I believe that the Government should reasonably bring forward an impact assessment of the type that I have described and that we should have an opportunity to debate it not just in the Finance Bill Committee but in the Chamber.

I represent the poorest region in the country, so I am bound to be particularly sensitive to the impact of the Budget on the poor. However, I am not just concerned about low-income families; I am concerned about the impact of the VAT increase on rural travellers, who have a car out of necessity, not luxury, and on charities, as my hon. Friend described a moment ago. I am also concerned about the contrast between the effect on businesses that are engaged in the renovation of older buildings, for which VAT is applicable, and on those that build new buildings, for which VAT is not applicable.

The key themes underlying the emergency Budget turn on the challenges that any Government would have, such as ensuring that those who dropped us into the mess that we are in—due partly to the management of public finances by the Labour party and partly to those in the City who contributed a great deal—should be doing the most to help us out of it. As is made clear in the Budget, there is also an issue regarding wealthy people who have managed to pay less marginal tax than their cleaners. Those people should start paying their way. I hope that the Chief Secretary will consider very carefully our amendment and the reason behind it when he winds up. In this area of policy and policy making, we should have an impact assessment and an opportunity to debate this issue.

18:55

[Mr Geoffrey Robinson (Coventry North West) (Lab)]

It does seem strange that the House cannot debate the amendment in the names of the hon. Member for St Ives (Andrew George), the hon. Member for Chelmsford—

[Bob Russell (Colchester) (LD)]

Colchester, for God’s sake. [Laughter.]

[Mr Robinson]

The hon. Member for Colchester (Bob Russell)—I am so sorry—and other very distinguished honourable dissidents opposite, who are clearly being silenced for some reason or other; I cannot comment on why. I thought the amendment very apropos and exactly to the point in all respects. I am sure that it has not been withdrawn, so quite why it has not been chosen for debate I cannot think. It is a pity, because we could have probed even further the support of the hon. Member for Bermondsey and Old Southwark (Simon Hughes) for it and for the package as a whole, which he was trying to defend last Wednesday with as much discomfort as is evident amongst the Liberals who have not yet entirely been bought by, or who have not bought into, the so-called coalition policies.

It is very sad. There has been nothing sadder, in my opinion, than the right hon. Member for Twickenham (Vince Cable), who is now the Business Secretary, coming around to explain why he supports the Budget. One of the two reasons that he gave was essentially that he had been, belatedly—I think his leader got there first—to see the Governor of the Bank of the England, who had assured him that a crisis was imminent, that we were going to be downgraded and that we would be in the same position as Greece, all of which would happen in a matter of days or hours, if he and the Liberal party did not agree to every measure that the coalition subsequently put forward. All of that should have been entirely predictable at any point before or during the election, even as the bond market strengthened and the UK position strengthened during the election, and even as we learned afterwards that the funding requirement is going to be £20 billion to £30 billion less than expected. Apparently, the leadership of the Liberal party fell for the oldest trick in the book, the bankers’ scare, which has gone on for centuries—classically, of course, with Montagu Norman and all the rest in the 1930s taking that party and this country to the brink of collapse.

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

Has my hon. Friend noticed that the same Governor of the Bank of England who backed the stimulus under the previous Government is now backing the present Government’s policies—to the detriment of the public?

[Mr Robinson]

I note also that when the Governor was still an economist, before he converted to being a banker, he signed the famous letter of 364 economists, which he has now, in a piece of classic recantation, given up on.

All those considerations point to the fact that events could have been predicted and should have been accommodated. We should not have reached the situation in which we had the Business Secretary proudly telling the House—I still cannot believe this every time I read it:

“Those factors drove the economy in terms of demand”—

the factors being monetary policy and devaluation of the pound—

“and they will continue to do so.”

So, we are to have monetary easing and a continued devaluation of the pound. I do not think that either is remotely likely. He went on:

“There is a reason for believing that that is what will happen: the Governor of the Bank of England called for this Budget and has now got it, and he has every reason to understand the need for monetary policy to support recovery.”—[Official Report, 23 June 2010; Vol. 512, c. 316.]

Well, over to you, Mervyn, and good luck!

It really is absurd. It is one thing to hand over control of the money supply and monetary policy to the Governor. We did that back in 1997, and I think that was a good move. My right hon. Friend the Member for Croydon North (Malcolm Wicks) nods, and I know that he was in agreement with that move. However, it is quite another thing to say, “Look, we are giving up on fiscal policy too; you can have the whole of the economy.” When we did what we did, we joked amongst ourselves that we had got rid of one half of economic policy—notably the monetary side—to the Governor and that it would only be a matter of time before he laid claim to and was given the whole of it. Joke though that was, it has come to pass under this Government. That is sad and regrettable. The Work and Pensions Secretary is sincere in what he wants to do, but he has had to absorb many cuts, which will make his job much more difficult, as was brilliantly exposed by my right hon. Friend the Member for Normanton, Pontefract and Castleford (Yvette Cooper), who spoke for the Opposition.

However, it is not just that. The only two sure things about the Budget is that it will increase unemployment and reduce growth. That we can predict, because the Office for Budget Responsibility has told us. Beyond that, the Government refuse to give any distributional analysis. Beyond the second year, we do not know what will happen, except that the OBR has pencilled in some figures for growth that it says are hazardous in the extreme.

The Budget is an enormous gamble at the great cost of the working people in this country. It is a gamble based on the assumption that the Governor will increase quantitative easing when he said he would not. Perhaps in some magical way he will take other powers to deal with the fiscal constraints imposed by the Budget, because he can do nothing else. He cannot reduce interest rates much more, unless he wants to reduce them from 0.5% to 0%, or unless he starts shelling money out, which is hardly credible. He said he would not do any of those things, so the truth is that we face a situation in which the future of the country is being gambled.

Apart from the good intentions of, and the megalomania that seems to be developing in, the Bank, that gamble rests on three factors: an increase in inventories, meaning an increase in output; an increase in investment; and an increase in private sector activity. Who really believes in their heart that any of those factors can be counted on, especially given that the Government have made the investment route highly unlikely by reducing capital allowances? They are served at the moment by a Financial Secretary who told the Committee that considered the previous Finance Bill that they would reduce such allowances—on nearly all counts, and they have been as good as if not better than their word. He could see no reason why investment should not be reduced to the cost of amortisation in manufacturing or industrial enterprises. If that is the negative, neutral view of the need for increased investment and output that infuses the Budget, and in particular the crucial elements highlighted by the OBR—it says that there is a need for greater investment and output, and to rebalance exports—we are in for a big let down on that gamble.

Let us take one other example—Sheffield Forgemasters. Anybody who has dealt with the Government knows that it is virtually impossible to get money out of a shareholder executive. It is like getting money out of a stone, but the firm reached a conditional agreement. That would have made an enormous contribution to the rebalancing of the economy, including in respect of import substitution, and now those products will come in from Japan, because the arrangement was cancelled. I am afraid that in their tone and their measures, the Government are making recovery immensely more difficult and, far from recovery, we face a further period of prolonged deflation.

[Several hon. Members]

rose—

[Mr Deputy Speaker]

Order. We are expecting a few maiden speeches this evening, and I am sure the House will want to ensure that it complies with the associated conventions.

19:03

[Mr Sam Gyimah (East Surrey) (Con)]

Thank you very much, Mr Deputy Speaker, for the opportunity to make my maiden speech on this emergency Budget.

I strongly believe that over the past few years, the state has taken too much. It was interesting listening to the right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper). She declared that the nasty party is back, but I know from my personal life that to protect the vulnerable and to give people a genuine chance of making the most of their lives, we need to empower individuals, families and communities.

In talking to several of my constituents in East Surrey, the constituency I have the honour of representing in this House, it became vividly clear to me that budgetary discussions should focus not only on accountancy, numbers and economic jargon, but on people and their lives and futures: including the hard-working young family juggling child care and work, who are concerned about their jobs and the rising cost of living; the 22-year-old graduate with more than £20,000 of debt, wondering whether she will ever get a job or a foot on the housing ladder; and the couple about to retire who are worried about their pension after years of paying their taxes and saving for retirement, and who are left wondering whether they will achieve their aim—this must be the aim for every generation—of leaving a better future for their children and grandchildren.

For my constituents, this is what the Budget boils down to: real people, real lives and real issues. Yes, we have beautiful rolling countryside in East Surrey, most of which has been recognised as green belt, meandering between vibrant towns and beautiful villages. It is the epitome of what makes England unique. We know how fortunate we are, and we take seriously our duty as custodians and protectors of the local environment for future generations. We have great community spirit and pride in our area, which means that for the vast majority of people in my constituency, putting back into the community is a way of life.

It sounds idyllic. However, my constituents work very hard, and I know from my postbag that some of them face difficulties just as real as those faced by people in other parts of the country. A lot of them think—and I tend to agree—that the previous Government treated them as a cash cow, and squeezed and squeezed and squeezed. That is true of all those paying taxes, and of the various local councils who do sterling work on a shoestring budget from central Government.

On a national level, East Surrey has been served with distinction by two great public servants: Peter Ainsworth, for 18 years; and Geoffrey Howe, who now sits in another place, for 24 years. They championed the constituency in this place and always stood up for what they believed in. I know I have big shoes to fill, and at 5 foot 4½ inches, I need to stand on the shoulders of giants.

Peter’s radical stance on the environment was instrumental in shifting attitudes to green issues, and he introduced as a private Member’s Bill the Green Energy (Definition and Promotion) Act 2009. I also respect him for sticking to his guns on the Iraq war when it seemed unpopular to do so. From my dealings with him, I can say without equivocation that he is a good man.

I can say the same of Geoffrey Howe, whose mild manner disguised a steely sense of purpose. He was Mrs Thatcher’s longest-serving Cabinet Minister— 11 years is a long time in politics. In his now famous 1981 Budget, when our party faced the task of getting the country back on its feet, he followed the courage of his convictions by deflating the economy at a time of recession, in the face of resistance from all sides, including 364 leading economists who wrote a letter to The Times saying that the Budget had no basis in economic theory.

However, I believe we learned a greater lesson from that Budget—that we cannot pull certain economic levers in certain circumstances. The lessons from that Budget lie firmly with its weaknesses rather than its strengths. We have learned that we cannot be coldly dispassionate when setting economic policy, and that we cannot ignore the effect on jobs and people’s lives. That is why I support our programme to get people back to work. Getting people into work is the best route out of poverty.

As in 1981, our party once again faces the task of redefining our economy and reshaping our society. That is why I welcome the Chancellor’s proposals for small businesses, which are the backbone of our economy. A long-lasting recovery must have its foundations in the private sector, which is where jobs will come from. Jobs will come if we reward enterprise, endeavour and ambition, and if we have a step change in our approach to enterprise. We need to encourage a spirit of adventure. Without accepting that basic premise, we will not have people taking the risks that are essential to creating the next Vodafone, the next Dyson and the next lastminute.com.

Many Opposition Members say that having the state do less by focusing on getting people into work and building an economy based on rewarding endeavour will penalise the less well-off. They are wrong, and I should know. I grew up in very modest circumstances. My standing here in the Chamber is the result of the vision, care and support of a strong mother, who brought us up on her own and overcame numerous odds, and instilled in us character, discipline and the value of hard work. I do not believe that any state programme could achieve what she has. On the contrary, I would have been trapped in poverty, as millions are.

At university I struggled to pay my rent. But for the generosity of my college, Somerville, I would have been thrown out. That could have been the end of my university education, and perhaps I would not have made it here, so I understand that we cannot leave people to the mercy of markets. For me, the crux of the Budget is that we should empower individuals, families and communities to make the most of their lives.

Some have said that on the face of it, I am an unlikely candidate to represent East Surrey. I have pointed out to them that it is a privilege and a pleasure for me to represent this great constituency because every day I see there the values that shaped me and that I hold dear. Those values should be at the heart of our economic policy and should guide us as we seek to reshape our society for the better.

19:10

[Mark Durkan (Foyle) (SDLP)]

It is a privilege to follow the hon. Member for East Surrey (Mr Gyimah). He not only reflected on the beauty of his constituency but let us know that, just because people live in idyllic settings, that does not mean that their family or work circumstances are ideal. He has also given us a trailer for the many lively contributions he will make in this House, seasoned with strong personal reflections, which many Members will have taken on board.

Claims have been made that, with the coalition Government, we have a new politics. That new politics, we are told, is about honesty and rebuilding trust. However, we have at the heart of the Budget the departure of honesty, with parties justifying doing what they said they would not do. Parties campaigned to get votes on the basis that the last thing we wanted was a VAT increase, but it is the first thing imposed by this Budget. It is a Tory Budget with Liberal Democrat accessories. I concede that some of those Liberal Democrat accessories are attractive—and that is part of the political calculation behind the Budget—such as the triple guarantee on pensions, which is there so that the coalition can say to Labour opponents, “We have done something that you didn’t do, we have restored the earnings link and better.” I regret that Labour Ministers did not listen to all their Back Benchers during their 13 years in government and do something about the pensions earning link.

We need honesty all round. I welcome the intensity that is coming from some of my hon. Friends on the Labour Benches, but I hope it comes with a measure of honesty, point by point.

[Simon Hughes]

The hon. Gentleman’s views are much respected, but may I say that I was always clear on this point? We did not want a VAT increase, although we had it under the last Government when it went up and then came down again. We were hoping that it would not happen, but certainly I said—as did all my colleagues, as far as I know—that it could never be ruled out. For many of us, the current position is that it may be one of the least worst options.

[Mark Durkan]

I am not sure if that was the least worst defence of a significant U-turn on a significant campaign issue. People did not just imagine that the Liberal Democrats campaigned aggressively on the issue of VAT increases, so to mount new politics on the basis of honesty and trust against that background is dangerous indeed.

I acknowledge that the Budget has Liberal Democrat accessories that are attractive, as are other aspects, such as the increase in personal allowances. But Liberal Democrats perhaps need to consider that this may be as good as it gets in the coalition. I recall a famous observation in Irish politics by a member of the Irish Labour party. Some time next year, the self-image of Liberal Democrats will change. They will realise that they are no longer in the vanguard of social justice and civil liberty, but instead have become the mudguard of a hard cutting Conservative Government. That will be their role in this Government.

It is not the case that the whole Budget is wrong, and from a study of the Budget notes it is significant how many of the measures build on aspects of the Finance Act 2009 and other Acts passed in the last Parliament. There are tweaks here and there, of the good, bad and neutral variety, but we should not pretend that there is no continuity. When the Chancellor made his statement, he said we would not have to look anywhere else for the Budget, because we would get it from him. He said that there would be no details hidden in the Red Book. However, when we compare his speech with the Red Book, we see that it is littered with phrases such as “We will produce proposals on this”, or “Other proposals will be published after we have the spending review in the autumn.” The details are all to come elsewhere, so we did not actually get them straight from the Chancellor.

This Government gave us some show-cuts on 22 June. Those cuts were for purely presentational purposes to show that this is a new Government, and to try to mark difference. The Chancellor even told us last week that that was one of the messages he wanted to go out from the Budget, so that people would know there was a difference. That is why the shadow Secretary of State was right to say that the Budget had an underlying ideological push. The scale of the cuts that will come in the autumn is there to drive a political narrative that pain has to be imposed, change will happen and those who do not like it should blame Labour, rather than the Government who are imposing that change. That is the narrative that the Government want, and that is why significant cuts will come in the autumn.

Where will we be then? The poor, who are being asked to pay more in VAT, will then see the services on which they rely squeezed. That is when the full toll of this Budget will be felt, contrary to what the Chancellor told us about getting it straight from him on the day in his statement. We know that this will be pain and penury by instalments, over time, so that they can maintain the narrative of blaming it all on Labour.

I agree with the hon. Member for Gainsborough (Mr Leigh) about the need for a Budget committee in this House. When we consider the scale of the banking issues that this House has to deal with, they should not all be left to the Treasury Committee. The scale of the public expenditure issues we will have to cope with means that we need a discrete Budget committee that has a full and proper handle on them, as well as one for the banking issues. If we are serious about giving priority to cutting waste in government, we should also have a committee that tests Government expenditure in real time. The Public Accounts Committee looks at spending post hoc, and there is nobody who challenges spending plans in real time. We do not have a committee that permanently interrogates waste in government, proofing for good priority and busting waste, but that is what we need. There is no point setting up ever more independent offices of this and independent offices of that, when we do not give this House the tools it needs to provide joined-up scrutiny. We hear a lot about joined-up government, but we do not have joined-up scrutiny. We should take added measures, on top of those put through in the last Parliament.

I urge the Government to lead us in changing the Budget by reclassifying the Budget lines, so that we have one for front-line services, say, and one for spending that does not go fully to front-line services but broadly supports them. We should have three or four, but no more than five, classes of Budget line so that we know immediately if a measure affects front-line services or just administrative spend. We could then be more honest when we say that we are defending front-line services, because we would have a Budget information system that allowed us to do just that.

19:19

[Mr Stewart Jackson (Peterborough) (Con)]

It is a pleasure, as always, to follow the hon. Member for Foyle (Mark Durkan). I pay tribute to my hon. Friend the Member for East Surrey (Mr Gyimah) for his fluent and assured maiden speech. There is a great future for him in this House.

The Budget that was presented to the House by the Chancellor of the Exchequer last week was brave and bold, and it was the right thing to do. History will record that it will set our country back on the road to economic recovery and prosperity. Just as it fell to Margaret Thatcher 30 years ago to deal with the poisonous legacy of Labour profligacy and financial ruin, the Prime Minister faces a similar challenge today. Labour Members, in their faux outrage at the Budget, barely comprehend the fiscal catastrophe that they inflicted on our country, displaying a mixture of cocky bravado and denial.

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

Will the hon. Gentleman give way?

[Mr Jackson]

I will not at the moment.

A modicum of humility or contrition from Labour would surely be appropriate and in order. Given Labour’s utterly negative message at the general election, with no vision of what a fourth Labour Government would mean, it is no wonder that few commentators and fewer voters take its protestations seriously. It simply has no coherent alternative, other than to tax and spend, and to bribe the core vote with other people’s money. Labour’s plan to cut the deficit was completely empty of detail and its deficit reduction bill merely partisan window-dressing.

The Labour party would have had more credibility at the general election and in this debate if it had been honest with the voters about the 20% cuts in non-ring-fenced departmental budgets that the previous Chancellor had already planned. We know that Labour prepared position papers in the Treasury for a 20% VAT rise, which, most importantly, the party failed to rule out in its election manifesto. Labour bet the ranch over the past 13 years on financial services that were not properly regulated, on unsustainable increases in public spending and on a housing market built on a South Sea-style bubble. Labour lost, and we all lost: a £155 billion deficit—bigger in percentage terms than in Italy, Greece or Portugal—a structural deficit that is £12 billion more than we were led to believe, and a debt mountain of £1.4 trillion from the Government who gave us £3 billion overspends on welfare payments and wasted £780 million on the reorganisation of Departments and agencies.

It is scarcely possible to believe that during a dozen years of plenty so many of our fellow citizens were failed, and none more so than the so-called working poor—those who get up in the morning and go to work, pay their taxes, teach their children right from wrong, and have a sense of pride and self-respect. People are rational, and they will do rational things. If we pay for people not to go to work, they will take the path of least resistance and not work. That is Labour’s legacy: the people who need our help, trapped in a half-life of bureaucratic form-filling, and a hopeless and aimless existence on benefits. I believe that the Labour Government were not malevolent, but merely incompetent to an Olympian degree. After 13 years, the number of children in severe poverty is rising. We also have a higher number of children living in workless households than practically any other country in the European Union, 4.8 million people of working age in workless households, and one in five 18-year-old boys who are NEET—not in education, employment or training.

[Mr Leigh]

The worst statistic of all is that last year, of the 85,000 children in receipt of free school meals, whom we should be helping more, only 45 got into Oxbridge, which is fewer than those who came from just one school—that attended by the Leader of the Opposition. That is the true demerit of what we have been creating in the past 13 years.

[Mr Jackson]

My hon. Friend is absolutely right to draw the House’s attention to that statistic. Likewise, the number of children who go from care into higher education is also a shameful figure. I therefore strongly endorse the ambition of my right hon. Friend the Secretary of State for Work and Pensions to tackle the deep-rooted causes of poverty in this country, and to tackle the twin aims of lessening the scale of social breakdown and improving the quality of life of the poorest in our society. If our Government achieve nothing less, they will have served our country in achieving that.

In my constituency, where we have recently suffered job losses, and where we also have low skill levels, lower-than-average pay and high welfare dependency, the problems are real and they are about people, not statistics. Hundreds of children in Peterborough live in dysfunctional families, their parents on welfare benefits. Those children lack ambition, a focus and, often, a moral framework, going without anything other than peremptory familial love and experiencing, through no fault of their own, an inevitable poverty of imagination, as well as, too often, material poverty. Dedicated teachers, nursery staff, health professionals and members of the extended family, such as grandparents, are often forced to assume a role in loco parentis. I believe that we have a moral duty to those children to do something about the situation, even if not to their often indolent and feckless parents.

[Mr Anderson]

rose—

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

rose—

[Mr Jackson]

No, I will not give way; I do not have time.

More than 6,000 of my constituents languish on disability living allowance and, most shockingly, more than 1,000 of them languished on that particular benefit for more than 12 years under the previous Labour Government.

We simply cannot go on as we are. I welcome the measures in the Budget. I believe that they seek to protect the vulnerable while rebalancing our efforts to generate a private sector-led recovery that will benefit everyone in the medium term. In that spirit, I particularly welcome the 50,000 extra apprenticeships, an increase in the child element of the child tax credit, the re-linking of pensions and the allowance increase of £1,000 for low and middle-income earners. I restate our commitment to Sure Start, to refocusing on the neediest families and to helping ensure that the 6 million carers in our country receive appropriate respite care. I welcome too the cuts in corporation tax, the £200 million increase in the enterprise finance guarantee scheme, the green investment bank and the green new deal.

I hope that the new fiscal rules that the Chancellor has outlined will mean that by 2016, if we have extra money as a result of the cyclically adjusted current balance being in surplus, we will be able to cut tax again for the lowest-paid working people in this country. It took courage in this Budget to tackle the entitlement culture and some of the shibboleths and sacred cows, but putting this country back on track will require further tough decisions, which are the right thing to do. We should also disregard the opportunism of Her Majesty’s Opposition. There is nothing inevitable about a double-dip recession, and I believe that it will not happen. The Budget is borne of desperate necessity, but is there any evidence that seeking to encourage private sector growth and reducing the size of the state to 39% of GDP in four years is a bad thing and will not create jobs, wealth and new markets for our goods and services?

The Chancellor was candid and straightforward last week, in contrast to the Labour years of subterfuge, stealth taxes and fictitious growth projections. Tough but fair, a progressive and forward-looking Budget; a Conservative Budget for the nation and not for narrow, sectional, vested interests and the core vote—it is for this reason that I commend the Budget to the House and my constituents. I will be voting for it tonight.

19:27

[Glenda Jackson (Hampstead and Kilburn) (Lab)]

May I say what a pleasure it is to serve under your chairmanship, Mr Deputy Speaker? It is such a pleasure to see you sitting in that Chair.

There was a kind of creepy pleasure in listening to the hon. Member for Peterborough (Mr Jackson) because, in a curious way, it was like hearing a really bad horror film, and there is always a great deal of pleasure to be found in a really bad horror film. As for this recalling of Thatcherism in all its glory, dressed up for the 21st century, I love the idea that we can simply get people to work. There are all these people living in Peterborough who apparently have no desire to work and are perfectly happy to stay at home, neglecting their children, but the hon. Gentleman has been their MP for all this time—how long?—so why has he not done something about it? The issue is that in Peterborough, as in the rest of the country, under this—in my view Thatcherite mark 2 —Budget, there will be no jobs. As was said by my hon. Friend the Member for Coventry North West (Mr Robinson)—I regret that he is no longer in his place—the only guarantee in the Budget is a massive rise in unemployment.

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

In my constituency, the number of people in receipt of disability living allowance doubled under the previous Government; and not only did it double, it went up every year. Would the hon. Lady not see that as an example of the failure of the policies of the previous Government?

[Glenda Jackson]

Perhaps that is one of those areas—this was briefly touched on in an earlier contribution—that, like our health service, has increased so much because we are all living longer, so that people who might have died many years before are still living, but justifiably claiming disability living allowance because they are disabled. The hon. Gentleman should forgive me for giving him a tiny history lesson, but I would just point out to him that when his party was last in total government—as opposed to being propped up by the “30 pieces of silver” party—it massaged the unemployment figures by putting people on incapacity benefit, and that ran for years.

The hon. Member for Peterborough is also suffering from selective amnesia. Those of us who lived through the first Thatcherite era remember well the levels of unemployment, the destruction of communities, and the throwing on to the scrap heap of the greatest national resource that this country will ever have: its people. Their talent, their ability, their creativity and their capacity for hard work were all thrown away for the same reason that they are being thrown away now. “You can’t buck the markets” was the litany then; it is exactly the same now, even though it has been dressed up and presented in a very different way.

We hear massive arguments from Conservative Members that the Labour party created this fiscal downturn, yet they are all intelligent enough to know that that is grossly untrue. It is easy, in the blame culture that we live in today, to make threats to bankers and to say that they are the most blameworthy people, yet they have not been punished in the Budget at all.

[Mr Gyimah]

What is progressive about leaving the country without any money, as the former Chief Secretary to the Treasury said had happened?

[Glenda Jackson]

You really have to get another club to beat us with. I would have thought that there were a couple, although they are not necessarily to do with the Budget.

The hon. Member for St Ives (Andrew George), who is no longer in his place, and the hon. Member for Gainsborough (Mr Leigh) both attempted, in their different ways, to make a salient point—namely, that this is a fair Budget because the richest pay the most. They must know that that is completely and utterly untrue. It is a grossly unfair Budget, because the poorest are the most dependent on public services, which we know will be slashed under the comprehensive spending review, when it eventually happens in October.

[Maria Eagle]

Did my hon. Friend see the analysis in The Observer at the weekend that suggested that the Chancellor’s

“budget cuts will hit Britain’s poorest families six times harder than the richest”?

Does she believe that that is in any way a definition of “progressive”?

[Glenda Jackson]

It is neither progressive nor fair. What is depressing about the path that the coalition Government have gone down is that they have learned absolutely nothing from the lessons of history. This is always the case: it is always the poorest who pay the most; their health suffers, they live in the worst possible housing, and their job opportunities are nil. I love the Secretary of State’s wonderful idea that they can move out of their social housing to another part of the country and find a job. This is coming from a Government who have already destroyed the regional development agencies. Sheffield Forgemasters has also been mentioned. There is absolutely nothing in the Budget that will help to create employment. One of the worst aspects of the Budget is that it will slash the confidence of those people who need it the most in order to get out there and compete in an ever-shrinking jobs market.

[Mr Ward]

Does the hon. Lady believe that it was a question of 30 pieces of silver when Clem Attlee, Herbert Morrison, Hugh Dalton and Ernest Bevin joined a coalition Government at a time of national disaster?

[Glenda Jackson]

This is a kind of psychobabble. When we get to the age of 18 and become adults, we really cannot blame everything on our parents, and, at his age, the hon. Gentleman really should not be blaming all those grandparents and great-grandparents for anything. The Liberal Democrats made their choices: they campaigned and they spent money on posters that warned of the VAT bombshell, but they have now signed up for it.

I want to go back to my point that it is always the poorest who pay the most. It will not be the richest who will feel the pain of the VAT increase; it will be the poorest. We have only to go round the supermarkets to see the kind of changes that are being brought into play. The special purchases of particular products that are cheaper than the branded product—or even, in some instances, than the supermarket’s own product—will be the products that the poorest people will have to buy.

[Mr Stewart Jackson]

Will the hon. Lady give way?

[Glenda Jackson]

No. The idea that you have allowed children to languish in that state in Peterborough for all these years and done nothing about it—no, I am sorry, I cannot give you time. You voted against Sure Start. You voted against the new deal. You voted against every single policy that the Labour Government brought in over our 13 years to give every child a chance and to ensure that we as a nation invested in our greatest national treasure: our people.

[Mr Brian Binley (Northampton South) (Con)]

Will the hon. Lady give way?

[Glenda Jackson]

Oh, go on then.

[Mr Binley]

I am most grateful to the hon. Lady. Does she not have any regrets at all about the massive rise in the number of young people who are not in education, employment or training? That can be laid at no one else’s doorstep but the Labour Government’s.

[Glenda Jackson]

May I just point out to the hon. Gentleman that, when his party was last in government, it was not children who were not in education, employment or training? In Birkenhead, the city in which I was born—admittedly, I have not lived there for a very long time—there were men who were entirely fit, healthy and capable of work, but the only way for them to earn a living was to pick over the rubbish dumps to see if they could find anything to sell.

[Mr Binley]

I am a working-class boy.

[Glenda Jackson]

You did not have to go through a rubbish dump to find things to sell. And I am a working-class girl.

There is a fantasy about a big black hole of debt that is resting on the shoulders of every man, woman and child in this country. I have lived all my life under the debt incurred by this country fighting and winning the second world war. We paid that debt off about five years ago, but I had not even been aware of its existence. During those decades, I and millions like me were given opportunities to move forward, to develop our talents and to create work that had not been dreamt of by the preceding generations. That could have happened again, but it will not happen under this Budget. This Budget is quite deliberately following the good old Conservative rule of divide and rule, and blame the poor—

[Mr Stewart Jackson]

indicated dissent.

[Glenda Jackson]

Don’t shake your head. In every soundbite you give, you are running with the idea that the people who are claiming benefit are scroungers, and that they have no job because they do not want to work. That is classic Conservative party doctrine. This Budget is a disgrace, because it attacks the most vulnerable in our society, and they are the people, regardless of their party political colour, whom everyone in the House should be committed to defending and protecting. You are simply destroying their opportunities.

[Several hon. Members]

rose—

[Mr Deputy Speaker]

Order. This might be an appropriate time to remind Members that, when they use the word “you”, they are addressing me, and I have been accused of many things for which I was not responsible. I call Helen Grant.

19:38

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

Thank you very much for giving me the opportunity to speak in this debate, Mr Deputy Speaker. Paying tribute to my predecessor is a task that I find very easy. Ann Widdecombe was a high-profile and eminent MP who worked very hard for the people of Maidstone and The Weald. She is a woman of great integrity, honesty and sincerity, and a lady I am very proud to call my friend. Ann has been one of our most colourful and controversial politicians, and I know that her pragmatic contributions will be sadly missed in this place. Happily, her clarion voice will continue to be heard in the media and beyond, and, on behalf of the House, I wish her well in her future endeavours.

The constituency of Maidstone and The Weald is the perfect mix of rural and urban life. The rural aspect of the seat stretches some 20 miles to the south of Maidstone, encompassing vibrant communities such as Cranbrook and Marden, and picture postcard villages such as Benenden. In the north of the constituency, we have Maidstone, the county town of Kent, which is also the home of the 36 Engineer Regiment. I should like to pay tribute to the bravery of our engineers and to remember their losses in Afghanistan. May God bless them, their families and their loved ones.

I must declare an interest in our armed services, as my eldest son, Ben, is a Royal Marine training in Devon. As a forces Mum, I am gaining an understanding of the tremendous pride that families feel, but also of the emotional rollercoaster that they ride each day. I hope that what I learn from my son’s service will translate into something useful for our many military families.

I want to say something about social mobility. One of the greatest attributes of the British people is their belief in fairness, and it is that sense of fairness that supports the notion that whatever your starting point in life’s marathon, it does not have to be your personal best for the rest of the race. If you try to move up the field, or even get into the leading pack, you should have the opportunity to do so. Aspiration, family and enterprise have been essential elements in my own personal journey. They are also fundamental in a society in which mobility can flourish and not flounder. I should like to say a few things about each of them.

I believe in opportunity and aspiration, and in the ability of individuals to achieve, progress and reach their full potential, whoever they are and wherever they are from, if they choose to do so. I came from a pretty humble start, but I was allowed to progress in life because I had the good fortune to engage with people who instilled in me the importance of working hard and aiming high, and values such as individualism, self-empowerment, choice, freedom, free enterprise, self-reliance and self-esteem. I hope that we, as politicians, can advocate and reinforce those values, because if we do we may be able to help many, many people to rise beyond the circumstances of their birth, and if we do that, society as a whole will prosper.

I also believe in the power of the family. I believe that the family is a fundamental and vital tool in holding society together. It can provide security, stability and commitment. In the family we learn how to give, how to share, how to be kind, how to care, and how to build relationships. Those are the foundations that people need in order to progress. Yet for many years the family has been badly neglected as an institution, although it is also key to dealing with issues such as gun crime, knife crime, teenage pregnancy, truancy and antisocial behaviour. I hope that we, as a Parliament, will do all that we can to support the family.

As for enterprise, it enables aspiration to become reality. It can also create wealth, independence and choice. I set up my first business when I was 11 years old, digging up old bottles from a Victorian dump in Carlisle and selling them at an old curiosity shop. I know that that sounds like something out of Dickens, but it is absolutely true. At one stage I was making about £2 a week, which was a lot of money in those days. I have always loved business, and I have always been enterprising.

In our country it has nearly always been possible to aim high, work hard, be resourceful, take a risk and make money, but that is changing. Over-regulation is strangling enterprise. Every accident is someone else’s fault, and people are quick to talk about rights—but what about responsibilities? Even our employment legislation has become so potentially onerous that people must be very careful about whom they take on. Any redefinition of a job description can be construed as constructive dismissal, and any criticism of performance may equal “harassment”. I often feel that I cannot give a bad but honest reference without fear of litigation.

The combined effect of all that is a massive disincentive to enterprise, which is bad for business and bad for Britain. I hope that, through this coalition Government, we can get rid of some of this nonsense, replacing it with a much more common-sense approach. In order to do that, however, we may need to promote and recruit Ministers and Government officials who have at least some direct experience of wealth creation, and who understand the importance of cash flow and the working environment in which we must all operate.

Our country is facing very difficult times. The House is debating an emergency Budget and the effects that it may have, but however we choose to rectify our financial position, we must strive to preserve the things that underpin our chances of success: aspiration, family and enterprise.

I thank the House for listening to my speech, and thank the fine people of Maidstone and The Weald for electing me and sending me here.

19:44

[Mr Eric Illsley (Barnsley Central) (Lab)]

I congratulate the hon. Member for Maidstone and The Weald (Mrs Grant) on her maiden speech. As she admitted, she has a difficult act to follow, but the confident and assured way in which she addressed the House shows that she is well up to meeting the challenge. We look forward to listening to her on many occasions in the future.

This Budget is hypocritical, regressive and vindictive. It is hypocritical because, as recently as April, both the Prime Minister and the leader of the Liberal Democrats rejected the idea of an increase in value added tax. The excuse that they have given since forming the coalition Government is that they found that matters were much worse than they had thought once they managed to see the books. I find that somewhat difficult to swallow, given that the problems relating to our finances have been well documented.

I tend to agree with my hon. Friend the Member for Coventry North West (Mr Robinson) that the Government have been suckered into believing information from the Bank of England about the danger of our being sucked into eurozone problems, when in fact we are in no such danger. Before the banking crisis and the recession struck, our historic debt stood at about 40%, a level comparable to that in some other regions. It was not particularly excessive.

It is rather galling that the Liberal Democrats have fallen so easily into the coalition Government, agreeing not only to the £6 billion of cuts that affect my area but to the cuts that form part of this emergency Budget. They seem to sit comfortably in this cutting Government; they seem to be comfortable wearing the Tory mantle that they appear to have assumed. I think that many people in the country will rightly feel that they voted for Liberal Democrat Members of Parliament only to be presented with Tories.

The Budget is vindictive because it attacks the less well off: the lower paid and benefit claimants. The hon. Member for Peterborough (Mr Jackson) let the cat out of the bag when he called it a Conservative Budget—a traditional Conservative Budget, which attacks the public sector and cuts the welfare state. Are the Government trying to tell us that, in an emergency Budget, they will remedy all the ills of recent years in which our welfare budget has increased? Are they going to do all that in one Budget? Surely not. Surely they could have taken time to examine our debt problems in depth before making slashing, swingeing cuts such as these.

It seems that we are returning to the old Tory mantra: if it is provided by the public sector it is bad but if it is provided by the private sector it is good, and everything to do with the private sector is far superior to everything to do with the public sector. That simply will not wash. It is the old dogma that we have heard in the past.

VAT is obviously a regressive tax. It affects the less well off far more than those on higher incomes. It is a question of involuntary versus voluntary expenditure. Yes, people on higher incomes will pay more in VAT, because they will spend more of their disposable income on luxuries. Unavoidable expenditure on food, groceries and other necessities will affect the lower paid much more than the well off.

[Ian Swales]

Will the hon. Gentleman give way?

[Mr Illsley]

No, I will not.

As we have heard time and again this evening, housing benefit cuts will throw people out of their homes. It is apparently assumed that those people can move from one end of the country to another to find employment, but slashing public sector spending by 25% in every Department will surely result in further job losses. Here we are, throwing people on to unemployment benefit while at the same time cutting the welfare state that is designed to assist them. That will have an impact on areas such as mine, in which there are high levels of public sector employment. Why does my area have a high level of public sector employment? Because a certain previous Government removed its one major industry, the coal industry, many years ago. We have struggled to find incoming investment and employment to compensate for those job losses, and, as has been mentioned, when the coal industry was being closed down the Government of the time encouraged workers to go on to incapacity benefit rather than unemployment benefit because that reduced the unemployment figures. We therefore have a legacy of higher numbers of claimants of incapacity benefits such as disability living allowance. As for the idea that we will bring in a medical test for DLA, the conditions for DLA are based on care needs. They are based not on the medical condition of the person claiming, but on whether they require care throughout the day or night. The introduction of a medical would therefore remove a lot of people from that benefit, probably unjustly.

Why have the Government decided to cut at the ratio of 80:20? Why does the cut suddenly need to be so great? The hon. Member for Peterborough made the point that this is a Conservative Budget. The Conservatives have, with the co-operation of the Liberal Democrats, taken the opportunity to attack the public sector and the welfare state, just as they have done in the past. This is simple opportunism to cut the welfare state and the public sector work force.

19:51

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

In the limited time available to me, I want to concentrate on some specific areas of the Budget that affect either my constituency or subjects about which I feel passionately, but first let me say that there was one subject the hon. Member for Barnsley Central (Mr Illsley) did not speak about: bingo. It is a passion that we share, and it is important to mention it as I do not think it has been referred to so far in the Budget debate. Through campaigning, we recently managed to secure a reduction in the tax on bingo from 22% to 20%, and I am sure he would want to join me in campaigning to ensure that that reduction continues until we have got it back to the 15% level and that we get a commitment from the Government that they will look to reduce that tax as soon as the financial circumstances of the country allow.

The right hon. and learned Lady the Leader of the Opposition said in her response to the Chancellor’s statement that the Budget would “hit” constituents in Cheshire the least. I am unsure whether she said that out of concern for the poorest and most vulnerable people in my constituency or out of political mischief aimed in the direction of the Chancellor, my right hon. Friend the Member for Tatton (Mr Osborne)—although I think I know which is the more likely—but I am nevertheless glad that she raised the matter. Crewe and Nantwich is home to some of the most poverty-stricken areas in Cheshire, and it is the people in those areas who deserve to be—to quote the right hon. and learned Lady again—“hit” the least.

In 2008, the year in which I was first elected to the House, Labour hit the lowest paid with the 10p tax fiasco. While this is a difficult Budget, I am proud of the fact that the coalition is doing the opposite by lifting 880,000 of the lowest paid out of tax altogether. I am also proud that we are introducing the earnings link for pensions, something Labour did not do for 13 years, instead, unforgettably, increasing the pension by 75p.

It is not just these headline measures that affect my constituency, however. The Government have announced that they will reduce regulatory costs by introducing a one in, one out system for new regulations. That was touched on by my hon. Friend the Member for Maidstone and The Weald (Mrs Grant), who made an excellent maiden speech. She made the point that regulation is right at the heart of the issues that small businesses in particular face. At an election hustings event in Crewe and Nantwich organised by the Federation of Small Businesses, local business man after local business man told me about their No. 1 concern: stifling regulation. At present, a small business spends on average seven hours a week filling in forms. What a waste! Three in four firms say the Budget will make a positive impact on their business, and I have no doubt that to those job and wealth creators the reduction in regulations is one of the most important measures that back business in the Budget. It has inspired a welcome response.

Another measure in the Red Book that will benefit business in Crewe and Nantwich is the coalition’s commitment to investigate ways to help with fuel costs in remote rural areas. The coalition is considering the case for introducing a fuel duty discount in those important parts of the country, including a possible pilot scheme in Scotland, but I ask my right hon. and hon. Friends on the Treasury Bench to consider extending the scope of the pilot schemes to include thriving rural economies such as that in Crewe and Nantwich, which is at the very heart of our dairy industry.

I also want to speak about one of my particular passions: adoption and fostering, and looked-after children. As chairman of the all-party groups on both those subjects, and as someone who shared his childhood—and most of his adulthood—with foster children, I can say that foster carers will be very happy that their capital allowance rules will be amended in this Budget to ensure that they operate consistently and as intended for all carers. Foster carers are to be applauded for the sterling work they do in providing for some of the most vulnerable in our society, and none of them should be penalised by the taxation system purely because their business circumstances change.

We know we have to make choices in this Budget about where we make cuts. There are issues of essential spending and issues of discretionary spending, but money spent on looked-after children and the caring and support of vulnerable children by foster carers should never be seen as a luxury, so my plea on behalf of a part of our population that cannot speak for itself in these chastened and difficult times is do not forget about us. If the baby P and Edlington cases taught us anything, it is that when it comes to child protection we cannot afford to cut corners or pass the buck. With 40% of people in prison having been through the care system, we have to recognise that there is still much to do.

I believe that this is a decisive Budget. It deals with the record deficit the Government inherited from Labour and it contains important measures that will benefit some of the poorest and most vulnerable in my constituency, as well as the business and rural communities. It is hard to welcome some of the tougher measures contained in it, but, sadly, they are necessary, albeit painful, decisions. I applaud the overall structure of the Budget, therefore. We on the Government Benches did not build up the record deficit, but we will do all we can to knock it back down and get Britain back in the black.

19:57

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

Thank you, Mr Deputy Speaker, for allowing me this opportunity to make my maiden speech, and I would like to congratulate the hon. Members for East Surrey (Mr Gyimah) and for Maidstone and The Weald (Mrs Grant) on their excellent maiden speeches.

I am delighted to have been elected for my home constituency of Airdrie and Shotts. To represent the people from whom I have come is the greatest honour I can imagine. It is, however, sad that this, my maiden speech, comes on a day when we will be asked to vote on a Budget that is more regressive than anything Thatcher ever managed to produce. It is a Budget based on ideology, not reality; on aggressive cuts, not need. The hard-working people of my constituency will be among those hardest hit by the measures proposed: when tax credits are cut, when necessary benefits are lowered, when 100,000 jobs are lost that would have been saved under a Labour Government.

My constituents have not forgiven the Tories for the destruction they let loose upon Scotland in the 1980s. Unfortunately, if the Budget gets through, it looks as if history will repeat itself. How can a Budget that reduces the opportunities that are available, that takes away support from those in danger of losing their homes and that increases VAT be described as progressive? How can Liberal Democrat Members who publicly campaigned so hard against these measures support this Budget? I have quickly come to the conclusion that the Members on the Government Benches do not know the meaning of the word “progressive”.

One of the most famous sons of my constituency, the father of the Labour party, James Keir Hardie, was an intelligent man, ahead of his time. While, admittedly, he did show an affinity for the Liberals early in his career, he soon became disillusioned with the economic policies of Gladstone’s Government and came to the conclusion

“that the Liberals neither would nor could ever adequately represent the working classes.”

I wonder what he would make of their successors today.

Reading Keir Hardie’s story once again, as I prepared this speech, I was reminded why I became interested in politics. His family had little and lost the little they had because they were unprotected from unemployment and health problems, and there was a lack of education provision. He struggled against startling odds to educate himself, beginning at night school in Holytown in my constituency, and took great risks to enter politics and represent those unable to represent themselves. It is to lift people out of poverty and ensure that no one has to exist like that that I entered politics. We in the Labour party are grateful to Keir Hardie for blazing the trail that allows us to sit in the Chamber today.

Thirteen years after Keir Hardie first led Labour MPs into the House of Commons, my constituency was fortunate to be represented by the then baby of the House, Jennie Lee. She gave her maiden speech in response to Churchill’s Budget, using the opportunity to highlight the real suffering behind the figures. Since 1945 my constituency, in its various guises, has been represented by some of Labour’s brightest stars, including Margaret Herbison, who in her 25 years as an MP fought for miners’ rights and was instrumental in forging the foundations of our welfare system.

Peggy was succeeded by Labour’s former leader, the right hon. John Smith. My first political memory was hearing of his death when I was in a school assembly. His memory and influence remain at the heart of my community and its politics as much as they lie in the spirit of this Chamber. He will never be forgotten.

Following John Smith’s death a by-election was called and the right hon. Helen Liddell emerged victorious. Helen’s strong wit and character lit up the Chamber. She will be an excellent addition on the red Benches and I look forward to the contributions she will make there. When Helen headed for sunnier climes down under, the right hon. Dr John Reid took her place as Member of Parliament for Airdrie and Shotts. Dr, soon to be Lord, Reid has served the people of Lanarkshire for 23 years. His wit became apparent in the first minute of his maiden speech when he mentioned that the empty Tory Benches he was facing reminded him of a mass rally of the Scottish Conservative party. Following this year’s general election in Scotland, I could not agree more.

Soon after Labour came to power in 1997, Dr Reid began his ministerial career at the Department for Transport and went on to hold more Cabinet posts than any politician in recent history. As Secretary of State for Scotland, he oversaw the handover of power from Westminster to the Scottish Parliament. He went on to become Secretary of State for Northern Ireland when the peace process was in jeopardy. I know that the highlight of his political career was to witness Martin McGuinness and the Reverend Ian Paisley sit down together at Stormont as Deputy and First Minister, an outcome helped along by the work of Dr Reid.

Quickly gaining a reputation as a problem solver, Dr Reid was given two of the most difficult jobs in Cabinet in his final years in government—Defence and the Home Office. Three years ago today, he woke up for the first time in a decade without the pressures of ministerial office. He returned to the Back Benches with quiet grace and dignity, quickly managing to find an excellent assistant from his constituency. He now moves on to other challenges, including accompanying his predecessor next-door. To the country, he is the Labour fixer who sorted out Departments when they went wrong. To Parliament, he is a man of honour, loyalty and wit, but to me he is the man who gave me the opportunity to reach my potential and I thank him for that.

Before I finish, I pay tribute to the greatest feature of my constituency—its people. Their kindness and good-heartedness are best illustrated by the generosity shown towards St Andrew’s hospice in Airdrie, which requires donations of more than £40,000 a week to keep going, yet still manages to get the support it requires. In Shotts, a local boy, Kyle Grant, has won the hearts of our community by raising money with his family to obtain specialist treatment for cerebral palsy in America. Not so long ago, his target of £40,000 seemed like a far-off dream, but he has now managed to achieve double that amount. With the support of local businesses, local newspapers—the Airdrie & Coatbridge Advertiser, the Wishaw Press and the Motherwell Times—and local people, charitable causes will continue to flourish in our area for as long as they are required.

I am proud to come from a place where people put others before themselves. That is at the heart of the politics of the area. It is the birthplace of the Labour movement; people do not just want a better life for themselves and their families, but for everyone else too. That is why when we do well, we do not pull up the ladder of opportunity behind us. That is why we support moves to end poverty at home and overseas. That is why I am proud to serve the people of Airdrie and Shotts.

20:04

[Jackie Doyle-Price (Thurrock) (Con)]

It is a pleasure to follow the hon. Member for Airdrie and Shotts (Pamela Nash) who has just given her maiden speech. I am sure the rest of the House will forgive her for making us feel a little bit old when she reminded us of her first political memory. It was a fantastic start and we all look forward to hearing much more from her in the near future.

I am pleased to have this opportunity to deliver my maiden speech in an extremely important debate. Tackling the long-term culture of welfare dependency is probably the single most important ingredient in really sorting out and fixing our broken economy.

I have the great honour to represent the constituency of Thurrock, which, for Members who do not know, is in Essex, on the borders of London. I am the sixth Member for Thurrock since the constituency was created in 1945. I am extremely honoured to follow in the footsteps of Andrew Mackinlay, who served the people of Thurrock in this place for 18 years. I say that with real sincerity. He was much loved and respected on both sides of the House. He was a committed parliamentarian and a stout and outspoken defender of civil liberties. He will be missed here and in Thurrock where he is held in considerable warmth.

My constituency is a collection of towns and communities. At its heart is the town of Grays and it extends to the west to Aveley, Purfleet and South Ockendon and to the east to Tilbury and Chadwell St Mary. One of our jewels is the port at Tilbury, which even today supports 10,000 jobs. It is one of the traditional industries that have been much neglected in recent years, and although it goes from strength to strength it needs further support.

Thurrock’s communications are one of its biggest strengths. Its proximity to the M25 and to London, and its location on the River Thames all make it an attractive location for business and a key logistics hub. We also have the Dartford crossing, which I am sure is the scourge of many a motorist—including Members—as they queue to pay the toll. I remind the House that when the crossing was constructed it was envisaged that the tolls would be lifted once the construction costs had been met. That time has been and gone, and instead of scrapping the tolls the last Government increased them. Since the tolls were increased the queues have become more problematic and no doubt cause significant costs to business users of the crossing when they find themselves stuck in congestion. We need to think again about the continued existence of the tolls, about future capacity needs on the M25 and crossings on the River Thames and the prospects for additional crossings to the west and the east. The review announced in the Budget must consider all the options thoroughly so that we have a transport system along the M25 fit for the future.

In recent years, Thurrock has become a major retail centre, with the development of the Lakeside shopping centre and retail park. There are signs that the retail offering is likely to expand still further, which is why this is a particularly exciting time to represent Thurrock. I have mentioned its strategic location and although there is much to celebrate, the area can do so much better.

The Thurrock Thames Gateway Development Corporation has been charged with delivering inward investment and has made some progress. I very much hope it will be given the opportunity to deliver its plans, notwithstanding plans to fold it up into the Homes and Communities Agency.

In Thurrock, we are all excited about the potential for the development of creative industries following the major investment made by the Royal Opera House. We need to establish the national skills academy to support Thurrock as a creative industries cluster. I firmly believe that we have a once in a generation opportunity to secure the future development of Thurrock and it should not be squandered. I look forward to playing my part in building a better future for the constituency.

Having indulged the House by describing everything that is great about Thurrock, I turn to the business under discussion. The need for welfare reform was the main issue that brought me into politics as a teenager. In those days, I was living on a council estate in Sheffield. It seemed to me a real injustice that hard-working families—people working every hour to put food on the table—had no better standard of living than many households where no one was in work. The frequent lament at the working men’s club was, “Why do we bother?”

Over time, that injustice seems to have become more and more entrenched. The way that tax and benefits interact today means that work simply does not pay for far too many households. The result is that we have a society where too many individuals do not have the self-respect or discipline that comes from work and individual responsibility, the rest of society is burdened by an ever-higher tax bill and we as a country are dependent on migrant labour to fill those jobs that simply do not pay for our workers to do. We cannot go on like this.

I hope that the Budget really marks the beginning of our quest truly to reform the dependency culture that exists in Britain today and to give everyone the opportunity and incentive to work. In so doing, we will not only reduce welfare bills, but increase tax receipts to the Exchequer, so that the entire nation will become better off and future Budgets will be a lot less painful than this one.

20:10

[Mr Iain Wright (Hartlepool) (Lab)]

It has been a pleasure to participate in a debate that has included so many excellent maiden speeches—from the hon. Members for East Surrey (Mr Gyimah), for Thurrock (Jackie Doyle-Price) and for Maidstone and The Weald (Mrs Grant)—and an astonishingly powerful maiden speech from my hon. Friend the Member for Airdrie and Shotts (Pamela Nash). I often used to think that parliamentary democracy needed a regular infusion of youth, talent and drive to keep it going, but given how much great talent there now is on both sides of the House, I am not sure that that is the case; I do not think that we should see so much great talent, because it certainly does not do my career chances any good whatsoever.

The best way to secure a sustained recovery is to put in place the conditions for growth, but the Budget fails to do so. Indeed, from reading the Red Book, it is very unclear where growth will come from at all. Paragraph 1.48, backed up by comments from the Office for Budget Responsibility, states that the economic forecast is for a gradual recovery, with

“net exports and business investment making a greater contribution to growth than in the recent past, and government spending making a negative contribution to growth as fiscal consolidation is implemented.”

The notion of an export-led recovery is very welcome—it would help some of the firms in my constituency—but how on earth is this going to happen? The eurozone economy is in grave danger, and the notion that we can rely on growing opportunities for exports into Europe in the next few years seems very ill-judged. The policy stance adopted by some of the G20 at the weekend seems to indicate that, where there was once global co-operation for stimulus, there now seems to be broad agreement for austerity. If that is the case and the world’s major economies are collectively going to reduce demand, where does that leave the prospect for an export-led growth plan?

In similar vein, the Red Book states that business investment will also be a catalyst for recovery, but how will that happen when the Chancellor is cutting the capital allowances rate that would incentivise businesses to invest in new plant? How will that happen if the OBR’s own forecasts envisage companies having to absorb some of the rise in VAT through lower profit margins? How will that happen if, as the OBR states in paragraph C.29, business investment has a relatively high import content? How will businesses be encouraged to invest more when they face in the next few years higher import costs and lower profit margins. Admittedly, they will have lower corporation tax rates, but disproportionately higher cuts in capital allowance.

My region of the north-east and my constituency suffer more than their fair share during economic downturns. We in Hartlepool are still suffering from the social and economic consequences of deindustrialisation and the Thatcher Government’s response. I would be the first to applaud the Government if they genuinely helped communities such as mine to stimulate their sense of enterprise and entrepreneurialism. I, too, want an economy led by the private sector and for the north-east to achieve its potential, but nothing in the Budget will allow that to happen.

Nothing in the Budget gives us any clue about the future industries that would help our country to prosper in the 21st century. We lead the world in creative industries and are second only to the US in digital industries, but how could the Chancellor state that he wanted to see Britain open for business when he scraps video games tax relief? There was frighteningly little on how this country could lead the world in green jobs and green industries, and how the Government could encourage and facilitate such a move to a leading low-carbon economy. The north-east could be leading the world in energy infrastructure, incorporating nuclear, oil and gas and renewable technology that could help this country to prosper, but there was nothing at all in the Budget to encourage that.

The regional growth fund that was announced in the Budget is very welcome, as is the proposed White Paper on regional economic performance, but the proposals in the Budget were so bland and ambiguous as to be almost meaningless and gave the impression of being put in the Red Book at the last minute, as an afterthought. I am particularly concerned that the regional growth fund will be set up only in 2011-12 and 2012-13, so the job losses that take place now, as a result of the Government’s cuts set to take place in this financial year, will not be helped.

Scrapping the future jobs fund, which has been successful in Hartlepool, combined with the deep cuts to working neighbourhoods funding, will stop hundreds of young people from embarking upon a career. Potential growth of the economy in my constituency is therefore being hit now, in this financial year, with no clear assistance from the Government at all.

Within a few days of the new Government taking over, the largest private sector company in my constituency went into administration, which led to the loss of 650 jobs in Hartlepool. I am not blaming the Government for the company’s fall, but the coalition’s response was incredibly telling and deeply depressing. The response that I received from a Minister at the Department for Business, Innovation and Skills following my request for assistance was offensively complacent—basically washing his hands of the matter and stating that the local authority and regional development agency should be expected to bear the load. Indeed, the local authority’s economic development team—the best in the country—and One NorthEast are working closely together for the workers who lost their jobs, but how can they work to the best of their abilities when the local authority has been asked to find £1.7 million of cuts this year? How can One NorthEast be expected to operate as effectively as it could when it has heard conflicting, contradictory and confusing reports about its future? How can help for a private sector-led recovery be given—for example, retraining opportunities for the workers who have lost their jobs—when the Department in Whitehall charged with helping business is facing some of the biggest cuts?

Many hon. Members in the Budget debate have mentioned the 1980s, when the Thatcher Government doubled VAT, and it was clear then, as it is clear now, that the priorities were to shift the burden from income taxation to taxation on consumption. That is not only regressive and impacts upon the poorest in society, but deflationary, taking demand and consumption out of the economy, so it will take us longer to climb on to sustained recovery. That deflationary stance always increases unemployment, and I fear that we will once again see unemployment rise to levels that are socially unacceptable and economically wasteful.

The coalition Government’s tired policies are devastating in any era. The policies did not work in the 1980s, and they will not work now. I ask the Government to think again and not rush headlong into an ideological zest for cuts that will increase unemployment.

20:17

[Lorely Burt (Solihull) (LD)]

I congratulate the hon. Members for Thurrock (Jackie Doyle-Price), for Airdrie and Shotts (Pamela Nash), for Maidstone and The Weald (Mrs Grant) and for East Surrey (Mr Gyimah). I agree with the hon. Member for Hartlepool (Mr Wright) that they bring inspiration and enthusiasm to the House. We are all here to try to make things better, and I am sure that all of them will play their part.

The coalition Budget has been described as tough but fair, and hon. Members on both sides of the House will certainly agree that it is tough. Why does it have to be so tough? It is tough because we are borrowing £1 in every £4 that we spend, because we owe £22,400 for every man, woman and child in this country and because, thanks to Labour, we have one of the largest budget deficits in the whole of Europe, so we must take the action that Labour dodged. Now that the OBR has been formed, we know the true scale of the problem that we face, and we have worked it out so that no one can fix the figures anymore.

[Mr Anderson]

Does the hon. Lady disagree with the OECD, which said that the previous Government’s actions prevented this country from going from a recession into a depression? If those actions had not been taken, we really would have been in a mess.

[Lorely Burt]

The hon. Gentleman makes a fair point. Indeed, the Liberal Democrats supported some of the steps that the Labour Government took, but that does not allow Labour Members to wash their hands completely of this country’s financial state.

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

But can the hon. Lady and her colleagues wash their hands of the fact that although they opposed a rise in VAT during the election, they will now go through the Lobby to support it? Surely that is hypocrisy.

[Lorely Burt]

I am glad that the hon. Gentleman raises the issue of VAT. If he has a little patience, I shall address that fully in just a moment.

I applaud the fairness factors in the Budget, many of which were suggested by Liberal Democrats. The £1,000 increase in the threshold at which people start to pay tax will bring 880,000 people out of tax altogether and benefit 23 million people on low and middle incomes. That increase is the first step towards a Liberal Democrat manifesto pledge. The tax on banks will not affect small banks, but it will allow tax cuts for other types of business to be introduced. The changes to capital gains tax will mean that top earners pay 10% more, although there will be thresholds so that others pay at a lower rate. The rate of 28% is not as high as Liberal Democrats might have gone, but the Government have been advised that 28% is the highest rate that can practically be set before revenue starts to be lost, so that is fair enough.

Pensioners have already been discussed today. They will benefit from the earnings link and the triple lock, which will mean that they receive an increase reflecting earnings inflation or 2.5%. No Labour Member has managed to explain why the Labour Government did not restore the earnings link over 13 years, and never again will we have the disgraceful situation of pensioners receiving a 75p increase, as Labour proposed. Child poverty is addressed through an extra £2 billion for child tax credits, and the pupil premium will help the most disadvantaged children.

This is a Budget for business. Business is the engine that will drive us out of the recession, so we have put our emphasis on ensuring that we have cuts rather than taxes, with a 77:23 split.

The hon. Member for Hartlepool said that this was not a green Budget, but there are good incentives for low-carbon investment through the reform of the climate change levy, the proposals on which will come in the autumn. We also have the green investment bank and the green deal for households, which will enable households to make improvements that will pay for themselves over time.

The reduction in corporation tax also shows that this is a Budget for business. In addition, we are pumping money into Royal Mail, which did not happen under the previous Government. The Budget contains nice little touches such as entrepreneurs relief. It does not involve any indexation or a taper, and the amount that retiring entrepreneurs can enjoy has increased from £2 million to £5 million.

The national insurance threshold increase in 2011 will take 650,000 people out of national insurance altogether. What a contrast that is to Labour’s proposals for a tax on jobs. The enterprise finance guarantee scheme is being extended to 2,000 businesses. Under the regional growth fund, I look forward to our pumping money into the regions, meaning that we are no longer a London-centric Government. We will ensure that the regions get the kind of support they need, especially for new businesses.

Of course, there have been hard choices. The hon. Member for South Antrim (Dr McCrea) talked about VAT, and it is regressive. The hon. Member for Airdrie and Shotts said that we did not know the meaning of that word, but we really do. However, our VAT rate is still below the average for Europe.

[Ian Swales]

Is my hon. Friend aware that after Thursday, when Spain increases its VAT rate by 2%, only Cyprus and Luxembourg will have a lower rate of VAT than we do?

[Lorely Burt]

My hon. Friend is right and I am grateful for his helpful intervention. We must put all these things into perspective. The existing exemptions will apply to items such as food and children’s clothing. My hon. Friend the Member for St Ives (Andrew George) has tabled an amendment about VAT. He is rightly worried about the effect of the VAT rise on particular groups, but I point out that the Red Book states of the chart on page 67 to which he referred:

“Chart A3 shows that the top expenditure decile will lose almost 15 times more, in absolute terms, than the bottom expenditure decile from changes in indirect taxes.”

The increase is not nice, but we feel that it is appropriate.

[Several hon. Members]

rose—

[Lorely Burt]

I am sorry but I cannot take any more interventions.

We have talked about welfare throughout today’s debate, but I should point out that the welfare bill was set to rise to nearly £200 billion and we just cannot afford that. The autumn spending review will treat those most in need as a priority, and although we will make cuts, we will cut carefully. This year’s Labour Budget included plans for £44 billion of cuts and tax rises, but the previous Government did not say how they would raise that money and what taxes they would have increased. Until Labour Members are prepared to tell us what they would have done, they have no right to criticise this coalition Government.

20:27

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

In March, before the election, the Chancellor told the News of the World:

“We are all in this together. I am not going to balance the budget on the backs of the poor”,

which was very reassuring for voters to hear before an election. Since the election, both the Prime Minister and the Deputy Prime Minister have tried to argue that the Government and even their Budget are progressive. However, having had a closer look at the Budget and the Government, we can conclude that neither is progressive in political or economic terms. I am afraid that it looks very much like the Chancellor is indeed planning on balancing the budget on the backs of the poor.

I want to spend a little of the time that I have examining the effects of several Budget measures on poorer and disabled people. Disabled people are some of the most marginalised and vulnerable of our fellow citizens, but they are also one of the greatest sources of under-utilised talent and potential in our country. They are generally at the poorer end of the income distribution and they are more reliant on public services than many of our citizens, so the Budget’s impact on them will indeed test the Chancellor’s claim that he is not aiming his Budget at the poor.

I characterise the Chancellor’s overall Budget strategy as further and faster deficit reduction than was planned by the last Labour Government, and an 80:20 split between spending cuts and tax rises in advance of severe spending cuts in the autumn. That is his general approach. We should remember that even the most Thatcherite hawks who did not believe in the existence of society in the 1980s only ever aimed at a 50:50 split between spending cuts and tax rises, so the Chancellor is making the Thatcherites of that time look soft and even-handed. That is not, by the way, how the people of Liverpool remember them for what they did in that decade.

We can say that for most disabled people on lower incomes, who are more dependent than most on public services, the increase in VAT is a disaster. Some Government Members have had the grace to accept that it is a regressive tax. Indeed, both the Prime Minister and Deputy Prime Minister, before the election, said on TV that it was a regressive tax. The deputy leader of the Liberal Democrats, who is in his place, has said so more recently. The increase in VAT, which both the PM and the Deputy PM promised us before the election we would not have, but which they are now both going to invite their hon. Friends to vote for, is not only a joint broken promise that will hit the poorest hardest, but something on which both parties will be judged.

The degree of reliance on spending cuts will also impact much more heavily on poor and disabled people than a more balanced ratio would have done. More than half the £11 billion of welfare cuts will come from indexing benefit rates to the consumer prices index rather than the retail prices index. That sounds technical, but the effect is to set benefits on a permanently lower trajectory, thus year by year compounding the disparity at every uprating, though saving more money for the Chancellor. That, in my book, is the very definition of balancing the Budget on the backs of the poor.

The changes in disability living allowance will be judged not only on that score, which will in itself cut almost £300 a year from the payment. The Red Book also promises us reform

“to ensure support is targeted on those with the highest medical need”

and says:

“The Government will introduce the use of objective medical assessments for all DLA claimants”.

Indeed, one Government Member referred to DLA as a benefit that one languishes upon. However, DLA is an extra costs benefit: it is paid not on the basis of a medical diagnosis, but to compensate disabled people for the extra costs incurred by the effect their condition has on their ability to get around or look after themselves. People who work receive DLA. It is not a benefit that one languishes upon; it is a recognition from society that disabled people need a little extra support to enable them to participate in life.

[Mrs McGuire]

Does my hon. Friend agree with the Essex Coalition of Disabled People, which has indicated that the increase in people claiming DLA has resulted in more disabled people living independently in the community, rather than in the residential care that was in existence in 1993, 1994 and 1995?

[Maria Eagle]

My right hon. Friend is correct. She, like me, is a former Minister with responsibility for disabled people and has had to grapple with these issues.

This proposal is retrograde because it reverts to a medical model of disability, which disabled people themselves resent. It also has enormous deadweight costs. People who have never been able to walk do not need a doctor’s assessment to say that their mobility is restricted. What possible sense is there in subjecting them to one? It just looks like harassment. How does that sit with not introducing a medical for those components of attendance allowance which are the same as the components of disability living allowance? What about pensioners who got their DLA before they turned 65 and still retain it? Are they to be subjected to a medical test? Looking at the Red Book, it seems to me that we have a savings figure attached to this measure of £1.1 billion, and the objective medical test is simply designed to reduce the numbers on the benefit by 20%. The policy has not been thought through. This seems to be a proposal aimed at saving money.

Similarly on housing benefit, the Red Book says:

“Housing Benefit is often criticised as making excessively generous payments that damage work incentives. To address this, the Government will remove payments that trap benefit claimants in poverty instead of providing incentives to work”.

But only one in eight housing benefit claimants are unemployed. The majority are pensioners, disabled people, carers or people in work who are on low incomes. What is the point of making this benefit one that incentivises work when most of the people on it fall into those categories? It is nonsense. If instead we start with a suspicion that the reforms are actually about saving money, and we see that they cut £1.8 billion, we are more likely to get to the nub of the issue.

The Institute for Fiscal Studies says that the welfare reforms are

“A mixed bag, with no consistent objective beyond the desire to save money”.

The private rented sector reforms just decouple the local housing allowance payable from the level of the rent even in local housing markets, which can only result in people falling into arrears and debt, and being subjected to eviction. In the public and registered social landlord sector the reforms are equally worrying. Many disabled people only have their home. It is the foundation of their lives and their security. It is all they have that is their own. These proposals will force people to move house and face increasing levels of debt. If their area gentrifies—nothing to do with them—they have to move on. If their children grow up and leave home, as they tend to do, they have to move on.

What about disabled people who have adaptations in their home? Are they to have to move? Often, those adaptations make life liveable. They are not a luxury; they are a necessity. Having debt and having to move from one’s home is difficult enough for anyone to cope with, but many disabled people are too vulnerable to cope well with such upheaval. How are learning-disabled people, those with severe mental ill health and those with severe physical impairments supposed to go out and look for a new home, as they may have to simply because of these reforms to save money? Disabled people are the least equipped to do that, even before the spending review cuts the support they can get in their local communities to help them with such things.

The Budget is a triple whammy for disabled people: VAT and the cost of living up; incomes and benefits slashed; help and support to navigate those challenges ended. If the Tories do this, they should not have the support of the Liberal Democrats and, quite frankly, the Liberal Democrats should be ashamed to walk through the Lobby tonight to support this appalling Budget.

20:35

[Stuart Andrew (Pudsey) (Con)]

I am grateful, Mr Deputy Speaker, for the opportunity to make my maiden speech.

I congratulate my hon. Friends the Members for Thurrock (Jackie Doyle-Price), for East Surrey (Mr Gyimah), and for Maidstone and The Weald (Mrs Grant), as well as the hon. Member for Airdrie and Shotts (Pamela Nash) on making excellent maiden speeches and for raising the bar so high. I fear that all that is about to change. Through you, Mr Deputy Speaker, may I thank all Members of Parliament and staff for the courtesy and help that they have given new Members? This is a baffling and overwhelming place to get used to, particularly when lost down a corridor somewhere.

I pay tribute to my predecessor, Paul Truswell, who was the Labour MP for the constituency from 1997 until the recent election. He was, and is, an honourable man, and although we did not always see eye to eye, I would like to think that we had mutual respect for each other. He was regarded as a very good constituency Member of Parliament, and only announced his retirement after a serious car crash. I hope that he is recovering well, and that he will enjoy his time with his family. I shall also say a few words about his predecessor, the late Sir Giles Shaw. I never had the fortune of meeting him—sadly, he died not long after his retirement—but he was a contender for the post of Speaker. I understand that he was a witty man, who was well respected for his ability in consensus seeking. Indeed, he had such an effect on the constituency of Pudsey, that someone asked if I was taking over from him.

It is an honour and a privilege to represent the Pudsey constituency, and I am grateful to the voters there for returning me. It is a long constituency that straddles the borders of Leeds and Bradford. In 10 minutes, we can be in the vibrant city of Leeds; in 10 minutes going in the other direction, we can be in the beautiful Yorkshire dales. The common reaction when I say that I represent Pudsey is, “Ah, named after the bear.” I point out that the town came first, featuring in the Domesday book. Pudsey is an old mill town, but many of the mills in the constituency have sadly gone. Indeed, at the height of their success, the pollution was so bad that it was said that the birds in Pudsey park flew backwards to keep the soot out of their eyes.

Pudsey is a big town that is suffering somewhat from out-of-town developments, but there is a vibrant market, and I hope that I can do my bit to help the town’s economy. There is a lot more to Pudsey than just Pudsey. The neighbouring town of Farsley is home to Hainsworth mills, which provide speciality textiles for the Royal Guards’ uniforms, and claim to make the fastest cloth for snooker tables. The cloth in the Woolsack in another place even comes from that mill. One of the town’s famous sons is Ray Illingworth, the former England cricket captain.

In Calverley, an attractive and typical Yorkshire village steeped in history, there is a wonderful old hall. In 1604, the local owner and landowner, Walter Calverley, apparently went insane and murdered his two sons. He refused to plead, and was ordered to be pressed to death at the York assizes—a method that was used to try to force a confession, and something I fear that the Whips would like to use on some of us in future. However, he died without confessing his crime, and his ghost apparently haunts the village on dark, lonely nights.

The next village is Horsforth, considered to have the largest population of any village. It is home to Leeds Trinity university college, which has just received that status and is famed for teaching and media training. Finally, there is Aireborough, an area that was regarded in the 2001 census as the most average place in Britain, which I would dispute. It is the home of the original Harry Ramsden’s fish and chip shop, Silver Cross prams and another furry friend, Sooty. I know that I am biased, but I love our constituency.

Let me move on to the debate. Yes, this is a difficult Budget, but these are difficult times and I am glad we have a responsible Budget, one which is sensible and is now clearly endorsed by members of the G20. The scale of our debt is truly terrifying and threatens to restrict what we will be able to do in future years. If we do not deal with the debt now, we will be wasting more than £70 billion a year on interest alone, which will threaten our household interest rates and business growth.

I welcome the initiatives of the Chancellor for encouraging regional growth. Tax breaks for new businesses outside London and the south-east are particularly welcomed by someone who is a Yorkshire MP. I want to see our private sector grow so that we are not so dependent on the public sector. Capital investment, too, has been mentioned. I was pleased to hear about the Leeds and Liverpool railway line. I know that there are other things that we want for our city in Leeds, for which I will be pressing the Chancellor. All these will encourage enterprise.

I shall say a little about my background. I grew up on a council estate in a family that had very little money. I was the eldest, and even I had hand-me-downs. What helped my family and others was the ability to start a new business. I remember my father starting a small roofing company. It was not much, but it was something. It got him off the dole and it employed another person. That is the sort of wealth creation that we need in this country so that we can help the small businesses to create the wealth to improve the prospects for our future, and also to help the millions of people who have been abandoned by the Opposition on benefits. I think particularly of the young people who are out of work. Through the creation of wealth and jobs we can turn the country round and improve the prospect of helping those people.

20:42

[Katy Clark (North Ayrshire and Arran) (Lab)]

Thank you, Mr Deputy Speaker. I warmly welcome you to your position.

I congratulate the hon. Member for Pudsey (Stuart Andrew) on an eloquent maiden speech, as well as the hon. Members for Maidstone and The Weald (Mrs Grant), for East Surrey (Mr Gyimah) and for Thurrock (Jackie Doyle-Price), who also made excellent maiden speeches today. My hon. Friend the Member for Airdrie and Shotts (Pamela Nash) clearly knows her Labour history. A number of strong Labour women have represented her constituency in the past, and she showed today that she will be a powerful advocate for the community that she represents. She mentioned in her speech that her constituents have not forgiven the Conservatives for what they did in the 1980s. In my constituency, North Ayrshire and Arran, that is what I was told repeatedly during the general election.

As I listened to the debate today and as I have listened to the rhetoric from the Conservative party over the past few weeks, it reminded me of the 1980s. Fortunately I was a little older than my hon. Friend at the time. When I left school I knew nobody between the ages of 16 and 25 who had a job. Education or the youth training scheme, as it was then, were the only opportunities available. It was astonishing to hear again after 20 years the talk about getting “on yer bike”. For most people in areas such as the one that I represent, moving is not an option. For all the reasons that have been set out today, if we see the kind of attacks on our benefit system that are being outlined, that will become even less of an option.

My hon. Friend the Member for Garston and Halewood (Maria Eagle) described in detail how the changes in the benefit system would have a disproportionate effect on some of the poorest in society. The Budget is deeply regressive and will be devastating for some of the poorest communities and some of the poorest people in the country. However, it will also devastate the economy, because it is a depressive Budget. The rise in VAT, the cuts in benefits to some of the poorest in society and, perhaps even more significantly, the huge cuts in public spending will drain huge amounts of money from the economy. In other parts of Europe, more and more Governments are taking an increasingly similar approach, and that is very worrying for not just the British economy but beyond, because it does not seem obvious where we will be able to sell our goods. So this is a very dangerous Budget.

I have already said that the current debate is reminiscent of debates that took place in the 1980s. In 1979, a Government were elected saying that they had no plans to increase VAT, but not long after there was an increase from 8% to 15%; and now, of course, one of the first steps that we see is a significant increase in VAT. Until the past few weeks I had never heard it argued that increasing VAT was anything other than a regressive policy that would disproportionately affect some of the lowest earners in society.

[Mr Anderson]

I remember a similar situation. Does my hon. Friend remember also that in the 1980s people continually said, “There is no alternative”? Now, the code for that is, “This is unavoidable”, and it is sad that the Liberal Democrats have been taken in by the Conservative party. The Lib Dems are the real dupes in this House.

[Katy Clark]

I agree. I listened with care to the hon. Member for Solihull (Lorely Burt), who basically said that we could not afford the benefit system and, therefore, it was necessary to take these steps, but the House must remind itself again and again that we are a hugely wealthy country. We have the fifth wealthiest economy in the world, but the wealth and power in society are unevenly distributed, and that has to be the backdrop whenever we have these discussions.

Given the proposals that we have heard, this Budget simply seems to be a Tory Budget. I appreciate the Liberal Democrats’ points about the policies that they have tried to inject, but overall the Budget will disproportionately affect those on the lowest incomes. A few days ago the TUC commissioned a paper, which states that overall the annual loss in income and services for the poorest 10th of households is estimated to be £1,514, which is equivalent to 21.7% of their household income. The average annual loss for the richest 10th of households is estimated to be £2,685, which is equivalent to 3.6% of their overall income. No doubt a lot of work will be done on those figures, but we must consider them when we discuss not only the Budget, but the Finance Bill, which we will debate over the coming weeks.

I agreed with the hon. Member for St Ives (Andrew George), and I fully appreciate the difficulties and stress that Liberal Democrat MPs in his position must feel if they have always argued that a VAT increase would have a disproportionate impact on the poorest in society. I hope that we see some detailed work on the impact of not just the VAT increase, but all those policies on the poorest in society.

In reality, we are seeing unprecedented cuts in spending on public services, but I find it difficult to believe that any Government of any political colour will be able to make the proposed reductions, because we are talking about departmental cuts of about 20% to 25% over five years. It is difficult to imagine that the Government will be able to deliver on that, because these are such savage cuts in the services that all our constituents rely on.

This is a bad policy not only because it disproportionately affects some of the lowest-paid and lowest-earning in society, but because it risks choking off the recovery that is so vital to us all. My hon. Friend the Member for Coventry North West (Mr Robinson) was absolutely right—we needed a Budget for jobs and growth, but we have something completely to the contrary.

20:50

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

I think that I will be the last person this evening to make their maiden speech—[Interruption.] No, I am sorry—I stand corrected. I am the penultimate person to do so.

Having grown up in Falmouth and having been confirmed in Truro cathedral, it is a real privilege to stand here today as the first MP for the new constituency of Truro and Falmouth. I am particularly pleased to join today’s debate, in which we are discussing the important contribution that many of the measures in the Budget will make in enabling enterprise to prosper in my constituency.

My immediate predecessors will be well known to Members of this House. Matthew Taylor served for more than 20 years as the Member for Truro and St Austell, and he played an important role in highlighting the issues of living and working in the countryside of Cornwall in his well-respected Taylor report. As chairman of the National Housing Federation and a director of South West Water, as well as serving in the House of Lords as a Lib Dem peer, he will be able to continue his work on the issues identified in his report. I look forward to helping him to take the words from its pages and put them into action, especially in delivering truly affordable homes for local people to buy or rent.

Julia Goldsworthy served as the Member for Falmouth and Camborne in the last Parliament, and she has recently returned to the Westminster to work as special adviser to the Chief Secretary to the Treasury. Her work in creating the Sustainable Communities Act 2007 is noteworthy, as is her dedicated campaigning work for NHS services in Cornwall. I look forward to working with her in her new role.

I have often heard colleagues in this House refer to Cornwall as part of the Celtic fringe; no doubt that is intended in a humorous way. While I am very proud of the Celtic culture, sports and traditions of Cornwall, there is absolutely nothing “fringe” about Cornwall or its people. Cornwall throughout the ages has been, and will continue to be, at the cutting edge of important national developments, as well as being at the centre of key moments of our history. The industrial revolution started in Cornwall, and Cornwall is leading the new industrial revolution—that of delivering the renewable and sustainable energy that our future economic security and growth will depend upon. Cornwall’s pioneering and inventive people and enterprises are ready to rise to the challenge of delivering a low-carbon economy and secure energy supplies. They need a Government who understand how to create the right market conditions for enterprise to succeed. I believe that this coalition Government have the determination to do this, and so to unlock potential in Cornwall.

My constituency is a slice of central Cornwall running from the north to the south coasts. It includes Cornwall’s administrative, retail and media centre and its only city—Truro. The Royal Cornwall hospital, the only acute hospital in the whole county, is in Truro, along with the Peninsula medical and dental school. I am grateful for the dedication of the staff in our NHS in Cornwall and the people who work hard in all our public services.

Cornwall has benefited from EU objective 1 funding, and now convergence funding, which has helped to develop the knowledge-based economy. Combined Universities in Cornwall has enabled people of all ages to access the opportunity to undertake higher education and obtain new skills. University College Falmouth is a world-leading arts organisation.

Throughout the constituency are very many beautiful villages, from the rugged splendour of the north coast villages of St Agnes and Perranporth to the no less beautiful but gentler coastline of the Roseland peninsula. As hon. Members will be aware, tourism is an important industry in Cornwall. Thanks to local farmers and fishermen, there is a thriving and growing local food scene, which comes together into some mouth-watering food festivals enjoyed by locals and tourists alike. I am delighted that the new coalition Government recognise the importance of farming and fishing to our national food security.

In the hinterlands of the constituency are the ruins of many of the mines for which Cornwall is famous. As a descendant of Cornish miners, I am particularly pleased to see renewable energy enterprises developing in the ruins of the old tin and copper mines. Cornwall has the hottest rocks in the UK and is a natural location for geothermal energy production. That, combined with our rich tradition of engineering and inventiveness, provides an ideal environment and ideal skills to develop that sustainable form of energy. Geothermal Engineering Ltd has submitted a popularly backed planning application to Cornwall council and if it is successful, we will see the first commercial geothermal energy plant in the UK, which will produce 10 MW of renewable energy to be fed into the national grid.

Nearby, at the former mine of Mount Wellington, is Kensa Engineering, an award-winning manufacturer of ground heat pumps that works with social housing providers across the country to deliver low-carbon energy and at the same time lift people out of fuel poverty. I am delighted that the coalition Government have stated their support for renewable energy incentives. I believe that the Government’s priority, as set out in the Budget, to enable more business finance and financial support for the low-carbon economy, will help support excellent low-carbon companies and energy providers such as those in my constituency. The Government’s emphasis on the need for economic growth to come from the private sector will also, I believe, create a better environment for the many businesses that already contribute so much to the local economy, particularly at Falmouth port.

Falmouth is not only important to the economy of Cornwall as the third-largest natural harbour in the world, it is of strategic importance to the UK. Falmouth has a long and proud maritime history and, as the most westerly port in the Atlantic gateway, has been at the centre of trade since ancient times. As ships for all purposes, including those needed to service marine renewables and the Navy, are getting larger, the deep waters of that safe haven are ever more important to the nation, not just to Cornwall.

I understand that many of the measures in the Budget will be tough for people living and working in my constituency. I do, however, believe that by taking the brave decisions in this Budget—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order.

20:57

[Anas Sarwar (Glasgow Central) (Lab)]

I am grateful to you, Mr Deputy Speaker, for giving me the opportunity to make my maiden speech in this debate as the new Member for Glasgow Central. It is a pleasure to follow the excellent contributions of the hon. Members for East Surrey (Mr Gyimah), for Maidstone and The Weald (Mrs Grant), for Thurrock (Jackie Doyle-Price), for Pudsey (Stuart Andrew) and for Truro and Falmouth (Sarah Newton), and of course of the baby of the House, my hon. Friend the Member for Airdrie and Shotts (Pamela Nash).

I would like to begin, as is customary, by paying tribute to my predecessor. It is perhaps somewhat easier for me to take part in that tradition than for other hon. Members making their maiden speeches, as I have had the privilege of knowing Mohammad Sarwar for all 27 years of my life. He has been a tremendous inspiration to me and it is an honour to follow him into Parliament as the Member for Glasgow Central.

Mohammad Sarwar began his political career in 1992, when he was elected to serve on Glasgow city council. He went on to make history in 1997 when he became the UK’s first Muslim Member of Parliament. He was re-elected to serve Glasgow Govan in 2001 and, following boundary changes, won Glasgow Central in 2005. On election night in May of this year, when I learned that I had held the seat for Labour with an increased majority, I turned to my election agent and we congratulated each other on a well-fought five-week campaign. Overhearing our exuberance, my predecessor was quick to remind us that his hard work as an MP for the preceding five years may also have had something to do with it.

My predecessor enjoyed a distinguished parliamentary career, including serving as a member of the Select Committee on Scottish Affairs before being elected its Chair in 2005. A devoted internationalist who was respected on both sides of the House as a champion of the Asian and Muslim communities, Mohammad Sarwar did a tremendous amount of work to strengthen Britain’s relationships abroad, but first and foremost, my predecessor was a very passionate and forthright constituency MP who always spoke up to ensure that the interests of his constituents were well represented in this House. In recognition of his 20 years of service to Glasgow, he was last month awarded the Loving cup by the city’s lord provost. It is one of the highest honours that can be given by the great city. One example of his devotion to his constituents is his successful campaign to secure the future of thousands of jobs in Glasgow’s Govan shipyards, which he cites as his greatest achievement as a Member of Parliament. I hope that under this Government, the tremendous history of shipbuilding on the Clydeside will be protected and promoted, and not harmed.

As you can probably tell from my accent, Mr Deputy Speaker, I was born and brought up in the city of Glasgow, and I have lived there all my life. I love the city of Glasgow and I am a proud Glaswegian, so I feel immensely honoured and hugely privileged to have been given the opportunity to represent the people of Glasgow Central in Parliament. I thank them for putting their faith and trust in me and I promise to work tirelessly to repay that trust.

Glasgow has been through some very difficult periods in its history, and there will clearly be further testing times ahead, but I know the resilience, spirit and innovation of the city’s people, and that is why I am confident for its future. In the past 13 years, Glasgow has been transformed from its inward-looking, post-industrial slump to become a confident, outward-looking, economically regenerated city. It is now a leading location not just for shipbuilding but for high-tech industries and developing fields such as biotechnology. It is Europe’s fastest-growing conference centre and we now have more than 4 million tourists visiting annually. World-renowned universities such as the university of Strathclyde and Glasgow Caledonian university are also within my constituency, and I am proud to have graduated from the university of Glasgow with a BDS in dentistry. We all know the pain that can be inflicted by a dentist, but that pales in comparison to the pain inflicted by the Chancellor with this Budget—I know that was a cheap joke, but I could not resist it.

Glasgow Central’s school leavers and graduates can look forward to employment in the largest economic part of Scotland. Its business district, international financial centre, manufacturing sector and Clydeside media hub provide thousands of jobs. Glasgow Central also boasts a thriving retail industry and the best shopping in the UK outside London, including the style mile, which takes in Sauchiehall street, Buchanan street and Argyle street together with three shopping centres. Culture seekers are also catered for in my constituency, which boasts the Scottish exhibition and conference centre, the Glasgow science centre, the Kelvingrove art gallery, the gallery of modern art, the People’s Palace and several theatres among its many attractions.

Glasgow is a city that is brimming with confidence and is on the up. This will be demonstrated on the world stage when we proudly host the 2014 Commonwealth games. The spirit of optimism so evident in the city centre permeates into the neighbouring communities that surround it: to the north and west lie Dundasvale, Cowcaddens, Garnethill, Anderston and Finnieston; south of the River Clyde are the hard-working communities of Govanhill, Toryglen, Pollokshields, Kinning Park and the Gorbals; and in the east are Bridgeton, Calton and Dalmarnock, which I hope will reap the economic benefits of the Commonwealth games.

There is much to celebrate across Glasgow Central, but we still face many challenges. Although the previous Government made huge strides, we must recognise that there is still a way to go, and I am determined that the progress made in recent years will be built upon, not diminished. Some areas are still counting the cost of the devastating economic policies of the 1980s, which saw communities blighted and a generation of young people left on the unemployment scrap heap. Sadly, it seems that the same mistakes are being made again.

The Institute for Fiscal Studies has shown that the bulk of the pain in this Budget will be felt by the poorest in the country. At times of economic difficulty, the Government should be supporting and protecting the most vulnerable in our society, not harming them and hitting them hardest. Severe cuts to child tax credits, housing benefit, and disability living allowance, as well as the VAT increase, will affect thousands of low and middle-income families and pensioners in Glasgow Central and across the UK. That is on top of the decisions to scrap child trust funds and the future jobs fund. I urge the Government, particularly hon. Members on the Liberal Benches, to rethink many of those previously tested and failed policies before it is too late.

Let me conclude with a message to my constituents. My first priority is to be a visible, accessible and hard-working member of parliament. I will fight for vital investment to ensure that we continue to create opportunity and jobs in Glasgow so that it can remain a great place to live, work and raise a family. I will work in the House with hon. Members on both sides to help to build a society that has equality and fairness as its guiding principles, providing educational opportunity, tackling child poverty and ensuring that everyone, no matter what their background, can match their aspirations with achievement.

21:04

[Mr Brian Binley (Northampton South) (Con)]

May I first pay tribute to my hon. Friend the Member for Truro and Falmouth (Sarah Newton)? She is no longer in the Chamber, but she held her own with charm and interest among the many excellent maiden speeches this evening. I congratulate all who made such speeches, especially the hon. Member for Glasgow Central (Anas Sarwar), who delivered an informative, interesting and hard-hitting speech. He clearly has a great future in the House. I know I speak for all hon. Members when I ask that he pass on our good wishes to his distinguished predecessor—his dad.

It will come as no surprise to Labour Members that I welcome the Chancellor’s Budget, but I have been amazed when listening to some of their speeches during the Budget debates. It seems to me that they have a collective delete button that has erased the last 13 years of their memory. I regret the situation left by the previous Government, which has motivated the many tough measures that the Chancellor has been forced to take. I also regret that they left such a massive budget deficit and such a large public sector debt, and that they let spending rip to sustain the previous Prime Minister’s vain boast that he had done away with boom and bust. How empty those words seem now.

[Mrs McGuire]

rose—

[Charlie Elphicke (Dover) (Con)]

rose—

[Mr Binley]

I will gave way to my hon. Friend, if the right hon. Lady will forgive me. Time is limited to only seven minutes per speech, so I ask her indulgence.

[Charlie Elphicke]

Does my hon. Friend also regret the fact that child poverty has increased by 300,000 since 2004-05? Does he welcome the fact that it should be frozen in the next two years?

[Mr Binley]

I welcome the Government’s pledge to ensure that child poverty does not increase in the next two years in these difficult times, but I was dismayed by the previous Government’s record, which left so many young people out of employment, education and training. That was terribly sad.

I regret that the previous Government thought that they had only to create a project and throw money at it to solve a problem. I come from industry, and I can tell Labour Members that in truth, how projects are managed determines their success or otherwise. Perhaps they can take that lesson on board.

I congratulate the Chancellor on his courage in the face of what he had to deal with. I think he produced a fair and balanced Budget, as do many of my electorate in Northampton. To fire a warning shot across the bows of Labour Members, I can tell them that a number of those who told me that this weekend were in fact Labour voters. Labour Members might need to temper their comments in the light of that information.

The success of the Budget is not assured. It depends on achieving the projected growth figures, which means being competitive. How sad that on the World Economic Forum’s global competitiveness index, the UK fell from seventh to 13th in the rankings between 1997 and 2010. Sadly, that is another Labour failure.

As I said, the Chancellor did a great job in trying to be fair and balanced, not only for this generation, but for our children and grandchildren. Had we not taken that action and set out on that course, they would be left with the burden.

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

rose—

[Mr Binley]

I will not give way because time is very limited.

One thing that makes me most angry is the idea that we should spend the money and expect our children and grandchildren to bail us out. That is totally unacceptable.

I said that the success of the Budget is not assured, but I welcome the many initiatives that the Chancellor outlined in his speech, including the reduction in corporation tax, particularly for small businesses. The Federation of Small Businesses announced that they will help more than 850,000 small and medium-sized concerns. Along with the FSB and the Forum of Private Business, I welcome the extension of the enterprise guarantee scheme, which will likewise help those small businesses. The FSB reckoned that a 1% increase in national insurance contributions would have brought about the loss of 57,000 jobs. So the previous Government’s record continues. The issue is not only what they did, but what they said they would do. We need to take that into account.

I am delighted that the Chancellor listened to our concerns about raising capital gains tax and that he has increased the threshold to £5 million from £2 million to further encourage entrepreneurs. All of that, welcome though it is, might not be enough to ensure that business has the available financial resources to produce the growth that we need. I am especially worried about that because some 94% of the people who work in the private sector in Northamptonshire work in small or medium-sized enterprises. I fear that they will not have access to the credit from the banks that they require to continue their businesses. Some 70% of the nation’s creativity comes from that sector, and SMEs added 2 million jobs to the employment list at a time when UK plc was shedding 1.5 million jobs. Without that sector, we would not have had the jobs growth that we had in the five or six years before the beginning of the recession.

We face some serious issues in ensuring that the SME sector receives the credit it needs to provide the growth that my right hon. Friends the Chancellor and the Chief Secretary require. The G20 agreement to force the Government to make sure that the banks hold on to even larger amounts of capital flies in the face of our work in that respect, so I ask the Chief Secretary to look at ways of ensuring that the sector receives the money it requires. I want him to look at the levy on the banks to see whether he can allow some of that money to be spent on providing credit for the small business sector and I also want him to promise that he will look at ways of alleviating the £130 billion figure placed on us—seemingly by agreement—by the G20. I welcome the Budget, but I need my Government to recognise the need for SMEs to get the money they need to continue to grow to provide the jobs that we require.

21:13

[Mr George Mudie (Leeds East) (Lab)]

This is one of those occasions that Members dread, when they write a very calm speech but then have to follow the hon. Member for Northampton South (Mr Binley), nice fellow though he is. He has, in one contribution, echoed so much of the same political nonsense that has come from the Government Benches to justify this unnecessary Budget. Day after day, we have heard about the state that Labour left the country in and the deficit that Labour caused.

The hon. Gentleman forgets that from 1997 until 2007 and into 2008 we had unbroken growth every month—[Interruption.] I do not know about the hon. Gentleman’s constituency, but I have a very deprived constituency and, however critical I was of the Labour Government, a lot of people were able to leave behind the memories of the Thatcher 1980s. They got jobs, bought houses and started to take pride in themselves and their families. They started to think that they had a future. That was our Labour Government, but what those on the Government Benches seem to forget is that they are letting some greedy, irresponsible people get away with what they have done to this country and its people. [Hon. Members: “It’s your lot!”] This is exactly it: how could anybody on the Government Benches blame a Labour Government for a financial crisis that swept through the western world, bringing misery and poverty?

The fact is that those on the Government Benches are letting the bankers get away with it—it is obvious even in the Budget that they are doing that. Government Members are going to vote tonight for £5.9 billion of cuts in welfare benefits in the Budget, yet they are taking only £2 billion from the bankers. In fact, they are not even taking £2 billion from them; what they are doing is not hitting the bankers—the greedy, irresponsible ones; the ones who are pocketing the money and taking their bonuses—but hitting the banks and the customers.

[Andrew Bingham (High Peak) (Con)]

Will the hon. Gentleman give way?

[Mr Mudie]

No, we have no time, as the hon. Member for Northampton South said.

Those on the Liberal Benches—the real Liberal Benches —seem to be listening to the Government propaganda. I wonder whether they read David Smith in The Sunday Times the week before the Budget. David Smith—not a well-known Labour supporter—drew our attention to the independent Office for Budget Responsibility, which was set up by the Chancellor. The OBR produced a report, which I see one member of the Front-Bench team has read and understands, containing its forecasting from June, based on the Labour Budget of March. We are talking about the choice for the Liberal Members who entered the Government, having taken their Business Secretary’s word that Mervyn at the Bank told him that things were so bad that we had only one option—to push through the cuts, which are reminiscent of the ’80s—but we do not.

This is David Smith’s introduction to the Office for Budget Responsibility’s report:

“The ‘before’ version, the OBR’s baseline projection, was contrary to some reporting last week, a rather attractive vision for the economy over the next few years.”

That is our legacy: “a rather attractive vision for the economy”. What was in that projection? The answer is that

“growth averages 2.7% from next year until the end of the parliament,”

in 2014-15, and

“inflation sticks to the Bank of England’s 2% target,”

throughout the life of the Parliament. As for unemployment —this is the choice that those on the Government Benches are making—it will go up with the Budget. Under the Labour Budget, as analysed by the independent Office for Budget Responsibility,

“unemployment falls despite…Labour’s planned spending cuts.”

“Unemployment falls”—can those on the Government Benches say the same? The article continues:

“The economy rebalances away from consumer spending and government towards exports and investment. The saving ratio steadies,”

with

“borrowing falling from 11.1% of GDP in 2009-10 to 3.9% by 2014-15 and the current account deficit, 1.7% of GDP this year, falling to 0.8% in 2014,”

and both the structural budget deficit and the cyclically adjusted deficit falling. That was all in the independent report that the Chancellor called through.

So when those on the Government Benches are walking through the Lobby to force cuts on people—kids who want to go to university; disabled people; people on incapacity benefit—[Interruption.] Oh yes, of course, it is all emotional, but these are people. We are taking a gamble with the Budget, and it is an unnecessary gamble. Professor Budd spelled out in his report that it is unnecessary. When those on the Government Benches go through the Lobby to vote for the Budget—this great risk, as the Business Secretary admitted in the House last week—they ought to know what they are doing to ordinary people in their constituencies and our constituencies. The Budget has been described by the hon. Member for Solihull (Lorely Burt) as tough but fair, but the word that she left out was “unnecessary”. The Budget this year will mean a difference of £6 billion, but before the Chancellor brought it forward, he had to admit, when the result came in, that we were £11 billion better off. It is an unnecessary Budget and it is a gamble. Ordinary people will pay for it, and that is a disgrace.

21:20

[David Rutley (Macclesfield) (Con)]

Thank you for giving me the opportunity to speak in this debate, Mr Deputy Speaker. We have heard some wonderful maiden speeches today, including those of the hon. Member for Glasgow Central (Anas Sarwar) and my hon. Friends the Members for Truro and Falmouth (Sarah Newton), for Pudsey (Stuart Andrew) and for Thurrock (Jackie Doyle-Price), among other great constituencies of this country. I congratulate them. Our talk about the Budget today has been vital, because it will define the challenge of this Parliament and, quite possibly, of a political generation.

I should like to thank hon. Members on this side of the House for electing me a member of the Treasury Committee. It will be a great honour to serve on the Committee, which plays an important role in Parliament, and I look forward to working with its Chairman, my hon. Friend the Member for Chichester (Mr Tyrie), and all its other members, in carrying out my duties.

Before I go into the content of the Budget, it is important to remind the House why such a Budget is required. Yes, there has been a global economic crisis, but the sheer scale of the budget deficit has clearly been exacerbated by the policies of the previous Government, and it is time that Labour Members had the honesty to acknowledge that. As a special adviser in the Treasury during the last Conservative Government, when “canny Ken” was Chancellor, the most important lesson that I learned was that you cannot spend what you have not got. Based on the exchanges in the last couple of debates, however, it is clear that that lesson has been lost on Labour Members. It is as though they think that spending is an end in itself, that it is good to spend, and that we should carry on spending regardless. Well, we have had to take the measures to stop all that.

The economic crisis is affecting the whole of the country, including Cheshire, despite what the Leader of the Opposition said last week. In Macclesfield, we shall see the loss of 600 jobs with the closure of BAE Systems’ Woodford site in 2012. There are also closures at Kay Metzeler in Bollington, and at Swain and Sons in Poynton. Most recently, we have heard the announcement of the loss of 250 jobs when the Cheshire building society closes down its operations in our town. We have now seen a staggering 177 % increase in unemployment in the past five years. We are working hard locally to address the situation, and we will be holding a business forum to determine what further action can be taken.

It is clear, however, that an improvement in the economy locally, as well as in constituencies across the country, will require national action as well. That is why I welcome the Budget, with its measures to show that Britain is open for business. That will be important for local employers in Macclesfield, such as AstraZeneca, who need to have the confidence to go on investing in this country, and for those looking to start new businesses in regions such as the north-west, where job creation needs a big boost from business, not from the public sector. I am also pleased that the Chancellor is taking positive steps to reduce the budget deficit. It is the biggest in living memory, which is why we are having to take tough action to get the economy moving again.

Given such difficult circumstances, the focus of our debate should be not only on what needs to be done, but on how these huge objectives can be achieved. Policies and programmes will need to be reviewed as planned, but let us not forget the process by which the challenges should be addressed. My hon. Friend the Member for Gainsborough (Mr Leigh) has already made some important points on this. The public spending review will be a critical task. Lord Waldegrave of North Hill, my former boss at the Treasury, recently gave the Chief Secretary to the Treasury some advice. He told him that he would need to have the hide of a rhinoceros in taking the review forward, and I have no doubt that that is true. I wish the Chief Secretary every success in establishing a rigorous and challenging review, and in deciding the urgent priorities in Government spending.

Delivering the Budget will also require a transformation in the culture of our civil service. We need to help civil servants to feel proud about their efforts to save taxpayers’ money. When I worked at Asda, colleagues there were genuinely motivated and proud to work towards delivering a lower cost of living to customers. They knew that to deliver everyday low prices they had to focus on delivering everyday low costs, and they were proud to do that. It was part of every bit of work that they did, day in, day out. I suggest that there are lessons to be learnt from that approach in the delivery of value for money in Government and effective public services. It is clear from the actions of Ministers in the coalition Government that they are committed to bringing about cultural change of that kind, and I fully support their efforts.

It is good to know that clear objectives are being set at the top, and that value-for-money Ministers will be appointed in every single Department; but I trust that, in such difficult circumstances, those objectives will be shared throughout Whitehall, and that the Cabinet Secretary will give more priority to the value-for-money objectives of permanent secretaries and their teams. I believe that much of the knowledge required for the achievement of those objectives rests with those responsible for front-line service provision, where the proximity of customers provides powerful knowledge and understanding.

During the general election campaign, I met thousands of public sector workers who were appalled at the amount of waste and the layers of bureaucracy that they had to face every day of the week. One hospital chef told me that he had three bosses. I think most people would agree that that should not be part of the recipe for providing nourishing meals for patients in hospitals. That is why I support Ministers in their efforts to learn from people in the front line and, despite many competing priorities, find time to listen to their views and work with them. I urge those Ministers to continue their efforts to break down the barriers that are preventing taxpayers from receiving the effective services and real value for money that they so richly deserve.

For those reasons, I support the Budget. It is tough and it will be challenging to deliver, but it is the medicine that is needed to treat the trauma of this economic crisis and return our ailing economy to full health. I entirely support the Chancellor’s proposals, which are set out so clearly in his Budget.

21:27

[Mr Ivan Lewis (Bury South) (Lab)]

I congratulate the hon. Members for East Surrey (Mr Gyimah) and for Maidstone and The Weald (Mrs Grant), my hon. Friend the Member for Airdrie and Shotts (Pamela Nash), the hon. Members for Thurrock (Jackie Doyle-Price), for Pudsey (Stuart Andrew) and for Truro and Falmouth (Sarah Newton), and my hon. Friend the Member for Glasgow Central (Anas Sarwar) on their excellent maiden speeches.

This is a Budget that will define not only the new Government but the kind of country that Britain is to become for a decade, perhaps even a generation. The choices made in this Budget will have an impact on every middle and low-income family, every community and every workplace. They will determine not only our economic destiny, but the very nature of our society. Those choices, presented as economic imperatives, are in reality driven by an ideology which yet again fails to understand that if a state retreats too far, the result is not a big society but a broken society.

I want to concentrate on public services and welfare. Let us be clear: this is a Budget of choice, rather than a Budget in which there is only one choice. The deficit could have been reduced over a longer period, as happened in the aftermath of the IMF loan in the 1970s and that of Black Wednesday in the 1990s. The balance between taxation, spending cuts and growth could have been different, and the overall package of measures could have been progressive rather than regressive.

Much has rightly been made of Liberal Democrat duplicity. I watched closely on Budget day as the Deputy Prime Minister anxiously passed the Red Book to the right hon. Member for Gordon (Malcolm Bruce), frantically seeking to draw his attention to the tables on pages 66 and 67. The right hon. Gentleman dutifully made a trenchant speech, claiming that this was a progressive Budget and citing the tables as evidence. Within 24 hours, the Institute for Fiscal Studies had made it clear that such claims were as misleading as a typical Liberal Democrat “Focus” leaflet. It confirmed that the overall impact of the Budget measures was regressive and that the poorest would be 2.6% worse off, while the richest would be worse off by only 0.6%. That did not include cuts in benefits and public services, which would widen the gap considerably. I do not see how Liberal Democrats can claim to be progressive when they are willing to vote for this Budget, let alone for VAT increases.

In legitimacy and credibility terms, the Tories have matched the Liberal Democrats in their contempt for the electorate. It seems to have been forgotten that the Prime Minister, the right hon. Member for Witney (Mr Cameron), claimed to have modernised his party. It was no longer the nasty party, no longer indifferent to social and economic inequality. The right hon. Gentleman would govern from the centre ground, and would face down the right-wing ideologues in his party.

This Budget proves that that was all a charade. Instead we have the same old Tories, driven by a “leave it to the market” dogma, cavalier about social disintegration and contemptuous of the public sector. As throughout history, they seek to divide and rule, reversing new Labour’s economic prosperity and social justice paradigm and disregarding the link between public sector investment and private sector growth. They stigmatise the public sector and its work force as the primary cause of our economic problems, while irresponsible bankers and markets without ethics hardly get a mention. This narrative emanates from politicians and commentators who mainly use private education and health care, whose personal wealth guarantees their quality of life, and who are out of touch with the daily realities of most people in this country.

Let us consider the public servants who make a difference on a typical day in my constituency and those of every other Member: children’s centre staff and nursery nurses; teachers, classroom assistants and support staff; head teachers; police officers and police community support officers; prison and probation officers; doctors, nurses and ancillary staff; district nurses, home carers and mobile wardens; social workers, youth workers and Connexions staff; area co-ordinators and leisure staff. I could go on and on. Yes, and managers and administrators too; after all, effective organisations in the public as well as the private sector need good management and sound administration. There are also the construction companies, contractors and suppliers, providing a range of goods and services to public agencies. The public sector civilises our society, helps people to fulfil their potential, and protects those who are sick and vulnerable.

I do not deny the need for reform and cuts. In government, we should have devolved more to local government and local communities. The remuneration of public service executives should be transparent, and some roles can no longer be justified when tested against other priorities. However, cutting 25% to 30% of the public sector in only five years will both destroy our social fabric and slow the pace of economic growth. This coalition believes that as the state retreats, enterprise will flourish and the “big society” will fill the gap left by public services. That is fantasy politics and fantasy economics. The private sector will struggle to expand while the economy is fragile, which is why these cuts are too fast and too deep. Also, 1.2 million private sector jobs are dependent on the public sector, and 40% of public expenditure is spent in the private sector. The agents of the so-called big society—voluntary groups and community networks—will have their grants cut by local councils reduced to fulfilling only statutory duties.

The Secretary of State claims to champion the family, but he now wants people to break up their families and give up their homes in the pursuit of work. I thought his party was committed to a balanced, not a “get on your bike”, economy. He was at pains to say, however, that people would not have to go up north; heaven forbid!

Our opponents can attempt to rewrite history but they cannot change history. We are proud of the decisions we took to save Northern Rock, recapitalise the banks and boost the economy with a significant fiscal stimulus. We protected savers and home owners and intervened to save jobs and businesses. Our approach, in conjunction with that of our global partners, ensured recession did not lead to depression. Prior to the credit crunch, we delivered an unprecedented 11 years of economic growth, with people on low and middle incomes seeing major advances in their standard of living. We lifted hundreds of thousands of children and pensioners out of poverty, and public services were fixed and then transformed.

This Budget fails the tests of fairness and economic recovery. The Lib Dems have made their choice. It is Labour that is now left with the duty to fight for the interests of the—

[Mr Speaker]

Order. Time is up.

21:34

[Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)]

We have had some excellent debates in the Chamber since the Chancellor presented his Budget to the House. They have been good debates not least because we have heard the speeches of some extraordinary new Members, and I hope I will be forgiven for dwelling for now on only the maiden speeches we have heard today.

The hon. Member for East Surrey (Mr Gyimah) rightly perceived that Budgets are not simply collections of statistics. They are important because they are statements about our ambitions for our country and our communities. I was glad to see the scale of his ambitions for East Surrey and I wish him the very best of luck in the difficult business of delivering them, but he showed us that he needs no shoulders to stand on.

The hon. Member for Maidstone and The Weald (Mrs Grant) put the emphasis on family and enterprise. She will find a ready audience for both subjects in the House. She spoke with real feeling about the need to draw politicians and civil servants into public life from a wider range of backgrounds. She is right about that.

My hon. Friend the Member for Airdrie and Shotts (Pamela Nash) spoke movingly about her memories of John Smith and of her debt to John Reid. I served as one of his Ministers and she got his character absolutely right. She was passionate about her constituents and will clearly be an effective fighter in this place on their behalf.

The hon. Member for Thurrock (Jackie Doyle-Price) spoke about her roots and how they have shaped her political outlook. She left us very much wanting to hear more. The hon. Member for Pudsey (Stuart Andrew) told us about some of Pudsey’s famous sons—if that is the word to describe both Sooty and Sweep; I have never been quite sure—and I now know the home of Britain’s best fish and chips. The hon. Member for Truro and Falmouth (Sarah Newton) was passionate and informed about green energy. The House is in need of those qualities on that subject, and we look forward to hearing more from her.

Listening to my hon. Friend the Member for Glasgow Central (Anas Sarwar) brought me enormous pleasure. He captured with brilliance his father’s passion and contribution to this place. He showed us that he is a magnificent successor to his father.

When all is said, however, at the heart of the debate is a judgment. The reality is that the Budget has presented us with the judgment of a gambler. That is not just our conclusion; we have heard it across the spectrum of informed opinion. KPMG said:

“This is a kill or cure budget”,

which

“risks choking off the recovery.”

The Chartered Institute for Personnel Development said that it

“will curb the demand for the goods and services that…drives business investment and exports.”

BNP Paribas—hardly a bedrock of socialism—said:

“We expect GDP will be much weaker than the Budget projections”.

Lombard Street Research said that

“there remain risks that aggressive fiscal tightening causes the UK recovery to stumble.”

IHS Global Insight said:

“There is undeniably a very serious risk that this accelerated and intensified fiscal tightening could derail a still fragile UK economic recovery.”

This afternoon, we have been presented with a contrast. In Toronto, international leaders gathered to agree that the need now was for what they called “growth-friendly” fiscal consolidation, yet at home we are presented with a Budget that suffered the instant indignity of its independent reviewers telling us that it will not speed up recovery, but will slow it down. It will not put more people in work, it will put more people on the dole. It will not move the Chancellor’s party—it is so kind of him to join us—from the 1980s, because at the heart of the Budget is an old calculation: unemployment is a price worth paying. That is a philosophy that the Opposition cannot and will not accept.

Only in the fine print of the Red Book does the scale of the Chancellor’s bet become clear. The Chancellor promised that he would be up front with us, but in the small print of the Office for Budget Responsibility report we see that he is gambling on growth of £192 billion in business investment and exports to pull us through. Last week, he told us he was all for caution, but now we have learned that he is relying on business investment that is higher, not lower, than Labour’s projections, helped no doubt by the cancellation of support for firms such as Sheffield Forgemasters and cuts to investment allowances for manufacturing firms.

What do manufacturers think of that? The Engineering Employers Federation said that manufacturers

“will now be left wondering where the necessary growth and investment will come from, given the cuts to investment allowances and capital budgets.”

Last week, the Chancellor liked to tell us he was all for caution, but now it turns out that he is relying on trade figures not seen in this country since 1974 and only beaten once—in 1950. Yet the prospects for trade in Europe, where half our exports go, are not better than when the March Budget was written; they are worse. Where, exactly, will all those exports go?

I wanted to know whether we had ever had a recovery like the one the Chancellor is gambling on in the next three years, so I asked the Library to do some research, and it said that only once has business investment and trade recovered in the way that he prays for, since the Library started collecting figures in 1966. Now, he is relying on the same performance for the next three years in a row. It is like betting not just on England winning the World cup, but on winning the next three World cups in a row. His strategy is nothing short of a massive bet on a recovery that has been hard-fought by businesses and families in this country. But of course, it has been made possible by the Liberal Democrats’ support, not least the imprimatur of the Secretary of State for Business, Innovation and Skills, who is not in his place tonight. Thus the man who made his reputation attacking casino banks has ushered in casino economics to the Treasury.

It is now right to give the Business Secretary a little credit: he at least had the decency to give the House an extended mea culpa for his change of heart. In January, as some hon. Members will remember, he told the House that he agreed with my right hon. Friend the shadow Chancellor about the way forward. Now, he agrees with the Chancellor. At least he spared us the nonsense that, somehow, Britain risks becoming Greece—a country still in recession, with debt twice the level of ours and no ability to devalue its currency.

All this is hinged, it seems, on the words of the Governor—words, I notice, that were entirely absent from the Monetary Policy Committee’s minutes for May. In essence, the Business Secretary made markets his defence—it was not his fault; the markets forced him—but somehow, he forgot to mention that those were the same markets in which interest rates were falling during the election. The MPC’s minutes for May are, in fact, very helpful. They note that 10-year spot rates were declining, not rising, by about 30 basis points in the month before the election.

The tragedy, of course, in the Budget is that there was an alternative. No doubt we will hear from the Chief Secretary a pretence that, somehow, he inherited no plan. Of course, nothing could be further from the truth, because until May he agreed with our plan. Labour’s plan to halve the deficit by 2013, with debt as a share of our national economy falling by 2016, is bang in line with the G20 communiqué announced to the House by the Prime Minister today. I notice that Sir Alan Budd agreed that we were on track to deliver that plan, not least because the public finances were £30 billion better than expected.

[Several hon. Members]

rose—

[Mr Byrne]

I will give way in a moment, because I want Government Members to hear this: far from the absence of detail in the Budget, the Budget prepared by the then Chancellor of Exchequer and presented to the House in March set out to the last penny £19 billion-worth of tax rises and, yes, £20 billion-worth of spending cuts, including £1 billion in cuts from the reform of public sector pensions, £1.2 billion in savings from welfare, £3.5 billion in holding down public sector pay, £5 billion in cuts to lower-priority programmes and £11 billion in savings through the biggest shake-up of Whitehall in a generation. That was on top of £15 billion of efficiencies in this year alone—all carefully broken down by Department.

[Matthew Hancock (West Suffolk) (Con)]

Will the right hon. Gentleman give way?

[Mr Byrne]

I will give way to the hon. Gentleman. Does he accept that the nonsense about there being no plan that we have heard in the debate was complete rubbish?

[Matthew Hancock]

Does the right hon. Gentleman think that there is no money left, or does he no longer agree with himself?

[Mr Byrne]

We can see at whose feet the hon. Gentleman has been training.

Our plan was different from the one the Chancellor presented. Unlike the plan that we heard last week, our plan really did have fairness at its heart. Last Monday night, the Chancellor’s spin doctors made fairness his key Budget test, and by Tuesday lunchtime he had failed it. The night before the Budget, we are reliably informed, Lobby journalists were equipped with an analysis of the Budget’s impact on different groups of citizens, yet somehow, someone forgot to tell the press that the picture was only fair because it included Labour measures. The Government would not dare to present a Budget to stand and fall on its own merits; they had to borrow ours. It did not take long to hear why.

What was the Budget’s impact on pensioners? Age UK says:

“Our research shows that cuts of this scale will be disastrous for older people”

and warns that thousands of lives will be lost. What is the impact on children? Save the Children says:

“Freezing child benefit…will hurt the poorest parents most, rather than their richest peers”.

A 20% VAT rate means driving some of the poorest parents into the arms of loan sharks. The Child Poverty Action Group said:

“This is a disappointing budget for child poverty…The increase in VAT is a regressive measure which will impact hardest on poorest families.”

Perhaps the final word should go to the Institute for Fiscal Studies. In a phrase that will come back to haunt Government Members, it said that the cuts to benefits will

“hit the poorest hardest and keep on hitting them harder year on year”.

Six days on from the main event, the Government’s progressive credentials already lie in ruins.

The price of keeping down unemployment in the worst global recession for 60 years was a price worth paying. It was the price of a national defence in a global storm. When we left office, unemployment was 500,000 lower than people expected a year ago. Repossessions were half the level of the 1990s, and company insolvencies were just a third of the rate they reached in the recession of the early 1990s. We are proud that we got the country though the recession in one piece and that we have delivered a return to growth.

It is true to say that no Government would have had an easy time in this Parliament, but the difficulty of the task demands that we do not take gratuitous bets with the nation’s hard-fought recovery and that we pay down the debt in a way that is fair. The Budget fails both those tests, and we will campaign for a plan that is better in this House and beyond.

21:46

[The Chief Secretary to the Treasury (Danny Alexander)]

And this from the man who wrote the note saying, “There’s no money left”, the most infamous letter in recent British political history. However, the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) gave us not one single word of apology for his Government’s actions.

Our good, full debate has been illuminated by the excellent maiden speeches made by the hon. Members for East Surrey (Mr Gyimah), for Maidstone and The Weald (Mrs Grant), for Airdrie and Shotts (Pamela Nash), for Thurrock (Jackie Doyle-Price), for Pudsey (Stuart Andrew), for Truro and Falmouth (Sarah Newton) and for Glasgow Central (Anas Sarwar). I served on the Scottish Affairs Committee with the father of the hon. Member for Glasgow Central, so I know that he has big shoes to fill.

This decisive emergency Budget sets out a credible plan to deal with the record deficit that we inherited from the previous Government. It is a tough Budget, and it needed to be tough to reverse the dreadful state of the public finances with which they left us. However, it is a fair Budget that recognises that we are all in this together and that those with the broadest shoulders must carry a greater share of the burden. The previous Government left behind the second largest budget deficit in Europe. Thanks to their incompetence, we are now borrowing £1 for every £4 that we spend, which is a gap of £149 billion this year.

The right hon. Member for Birmingham, Hodge Hill was right to say that at the centre of the Budget was one big judgment: we must go further and faster to reduce the deficit to protect this country and its people from the biggest economic risk of failing to act. If we had failed to act as we have through the Budget, the consequences would have been severe, and the poorest would have suffered the most. We only have to look at Greece to see what happens to countries that do not live within their means: more businesses going bust and higher unemployment.

The Liberal Democrats and Conservatives have come together to tackle the debt crisis facing our country. We have taken the tough decisions that the Governor of the Bank of England and the G20 called for, but that Labour ducked.

[Alec Shelbrooke (Elmet and Rothwell) (Con)]

Will my right hon. Friend give way?

[Danny Alexander]

I will press on, if hon. Members do not mind.

At the weekend, President Obama praised the action that we have taken, describing it as necessary and courageous. Yesterday’s G20 communiqué made the situation clear when it said:

“Those countries with serious fiscal challenges need to accelerate the pace of consolidation”,

and no major country has more serious fiscal challenges than those that the previous Government left Britain. Her Majesty’s Opposition seem to have adopted the strategy of Fabio Capello: they blame everyone else and deploy the same formation of arguments, leaving a gaping hole in their own defence. They refuse to accept responsibility for their mistakes, let alone apologise.

This Budget stands for three things: responsibility—taking action to eliminate our structural deficit; freedom—helping the businesses that we rely on to rebuild our broken economy; and fairness—protecting the most vulnerable while ensuring the contribution of all. Failure to deal with the deficit is the greatest threat to growth. Failure to act now would mean higher interest rates hitting businesses, hitting families and hitting the cost of repaying the Government’s enormous debt, losing jobs and losing growth too. This Budget takes action now to restore confidence in our economy—the confidence that is needed to underpin the recovery that we all want to see. This Budget’s forward-looking fiscal mandate will eliminate the deficit in five years and puts us on track to get debt falling by 2015-16. The Office for Budget responsibility, in fact, forecasts that the measures in our Budget will lead us to meet that challenge a year early.

Before I outline our plan, let me remind the House of the previous Government’s commitments. They were planning £50 billon of cuts, about which they had nothing of substance to say. Some of their leadership contenders—I do not see any of them here—are rowing back even on that plan. Our emergency Budget sets out the path of public spending for the next five years with the following additional measures: an extra £17 billion comes from reductions in departmental spending, £11 billion from reductions in welfare spending, £3 billion from lower debt interest payments and £8 billion from net tax increases.

As has been observed by all sides in this debate, we know that this will be painful, but it is absolutely necessary to secure the growth and prosperity that this country needs in the future. The last Government’s spending plans implied a reduction in departmental budgets of 20%. We are committed to real increases in NHS spending and to protecting international aid, and this Budget implies, as the Chancellor said, that other Departments will face an average real cut of 25%. We will set out the details of those cuts in the spending review, and we will consult widely to inform those plans. In fact, we launched our consultation on Friday, and we have already had more than 20,000 substantive responses from public sector workers, setting out ideas for areas where they know savings can be found. If only we had had a single serious suggestion from the Labour party.

We have taken the tough decision to increase VAT by 2.5%. With a structural deficit some £12 billion larger than the previous Government told us, we had a difficult choice to make: whether to fill that hole by making yet more spending cuts or to increase taxes. Further spending cuts would, I believe, have made it impossible to protect the most essential services in the spending review, so the VAT rise was unavoidable.

[Mr Anderson]

Does the right hon. Gentleman agree with his colleague, the hon. Member for Bermondsey and Old Southwark (Simon Hughes), who said, only on 15 June:

“I hope we don’t get a VAT rise because it is the most regressive form of tax”?

[Danny Alexander]

No party went into the election promising to increase VAT, but the hon. Gentleman should make no mistake: the rise in VAT is a result of the public finances that we inherited from his Front-Bench colleagues. One could say that it is a Labour inheritance tax.

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

Will the right hon. Gentleman give way?

[Danny Alexander]

I shall press on. I have already given way.

In response to the points raised by my hon. Friend the Member for St Ives (Andrew George), I can say that we have already demonstrated our commitment to transparency by publishing data on the distributional impact of the Budget measures, which has never been done before. We are committed to continuing with that level of transparency in future fiscal events, and we will continue to look at whether we can further improve the breadth of information provided. Parliament will, of course, as my hon. Friend requested, continue to have full scrutiny of the Government’s decisions, and I hope that the information that we have already provided, and will provide in future, will facilitate that debate.

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

Will the right hon. Gentleman give way?

[Danny Alexander]

No, I want to press on.

Thirdly, this is a Budget for fairness. Fairness underpins this Budget, and fairness runs throughout this Budget. This is the first Budget to include an analysis of the distributional impact of its measures. It shows that overall the richest will contribute most to deficit reduction, and it will have no measurable impact on child poverty by 2012-13. That is a good start, and of course we will take further action to underpin fairness on future occasions and in future Budgets. It is important to stress to the House the fact that the principles that have shaped the Budget will also shape the decisions that we make in the spending review, too.

As my right hon. Friend the Chancellor said, this is a progressive Budget. It is a Budget that takes almost 1 million of the lowest-earning income taxpayers out of income tax altogether—that is progressive. It is a Budget that locks in an annual increase in the state pension in line with earnings, prices or 2.5%, whichever is highest, to the benefit of 11 million pensioners. That is progressive, too. It is a Budget that increases capital gains tax rates by 10% for higher rate taxpayers, but keeps it the same for basic rate taxpayers. That is progressive. It includes a radical programme of welfare reform to focus support on those most in need. The welfare bill has ballooned from £132 billion 10 years ago to £192 billion today. If we ignore the economic and social pressures caused by this system, we will only put the whole country and the front-line services on which we rely under even greater financial pressure in future. The Government will tackle that situation head on, including through the reforms in the Budget to the disability living allowance, housing benefits, and the uprating of benefits. As my right hon. Friend the Secretary of State for Work and Pensions said, these reforms will ensure that help is targeted on those most in need.

[Yvette Cooper]

Will the right hon. Gentleman give way?

[Danny Alexander]

I will not give way. The irresponsible Opposition, when in government, caused many of the problems that we face today. We have heard accusations from them today that the measures we announced in the Budget are unfair. Let me test that accusation. The previous Government uprated pensions by 75p. That is not fairness. We have reintroduced the earnings link as our first action—that is fairness.

[Yvette Cooper]

Will the right hon. Gentleman give way?

[Danny Alexander]

I will not; I must press on.

The previous Government abolished the 10p rate of income tax. [Interruption.]

[Mr Speaker]

It is for the Chief Secretary to decide. He is not giving way at the moment.

[Danny Alexander]

That is not fairness. We have taken nearly 1 million people out of income tax altogether. That is fairness. The previous Government left an open door for the highest earners to exploit the gap between the rate of capital gains tax and the top rates of income tax, costing the taxpayer £1 billion a year. That is not fairness either. We have raised capital gains tax for higher rate taxpayers, and only higher rate taxpayers, by 10%. That is fairness.

[Yvette Cooper]

rose—

[Danny Alexander]

I will give way to the right hon. Lady.

[Yvette Cooper]

I thank the right hon. Gentleman for giving way. Will he confirm that pensioners will pay hundreds of pounds a year in VAT as a result of his VAT hike, but he chose not to include them in his increase in the personal allowance?

[Danny Alexander]

I thought that the right hon. Lady was going to do better than that. We have relinked pensions to earnings after 13 years. She failed to answer the question from my right hon. Friend the Work and Pensions Secretary earlier about the uprating she had planned, which was less than ours even in the second year.

We should compare the Opposition’s denial that there is a genuine economic need to tackle the deficit with our decisiveness, taking the action on the deficit that we all know is necessary. Compare their complacency with our responsibility. Compare their legacy of ruin in the public finances with our approach of fairness as we take steps to clean up the mess that they left. Compare their obstinate refusal to take unilateral action in introducing a banking levy with our resolute leadership, which not only delivered a levy but brought France and Germany along with us too. The Opposition would have us living in denial. Their approach to the deficit seems to be see no deficit, hear no deficit, speak no deficit. One Opposition Member even told us in today’s debate that they believed the deficit was a fantasy. It is such self-indulgence and complacency that led us into the mess we are in. The way that they got us here is not the way out.

This is a Budget for responsibility, it is a Budget for freedom and it is a Budget for fairness. It is a coalition Budget, and I commend it to the House.

[Hon. Members]

Hear, hear.

[Mr Speaker]

Order. [Interruption.] Order. There is extensive gesticulation from some very senior and experienced Members, and no little sedentary chuntering from Ministers on the Front Bench, who now occupy senior and important positions.

Question put and agreed to.

Resolved,

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

The Speaker put forthwith the Questions necessary to dispose of the motions made in the name of the Chancellor of the Exchequer (Standing Order No. 51(3)).

2. Value added tax (rate and supplementary charge)

Question put,

That provision be made for and in connection with increasing the standard rate of value added tax.

22:00

Division 10

Ayes: 346

---

Conservative: 295
Liberal Democrat: 50

Noes: 270

---

Labour: 248
Democratic Unionist Party: 8
Scottish National Party: 5
Social Democratic & Labour Party: 3
Plaid Cymru: 2
Liberal Democrat: 2
Independent: 1
Alliance: 1
Green Party: 1

3. Insurance premium tax (rates)

Resolved,

That provision may be made for and in connection with increasing the rates of insurance premium tax.

4. Pensions

Question put,

That provision may be made about registered pension schemes.

22:18

Division 11

Ayes: 366

---

Conservative: 295
Liberal Democrat: 53
Democratic Unionist Party: 8
Scottish National Party: 5
Plaid Cymru: 2
Alliance: 1
Green Party: 1

Noes: 247

---

Labour: 245
Independent: 1

5. Income tax: expenses and allowances of MPs etc

Resolved,

That provision may be made about expenses and allowances paid to members of the House of Commons and other representatives.

6. Amounts not fully recognised for accounting purposes

Resolved,

That provision may be made amending sections 311, 312 and 599A of the Corporation Tax Act 2009.

7. Insurance Companies

Resolved,

That provision (including provision having retrospective effect) may be made about insurance companies.

PROCEDURE (FUTURE TAXATION)

Resolved,

That, notwithstanding anything to the contrary in the practice of the House relating to the matters that may be included in Finance Bills, any Finance Bill of the present Session may contain provision taking effect in a future year reducing the rate of corporation tax for the financial year 2011 on profits other than ring fence profits.

Ordered,

That a Bill be brought in upon the foregoing Resolutions;

That the Chairman of Ways and Means, the Prime Minister, the Deputy Prime Minister, Mr Chancellor of the Exchequer, Secretary Vince Cable, Secretary Iain Duncan Smith, Secretary Chris Huhne, Danny Alexander, Mr Mark Hoban, Mr David Gauke and Justine Greening present the Bill.

Finance Bill

Presentation and First Reading,

Mr David Gauke accordingly presented a Bill to grant certain duties, to alter other duties, and to amend the law relating to the National Debt and the Public Revenue, and to make further provision in connection with finance.

Bill read the First time; to be read a Second time tomorrow, and to be printed (Bill 3) with explanatory notes (Bill 3-EN).

Wheelchair Services

Monday 28th June 2010 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Mr Dunne.)

[Mr Speaker]

Before Mr Anderson starts his speech, may I appeal to right hon. and hon. Members who are leaving the Chamber to do so quickly and quietly, so that he can make his speech and be heard?

22:37

[Mr David Anderson (Blaydon) (Lab)]

Some five years ago, as a new Member, I was approached by a number of children from Ryton comprehensive school in my constituency to see whether I would attend a lobby by the Muscular Dystrophy Campaign that was being held outside the Department of Health. The lobby was held to support a teacher at the school who had a son by the name of Sam who had been diagnosed as suffering from Duchenne muscular dystrophy—the type of muscular dystrophy that attacks young boys in particular, many of whom do not live to see out their teens.

As a result of that lobby, I was approached by a colleague who is now a Minister and asked if I would take on the role of chairing the all-party group on muscular dystrophy. As a young volunteer—well, not so young, but a lot younger than I am today—I did not know what I was letting myself in for, but I can quite safely say that that was one of the most important decisions that I ever took in the House. As a result of the work that we have done over the past five years, we have made great strides in helping people with muscular dystrophy. However, the truth is that we are still a long way from finding a cure. As part of that work, we decided to hold a series of hearings, to which we would invite patients, professionals and people from the Department of Health, as well as people from the specialist commissioning groups and the Muscular Dystrophy Campaign.

Following that work, we produced a report last summer entitled “Access to specialist neuromuscular care”. Its subtitle is “The Walton Report”, because one of the key players in producing it was Lord John Walton. He was born 88 years ago, and is one of my constituents. Based in Newcastle upon Tyne, he has a long history as a leading light in the work on neuromuscular diseases. He has been a distinguished Member of the House of Lords for about 20 years. He brought to the Committee a real sense of purpose. Others who were involved include our old colleague Dr Ian Gibson, who is no longer in the House, and many others from both sides of this House and from the House of Lords. We produced the report based on people’s real-life experiences of living day to day with muscular dystrophy.

We knew that it was not going to be possible to find a cure. We knew that we were not going to get into a debate about research or about trying to find a drug that would be the silver bullet that cured muscular dystrophy. We knew that that would not be possible. However, we heard time and again from people living with the disease that their basic care needs were not being properly addressed. An example is hydrotherapy. Why is it that children who have hydrotherapy during term time cannot have it during the holidays because the caretaker is not at their school? If access to drugs were involved, and a child was told, “Go away for six weeks. You can’t have your drugs because we’re on holiday,” there would be an outcry. Similarly, parts of the country have good access to physiotherapy, but other parts do not.

A further important issue that cropped up time and again was that of access to powered wheelchairs. Because of the frequency of this complaint, we asked the representatives of the Muscular Dystrophy Campaign to go away and work with people to produce a new report. That report came out last week, and it is called “Get moving—the case for effective wheelchair services”. I have sent the Minister a copy, and I hope that he has received it, because he will then be able to give us all the right answers later. I am sure he will not mind if I put my glasses on so that I can read it properly.

These are some real-life experiences of people with muscular dystrophy. They are setting out some basic stuff very clearly indeed. Wendy Hughes from Devon describes her son’s situation, saying:

“I have never been more angry or upset about a seemingly hopeless situation. Zak’s fight for independence has been an upward battle and completely frustrating, demoralising and hopeless for the whole family”.

A patient whose 10-year-old wheelchair is described as “falling apart” said:

“I have had no chance of trying another chair. I need a different type and shape of chair now. No one is listening and it’s soul-destroying.”

Jill Brown, from Wiltshire, is 68 years old and has progressive neuropathic myopathy. She has been waiting 12 years for the powered wheelchair that she needs. Six weeks ago, she finally received it. Sadly, because her condition has worsened, the chair no longer meets her needs.

The report contains a catalogue of complaints and heart-rending real-life stories. Christopher Powell lives in Plymouth, and has a muscle-wasting condition. He says:

“My current wheelchair has so many faults and I’m paying through the nose to get it fixed. I actually had to make my own headrest for the wheelchair, made out of a Pringles tube wrapped in a sock. It’s very embarrassing.”

Mark Bishop is from Herne Bay and has had problems getting a wheelchair adapted to suit his needs. He says:

“It ended up taking two years for wheelchair services to adapt a wheelchair they had to what I wanted, and even now it’s not finished…Someone with a Meccano kit could have done a better job.”

Karen Duckmanton lives in Essex. She, too, has Duchenne muscular dystrophy. She says:

“Even though I can’t walk and I need to be in my wheelchair all the time, wheelchair services told me that because I still had a small amount of power in my arms, I could not have an electric wheelchair. I think pushing the wheelchair has made my arms worse. I’ve been told I would be on the waiting list for 18 months for another wheelchair assessment.”

Carol Lawson from Chester-le-Street, quite close to where I live, said:

“I was given a manual chair by wheelchair services but I live on my own so lots of things like windows and shelves were out of reach for me—I couldn’t even hang clothes in the wardrobe. So I asked wheelchair services for an electric chair with a rising seat but they told me they couldn’t fund it.”

That is the story we hear left, right and centre when we approach the Department of Health and the various primary care trusts, although the need for provision has been accepted. It was recognised last year by Phil Hope, the former care services Minister, who said as recently as 19 March:

“Not having the right equipment to get about easily can restrict freedom, isolate and prevent an individual from fully contributing to society. That’s not right. That’s why we are developing a national entitlement standard for wheelchairs services.”

There has been national guidance on wheelchair services for a number of years now, but what is the real experience of the people concerned? They tell us plainly that the guidance is not working, but why is it not working? Here are some of the reasons given by the health service:

“Lack of awareness: Wheelchair Services may not have the specialist knowledge needed for these complex conditions.

Limited funding available: Wheelchair Services may have been allocated a limited budget by PCTs.

Equipment is restricted: Wheelchair Services may have a limited list of equipment it is willing to fund.

Equipment rationing: Equipment may be limited to one piece per patient.

Excessively strict criteria: The provision of equipment is often based on strict assessment criteria rather than actual need.”

Wheelchairs are not just a means of getting about, however. For some people, they are life support mechanisms.

[Julie Hilling (Bolton West) (Lab)]

Is my hon. Friend aware of the excellent work done by the charity Whizz-Kidz, which provides bespoke wheelchairs for young people? Does he agree that wheelchairs that fulfil the needs of young people, fit them and are suitable for their purposes, enabling them to lead fulfilled lives, should be funded by the national health service?

[Mr Anderson]

I entirely agree. I have done some work with Whizz-Kidz, and the appendix to the report contains a reference to its work. However, while everyone welcomes the great work that is being done by the Muscular Dystrophy Campaign and other charities—especially Whizz-Kidz—we should not have to rely on charity.

Mobility is as important to the quality of these people’s lives, and in many instances to their longevity, as medication. If someone was told, “I am sorry but you will have to get into a queue because there is not enough medication to go round,” every one of us here tonight would be knocking on the GP’s door, or asking the primary care trust or the strategic health authority, “What are you playing at?”

This is not like an assessment by the National Institute for Health and Clinical Excellence, when people are told “Yes, it would be good if you could have this, but we cannot afford it.” In this instance, people are being told, “You cannot have it for a variety of reasons.” In some parts of the country, such as Newcastle, there is a one-week waiting list; in others, there are waiting lists of up to 18 months. However, it ultimately costs the NHS more when people do not have the right wheelchair. They end up in hospital with diseases caused directly by the fact that they are not mobile, and experience physical as well as mental difficulties caused by the stress and strain of living with their problems.

At a lobbying event last week, a gentleman from Essex spoke to the main provider of wheelchairs there. That gentleman was almost in tears. He said—this was a gentleman in his mid-forties—“I have had this wheelchair for 12 years, and I cannot cope with it any longer.” But the truth is that this is not a difficult problem to solve. The Minister will probably talk about resources. We could all come into the Chamber every night and speak about a particular health-related problem, and I accept that there are limits, but the fact is that this could be cost-effective. People would not be in hospital, there would be fewer emergency admissions, and people could lead much better lives if they were not tied to equipment that does not work properly.

We must accept that the current position is not the position of 10, 20 or 30 years ago. People who are disabled now, thank goodness, expect more, and we as a society should give them more. Some great young people are involved in the Muscular Dystrophy Campaign who go to university and lead independent lives in their own houses, with access to transport and travel around the world, and we should help them in every way we can.

There are a number of things that I should like the Minister to do. I hope that he will agree to meet me, along with representatives of the campaign and of the working group of the all-party group on muscular dystrophy. We are asking the Government to act on the following recommendations. We want them to set up a short-life review group led by the Department of Health to address the failings of wheelchair services, and to get that review group to examine the savings and improvements made by new service models and to ensure they are implemented nationally. We want them to set a national target for waiting times for wheelchairs at a maximum of 18 weeks from the initial referral to the delivery of the chair—I know the new Government are not keen on targets, but we are talking about really looking after people. We also want the Government to set aside an adequate ring-fenced budget for wheelchairs in each PCT under the supervision of a specialised commissioning group. We want them, too, to set up uniform eligibility criteria and a national consensus regarding the features and equipment that should be provided by the NHS so that that can be developed fully. As it is pointless providing a wheelchair if its condition is not maintained, PCTs must accept the cost of maintaining all wheelchairs, including those that have already been bought, modified or privately funded, and that maintenance should be carried out quickly and efficiently.

We should also look to the scheme set up by the people involved in the campaign which is aimed at ending the wheelchair postcode lottery, so that there is the same access to wheelchairs across the country. It is wrong that people in some areas get better access than people in others, but people with muscular dystrophy find that that is the case time and again and it is totally out of order. We should fully implement definition 5 in the specialised services national definitions set, with a named lead for special equipment on the specialised commissioning group. The above recommendations should be used to develop and form a national strategy for wheelchair provision to reduce waiting times, improve access and bring an end to the current postcode lottery.

I know those are big demands, but these people need them. The first young gentleman I saw in a specialised wheelchair was a young man of 25 who had served in the Army Signals. Most of his contemporaries were dead, but he has been saved because his father and mother went to a fête and Lord Tebbit and his wife were there. We all know the sad story of what happened to Lord Tebbit’s wife, and she was in a specialised wheelchair. The young man’s parents talked to Lord Tebbit on that day, and he pointed them in the right direction. They were therefore able to go and see the people who had built the wheelchair for his wife and get a purpose-built one for themselves, which they had to pay for.

This is not on in the 21st century. It should not be a matter of luck in bumping into somebody somewhere who says, “Why don’t you do this?” We are talking about saving lives and improving lives. The truth is, sadly, that a lot of these people will be dead before they are out of their teens. The lucky few will probably live to 30. In other parts of the world, they possibly live for 10 years longer and we can learn lessons from them, and a key part of the way they look after people is access to wheelchair services.

I have spoken specifically about the work we have done in the Muscular Dystrophy Campaign. Since this debate went on to the parliamentary agenda, at least five groups have contacted me and my office, saying these issues apply across the board. I have no doubt that they do, and I will be happy to work with them and the Minister to try to see whether we can find a strategy that works. It is very important, and it is life-saving.

22:53

[The Minister of State, Department of Health (Mr Paul Burstow)]

May I start by thanking the hon. Member for Blaydon (Mr Anderson) for taking the initiative in bidding for the debate and for securing it this evening? He has raised some very important issues on behalf of both constituents and the muscular dystrophy movement.

I know the hon. Gentleman has a very strong personal interest in this issue and I was delighted to attend the event in the House that he organised last week when he launched the report he has described this evening. I was sorry not to have been able to be present when he delivered it, but he rightly set it out in great detail this evening.

While I was at the event, I met a number of families who had been affected by muscular dystrophy and heard about some of the difficulties they have faced, and the hon. Gentleman has talked tonight about some of the very powerful testimonies set out in the report, which make compelling reading. The conversations I had with people at the reception left me in no doubt that wheelchair services is an area that really does require improvement: real improvement in how wheelchair services are commissioned and delivered, and real improvement in extending personalisation to wheelchair services, where there is still far too much off-the-shelf or “like it or lump it” provision. I hope that my responses and remarks will reassure the hon. Gentleman and the Members on both sides of the House who have stayed for the debate that the Department of Health and I take the issues seriously and that we want to make good progress.

I am keen that we take on board the observations that the hon. Gentleman set out tonight, which are contained in his report. I certainly welcome the work done on commissioning and writing the Walton report. He may be aware that there is already an advisory group looking at wheelchair services, involving service users, representatives from the NHS and local government, clinicians and third sector organisations. It would be very helpful indeed if a representative from the muscular dystrophy campaign was involved with the group and, through the debate, I extend an invitation to that organisation to take part. I also invite the hon. Gentleman and members of his all-party group to meet the chairman of the advisory group, David Colin-Thomé, to discuss specific issues arising from the report, with a view to holding a meeting with me to discuss how we take matters forward.

I certainly agree that there is a great deal in what the hon. Gentleman said. We can see from the reviews carried out over recent years that there has been tangible improvement, but—an important but—as the hon. Gentleman outlined, it has been extremely limited. The experience for many people is a poor one. The service is characterised by long waiting times. As we have heard, it is quite common for people to wait months for a wheelchair, and not uncommon for them to wait years for a powered wheelchair. That really affects outcomes for people. It poses particular problems for children whose needs change as they grow, and for those with progressive conditions such as muscular dystrophy or motor neurone disease, whose needs can change very rapidly. The service is also characterised by considerable regional variation—in assessments, procurement, and choice for the individual. Quite simply, that is unacceptable.

The majority of wheelchair services are provided by the national health service, and should be subject to consistent, national standards, applied by local commissioners to the needs of individual populations. I think the hon. Gentleman and I agree on the diagnosis, but we might disagree about the best way to effect a cure.

The hon. Gentleman suggested that we should ring-fence wheelchair funding and introduce a new target on waiting times. However, we are already performing the biggest ring-fence possible. By providing real-terms increases in NHS budgets for the duration of the Parliament, we are protecting all health services, including wheelchair services, at a time of unprecedented spending restraint; yet even with that protection, the NHS faces a stark challenge as the population ages and lives longer, and the increasing costs of treatment squeeze health budgets. That demands greater efficiency and cost-effectiveness across the whole of the health service.

If the NHS is to meet that challenge, local organisations must have the freedom to allocate funds in the best interests of their local communities. In that sense, I am afraid that proposals for a new ring fence and centralised targets swim against the tide. The Government strongly believe that we need less Whitehall control, not more; we need to liberate the NHS and ensure higher standards for patients.

In the case of wheelchair services, a ring-fenced budget could have the opposite effect. By extending autonomy for the local NHS, a ring-fenced budget could effectively cap resources, and cap the amount a trust spends on wheelchairs, rather than allowing commissioners to make a judgment, informed by local need, about what should be spent on those services. Furthermore, ring-fencing could result in services that fail to improve, and we need to make sure that does not happen.

With greater freedoms come greater responsibilities for the local NHS. We want to strengthen both the patient and the clinical voice, so that patients, general practitioners, consultants and other clinicians, rather than layers of NHS management, call the shots and control the way services work. We will strengthen accountability and transparency so that the public can hold the local NHS properly to account for the decisions it makes, and poor performance can be properly challenged across the country.

We need to address a number of issues and the hon. Gentleman has touched on several of them. First and foremost, commissioning has to improve. The fact that wheelchair services account for only a small proportion of local budgets means that they have been neglected by too many. Good assessment of local need is rare, performance information is patchy and procurement is often left to individual wheelchair service managers.

Furthermore, higher costs due to rising demand and improving technology have not been properly reflected in many local budget allocations for wheelchair services. As a result, service managers have tended to focus on purchasing the right volume of wheelchairs for their communities, but not necessarily the right kind of wheelchairs for individual clinical needs. That gives rise to some shocking examples of the sort that the hon. Gentleman mentions.

[Mr Anderson]

I thank the Minister for his studied reply. One of the things that came to me was the fact that the spending that is put aside averages £2,000 per chair, but people want probably five or six times that amount for a chair that really meets their needs. Although I take on board the resources issue, it is pointless people saying that they can commission a number of chairs if, as he says, they are not worth having.

[Mr Burstow]

I take the point, but if one caps a budget, the danger is that the likelihood of rationing the service increases even further. We want to ensure that the services are tailored to local needs, but there are clearly some quite unacceptable performances around the country in how the service is being delivered at the moment.

On a related point, there are several funding streams for wheelchair services, and that is rather confused and confusing. Alongside NHS provision for wheelchairs, they can also be supplied through local children’s trusts and Jobcentre Plus, so there is duplication and inefficiency in the system, not to mention problems for service users in terms of understanding where their entitlement might lie. Indeed, in preparing for this debate, my jaw nearly hit the floor when I read that 57% of wheelchair budgets currently go on back-office costs. Fifty-seven pence in every pound that the taxpayer puts into these services fails to reach the front line at the moment. That is not acceptable; it is not a good way to use our taxpayer-funded resources for the health service. In these financially straitened times, it is clear that we have to make the available funding work much harder than that, and we can achieve much greater efficiency and a much better quality of service by encouraging a more co-ordinated system of assessment and provision across the Government. For example, there is a good argument for managing procurement regionally, not locally, so we can benefit from the economies of scale that that would provide.

It is also important that commissioning is sufficiently flexible to accommodate those who wish to use personal health budgets to purchase wheelchair services. I agree with the hon. Gentleman that more needs to be done to ensure that commissioning and procurement processes work for those with the most specialised needs. I do not think that we have been bold enough in using third sector organisations, in the sense not that they are charities that hand out something that the state does not provide, but that they are good partners with the state to go the extra mile to deliver the sort of service that we need. Indeed, Whizz-Kidz has been mentioned in the debate, and there is a major success story in the partnership that that charity has formed with NHS London, local primary care trusts and local authorities to improve wheelchair services for children.

I want to encourage more of those innovative partnerships with the voluntary sector, so that we can start to make a difference by improving quality and efficiency in the system. For instance, we could usefully deploy the specialist skills of a social enterprise such as Whizz-Kidz as the main procurement body in a more co-ordinated regional system. That area needs further exploration across the NHS.

The Whizz-Kidz example demonstrates another important point: the picture is not entirely black. There are beacons of best practice in some parts of the country, and we need to learn more from them so that one area’s best practice becomes common practice throughout the country.

I can announce tonight that the Government will be pursuing a pilot programme specifically to examine the commissioning of wheelchair and seating services. The work in the two regional sites that have been selected—the east of England and the south-west—will see PCTs, councils, NHS trusts and clinicians examining new ways of commissioning wheelchair services along the lines that I described. They will make recommendations for new models that will be underpinned by consistent approaches to eligibility and access, which could then be established across the country. I understand people’s frustration and desire that this should happen quickly, which the hon. Gentleman articulated clearly. However, the big risk of rushing to a conclusion is that we will not arrive at the best possible solution. It is important that we work through solutions to develop a robust, evidence-based system.

The pilot programme is an important start on building up the comprehensive understanding that we need. It will help us to uncover the best ways of organising wheelchair services to meet people’s individual needs, and it will sow the seeds for best practice to take root across the whole NHS. I hope that we can work with the hon. Gentleman and his all-party group to ensure that we achieve the tangible outcomes that we all want so that all people who need powered wheelchairs get the quality of life that they desire and can contribute to society in the way in which they want.

I thank the hon. Gentleman for initiating this helpful debate and look forward to seeing how we can take things forward in the future.

Question put and agreed to.

23:05

House adjourned.